Subledger Accounting Implementation Options Presented to the UKOUG Oracle Financials SIG by Nic...

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Subledger Accounting Implementation Options Presented to the UKOUG Oracle Financials SIG by Nic Atkin

Transcript of Subledger Accounting Implementation Options Presented to the UKOUG Oracle Financials SIG by Nic...

Page 1: Subledger Accounting Implementation Options Presented to the UKOUG Oracle Financials SIG by Nic Atkin.

Subledger Accounting Implementation Options

Presented to the UKOUG Oracle Financials SIG by Nic Atkin

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Subledger Accounting

Implementation options for new R12 implementations, and R11i upgrades

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About the presenter Nic has been implementing, designing or developing solution architectures

within the Oracle E-Business Suite arena since Release 7.

Nic spent 15 years with Oracle Consulting UK, and in his last year delivered both the R12 Awareness and Financials Accounting Hub training to consultants throughout EMEA.

Since leaving Oracle Consulting UK he has worked as an independent contractor implementing:– Financials Accounting Hub at Ministerie van Landbouw, Natuurbeheer en

Voedselkwaliteit; LNV (Netherlands Ministry of Agriculture, Nature and Food Quality);

– Subledger Accounting at LNV and Royal KPN NV (Netherlands landline and mobile telecommunications).

Nic is currently at Balfour Beatty as the R12 Solution owner delivering a common business process and share service centre based solution to 16 disparate Operating Companies in the Balfour Beatty Group.

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Agenda

Introduction to Subledger Accounting

Scope of Subledger Accounting in EBS

11i upgrade options

R12 Implementation options

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Introduction to Subledger Accounting

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Introduction to Subledger Accounting

What is Subledger Accounting (SLA)?– Common Accounting Engine embedded in E-Business Suite R12– A specific licence usage of the Financials Accounting Engine– SLA Licence comes free with EBS licence– Financials Accounting Hub (FAH/FSAH) licence is the other licence usage

of the Financials Accounting Engine

What does it do?– Creates Journals from the transactional events that happen to a document

during its lifecycle, e.g. approval, cancellation, adjustment– Can create Journals in many ledgers (Primary, Secondary, Reporting) from

a single accounting event

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11i

END USER

Enter/validate/approve transaction

Introduction to Subledger Accounting11i User Interaction

END USER

Create accounting and transfer to GL Import into GL

END USER END USER

Post in GL

Financial Options

System Options

AccountingOptions

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11i New in R12

Accounting event created

Enter/validate/approve transaction

END USER

Create accounting, transfer, and import into GL

END USER END USER

Post in GL

SLA Setup Transaction Data Accounting Event

Introduction to Subledger AccountingR12 User Interaction

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Introduction to Subledger AccountingKey Components (1)

Components configured and used by each Subledger separately

Single journal repository (can report across subledgers using custom reports)

Configuration/Setup– Event and Entity Model

• Defines the Events that can happen to a document

• Defines Entities to extract data from the source subledger document

– Transaction Account Builder• Defines how an account code combination is built up in a subledger*

– Account Method Builder• Defines a Journal and its Lines

• Uses or overrides account code combination built in the subledger

– Subledger Accounting Rules Detail Listing Report• Reports the entire configuration

* If implemented by Oracle Development

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Introduction to Subledger AccountingKey Components (2)

Master Data Management User Functionality– Mappings Sets

• Map any source value to a account segment or an entire account code combination

End User Functionality– Accounting Journals

• Create Accounting (Offline) and

• Online accounting (not in all subledgers)

– Inquiry: Drill-down, Drill-up (GL->SLA->Subledger->SLA->GL)– Reports

• Account Analysis Report

• Journal Entries Report

• Open Account Balances Listing

• Subledger Multiperiod Accounting and Accrual Reversal Report

• Subledger Period Close Exceptions Report

• Third Party Balances Report

• Trading Partner Summary Report

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Financials Accounting HubSubledger Accounting

Introduction to Subledger AccountingTwo licenses, Two levels of permission

Subledger Registration

Account Method Builder

Entity Model

Standard Sources

Custom Sources

Transaction Account Builder

Event Model

If implemented by Oracle Development

Change to seed data NOT SUPPORTED by

Oracle

Supported by Oracle for a new Subledger

Registration ONLY

Applies to seeded Subledgers

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Introduction to Subledger Accounting Accounting Methods Builder (AMB)

FR Statutory Ledger

Standard IAS Subledger Accounting Method

Payables Application Accounting Definition

Journal Line Types

Account Derivation Rules (ADRs)

Journal Entry Descriptions

Payment Journal Line Definition

Document Transaction Entity (Objects, Records)

Sources (Fields)

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Introduction to Subledger Accounting Transaction Account Builder (TAB)

FR Corporate Ledger

Corporate Chart of Accounts

Account Derivation Rules (ADRs)

Document Transaction Entity (Objects, Records)

Sources (Fields)

Receivables Invoice Revenue Transaction Account Type

Receivables Invoice Transaction Account Definition

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Scope of Subledger Accounting in EBSWhere and how used up to R12.1.3

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Scope of Subledger Accounting in EBS Where and how used up to R12.1.3

Accounting for Journals in the following subledgers of the core Financials Suite:– Assets, Cost Management*, Purchasing**, E-Business Tax,

Payables, Receivables, Cash Management• *Cost Management covers Purchasing Receipts, Inventory and

Manufacturing• **Purchasing covers burden and encumbrance accounting for

Requisitions and Purchase Orders

Accounting for Journals elsewhere in EBS:– Payroll, Projects, Lease and Finance Management, Loans,

Property Manager, Process Manufacturing, Price Protection, Trade Management, Contract Commitment and Federal Financials.

Transaction Account Builder only used for Financials Common Modules (Advanced Global Intercompany System (AGIS))

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Scope of Subledger Accounting in EBS Transaction Account Builders up to R12.1.3

Subledger Transaction Account Building Functionality

Cost Management PO Requisition Account Generator

PO Account Generator

Payables Project Supplier Invoice Account Generator; or

Project Expense Report Account Generator; orPrior transaction (PO related) or Expense Report Template (Expense

Reports); or Distribution Set (Invoices); otherwise entered manually.

Assets FA Account Generator, or SLA Account Derivation Rules

Payroll Cost Allocation Flexfield qualifiers and Costing program

Projects AutoAccounting for Projects

Receivables AR: Substitute Balancing Segment Account Generator

AutoAccounting for Invoices

Cash Management SLA Account Derivation Rules

Leasing and Finance Management

Accounting Template Set (optional)

Advanced Global Intercompany System

SLA Transaction Account Builder

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Scope of Subledger Accounting in EBS Transaction Account Builders post R12.1.3?

Subledger Transaction Account Building Functionality

Cost Management PO Requisition Account Generator

PO Account Generator

Payables Project Supplier Invoice Account Generator; or

Project Expense Report Account Generator; orPrior transaction (PO related) or Expense Report Template (Expense

Reports); or Distribution Set (Invoices)

Assets FA Account Generator, or SLA Account Derivation Rules

Payroll Cost Allocation Flexfield qualifiers and Costing program

Projects AutoAccounting for Projects

Receivables AR: Substitute Balancing Segment Account Generator

AutoAccounting for Invoices

Cash Management SLA Account Derivation Rules

Leasing and Finance Management

Accounting Template Set (optional)

Advanced Global Intercompany System

SLA Transaction Account Builder

SLA Tra

nsact

ion A

ccount B

uilder

?

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Scope of Subledger Accounting in EBSRelated changes in R12

Replaced Sets of Books with Ledger and Ledgers Sets– Primary– Secondary– Reporting (Currency)

Moved Multiple Reporting Currency functionality to Reporting currency

Moved Taxation functionality embedded in the subledgers to the common tax engine (E-Business Tax)

Legal entities model and functionality extended into most subledgers and supports Inter- and Intra- company accounting

Replaced Global Intercompany System (GIS) with Advanced Global Intercompany System (AGIS)

Replaced Global Accounting Engine with Subledger Accounting

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11i upgrade options and considerations

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11i upgrade options and considerationsKey options

Your existing 11i implementation should upgrade without any changes in configuration or additional development – subject to regression testing.

Factors that may change an upgrade ‘without changes’:– You have accounting (GAAP) issues that are being addressed by manual

journals, that could be addressed by changing the seeded accounting– You have customised any one of the Account Generators (dependent

Workflow technical skills) Projects AutoAccounting (dependent on SQL technical skills) but want to revert to standard TABs and override account derivation in SLA instead

– You want to implement a secondary ledger with a different chart of accounts.

– You want implement some of the advanced features of SLA (see R12 implementation options)

– Note: this may still require PL/SQL technical skills to develop custom sources.

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11i upgrade options and considerationsUpgrade considerations

By default, the upgrade updates the data for the current fiscal year, as well as the necessary periods of the previous fiscal year, to ensure that at least six periods are included in the upgrade

How much data must be moved to the new model to support the business?, if more required then:– Get patch 5233248– Run SLA Pre-upgrade program to change the number of periods of data to

upgrade

How much downtime is available to upgrade old data to the new model?

How many old transactions could possibly be reversed or rely on previous accounted transactions in a flow? (e.g. the accounting of payments related to a payable invoices are in a flow)

Mitigation: “Upgrade by Request” can run SLA post-upgrade program at any time to create the missing data

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11i upgrade options and considerationsSubledger Specific considerations: Payroll

Use old GL Interface approach– No effort required

Use new SLA approach– Provides GL to Payroll SLA journal drill-down (unlike other subledgers not

to HR/Payroll itself as this is secured data)– Full control of accounting– Need to configure all Journal Lines from scratch– On My Oracle Support, see:

• Article ID 399632.1 and Article ID 409174.1

• White Paper Oracle Payroll - Sub Ledger Accounting Integration - An Oracle White Paper

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11i upgrade options and considerationsSubledger Specific considerations: Assets

Use existing Account Generator– Set FA: Use Workflow Account Generation profile option to Yes

SLA Account Derivation rules– Set FA: Use Workflow Account Generation profile option to No– Amend Account Derivation Rules in SLA as required.

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R12 implementation options

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R12 implementation optionsOverview

Choose an Account Building Approach

Implement additional functionality:– Reconciliation References– Journal Header Descriptions– Journal Line Descriptions– Supporting References (for Inquiry)– Supporting Reference Balances– Integrate non-EBS sources via Financials Accounting Hub

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R12 implementation optionsChoose an Account Building approach (1)

Documentsubject to

Accounting Events (e.g.

Payable Invoice)

Master Data

related to Document (e.g.

Supplier)

Setup Data

related to Document (e.g. Operating Unit

System Options)

SourcesTransaction Account Builder

(Account Generator, AutoAccounting, Hard-wired rules, SLA ADR, SLA TAB)

10023 2099 38765 476 00000

DocumentDistributions

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10023 2072 38765 421 00000

R12 implementation optionsChoose an Account Building approach (2)

Accounting Engine

(SLA ADR)

Documentsubject to

Accounting Events (e.g.

Payable Invoice)

Master Data

related to Document (e.g.

Supplier)

Setup Data

related to Document (e.g. Operating Unit

System Options)

Sources

Master Data

SLA Mapping Set

DRDR CRCR

Journal Line

e.g Debit GBP 100

Journal

DocumentDistributions

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R12 implementation optionsChoose an Account Building approach (3)

Key questions:– Do you want to prevent users entering account code combinations

manually anywhere in EBS? – Total Accounting Automation– Do your ‘Organisational’ accounting segments change frequently causing

documents with long life cycles to use invalid segment values and invalid combinations in the later part of their life?

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R12 implementation optionsChoose an Account Building approach (3)

Two main approaches:1. Calculate account code combinations at journal creation time (override

‘dummy’ TAB defaults with ADRs using setup and master data)– KPN approach

2. TABs calculate using setup and master data. ADRs Use TABs results at journal creation time (accept TAB defaults with minimal override in ADRs)– Oracle Product Development approach

Approach 1:– Change TABs to generate ‘dummy’ account combinations, change SLA

ADRs and SLA JLDs – high cost, high complexity, custom development

Approach 2:– Take the seeded functionality: don’t change the TABs, don’t change the

SLA ADRs - low cost, low complexity, no custom development– Or, do as you did in 11i implementations: change the TABs, don’t change

the SLA ADRs - medium cost, medium complexity, custom development

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R12 implementation options Reconciliation References

Reconciliation References have to be populated (from a source) to use the new GL AutoReconciliation feature for each journal line.

Scenario:– Two source subledgers imported into GL via FAH– Subledger A, primarily debits a control/clearing account using a

Transaction Reference recorded in the reconciliation reference– Subledger B, primarily credits the same control/clearing account using the

same Transaction Reference recorded in the reconciliation reference– Reconciliation enabled for the control/clearing account– GL Automatically Reconciles journal lines that have the same reconciliation

reference and the sum of the debits equal the sum of the credits– Should be able to prove un-reconciled journal lines balance using reports

from the source Subledgers.

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R12 implementation optionsJournal Header Descriptions

Journal Header Descriptions have to be populated (from sources)– E.g. Invoice: <Invoice Number> Suppler: <Supplier Number>

Visible in SLA Inquiry screens

Visible in GL Inquiry screens if SLA Journal Lines are not summarised

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R12 implementation optionsJournal Line Descriptions

Journal Line Descriptions have to be populated (from sources)– E.g. Invoice: <Invoice Number> Suppler: <Supplier Number> Line Number:

<Line Number>

Visible in SLA Inquiry screens

Visible in GL Inquiry screens if SLA Journal Lines are not summarised

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R12 implementation options Supporting References (for Inquiry)

Supporting References have to be populated (from sources)– E.g. Project Expenditure Type

Can have up to five segments

Allows Journal Lines to be retrieved using this value in the SLA Inquiry screens

Can be a source for a data warehouse

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R12 implementation optionsSupporting Reference Balances

Supporting References have to be populated (from sources)– E.g. Project Number

Can have up to five segments

Allows GL Balances to be further analysed

Effectively extends the accounting flexflield by up to five segments

Balances can never reset (inception to date), or reset on year end (year to date)

Can be a source for a data warehouse

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R12 implementation optionsIntegrate non-EBS sources via Financials Accounting Hub

Requires a FAH licence

Can be a complex development

Needs detailed report requirement analysis

Needs detailed analysis of source system (subledger) to identify the documents and their accounting events

Needs detailed accounting requirements analysis to identify the journals required for each accounting event

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