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Subledger Accounting Implementation Options

Presented to the UKOUG Oracle Financials SIG by Nic Atkin

Subledger Accounting
Implementation options for new R12 implementations, and R11i upgrades

About the presenter

Nic has been implementing, designing or developing solution architectures within the Oracle E-Business Suite arena since Release 7.
Nic spent 15 years with Oracle Consulting UK, and in his last year delivered both the R12 Awareness and Financials Accounting Hub training to consultants throughout EMEA. Since leaving Oracle Consulting UK he has worked as an independent contractor implementing:
Financials Accounting Hub at Ministerie van Landbouw, Natuurbeheer en Voedselkwaliteit; LNV (Netherlands Ministry of Agriculture, Nature and Food Quality); Subledger Accounting at LNV and Royal KPN NV (Netherlands landline and mobile telecommunications).

Nic is currently at Balfour Beatty as the R12 Solution owner delivering a common business process and share service centre based solution to 16 disparate Operating Companies in the Balfour Beatty Group.

Agenda

Introduction to Subledger Accounting


Scope of Subledger Accounting in EBS 11i upgrade options R12 Implementation options

Introduction to Subledger Accounting

Introduction to Subledger Accounting

What is Subledger Accounting (SLA)?


Common Accounting Engine embedded in E-Business Suite R12 A specific licence usage of the Financials Accounting Engine SLA Licence comes free with EBS licence Financials Accounting Hub (FAH/FSAH) licence is the other licence usage of the Financials Accounting Engine

What does it do?


Creates Journals from the transactional events that happen to a document during its lifecycle, e.g. approval, cancellation, adjustment Can create Journals in many ledgers (Primary, Secondary, Reporting) from a single accounting event

Introduction to Subledger Accounting 11i User Interaction


END USER END USER END USER

END USER

Enter/validate/ approve transaction

Create accounting and transfer to GL

Import into GL

Post in GL

Financial Options
System Options Accounting Options
11i

Introduction to Subledger Accounting R12 User Interaction


END USER END USER END USER

Enter/validate/ approve transaction

Create accounting, transfer, and import into GL

Post in GL

Accounting event created


11i New in R12

SLA Setup Transaction Data Accounting Event

Introduction to Subledger Accounting


Key Components (1)

Components configured and used by each Subledger separately Single journal repository (can report across subledgers using custom reports) Configuration/Setup
Event and Entity Model
Defines the Events that can happen to a document Defines Entities to extract data from the source subledger document

Transaction Account Builder


Defines how an account code combination is built up in a subledger*

Account Method Builder


Defines a Journal and its Lines Uses or overrides account code combination built in the subledger

Subledger Accounting Rules Detail Listing Report


Reports the entire configuration
* If implemented by Oracle Development

Introduction to Subledger Accounting


Key Components (2)

Master Data Management User Functionality


Mappings Sets
Map any source value to a account segment or an entire account code combination

End User Functionality


Accounting Journals
Create Accounting (Offline) and Online accounting (not in all subledgers)

Inquiry: Drill-down, Drill-up (GL->SLA->Subledger->SLA->GL) Reports


Account Analysis Report Journal Entries Report Open Account Balances Listing Subledger Multiperiod Accounting and Accrual Reversal Report Subledger Period Close Exceptions Report Third Party Balances Report Trading Partner Summary Report

Introduction to Subledger Accounting


Two licenses, Two levels of permission
Subledger Accounting
Applies to seeded Subledgers

Financials Accounting Hub Subledger Registration Event Model

Change to seed data NOT SUPPORTED by Oracle

Entity Model Standard Sources Custom Sources Account Method Builder


Supported by Oracle for a new Subledger Registration ONLY

If implemented by Oracle Development

Transaction Account Builder


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Introduction to Subledger Accounting


Accounting Methods Builder (AMB)
FR Statutory Ledger Standard IAS Subledger Accounting Method

Payables Application Accounting Definition


Payment Journal Line Definition

Journal Line Types

Account Derivation Rules (ADRs)

Journal Entry Descriptions

Sources (Fields)
Document Transaction Entity (Objects, Records)
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Introduction to Subledger Accounting


Transaction Account Builder (TAB)
FR Corporate Ledger Corporate Chart of Accounts

Receivables Invoice Transaction Account Definition


Receivables Invoice Revenue Transaction Account Type

Account Derivation Rules (ADRs)

Sources (Fields)
Document Transaction Entity (Objects, Records)
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Scope of Subledger Accounting in EBS


Where and how used up to R12.1.3

Scope of Subledger Accounting in EBS


Where and how used up to R12.1.3

Accounting for Journals in the following subledgers of the core Financials Suite:
Assets, Cost Management*, Purchasing**, E-Business Tax, Payables, Receivables, Cash Management
*Cost Management covers Purchasing Receipts, Inventory and Manufacturing **Purchasing covers burden and encumbrance accounting for Requisitions and Purchase Orders

Accounting for Journals elsewhere in EBS:


Payroll, Projects, Lease and Finance Management, Loans, Property Manager, Process Manufacturing, Price Protection, Trade Management, Contract Commitment and Federal Financials.

Transaction Account Builder only used for Financials Common Modules (Advanced Global Intercompany System (AGIS))

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Scope of Subledger Accounting in EBS


Transaction Account Builders up to R12.1.3
Subledger Cost Management Payables Transaction Account Building Functionality PO Requisition Account Generator PO Account Generator Project Supplier Invoice Account Generator; or Project Expense Report Account Generator; or Prior transaction (PO related) or Expense Report Template (Expense Reports); or Distribution Set (Invoices); otherwise entered manually. Assets Payroll Projects Receivables Cash Management FA Account Generator, or SLA Account Derivation Rules Cost Allocation Flexfield qualifiers and Costing program AutoAccounting for Projects AR: Substitute Balancing Segment Account Generator AutoAccounting for Invoices SLA Account Derivation Rules

Leasing and Finance Management


Advanced Global Intercompany System

Accounting Template Set (optional)


SLA Transaction Account Builder
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Scope of Subledger Accounting in EBS


Transaction Account Builders post R12.1.3?
Subledger Cost Management Payables Transaction Account Building Functionality PO Requisition Account Generator PO Account Generator Project Supplier Invoice Account Generator; or

Project Expense Report Account Generator; or Prior transaction (PO related) or Expense Report Template (Expense Reports); or Distribution Set (Invoices)
Assets Payroll Projects Receivables Cash Management Leasing and Finance Management Advanced Global Intercompany System FA Account Generator, or SLA Account Derivation Rules Cost Allocation Flexfield qualifiers and Costing program AutoAccounting for Projects AR: Substitute Balancing Segment Account Generator AutoAccounting for Invoices SLA Account Derivation Rules Accounting Template Set (optional) SLA Transaction Account Builder
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Scope of Subledger Accounting in EBS


Related changes in R12

Replaced Sets of Books with Ledger and Ledgers Sets


Primary Secondary Reporting (Currency)

Moved Multiple Reporting Currency functionality to Reporting currency Moved Taxation functionality embedded in the subledgers to the common tax engine (E-Business Tax) Legal entities model and functionality extended into most subledgers and supports Inter- and Intra- company accounting Replaced Global Intercompany System (GIS) with Advanced Global Intercompany System (AGIS) Replaced Global Accounting Engine with Subledger Accounting
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11i upgrade options and considerations

11i upgrade options and considerations


Key options

Your existing 11i implementation should upgrade without any changes in configuration or additional development subject to regression testing.
Factors that may change an upgrade without changes:
You have accounting (GAAP) issues that are being addressed by manual journals, that could be addressed by changing the seeded accounting You have customised any one of the Account Generators (dependent Workflow technical skills) Projects AutoAccounting (dependent on SQL technical skills) but want to revert to standard TABs and override account derivation in SLA instead You want to implement a secondary ledger with a different chart of accounts. You want implement some of the advanced features of SLA (see R12 implementation options) Note: this may still require PL/SQL technical skills to develop custom sources.
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11i upgrade options and considerations


Upgrade considerations

By default, the upgrade updates the data for the current fiscal year, as well as the necessary periods of the previous fiscal year, to ensure that at least six periods are included in the upgrade
How much data must be moved to the new model to support the business?, if more required then:
Get patch 5233248 Run SLA Pre-upgrade program to change the number of periods of data to upgrade

How much downtime is available to upgrade old data to the new model? How many old transactions could possibly be reversed or rely on previous accounted transactions in a flow? (e.g. the accounting of payments related to a payable invoices are in a flow) Mitigation: Upgrade by Request can run SLA post-upgrade program at any time to create the missing data

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11i upgrade options and considerations


Subledger Specific considerations: Payroll

Use old GL Interface approach


No effort required

Use new SLA approach


Provides GL to Payroll SLA journal drill-down (unlike other subledgers not to HR/Payroll itself as this is secured data) Full control of accounting Need to configure all Journal Lines from scratch On My Oracle Support, see:
Article ID 399632.1 and Article ID 409174.1 White Paper Oracle Payroll - Sub Ledger Accounting Integration - An Oracle White Paper

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11i upgrade options and considerations


Subledger Specific considerations: Assets

Use existing Account Generator


Set FA: Use Workflow Account Generation profile option to Yes

SLA Account Derivation rules


Set FA: Use Workflow Account Generation profile option to No Amend Account Derivation Rules in SLA as required.

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R12 implementation options

R12 implementation options


Overview

Choose an Account Building Approach


Implement additional functionality:
Reconciliation References Journal Header Descriptions Journal Line Descriptions Supporting References (for Inquiry) Supporting Reference Balances Integrate non-EBS sources via Financials Accounting Hub

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R12 implementation options


Choose an Account Building approach (1)
Sources
Transaction Account Builder
Document
subject to Accounting Events (e.g. Payable Invoice)

(Account Generator, AutoAccounting, Hard-wired rules, SLA ADR, SLA TAB)


Document
Distributions

10023
Master Data
related to Document (e.g. Supplier)

2099

38765

476

00000

Setup Data
related to Document (e.g. Operating Unit System Options)

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R12 implementation options


Choose an Account Building approach (2)
Sources
Document
subject to Accounting Events (e.g. Payable Invoice)

Journal
DR CR

Journal Line

10023
Master Data
related to Document (e.g. Supplier)

2072

38765

421

00000

e.g Debit GBP 100

Accounting Engine (SLA ADR)

Setup Data
related to Document (e.g. Operating Unit System Options)

Master Data
SLA Mapping Set

Document
Distributions

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R12 implementation options


Choose an Account Building approach (3)

Key questions:
Do you want to prevent users entering account code combinations manually anywhere in EBS? Total Accounting Automation Do your Organisational accounting segments change frequently causing documents with long life cycles to use invalid segment values and invalid combinations in the later part of their life?

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R12 implementation options


Choose an Account Building approach (3)

Two main approaches:


1. Calculate account code combinations at journal creation time (override dummy TAB defaults with ADRs using setup and master data)
KPN approach

2. TABs calculate using setup and master data. ADRs Use TABs results at journal creation time (accept TAB defaults with minimal override in ADRs)
Oracle Product Development approach

Approach 1:
Change TABs to generate dummy account combinations, change SLA ADRs and SLA JLDs high cost, high complexity, custom development

Approach 2:
Take the seeded functionality: dont change the TABs, dont change the SLA ADRs - low cost, low complexity, no custom development Or, do as you did in 11i implementations: change the TABs, dont change the SLA ADRs - medium cost, medium complexity, custom development

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R12 implementation options


Reconciliation References

Reconciliation References have to be populated (from a source) to use the new GL AutoReconciliation feature for each journal line.
Scenario:
Two source subledgers imported into GL via FAH Subledger A, primarily debits a control/clearing account using a Transaction Reference recorded in the reconciliation reference Subledger B, primarily credits the same control/clearing account using the same Transaction Reference recorded in the reconciliation reference Reconciliation enabled for the control/clearing account GL Automatically Reconciles journal lines that have the same reconciliation reference and the sum of the debits equal the sum of the credits Should be able to prove un-reconciled journal lines balance using reports from the source Subledgers.

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R12 implementation options


Journal Header Descriptions

Journal Header Descriptions have to be populated (from sources)


E.g. Invoice: <Invoice Number> Suppler: <Supplier Number>

Visible in SLA Inquiry screens Visible in GL Inquiry screens if SLA Journal Lines are not summarised

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R12 implementation options


Journal Line Descriptions

Journal Line Descriptions have to be populated (from sources)


E.g. Invoice: <Invoice Number> Suppler: <Supplier Number> Line Number: <Line Number>

Visible in SLA Inquiry screens Visible in GL Inquiry screens if SLA Journal Lines are not summarised

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R12 implementation options


Supporting References (for Inquiry)

Supporting References have to be populated (from sources)


E.g. Project Expenditure Type

Can have up to five segments Allows Journal Lines to be retrieved using this value in the SLA Inquiry screens Can be a source for a data warehouse

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R12 implementation options


Supporting Reference Balances

Supporting References have to be populated (from sources)


E.g. Project Number

Can have up to five segments Allows GL Balances to be further analysed

Effectively extends the accounting flexflield by up to five segments


Balances can never reset (inception to date), or reset on year end (year to date) Can be a source for a data warehouse

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R12 implementation options


Integrate non-EBS sources via Financials Accounting Hub

Requires a FAH licence


Can be a complex development Needs detailed report requirement analysis Needs detailed analysis of source system (subledger) to identify the documents and their accounting events Needs detailed accounting requirements analysis to identify the journals required for each accounting event

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