Transcript Subledger Accounting Implementation Options

Subledger Accounting Implementation Options
Presented to the UKOUG Oracle Financials SIG by Nic Atkin
Subledger Accounting
Implementation options for new R12
implementations, and R11i upgrades
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
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Introduction to Subledger Accounting
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Scope of Subledger Accounting in EBS

11i upgrade options

R12 Implementation options
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Introduction to Subledger Accounting
Introduction to Subledger Accounting
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What is Subledger Accounting (SLA)?
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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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Introduction to Subledger Accounting
11i User Interaction
END USER
Enter/validate/
approve transaction
END USER
Create accounting
and transfer to GL
END USER
Import into GL
END USER
Post in GL
Financial Options
System Options
Accounting
Options
11i
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Introduction to Subledger Accounting
R12 User Interaction
END USER
11i
END USER
Enter/validate/
approve transaction
Create accounting,
transfer, and import
into GL
Accounting event
created
SLA Setup
Transaction Data
Accounting Event
END USER
Post in GL
New in R12
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Introduction to Subledger Accounting
Key Components (1)

Components configured and used by each Subledger separately
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Single journal repository (can report across subledgers using custom
reports)
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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 Accounting
Key Components (2)
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Master Data Management User Functionality
– Mappings Sets
• Map any source value to a account segment or an entire account code combination
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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
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•
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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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Introduction to Subledger Accounting
Two licenses, Two levels of permission
Subledger Accounting
Applies to seeded
Subledgers
Financials Accounting Hub
Subledger Registration
Event Model
Change to seed data
NOT SUPPORTED by
Oracle
Entity Model
Standard Sources
Supported by Oracle for
a new Subledger
Registration ONLY
Custom Sources
Account Method Builder
If implemented by
Oracle Development
Transaction Account Builder
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Introduction to Subledger Accounting
Accounting Methods Builder (AMB)
FR Statutory Ledger
Standard IAS Subledger Accounting Method
Payables Application Accounting Definition
Payment Journal Line Definition
Journal Line
Types
Account Derivation
Rules (ADRs)
Journal Entry
Descriptions
Sources (Fields)
Document Transaction Entity (Objects, Records)
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Introduction to Subledger Accounting
Transaction Account Builder (TAB)
FR Corporate Ledger
Corporate Chart of Accounts
Receivables Invoice Transaction Account Definition
Receivables Invoice Revenue Transaction Account Type
Account Derivation
Rules (ADRs)
Sources (Fields)
Document Transaction Entity (Objects, Records)
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Scope of Subledger Accounting in
EBS
Where and how used up to R12.1.3
Scope of Subledger Accounting in EBS
Where and how used up to R12.1.3
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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
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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.
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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; or
Prior 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; or
Prior 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
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Scope of Subledger Accounting in EBS
Related changes in R12
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Replaced Sets of Books with Ledger and Ledgers Sets
– Primary
– Secondary
– Reporting (Currency)

Moved Multiple Reporting Currency functionality to Reporting
currency
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Moved Taxation functionality embedded in the subledgers to the
common tax engine (E-Business Tax)
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Legal entities model and functionality extended into most subledgers
and supports Inter- and Intra- company accounting
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Replaced Global Intercompany System (GIS) with Advanced Global
Intercompany System (AGIS)
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Replaced Global Accounting Engine with Subledger Accounting
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11i upgrade options and
considerations
11i upgrade options and considerations
Key options
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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 considerations
Upgrade considerations
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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
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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
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How much downtime is available to upgrade old data to the new
model?
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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)
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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 considerations
Subledger Specific considerations: Payroll
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Use old GL Interface approach
– No effort required
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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 considerations
Subledger Specific considerations: Assets
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Use existing Account Generator
– Set FA: Use Workflow Account Generation profile option to Yes
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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
R12 implementation options
Overview
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Choose an Account Building Approach
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Implement additional functionality:
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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 options
Choose an Account Building approach (1)
Sources
Transaction Account Builder
Document
subject to
Accounting
Events (e.g.
Payable
Invoice)
(Account Generator, AutoAccounting,
Hard-wired rules, SLA ADR, SLA TAB)
Document
Distributions
10023
2099
38765
476
00000
Master
Data
related to
Document (e.g.
Supplier)
Setup
Data
related to
Document (e.g.
Operating Unit
System
Options)
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R12 implementation options
Choose an Account Building approach (2)
Journal
Sources
DR
CR
Document
subject to
Accounting
Events (e.g.
Payable
Invoice)
Journal
Line
10023
2072
38765
421
00000
Master
Data
related to
Document (e.g.
Supplier)
e.g Debit GBP
100
Accounting Engine
(SLA ADR)
Setup
Data
related to
Document (e.g.
Operating Unit
System
Options)
Master
Data
Document
Distributions
SLA Mapping
Set
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R12 implementation options
Choose an Account Building approach (3)
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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 options
Choose an Account Building approach (3)
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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
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Approach 1:
– Change TABs to generate ‘dummy’ account combinations, change SLA
ADRs and SLA JLDs – high cost, high complexity, custom development
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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.
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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 options
Journal Header Descriptions
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Journal Header Descriptions have to be populated (from sources)
– E.g. Invoice: <Invoice Number> Suppler: <Supplier Number>
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Visible in SLA Inquiry screens
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Visible in GL Inquiry screens if SLA Journal Lines are not
summarised
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R12 implementation options
Journal Line Descriptions
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Journal Line Descriptions have to be populated (from sources)
– E.g. Invoice: <Invoice Number> Suppler: <Supplier Number> Line Number:
<Line Number>
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Visible in SLA Inquiry screens
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Visible in GL Inquiry screens if SLA Journal Lines are not
summarised
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R12 implementation options
Supporting References (for Inquiry)
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Supporting References have to be populated (from sources)
– E.g. Project Expenditure Type
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Can have up to five segments
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Allows Journal Lines to be retrieved using this value in the SLA
Inquiry screens
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Can be a source for a data warehouse
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R12 implementation options
Supporting Reference Balances
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Supporting References have to be populated (from sources)
– E.g. Project Number
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Can have up to five segments
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Allows GL Balances to be further analysed
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Effectively extends the accounting flexflield by up to five segments
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Balances can never reset (inception to date), or reset on year end
(year to date)
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Can be a source for a data warehouse
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R12 implementation options
Integrate non-EBS sources via Financials Accounting Hub
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Requires a FAH licence
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Can be a complex development
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Needs detailed report requirement analysis
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Needs detailed analysis of source system (subledger) to identify the
documents and their accounting events
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Needs detailed accounting requirements analysis to identify the
journals required for each accounting event
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