Oracle Applications Financials(R12)

-By
J.Sathya Kumar

AGENDA
Highlights of E-Business Suite Business Cycles(P2P and O2C) User and Responsibilities High Level Overview of individual products

E-Business Suite definition:

Oracle Corporation's E-Business Suite consists of a collection of enterprise resource planning (ERP) computer applications either developed by or acquired by Oracle. E-Business Suite contains several product lines, including: Illustrative list: * Oracle CRM * Oracle Financials * Oracle HRMS * Oracle Order Management * Oracle Procurement * Oracle Inventory Each product line comprises of several modules.

E-Business Suite
FIN CRM HRMS PROC INV OM

E-Business Suite

Business Cycle classification

B u s in e s s C yc le

P ro cu re to P ay P 2P

O rd er to C a sh O 2C

M o d ule s In v olv e d: P u rc ha s ing P a yab les P a ym e n ts

M o d ule s In v olv e d: S a les O rd e r M a na g e m e nt R e c e iv a b les

Procure to Pay
Requisition to Purchasing Department
Purchase Dept: Send Request for quotation & Receive quotes Suppliers

Analyze and Select Best Quote

Raise PO and send to Supplier

Receive Invoice from Supplier

Transfer Goods to WH

Receive Goods From Supplier

Record Invoice in Application

Payment to Suppliers

Order to Cash
Receive an Order from Customer Book Orders Ship Order

Bill Customer

Receive Payment

Login credentials
The system administrator manages security by creating user sign-on and assigning them to one or more responsibilities. Users then have access to all the functionalities associated with that responsibility. Eg : User Mark can only purchase goods in purchasing not pay them. User Lee can Bill Invoices from Suppliers not account them. User Bruce can create accounting entries for the above. User Sathya can perform all the above actions. This is done using USER SECURITY(Authorize an user to sign on).

Legal Entity and Operating Unit

Legal Entity: An organization that represents a legal company for which you prepare fiscal or tax reports. LEs pay the taxes and therefore need tax registrations LEs own the money and bank accounts LEs file the accounts and take care of accounting LEs comply with whatever needs compliance An organization that partitions and uses data for Payables, Purchasing, Order Management, Cash Management, Fixed Assets and Receivables. In short any place where day to day purchase/sales or trading activity take place. Relationship between LE:OU = 1:N Operating Unit can be classified based on location or nature of business.

Operating Unit:

LE and OU Relationship
Legal E tit DELL Lt U A

Oper ti U it DELL INDIA les tlet

Oper ti U it DELL HINA les Outlet

Oper ti U it DELL A U A ip ufacture

Operati U it DELL A U A sulti er ices

Financials Product Listing

11i & R12
Accounts Payable(AP) Accounts Receivable(AR) Fixed Assets(FA) Cash Management(CE) General Ledger(GL)

R12 Initiatives
Subledger Accounting(SLA) Oracle Payments(IBY) E-business Tax Legal Entity Configuration(XLE)

Oracle Financials R12

Accounts Payable(AP) Cash Management (CE) Subledger Accounting (SLA) General Ledger(GL) Fixed Assets(FA) Accounts Receivable(AR) Legal Entity Configuration (XLE) E-Business Tax (ZX)

Oracle Payments(IBY)

Accounts Payable
Raise Invoices and Book Liability. Calculate Discount on early payments. Calculate Interest on delayed payments. Match Invoice to PO. Account Invoices(via SLA) Raise Debit/Credit Memo. Manage Supplier Balances. Batch Invoices Make Single Payment Adjust Invoices

Invoice Overview
An invoice is an itemized list of goods shipped or services rendered, with cost details. External Document sent by supplier. Represents a liability to pay Supplier for goods/services. Enforces Legal contractual obligation.

Payment Terms
Payables uses the Payment Terms definition to calculate interest/discount. Eg: Inv Date 1-April Payment terms 2/10 Net 30 with Interest 10% after 30 days Payment date Within 10-April 10- April Till 30- April After 30- April Discount/Interest 2% No Disc /Interest Interest @ 10%

AP Integration with other products

Trading Community Architecture (TCA) Sub-Ledger Accounting (SLA) Cash Management (CE) Oracle Payments (IBY) Oracle E-business Tax (eTax) Oracle Purchasing (PO)

Oracle Assets (FA) i-Supplier Portal. Oracle General Ledger (GL) via XLA Approval Management Engine (AME)

Q&A

Fixed Assets
Definition : A long-term, tangible asset held for business use and not expected to be converted to cash in the current or upcoming fiscal year, such as manufacturing equipment, real estate, plant and furniture. Raw Materials form part of stock in trade are handled in Inventory Module.

Oracle Assets
Assets Addition Depreciation Calculate Gain or Loss on Sale Transfer Corporate Vs Tax Books Major Vs Minor Categories

Major and Minor categories

CATEGORIES:
MAJOR LAND & BUILDING MINOR Factory Building, Office Building etc Engines, Oil Extraction machines etc Air Conditioner, Lights and Fittings.

Plans & Machinery Electricals

Asset Workbench

Internal Vs External Banks Accounts(R12)

INTERNAL BANKS ACCOUNTS Owned by OU Maintained in Cash Management EXTERNAL BANKS ACCOUNTS Owned by External Parties Maintained in Oracle Payments

Internal Vs External Bank Accounts eg.

OU Pays using its ICICI Acc Supplier Receives the Payment in his HDFC Acc

OU Receives Payment in AXIS Acc

Customer Pays Using ICICI Acc

What is SLA?
Centralized Accounting Engine Rule based Repository Contains granular level accounting info Multiple Accounting Requirements in a single Instance Satisfies diff Acc regulations Link between Transaction and GL

Payables

Centralised Accounting Model, Rules, Engine and Repository

SLA

GL

Receivables

Accounts Receivables
Transactions Receipts Remittances Auto Receipts Debit/Credit Memo AP/AR Netting

Multi Organization(MOAC)
Multi Org is a server side enhancement, which enables one user to access multiple organizations while keeping transaction data specific and secure. Multi Org is essential for large customers with multiple lines of business or divisions where you want to secure access to information and simplify processing and reporting.

MOAC in 11i
BELGIUM LE
HOLLAND LE DENMARK LE

BELGIUM OU

HOLLAND OU

DENMARK OU

BELGIUM Responsibility

HOLLAND Responsibility

DENMARK Responsibility

Holland

Belgium LE

Holland LE Legal Entity

Holland
Operating Unit

Denmark LE
Functional Tasks
Accounting

Belgium
Operating Unit

Denmark
Operating Unit

Billing, Dunning & Collections Procurement Order Management Payments Data Management

Single Responsibility

Multi Org Access Control(MOAC)

What is eBusiness Tax?

Central application that manages the following for all eBusiness Suite products:
Tax setups Enforcement of tax rules, regulations, and legislation Tax data Tax reporting Complete Global Solution for E-Business Suite. Enables Sharing of tax set up across Operating Units. Amendments in Tax Laws can be incorporated through Tax Rules.

General Ledger
1. 2. 3. 4. 5. Final repository for accounting data. Preparation of Balance Sheet and P&L Account. Ledger Mapped with LE UI Changes - ASM 4 Cs of Accounting Currency Calendar Chart Of Accounts Convention

Thank You

Flexfields
Flexible data that is customized to suit business needs without any programming. Made of sub fields and segments. Two types: Key flexfields and Descriptive flexfields. Eg of KFF: Bank Number : [01].[00 ].[08].[ ].[1 4467]
Countr Code/ Cit Code/ Branc Code/ Account T pe(Savings/Current)/ Account #

Descriptive Flexfield: Provide customizable expansion spaces. Appears as a single character unnamed field enclosed in brackets [].

Accounting Key Flexfield

4 Accounting FF with 3 Segments
Company (01) A Ltd Company (01) A Ltd Company(02) B Ltd Company(03) C Ltd Cost Centre(02) Shoe Factory Cost Centre (03) Soap Factory Cost Centre(02) Shoe Factory Account Codes (00001 10000) Account Codes (00001 10000) Account Codes (00001 10000) Account Codes (01 10) Sub Assemblies (AA- ZZ)

Descriptive Flexfields

Business Scenario
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Get quotation from Suppliers Select Best quote Raise PO and send to Supplier Receive Goods Transfer to Inventory Transfer from Inventory to Production Record Invoice and match it to PO. Account and Post it to Supplier Acc Pay the supplier and calculate Interest or Discount Move Finishes Goods from Production to WH. Ship F.P to Customer Bill the Customer Receive sale Proceeds Cash Management and Reconciliation Account Transactions and calculate profit.

Responsibilities overview
Fundamentals of ERP Whole is greater than sum of its parts. Payables- deal with the vendors since you typically purchase from vendors and eventually have to pay the dues. Oracle Purchasing handles all the requisitions and purchase orders to the vendors whereas Oracle Accounts Payables handles all the payments to the vendors. Inventory-deals with the items you maintain in stock, warehouse etc Dealing with customers is handled collectively with the help of Oracle Receivables and Oracle Order Management. Order Management helps you collect all the information that your customer is ordering over the phone or webstore etc whereas Receivables help you collect the money for the orders that are delivered to the customers. Oracle General Ledger. This module receives information from all the different transaction modules and summarizes them in order to help you create profit and loss statements, reports for paying Taxes etc All the equipment, shops, warehouses, computers can be termed as Assets and they are managed by Oracle Fixed Assets Cash Management manages reconciliation with bank accounts.

Q&A

Global Financial Architecture R12

Major Initiatives
1. Ledger and Ledger Sets
Dr Cr

General Ledger Ledger & Ledger Sets

2. Multi-Org Access Control

3. 4. 5. Subledger Accounting Tax Engine Bank Model

Subledger Accounting (SLA)

Tax Engine

Bank Model

MultiMulti-Org Access Control

Inventory

Receivables

Projects

Work in Process

Purchasing

Payables

Ledger Vs Set of Books

1. 2. 3. Ledger and LE Mapping UI Changes - ASM 4 Cs of Accounting Currency Calendar Chart Of Accounts Convention

Is Secondary Ledger Required?

Company
A Ltd (Legal Entity) B Ltd (OU -INDIA) C Ltd (OU-INDIA ) D Ltd (OU- US) E Ltd

Currency
$ INR INR $ $

Calendar
Jan- Dec Jan- Dec Apr- Mar Apr- Mar Jan- Dec

COA
US COA US COA US COA US COA UK COA

PL/SL/RL
PL RL SL SL SL

From Sets of Books to .. Ledger Sets More Efficient Period-end Processing

Ledger Set Share: Chart of Accounts Calendar
Ledger C US GAAP US COA US Calendar

Ledger B French Rules Plan Comptable French Calendar

Ledger A US GAAP US COA US Calendar

EUR

EUR

Defined by 4 C s: USD Accounting Convention Chart of Accounts Ledger D Calendar US GAAP Currency US COA

US Calendar

GBP Ledger Set Benefits:

Cross/Multiple Ledger processing and reporting Data and definitions t at can be s ared and secured Native support for multiple accounting representations Reporting Currency

Q&A

Multi Organization(MOAC)
Multi Org is a server side enhancement, which enables multiple organizations in an enterprise to use a single installation of Oracle Applications products while keeping transaction data specific and secure. Multi Org is essential for large customers with multiple lines of business or divisions where you want to secure access to information and simplify processing and reporting.

Tax Definition Regime to Rates

US Sales & Use Tax egime

California Jurisdiction

US State Sales Tax

Count Sales Tax

Cit Sales Tax

Standard Status

educed Status

Zero Status

Standard ate

Reduced Rate

Zero Rate

California State Rate

Subledger Accounting
-R12 Initiative

What is SLA?
Centralized Accounting Engine Rule based Repository Contains granular level accounting info Multiple Accounting Requirements in a single Instance Satisfies diff Acc regulations Link between Transaction and GL

Event Model
What Documents do you account? highest level of classification (functional) same unique identifiers (technical) ENTITIES

What Transaction Types are available for those Documents? common set of accounting rules (functional) EVENT common transaction datamodel to fetch details CLASSES

What is the Accounting Lifecycle for those Transaction Types? Validate/Adjust/Cancel

EVENT TYPES

Journal Line Types

Application Accounting Definitions

ADR for AP Invoice Liability

Application Accounting Definition (AAD)

Payables Accrual Application Accounting Definition Invoice Journal Line Definition

Journal Line Types

Account Derivation Rules Sources Transaction Objects

Journal Entry Descriptions

Centralized Payments Engine

E-commerce Integration
Formulating commercial transactions at a site remote from the trading partner and then using electronic communications to execute that transaction. Credit card and Online Bank Account Payments. iSupplier Portal iStore iReceivables

Automatic Receipts
Cybercash
1 Order Management

iPayment Server

2 Accounts Receivable (Confirmation)

Customers Bank

RECEIPT

BANK STATEMENT

Our Bank

3 Accounts Receivable (Remit)

4 Accounts Receivable (Clear)

Bank Accounts in R12

Internal Bank Accounts are owner by Cash Management(CE_BANK_ACCOUNTS). External Bank Accounts are owned by Oracle Payments (IBY_BANK_ACCOUNTS). Bank and Bank Branches are owned by Trading Community Architecture.

Bank Account Model

Payables Cash Management/Oracle Payments Bank Account Receivables Bank Account Payroll Bank Account Bank Account Bank Branch Trading Community Architecture (TCA) Bank

Treasury