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E-Business Suite R12 Cost Accounting Integrated with SLA

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E-Business Suite R12 Cost Accounting Integrated with SLA

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  1. 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.

  2. E-Business Suite R12 Cost Accounting Integrated with SLA Diane Streubel – Schreiber Foods Cost Manager Douglas Volz – OAUG Discrete Cost SIG Sub-Committee Herve Yu – Oracle Costing Development

  3. Costing Accounting Integrated with SLAAgenda • Oracle Process Costing MAC transitioning to SLA • Oracle Discrete Costing SLA enhancements • Case example: Discrete Costing-Product Line Accounting

  4. <Insert Picture Here> Schreiber Foods Diane Streubel Manager - Cost & System Development Oracle Process Costing MAC transitioning to SLA

  5. Costing Accounting Integrated with SLAOPM 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

  6. Cost Setup Calculate Cost Store Costs Oracle GL Costing Accounting Integrated with SLAOPM MAC transitioning to SLA 11i OPM Order Management GMI (OPM Inventory) Purchasing GMD, GME MAC

  7. Cost Setup Calculate Cost Store Costs Oracle GL Costing Accounting Integrated with SLA OPM MAC transitioning to SLA R12 OPM Order Management Oracle Inventory Purchasing GMD, GME SLA

  8. Costing Accounting Integrated with SLA 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.

  9. Costing Accounting Integrated with SLA OPM MAC transitioning to SLA 11i OPM General Ledger Interface Subledger GL Export Journal Import Journal Posting For G/L integration, discrete costing works the same as OPM costing

  10. OPM Receivables Payables Projects Costing Accounting Integrated with SLA OPM MAC transitioning to SLA R12 OPM Oracle SubledgerAccounting Oracle General Ledger For G/L integration, discrete costing works the same as OPM costing

  11. OPM Costing Engine generates costs. OPM Costing Engine generates costs. Costing Accounting Integrated with SLA OPM MAC transitioning to SLA SLA OPM MAC Completed material and/or resource transactions. Completed material and/or resource transactions. Cost Pre-processor will create accounting Events OPM Subledger process processes these transactions to create Journal entries SLA accounting program processes the events to create the journal entries

  12. Costing Accounting Integrated with SLAOPM MAC transitioning to SLA – Setup Forms

  13. Costing Accounting Integrated with SLAOPM MAC transitioning to SLA - Reports

  14. Costing Accounting Integrated with SLA 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

  15. Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Process

  16. Costing Accounting Integrated with SLAOPM MAC transitioning to SLA - Summary • NO LOSS of functionality by moving to SLA model • A new sub-menu created under Cost Management for 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.

  17. <Insert Picture Here> OAUG Discrete Cost SIG Sub-Committee Douglas Volz Douglas Volz Consulting, Inc. Oracle Discrete Costing SLA Enhancements

  18. Costing Accounting Integrated with SLA Increased Flexibility: Oracle Discrete Costing SLA Release 11i account recognition “pain points” eliminated by SLA: • SLA removes limitations for recording COGS and Revenue (still uses Cost Account Generator/workflow and A/R AutoAccounting) • Recording inventory and WIP accounts with more flexibility • Flexible variance account recognition for: • Invoice price variance • Purchase price variance • Average cost adjustment • Standard cost adjustment • Manufacturing variances • Account aliases • Freight charges • And most other inventory, manufacturing and related account entries

  19. Sub Ledger Accounting(SLA)Key Concepts • 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 The most granular level of business event which has accounting impact EVENT TYPE

  20. Sub Ledger Accounting(SLA) Setup and Process PROCESS JOURNAL ENTRY SETUPS Enter Transaction(s) Define/copy and modify journal line types Cost Manager Define/copy and modify account derivation rules Create Accounting* Transfer Journal Entries to GL Define/copy and modify descriptions *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.

  21. GL Journal Entries and Balances Transactions Accounting Events Accounting Configurations Subledger Journal Entries Journal Entry Setup Subledger Balances SLA Cost Management Sub Ledger Accounting(SLA) Setup and Process Accounting Program

  22. <Insert Picture Here> Oracle Corporation - Discrete Costing Development Herve Yu Senior Principal Engineer Case Example: Discrete Costing-Product Line Accounting

  23. Costing Accounting Integrated with SLA Case Example: Purchase Price Variance product Line Example: Record Purchase Price Variance by Product Line • We have 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 • Category Accounting – Cost/Global Accounting migrated to SLA in R12.1 • A word for Inventory period close and Cost/SLA upgrade

  24. Cost/SLA mapping set capability

  25. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Product Line Setup StepsSet up your product line using SLA mapping set • Enter your SLA account derivation rule for Purchase Price Variance accounts • Associate the new account derivation rule to your Journal Line Type • Associate the Application Accounting Definition with Subledger Accounting Method

  26. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Product Line Accounting – Descriptive flexfield

  27. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Product Line Accounting – Descriptive flexfield

  28. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Mapping set – Account Derivation Rule

  29. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Mapping set – Account Derivation Rule

  30. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • SLA Journal Line / Derivation Rule

  31. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Associate Journal Lines Definition to the Event Class

  32. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • Note the same ADR is usable for Standard Cost Update

  33. Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line • Note the same ADR is usable for Standard Cost Update

  34. Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line • Associate SLA Definition to the SLA Method/Ledger

  35. Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line • Assign product line code to the inventory item

  36. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • The material subledger from 11i still exists Inventory Inventory Receiving PPV Matl Overhead Absorption

  37. Costing Accounting Integrated with SLACost/SLA mapping set capability:PPV by product Line • SLA Entries That Go to Your G/L

  38. Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line • For the Standard Cost Update That Go to Your G/L

  39. Category Accounting – Cost/Global Accounting migrated to SLA in R12.1

  40. Costing Accounting Integrated with SLAProduct Line Category Accounting:Global Accounting • Create a new structure under the key flexfield “Item Category”

  41. Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes

  42. Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes • Create category set

  43. Costing Accounting Integrated with SLAProduct Line Category Accounting:Global 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

  44. Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting • Product Line category account

  45. Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting • Account Derivation Rule would have used a source directly

  46. Costing Accounting Integrated with SLA Case Example - Conclusion • Summary Notes • Product line accounting can be achieved in many ways without using 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 desire using BI Publisher.

  47. Costing Accounting Integrated with SLAInventory 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.

  48. Costing Accounting Integrated with SLA • Additional information are available: • R12 Oracle Subledger Accounting – Implementation Guide • R12 Oracle Cost Management – User Guide • R12 Oracle Process Manufacturing Cost Management - User Guide

  49. THANK YOU

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