Title: Cost Accounting As You Want It - EBS R12 Cost Accounting with SLA
1Cost Accounting As You Want It - EBS R12 Cost
Accounting with SLA
- UKOUG 2009 Conference Series November 30, 2009
Douglas Volzdoug_at_volzconsulting.com Douglas Volz
Consulting, Inc. OAUG Discrete MFG Cost
Sub-Committee Lead
2Agenda
- Oracle Discrete Costing SLA enhancements
- Oracle SLA Concepts
- Case example Product Line Accounting
- If Time Allows Oracle Process Costing MAC
transitioning to SLA
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3Oracle Discrete Costing SLA enhancements
Increased Flexibility
- Release 11i account recognition pain points
eliminated by Subledger Accounting (SLA) - SLA removes limitations for recording COGS and
Revenue (Cost Account Generator/workflow and A/R
AutoAccounting are still in use) - Gives you the ability to record inventory and WIP
accounts with more flexibility
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4Oracle Discrete Costing SLA enhancements
Increased Flexibility
- Flexible variance account recognition for
- Invoice price and purchase variances
- Average cost adjustment
- Standard cost adjustment
- Manufacturing variances
- Account aliases
- Freight charges
- Most other inventory, manufacturing and related
account entries
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5Oracle SLA Concepts
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6Subledger Accounting Method (SLAM) Setup Steps
- Determine sources of information for your account
derivation rules (understand the underlying
business logic and data) - Create account derivation rules (and optional
mapping sets) - Create journal line types
- Create a journal lines definition(link the
journal line type to the account derivation rule) - Create an application accounting definition(copy
an existing definition and modify it and then
validate it) - Create a subledger accounting method (SLAM)
(copy standard accrual and create a new one) - Assign the new SLAM to a Ledger
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7Key Concepts for SLA Transaction Types
- 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
accounting
The most granular level of business event which
has accounting impact
EVENT TYPE
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8Setup and Process
PROCESS
JOURNAL ENTRY SETUPS
Enter Transaction(s)
Enter Transaction(s)
Define/copy and modify account derivation rules
Cost Manager
Cost Manager
Cost Manager
Define/copy and modify journal line types
Create Accounting
Transfer Journal Entries to GL
Create Accounting
Transfer Journal Entries to GL
Create Accounting
Transfer Journal Entries to GL
Create Accounting
Transfer Journal Entries to GL
Define/copy and modify descriptions
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.
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9Setup and Process
Accounting Program
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10Basic Table Structure for SLA
Enter Transaction(s)
One Common Accounting Subledger Table
Same Cost Transaction Accounting Tables
Cost Manager
SLA Accounting Tables
G/L Tables
Transaction Accounting Tables
GL_LEDGERS
XLA_EVENTS
Create Accounting
GL_JE_BATCHES
XLA_AE_HEADERS
GL_INTERFACE
GL_JE_HEADERS
XLA_AE_LINES
GL_JE_LINES
XLA_DISTRIBUTION_LINKS
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11Case Example Product Line Accounting for
Discrete and Process Costing
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12Example Purchase Price Variance product Line
- Say there are 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 using an Item
Master DFF - Category Accounting R11i Cost Accounting
migrated to SLA in R12.1 (only works with
Discrete Costing)
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13Cost/SLA Mapping Set Capability(for Discrete
and Process Costing)
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14Cost SLA Mapping Set Capability PPV by product
Line
- Product Line Setup Steps Using SLA mapping set
- Create the product line information in your item
master - Enter your SLA account derivation rule for
Purchase Price Variance accounts - Associate the new account derivation rule to your
Journal Line Type - Associate the Application Accounting Definition
with Subledger Accounting Method
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15Cost/SLA Mapping Set Capability
- Product Line Accounting Descriptive flexfield
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16Cost/SLA Mapping Set Capability
- Product Line Accounting Item Descriptive FF
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17Cost/SLA Mapping Set Capability
- Assign product line code to the inventory item
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18Cost/SLA Mapping Set Capability
- Mapping set Account Derivation Rule
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19Cost/SLA Mapping Set Capability
- Mapping set Account Derivation Rule
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20Cost/SLA Mapping Set Capability
- SLA Journal Line / Derivation Rule
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21Cost/SLA Mapping Set Capability
- Associate Journal Lines Definition to the Event
Class
Dont forget to validate your new AADs
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22Cost/SLA Mapping Set Capability
- Note the same ADR is usable for Standard Cost
Update
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23Cost/SLA Mapping Set Capability
- Note the same ADR is usable for Standard Cost
Update
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24Cost/SLA Mapping Set Capability
- Associate SLA Definition to the SLA Method/Ledger
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25Cost/SLA Mapping Set Capability
- The material subledger from 11i still exists
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26Cost/SLA Mapping Set Capability
- SLA Entries That Go to Your G/L
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27Cost/SLA Mapping Set Capability
- For the Standard Cost Updates That Go to Your G/L
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28Category Accounting Discrete Cost Accounting
migrated to SLA in R12.1
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29Product Line Category Accounting
- Create a new structure under the key flexfield
Item Category
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30Product Line Category Accounting
- Create a new structure under the key flexfield
Item Category - Create category codes
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31Product Line Category Accounting
- Create a new structure under the key flexfield
Item Category - Create category codes
- Create category set
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32Product Line Category Accounting
- Create a new structure under the key flexfield
Item Category - Create category codes
- Create category set
- Assign Product Line Accounting functional area
category set
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33Product Line Category Accounting
- Assign product line category accounts
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34Product Line Category Accounting
- Find the correct source name to use
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35Product Line Category Accounting
- Summary Notes
- Product line accounting can be achieved in many
ways without using custom programming or using
the 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. - You could also create a custom SLA source for the
Item Master Cost of Sales Account
(mtl_system_items_b.cost_of_sales)
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36Discrete Inventory Period Close and Upgrade
- 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
(Create Accounting) - Discrete 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.
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37Release 11i to 12 Upgrade Caveats
- Material and WIP Accounting Distribution
Inquiries Reports - These inquiries and reports dont show the
Subledger journals - You still see the same information as in Release
11i - This can be confusing
- SLA has new accounting reports (such as Journal
Entries Report, Accounting Analysis Report)
which can be modified as desired using BI
Publisher. - The Standard Costing profile CST Account
Summarization profile no longer exists
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38R12 New Journal Sources and Categories
Release 12Cost Management - Inventory -
Receiving - WIP
Release 11iInventory - MTL -
WIPPurchasing - Receiving
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39- Acknowledgements of assistance
- Herve Yu Oracle Cost Management Development
Manager - Audrea Auld Oracle University Senior
Financials Instructor - Russell Bayles Oracle Principal Product
Strategy Manager - Michel Basinet Oracle Director Fusion Costing
Product Strategy - Diane Streubel OAUG Process Cost SIG Lead
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40- Additional information available from
- R12 Oracle Subledger Accounting Implementation
Guide - R12 Oracle Cost Management User Guide
- R12 Oracle Process Manufacturing Cost Management
- User Guide
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41THANK YOU
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42Appendix
- Oracle Process Costing MAC transitioning to SLA
-
- Professional Background for Douglas Volz
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43Oracle Process Costing MAC transitioning to SLA
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44OPM MAC transitioning to SLA
- 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
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45OPM MAC transitioning to SLA
11i OPM
Order Management
GMI (OPM Inventory)
Purchasing
GMD, GME
MAC
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46OPM MAC transitioning to SLA
R12 OPM
Order Management
Oracle Inventory
Purchasing
GMD, GME
SLA
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47OPM MAC transitioning to SLA
- 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.
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48OPM MAC transitioning to SLA
11i OPM
General Ledger
Interface
Subledger
GL Export
Journal Import
Journal Posting
For G/L integration, discrete costing works the
same as OPM costing
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49OPM MAC transitioning to SLA
R12 OPM
Oracle Subledger Accounting
Oracle General Ledger
For G/L integration, discrete costing works the
same as OPM costing
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50OPM MAC transitioning to SLA
SLA
OPM MAC
Completed material and/or resource transactions.
Completed material and/or resource transactions.
Cost Pre-processor will create accounting Events
OPM Subledger process processes these
transactions to create Journal entries
SLA accounting program processes the events to
create the journal entries
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51OPM MAC transitioning to SLA
OPM MAC SLA COMMENTS
Fiscal 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
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52OPM MAC transitioning to SLA
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
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53OPM MAC transitioning to SLA
- 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
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54OPM MAC transitioning to SLA
- Historical OPM Subledger distribution data not
migrated to SLA - Data refers to OPM Inventory
- Historical data available in query mode
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55OPM MAC transitioning to SLA
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56OPM MAC transitioning to SLA
- NO LOSS of functionality by moving to SLA model
- New menus created under OPM Financials for new
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.
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57Douglas Volz
Professional Background
Doug Volz is a Senior Architect and Advisor for
Oracle Application projects, with a particular
interest in Project and Cost Management. He has
over 30 years experience, including 5 years in
Oracle Development (co-designing Oracle Cost
Management), 12 years in industry for
manufacturing and distribution companies, and 14
years consulting. His Manufacturing and Cost
systems experience covers project management,
software design/development, delivery and
consulting services, for both Oracle Corporation,
and multiple international consulting firms.
Prior to his systems career, Mr. Volz also held
numerous management accounting positions for
telecommunications, defense, and electronics
firms. In his consulting roles, Doug has served
over 100 clients. Many of these were multi-org,
multi-currency with global footprints. Countries
include US, Mexico, UK, Netherlands, Belgium,
Taiwan, P.R.O.C., Norway, Japan, Italy and
Germany. Doug leads the Cost Sub-Committee, for
the OAUG Discrete Manufacturing SIG. He also
participates on the Oracle Customer Advisory
Board for Fusion Costing and for the Fusion SCM
Strategy Council.
Core Expertise
Experience
- Multi-organization, Multi-currency ERP
Implementations - Project Management and Senior Project Advisor
- Core manufacturing processes
- Cost Management
- Inventory
- Bills of Material
- WIP
- Systems Integration and Data Conversions
- Sample of clients served
- Celgene (US Switzerland)
- Beckman Coulter (US)
- Onninen AS (Norway)
- Matsushita (UK, Mexico)
- NTL (now Virgin Media)
- Idec Izumi (Japan)
- Logitech (US, Taiwan, P.R.C.)
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58End of Presentation
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