Oracle R12 Intercompany - DARC - SKorwin - NCOAUGSummer2010 [EDocFind.com]

O l R12 I tOracle R12 Intercompany

Stan Korwin

DARC CorporationDARC Corporation

NCOAUG August 20, 2010

DARC Lines of Business

• Consulting Services• ProgramManagement Functional Technical

• Production Support• 24x7 Functional & DatabaseProgram Management, Functional, Technical,

Architecture 24x7 Functional & Database

• Accelerators for Interfaces and Conversions• Organizational Change Management

• Communications, Documentation, Training

• Accelerators for Interfaces and Conversions

• Mergers & Acquisitions

• Global Consolidation

Agenda

• What Is Intercompany?

k?• How Does It Work?

• Important Concepts

• How To Set It Up?

• Q & AQ & A

What is Intercompany?

Functionality to create, manage, reconcile and report transactions among multiple p g porganizations and entities across EBS

New Features forIntercompany TransactionsIntercompany Transactions

• Ability to create invoices• Ability to create invoices

• Multiple recipients support• Multiple recipients support

• Proration of transaction distribution amounts• Proration of transaction distribution amounts

U l d T ti B t h t d i E l• Upload Transaction Batches created in Excel

Intercompany TransactionsB fit

• Ability to create invoices in subledger

Benefits

Ability to create invoices in subledger

• Multiple recipient transactions

• Automatic intercompany accounting• Automatic intercompany accounting

• Descriptive Flexfield support

• Web ADI integration• Web ADI integration

• Period status controls transaction processing

Intercompany ReconciliationBenefits

• Increases company efficiency by shortening the close

Benefits

cycle • Reduces costs by automating a largely manual and l b ilaborious process

• Supports global enterprise by allowing to reconcile across ledgers and charts of accountsacross ledgers and charts of accounts

• Offers better information by providing insight into the sources of intercompany differences

• Delivers process innovation by allowing reconciliation any time on selected level of detail

How Does It Work?

Pretty well actually…y y

Intercompany TransactionsProcessProcess

• Transfer approved transactions to General LedgerTransfer approved transactions to General Ledger – Online: Workflow transfers the transaction– Batch: Run ‘Transfer Intercompany Transactions to General Ledger program’

• Transfer approved transactions to AR and AP O li W kfl t f th t ti– Online: Workflow transfers the transaction

– Batch: Run ‘Transfer Intercompany Transactions to AR program’AR program

– Batch: Run ‘Transfer Intercompany Transactions to AP program’

Intercompany TransactionsProcess Web ADIProcess – Web ADI

Enter transactions in a spreadsheet and upload them into Oracle Intercompany

Spreadsheet D t E t

Web ADI Generate Templates Upload, Oracle

I tData EntryGenerate Templates Validation Intercompany Transactions

Intercompany TransactionsProcess Open InterfaceProcess – Open Interface

Import the external intercompany transactions into Oracle Advanced Global Intercompany System

I tE ternal Data loaded Validated DataImportValidations

External Data loaded into FUN_Interface

Validated Data imported to FUN

tables

FUN_INTERFACE TablesExternal Data Intercompany Transactions

Intercompany Reconciliation Process ReconciliationProcess – Reconciliation

DrillDown

Intercompany Reconciliation Summary by SourceSummary by Source

Intercompany Transaction Summary ReportSummary Report

Important Concepts

Balance is Good…Balance is Good…

Intercompany and Intracompany BalancingBalancing

BALANCING API

IntracompanyBalancing Rules Post

JournalsCreate

Accounting

Intercompany Accounts GeneralLedger

SubledgerAccounting

ArchitectureArchitecture

Intercompany and Intracompany Balancing

• What are the trigger points for generating balancing

Balancing

What are the trigger points for generating balancing entries?– GL Posting

– Subledger Journal Creation

• How are balancing lines created?How are balancing lines created?– Journal Mode

• 1 to 1

• 1 to Many

• Many to 1

• Many to Many

Intercompany and Intracompany Balancing ProcessBalancing Process

Wh t h if I t d I t• What happens if Intercompany and Intracompany lines are mixed on a transaction?

• What differences exist between Intercompany and• What differences exist between Intercompany and Intracompany balancing?– Different AccountsDifferent Accounts

– Summarization of Balancing Lines

– Use of a Clearing Company

– Processing Many to Many Journals

Intercompany and Intracompany Balancing Process ExampleBalancing Process – Example

Balancing Rule Journal

Dr BSV

Cr BSV

Debit Account

Credit Account Journal Mode: 1-1

01 02 01-4102-02 02-2201-01

02 01 02-4201-01 01-2102-02

03 5400.00 Original Line

10 5400.00 Original Line

01 All Other 01-4100-99 99-2200-01

All Other 01 99-4200-01 01-2100-99

03-4000-10 5400.00 Dr. Balancing

10-2000-03 5400.00 Cr. Balancing

LineOther

All Other All Other 99-4000-99 99-2000-99

2000 03 Line

Intercompany and Intracompany Balancing Process Example

Setup for LE1Journal

BSV 10 maps to LE 1. BSV 20 maps to LE 2

Balancing Process – Example

From LE 1: Corporate Ledger: Corporate COA

To Account Type

Journal

Journal Mode: 1-1

LE2 10-2000-20 Intercompany Payables Account

10-5200-00 1800.00 Original Line

20-5000-00 1800.00 Original Line

S t f LE210-2000-20 1800.00 IC Payables to

LE 2 (BSV 20)

20- 1800 00

ICReceivables

From LE 2: Corporate Ledger: Corporate COA

Setup for LE2

4000-10 1800.00 Receivables from LE 1 (BSV 10)

To Account Type

LE1 20-4000-10 Intercompany Receivables Account

Intercompany TransactionsDependencies and InteractionsDependencies and Interactions

• DependenciesDependencies– Legal Entity to be defined and associated to Ledger

• Interactions– Receivables – creation of invoice for outbound t titransactions

– Payables – creation of invoice for inbound transactionstransactions

– General Ledger –accounting for non invoicing intercompany transactions

How To Set It Up

Very Carefully…

Intercompany Benefits

• Simplified maintenanceSimplified maintenance

• Enhanced Control of intercompany transactions

• Integration of Accounting Setup With Accounting• Integration of Accounting Setup With Accounting Setup Manager

• Migration of Profile Options to simpler SystemMigration of Profile Options to simpler System Options page

• Seeded default Setup Options, so operable out of the p p , pbox

Intercompany Setup and Process

Setup intercompany

SETUP PROCESS

Open intercompanyi d

Setup security and approvers

Create intercompany transactions

organizations period

Define transaction types

Approve intercompanytransactions

Transfer intercompany

Setup invoicing options

Transfer intercompanytransactions

Reconcile intercompanytransactions

Close intercompany period

Setup system options

Intercompany Setup 1I t O i tiIntercompany Organizations

• Define Intercompany organizations toDefine Intercompany organizations to represent Internal Trading organizations

• Relate Intercompany organization to Legal• Relate Intercompany organization to Legal Entity

R l I i i• Relate Intercompany organization to Operating Unit ‐ optional

Intercompany Setup 2SecuritySecurity

• Define Security and ApproversDefine Security and Approvers– security set up maps trading partners to users

– user can access to many intercompany organizations

• Example: Intercompany accountant processes intercompany transactions for many intercompany organizations in the enterprise.– R11i ‐ Each responsibility has only one subsidiary assigned, therefore a user

can initiate intercompany transactions for one subsidiary from eachcan initiate intercompany transactions for one subsidiary from each responsibility

– R12 – the user can initiate intercompany transactions for many trading partners without changing responsibility

p g g p y

Intercompany Setup 3Intercompany AccountsIntercompany Accounts

• Define Intercompany AccountsDefine Intercompany Accounts– Provides the ability to define and update the Intercompany Accounts for each Legal EntityIntercompany Accounts for each Legal Entity within their corporate enterprise. The ability to define and update Intercompany accounts is key to eliminating Intercompany transactions during the consolidation process

Intercompany Setup 4TransactionsTransactions

• Define transaction types to group transactionsDefine transaction types to group transactions logically to simplify processing

• Choose to create invoices for some transaction types ypto comply with legal requirements

• Speed up the approval process by making it p p pp p y gautomatic

• Close Periods by Transaction Types to give more control over processing and faster period close

Invoicing Options Setup 5

• Specify the receivables invoice Transaction Type andSpecify the receivables invoice Transaction Type and Standard Memo Line used to create Intercompany Sales Invoice to suit specific business needs

• Define Trading Partner relationships to specify existing Customers and Suppliers for invoices created in subledgers

• Create new Customers and Suppliers and relate them dto Trading Partners

System Options Setup 6

• Select manual or system‐generated batch numberingSelect manual or system generated batch numbering

• Choose Intercompany Currency to standardize processing of intercompany transactionsp g p y

• Exclude immaterial transactions by choosing a minimum transaction amount

• Choose a minimum transaction amount currency

System Options Setup 7

• Select exchange rate type for consistent conversionSelect exchange rate type for consistent conversion of foreign‐currency transactions

• Allow or disallow the rejection of intercompany j p ytransactions by recipient

• Choose to transfer transactions in batch or online to Oracle General Ledger or subledgers

• Select Intercompany Calendar

Open / Close Periods Setup 8

• Maintain period status per Transaction TypeMaintain period status per Transaction Type

S i b f l i• Sweep transactions before closing

Intercompany and Intracompany S

• Intercompany accounting

Summary

Intercompany accounting

• Intracompany balancing

C li d d h d f• Centralized and shared setup of Intercompany Accounts and Intracompany B l i R lBalancing Rules

• Balancing entries can be created in General Ledger and in Subledgers

Intercompany TransactionsSummary

Intercompany transactions is now enhanced

Summary

process:

• Support for Intercompany InvoicingSupport for Intercompany Invoicing

• Transactions can be entered for multiple recipientsrecipients

• Flexible Security model

• Control timing with Intercompany Periods

• Web ADI integration

Questions?

Thank You!

S iStan Korwin

sales@darc.com

877‐476‐7151877 476 7151

Oracle R12 Intercompany - DARC - SKorwin - NCOAUGSummer2010 [EDocFind.com]

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