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E-Business Suite R12 Cost Accounting Integrated with SLA PowerPoint Presentation
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slide2

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

slide3

E-Business Suite R12 Cost Accounting Integrated with SLA

Diane Streubel – Schreiber Foods Cost Manager

Douglas Volz – OAUG Discrete Cost SIG Sub-Committee

Herve Yu – Oracle Costing Development

slide4

Costing Accounting Integrated with SLAAgenda

  • Oracle Process Costing MAC transitioning to SLA
  • Oracle Discrete Costing SLA enhancements
  • Case example: Discrete Costing-Product Line Accounting
slide5

<Insert Picture Here>

Schreiber Foods

Diane Streubel

Manager - Cost & System Development

Oracle Process Costing

MAC transitioning

to SLA

slide6

Costing Accounting Integrated with SLAOPM MAC transitioning to SLA

  • Converged inventory model
  • Inventory Organizations that are Process will use Process Costing
  • Process users are denied access to Discrete Costing forms
    • Process Enabled organizations can not setup costs in the Discrete Costing application
  • Sub Ledger Architecture (SLA) replaces MAC
slide7

Cost Setup

Calculate Cost

Store Costs

Oracle GL

Costing Accounting Integrated with SLAOPM MAC transitioning to SLA

11i OPM

Order Management

GMI

(OPM Inventory)

Purchasing

GMD, GME

MAC

slide8

Cost Setup

Calculate Cost

Store Costs

Oracle GL

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

R12 OPM

Order Management

Oracle Inventory

Purchasing

GMD, GME

SLA

slide9

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

  • Subledger accounting is an intermediate step between subledger products and the Oracle General Ledger
  • Each transaction that requires accounting is represented by a complete and balanced subledger journal entry, stored in a common data model.
slide10

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

11i OPM

General Ledger

Interface

Subledger

GL Export

Journal Import

Journal Posting

For G/L integration, discrete costing works the same as OPM costing

slide11

OPM

Receivables

Payables

Projects

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

R12 OPM

Oracle SubledgerAccounting

Oracle General Ledger

For G/L integration, discrete costing works the same as OPM costing

slide12

OPM Costing Engine

generates costs.

OPM Costing Engine

generates costs.

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

SLA

OPM MAC

Completed material

and/or resource

transactions.

Completed material

and/or resource

transactions.

Cost Pre-processor will create accounting Events

OPM Subledger process processes these transactions to create Journal entries

SLA accounting program processes the events to create the journal entries

slide15

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

  • Most of the steps are automated using migration scripts
  • All the Account Definitions would be migrated as ADRs
  • Manual Steps to be completed are:
    • Assign Account Derivation Rules to Journal Line Definitions
    • Validate Application Accounting Definition
    • Assign User Subledger Accounting Method to Ledger
slide17

Costing Accounting Integrated with SLAOPM MAC transitioning to SLA - Summary

  • NO LOSS of functionality by moving to SLA model
  • A new sub-menu created under Cost Management for SLA forms.
  • Fiscal Policy and Event Fiscal Policy screens retained with minor modifications. Most of the fields will be read-only.
  • OPM Event model mapped to SLA event model.
slide18

<Insert Picture Here>

OAUG Discrete Cost SIG Sub-Committee

Douglas Volz

Douglas Volz Consulting, Inc.

Oracle Discrete Costing SLA

Enhancements

slide19

Costing Accounting Integrated with SLA Increased Flexibility: Oracle Discrete Costing SLA

Release 11i account recognition “pain points” eliminated by SLA:

  • SLA removes limitations for recording COGS and Revenue (still uses Cost Account Generator/workflow and A/R AutoAccounting)
  • Recording inventory and WIP accounts with more flexibility
  • Flexible variance account recognition for:
    • Invoice price variance
    • Purchase price variance
    • Average cost adjustment
    • Standard cost adjustment
    • Manufacturing variances
    • Account aliases
    • Freight charges
    • And most other inventory, manufacturing and related account entries
slide20

Sub Ledger Accounting(SLA)Key Concepts

  • Event Model: definition of the subledger transaction types and

lifecycle

    • Entity : Classification of source of transaction
    • Event Class: Classifies transaction types for accounting rule purposes
    • Event Type: for each transaction type, defines possible actions with accounting significance

ENTITY

Material Transaction, Receiving or WIP or Write Off

EVENT CLASS

Logical grouping of events which have similar kind of accounting

The most granular level of business event which has accounting impact

EVENT TYPE

slide21

Sub Ledger Accounting(SLA) Setup and Process

PROCESS

JOURNAL ENTRY SETUPS

Enter Transaction(s)

Define/copy and modify journal line types

Cost Manager

Define/copy and modify account derivation rules

Create Accounting*

Transfer Journal Entries to GL

Define/copy and modify descriptions

*Run ‘Create Accounting – Cost Management’ concurrent request for accounting all transactions from the Cost Management – SLA responsibility.

Receiving Accounting can be generated in the Purchasing responsibilities using the ‘Create Accounting – Receiving’ concurrent request.

These requests have an option to transfer the entries created to General Ledger. A separate process is also available.

slide22

GL

Journal Entries

and Balances

Transactions

Accounting Events

Accounting

Configurations

Subledger

Journal Entries

Journal Entry Setup

Subledger

Balances

SLA

Cost Management

Sub Ledger Accounting(SLA) Setup and Process

Accounting

Program

slide23

<Insert Picture Here>

Oracle Corporation - Discrete Costing Development

Herve Yu

Senior Principal Engineer

Case Example: Discrete Costing-Product Line Accounting

slide24

Costing Accounting Integrated with SLA Case Example: Purchase Price Variance product Line

Example: Record Purchase Price Variance by Product Line

  • We have two brands of cell phones, Samsung and Nokia
  • We want to track variances by cell phone brands
  • We are going to use 2 different ways to address this same requirement
    • Cost/SLA mapping set capability
    • Category Accounting – Cost/Global Accounting migrated to SLA in R12.1
  • A word for Inventory period close and Cost/SLA upgrade
slide26

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Product Line Setup StepsSet up your product line using SLA mapping set
    • Enter your SLA account derivation rule for Purchase Price Variance accounts
    • Associate the new account derivation rule to your Journal Line Type
    • Associate the Application Accounting Definition with Subledger Accounting Method
slide27

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Product Line Accounting – Descriptive flexfield
slide28

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Product Line Accounting – Descriptive flexfield
slide29

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Mapping set – Account Derivation Rule
slide30

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Mapping set – Account Derivation Rule
slide31

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • SLA Journal Line / Derivation Rule
slide32

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Associate Journal Lines Definition to the Event Class
slide33

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • Note the same ADR is usable for Standard Cost Update
slide34

Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line

  • Note the same ADR is usable for Standard Cost Update
slide35

Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line

  • Associate SLA Definition to the SLA Method/Ledger
slide36

Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line

  • Assign product line code to the inventory item
slide37

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • The material subledger from 11i still exists

Inventory

Inventory

Receiving

PPV

Matl Overhead Absorption

slide38

Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line

  • SLA Entries That Go to Your G/L
slide39

Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

  • For the Standard Cost Update That Go to Your G/L
slide41

Costing Accounting Integrated with SLAProduct Line Category Accounting:Global Accounting

  • Create a new structure under the key flexfield “Item Category”
slide42

Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

  • Create a new structure under the key flexfield “Item Category”
  • Create category codes
slide43

Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

  • Create a new structure under the key flexfield “Item Category”
  • Create category codes
  • Create category set
slide44

Costing Accounting Integrated with SLAProduct Line Category Accounting:Global Accounting

  • Create a new structure under the key flexfield “Item Category”
  • Create category codes
  • Create category set
  • Assign “Product Line Accounting” functional area category set
slide45

Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

  • Product Line category account
slide46

Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

  • Account Derivation Rule would have used a source directly
slide47

Costing Accounting Integrated with SLA Case Example - Conclusion

  • Summary Notes
    • Product line accounting can be achieved in many ways without using Costing Hook.
    • In R12 SLA is the Oracle R12 accounting platform and Costing supplies application sources from INV,WIP,RCV… to build the accounting journals.
    • One caveat: Pre-Release 12 subledger accounting reports are reading data from Costing distribution layer (such as the Material Account Distribution Summary or Detail Reports). Those reports will not show SLA journals. SLA provides a set of new accounting reports (such as Journal Entries Report, Accounting Analysis Report…) which can be modified as desire using BI Publisher.
slide48

Costing Accounting Integrated with SLAInventory Period Close and Upgrade

  • Inventory Period Close Process
    • Inventory interim G/L transfer has been replaced by SLA
    • The Inventory Accounting Period close works just like it did before, however, SLA now sends accounting information to the general ledger
  • Upgrade Process
    • Customers have option of migrating the whole historical data to SLA or choose which periods data to be migrated.
    • Customers get option to either upgrade in downtime when upgrading or anytime after the upgrade process.
    • Default for Cost management is to migrate the present calendar year data to SLA.
slide49

Costing Accounting Integrated with SLA

  • Additional information are available:
  • R12 Oracle Subledger Accounting – Implementation Guide
  • R12 Oracle Cost Management – User Guide
  • R12 Oracle Process Manufacturing Cost Management - User Guide