Download - Quote to Cash SLA1

Collaborative SIG:SLA Accounting in R12: Quote to

Cash Process

Mohan Iyer

Principal ConsultantFSCP Solutions Inc

[email protected] Session: 8710

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• Agenda

– About the Presenter

– SLA Overview

– Accounting touch points

– Business Cases for SLA changes

– Reporting using SLA data

– Other capabilities of SLA

– Gotchas

– References

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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 …)

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Oracle SubledgerAccounting:

Oracle Subledger Accounting is a rules-based engine for generating accounting

entries based on source transactions from ALL Oracle Applications.

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Transaction

SLA Journal Entry

GL Journal Entry

GL Balances

Journal Import

Posting

Create Accounting

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SubLedger Accounting OverviewLedger

Subledger Accounting Method (SLAM)

Application Accounting Definition (AAD)

Journal Line Types (JLT)

Account Derivation Rules (ADR)

Journal Entry Descriptions (JED)

Journal Line Definition (JLD)

Transaction Objects

Sources

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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 Revenue

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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 change

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• 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

ØNo custom sources

ØHave to set up category accounts for each subinventory or costing method

• Create Custom Source for Item Master COGS Account

ØHave to set up a custom source

ØUse the item master COGS account so overall you have less setup

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SLA changes

• Product Line Accounting

Changes to make configuration changes to achieve the requirement

1. Custom Sources (depending on the approach) or Category Accounts Setup

2. Account Derivation Rule (default Cost Management Account Derivation is now standard)

3. Create Custom Journal Line Definitions and assign the Account Derivation Rule (over 20 journal lines types, depending on which transactions you use)

4. Link Custom Journal Line Definitions to Application Accounting Definition

5. Link Application Accounting Definition to Subledger Accounting Method

6. Link Subledger Accounting Method to a Ledger

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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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• 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 [email protected].

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• 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 flag

Accrual line type Recognition line type

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

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Ø 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• Sources

• Source Assignments

• Accounting Attributes

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• Configure custom sources in Cost Management

Cost Management – SLA: SLAà Accounting Setup à Accounting Methods Builder àSources à Custom Sources

Required Attributes:1. MP Flag2. MP Start Date3. MP End Date

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• 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 SLA

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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

• Supporting Reference Balances– Store an unlimited number of sources as supporting references on the

accounting entries

– Optionally track balances by account and supporting reference

• Open Account Balances (AP Trial Balance)– Track balances by originating transactions and downstream applied transactions

• Balances calculated and stored AFTER Accounting Program Completes

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Transaction

SLA Journal Entry

GL Journal Entry

GL Balances

Journal Import

Posting

Create Accounting

SLA Balances (Supporting References &

Open Account - AP TB)

Balance Calculation

SLA Transactional Detail & Balances

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SLA Supporting References• Supporting references may be used as follows

• Provide 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

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SLA Supporting References

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References

– Prior OAUG papers on SLA • Cost Accounting As You Want It - R12 Cost Accounting with SLA

• http://www.volzconsulting.com/resources.html

? Metalink notes:

• Setting Up Product Line Accounting Using Release 12.1.1 Permanent Inventory Structure (CST-SLA) ID 788666.1

• Supporting References in R12 (published document from Oracle Support)

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Gotchas• Making the update to every Event / Event Type combination

• Copying the seeded definition prior to making changes

• Coordinating all SLA changes in the Subledger Accounting Methods

• For product line changes you usually have to change over 20 events or journal line assignments – very time-consuming and error-prone

• Test, test, test