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interRel Highlights and Company Overview

Introduction to Account Reconciliation Cloud (ARC)

Terrance D. Walker, PMP

info@interRel.com

epm.bi/Videos

Disclaimer

• These slides represent the work and opinions of the presenter and do not constitute official positions of Oracle or any other organization.

• This material has not been peer reviewed and is presented here with the permission of the presenter.

• This material should not be reproduced without the written permission of interRel Consulting.

What is a Reconciliation?

• Validation that the balance in an account is “accurate”

• Different types of accounts are validated or reconciled differently

Cash – Compare the GL balance to the bank balance

AP – Compare GL to sub-ledger

AR – Compare GL to sub-ledger and analyze the aging of receivables

Fixed Assets – Compare GL to sub-ledger and perform a roll-forward

Pre-paids (e.g. Insurance) – Document the composition of the balance and justify

Accruals (e.g. Bonuses) – Document the composition of the balance and justify

Provisions and Reserves – Document the composition of the balance and justify

Challenges in the Account Reconciliation Process

• #1 non-data related delay in the close process

• Honest questions What percentage of close time are you spending on account recs? Is it even happening? What tools are you using? Excel? Emails back and forth? Is every account truly being reconciled? Are we reconciling at the correct level(s)? Are recs updated as balances change during close?

• The result Limited visibility into completion status Limited reporting across recs Lost reconciliations Inefficient processes and lost time High risk and non-compliance

Challenges in the Account Reconciliation Process

Manual process

Incomplete information

Audit issues

Limited visibility

Security/compliance

Limited governance

ARC Addresses these Pain Points and Challenges

Manual process

Incomplete information

Audit issues

Limited visibility

Security/compliance

Limited governance

Enables automated

account reconciliations

Provides governance and real-time status

reporting

Addresses security and risk

concerns

Account Reconciliation Cloud (ARC)

• Addresses the global reconciliation process

• Reduces risk, providing real-time visibility into the performance of account reconciliations

• Ensures all reconciliations are properly qualified

• Helps companies streamline and optimize performance by automating certain reconciliation tasks and supporting risk-based reconciliation cycles

• Integrated with transaction systems

• Simplified UI for Cloud

• Analytics covering performanceand compliance

Easy To Use SUI for Completing Reconciliations

Profile Properties

Workflow Support for Account Rec Process

Manage the Overall Process

• Real-time visibility into the progress and status

• Assign resources/teams to specific items to be reconciled

• Analytics to review trending and areas for improvement

Report and Analyze on the Account Rec Process

• Pre-built reports

• Supports creation of custom reports and report groups

Fully integrate Account Reconciliation into the Close

• Integrate data from Oracle EBS, ERP Cloud and other ERP systems General Ledger

A/R, A/P & Fixed Asset Sub-ledgers

Cash Management

• Leverage existing on premise IT investments

• Automate with EPM Automate Routineso Import Profiles

o Import Balances

o Import Pre-mapped Balances

o Run Auto-match

Oracle Business Processes

How to subscribe? Part of 4 Main Business Processes

• Available with both EPM Standard and EPM Enterprise

• Oracle is shifting away from Cloud Services to 1 solution that supports 4 primary business processes:

This does mean that except for legacy customers, the products will not be sold separately

What was a “product” is now just a “business process” inside Oracle EPM Cloud

1. Planning: Planning, Profitability & Cost Management

2. Financial Close: Financial Consolidation & Close, Account Reconciliation, Tax Reporting

3. Narrative Reporting: Narrative Reporting, Dashboards

4. Enterprise Data Management: Enterprise Data Management / Governance

https://www.oracle.com/applications/performance-management/products.html

Oracle EPM Standard

ERPs Data Warehouses Unstructured Data Excel

•Custom Plan Types•Workforce•Projects•CapEx•Scenario Modeling• Financials

PLANNING

•Consolidation•Account Reconciliation•Task Management•Supplemental Data

FINANCIAL CLOSE

DATAMANAGEMENT

Ad Hoc Management ReportsNarration Mobile

Oracle EPM Enterprise

ERPs Data Warehouses Unstructured Data Excel

•Custom Plan Types•Workforce•Projects•CapEx•Scenario Modeling• Financials• Freeform (Essbase)•Groovy

PLANNING

•Consolidation•Account Reconciliation•Task Management•Supplemental Data•Advanced Consolidations•Transaction Matching•Tax Reporting

FINANCIAL CLOSE

ENTERPRISEDATA

MANAGEMENT

Ad Hoc Management ReportsNarration Mobile

Profitability & Cost Management

EPM Cloud Standard vs. Enterprise

Business Processes EPM Cloud Standard EPM Cloud Enterprise

Planning Planning & BudgetingPackaged modules: Workforce, Capital, Financial Project Planning Scenario Modeling1 Custom Hybrid BSO & 1 Custom ASO

+ Advanced Customization and modeling (Groovy)Intelligent Performance Management Intelligent Process AutomationFree Form Planning

Financial Consolidation & Close Financial ConsolidationTask Management

+ Advanced consolidation (on-demand business rules, custom calculations)Intelligent Performance Management Intelligent Process Automation

Narrative Reporting Narrative Reporting + XBRL Reporting

Account Reconciliation Account Reconciliation + Transaction Matching

Tax Reporting Not available Tax Reporting

Profitability Not available Profitability and Cost Management

Enterprise Data Management Not available Enterprise Data Management with 5,000 records limit

New Names of EPM Products (“Business Processes”)

• EPBCS/PBCS –> Planning

• EPRCS –> Narrative Reporting

• ARCS –> Account Reconciliation

• FCCS –> Financial Consolidation and Close

• PCMCS –> Profitability and Cost Management

• TRCS –> Tax Reporting

• EDMCS –> Enterprise Data Management

Into the Details of ARC

ARC Home Screen

• Simplified User Interface (SUI) across all EPM Cloud products

• Role-based views of ARC functionality

• ARC Cards: Worklist

Reconciliations

Matching

Dashboards

Reports

Application

Tools

Academy

Worklist

• The Worklist Card reflects a listing & the status of reconciliations

• Summary of the status by All, Late, Due Today or Due in 7 days

• Leverage Filter bar to filter by attributes such as name or account type.

Reconciliations

• Balance Summaryo Source System

& Sub-system balances

o Format Details

• Prior Ending Balanceso Balance Trending

o Imbalance review

• Reconciliation Metricso Assignee

o Status

o Attachments

o Commentary

Matching

The Matching Card notes all reconciliations created with Transaction Matching and shows a description, the name of the preparer and whether there are unmatched items.

The process for performing matching involves:

Importing Transactional Data

Confirming Suggested Matches

Creating Manual Matches

Creating the Reconciliation Balancing Report

Application

• Overview displays recent reconciliation activity by different users, data loads, and the number of change requests for today, last seven days, and all

• Profiles used to define reconciliation templates which are basis for which data points are reconciled

• Periods allows for opening, closing or locking periods

• Configuration used to set up, configure, and maintain ARC application settings, i.e. –Currencies, Formats, Organizational Units, etc.

• Match Types allows for creating match types for Transaction Matching and Calendars

Application (cont’d)

• Jobs displays the jobs performed in ARC – Jobs History maintains a history of the jobs run in Transaction Matching and allows for: importing transactions, deleting imported transactions, importing balances, and running Auto Match

• Services allows a Service Administrator to restart or run the following: email notifications, open reconciliations or system maintenance tasks such as synchronizing users

• Archive allows a Service Administrator to keep the size of the database in check and help performance by using archive, restore and purge functionality

• Report Configuration allows for creating custom reports, creating report queries, and group reports

Academy

Into the Details of the Reconciliation Process

Profiles

• Grouping of Account IDs that are subject to reconciliation Created to meet the reconciliation requirement(s)

Can contain multiple G/L segments – Entity-Account-LOB

• Assigned a type, format, preparer, reviewer, balance, etc.

Profiles

• Profiles can be updated as business changes

• Updated profiles will apply for future reconciliations

Will not impact or change past reconciliations

Profile

Reconciliation is created based on

Profile

Formats

• Define what the reconciliation will look like

• What information will be required from preparers during reconciliation

• Formats can also be created

• Pre-built Format are delivered with ARC AP, AR, Accruals, Bank Reconciliation, Fixed Asset, Tracking Only…

Standard Formats

• Prebuilt formats for you to use for reconciliations

• Balance comparison, account analysis or variance analysis reconciliation methods

• Prior period balance and net activity are not displayed across standard formats

You can clear the hide check box to display

• Simplified definitions for system and subsystem adjustments but you can update and change

Format Design

• Will determine the info presented in the Balance Summary

• Defines the types of transactions, attributes, and rules for the rec, auto-recs and controls

• Design at the account type level for accounts easily reconciled (e.g. Sub ledger to GL)

• Create custom formats for accounts that require manual reconciliation / more complex

Pre-paids, accruals, provisions and reserves Design formats to reduce risk for these items Add rules that validate data or require attachments Add questions to the reconciliation to ensure quality Target highest risk accounts

• Snapshots of formats are taken with each period’s reconciliations

Reconciliation Method – Balance Comparison

• Compare balances to a balance from another source (sub-ledger, bank balance, or other)

• Calculates a difference

• If difference exists, user enters adjustment on source and/or subsystem to explain/resolve the difference

Reconciliation Method – Account Analysis

• Used for accounts that have no comparative balance

• Preparers enter/load the Source System Balance

• Preparers enter/load the items that make up that balance on the Explained Balance tab

• Use Adjustments if there are any unexplained differences

Account Reconciliation Process

Load Data

Auto Rec Notify Prepare Review Monitor

Load Data

• Supports pre-mapped data loads (non-Admins)

• Supports Data Management for mapping source system data to Account IDs

• FDMEE (on-premises) direct ARC integration with EPM cloud

• Source system balances, sub-system balances, transactions

Load Data - Balances

• Preparers load from Reconciliations; admins from the Console or Reconciliations

• Import for period Data can be imported for periods that

have pending, open or closed status

• Define the file, source type, and currency bucket

• Click Import

Load Data - Import to Any Status

• Data can be imported for periods that have pending, open or closed statuses

• Balances If the balances change and the status was Closed or Open with Reviewer,

will be changed to Open with Preparer

If balance doesn’t change, the status does not change

• Transactions Changed to Open with Preparer

Data Management

• Data integration tool that provides a single, systematic process for loading data from disparate systems into target analytical applications

• FDMEE “Lite” (Financial Data Quality Management, Enterprise Edition)

• ETL for the business user

• Provides visibility, traceability, integrity and verification processes

• Mapping capabilities by end users

• Targets and sources

• File-based

• Drill-through to source data (Landing Page)

• Fully automated with EPM Automate

Auto Reconciliations

• Configurable for low risk accounts

• Standard auto rec rules Authorized zero balance

accounts

Matching G/L to sub-G/L within tolerance

• Customized auto rec rules with specific logic for your organization and compliance rules

Notify

• Preparers and reviewers receive email notifications for status changes, upcoming due dates and delinquencies

Preparers

• View balances loaded into reconciliations

• Review executed auto-reconciliations

• Review executed automated rules

• Copy forward previous activity

• Review notifications

• Complete reconciling items

• Provide balance explanations

• Attach supporting information (doc, xls, pdf) to reconciliations

• Provide commentary

• Calculate amortizations

Reviewers

• Review notifications

• Review reconciliations

• Provide feedback through commentary and flagging

• Approve or Reject reconciliations

• Multiple reviewers are supported

• Monthly, quarterly & yearly frequencies

• Risk Ratings

• Post reconciliation Commentary and view only

ARC Dashboards

Overview Dashboard

•Overview dashboard used to check the status of account reconciliations:o Open reconciliation count

o Late reconciliations

o On-time reconciliations

Compliance Dashboard

• Compliance dashboard to view more details into the reconciliation process

• View completed, prepared on time, reviewed on time, rejected, and warnings

• User success tracking

Match Metrics Dashboard

• Match Metrics dashboard by Reconciliation Type

• Transaction import date

• Sorting by various status

ARC Implementation Methods

Consider a Phased Approach

Tracking Only

Auto Rec Accounts

Complex Accounts

Phase 1 – Tracking Only

• Every account should be reconciled

• Consider tracking only for first phase

Continue to use current reconciliation processes

Only use 1 – 2 formats to attach Excel reconciliations

• Quickly achieve benefits into rec process

Centralized database of recs

Monitoring / reporting

• Leverage prebuilt tracking formats

Two formats – Tracking Only and Tracking with Reconciling Items (Allows updating spreadsheet / uploading a spreadsheet with the ability for preparers to document reconciling items)

Phase 2 – Auto Rec Accounts

• Next implement the “easier” reconciliations Accounts supported by sub-ledger (AP, AR, FA)

Those that can be auto reconciled

• Automate sub-ledger and GL balance loads

• Design at the account type level

• Define auto reconciliations

Phase 3 – Complex Recs / Manual Recs

• Accounts that require manual reconciliation / more complex Prepaids, accruals, provisions and reserves

Transaction Matching

Design formats to reduce risk for these items

Add rules that validate data or require attachments, add questions

Target highest risk accounts

Training & UAT

• Training interRel Training Division ☺ ☺ ☺

Great training videos provided by Oracle on YouTube

Excellent subject matter videos available in the Academy

Search for the Account Reconciliation Cloud playlist• https://www.youtube.com/playlist?list=PL6gBNP-Fr8KWAW6NVVTqyFRUCKZHtJBQk

• UAT Reconciliations have the correct format and balances

Preparer assignments are correct

Review assignments are correct

Reconciliation rules working per expectation

Bringing It All Together

Ready to Ascend to ARC…

• You are manually reconciling accounts / using Excel or some other sub-optimal tool for account reconciliations

• You want to make your close process more efficient / spend more time on value added analysis of results

• You need visibility into accounts that present the most risk

• You need real time status and oversight of the reconciliation process

• Current ARM customers desiring to use ARC functionality

• No brainer if:X hours per month reconciling * Y cost per hour > $120

Available with both EPM Cloud Standard vs. Enterprise

Business Processes EPM Cloud Standard EPM Cloud Enterprise

Planning Planning & BudgetingPackaged modules: Workforce, Capital, Financial Project Planning Scenario Modeling1 Custom Hybrid BSO & 1 Custom ASO

+ Advanced Customization and modeling (Groovy)Intelligent Performance Management Intelligent Process AutomationFree Form Planning

Financial Consolidation & Close

Financial ConsolidationTask Management

+ Advanced consolidation (on-demand business rules, custom calculations)Intelligent Performance Management Intelligent Process Automation

Narrative Reporting Narrative Reporting + XBRL Reporting

Account Reconciliation Account Reconciliation + Transaction Matching

Tax Reporting Not available Tax Reporting

Profitability Not available Profitability and Cost Management

Enterprise Data Management Not available Enterprise Data Management with 5,000 records limit

Continuing Education

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