Release 12-financials-best-practices1227

Release 12 Financials Best Practices

Alyssa Johnson
Solution Beacon

Agenda

• Global Financial Management
• Shared Services
• Subledger Features and Best Practices
– Payables
– Assets
– Receivables
– Cash Management
• Subledger Accounting
• General Ledger
• More Information

Copyright 2009 Solution Beacon, LLC All Rights Reserved Any other commercial product names
herein are trademark, registered trademarks or service marks of their respective owners. 2

Oracle’s Global Financial Management Model


Shared Services
Multi-Org Access Control

• Access multiple operating units within a single
application responsibility
• Perform tasks for and across multiple operating units
– Enter transactions
– Process data
– View information
– Run reports

• Increase effectiveness of Shared Service Centers


What is Multi-Org Access Control?

United States Canada France
Legal Entity Legal Entity Legal Entity
Release 11i
USA CANADA FRANCE
Operating Unit Operating Unit Operating Unit
Responsibility Responsibility Responsibility

United States Canada France
Ledger Ledger Ledger

Release 12 USA CANADA FRANCE
Operating Unit Operating Unit Operating Unit
Responsibility


Multi-Org Best Practices

Customizations which filter data by operating unit must be checked
• Virtual Private Database (VPD) feature will replace usage of
CLIENT_INFO(Org Context) function in new Multi-Org Architecture
• Release 11i script to access specific operating unit data
– begin
dbms_application_info.set_client_info('&org_id');
end;
/
select * from po_headers
/
• Release 12 must request access through Security Policy in the
database
– begin
mo_global.set_policy_context('S', &org_id);
– end;
– /
select * from po_headers
/
8


Check programs where concurrent program definition
has been customized, value is null on upgrade and
concurrent program may not run correctly
• New column MULTI_ORG_CATEGORY add to table
FND_CONCURRENT_PROGRAMS
• On upgrade, values assigned
– ‘S’ = Single Org
– ‘M’ = Multi Org
• Example script to set value
– UPDATE FND_CONCURRENT_PROGRAMS
SET MULTI_ORG_CATEGORY = {'S‘ or ‘M’}
WHERE CONCURRENT_PROGRAM_NAME = '{Program
Name}'



• Upon upgrade, MOAC will not be automatically enabled
• Not required to implement MOAC
Test bolt-ons, personalizations, customizations and 3rd party
apps with MOAC enabled during upgrade testing
• A hybrid environment, where some users operate in
MOAC and others do not, is supported
• Features unconstrained by multi-org today are still
unaffected in R12 MOAC
• MOAC may require additional internal controls or
security
Utilize function FNDMOPREFS to give users even more
flexibility in managing their assigned Operating Units

Subledger Features and
Best Practices

Payables – Invoice Lines

• Added between Header and Distribution Line information
• Improved Asset Tracking (Item Description, Manufacturer,
Model, Serial Number, Warranty Number)
• Line Level Approval Capability

Payables – Invoice Workbench

• Invoice Workbench has significant changes
– Operating Unit column added
– Invoice line required
– New button (Discard) for reversing PO matched
invoices
– New tabs for managing invoice lines, holds, viewing
and scheduling payments
Allow adequate training time


Payables – Supplier Maintenance

Improved
search
functionality
Notification
from iSupplier
portal

Ease of
navigation

• New Supplier Maintenance User Interface
• Prior Customizations will have to be addressed
• Can also be accessed from Professional Buyers Workbench

Payables – Supplier Maintenance

• Suppliers moved to Trading Community Architecture as
Parties
Clean up Suppliers prior to upgrade
Allow adequate training time both for Supplier forms and
TCA
Ease of
Navigation

Shared
Services


Oracle Payments
Funds Disbursement

• Centralized Payment Engine to Manage Funds Capture
and Funds Disbursements
• Increase Straight Through Processing Rates
• Better working capital management by providing real-
time visibility to cash inflows and outflows
• Efficiently Generate Payments for Multiple
Organizations, Currencies and Regions
• Single Payment across OUs with same LE
• Lower Costs associated with Transmission Protocol/
Formats
• Schema IBY
• Data repository on top of TCA


Oracle Payments
Funds Disbursement

Select Selection Payment Payment Payment Transmit
Invoices Batch Build Instruction Instructions Payments
Creation
1 1

2 2
POOL OF
BUILT
PAYMENTS

3 3
Print
Payments
Payables Payments


Oracle Payments
Funds Disbursement

Quick
Search

Quick view
Shortcuts graphics

Concurrent
Requests

Oracle Payments
Funds Disbursement

Learn new definitions and process flow
All payment document formats must be in BI
Publisher – plan accordingly
Utilize templates to expedite processing
Consider straight-through processing
Training, Training, Training


Payables
Accounting

Run the Invoice Validation program DAILY
Run Create Accounting Process DAILY
Resolve issues reported in Subledger
Accounting Program Report DAILY
When closing period, run Transfer to GL
program an additional time, to verify all
accounting entries have transferred


Payables
Period Close and Reconciliation

Start to work any exceptions in Subledger Period
Close Exception Report 5 days before close
Utilize Subledger Control Accounts for liability
accounts to ensure only used by Payables
– New Flexfield Qualifier on Natural Account
Become Familiar with Reconciliation Reports
– Open Account Balance Listing (Accounts Payable
Trial Balance); Newest version in CPC
R12 Proactive Intelligence Center: Oracle
Payables MetaLink Doc ID: 578232.1

Assets
Automatic Preparation of Mass Additions

• Utilizes Default Rules and/or Public APIs to
prepare mass addition lines automatically
• Benefits
– Avoids customization and manual intervention
– Auto populates required fields such as expense
account, and asset category


Assets
Automatic Depreciation Rollback

• No Longer Necessary to perform rollback manually
• Automatic Depreciation Rollback performed when two
criteria are met:
– Period is open
– Depreciation has been performed in that period
• Performed only on selected assets as required
• Benefits
– Enhanced Performance
– More Efficient Processing of Adjustments


Assets

• Create Journal Entries is replaced by Create Accounting
• Relocated Setups
– Journal Source and Journal Category setup now located in Subledger
Accounting
– Intercompany account setup now located in Accounting Setup Manager
• Profile Options
– New - FA: Use Workflow Account Generation. Default is Yes. Workflow
Account Generator functionality could be managed by Subledger
Accounting Rules
– Obsolete - FA: Include Nonrecoverable Tax in Mass Addition. Replaced
by Post Accounting Programs under Subledger Accounting. These
programs manage the setup for all eligible lines from Payables to
Assets for the Mass Additions Create program
• Invoice distributions from Oracle Payables that interface to Assets
now display the Invoice Line Number


Receivables
Customer Maintenance

• New Customer Form
• Any customizations to 11i form must be addressed

Search
Functionality


Receivables

Backward-compatible views RA_CUSTOMERS and
RA_ADDRESSES are no longer available; customizations should
reference TCA tables

Navigation
Tabs

Details Icon
Site
Information


Receivables

Utilize Best Practices for modeling Customer
Data from Metalink Doc ID: 269124.1
– When considering a particular company which entities
should be modeled as parties? Which should be
modeled as party sites?
– For which of these parties do you need to create
accounts?
– Should multiple accounts be created for any of the
parties? Should multiple bill-to account sites be
created for any given account?
– Should any account relationships be created?


Receivables
Revenue Recognition

Revenue Recognition based on
– Time
• Proportionally over Time
• Upon Expiration of Contingencies
– Events
• Payment
• Customer Acceptance
– Rules
• Payment Term Thresholds
• Refund Policy Thresholds
• Customer Creditworthiness

Receivables
Direct Refund Generation

Apply To Electronic
Refund Generates
Credit Memo Payables Refund
Request
Refund Attributes
Button

Receivables
Line Level Cash Application

• Receipts can be
applied at line
level
• More accurate
representation
• Application Form
– Select Receipt
– Select Apply in
Detail

Oracle Payments
Funds Capture

• Payments integrates with the following products
to facilitate Funds Capture
- Collections - Service
- iReceivables - Service Contracts
- iStore - Lease Management
- Order Capture - Receivables
- Order Management - Student System


Oracle Payments
Funds Capture

1 Create Transaction
SOURCE 2
PRODUCT Request
Authorization Authorizes
funds
Results
Notification
Acknowledgement

Payment Attributes and
THIRD PARTY
Authorization for Future PAYMENT
Sends request
Settlements SYSTEM
for settlement
Acknowledgement

3
Request for
RECEIVABLES settlement PAYMENTS

Receivables
Balance Forward Billing

• Release 11i Consolidated Billing becomes
Release 12 Balance Forward Billing
• More Flexible Billing Cycles
• Consolidation of invoices at site or account level
• Generate Balance Forward Bills using Bill
Presentment Architecture


Receivables

Receivables Collections Workbench is a subset
of Advanced Collections module
Check MetaLink Doc ID: 389443.1, Appendix C
for Advanced Collections features available for
use in the Receivables Collections Workbench
Utilize Subledger Control Accounts for liability
accounts to ensure only used by Receivables
– New Flexfield Qualifier


Receivables

Use parallel processing functionality to reduce
processing time on large volumes of data
– Automatic Receipts Creation Program (API)
– Automatic Remittances Creation Program (API)
– Revenue Recognition Master Program
– Late Charges program
– Submit Accounting Program


Receivables
Close and Reconciliation

Run Submit Accounting Program DAILY and resolve any
issues in accounting
Submit Accounting runs both
– Revenue Recognition
– Create Accounting
Utilize Unposted Items Report to identify issues
Reconciliation
– AR Reconciliation Report (other reports if discrepancies)
– Potential Reconciling Items Report
– Run Aging and compare with Reconciliation Report
– Run Journal Entries report and compare with Reconciliation
– Run AR to GL Reconciliation Report

Cash Management

Cash Mgmt
Cash Mgmt Cash Mgmt
Cash Mgmt
Payables
Payables
Payables Bank
Bank Payables
Payables Payables
Accounts
Accounts TCA
TCA
Receivables
Receivables Receivables
Receivables
Payroll
Payroll Banks
Banks
Payroll Bank Payroll
Payroll
Payroll Bank
Accounts
Accounts
Treasury Bank
Bank
Treasury Treasury
Treasury
Bank Accounts
Accounts
Treasury
Treasury Bank
Accounts
Accounts

Release11i Release 12

Cash Management

• Single User Interface
• Bank Account owned by Legal Entity instead of OU
• Bank/Branches are TCA Parties

Update Bank, Branch,
and Account in one
location


Cash Management – Bank Accounts

Manage Payment Documents from Bank Accounts form


Cash Management

Verify cash clearing and cash accounts are defined at
the bank accounts control level


Setting up the General Ledger


Setting up the General Ledger

Best Practices
Make every effort to model your business processes
to take full advantage of the new R12 architecture
and flow
Requires review of business processes
Familiarize yourself with the new R12 features
Design of Accounting Structure is Key
Run the Accounting Setup Manager Pre-Update
Diagnosis Report to identify setups that are
potentially problematic

Setting up General Ledger

• Set of Books is now referred to as Ledger
• Accounting Structure
– Chart of Accounts
– Calendar
– Currency
– Subledger Accounting Convention (New in R12)
• Legal Entity
– Reflects legal corporate structure
– Utilized by Accounting Functions, E-Business Tax,
Intercompany, and Bank Account


• Primary Ledgers
– Legal Entities are associated with Primary Ledgers
– Primary Ledgers typically reflect your transactional accounting
– Primary Ledgers not associated with a Legal Entity can be used
for consolidation
• Secondary Ledgers
– Secondary Ledgers can be utilized for statutory, management,
and/or consolidation reporting
– Mapping from Primary to Secondary Ledger(s) is defined in
General Ledger and is assigned in the Accounting Setup
Manager
• When accounting is created, journal entries are
generated for the Primary Ledger and any associated
Secondary Ledgers based on the defined mapping rules


• Ledger Sets
– All Ledgers in a Ledger Set must have the same
Calendar and Chart of Accounts
– Can Open/Close Periods, Create Journals, Translate
Balances, Reporting, and View Information across a
Ledger Set
– Improves Data Security, Reliability, and Consistency
• On upgrade, each Set of Books becomes a
Ledger and a Ledger Set composed of one
Ledger


Setting Up General Ledger
Examples

Consolidation Ledger Set

Ledger:
Ledger: Orig Co Ledger: Acq Co
Primary Global CoA Acquisition CoA
Consolidation
Cons CoA
Ledgers Calendar Year Acquisition Calendar
Cons Calendar
USD Acquisition Currency
Cons Currency
Entries created by GL
Transfer and Elimination
Process
Secondary Ledger: Acq CON
Global CoA
Ledgers Calendar Year
USD

Ledger:
Consolidated Reporting to
Use Secondary Ledgers and Ledger Sets for Acquisition
Statutory
Secondary
preventLedger
the need to perform balance transfer Calendar
consolidations every period, and
Statutory CoA
Fiscal
to obtain a cross-company view of your organization
Currency

Note: This does not replace the consolidation process


Examples

Consolidation Ledger Set

Ledger: US Ledger: UK Ledger: FR
Primary Global CoA UK CoA FR CoA
Ledgers Calendar Year Calendar Year Calendar Year
USD GBP EUR

Secondary Ledger: UK CON Ledger: FR CON
Global CoA Global CoA
Ledgers Calendar Year Calendar Year
USD USD

Ledger: FR Statutory
Secondary Statutory CoA
Ledger Fiscal Calendar
EUR

• The FR Statutory Secondary Ledger contains entries which comply with
statutory regulations
65


Time spent on
design will not
be wasted


Subledger Accounting



• Rule-based accounting engine with a centralized
data model and repository (XLA)
• Generates and stores detailed accounting
entries
• User-defined Accounting Rules
• A single transaction can be represented in
multiple ledgers
• Drilldown capability from GL



GENERAL LEDGER
Primary Ledger

Secondary Ledger(s)

Drilldown to Subledger
Accounting
Accounting Details
Subledger Accounting (SLA)

Drilldown to
Transaction Details

Subledgers



• Standardization in
– Navigation
– Accounting
– Inquiry
– Reporting
• Setup
– Accounting Setup Manager
– Accounting Methods Builder


Accounting Methods Builder

Journal
Header
GL Description
Date

Account
Derivation
Rules
Journal
Journal Lines Lines



Use Validate Application Accounting Definition
Concurrent Program if Oracle owned AAD not
validated
Continue to use Account Generators on upgrade
Transition account generation to Subledger
Accounting Engine post-upgrade
User-defined AADs retained in upgrade


Create Accounting

Run Create Accounting Process DAILY
Utilize Draft Mode Accounting if continual issues
with accounting
Resolve issues reported in Subledger
Accounting Program Report DAILY
When closing period run Transfer to GL program
an additional time, to verify all accounting entries
have transferred


Accounting Entry Inquiry

Draft Mode
Entries Can Be
Deleted
Create Manual
Drilldown Journal Entries

Journal
Entry Status


Users can view both
the Journal Entry
and the Transaction
Information together



Drilldown from General Ledger to Subledger
Transaction goes through Subledger Accounting
Repository
Learn to utilize the Subledger Journal Entry
forms
Personalization



• Web ADI and Manual Journal Entries
– NOT processed by Subledger Accounting Engine
– Posted to Secondary Ledger(s) by General Ledger Posting
Program
– Are included in Account Analysis Report
• Journals can be corrected at the Transaction, SLA, or
GL Journal Entry level
Choose a method and make that the standard for all corrections
Since detail is retained in Subledger Accounting posting
to GL in Summary instead of Detail can be performed


WebADI and Report Manager

• Release 12 must use WebADI and Report
Manager
– Two separate applications
• MetaLink Doc ID: 458589.1, “Which Customers
Need to Migrate From Client/Server ADI to
WebADI and Report Manager?”
• Report Manager customized templates have to
be formatted in BI Publisher


Reconciliation Reports

Changes in standard Oracle reports – might
affect customizations
Transactional Reports
– R11i based on Transactions and Distributions
– R12 based on Transactions ONLY
Accounting Reports
– R11i based on Balancing Lines, GL Journals, GL
Balances
– R12 based on SLA Journals, GL Journals, GL
Balances


General Ledger
New Features


General Ledger
Alternate Accounts

Define alternate accounts if account is Note:
scrollbar
disabled
• Increased efficiency

General Ledger
Definition Access Sets

• Used in General Ledger only to secure access to
definitions and setup components
• One or more privileges can be given to a
responsibility
– Use
– Modify
– View
• Secures Definitions separate from Data
• More Flexibility, Reduction of Errors, Greater
Control

General Ledger
Definition Access Sets

• Definitions secured with Definition Access Sets
– Accounting Calendars – Elimination Sets
– AutoAllocations – FSG Reports and
– AutoPost Criteria Sets components
– Budget Formulas – Mass Allocations
– Budget Organizations – Mass Budgets
– Chart of Account Mappings – Rate Types
– Consolidation Definitions – Recurring Journals
– Consolidation Sets – Revaluations
– Transaction Calendars

General Ledger – Journal Copy

Journal Entry Form Journal Form
• Assign new batch name, period, and effective date
• Copy Journals with any status
• Increased efficiency, data integrity

BI Publisher


BI Publisher

• Utilized across entire E-Business Suite
• Over 850 templates across 55 products
• Remaining Standard reports migrated to BI
Publisher in 12.1
BI Publisher report development is a new skill
set which should be mastered as soon as
possible


Integration Repository

• Describes all Oracle interface endpoints
Search
All types of Functionality
interfaces
Browse
through tree
structure

Drilldown to
interface
details


More Information

• Release 12 Online Documentation
– Oracle Financials Concepts Guide (B28873-01)
– Oracle Applications Upgrade Guide: Release 11i to Release 12
(B31566-01)
– Oracle Financials and Oracle Procurement Functional Upgrade
Guide: Release 11i to Release 12 (B31543-01)
• Metalink Doc ID 580299.1 – Best Practices for Adopting
Oracle E-Business Suite Release 12
• Release 12 Information Center
– Knowledge Tab of My Oracle Support

93

Solution Beacon Toolkit

• www.solutionbeacon.com
• Checklists
• Pocket Guides
• Presentations
• Vision Instance
– Java Installed
– Disable pop-up blocking
– Valid Oracle Customer
Support Identifier (CSI)
• 12.1.1 Now Available

95

Ranked Scorecard
Free Consultation

How Does The Scorecard Work Scorecard Focus Areas
• Answer multiple-choice • Competitive Optimization
questions • Functional and Process Issues
• Identify areas of risk (business • Project Approach and
and IT) Complex Issues
• Ranked score helps measure • Workflow Issues
your status on issues • Customization Reduction
• Provides recommendations for • Database
next steps
• Data Integrity
• Feedback on issues that
concern steering committees • System Optimization
and ROI • Business Intelligence

96

Questions and Answers

Thank You!

Alyssa Johnson
ajohnson@solutionbeacon.com

www.solutionbeacon.com
Real Solutions for the Real World ®


Release 12-financials-best-practices1227

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