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Cost Accounting As You Want It EBS R12 Cost Accounting with SLA

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The most granular level of business event which has accounting impact ... We are going to use 2 different ways to address this same requirement ... – PowerPoint PPT presentation

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Title: Cost Accounting As You Want It EBS R12 Cost Accounting with SLA


1
Cost Accounting As You Want It - EBS R12 Cost
Accounting with SLA
  • Douglas A. Volz
  • Douglas Volz Consulting, Inc.
  • OAUG Discrete MFG Cost Sub-Committee Lead

2
Agenda
  • Oracle Discrete Costing SLA enhancements
  • Case example Discrete Costing-Product Line
    Accounting
  • Oracle Process Costing MAC transitioning to SLA

3
Oracle 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

4
Oracle 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

5
Subledger Accounting Method (SLAM) Setup Steps
  • Create account derivation rules
  • 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)
  • Create a subledger accounting method(copy
    standard accrual and create a new one)
  • Assign it to a Ledger

6
Key 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
kind of accounting
The most granular level of business event which
has accounting impact
EVENT TYPE
7
Setup and Process
PROCESS
JOURNAL ENTRY SETUPS
Enter Transaction(s)
Define/copy and modify account derivation rules
Cost Manager
Define/copy and modify journal line types
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.
8
Setup and Process
Accounting Program
9
Case Example Discrete Costing-Product Line
Accounting
10
Example 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(works for
    Discrete and Process Costing)
  • Category Accounting R11i Cost Accounting
    migrated to SLA in R12.1 (only works with
    Discrete Costing)

11
Cost/SLA Mapping Set Capability
12
Cost SLA Mapping Set Capability PPV by product
Line
  • Product Line Setup Steps Using SLA mapping set
  • 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

13
Cost/SLA Mapping Set Capability
  • Product Line Accounting Descriptive flexfield

14
Cost/SLA Mapping Set Capability
  • Product Line Accounting Item Descriptive FF

15
Cost/SLA Mapping Set Capability
  • Mapping set Account Derivation Rule

16
Cost/SLA Mapping Set Capability
  • Mapping set Account Derivation Rule

17
Cost/SLA Mapping Set Capability
  • SLA Journal Line / Derivation Rule

18
Cost/SLA Mapping Set Capability
  • Associate Journal Lines Definition to the Event
    Class

19
Cost/SLA Mapping Set Capability
  • Note the same ADR is usable for Standard Cost
    Update

20
Cost/SLA Mapping Set Capability
  • Note the same ADR is usable for Standard Cost
    Update

21
Cost/SLA Mapping Set Capability
  • Associate SLA Definition to the SLA Method/Ledger

22
Cost/SLA Mapping Set Capability
  • Assign product line code to the inventory item

23
Cost/SLA Mapping Set Capability
  • The material subledger from 11i still exists

Inventory
Inventory
Receiving
PPV
Matl Overhead Absorption
24
Cost/SLA Mapping Set Capability
  • SLA Entries That Go to Your G/L

25
Cost/SLA Mapping Set Capability
  • For the Standard Cost Updates That Go to Your G/L

26
Category Accounting Cost Accounting migrated
to SLA in R12.1
27
Product Line Category Accounting
  • Create a new structure under the key flexfield
    Item Category

28
Product Line Category Accounting
  • Create a new structure under the key flexfield
    Item Category
  • Create category codes

29
Product Line Category Accounting
  • Create a new structure under the key flexfield
    Item Category
  • Create category codes
  • Create category set

30
Product 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

31
Product Line Category Accounting
  • Assign product line category accounts

32
Product Line Category Accounting
  • Account Derivation Rule would have used a source
    directly

33
Product Line Category Accounting
  • Summary Notes
  • Product line accounting can be achieved in many
    ways without 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.
  • 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 desired using BI
    Publisher.

34
Discrete 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
  • 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.

35
Oracle Process Costing MAC transitioning to SLA
36
OPM 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

37
OPM MAC transitioning to SLA
11i OPM
Order Management
GMI (OPM Inventory)
Purchasing
GMD, GME
MAC
38
OPM MAC transitioning to SLA
R12 OPM
Order Management
Oracle Inventory
Purchasing
GMD, GME
SLA
39
OPM 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.

40
OPM 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
41
OPM MAC transitioning to SLA
R12 OPM
Oracle Subledger Accounting
Oracle General Ledger
For G/L integration, discrete costing works the
same as OPM costing
42
OPM 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
43
OPM MAC transitioning to SLA
44
OPM MAC transitioning to SLA
45
OPM 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

46
OPM MAC transitioning to SLA
47
OPM MAC transitioning to SLA
  • 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.

48
  • Acknowledgements of assistance
  • Herve Yu Oracle Cost Management Development
    Manager
  • Diane Struebel Schreiber Foods Cost Manager
    OAUG Process MFG Cost
    Sub-Committee Lead

49
  • Additional information available from
  • R12 Oracle Subledger Accounting Implementation
    Guide
  • R12 Oracle Cost Management User Guide
  • R12 Oracle Process Manufacturing Cost Management
    - User Guide

50
THANK YOU
51
Appendix
  • Professional Background for Douglas Volz

Douglas Volz Consulting, Inc.  Helping clients
use Oracle Applications since 1990 US Cell  1
510 755-7050 davolz_at_comcast.net www.volzconsultin
g.com
52
Douglas 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
30 years accumulated experience, including 5
years in Oracle Development (co-designing Oracle
Cost Management) and 12 years in industry in Cost
and Accounting Management positions. 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 companies. 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 and Germany. Doug leads the Cost
Sub-Committee, for the OAUG Discrete
Manufacturing Special Interest Group. He also
advises and participates on the Oracle Customer
Advisory Board for Fusion Costing.
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
  • Beckman Coulter (US)
  • Onninen AS (Norway)
  • Matsushita (UK, Mexico)
  • NTL (now Virgin Media)
  • Idec Izumi (Japan)
  • Motorola (UK, US)
  • Logitech (US, Taiwan, P.R.C.)

53
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