Oracle Accounting Flow

1. Flow of Accounting entries in Oracle Applications
By
Sivakumar Ganesan
E-Mail:sivakumar3009@gmail.com

2. AgendaAgenda
• Understanding the Accounting Flow in OracleUnderstanding the Accounting Flow in Oracle
ApplicationsApplications
• Transaction FlowTransaction Flow
• Modules CoveredModules Covered
• Set up required in Oracle ApplicationsSet up required in Oracle Applications
• Defaulting AccountsDefaulting Accounts
• Posting to General Ledger from Sub-LedgerPosting to General Ledger from Sub-Ledger
• Posting in General LedgerPosting in General Ledger
• Viewing the Trial BalanceViewing the Trial Balance

3. Understanding the flow of Accounting inUnderstanding the flow of Accounting in
Oracle ApplicationsOracle Applications
Cost MgmtCost MgmtCash MgmtCash Mgmt
General LedgerGeneral Ledger
PurchasingPurchasing
AccountingAccounting
EngineEngine
AssetsAssets
PayablesPayables
ReceivablesReceivables
ProjectsProjects
InterfacesInterfaces
with GLwith GLOther LegacyOther Legacy
SourcesSources
SAP

4. Transaction FlowTransaction Flow
• Create Opening Balances in General ledger and SubledgerCreate Opening Balances in General ledger and Subledger
• Place Purchase orderPlace Purchase order
• Receive the Materials into StoresReceive the Materials into Stores
• Receive the Supplier Invoice from SupplierReceive the Supplier Invoice from Supplier
• Match the Supplier invoice with PO and make PaymentMatch the Supplier invoice with PO and make Payment
• Issue Materials to ProductionIssue Materials to Production
• Complete the Production Order and Build InventoryComplete the Production Order and Build Inventory
• Ship the Material to CustomerShip the Material to Customer
• Raise invoice on CustomerRaise invoice on Customer
• Receive Cash from CustomerReceive Cash from Customer
• Reconcile the Payment and Receipt in Cash ManagementReconcile the Payment and Receipt in Cash Management
• Post Sub Ledger Transactions into GLPost Sub Ledger Transactions into GL
• Run Trial Balance and Financial Statements (Profit & LossRun Trial Balance and Financial Statements (Profit & Loss
Account & Balance SheetAccount & Balance Sheet

5. Modules CoveredModules Covered
• Oracle PurchasingOracle Purchasing
• Oracle PayablesOracle Payables
• Oracle InventoryOracle Inventory
• Oracle Manufacturing (WIP Accounting)Oracle Manufacturing (WIP Accounting)
• Oracle Order ManagementOracle Order Management
• Oracle ReceivablesOracle Receivables
• Oracle Cash ManagementOracle Cash Management
• Oracle General LedgerOracle General Ledger

6. Cost CalculationCost Calculation
FG/Sub Assembly
Purchased Item/
Sub Assembly Cost
Routing
Operations
Department
Resources Rate
Usage
Rate X Usage
Operations Cost
Men, Money, Machine
Production / Service Departments
Item Cost
Total Cost

7. Set up Required in Oracle ApplicationsSet up Required in Oracle Applications
• Each Module has a Parameter screen or Controlling ScreenEach Module has a Parameter screen or Controlling Screen
through which the Accounts are Defaultingthrough which the Accounts are Defaulting
– Ex (Inventory Organization for Materials in InventoryEx (Inventory Organization for Materials in Inventory
Module, Receiving options for Inventory Receipt inModule, Receiving options for Inventory Receipt in
Purchasing Module, Financial Options for Payables)Purchasing Module, Financial Options for Payables)
• There are other places also where we can define the AccountsThere are other places also where we can define the Accounts
and there is an inbuilt hierarchy within the Applications as toand there is an inbuilt hierarchy within the Applications as to
where from the Accounts need to be defaultedwhere from the Accounts need to be defaulted
• Each Module Needs to set the Accounts for an AccountingEach Module Needs to set the Accounts for an Accounting
Event Happening in that ModuleEvent Happening in that Module

8. Defaulting Accounts in Case ofDefaulting Accounts in Case of
PurchasingPurchasing

9. Defaulting Accounts in Case of PurchasingDefaulting Accounts in Case of Purchasing

10. Posting to General Ledger from Sub-LedgerPosting to General Ledger from Sub-Ledger
• Sub-Ledger Accounting Entries are Transferred to GeneralSub-Ledger Accounting Entries are Transferred to General
Ledger Interface table through the Concurrent ProgramsLedger Interface table through the Concurrent Programs
• We can schedule the concurrent Process to Transfer Data to GLWe can schedule the concurrent Process to Transfer Data to GL
instead of manually running the concurrent Programs.instead of manually running the concurrent Programs.
• You can run the Process Daily, Weekly, MonthlyYou can run the Process Daily, Weekly, Monthly
• You can transfer the data either inYou can transfer the data either in
– Summary or (Total Transaction for an Account CombinationSummary or (Total Transaction for an Account Combination
per day)per day)
– Detail (Each Transaction)Detail (Each Transaction)

11. Posting in General LedgerPosting in General Ledger
• This Process Transfers Data from GL Interface Tables toThis Process Transfers Data from GL Interface Tables to
GL Main TablesGL Main Tables
– (i.e) From GL_JE_INTERFACE table to(i.e) From GL_JE_INTERFACE table to
GL_JE_HEADERS and GL_JE_LINESGL_JE_HEADERS and GL_JE_LINES
• Once the Data is Posted No further changes to the Data isOnce the Data is Posted No further changes to the Data is
permittedpermitted

12. Accounting Events – Oracle PurchasingAccounting Events – Oracle Purchasing
• Oracle PurchasingOracle Purchasing
Inventory AccrualsInventory Accruals
Transfer to Sub InventoryTransfer to Sub Inventory
Purchase Price VariancePurchase Price Variance
Invoice Price Variance (IPV) and ExchangeInvoice Price Variance (IPV) and Exchange
Rate VarianceRate Variance
Return to Supplier From Receipt of MaterialsReturn to Supplier From Receipt of Materials
Inter-organization TransferInter-organization Transfer

13. Accounting Events – Oracle PayablesAccounting Events – Oracle Payables
• InvoicesInvoices
InvoiceInvoice
Invoice adjustmentInvoice adjustment
Invoice cancellationInvoice cancellation
Prepayment applicationPrepayment application
Prepayment un-applicationPrepayment un-application
• PaymentsPayments
PaymentPayment
Future dated payment maturityFuture dated payment maturity
Payment adjustmentPayment adjustment
Payment cancellationPayment cancellation
Payment clearingPayment clearing
Payment un-clearingPayment un-clearing

14. Accounting Events – ManufacturingAccounting Events – Manufacturing
(WIP)(WIP)
• Oracle InventoryOracle Inventory
Material Transfer from Stores to WIPMaterial Transfer from Stores to WIP
WIP Completions and Material ConsumptionWIP Completions and Material Consumption
EntryEntry
Operations Completion EntryOperations Completion Entry
Finished Goods Stock Creation EntryFinished Goods Stock Creation Entry
Inter-Org TransferInter-Org Transfer
Sub-Inventory TransferSub-Inventory Transfer

15. Accounting Events – Order ManagementAccounting Events – Order Management
• Order ManagementOrder Management
Cost of Goods Sold Entry in Inventory ModuleCost of Goods Sold Entry in Inventory Module

16. Accounting Events – Oracle ReceivablesAccounting Events – Oracle Receivables
• TransactionsTransactions
InvoicesInvoices
Debit MemosDebit Memos
CommitmentsCommitments
Invoices Against a DepositInvoices Against a Deposit
Invoice Against guaranteeInvoice Against guarantee
Credit MemosCredit Memos
On Account Credit MemoOn Account Credit Memo

17. Accounting Events – Oracle ReceivablesAccounting Events – Oracle Receivables
• ReceiptsReceipts
Unapplied ReceiptsUnapplied Receipts
On account ReceiptOn account Receipt
Applied ReceiptApplied Receipt
Reverse ReceiptReverse Receipt
Charge backCharge back
AdjustmentsAdjustments
Miscellaneous ReceiptsMiscellaneous Receipts
Bills ReceivablesBills Receivables

18. Accounting Event – Cash ManagementAccounting Event – Cash Management
• Oracle Cash ManagementOracle Cash Management
Cash Receipt ClearingCash Receipt Clearing
Cash Payment ClearingCash Payment Clearing
 JournalsJournals
Open InterfaceOpen Interface

19. Accounting Event – General LedgerAccounting Event – General Ledger
• Oracle General LedgerOracle General Ledger
Journal Entries Created from Sub LedgerJournal Entries Created from Sub Ledger
Manual Journal Entries created in GLManual Journal Entries created in GL
Inter-Company Transfer EntriesInter-Company Transfer Entries
Translation entriesTranslation entries
Revaluation EntriesRevaluation Entries

20. Flow of Accounting inFlow of Accounting in
oracle Applicationsoracle Applications
Case StudyCase Study