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Cost Accounting As You Want It EBS R12 Cost Accounting with SLA
Collaborate09May 3 - 7, 2009
Diane Streubel
[email protected] Foods
Manager for Cost & Systems DevelopmentOAUG Process MFG Cost Sub-Committee Lead
Douglas Volz
[email protected] Volz Consulting, Inc.President / Managing Director
OAUG Discrete MFG Cost Sub-Committee Lead
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Agenda
O racle Discrete Costing SLA enhancements
O racle Process Costing MAC transitioning to SLA
O racle SLA Concepts
Case example: Product Line Accounting
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Release 11i account recognition pain points eliminated bySubledger Accounting (SLA):
SLA removes limitations for recording C OG S andRevenue (Cost Account G enerator/workflow and A/R
AutoAccounting are still in use)
G ives you the ability to record inventory and WIP accounts
with more flexibility
Or acle Disc r ete Costing SLA enhancements:
Incr eased Flexibility
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F lexible variance account recognition for: Invoice price and purchase variances Average cost adjustment
Standard cost adjustment Manufacturing variances Account aliases F reight charges
Most other inventory, manufacturing and relatedaccount entries
Or acle Disc r ete Costing SLA enhancements:
Incr eased Flexibility
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Or acle P r ocess Costing:
MAC tr ansitioning to SLA
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Converged inventory model
Inventory O rganizations that are Process will use ProcessCosting
Process users are denied access to Discrete Costingforms Process Enabled organizations can not setup costs in
the Discrete Costing application
Sub Ledger Architecture (SLA) replaces MAC
O PM MAC t r ansitioning to SLA
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Cost Setup Calculate Cost Store Costs MAC Oracle GL
GMI(OPM Inventory)
Purchasing GMD, GMEOrder Management
11i OPM
O PM MAC t r ansitioning to SLA
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Cost Setup Calculate Cost Store Costs SLA Oracle GL
OracleInventory
Purchasing GMD, GMEOrder Management
R12 OPM
O PM MAC t r ansitioning to SLA
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Subledger accounting is an intermediate step betweensubledger products and the O racle G eneral Ledger
Each transaction that requires accounting is representedby a complete and balanced subledger journal entry,stored in a common data model.
O PM MAC t r ansitioning to SLA
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Subledger GL Export Journal Import Journal Posting
Inter f ace
General Ledger
For G/L integration, discrete costing works the same as OPM costing
11i OPM
O PM MAC t r ansitioning to SLA
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PayablesPayables
ReceivablesReceivables
ProjectsProjects
Oracle Subledger Accounting Oracle General
Ledger
OPM
R12 OPM
For G/L integration, discrete costing works the same as OPM costing
O PM MAC t r ansitioning to SLA
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OPM MACCompleted material
and/or resourcetransactions.
OPM Costing Enginegenerates costs.
OPM Subledger process processes
these transactions tocreate Journal entries
SLA
Cost Pre-processor will create
accounting Events
SLA accountingprogram processesthe events to createthe journal entries
Completed materialand/or resource
transactions.
OPM Costing Enginegenerates costs.
O PM MAC t r ansitioning to SLA
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O PM MAC SLA C O MMENTSF iscal Policy Retained with few modifications
Event F iscal Policy Retained with few modifications
Source Process Category
Event Event Entity
Sub-Event Event Class
Account Titles Journal Line Types (JLT)
Accounting Template Application AccountingDefinitions (AAD)
Users can define their own AADs or modify seeded information
Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs
Priorities and AccountMapping Account Derivation Rules (ADR) More flexible. Mapping can be doneat Accounting flexfield level as wellas segment level
Test Mapping Test Accounting Builder (TAB)
O PM Currency, O PM Ledger,O PM Exchange Rates
Use G L setups
O PM MAC t r ansitioning to SLA
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O PM MAC SLA C O MMENTS
Test and Actual Subledger Accounting
Draft and F inal Accounting
Subledger Program Accounting Pre-Processor
Run Subledger for multiplevaluation/cost methods for a ledger
Supports multiple valuationmethods
In O PM there can only beone representation at atime. SLA supportsmultiple representations atthe same time
Run Subledger process for
a functional area
Run Pre-Processor by Process
Category
F lexible. User can have
any number of categories. Assigned to one or moreevent classes
Detailed Subledger Report Is retained and has beenmodified to use SLArepository
O PM MAC t r ansitioning to SLA
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Most of the steps are automated using migrationscripts
All the Account Definitions would be migrated as ADRsManual Steps to be completed are: Assign Account Derivation Rules to Journal Line
Definitions Validate Application Accounting Definition Assign User Subledger Accounting Method to Ledger
O PM MAC t r ansitioning to SLA
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H istorical O PM Subledger distribution data notmigrated to SLA Data refers to O PM Inventory
H istorical data available in query mode
O PM MAC t r ansitioning to SLA
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Update the Account Derivation Rule conditions.Ex: Add Item/Item Class/Organizations
Validate the Application Accounting Definition
Run OPM Accounting Pre-Processor
Run Create Accounting in Draft mode
Check Create Accounting report and JournalEntries report
Run Create Accounting in Final mode to create GLaccounting entries
Run OPM Accounting Pre-Processor
O PM MAC t r ansitioning to SLA
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NO LO SS of functionality by moving to SLA modelNew menus created under O PM F inancials for newSLA forms
F iscal Policy and Event F iscal Policy screensretained with minor modifications. Most of the fieldswill be read-only.O PM Event model mapped to SLA event model.
O PM MAC t r ansitioning to SLA
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Or acle SLA Concepts
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1. Determine sources of information for your account derivationrules (understand the underlying business logic and data)
2. Create account derivation rules (and optional mapping sets)
3. Create journal line types4. Create a journal lines definition
(link the journal line type to the account derivation rule)5. Create an application accounting definition
(copy an existing definition and modify it and then validate it)
6. Create a subledger accounting method (SLAM)(copy standard accrual and create a new one)
7. Assign the new SLAM to a Ledger
Subledge r Accounting Method (SLAM)Setup Steps
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Event Model: definition of the subledger transaction types andlifecycle
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 T ransaction, Receivingor W IP or Write Off
EVENT CLASS
Logical grouping of events whichhave similar kind of accounting
EVENT TYPE
T he most granular level of business event which hasaccounting impact
K ey Concepts fo r SLA T r ansaction Types
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JOURNAL ENTRY SETUPS
Define/copy and modify journal line types
Define/copy and modifyaccount derivation rules
Define/copy and modifydescriptions
PROCESS
Enter Transaction(s)
Cost Manager
Create Accounting* Transfer Journal Entries to GL
*Run Create Accounting Cost Management concurrentrequest for accounting all transactions from the CostManagement SLA responsibility.
Receiving Accounting can be generated in the Purchasingresponsibilities using the Create Accounting Receivingconcurrent request.
These requests have an option to transfer the entries created toGeneral Ledger. A separate process is also available.
Setup and P r ocess
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Transactions
Accounting Events
Cost Management SLA
AccountingConfigurations
Subledger Balances
Subledger Journal Entries
AccountingProgram
Journal Entry Setup
GLJournal Entriesand Balances
Setup and P r ocess
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SLA Accounting Tables
Enter Transaction(s)
Basic Table St r uctu r e fo r SLA
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TransactionAccounting Tables
Cost Manager
XLA_AE_HEADERS
XLA_AE_LINES
XLA_DISTRIBUTION _LINKS
XLA_EVENTS
Same CostTransactionAccounting
Tables
CreateAccounting
GL_INTERFACE
G/L Tables
GL_LEDGERS
GL_JE_HEADERS
GL_JE_LINES
GL_JE_BATCHES
One CommonAccountingSubledger
Table
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Case Example:
P r oduct Line Accounting fo r Disc r ete andP r ocess Costing
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Say there are 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 samerequirement Cost/SLA mapping set capability
(works for Discrete and Process Costing) Category Accounting R11i Cost Accounting migrated to
SLA in R12.1(only works with Discrete Costing)
Example:
Pu r chase P r ice Va r iance p r oduct Line
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Cost/SLA Mapping Set Capability
(fo r Disc r ete and P r ocess Costing)
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Product Line Setup Steps Using SLA mapping set
1. Create the product line information in your item master
2. Enter your SLA account derivation rule for Purchase PriceVariance accounts
3. Associate the new account derivation rule to your Journal
Line Type
4. Associate the Application Accounting Definition withSubledger Accounting Method
Cost SLA Mapping Set Capability:
PPV by pr
oduct Line
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Product Line Accounting Descriptive flexfield
Cost/SLA Mapping Set Capability
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Product Line Accounting Item Descriptive FF
Cost/SLA Mapping Set Capability
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Assign product line code to the inventory item
Cost/SLA Mapping Set Capability
TIP: you can use an existing product line category set to populateyour item master DFF, you do not need to enter this one-by-one
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Mapping set Account Derivation Rule
Cost/SLA Mapping Set Capability
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Mapping set Account Derivation Rule
Cost/SLA Mapping Set Capability
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SLA Journal Line / Derivation Rule
Cost/SLA Mapping Set Capability
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Associate Journal Lines Definition to the Event Class
Cost/SLA Mapping Set Capability
Dont forgetto validateyour new
AADs
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Note the same ADR is usable for Standard Cost Update
Cost/SLA Mapping Set Capability
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Note the same ADR is usable for Standard Cost Update
Cost/SLA Mapping Set Capability
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Associate SLA Definition to the SLA Method/Ledger
Cost/SLA Mapping Set Capability
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The material subledger from 11i still exists
Cost/SLA Mapping Set Capability
Inventory
Inventory
PPV
Receiving
MatlO verhead
Absorption
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SLA Entries That G o to Your G /L
Cost/SLA Mapping Set Capability
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F or the Standard Cost Updates That G o to Your G /L
Cost/SLA Mapping Set Capability
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Catego r y Accounting
Disc r ete Cost Accounting mig r ated to SLAin R12.1
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Create a newstructure under the key flexfield
Item Category
P r oduct Line Catego r y Accounting
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Create a newstructure under the key flexfield
Item Category
Create categorycodes
P r oduct Line Catego r y Accounting
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Create a newstructure under the key flexfieldItem Category
Create categorycodes
Create categoryset
P r oduct Line Catego r y Accounting
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Create a newstructure under thekey flexfield ItemCategory
Create categorycodes
Create category set
Assign ProductLine Accountingfunctional areacategory set
P r oduct Line Catego r y Accounting
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Assign product line category accounts
P r oduct Line Catego r y Accounting
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Account Derivation Rule would have used a source directly
P r oduct Line Catego r y Accounting
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Summary Notes Product line accounting can be achieved in many ways without
using the Costing H ook.
In R12 SLA is theO
racle R12 accounting platform and Costingsupplies application sources from INV, WIP, RCV to build theaccounting journals.
One caveat: Pre-Release 12 subledger accounting reports arereading data from Costing distribution layer (such as the Material
Account Distribution Summary or Detail Reports). Those reportswill not show SLA journals. SLA provides a set of newaccounting reports (such as Journal Entries Report, Accounting
Analysis Report) which can be modified as desired using BIPublisher.
P r oduct Line Catego r y Accounting
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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.
Disc r ete Invento r y Pe r iod Close and Upg r ade
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Acknowledgements of assistance:
Herve Yu Oracle Cost Management Development Manager
Audrea Auld Oracle University Senior Financials Instructor
Russell Bayles Oracle Principal Product Strategy Manager
Michel Basinet Oracle Director Fusion Costing Product Strategy
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Additional information available from: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 THANK YOU
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Appendix
Professional Background for Diane Streubel
Professional Background for Douglas Volz
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Diane St r eubel
Professional BackgroundDiane Streubel is the Cost & Systems Development Manager for Schreiber F oods. A processmanufacturing company, Schreiber is the worlds largest supplier of private label dairy products and hasbeen using G emms/ O PM for the past 13 years. Diane has been involved with O PM from its inceptionat Schreiber with G emms 3.1. She has been involved in implementing additional products within O racleat Schreiber and has played a key role in all of the upgrades within the company. Schreiber F oods iscurrently at 11.5.10.
Diane is also actively involved in the Process Manufacturing SI G . She has been the Costing Sub-Committee chairperson and the Membership chairperson for the Process SI G since 2001. As theProcess SI G Enhancements chairperson, she has worked with the Process Manufacturing team atO racle to develop and coordinate an Enhancements Voting process each year since 2001. She hasbeen on the paper selection team for O AUG conferences for the past four years. Diane has alsopresented numerous papers at O penWorld and O AUG conferences over the past several years onO PM Costing topics.
Core ExpertiseUpgrades for Process ManufacturingProject Management
Core manufacturing processesO PM Cost ManagementO PM InventoryO PM F ormulas
ExperienceWithin Schreiber F oods:
Responsible for O PM Costing and Inventory testing andvalidations for all upgradesDevelop and improve processes wi thin Company relatedto Costing, Inventory and F ormulasEstablish Cost Accounting methods, cost and productionformula structures, inventory and production transactionprocesses and system documentation.Train F inance employees at 17 plant facilities on O PMprocesses
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Douglas Volz
Professional BackgroundDoug Volz is a Senior Architect and Advisor for O racle Application projects, with a particular interest inProject and Cost Management. H e has 30 years experience, including 5 years in O racle Development(co-designing O racle Cost Management), 12 years in industry for manufacturing and distributioncompanies, and 14 years consulting. H is Manufacturing and Cost systems experience covers projectmanagement, software design/development, delivery and consulting services, for both O racleCorporation, and multiple international consulting firms. Prior to his systems career, Mr. Volz also heldnumerous management accounting positions for telecommunications, defense, and electronics firms.
In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currencywith global footprints. Countries include US, Mexico, UK, Netherlands, Belgium, Taiwan, P.R. O .C.,Norway, Japan and G ermany.
Doug leads the Cost Sub-Committee, for the O AUG Discrete Manufacturing Special Interest G roup.H e also advises and participates on the O racle Customer Advisory Board for F usion Costing and for theF usion SCM Strategy Council.
Core ExpertiseMulti-organization, Multi-currency ERPImplementations
Project Management and Senior Project Advisor Core manufacturing processesCost ManagementInventoryBills of MaterialWIP
Systems Integration and Data Conversions
ExperienceSample of clients served:
Beckman Coulter (US)
O nninen AS (Norway)Matsushita (UK, Mexico)NTL (now Virgin Media)Idec Izumi (Japan)Motorola (UK, US)Logitech (US, Taiwan, P.R.C.)
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End of P r esentation
Slid C A i A S 12 d S A
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