D kandampalayam shanmugam_ppt_1


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Deck presented in OAUG Collaborate 2010 in Las Vegas, NV on 21-Apr-2010

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  • Presented in Collaborate 2010 in Las Vegas, NV
  • Pl contact Dharma in case you have any questions or comments at dharmalingamks@gmail.com / +1-301-642-0003 (Cell)
  • Pl contact Dharma in case you have any questions or comments at dharmalingamks@gmail.com / +1-301-642-0003 (Cell)
  • D kandampalayam shanmugam_ppt_1

    1. 1. Cost Mgt Data Flow and COGS Revenue Matching Challenges in R12.0.4 Dharma lingam Kandampalayam Shanmugam, OCP, PMP Cell: +1-301-642-0003 / +1-616-916-6317 Email: [email_address] / [email_address] Blog: http://oracle-apps-sme.blogspot.com
    2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Cost Accounting Data Flow </li></ul><ul><li>COGS Revenue Matching </li></ul><ul><ul><li>Accounting for deferred COGS </li></ul></ul><ul><ul><li>Challenges </li></ul></ul><ul><li>Lessons Learned </li></ul><ul><li>References </li></ul><ul><li>Q&A </li></ul>
    3. 3. About Dharma… <ul><li>I go by Dharma - 15+ years of total experience including 10+ years in implementing and supporting Oracle Apps </li></ul><ul><li>Worked with leading consulting companies – Deloitte, Oracle, and Satyam Computers </li></ul><ul><li>Presently work as Principal Business Analyst in Amway COE team </li></ul>
    4. 4. About Amway… <ul><li>Amway/Alticor is the market leader in multi level marketing for health, beauty, and homecare products </li></ul><ul><li>8.4B$ revenue in 2009 with operations in 50+ countries and 13,000 employees </li></ul><ul><li>Went live in EBS R12.0.4 in Jul/2009 with the footprint </li></ul><ul><ul><li>Financials (GL, AP, AR, FA, CM, EBTax) </li></ul></ul><ul><ul><li>Logistics (INV, PO, iProc, Sourcing, WMS, MSCA, ASCP, BOM, WIP) </li></ul></ul><ul><ul><li>Order Management (OM, QP, Marketing, Depot Repair) </li></ul></ul><ul><li>Complex integrations with eCom, JDE, and UC4 </li></ul>
    5. 5. Cost Accounting Data Flow of Inventory Transactions
    6. 6. Cost Accounting Data Flow of Inventory Transactions through SLA <ul><li>Difference between ‘Transaction Manager’ and ‘Cost Manager’ requests </li></ul><ul><li>Depending on the cost type, records in MMT are costed by either ‘Average Cost Worker’ (CMCACW) or ‘Layer Cost Worker’ (CMCLCW – incase of FIFO/LIFO) </li></ul>
    7. 7. Cost Management Data Flow in SLA <ul><li>This picture clearly explains </li></ul><ul><li>how the various tables are linked </li></ul><ul><li>From metalink note 802966.1 </li></ul>
    8. 8. COGS Revenue Matching <ul><li>New feature in R12 </li></ul><ul><li>Fundamental accounting directive per GAAP </li></ul><ul><li>To recognize revenue & COGS in the same accounting period and in the same proportion </li></ul><ul><li>Customized COGS workflow to defer COGS in 11i but matching remained a gap till R12. </li></ul>
    9. 9. Deferred COGS and Costing Programs <ul><li>On sales order shipment, the accounting is: </li></ul><ul><ul><ul><li>Dr Deferred COGS (@ item cost) </li></ul></ul></ul><ul><ul><ul><li>Cr Inventory Valuation (@ item cost) </li></ul></ul></ul><ul><li>Below 3 programs to be run from Costing: </li></ul><ul><ul><li>Record Order Management Transactions – To record new sales order shipments & RMA’s. </li></ul></ul><ul><ul><li>Collect Revenue Recognition Information – To collect change in revenue recognition % based on AR events within user specified date range. </li></ul></ul><ul><ul><li>Generate COGS Recognition Events – To create COGS recognition txn when there is a difference b/w revenue & COGS recognition %’s. </li></ul></ul>
    10. 10. COGS Recognition Transactions <ul><li>The 3rd program creates logical transactions in Inventory with the time stamp as 23:59:59. </li></ul>
    11. 11. Accounting - Deferred COGS <ul><li>When the revenue is recognized (full/partial) in AR and after running the cost process, the below accounting happens: </li></ul><ul><ul><li>Dr COGS (Actual revenue %) </li></ul></ul><ul><ul><li>Cr Deferred COGS (Actual revenue %) </li></ul></ul><ul><li>Now let’s look at a quick video of this report. (Please save both the html & swf files to the same folder and open the html file after unzipping it) </li></ul>
    12. 12. Challenges in R12.0.4 <ul><li>Duplicate accounting of COGS Recognition Txn’s by Match_RevenueCOGS API (part of ‘Create Accounting’ program) and the ‘Cost Manager’ which was fixed by an one off patch 8716295 . </li></ul><ul><li>COGS Revenue Matching report completes in error (Apply a controlled (p/w protected) patch 8614641 ). </li></ul><ul><li>Even after the patch, performance was a problem (Report ran for 30 minutes - 1800 order lines). </li></ul><ul><li>Known issues in XML/OPP and various bugs reported for performance fixed by different patches. </li></ul>
    13. 13. Challenges in R12.0.4 <ul><li>Grouping issues makes analysis difficult in excel </li></ul><ul><li>When the layout format type was RTF, it did not group (BI publisher version 5.6.2). </li></ul><ul><li>When we applied the patch 8616804 to fix XML/BI publisher issues for table header repeat, the RTF output also showed the grouped results. </li></ul>
    14. 14. Challenges in R12.0.4 <ul><li>There are 2 seeded XML templates: </li></ul><ul><ul><li>COGS Revenue Match Report </li></ul></ul><ul><ul><li>COGS Revenue Match Excel Report </li></ul></ul><ul><ul><li>But the 2 nd excel template displays blank columns and we needed to apply a patch 7705861 . </li></ul></ul>
    15. 15. Other Reports… <ul><li>There is a margin analysis report to analyze the revenue, COGS, and gross margin. For this, we need to run the below: </li></ul><ul><ul><li>Margin Analysis Load Run - To create the build (Load option: Increment or Refresh) </li></ul></ul><ul><ul><li>Margin Analysis Report for Order Management </li></ul></ul><ul><ul><li>Margin Analysis Report (Provided for backward compatibility) </li></ul></ul><ul><li>Also there are 2 Rxi based AR reports: </li></ul><ul><ul><li>COGS and Revenue Matching Summary Report </li></ul></ul><ul><ul><li>COGS and Revenue Matching Detail Report </li></ul></ul>
    16. 16. Key Tables for COGS Revenue Matching <ul><li>The seeded report is based on the package CSTRCMVB.pls. The key tables are: </li></ul><ul><ul><li>CST_REVENUE_COGS_MATCH_LINES (CRCML) </li></ul></ul><ul><ul><ul><li>To store the relationships between revenue & COGS lines and elemental and total unit costs </li></ul></ul></ul><ul><ul><li>CST_COGS_EVENTS (CCE) </li></ul></ul><ul><ul><ul><li>To store different events (SO issues, RMA receipts, COGS Recognition) impacting COGS </li></ul></ul></ul><ul><ul><li>CST_REVENUE_RECOGNITION_LINES (CRRL) </li></ul></ul><ul><ul><ul><li>To store revenue recognition % for each OM line and accounting period </li></ul></ul></ul>
    17. 17. Lessons Learned… <ul><li>Test End to End flows (including inter-company, drop ship flows, configured items) before go-live. </li></ul><ul><li>Practice period close with appropriate reports thoroughly - Refer R12 period end procedures whitepaper 961285.1 . </li></ul><ul><li>Check the links among various apps/modules – here AR, OM, Cost Mgt, INV, and BI Publisher. </li></ul>
    18. 18. Lessons Learned… <ul><li>Test for performance with almost real volumes (if possible) </li></ul><ul><li>Test promotions (like free items) and their impact on margin </li></ul><ul><li>If RMA’s are not tied to a sales order, there is no deferred COGS. So the resulting accounting distributions for such RMA receipt is: </li></ul><ul><ul><li>Dr Inventory Valuation </li></ul></ul><ul><ul><li>Cr COGS </li></ul></ul>
    19. 19. References <ul><li>SLA Data Flow and Table Links – Metalink Note 802966.1 </li></ul><ul><li>R12: Deferred COGS account (Metalink note 416678.1 ) </li></ul><ul><li>COGS Recognition Accounting useful tips (Metalink note 1060202.1 ) </li></ul><ul><li>OM COGS Account Generator whitepaper (part of OM suite whitepapers - Metalink Note 113492.1 ) </li></ul><ul><li>Cost Management User Guide </li></ul><ul><ul><li>Part No. A75088 for 11 i </li></ul></ul><ul><ul><li>Part No. B31271 for R12 </li></ul></ul><ul><ul><li>Part No. B13635 for R12.1 </li></ul></ul>
    20. 20. <ul><li>Pl do not forget to fill-in the survey </li></ul><ul><li>Contact Information </li></ul><ul><ul><li>Dharma </li></ul></ul><ul><ul><li>Cell: +1-301-642-0003 / +1-616-916-6317 </li></ul></ul><ul><ul><li>Email: [email_address] / [email_address] </li></ul></ul>