Quote to Cash SLA1

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Collaborative SIG: SLA Accounting in R12: Quote to Cash ProcessMohan Iyer Principal Consultant FSCP Solutions Inc mohan@fscpsolutions.com Session: 8710

Agenda About the Presenter SLA Overview Accounting touch points Business Cases for SLA changes Reporting using SLA data Other capabilities of SLA Gotchas References2

About the Presenter Mohan Iyer Principal Consultant @ FSCP Solutions Inc. Over 20 years experience with Oracle Applications Functional consultant in Finance applications Multiple full cycle R12 implementations Currently working on R12.1.3 Founding Board Member of NorCalOAUG and GL SIG Board Member on MNSIG

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SubLedger Accounting Overview SLA is a rules engine that creates accounting for all transactions into GL This allows for the disconnect between a transaction and its accounting This also allows for a single process to create accounting entries into GL There is a layer between GL and the subledgers (AP, AR )4

SubLedger Accounting OverviewOracle Subledger Accounting:Oracle Subledger Accounting is a rulesbased engine for generating accounting entries based on source transactions from ALL Oracle Applications.

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SubLedger Accounting OverviewGL Balances Posting GL Journal Entry Journal Import SLA Journal Entry

Create Accounting Transaction6

SubLedger Accounting OverviewLedger Subledger Accounting Method (SLAM) Application Accounting Definition (AAD) Journal Line Definition (JLD)

Journal Line Types (JLT)

Account Derivation Rules (ADR)

Journal Entry Descriptions (JED)

Sources Transaction Objects

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SubLedger Accounting Overview

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Quote to Cash Overview

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Business Case for Product Line Accounting Presented by Douglas Volz Principal Consultant at Douglas Volz Consulting, Inc. 10+ years in industry in cost accounting staff & management positions 20+ years Oracle Experience as an Oracle systems designer, implementation consultant and project manager Specializing in advising on: Efficient Cost Accounting processes Managing Oracle implementations and post-implementation support

Currently working on R12 Founding Board Member of OAUG Cost Management SIG Presentations at Collaborate 2011 60 Inventory Orgs & 6 Ledgers? No Worries, Reconcile Your G/L to Inventory in less than 60 Minutes! Co-Presenter: OAUG Cost Management SIG

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Business Case for SLA changes Product Line Accounting Use separate sub-accounts to denote your product line for variances, cost of goods sold and inventory

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Accounting Touchpoints Every single transaction that ships has an effect on Shipment Inventory Cost Deferred COGS Invoicing COGS Receivables Revenue Unearned Revenue12

Accounting Touchpoints Every single inventory and WIP transaction you use PO Receipts PO Deliveries Material Issues WIP Completions Cost Updates Subinventory Transfers Over 20 SLA transaction events to change13

Business Case for SLA changes Cost Accounting Standard SLA will book purchase receipts with the following rules: Cost Management Default Use the same offset accounts as normally used pre-SLA Use the same receiving, inventory and WIP valuation accounts Use the same variance and COGS accounts

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SLA changes Two approaches:

Use Existing Sources and the Category Accounts No custom sources Have to set up category accounts for each subinventory or costing

method

Create Custom Source for Item Master COGS Account Have to set up a custom source Use the item master COGS account so overall you have less setup15

SLA changes Product Line AccountingChanges to make configuration changes to achieve the requirement1. 2. 3. 4. 5. 6.

Custom Sources (depending on the approach) or Category Accounts Setup Account Derivation Rule (default Cost Management Account Derivation is now standard) Create Custom Journal Line Definitions and assign the Account Derivation Rule (over 20 journal lines types, depending on which transactions you use) Link Custom Journal Line Definitions to Application Accounting Definition Link Application Accounting Definition to Subledger Accounting Method Link Subledger Accounting Method to a Ledger16

SLA changes default ADR

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SLA changes line assignments Example for Receiving Events: Need to change both the receipt and deliver

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Business Case for SLA changes Management Reporting Standard reporting is delayed till close and too late to react to negative trends Manual reporting tasks to derive trends

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Business Case for Management Reporting Presented by Thomas Simkiss Chief Operating Officer and Lead Financials Architect at BizTech, a mid-Atlantic Oracle Certified Advantage Partner based in King of Prussia, Pennsylvania. has 14 years Oracle Applications experience both as an end-user and implementer across many industries, including Telecom, Retail, Membership Organizations, Healthcare, Government, and Social Services. Thomas has had a wide range of roles both utilizing and implementing Oracle Financials, Supply Chain, Discoverer and Business Intelligence as a business analyst, team lead, and project manager. Thomas is a member of the New Jersey State Society of Certified Public Accountants, and a member of the Pennsylvania and New Jersey Bar Association. BizTech is an Oracle Platinum Partner based in King of Prussia Pennsylvania. BizTech provides software, services and hosted Oracle software solutions with a primary focus on Oracle EBS, Business Intelligence, and Hyperion. Thomas has presented previously at the OAUG, MAOAUG, Collaborate 2007, 2008, 2009, 2010 and Oracle Open World. He can be reached at Tsimkiss@biztech.com.20

Business Case for SLA changes Management Reporting Use secondary ledger to create a more frequent reporting analysis basis Spread certain expenses over weekly periods to avoid unusual spikes Timely reporting to support better analysis and on-time decisions to manage negative trends

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Business Case Multi-period Accounting Copy the existing Journal Line Type and set the multiperiod flagAccrual line type Recognition line type

Note: No conditions may be used 22 for a recognition line type

Business Case Multi-period Accounting Configuration related to Multi-Period Accounting 1. In the Journal Line Accounting Attributes Assignments window, assign sources for the following accounting attributes: Multiperiod: Specifies whether a journal line type is eligible for multiperiod accounting Multiperiod Start Date: Date to begin multiperiod accounting Multiperiod End Date: Date to end multiperiod accounting

2. In the Journal Line Types window, define the journal line types to be used for multiperiod accounting by setting the multiperiod option. 3. In the Journal Lines Definitions window, complete the following: Assign the accrual journal line type Navigate to the Multiperiod Accounting window to define the multiperiod options In the Multiperiod Accounting window, users define the multiperiod options.

4. In the Line Assignments window, define the multiperiod line assignments as follows: Update the line description for the accrual journal entry line type, which defaults from the Journal Lines Definitions window Assign the recognition journal line types Assign account derivation rules

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Business Case Multi-period Accounting

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Business Case Multi-period Accounting Sources

Accounting Attributes Source Assignments

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Business Case Multi-period Accounting Configure custom sources in Cost ManagementCost Management SLA: SLA Accounting Setup Accounting Methods Builder Sources Custom Sources

Required Attributes: 1. MP Flag 2. MP Start Date 3. MP End Date

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Business Case Multi-period Accounting Assign custom sources to required accounting attributes

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Reporting using SLA data tables Many reports now are generated from the SLA tables, given below are a few Account Analysis (all modules) Accounts Payable Trial Balance Accounting Report while running Create Accounting

All account query capability is now drill-down through the SLA28

Other capabilities of SLA SLA Transactions and Balances SLA maintains its own Journal Entries and Balances as a middle level to maintain these data sets before they flow to GL Third Party Control Account Balances Track balances by account and Customer/Supplier Statutory reporting requirement in certain countries Store an unlimited number of sources as supporting references on the accounting entries Optionally track balances by account and supporting reference Track balances by originating transactions and downstream applied transactions

Supporting Reference Balances

Open Account Balances (AP Trial Balance)

Balances calculated and stored AFTER Accounting Program Completes29

SLA Transactional Detail & BalancesGL Balances Posting GL Journal Entry Journal Import SLA Journal Entry Balance Calculation SLA Balances(Supporting References & Open Account - AP TB)

Create Accounting Transaction30

SLA Supporting References Supporting references may be used as followsProvide additional business information for balances on transactions To establish a subledger balance for a particular source value or combination of source values For financial and managerial analysis Balances can be maintained Never no balances maintained only used for tracking purposes Based on Account based on the account that is source of this supporting reference Always continously maintains the balance for this source 31

SLA Supporting References

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References Prior OAUG papers on SLA Cost Accounting As You Want It - R12 Cost Account