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Sla and cost acctg

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Oracle SLA and Acctg entries

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Sla and cost acctg

  1. 1. Cost Accounting As You Want It ─ EBS R12 Cost Accounting with SLA Collaborate09 May 3 - 7, 2009 Diane Streubel diane.streubel@schreiberfoods.com Schreiber Foods Manager for Cost & Systems Development OAUG Process MFG Cost Sub-Committee Lead Douglas Volz davolz@comcast.net Douglas Volz Consulting, Inc. President / Managing Director OAUG Discrete MFG Cost Sub-Committee Lead
  2. 2. Agenda • Oracle Discrete Costing SLA enhancements • Oracle Process Costing MAC transitioning to SLA • Oracle SLA Concepts • Case example: Product Line Accounting Slide – 2 Cost Accounting As You Want It ─ EBS R12 and SLA
  3. 3. Oracle Discrete Costing SLA enhancements: Increased Flexibility Release 11i account recognition “pain points” eliminated by Subledger Accounting (SLA): • SLA removes limitations for recording COGS and Revenue (Cost Account Generator/workflow and A/R AutoAccounting are still in use) • Gives you the ability to record inventory and WIP accounts with more flexibility Slide – 3 Cost Accounting As You Want It ─ EBS R12 and SLA
  4. 4. Oracle Discrete Costing SLA enhancements: Increased Flexibility Flexible variance account recognition for: – Invoice price and purchase variances – Average cost adjustment – Standard cost adjustment – Manufacturing variances – Account aliases – Freight charges – Most other inventory, manufacturing and related account entries Slide – 4 Cost Accounting As You Want It ─ EBS R12 and SLA
  5. 5. Oracle Process Costing: MAC transitioning to SLA Slide – 5 Cost Accounting As You Want It ─ EBS R12 and SLA
  6. 6. OPM 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 Slide – 6 Cost Accounting As You Want It ─ EBS R12 and SLA
  7. 7. OPM MAC transitioning to SLA 11i OPM GMI (OPM Inventory) Purchasing Order GMD, GME Management Cost Setup Calculate Cost Store Costs MAC Oracle GL Slide – 7 Cost Accounting As You Want It ─ EBS R12 and SLA
  8. 8. OPM MAC transitioning to SLA R12 OPM Oracle Purchasing Order Inventory Management GMD, GME Cost Setup Calculate Cost Store Costs SLA Oracle GL Slide – 8 Cost Accounting As You Want It ─ EBS R12 and SLA
  9. 9. 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. Slide – 9 Cost Accounting As You Want It ─ EBS R12 and SLA
  10. 10. OPM MAC transitioning to SLA Interface General Ledger 11i OPM Subledger GL Export Journal Import Journal Posting For G/L integration, discrete costing works the same as OPM costing Slide – 10 Cost Accounting As You Want It ─ EBS R12 and SLA
  11. 11. OPM MAC transitioning to SLA PPaayyaabblleess RReecceeiivvaabblleess PPrroojjeeccttss Oracle Subledger Accounting Oracle General Ledger OPM R12 OPM For G/L integration, discrete costing works the same as OPM costing Slide – 11 Cost Accounting As You Want It ─ EBS R12 and SLA
  12. 12. OPM MAC transitioning to SLA OPM MAC Completed material and/or resource transactions. OPM Costing Engine generates costs. OPM Subledger process processes these transactions to create Journal entries SLA Completed material and/or resource transactions. OPM Costing Engine generates costs. Cost Pre-processor will create accounting Events SLA accounting program processes the events to create the journal entries Slide – 12 Cost Accounting As You Want It ─ EBS R12 and SLA
  13. 13. OPM MAC transitioning to SLA OPM MAC SLA COMMENTS Fiscal Policy Retained with few modifications Event Fiscal Policy Retained with few modifications Source Process Category Event Event Entity Sub-Event Event Class Account Titles Journal Line Types (JLT) Accounting Template Application Accounting Definitions (AAD) Users can define their own AADs or modify seeded information Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs Priorities and Account Mapping Account Derivation Rules (ADR) More flexible. Mapping can be done at Accounting flexfield level as well as segment level Test Mapping Test Accounting Builder (TAB) OPM Currency, OPM Ledger, OPM Exchange Rates Use GL setups Slide – 13 Cost Accounting As You Want It ─ EBS R12 and SLA
  14. 14. OPM MAC SLA COMMENTS Test and Actual Subledger Accounting Draft and Final Accounting Subledger Program Accounting Pre-Processor Run Subledger for multiple valuation/cost methods for a ledger Supports multiple valuation methods In OPM there can only be one representation at a time. SLA supports multiple representations at the same time Run Subledger process for a functional area Run Pre-Processor by Process Category Flexible. User can have any number of categories. Assigned to one or more event classes Detailed Subledger Report Is retained and has been modified to use SLA repository OPM MAC transitioning to SLA Slide – 14 Cost Accounting As You Want It ─ EBS R12 and SLA
  15. 15. 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 Slide – 15 Cost Accounting As You Want It ─ EBS R12 and SLA
  16. 16. OPM MAC transitioning to SLA • Historical OPM Subledger distribution data not migrated to SLA – Data refers to OPM Inventory • Historical data available in query mode Slide – 16 Cost Accounting As You Want It ─ EBS R12 and SLA
  17. 17. OPM MAC transitioning to SLA Update the Account Derivation Rule conditions. Ex: Add Item/Item Class/Organizations Validate the Application Accounting Definition Run OPM Accounting Pre-Processor Run OPM Accounting Pre-Processor Run Create Accounting in Draft mode Check Create Accounting report and Journal Entries report Run Create Accounting in Final mode to create GL accounting entries Slide – 17 Cost Accounting As You Want It ─ EBS R12 and SLA
  18. 18. OPM MAC transitioning to SLA • NO LOSS of functionality by moving to SLA model • New menus created under OPM Financials for new 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. Slide – 18 Cost Accounting As You Want It ─ EBS R12 and SLA
  19. 19. Oracle SLA Concepts Slide – 19 Cost Accounting As You Want It ─ EBS R12 and SLA
  20. 20. Subledger Accounting Method (SLAM) Setup Steps 1. Determine sources of information for your account derivation rules (understand the underlying business logic and data) 2. Create account derivation rules (and optional mapping sets) 3. Create journal line types 4. Create a journal lines definition (link the journal line type to the account derivation rule) 5. Create an application accounting definition (copy an existing definition and modify it and then validate it) 6. Create a subledger accounting method (SLAM) (copy “standard accrual” and create a new one) 7. Assign the new SLAM to a Ledger Slide – 20 Cost Accounting As You Want It ─ EBS R12 and SLA
  21. 21. Key Concepts for SLA Transaction Types 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 EVENT TYPE The most granular level of business event which has accounting impact Slide – 21 Cost Accounting As You Want It ─ EBS R12 and SLA
  22. 22. Setup and Process JOURNAL ENTRY SETUPS Define/copy and modify account derivation rules Define/copy and modify journal line types Define/copy and modify descriptions PROCESS Enter Transaction(s) Cost Manager Create Accounting* Transfer Journal Entries to GL *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. Slide – 22 Cost Accounting As You Want It ─ EBS R12 and SLA
  23. 23. Transactions Accounting Events Accounting Configurations Cost Management SLA Subledger Journal Entries Subledger Balances Accounting Program Journal Entry Setup GL Journal Entries and Balances Setup and Process Slide – 23 Cost Accounting As You Want It ─ EBS R12 and SLA
  24. 24. Basic Table Structure for SLA Same Cost Transaction Accounting Tables SLA Accounting Tables Enter Transaction(s) Cost Manager Transaction Accounting Tables XLA_EVENTS XLA_AE_HEADERS XLA_AE_LINES XLA_DISTRIBUTION _LINKS Create Accounting Slide – 24 Cost Accounting As You Want It ─ EBS R12 and SLA GL_ INTERFACE G/L Tables GL_LEDGERS GL_JE_BATCHES GL_JE_HEADERS GL_JE_LINES One Common Accounting Subledger Table
  25. 25. Case Example: Product Line Accounting for Discrete and Process Costing Slide – 25 Cost Accounting As You Want It ─ EBS R12 and SLA
  26. 26. Example: Purchase Price Variance product Line Say there are 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 (works for Discrete and Process Costing) – Category Accounting – R11i Cost Accounting migrated to SLA in R12.1 (only works with Discrete Costing) Slide – 26 Cost Accounting As You Want It ─ EBS R12 and SLA
  27. 27. Cost/SLA Mapping Set Capability (for Discrete and Process Costing) Slide – 27 Cost Accounting As You Want It ─ EBS R12 and SLA
  28. 28. Cost SLA Mapping Set Capability: PPV by product Line • Product Line Setup Steps Using SLA mapping set 1. Create the product line information in your item master 2. Enter your SLA account derivation rule for Purchase Price Variance accounts 3. Associate the new account derivation rule to your Journal Line Type 4. Associate the Application Accounting Definition with Subledger Accounting Method Slide – 28 Cost Accounting As You Want It ─ EBS R12 and SLA
  29. 29. Cost/SLA Mapping Set Capability • Product Line Accounting – Descriptive flexfield Slide – 29 Cost Accounting As You Want It ─ EBS R12 and SLA
  30. 30. Cost/SLA Mapping Set Capability • Product Line Accounting – Item Descriptive FF Slide – 30 Cost Accounting As You Want It ─ EBS R12 and SLA
  31. 31. Cost/SLA Mapping Set Capability • Assign product line code to the inventory item TIP: you can use an existing product line category set to populate your item master DFF, you do not need to enter this one-by-one Slide – 31 Cost Accounting As You Want It ─ EBS R12 and SLA
  32. 32. Cost/SLA Mapping Set Capability • Mapping set – Account Derivation Rule Slide – 32 Cost Accounting As You Want It ─ EBS R12 and SLA
  33. 33. Cost/SLA Mapping Set Capability • Mapping set – Account Derivation Rule Slide – 33 Cost Accounting As You Want It ─ EBS R12 and SLA
  34. 34. Cost/SLA Mapping Set Capability • SLA Journal Line / Derivation Rule Slide – 34 Cost Accounting As You Want It ─ EBS R12 and SLA
  35. 35. Cost/SLA Mapping Set Capability • Associate Journal Lines Definition to the Event Class Don’t forget to validate your new AADs Slide – 35 Cost Accounting As You Want It ─ EBS R12 and SLA
  36. 36. Cost/SLA Mapping Set Capability • Note the same ADR is usable for Standard Cost Update Slide – 36 Cost Accounting As You Want It ─ EBS R12 and SLA
  37. 37. Cost/SLA Mapping Set Capability • Note the same ADR is usable for Standard Cost Update Slide – 37 Cost Accounting As You Want It ─ EBS R12 and SLA
  38. 38. Cost/SLA Mapping Set Capability • Associate SLA Definition to the SLA Method/Ledger Slide – 38 Cost Accounting As You Want It ─ EBS R12 and SLA
  39. 39. Cost/SLA Mapping Set Capability • The material subledger from 11i still exists Inventory Inventory PPV Receiving Matl Overhead Absorption Slide – 39 Cost Accounting As You Want It ─ EBS R12 and SLA
  40. 40. Cost/SLA Mapping Set Capability • SLA Entries That Go to Your G/L Slide – 40 Cost Accounting As You Want It ─ EBS R12 and SLA
  41. 41. Cost/SLA Mapping Set Capability • For the Standard Cost Updates That Go to Your G/L Slide – 41 Cost Accounting As You Want It ─ EBS R12 and SLA
  42. 42. Category Accounting – Discrete Cost Accounting migrated to SLA in R12.1 Slide – 42 Cost Accounting As You Want It ─ EBS R12 and SLA
  43. 43. Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” Slide – 43 Cost Accounting As You Want It ─ EBS R12 and SLA
  44. 44. Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes Slide – 44 Cost Accounting As You Want It ─ EBS R12 and SLA
  45. 45. Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes • Create category set Slide – 45 Cost Accounting As You Want It ─ EBS R12 and SLA
  46. 46. Product Line Category 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 Slide – 46 Cost Accounting As You Want It ─ EBS R12 and SLA
  47. 47. Product Line Category Accounting • Assign product line category accounts Slide – 47 Cost Accounting As You Want It ─ EBS R12 and SLA
  48. 48. Product Line Category Accounting • Account Derivation Rule would have used a source directly Slide – 48 Cost Accounting As You Want It ─ EBS R12 and SLA
  49. 49. Product Line Category Accounting • Summary Notes – Product line accounting can be achieved in many ways without using the 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 desired using BI Publisher. Slide – 49 Cost Accounting As You Want It ─ EBS R12 and SLA
  50. 50. Discrete Inventory 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. Slide – 50 Cost Accounting As You Want It ─ EBS R12 and SLA
  51. 51. Acknowledgements of assistance: • Herve Yu – Oracle Cost Management Development Manager • Audrea Auld – Oracle University Senior Financials Instructor • Russell Bayles – Oracle Principal Product Strategy Manager • Michel Basinet – Oracle Director Fusion Costing Product Strategy Slide – 51 Cost Accounting As You Want It ─ EBS R12 and SLA
  52. 52. Additional information available from: • R12 Oracle Subledger Accounting – Implementation Guide • R12 Oracle Cost Management – User Guide • R12 Oracle Process Manufacturing Cost Management - User Guide Slide – 52 Cost Accounting As You Want It ─ EBS R12 and SLA
  53. 53. TTHHAANNKK YYOOUU Slide – 53 Cost Accounting As You Want It ─ EBS R12 and SLA
  54. 54. Appendix • Professional Background for Diane Streubel • Professional Background for Douglas Volz Slide – 54 Cost Accounting As You Want It ─ EBS R12 and SLA
  55. 55. Diane Streubel Professional Background Diane Streubel is the Cost & Systems Development Manager for Schreiber Foods. A process manufacturing company, Schreiber is the world’s largest supplier of private label dairy products and has been using Gemms/OPM for the past 13 years. Diane has been involved with OPM from it’s inception at Schreiber with Gemms 3.1. She has been involved in implementing additional products within Oracle at Schreiber and has played a key role in all of the upgrades within the company. Schreiber Foods is currently at 11.5.10. Diane is also actively involved in the Process Manufacturing SIG. She has been the Costing Sub- Committee chairperson and the Membership chairperson for the Process SIG since 2001. As the Process SIG Enhancements chairperson, she has worked with the Process Manufacturing team at Oracle to develop and coordinate an Enhancements Voting process each year since 2001. She has been on the paper selection team for OAUG conferences for the past four years. Diane has also presented numerous papers at OpenWorld and OAUG conferences over the past several years on OPM Costing topics. Core Expertise • Upgrades for Process Manufacturing • Project Management • Core manufacturing processes  OPM Cost Management  OPM Inventory  OPM Formulas Experience Within Schreiber Foods: • Responsible for OPM Costing and Inventory testing and validations for all upgrades • Develop and improve processes within Company related to Costing, Inventory and Formulas • Establish Cost Accounting methods, cost and production formula structures, inventory and production transaction processes and system documentation. • Train Finance employees at 17 plant facilities on OPM processes Slide – 55 Cost Accounting As You Want It ─ EBS R12 and SLA
  56. 56. Douglas Volz Professional Background Doug Volz is a Senior Architect and Advisor for Oracle Application projects, with a particular interest in Project and Cost Management. He has 30 years experience, including 5 years in Oracle Development (co-designing Oracle Cost Management), 12 years in industry for manufacturing and distribution companies, and 14 years consulting. His Manufacturing and Cost systems experience covers project management, software design/development, delivery and consulting services, for both Oracle Corporation, and multiple international consulting firms. Prior to his systems career, Mr. Volz also held numerous management accounting positions for telecommunications, defense, and electronics firms. In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currency with global footprints. Countries include US, Mexico, UK, Netherlands, Belgium, Taiwan, P.R.O.C., Norway, Japan and Germany. Doug leads the Cost Sub-Committee, for the OAUG Discrete Manufacturing Special Interest Group. He also advises and participates on the Oracle Customer Advisory Board for Fusion Costing and for the Fusion SCM Strategy Council. Core Expertise • Multi-organization, Multi-currency ERP Implementations • Project Management and Senior Project Advisor • Core manufacturing processes  Cost Management  Inventory  Bills of Material  WIP • Systems Integration and Data Conversions Experience Sample of clients served: • Beckman Coulter (US) • Onninen AS (Norway) • Matsushita (UK, Mexico) • NTL (now Virgin Media) • Idec Izumi (Japan) • Motorola (UK, US) • Logitech (US, Taiwan, P.R.C.) Slide – 56 Cost Accounting As You Want It ─ EBS R12 and SLA
  57. 57. End of Presentation Slide – 57 Cost Accounting As You Want It ─ EBS R12 and SLA

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