11i opm - costing flow
DESCRIPTION
11i Opm - Costing FlowTRANSCRIPT
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The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
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E-Business Suite R12 Cost Accounting Integrated with SLA
Diane Streubel – Schreiber Foods Cost Manager
Douglas Volz – OAUG Discrete Cost SIG Sub-Committee
Herve Yu – Oracle Costing Development
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• Oracle Process Costing MAC transitioning to SLA
• Oracle Discrete Costing SLA enhancements
• Case example: Discrete Costing-Product Line Accounting
Costing Accounting Integrated with SLA Agenda
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Oracle Process Costing
MAC transitioning
to SLA
Schreiber FoodsDiane Streubel
Manager - Cost & System Development
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• Converged inventory model• Inventory Organizations that are Process will use Process
Costing• Process users are denied access to Discrete Costing forms
• Process Enabled organizations can not setup costs in the Discrete Costing application
• Sub Ledger Architecture (SLA) replaces MAC
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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Cost Setup Calculate Cost Store Costs MAC Oracle GL
GMI (OPM Inventory)
Purchasing GMD, GMEOrder Management
11i OPM
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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Cost Setup Calculate Cost Store Costs SLA Oracle GL
Oracle Inventory
Purchasing GMD, GMEOrder Management
R12 OPM
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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• Subledger accounting is an intermediate step between subledger products and the Oracle General Ledger
• Each transaction that requires accounting is represented by a complete and balanced subledger journal entry, stored in a common data model.
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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Subledger GL Export Journal Import Journal Posting
Interface
General Ledger
For G/L integration, discrete costing works the same as OPM costing
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
11i OPM
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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
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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OPM MACCompleted material
and/or resource transactions.
OPM Costing Engine generates costs.
OPM Subledger process processes
these transactions to create Journal entries
SLA
Cost Pre-processor will create
accounting Events
SLA accounting program processes the events to create the journal entries
Completed material and/or resource transactions.
OPM Costing Engine generates costs.
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA
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OPM MAC SLA COMMENTSFiscal Policy Retained with few modifications
Event Fiscal Policy Retained with few modifications
Source Process Category
Event Event Entity
Sub-Event Event Class
Account Titles Journal Line Types (JLT)
Accounting Template Application Accounting Definitions (AAD)
Users can define their own AADs or modify seeded information
Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs
Priorities and Account Mapping
Account Derivation Rules (ADR) More flexible. Mapping can be done at Accounting flexfield level as well as segment level
Test Mapping Test Accounting Builder (TAB)
OPM Currency, OPM Ledger, OPM Exchange Rates
Use GL setups
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA – Setup Forms
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OPM MAC SLA COMMENTS
Test and Actual Subledger Accounting
Draft and Final Accounting
Subledger Program Accounting Pre-Processor
Run Subledger for multiple valuation/cost methods for a ledger
Supports multiple valuation methods
In OPM there can only be one representation at a time. SLA supports multiple representations at the same time
Run Subledger process for a functional area
Run Pre-Processor by Process Category
Flexible. User can have any number of categories. Assigned to one or more event classes
Detailed Subledger Report Is retained and has been modified to use SLA repository
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Reports
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• Most of the steps are automated using migration scripts• All the Account Definitions would be migrated as ADRs• Manual Steps to be completed are:
• Assign Account Derivation Rules to Journal Line Definitions
• Validate Application Accounting Definition
• Assign User Subledger Accounting Method to Ledger
Costing Accounting Integrated with SLA OPM MAC transitioning 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 Journal Entries report
Run Create Accounting in Final mode to create GL accounting entries
Run OPM Accounting Pre-Processor
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Process
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• NO LOSS of functionality by moving to SLA model• A new sub-menu created under Cost Management for SLA
forms.• Fiscal Policy and Event Fiscal Policy screens retained with minor
modifications. Most of the fields will be read-only.• OPM Event model mapped to SLA event model.
Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Summary
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Oracle Discrete Costing SLA Enhancements
OAUG Discrete Cost SIG Sub-Committee Douglas Volz
Douglas Volz Consulting, Inc.
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Release 11i account recognition “pain points” eliminated by SLA:• SLA removes limitations for recording COGS and Revenue (still
uses Cost Account Generator/workflow and A/R AutoAccounting)• Recording inventory and WIP accounts with more flexibility• Flexible variance account recognition for:
• Invoice price variance
• Purchase price variance
• Average cost adjustment
• Standard cost adjustment
• Manufacturing variances
• Account aliases
• Freight charges
• And most other inventory, manufacturing and related account entries
Costing Accounting Integrated with SLA Increased Flexibility: Oracle Discrete Costing SLA
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• Event Model: definition of the subledger transaction types and
lifecycle• 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 Transaction, Receiving or WIP or Write Off
EVENT CLASS
Logical grouping of events which have similar kind of accounting
EVENT TYPE
The most granular level of business event which has accounting impact
Sub Ledger Accounting(SLA) Key Concepts
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JOURNAL ENTRY SETUPS
Define/copy and modify journal line types
Define/copy and modify account derivation rules
Define/copy and modify descriptions
PROCESS
Enter Transaction(s)
Cost Manager
Create Accounting* Transfer Journal Entries to GL
*Run ‘Create Accounting – Cost Management’ concurrent request for accounting all transactions from the Cost Management – SLA responsibility. Receiving Accounting can be generated in the Purchasing responsibilities using the ‘Create Accounting – Receiving’ concurrent request.
These requests have an option to transfer the entries created to General Ledger. A separate process is also available.
Sub Ledger Accounting(SLA) Setup and Process
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Transactions
Accounting Events
Cost Management SLA
AccountingConfigurations
SubledgerBalances
SubledgerJournal Entries
AccountingProgram
Journal Entry Setup
GLJournal Entriesand Balances
Sub Ledger Accounting(SLA) Setup and Process
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Case Example: Discrete Costing-Product Line Accounting
Oracle Corporation - Discrete Costing Development
Herve Yu Senior Principal Engineer
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Example: Record Purchase Price Variance by Product Line
• We have 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 same requirement• Cost/SLA mapping set capability
• Category Accounting – Cost/Global Accounting migrated to SLA in R12.1
• A word for Inventory period close and Cost/SLA upgrade
Costing Accounting Integrated with SLA
Case Example: Purchase Price Variance product Line
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Cost/SLA mapping set capability
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• Product Line Setup Steps
Set up your product line using SLA mapping set
1. Enter your SLA account derivation rule for Purchase Price Variance accounts
2. Associate the new account derivation rule to your Journal Line Type
3. Associate the Application Accounting Definition with Subledger Accounting Method
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Product Line Accounting – Descriptive flexfield
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Product Line Accounting – Descriptive flexfield
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Mapping set – Account Derivation Rule
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Mapping set – Account Derivation Rule
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• SLA Journal Line / Derivation Rule
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Associate Journal Lines Definition to the Event Class
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Note the same ADR is usable for Standard Cost Update
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Note the same ADR is usable for Standard Cost Update
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Associate SLA Definition to the SLA Method/Ledger
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• Assign product line code to the inventory item
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• The material subledger from 11i still exists
Inventory
PPV
Inventory
Receiving
Matl Overhead Absorption
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• SLA Entries That Go to Your G/L
Costing Accounting Integrated with SLA
Cost/SLA mapping set capability:PPV by product Line
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• For the Standard Cost Update That Go to Your G/L
Costing Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line
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Category Accounting – Cost/Global Accounting migrated to SLA in R12.1
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Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
• Create a new structure under the key flexfield “Item Category”
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Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
• Create a new structure under the key flexfield “Item Category”
• Create category codes
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Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
• Create a new structure under the key flexfield “Item Category”
• Create category codes
• Create category set
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• Create a new structure under the key flexfield “Item Category”
• Create category codes
• Create category set
• Assign “Product Line Accounting” functional area category set
Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
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• Product Line category account
Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
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• Account Derivation Rule would have used a source directly
Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting
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• Summary Notes • Product line accounting can be achieved in many ways without using
Costing Hook.
• In R12 SLA is the Oracle R12 accounting platform and Costing supplies application sources from INV,WIP,RCV… to build the accounting journals.
• One caveat: Pre-Release 12 subledger accounting reports are reading data from Costing distribution layer (such as the Material Account Distribution Summary or Detail Reports). Those reports will not show SLA journals. SLA provides a set of new accounting reports (such as Journal Entries Report, Accounting Analysis Report…) which can be modified as desire using BI Publisher.
Costing Accounting Integrated with SLA Case Example - Conclusion
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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.
Costing Accounting Integrated with SLA Inventory Period Close and Upgrade
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Additional information are available:
• R12 Oracle Subledger Accounting – Implementation Guide
• R12 Oracle Cost Management – User Guide
• R12 Oracle Process Manufacturing Cost Management - User Guide
Costing Accounting Integrated with SLA
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