SLA EBS R12 Cost Accounting Integrated With SLA

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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

• 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

• 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

Cost Setup Calculate Cost Store Costs MAC Oracle GL

GMI (OPM Inventory)

Purchasing GMD, GMEOrder Management

11i OPM


Cost Setup Calculate Cost Store Costs SLA Oracle GL

Oracle Inventory

Purchasing GMD, GMEOrder Management

R12 OPM


• 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.


Subledger GL Export Journal Import Journal Posting

Interface

General Ledger

For G/L integration, discrete costing works the same as OPM costing


11i OPM

PayablesPayables

ReceivablesReceivables

ProjectsProjects

Oracle Subledger Accounting Oracle General

Ledger

OPM

R12 OPM

For G/L integration, discrete costing works the same as OPM costing


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.


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

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

• 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


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

• 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


Oracle Discrete Costing SLA Enhancements

OAUG Discrete Cost SIG Sub-Committee Douglas Volz

Douglas Volz Consulting, Inc.

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

• 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

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

Transactions

Accounting Events

Cost Management SLA

AccountingConfigurations

SubledgerBalances

SubledgerJournal Entries

AccountingProgram

Journal Entry Setup

GLJournal Entriesand Balances

Sub Ledger Accounting(SLA) Setup and Process


Case Example: Discrete Costing-Product Line Accounting

Oracle Corporation - Discrete Costing Development

Herve Yu Senior Principal Engineer

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

Cost/SLA mapping set capability

• 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


Cost/SLA mapping set capability:PPV by product Line

• Product Line Accounting – Descriptive flexfield



• Product Line Accounting – Descriptive flexfield



• Mapping set – Account Derivation Rule



• Mapping set – Account Derivation Rule



• SLA Journal Line / Derivation Rule



• Associate Journal Lines Definition to the Event Class



• Note the same ADR is usable for Standard Cost Update



• Note the same ADR is usable for Standard Cost Update



• Associate SLA Definition to the SLA Method/Ledger



• Assign product line code to the inventory item



• The material subledger from 11i still exists

Inventory

PPV

Inventory

Receiving

Matl Overhead Absorption



• SLA Entries That Go to Your G/L



• 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

Category Accounting – Cost/Global Accounting migrated to SLA in R12.1

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



• Create category set

• Assign “Product Line Accounting” functional area category set


• Product Line category account


• Account Derivation Rule would have used a source directly


• 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

• 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

Additional information are available:

• R12 Oracle Subledger Accounting – Implementation Guide

• R12 Oracle Cost Management – User Guide

• R12 Oracle Process Manufacturing Cost Management - User Guide


THANK YOUTHANK YOU

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SLA EBS R12 Cost Accounting Integrated With SLA