Oracle Costing CustomerAdvisory Board

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(No Transcript)
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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
Oracles products remains at the sole discretion
of Oracle.
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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
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Costing Accounting Integrated with SLA Agenda

• Oracle Process Costing MAC transitioning to SLA
• Oracle Discrete Costing SLA enhancements
• Case example Discrete Costing-Product Line
  Accounting

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ltInsert Picture Heregt
Schreiber Foods Diane Streubel Manager - Cost
System Development
Oracle Process Costing MAC transitioning to SLA
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Costing Accounting Integrated with SLA 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

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Costing Accounting Integrated with SLA OPM MAC
transitioning to SLA
11i OPM
Order Management
GMI (OPM Inventory)
Purchasing
GMD, GME
MAC
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Costing Accounting Integrated with SLA OPM MAC
transitioning to SLA
R12 OPM
Order Management
Oracle Inventory
Purchasing
GMD, GME
SLA
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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.

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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
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Costing Accounting Integrated with SLA OPM MAC
transitioning to SLA
R12 OPM
Oracle Subledger Accounting
Oracle General Ledger
For G/L integration, discrete costing works the
same as OPM costing
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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
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Costing Accounting Integrated with SLA OPM MAC
transitioning to SLA Setup Forms
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
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Costing Accounting Integrated with SLA OPM MAC
transitioning to SLA - Reports
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
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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

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

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ltInsert Picture Heregt
OAUG Discrete Cost SIG Sub-Committee Douglas
Volz Douglas Volz Consulting, Inc.
Oracle Discrete Costing SLA Enhancements
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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

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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
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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.
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Sub Ledger Accounting(SLA) Setup and Process
Accounting Program
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ltInsert Picture Heregt
Oracle Corporation - Discrete Costing Development
Herve Yu Senior Principal Engineer
Case Example Discrete Costing-Product Line
Accounting
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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

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Cost/SLA mapping set capability
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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV 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

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Product Line Accounting Descriptive flexfield

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Product Line Accounting Descriptive flexfield

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Mapping set Account Derivation Rule

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Mapping set Account Derivation Rule

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• SLA Journal Line / Derivation Rule

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Associate Journal Lines Definition to the Event
  Class

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Note the same ADR is usable for Standard Cost
  Update

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Note the same ADR is usable for Standard Cost
  Update

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Associate SLA Definition to the SLA Method/Ledger

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• Assign product line code to the inventory item

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• The material subledger from 11i still exists

Inventory
Inventory
Receiving
PPV
Matl Overhead Absorption
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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• SLA Entries That Go to Your G/L

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Costing Accounting Integrated with SLA Cost/SLA
mapping set capabilityPPV by product Line

• For the Standard Cost Update That Go to Your G/L

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Category Accounting Cost/Global Accounting
migrated to SLA in R12.1
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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal Accounting

• Create a new structure under the key flexfield
  Item Category

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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal Accounting

• Create a new structure under the key flexfield
  Item Category
• Create category codes

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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal Accounting

• Create a new structure under the key flexfield
  Item Category
• Create category codes
• Create category set

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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal 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

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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal Accounting

• Product Line category account

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Costing Accounting Integrated with SLA Product
Line Category AccountingGlobal Accounting

• Account Derivation Rule would have used a source
  directly

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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.

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Costing Accounting Integrated with SLA 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.

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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

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THANK YOU