R12 – Feature and Impact with
Upgrade
-Anuj Kumar
Global Financial Architecture
6 Major Initiatives
1.
Ledger and
Ledger Sets
2.
Multi-Org
Access
Control
3.
Subledger
Accounting
4.
Tax Engine
5.
Intercompany
6.
Bank Model
Dr
Cr
General
Ledger Sets
Ledger
& Ledger
Subledger Accounting (SLA)
Tax
Engine
Multi-Org
Access
Control
Inter
Company
Inventory
Work in Process
Bank
Model
Receivables
Purchasing
Payables
Projects
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Multi-Org
Access Control
Work Think Manage
MOAC: Multi-Org Access Control
Role based access to Operating Units
Perform multiple tasks across operating units
without changing responsibilities
Belgium
Holland
Denmark
Legal Entity
Legal Entity
Legal Entity
Belgium
Holland
Denmark
Operating Unit
Operating Unit
Operating Unit
Responsibility
SingleResponsibility
Responsibility
Responsibility
Functional Tasks
 Order Management
 Dunning, Collections,
Billing
 Requisition, Demand &
Purchase Orders
 Receiving & Drop Ship
 Invoice Receipt,
Disbursement
 Customer Data
Management
 Accounting Setup
Multiple Organization Access
Control
Summary of Changes
• Security Profiles for data security
– MO: Security Profile
– List of operating units for a responsibility
– Defined in HR
• OU field on UI
– all transactions
– setup data specific to OU, like transaction type
• Enhanced Multi-Org Reporting and Processing
– Ledger/Ledger Set parameter on accounting reports and
processes
– OU parameter on other standard reports and processes
– For example: submit the Payables Open Interface Import
w/OU param null to import all records across all OUs
Multi-Org Access Control
In practice
Select
Operating
Units
In daily use
Select
Classify Unit
Operating
Organization
classification
as operating
unit
Run Reports
Across
Operating
Units
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Subledger Accounting
Work Think Manage
SLA Overview
• Rule-based accounting engine, toolset & repository
• Allows multiple accounting representations for a single
business event
• Common data model and UI across subledgers
• Supports all 11i functionality
Ticked &
Tied
SLA Controls that
GL Balances and
SLA Balances tie,
and that both tie
to the document
(invoice, payment, etc.)
sources
Opening
Balance
Debit
Credit
Opening
Balance
GENERAL LEDGER
Cash
Receivables
Inventory
Assets
Prepayments
Payables
Accruals
Shares
Previous Results
Balance Sheet
Sales
COGS
R&D
S&M
G&A-Fin
G&A-IT
G&A-HR
Period Income
Income Statement
100
1,000,000
500,000
100,000
1,000
(750,000)
(250,000)
(100,000)
(501,100)
-
-
Debit
Credit
3,500,000
3,000,000
1,200,000
2,750,000
3,500,000
1,500,000
2,800,000
2,700,000
50,000
10,500,000
10,500,000
3,000,000
1,500,000
300,000
300,000
300,000
150,000
150,000
300,000
24,000,000
24,000,000
Closing
Balance
750,100
500,000
200,000
100,000
1,000
(650,000)
(300,000)
(100,000)
(501,100)
(3,000,000)
1,500,000
300,000
300,000
300,000
150,000
150,000
300,000
-
Closing
Balance
SUBLEDGER ACCOUNTING
Receivables
Customer
Customer
Customer
Customer
Customer
Total
One
Two
Three
Four
Five
250,000
350,000
100,000
100,000
200,000
1,000,000
150,000
250,000
1,500,000
800,000
300,000
3,000,000
400,000
450,000
1,400,000
750,000
500,000
3,500,000
150,000
200,000
150,000
500,000
1,000,000
75,000
725,000
1,000,000
2,800,000
900,000
50,000
775,000
975,000
2,700,000
(150,000)
(75,000)
(200,000)
(225,000)
(650,000)
Payables
Vendor
Vendor
Vendor
Vendor
Total
I
II
III
IX
(250,000)
(100,000)
(150,000)
(250,000)
(750,000)
General Ledger
SLA Detail
Ledger A
Multiple Accounting
Representations
Ledger B
Multiple Ledgers
Global Compliance – Statutory
and Stock Market
French Rules
Plan Comptable
French Calendar
US GAAP
US COA
US Calendar
EUR
EUR
or
Dr
Cr
Subledger
Accounting
Payables Invoice
Single subledger
transaction
can create multiple
accounting
representations
and in multiple
currencies
Chose to use an
alternative Ledger or just an Adjustment
Ledger or segment
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Ledgers and Ledger Sets
Work Think Manage
Ledger
One Repository of Financial Truth
Ledger B
US GAAP
US COA
US Calendar
EUR
Implements the 4 C’s:
Accounting Method
Chart of Accounts
Calendar
Currency
The balance on Creditors (COA)
is 4.2M Eur (Currency)
on March 31, 2011 (Calendar)
according to IAS/IFRS definitions (Accounting Method)
- International Accounting Standards
- International Financial Reporting Standards
Reporting Currency
Ledger Sets
Global Information At A Glance
Ledger A
Ledger B
French Rules
Plan Comptable
French Calendar
US GAAP
US COA
US Calendar
EUR
EUR
Reporting Currency
Ledger Sets
Global Information At A Glance
Share:
Chart of Accounts
Calendar
Ledger Set
Ledger C
Ledger A
Ledger B
French Rules
Plan Comptable
French Calendar
US GAAP
US COA
US Calendar
EUR
EUR
Key benefits to many Ledgers in one set
• Decision-driving business information always available
• Simpler processing and General Ledger management
• Data and definitions that can be shared and secured
US GAAP
US COA
US Calendar
USD
Ledger D
US GAAP
US COA
US Calendar
AUD
Reporting Currency
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Global Business
Functions
Work Think Manage
Legal Entity: Your Registered
Legal AuthoritiesCompanies
Countries, States, Local,
Agencies, Taxation,
Registrars, Regulators...
Regulates
Complies
Legal Entities
Registered Companies,
Funds, Partnerships…
Inc. LLC. Ltd. SA. GmBH. Etc.
“exist in the outside world”
Managed & analyzed by
Management Orgs
Divisions, LOBS, Plants,
Cost Centers, Whatever =
“Decision Making Tags”
Public
Company
(ultimate parent)
Subsidiary
Public
Company
Company
(regional parent)
Subsidiary
Company
Subsidiary
Company
(business parent)
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
• Parent companies (LEs) “own or
control” subsidiaries (LEs)
• No outside ring - must pick an LE
• LEs create commercial
transactions
LEs: Why and What?
Why “Oracle” Care
• LEs pay the taxes
- need tax registrations
• Trade between LEs
needs intercompany
What “Oracle R12” have done
• Addresses, Officers, etc.
• Enabled First Party
stamp
• LEs own the money
and bank accounts
• Added Establishments:
map Registrations to
Authorities
• LEs file the accounts,
take care of accounting
• GRE/LE not touched
• LEs comply with
whatever needs
compliance: “legal” in LE
• Authorities as TCA
parties
• LE Configuration
Tabulate your Registered
Companies and other forms of LE
Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses
•E-Business Tax Administrator –> Home –> Task List –> External Dependencies –> Create Collecting and Reporting Tax Authorities. Click on the ‘Go to Task’ icon.
•General Ledger>setup>Financial>Accounting Setup (LE Tab)
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E-Business Tax
Work Think Manage
Centralized Global Tax
Less Complex Global Tax Compliance
Business Needs
Solution
• Tax content for certain countries
Automation
• Vertex and Taxware integration for U.S.
• Integrity checks during setup process
Constant Changes in
Tax Laws and
Regulations
• Date effective setup
• Tax rules flow for change or creating rules
• Tax simulator for setup, rules, and transactions
• Tax registrations and tax reporting codes
Local Compliance
• Tax lines determine applicable taxes
• Configurable tax reporting templates
• Single set up for all Oracle applications
Information Visibility
• Use of E-Business Suite components such as trading partner geography,
trading partner classification, legal entity, inventory item categorization,
and accounting event.
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Advanced Intercompany
(AGIS)
Work Think Manage
Advanced Global Intercompany System
Address the Top Barrier to a Fast Close
Advanced Global
Intercompany
System
Web UI
Subledger
Invoices &
Documents
Open
Interfaces /
API
 Generate subledger invoices
 Control transaction entry with
Intercompany Calendar
Excel
(Web ADI)
Online
Reconciliation
Reporting
 Fully Configurable Approval Rules
 Flexible Security Model
 Centrally defined Intercompany
Accounts
Dr
General
Ledger
XML
Publisher
Reports
Cr
Subledger
Accounting
Receivables
Payables
AGIS at Work
Rebilling a Corporate Cost from an USA HQ
Inter
Company
• AP and AR Invoices
created for France
and Italy
California
Company
General
Ledger Entries
Illinois
Company
• GL Entries created for
US subsidiaries
New York
Company
Subledger
Invoices &
Documents
France
Company
Italy
Company
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Banking Model
Work Think Manage
Centralized Banking
Shared Services Disbursements
• Bank account is now
associated with LE entity
rather than Operating Unit
LE
OU A
Inventory
Work in
Process
OU B
OU C
Receivables
Purchasing
Payables
Projects
Assets
• Single bank account
serves multiple Operating
Units
• Any and all Operating
Units associated with a
ledger can be permitted to
use the bank account
Plus
 Centralized Credit Card Model
 Credit Card Encryption
 Supplier & Customer Banks in TCA
Bank Model: Example of What You Can
Do
Newwith
Payments
Module
Pay invoices from different• OUs
1 instruction
OU A
• New Bank Model
• New Bank & Credit Card
Features
OU B
Single
Payment
Instruction
OU C
Bank
Sub Ledger
Accounting
Invoices
Payments
Banks
Legal Entity
Operating Units