Overview of the financial architecture in oracle e business suite release 12


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Oracle Apps Finance Functional R12 Online Training Course Details
Oracle Apps R12 Summary Course Content
Payables (AP)
Receivables (AR)
General Ledger (GL)
Fixed Assets (FA)
Cash Management (CE)
Multi Org Access Control (MOAC)
Sub Ledger Accounting (SLA)
R12 Detailed Course Content:
Basic Concepts of R12
Architectural Overview – System Administration
UI Navigation changes in R12 Vs 11i
Flex fields
Access and Controls
Functional overview of Products
Concepts of LE/OU/Chart of Accounts
Differences between R11 Vs 11i-sneek peek review
Creation of Users and assignment of Responsibilities
Profile Options and security controls

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Overview of the financial architecture in oracle e business suite release 12

  1. 1. Overview of the Financial Architecture in Oracle E-Business Suite Release 12 Online | classroom| Corporate Training | certifications | placements| support CONTACT US: MAGNIFIC TRAINING INDIA +91-9052666559 USA : +1-678-693-3475 info@magnifictraining.com www.magnifictraining.com
  2. 2. The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
  3. 3. Agenda • What We Set Out To Address • Release Twelve: The Global Release • Global Architecture • MultiOrg Access Control • Subledger Accounting • Ledgers and Ledger Sets • Ledger Considerations • Global Business Functions • Legal Entities • Accounting Set Up Manager • E-Business Tax • Advanced Intercompany • Banking Model
  4. 4. <Insert Picture Here> What we set out to address
  5. 5. National and International Laws & Regulations Actions by Competitors Changing Customer Requirements Industry Standards and Regulations Tax Codes Changing Workforce Attitudes International Reporting Standards Language and Cultural Differences 1 Doing Business Globally is Complex Top Drivers of Complexity 2 3 4 5 6 7 8 Direct impact on Finance
  6. 6. Make it Simpler to do your job Control Costs by Managing Complexity 50% Senior executives say simplification is driving the Finance agenda Major Focus Standardizing operating practices and controls 69% Standardizing policies and business rules 66% Standardizing and integrating finance systems 59% Adopting best practices 58% Optimizing the finance organization and its reporting structure 52% Reducing reliance on spreadsheets 33%
  7. 7. Make it Easier to do Your Job Transactional Activities Control Activities Decision Support, Performance Mgmt 50% Improve processes or rationalize technologies 60% Standardize policies, rules, and processes across the entire enterprise 73% Implement a shared services model * 80% Adopt best practices or simplify processes across the entire enterprise 47%26% 27% The Agile CFO, IBM Business Consulting Services, 2005 * Deloitte Consulting, 2006 How Finance Spends its Time % Yet To…
  8. 8. Controlled Transaction Entry Comprehensive and compliant processing Transparent Audit, Reconciliation & Drilldown Easy Reporting Analytics Customers: Centralize, Simplify, Standardize Work Globally, to be more competitive Think Globally, to make the right decisions Manage Globally, to lower cost and increase performance Financial Data for Management - and Compliant National Compliance Local Regulation National COA Local Calendar Corp. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar $ Joint Compliance US GAAP / IAS-IFRS Corp COA Corp CalendarA$+$ € Parent Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar €+$ +
  9. 9. WORK GLOBALLY To Be More Competitive THINK GLOBALLY To Make the Right Decisions MANAGE GLOBALLY To Lower Cost & Increase Performance How Financials Release 12 Can Help Financial Control & Reporting Credit-to-Cash Procure-to-Pay Treasury & Tax Performance Management Profitability Management Business Intelligence Integration Data Management Reporting Governance, Risk & Compliance Asset Management Travel & Expense Global: 1. Of, relating to, or involving the entire earth; worldwide: global peace; global monetary policies, etc. 2. Comprehensive; total: a... global, generalized sense of well-being
  10. 10. Financial Architecture Bank Model Tax Engine Inter Company General LedgerLedger & Ledger SetsGeneral LedgerLedger & Ledger Sets Subledger Accounting (SLA) Dr Cr ProjectsReceivablesInventory Work in Process Purchasing Payables Multi-Org Access Control 6 Major Initiatives 1. Ledger and Ledger Sets 2. Multi-Org Access Control 3. Subledger Accounting 4. Tax Engine 5. Intercompany 6. Bank Model
  11. 11. <Insert Picture Here> Multi-Org Access Control ThinkWork Manage
  12. 12. Responsibility Responsibility Responsibility Holland Legal Entity Denmark Legal Entity Belgium Legal Entity Functional Tasks  Order Management  Dunning, Collections, Billing  Requisition, Demand & Purchase Orders  Receiving & Drop Ship  Invoice Receipt, Disbursement  Customer Data Management  Accounting Setup Single Responsibility Belgium Operating Unit Holland Operating Unit Denmark Operating Unit Perform multiple tasks across operating units without changing responsibilities MOAC: Multi-Org Access Control Role based access to Operating Units
  13. 13. Purpose Built Cross OU “Desks” Shared Services Shared Service Product Reference Order Management Order Management Dunning, Collections, Billing Receivables Requisition, Demand & Purchase Orders Procurement Receiving & Drop Ship Supply Chain Management Invoice Receipt, Disbursement Payables Customer Data Management Trading Community Architecture Accounting Setup Accounting Setup Manager
  14. 14. Multiple Organization Access Control Summary of Changes • Security Profiles for data security • MO: Security Profile • List of operating units for a responsibility • Defined in HR • OU field on UI • all transactions • setup data specific to OU, like transaction type • Enhanced Multi-Org Reporting and Processing • Ledger/Ledger Set parameter on accounting reports and processes • OU parameter on other standard reports and processes • For example: submit the Payables Open Interface Import w/OU param null to import all records across all OUs
  15. 15. Multi-Org Access Control In practice Classify Organization as operating unit Select Operating Unit classification Select Operating Units In daily use Run Reports Across Operating Units
  16. 16. <Insert Picture Here> Subledger Accounting ThinkWork Manage
  17. 17. ProjectsReceivables Payables 3rd Party Systems Inventory 3rd Party Systems Centralized Accounting Policies Greater Control, Transparency and Auditability • Internal control and compliance with multiple accounting policies through user-defined accounting rules • Single source of truth for all subsystem accounting activity with a common data model and repository • Accounting, reconciliation and reporting facilitated by centralized data model • Streamline closing process with common posting engine • Auditable and transparent entries accessible with full drilldown Centralized Accounting Model, Rules, Engine and Repository Dr Cr General LedgerGeneral Ledger Work in Process Purchasing
  18. 18. Subledger Accounting Centralized Rules, Common Repository: Global Control Payables Invoice French Rules Plan Comptable French Calendar EUR Ledger Subledger Accounting Dr Cr • Faster, Easier Reconciliation • Corporate Rules = Accounting Standardization • Local Rules = Improved Local Compliance • Automate “Apples to Apples” Adjustments • Improved Audit- ability • Improved Internal Control Some Benefits • Accounting Rules • SarBox & 8th Dir. • User Editable • Subledger Daybooks (Journals) • Subledger Balancing • Reports, inquiries, open items, et cetera • Multiple Representations • Common Posting to GL Ledgers • Real time or Periodic What it is
  19. 19. Subledger Accounting Transaction Level Compliance Event Class: Invoices Event: Invoice Approved Ledger: France (EUR) GL Date: 20-Sep-2005 Description: Office supplies Type Account Description Debit Credit Asset purchase 01.9100010.100 Paris: furniture 10,000 Misc expense 01.9100020.100 Paris: supplies 400 Misc expense 01.9100020.200 Nantes: supplies 100 Misc expense 01.9100020.300 Nice: supplies 300 VAT 01.3100060.000 VAT@17% 1,836 Accounts Payable 01.7000010.000 ABC Supplies 12,636 12,636 12,636 • National Daily Journal Requirements • Internal Control: Central Definitions, Eliminate overrides • Policy Enforcement in Volume Processing • Transparent Accounting Rules • Debits & Credit at the point of the event • Automate Foreign Operation adjustments • Reconciliation Platform • “In accordance with the Underlying Records”
  20. 20. O pening Balance D ebit Credit Closing Balance SU BLED G ER ACCO U N TIN G R eceivables Custom er O ne 250,000 150,000 400,000 - Custom er Tw o 350,000 250,000 450,000 150,000 Custom er Three 100,000 1,500,000 1,400,000 200,000 Custom er Four 100,000 800,000 750,000 150,000 Custom er Five 200,000 300,000 500,000 - Total 1,000,000 3,000,000 3,500,000 500,000 Payables Vendor I (250,000) 1,000,000 900,000 (150,000) Vendor II (100,000) 75,000 50,000 (75,000) Vendor III (150,000) 725,000 775,000 (200,000) Vendor IX (250,000) 1,000,000 975,000 (225,000) Total (750,000) 2,800,000 2,700,000 (650,000) O pening Balance D ebit Credit Closing Balance G EN ER AL LED G ER Cash 100 3,500,000 2,750,000 750,100 R eceivables 1,000,000 3,000,000 3,500,000 500,000 Inventory 500,000 1,200,000 1,500,000 200,000 Assets 100,000 100,000 Prepaym ents 1,000 1,000 Payables (750,000) 2,800,000 2,700,000 (650,000) Accruals (250,000) 50,000 (300,000) Shares (100,000) (100,000) Previous Results (501,100) (501,100) Balance Sheet - 10,500,000 10,500,000 - Sales 3,000,000 (3,000,000) CO GS 1,500,000 1,500,000 R&D 300,000 300,000 S&M 300,000 300,000 G&A-Fin 300,000 300,000 G&A-IT 150,000 150,000 G&A-HR 150,000 150,000 Period Incom e 300,000 300,000 Incom e Statem ent - 24,000,000 24,000,000 - Ticked & Tied General Ledger SLA Detail SLA Controls that GL Balances and SLA Balances tie, and that both tie to the document (invoice, payment, etc.) sources
  21. 21. US GAAP US COA US Calendar EUR Ledger B French Rules Plan Comptable French Calendar EUR Ledger A Multiple Accounting Representations Global Compliance – Statutory and Stock Market Subledger Accounting Single subledger transaction can create multiple accounting representations and in multiple currencies Dr Cr Payables Invoice Chose to use an alternative Ledger - or just an Adjustment Ledger or segment or Multiple Ledgers
  22. 22. SLA keeps the Subledgers & GL tied out Keep the auditors happy! GL Journal Entries and BalancesTransactions (& adjustments) Subledger Applications Accounting Events Reconciled: Docs, SLA, GL in synch Accounting Configurations Journal Entry Setup Accounting Program Subledger Journal Entries Subledger Balances Subledger Accounting Service General Ledger
  23. 23. <Insert Picture Here> Ledgers and Ledger Sets ThinkWork Manage
  24. 24. Ledger One Repository of Financial Truth US GAAP US COA US Calendar EUR Ledger B Reporting Currency Implements the 4 C’s: Accounting Method Chart of Accounts Calendar Currency The balance on Creditors (COA) is 4.2M Eur (Currency) on March 31, 2006 (Calendar) according to IAS/IFRS definitions (Accounting Method)
  25. 25. Ledger Sets US GAAP US COA US Calendar EUR Ledger B French Rules Plan Comptable French Calendar EUR Ledger A Reporting Currency
  26. 26. Ledger Sets Ledger Set Key benefits to many Ledgers in one set • Decision-driving business information always available • Simpler processing and General Ledger management • Data and definitions that can be shared and secured US GAAP US COA US Calendar USD Ledger C US GAAP US COA US Calendar EUR Ledger B French Rules Plan Comptable French Calendar EUR Ledger A Share: Chart of Accounts Calendar Ledger D Reporting Currency US GAAP US COA US Calendar AUD
  27. 27. Currency in Release 12 • Transaction Currencies • Accounting Currency in Primary Ledger • Reporting Currency in Primary Ledger • More Accounting Currencies in Secondary Ledgers • For every transaction OR • For SLA Posting level / GL activity level • Balance level Translation or Remeasurement in Ledgers – within Ledger sets, run at one click • Balance & Activity level Translation or Remeasurement in Financial Consolidation Hub • Enhanced Revaluation • [Functional Currency term dropped: conflicts with IAS 21 / FAS 52]
  28. 28. Data Access, Definition Access • Data Access Sets • Grant and tailor access to Ledgers and Balancing Segment Values (i.e. Companies, Stores, Branches, etc.) Accountant Privileges France Ledger Canada Ledger US Ledger GL Manager View Write • Definition Access Sets – separate from data security • Share, restrict definitions; privileges to view, modify, etc.
  29. 29. <Insert Picture Here> Ledger Considerations
  30. 30. Ledger Sets – Work them your way Corporate Ledger Set adjustments eliminations UK Ledger Set US Ledger Set Legal Ledger UK1 Legal Ledger UK2 Adj Ledger Corporate Adjustment Ledger UK Adjustment Ledger US Legal Ledger US1 Legal Ledger US3 Legal Ledger US2 Management Ledger Set • Automate GAAP / IAS adjustments in an adjusting ledger • Eliminate within a Set with GCS • Consolidate Formally in FCH • Map from a non-conforming COA with a GCS Ledger • Set of 26 Ledgers in one country • Euro Zone in One Ledger Set • My Corporate Set in US GAAP • Statutory Set for Country Y Subs • Division X Worldwide Ledger Set
  31. 31. When to use a Secondary Ledger, an Adjusting Segment or an Adjusting Ledger? Adjusting Segment Adjusting Ledger Secondary Ledger Corp. wants GL balances per Parent GAAP Corp. wants “Just the adjustments, thank you” Corp. wants a complete Parent GAAP & Currency edition of the Sub’s books Subsidiary books are pretty similar to parents Mapping gets us most of the way to Parent Subsidiary books are quite alien to parents No inventory Inventory is the big difference Inventory is one of the big differences National chart of accounts is clearly related to IAS IFRS or GAAP balances Manageable series of reclassifications National chart of accounts is radically different from corporate National Controllership - Corp GAAP known Regional Controllership - Corp GAAP administered Parent Controllership Mexico plant, US parent Balances are enough (Full drill down available) See they’ve been properly adjusted to our rules Every petty cash slip
  32. 32. Legal Entity: Your Registered Companies Legal Authorities Countries, States, Local, Agencies, Taxation, Registrars, Regulators... Legal Entities Registered Companies, Funds, Partnerships… Inc. LLC. Ltd. SA. GmBH. Etc. “exist in the outside world” Management Orgs Divisions, LOBS, Plants, Cost Centers, Whatever = “Decision Making Tags” Regulates Managed & analyzed by Public Company (ultimate parent) Public Company Subsidiary Company (regional parent) Subsidiary Company (business parent) Subsidiary Company Subsidiary Company Subsidiary Company Subsidiary Company Subsidiary Company • Parent companies (LEs) “own or control” subsidiaries (LEs) • No outside ring - must pick an LE • LEs create commercial transactions Complies
  33. 33. LEs: Why and What? • LEs pay the taxes - need tax registrations • Trade between LEs needs intercompany • LEs own the money and bank accounts • LEs file the accounts, take care of accounting • LEs comply with whatever needs compliance: “legal” in LE Why We Care • Addresses, Officers, etc. • Enabled First Party stamp • Added Establishments: map Registrations to Authorities • GRE/LE not touched • Authorities as TCA parties • LE Configurator What we’ve done
  34. 34. Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses Tabulate your Registered Companies and other forms of LE
  35. 35. Where LE fits in… Transaction Taxes - Complies & Files, Pays Actual Registered Companies, etc. Et Cetera, 11iMaintains its Subledger Documents in many OUs Default Legal Context (DLC) Accounts for itself in a Ledger or BSVs Legal Entity Ledger Business Group GRE/LE Operating Units Registrations with Authorities Files Files Establishments Registrations with Authorities Legal Entity: Vehicle for compliance Exists Locally
  36. 36. Transaction Taxes - Complies & Files, Pays Actual Registered Companies, etc. Et Cetera, 11iMaintains its Subledger Documents in many OUs Default Legal Context (DLC) Accounts for itself in a Ledger or BSVs Legal Entity Ledger Business Group GRE/LE Operating Units Registrations with Authorities Files Files Establishments Registrations with Authorities Exists Locally Legal Entity: Vehicle for compliance Get the LE Right Compliance Falls Into Place Let’s put LEs to work • Isolate legal compliance from management needs • Track your registered companies • Make your compliance flow more easily Accounting Setup Manager Assign books, bookkeeping rules and currency management to your registered companies EBusiness Tax Have your registered companies calculate, file, and pay the transaction taxes they owe Intercompany Do business between and across your registered companies with full legal documentation Bank Model Have your registered companies use their money to pay their bills, et cetera
  37. 37. <Insert Picture Here> Accounting Setup Manager (ASM) ThinkWork Manage
  38. 38. Define Multiple Ledgers for Rules & Currencies Define Legal Entities & Associated Rules One Place to manage Your Global Accounting Rules, Currencies, Ledgers, And Ledger SetsSet Accounting Rules for All EBS Apps Ensure Complete & Accurate Setup via Online Checklist Centralized Set-up Accounting Setup Manager
  39. 39. <Insert Picture Here> E-Business Tax ThinkWork Manage
  40. 40. Automation • Tax content for certain countries • Vertex and Taxware integration for U.S. • Integrity checks during setup process Constant Changes in Tax Laws and Regulations • Date effective setup • Tax rules flow for change or creating rules • Tax simulator for setup, rules, and transactions Business Needs Solution Local Compliance • Tax registrations and tax reporting codes • Tax lines determine applicable taxes • Configurable tax reporting templates Centralized Global Tax Information Visibility • Single set up for all Oracle applications • Use of E-Business Suite components such as trading partner geography, trading partner classification, legal entity, inventory item categorization, and accounting event.
  41. 41. Tax Transactions Taxes, Rules Oracle E-Business Tax Processing taxes for transactions and reporting Determine Regimes Taxable Basis Calculate Tax Amount Tax Status & Rate Applicable Taxes Single Interface for Transactions Transparent Integration with Tax Partner Services Parties Places Products Processes Payables Receivables Purchasing Transactions Sales Orders … Tax Reports - PDF, HTML, RTF - Security enabled  Extensible  Service Oriented Architecture  Compliance, Assurance  Efficiency, Global Visibility
  42. 42. <Insert Picture Here> Advanced Intercompany (AGIS) ThinkWork Manage
  43. 43. Web UI Open Interfaces / API Excel (Web ADI) Advanced Global Intercompany System Subledger Invoices & Documents  Generate subledger invoices  Control transaction entry with Intercompany Calendar  Fully Configurable Approval Rules  Flexible Security Model  Centrally defined Intercompany Accounts Online Reconciliation Reporting XML Publisher Reports Advanced Intercompany System Address the Top Barrier to a Fast Close Subledger Accounting Dr Cr General Ledger Receivables Payables
  44. 44. Inter Company AGIS at Work Rebilling a Corporate Cost from an USA HQ California Company New York Company Illinois Company Italy Company France Company Subledger Invoices & Documents General Ledger Entries • GL Entries created for US subsidiaries • AP and AR Invoices created for France and Italy
  45. 45. <Insert Picture Here> Banking Model ThinkWork Manage
  46. 46. • Bank account is now associated with LE entity rather than Operating Unit • Single bank account serves multiple Operating Units • Any and all Operating Units associated with a ledger can be permitted to use the bank account Assets ProjectsReceivables PayablesPurchasing ProjectsReceivables Payables Inventory Plus  Centralized Credit Card Model  Credit Card Encryption  Supplier & Customer Banks in TCA Centralized Banking Shared Services Disbursements Work in Process LE OU A OU B OU C
  47. 47. Bank Model: Example of What You Can Do Pay invoices from different OUs with 1 instruction OU A OU B OU C Bank Single Payment Instruction Invoices Payments Sub Ledger Accounting • New Payments Module • New Bank Model • New Bank & Credit Card Features
  48. 48. Banks Legal Entity Operating Units
  49. 49. <Insert Picture Here> Sharing Services ThinkWork Manage
  50. 50. Shared Service Infrastructure (Serves Informal and Formal) Organizational Access Cross Org Processes Banking Model Inter Unit Accounting All Together: Easier To Share Services Central processing, Distributed impact SSCs (Formal) SLAs & Tax Inter-LE Formal SSCs At home or overseas Call Centers, Outsourcing Offshoring, SAS 70, On Demand Informal Service Sharing Process Efficiency Decentralized Depts. Centralized Depts.. Normal Business Practice Ledgers & Ledger Sets Ledgers with Balancing Segments MOAC across OUs Intercompany Bank Model Tax Ledger and Ledger Sets Subledger Accounting Intercompany, Tax Engine MOAC across LEs, Bank Internal Controls Manager
  51. 51. • Work Globally • Global Order Desk • Global Procurement • Global Billing • Global Dunning • Think Globally • Global Ledger Sets – worldwide insight • Global Reporting • Manage Globally • Global Accounting Rules • Global Set-up • Global Integration What the Architecture Gets You Release 12 Subsidiary LEs…. …account for themselves in Ledgers, and… Ledger Set Company CompanyCompany ProjectsReceivablesInventory Work in Process Purchasing Payables Multi-Org Access Control manage their subledger data in Operating Units
  52. 52. Share Services, maintain privacy Exploit Cross-OU Processes Yesterday: An LE Group in 1 SoB with 1 OU - no partitioning R12: Introduce partitioning without sacrificing processes Assets ProjectsReceivables PayablesPurchasing ProjectsReceivables Payables Inventory Work in Process Ledgers in Ledger Sets, New OUs MOAC Inventory Work in Process Assets ProjectsReceivables PayablesPurchasing ProjectsReceivables Payables Inventory Work in Process
  53. 53. MOAC, +300 Features SLA, Tax Ledger Sets, Ledgers XML Publisher Reporting Profitability Mgr, EPB Subledger Release 12: The Business Release Work Globally, to be more competitive Think Globally, to make the right decisions Manage Globally, to lower cost and increase performance DBI, FCH Intercompany, Bank, Payments General Ledger Transactions OICM TCA, LE National Compliance Local Regulation National COA Local Calendar Corp. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar $ Joint Compliance US GAAP / IAS-IFRS Corp COA Corp CalendarA$+$ € Parent Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar €+$ +
  54. 54. Q U E S T I O N S
  55. 55. Should you require any further information please do not hesitate to contact us • http://www.oraclecourseonline.com • oracle financial online training contact us: • info@magnifictraining.com or +919052666559 • By Real Time Experts from Hyderabad, • Bangalore • ,India,USA,Canada,UK, Australia,South • Africa.
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