R12 Oracle Subledger Accounting Fundamentals Chapter 1dbmanagement.info/Books/MIX/R12_Oracle_Subledger... · Web viewChapter 1. Overview of Subledger Accounting. Objectives. What

Overview of Subledger AccountingChapter 1

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Overview of Subledger AccountingChapter 2 - Page 1

Overview of Subledger Accounting



Objectives



What is Subledger Accounting?

What is Subledger Accounting?

Subledger Accounting is a set of services for R12 that significantly enhances accounting support across the E-Business Suite.

Subledger Accounting is a data store in the same way as General Ledger but Subledger Accounting provides the detailed data whereas General Ledger provides a summarized version. Subledger Accounting is therefore a “true” subledger.

Introduction to Subledger Accounting

Subledger Accounting is mainly a rule-based accounting engine that centralizes accounting for Oracle E-Business Suite products in R12.

Subledger Accounting is not a separate product in itself, but is Oracle’s engine catering to the accounting needs of Oracle applications.



Together with the new ledger support, Subledger Accounting enables support of multiple accounting requirements concurrently in a single instance. Different accounting regulations can be satisfied by maintaining and applying different sets of rules to different sets of transactions; or accounting for the same transaction with multiple methods.

By maintaining a full link between the transaction and accounting data, Subledger Accounting allows powerful reconciliation and auditing capabilities.

Since Subledger Accounting provides the setup and inquiry user interface and data model for accounting across modules, Subledger Accounting enables consistency in reporting, analysis, and user experience.


Let us assume a US based corporation with operations in the UK and France.

The French operation is subject to French accounting regulations, and therefore must report its activities to the local authorities in Euros, according to the French business calendar, French chart of accounts, and the French interpretation of IFRS (International Financial Reporting Standards).

The UK operation, similarly, is subject to the UK regulations, which for this example’s sake are not as restrictive as the French ones. Thus, the UK operation does its local reporting in the local currency, the British Pound, but according to the US business calendar, US chart of accounts (COA), and US GAAP.

The US operation reports in the USD according to the US business calendar, US COA, and GAAP.

In the R12 ledger setup, each of these operations would be defined as three separate ledgers to satisfy local reporting requirements.

The US headquarters/parent company would need to have a consolidated global visibility of the worldwide operations, however, it would not be very meaningful to consolidate or compare each of these entities with each other. Firstly, because the reporting currencies are different. Secondly, the COA and the method of accounting for the French activities may be considerably different than those in the UK and US. For example, in France, purchases or inventory will be reported as expenses, whereas in the UK and the US they will be reported as inventory items. Therefore, a simple currency conversion will not suffice. With the R12 ledger architecture and Subledger Accounting, the following model can be implemented to solve this business need:

For the UK operation, activities can be converted to the US equivalent simply by converting the currency since the calendar, COA, and accounting methods are the same. You can set this up by adding a reporting currency to the UK ledger.

For the French operation, a currency conversion alone will not work. You will need to define a secondary ledger for the French ledger, which will share the same currency, COA, calendar, and accounting method as those at HQ.



By defining the reporting currency and secondary ledgers, the three operations can satisfy local regulations, and also allow comparison and consolidation.

In the definition above, Subledger Accounting allows:

multiple accounting methods to be defined

separate accounting methods to be used on different ledgers

Journal entries to be created on multiple ledgers for a single business event (French activities accounted for on the primary ledger according to the IFRS method, and on the secondary ledger according to the US GAAP method).


You can see at a glance exactly where the accounting comes from.

This is a journal entry created upon the validation of an accounts payable invoice. Notice the description on the journal entry as well as information from the invoice itself which will help in associating the entry with the transaction.


Subledger Accounting tracks how the journal entry is built from a transaction.

On the left-hand side of the screen, you can see an invoice for two items, freight, and tax.

On the right, you can see two entries have been created: one on the US corporate ledger and the other on the FR statutory ledger.

The expense entry is created for the two line items of the invoice.

The next two lines (2 and 3) are for freight and tax respectively.

The rules have been set up to summarize all of this information and create a single liability entry. You could also configure the rule so that 3 or 4 separate liability lines are created.

Subledger Accounting stores and enables you to track how each line of the invoice contributed to the journal entry.


Let us go back to the previous example and look at a payment that pays off the invoice. The SLA data model not only allows keeping the transaction-to-accounting link, but the inherent features also allow the transaction flows to be reflected on the accounting side. You can see here that a particular payment is applied to a particular invoice liability.

Using the SLA Business Flows functionality, we are able to go back to the journal created for the invoice and view the exact liability account, at the exact rate that the invoice was converted at, if it was a foreign currency one, at the time of accounting for the payment.



What is a subledger?

Example: The Receivables subledger stores receivables by customer, but this detail is not needed in a general ledger.



Subledger Balances

Subledger Balances

Control Account: An asset or liability account (receivable or payable) to which only entries for subledger transactions with trading partners (suppliers or customers) can be booked. No manual GL adjustments are allowed. Subledger balances are tracked at an account and trading partner level.



Summary



Practice 1: Create a New User



Practice - Create a New User

Overview

In this practice, you will create a new user.

Assumptions

Replace XX with your terminal number or initials.

You must have access to an Oracle Application Vision database or comparable training or test instance at your site on which to complete this practice.

Tasks

1. Switch to the System Administrator responsibility. (I) Black Hat (on toolbar) Responsibility = System Adminstrator

2. Create a New User User Name = XXUSER Password = welcome1 Person = The employee you created in the first practice

Note: You have to tab and enter the Password again.

3. Enter the responsibilities for this user.Responsibility Security Group

General Ledger, Vision Operations (USA) Standard

Payables, Vision Operations (USA) Standard

Purchasing, Vision Operations (USA) Standard

Cash Management, Vision Operations (USA) Standard

US HRMS Manager Standard

Human Resources, Vision Enterprises Standard

iExpenses Standard

System Administrator Standard

Oracle Payments Payment Administrator Standard

4. Sign on as your new user.



Solution - Create a New User

Tasks

Sign on

1. Switch to the System Administrator responsibility. (I) Black Hat (on toolbar) Responsibility = System Adminstrator

Create a New User

2. Navigate to the Define User form

(N) Security : User > Define User Name = XXUSER, where XX is your terminal ID. Password = welcome (tab, re-enter to verify) Person = The employee you created in the first practice

Add Responsibilities

3. Add the following responsibilities to your new username

Responsibility Security Group


Payables, Vision Operations (USA) Standard

Purchasing, Vision Operations (USA) Standard


US HRMS Manager Standard

Human Resources, Vision Enterprises Standard

iExpenses Standard


Oracle Payments Payment Administrator Standard



4. Save and Close Form.

Login as New User

5. Exit Oracle Applications (M) File > Exit Oracle Applications (B) OK

6. From the Oracle e-Business Suite home page: (L) Logout

7. Log back into the system with your newly created User ID and password. Old Password = welcome1 New Password = XXuser (Tab, re-enter to verify)

8. (B) Submit.



Practice - Create a New User (Required)

Overview

In this practice you will create a new user.

Assumptions



Tasks

Create a New User

1. (M) File > Switch Responsibilities Responsibility = System Administrator

2. (B) OK

3. Navigate to the Define Users window

(N) Security > User > Define User Name = XXUSER (where XX is your terminal ID) Password = welcome (tab, re-enter password to verify) Person Name = Your employee name from the previous practice

4. (I) Save

5. Add the following responsibilities to your new username:

Responsibility Security Group


Workflow Standard


Order Management Super User, Vision Operations (USA) Standard

Receivables, Vision Operations (USA) Standard


iReceivables Internal, Vision Operations (USA) Standard

6. (I) Save



7. (M) File > Exit Oracle Applications

8. (B) OK

9. Make the Personal Home Page the active page

10. (L) Logout

Login as New User

11. Enter your Username and Password Username = XXUSER Password = welcome

12. (B) Connect Old Password = welcome New Password = Oracle (Tab, re-enter to verify)

13. (B) Save Responsibility = Receivables, Vision Operations (USA)



Practice 2: Create a Supplier



Practice - Create a Supplier With Two Sites

Overview

Your supervisor has notified you that the company will be purchasing materials and services from new suppliers. In this practice, you will create a pay group and a supplier with two sites.

Assumptions



Tasks

Responsibility = Purchasing, Vision Operations

1. Create a new pay group.

(N) Setup : Purchasing > Lookup Codes

Code Meaning Description

XXPAY GROUP XXPay Group XXPay Group

2. Switch to the Payables, Vision Operations (USA) responsibility

3. Create a supplier.

(N) Suppliers > Entry

(B) Create Supplier Type = Standard supplier Organization Name = XXIBM Corporation Type = Manufacturing Party Risk Profile = No Risk Allow Tax Applicability = Checked Create Debit Memo from RTS Transaction = Checked Receipt Routing = Standard Receipt Allow Substitute Receipts = Checked Match Approval Level = 3-Way Invoice Match Option = Purchase Order Terms = Immediate Pay Group = XXPay Group Always Take Discount = Checked



Payment Method : Electronic = Checked

4. Create a pay site. Address Line 1 = 1 Main St. City = San Francisco County = San Francisco State = CA Postal Code = 94105 Address Name = San Francisco Addressee = San Francisco Phone Area Code = 415 Phone Number = 555-1234 Email Address = [email protected] Address Purpose, Payment option = Checked

5. Assign the San Francisco address to the Vision Operations operating unit.

6. Create a purchasing site. Address Line 1 = 520 Madison Ave. City = New York County = New York State = NY Postal Code = 10022 Address Name = New York Addressee = New York Phone Area Code = 212 Phone Number = 555-7703 Email Address = [email protected] Address Purpose, Purchasing option = Checked

7. Assign the New York address to the Vision Operations operating unit.

8. Create a contact for the pay site. Navigate to (L) Contact Directory (B) Create First Name = John Last Name = Doe Email Address = [email protected] Phone Area Code = 415 Phone Number = 555-1234 Phone Extension = 1234 Create User Account for this Contact = Checked iSupplier Portal Full Access = Checked

9. Create a contact for the purchasing site. (B) Create First Name = Jane Last Name = Doe



Email Address = [email protected] Phone Area Code = 212 Phone Number = 555-7703 Create User Account for this Contact = Checked iSupplier Portal Full Access = Checked

10. Set the Tolerance level for the San Francisco and New York supplier sites to Vision Operations – Tolerance.



Solution - Create a Supplier With Two Sites

Tasks

Responsibility = Purchasing, Vision Operations (USA)

Create a New Pay Group

We will create a new pay group and assign it to your suppliers. The Pay Group will default to new supplier sites you enter and from your supplier sites to all invoices you enter. When we select invoices for payment during this course, you will use your pay group so you select only YOUR invoices for payment!

1. Navigate to the Oracle Purchasing lookups

(N) Setup : Purchasing > Lookup Codes

2. Query the PAY GROUP lookup code (F11) Enter search criteria ‘P%G%’ in the Type field (Ctrl)+(F11)

3. Create a new pay group by inserting your cursor in the bottom of the grid, then clicking (I) Add New Row. Use the information below to create the new pay group:

Code Meaning Description

XXPAY GROUP XXPay Group XXPay Group



4. Save. Close the form to return to the Navigator.

Create a Supplier

5. Switch to the Payables, Vision Operations (USA) responsibility. (I) Black Hat (on toolbar) Responsibility = Payables, Vision Operations (USA)

6. Navigate to the Suppliers page. (N) Suppliers > Entry

7. (B) Create Supplier. Supplier Type = Standard supplier Organization Name = XXIBM Corporation



8. (B) Apply.

9. Navigate to (L) Organization. Type = Manufacturing Party Risk Profile = No Risk

10. (B) Save.



11. Navigate to (L) Tax and Reporting. Allow Tax Applicability = Checked

12. (B) Save.

13. Navigate to (L) Purchasing. Create Debit Memo from RTS Transaction = Checked



Note: Enable the Create Debit Memo From RTS Transaction option if you want the system to automatically create a Debit Memo in Payables when you enter a Return to Supplier (RTS) in Purchasing. The value for supplier site defaults from the Purchasing Options window.

14. (B) Save.

15. Navigate to (L) Receiving. Receipt Routing = Standard Receipt

Note: To find Standard Receipt: (I) Search Change the search criteria to Routing Name, not Routing Description. Receipt Routing = Standard Receipt

Match Approval Level = 3-Way Allow Substitute Receipts = Checked



16. (B) Save.

17. Navigate to (L) Invoice Management. Invoice Match Option = Purchase Order Terms = Immediate Pay Group = XXPay Group Always Take Discount = Checked



18. (B) Save.

19. Navigate to (L) Payment Details. Payment Method : Electronic = Checked

20. (B) Save.

Create a Pay Site

21. Navigate to (L) Address Book.

22. (B) Create.



23. Enter the supplier site address information as follows: Country = United States Address Line 1 = 1 Main St. City = San Francisco County = San Francisco State = CA Postal Code = 94105 Address Name = San Francisco Addressee = San Francisco Phone Area Code = 415 Phone Number = 555-1234 Email Address = [email protected] Address Purpose, Payment = Checked

Note: This address should be complete as this is the address that will appear on any checks cut to this site!

24. (B) Continue.

Note: If you get a message about the postal code, click (B) Continue to accept the Zip code.

25. Assign the address to the Vision Operations operating unit, enable the Select check box.



26. (B) Apply. This creates the basic supplier site.

27. To update the supplier site attributes, click Manage Sites.

28. (T) Uses. Pay = Checked Primary Pay = Checked



29. (T) Communication. Supplier Notification Method = Print

30. Apply.

Create a Purchasing Site

31. In the Address Book page, click (B) Create.

32. Enter the supplier site address information as follows: Country = United States Address Line 1 = 520 Madison Ave. City = New York



County = New York State = NY Postal Code = 10022 Address Name = New York Addressee = New York Phone Area Code = 212 Phone Number = 555-7703 Email Address = [email protected] Address Purpose, Purchasing option = Checked

Note: This address should be complete as this is the address that will appear on any checks cut to this site!

33. (B) Continue.

34. Assign the address to the Vision Operations operating unit, by enabling the Select check box.

35. (B) Apply. This creates the basic supplier site.

36. To update the New York supplier site attributes, click Manage Sites.



37. (T) Communication. Supplier Notification Method = Print

Note: When you enter and approve purchase orders for this supplier, the Supplier Notification Method will default. We’ve chosen printed document here. However, if we chose e-Mail and specified an e-mail address, that information would default during purchase order approval so we could send the purchase order using the supplier’s preferred method. Valid options are e-Mail, Fax and Printed Document.



38. Apply.

Create a Contact for the Pay Site

39. Navigate to (L) Contact Directory.

40. (B) Create. First Name = John Last Name = Doe Email Address = [email protected] Phone Area Code = 415 Phone Number = 555-1234 Phone Extension = 1234 Create User Account for this Contact = Checked iSupplier Portal Full Access = Checked

41. In the Addresses for the Contact Region, click (B) Add Another Row.

42. Type 'San Francisco' in the Address Name Field.



43. (B) Apply.

Create a Contact for the Purchasing Site

44. Navigate to (L) Contact Directory.

45. (B) Create. First Name = Jane Last Name = Doe Email Address = [email protected] Phone Area Code = 212 Phone Number = 555-7703 Create User Account for this Contact = Checked iSupplier Portal Full Access = Checked

46. In the Addresses for the Contact Region, click (B) Add Another Row.



47. Type 'New York' in the Address Name Field.

48. (B) Apply.

Set the Supplier Site Tolerance

49. (L) Invoice Management

50. Scroll to the Supplier Sites region.

51. (ST) Invoicing

52. For the New York and San Francisco sites, select Vision Operations – Tolerance from the list of values.

(L) More . . . Search = Vision Operations – Tolerance (B) Go (B) Select

53. (B) Save.

54. Close the form back to the Navigation menu.



Practice - Create a Customer (Required)

Overview

Before creating a customer, use the Customer Search page to determine if the customer already exists and minimize the possibility of creating a duplicate.

The Create Customer page displays differently, depending upon your customer type selection, Organization or Person, on the Customer Search page.

In this practice, you will create an Organization customer.

Assumptions


You have the Receivables, Vision Operations (USA) or Order Management Super User, Vision Operations (USA) responsibility.

Replace XX in the Practice with a unique identifier such as your initials or terminal number. (For Instructor Led Training classes, this number will be assigned to you). This is necessary in order to create unique records within the database when performing the Practice.

Tasks

Create an Organization Customer

1. Navigate to the Customer Search page.

(N) Customers > Customers > Customer Search

2. Search for the customer XXMegamart.

3. If the customer does not exist, click (B) Create Customer.

4. Enter the following data:

Enter the following customer information to create the new Organization customer:Field Name Value

Organization Name XXMegamart

Alias Platinum

Enter the following account information to create the new Organization customer:Field Name Value



Account Description XX- XXMegamart Account1

Account Number XX-7556

Profile Class XXGOOD CREDIT

Account Type External

Note: The Account Number must be unique. You need not enter a customer account number if the Automatic Customer Numbering System Option is enabled on the (T) Trans and Customers of the System Options window.

Enter the following account site information to create the new Organization customer:Field Name Value

Country United States

Address Line 1 200 E Randolph Street

City Chicago

County Cook

State IL

Postal Code 60601

Operating Unit Vision Operations

Address Description Western United States

Business Purposes Bill To

5. Click (B) Save And Add Details to go to the Account Overview page. Alternatively, click (B) Apply to go to the Customer Overview page.

6. Click Apply on the Account Overview page (or on the Customer Overview page if you clicked (B) Apply in Step 5) to save the customer and return to the Customer Search page.

7. Repeat these steps to create a second customer named XXGiant Distributors.



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R12 Oracle Subledger Accounting Fundamentals Chapter 1dbmanagement.info/Books/MIX/R12_Oracle_Subledger... · Web viewChapter 1. Overview of Subledger Accounting. Objectives. What