SLA_and_Cost_Acctg.ppt cost accounting and reporting

Oracle ebs

1. Cost Accounting As You Want It
─ EBS R12 Cost Accounting with SLA
Collaborate09
May 3 -7, 2009
Diane Streubel
[email protected]
Schreiber Foods
Manager for Cost & Systems Development
OAUG Process MFG Cost Sub-Committee Lead
Douglas Volz
[email protected]
Douglas Volz Consulting, Inc.
President / Managing Director
OAUG Discrete MFG Cost Sub-Committee Lead

2. Agenda
•Oracle Discrete Costing SLA enhancements
•Oracle Process Costing MAC transitioning to SLA
•Oracle SLA Concepts
•Case example: Product Line Accounting
Slide –2Cost Accounting As You Want It ─ EBS R12 and SLA

3. 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
Oracle Discrete Costing SLA enhancements:
Increased Flexibility
Slide –3Cost Accounting As You Want It ─ EBS R12 and SLA

4. 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
Oracle Discrete Costing SLA enhancements:
Increased Flexibility
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5. Oracle Process Costing:
MAC transitioning to SLA
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6. •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
OPM MAC transitioning to SLA
Slide –6Cost Accounting As You Want It ─ EBS R12 and SLA

7. Cost Setup Calculate Cost Store Costs MAC Oracle GL
GMI
(OPM Inventory)
Purchasing GMD, GME
Order
Management
11i OPM
OPM MAC transitioning to SLA
Slide –7Cost Accounting As You Want It ─ EBS R12 and SLA

8. Cost Setup Calculate Cost Store Costs SLA Oracle GL
Oracle
Inventory
Purchasing GMD, GME
Order
Management
R12 OPM
OPM MAC transitioning to SLA
Slide –8Cost Accounting As You Want It ─ EBS R12 and SLA

9. •Subledger accounting is an intermediate stepbetween
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.
OPM MAC transitioning to SLA
Slide –9Cost Accounting As You Want It ─ EBS R12 and SLA

10. Subledger GL Export Journal Import Journal Posting
I
n
t
e
r
f
a
c
e
General Ledger
For G/L integration, discrete costing works the same as OPM costing
11i OPM
OPM MAC transitioning to SLA
Slide –10Cost Accounting As You Want It ─ EBS R12 and SLA

11. Payables
Receivables
Projects
Oracle Subledger
Accounting Oracle General
Ledger
OPM
R12 OPM
For G/L integration, discrete costing works the same as OPM costing
OPM MAC transitioning to SLA
Slide –11Cost Accounting As You Want It ─ EBS R12 and SLA

12. OPM MAC
Completed 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 transitioning to SLA
Slide –12Cost Accounting As You Want It ─ EBS R12 and SLA

13. 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
OPM MAC transitioning to SLA
Slide –13Cost Accounting As You Want It ─ EBS R12 and SLA

14. 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
OPM MAC transitioning to SLA
Slide –14Cost Accounting As You Want It ─ EBS R12 and SLA

15. •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
OPM MAC transitioning to SLA
Slide –15Cost Accounting As You Want It ─ EBS R12 and SLA

16. •Historical OPM Subledger distribution data not
migrated to SLA
–Data refers to OPM Inventory
•Historical data available in query mode
OPM MAC transitioning to SLA
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17. 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 OPM MAC transitioning to SLA
Slide –17Cost Accounting As You Want It ─ EBS R12 and SLA

18. •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.
OPM MAC transitioning to SLA
Slide –18Cost Accounting As You Want It ─ EBS R12 and SLA

19. Oracle SLA Concepts
Slide –19Cost Accounting As You Want It ─ EBS R12 and SLA

20. 1.Determine sources of information for your account derivation
rules (understand the underlying business logic and data)
2.Create account derivation rules (and optional mapping sets)
3.Create journal line types
4.Create a journal lines definition
(link the journal line type to the account derivation rule)
5.Create an application accounting definition
(copy an existing definition and modify it and then validate it)
6.Create a subledger accounting method (SLAM)
(copy “standard accrual” and create a new one)
7.Assign the new SLAM to a Ledger
Subledger Accounting Method (SLAM)
Setup Steps
Slide –20Cost Accounting As You Want It ─ EBS R12 and SLA

21. 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
Key Concepts for SLA Transaction Types
Slide –21Cost Accounting As You Want It ─ EBS R12 and SLA

22. 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.
Setup and Process
Slide –22Cost Accounting As You Want It ─ EBS R12 and SLA

23. Transactions
Accounting Events
Cost Management SLA
Accounting
Configurations
Subledger
Balances
Subledger
Journal Entries
Accounting
Program
Journal Entry Setup
GL
Journal Entries
and Balances
Setup and Process
Slide –23Cost Accounting As You Want It ─ EBS R12 and SLA

24. SLA Accounting Tables
Enter Transaction(s)
Basic Table Structure for SLA
Slide –24Cost Accounting As You Want It ─ EBS R12 and SLA
Transaction
Accounting Tables
Cost Manager
XLA_AE_HEADERS
XLA_AE_LINES
XLA_DISTRIBUTION
_LINKS
XLA_EVENTS
Same Cost
Transaction
Accounting
Tables
Create
Accounting
GL_
INTERFACE
G/L Tables
GL_LEDGERS
GL_JE_HEADERS
GL_JE_LINES
GL_JE_BATCHES
One Common
Accounting
Subledger
Table

25. Case Example:
Product Line Accounting for Discrete and
Process Costing
Slide –25Cost Accounting As You Want It ─ EBS R12 and SLA

26. 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)
Example:
Purchase Price Variance product Line
Slide –26Cost Accounting As You Want It ─ EBS R12 and SLA

27. Cost/SLA Mapping Set Capability
(for Discrete and Process Costing)
Slide –27Cost Accounting As You Want It ─ EBS R12 and SLA

28. •Product Line Setup Steps Using SLA mapping set
1.Create the product line information in your item master
2.Enter your SLA account derivation rule for Purchase Price
Variance accounts
3.Associate the new account derivation rule to your Journal
Line Type
4.Associate the Application Accounting Definition with
Subledger Accounting Method
Cost SLA Mapping Set Capability:
PPV by product Line
Slide –28Cost Accounting As You Want It ─ EBS R12 and SLA

29. •Product Line Accounting –Descriptive flexfield
Cost/SLA Mapping Set Capability
Slide –29Cost Accounting As You Want It ─ EBS R12 and SLA

30. •Product Line Accounting –Item Descriptive FF
Cost/SLA Mapping Set Capability
Slide –30Cost Accounting As You Want It ─ EBS R12 and SLA

31. •Assign product line code to the inventory item
Cost/SLA Mapping Set Capability
TIP: you can use an existing product line category set to populate
your item master DFF, you do not need to enter this one-by-one
Slide –31Cost Accounting As You Want It ─ EBS R12 and SLA

32. •Mapping set –Account Derivation Rule
Cost/SLA Mapping Set Capability
Slide –32Cost Accounting As You Want It ─ EBS R12 and SLA

33. •Mapping set –Account Derivation Rule
Cost/SLA Mapping Set Capability
Slide –33Cost Accounting As You Want It ─ EBS R12 and SLA

34. •SLA Journal Line / Derivation Rule
Cost/SLA Mapping Set Capability
Slide –34Cost Accounting As You Want It ─ EBS R12 and SLA

35. •Associate Journal Lines Definition to the Event Class
Cost/SLA Mapping Set Capability
Don’t forget
to validate
your new
AADs
Slide –35Cost Accounting As You Want It ─ EBS R12 and SLA

36. •Note the same ADR is usable for Standard Cost Update
Cost/SLA Mapping Set Capability
Slide –36Cost Accounting As You Want It ─ EBS R12 and SLA

37. •Note the same ADR is usable for Standard Cost Update
Cost/SLA Mapping Set Capability
Slide –37Cost Accounting As You Want It ─ EBS R12 and SLA

38. •Associate SLA Definition to the SLA Method/Ledger
Cost/SLA Mapping Set Capability
Slide –38Cost Accounting As You Want It ─ EBS R12 and SLA

39. •The material subledger from 11i still exists
Cost/SLA Mapping Set Capability
Inventory
Inventory
PPV
Receiving
Matl
Overhead
Absorption
Slide –39Cost Accounting As You Want It ─ EBS R12 and SLA

40. •SLA Entries That Go to Your G/L
Cost/SLA Mapping Set Capability
Slide –40Cost Accounting As You Want It ─ EBS R12 and SLA

41. •For the Standard Cost Updates That Go to Your G/L
Cost/SLA Mapping Set Capability
Slide –41Cost Accounting As You Want It ─ EBS R12 and SLA

42. Category Accounting –
Discrete Cost Accounting migrated to SLA
in R12.1
Slide –42Cost Accounting As You Want It ─ EBS R12 and SLA

43. •Create a new
structure under
the key flexfield
“Item Category”
Product Line Category Accounting
Slide –43Cost Accounting As You Want It ─ EBS R12 and SLA

44. •Create a new
structure under
the key flexfield
“Item Category”
•Create category
codes
Product Line Category Accounting
Slide –44Cost Accounting As You Want It ─ EBS R12 and SLA

45. •Create a new
structure under
the key flexfield
“Item Category”
•Create category
codes
•Create category
set
Product Line Category Accounting
Slide –45Cost Accounting As You Want It ─ EBS R12 and SLA

46. •Create a new
structure under the
key flexfield “Item
Category”
•Create category
codes
•Create category set
•Assign “Product
Line Accounting”
functional area
category set
Product Line Category Accounting
Slide –46Cost Accounting As You Want It ─ EBS R12 and SLA

47. •Assign product line category accounts
Product Line Category Accounting
Slide –47Cost Accounting As You Want It ─ EBS R12 and SLA

48. •Account Derivation Rule would have used a source directly
Product Line Category Accounting
Slide –48Cost Accounting As You Want It ─ EBS R12 and SLA

49. •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.
Product Line Category Accounting
Slide –49Cost Accounting As You Want It ─ EBS R12 and SLA

50. •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.
Discrete Inventory Period Close and Upgrade
Slide –50Cost Accounting As You Want It ─ EBS R12 and SLA

51. 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
Slide –51Cost Accounting As You Want It ─ EBS R12 and SLA

52. 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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53. THANK YOU
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54. Appendix
•Professional Background for Diane Streubel
•Professional Background for Douglas Volz
Slide –54Cost Accounting As You Want It ─ EBS R12 and SLA

55. Diane Streubel
Professional Background
Diane Streubel is the Cost & Systems Development Manager for Schreiber Foods. A process
manufacturing company, Schreiber is the world’s largest supplier of private label dairy products and has
been using Gemms/OPM for the past 13 years. Diane has been involved with OPM from it’s inception
at Schreiber with Gemms 3.1. She has been involved in implementing additional products within Oracle
at Schreiber and has played a key role in all of the upgrades within the company. Schreiber Foods is
currently at 11.5.10.
Diane is also actively involved in the Process Manufacturing SIG. She has been the Costing Sub-
Committee chairperson and the Membership chairperson for the Process SIG since 2001. As the
Process SIG Enhancements chairperson, she has worked with the Process Manufacturing team at
Oracle to develop and coordinate an Enhancements Voting process each year since 2001. She has
been on the paper selection team for OAUG conferences for the past four years. Diane has also
presented numerous papers at OpenWorld and OAUG conferences over the past several years on
OPM Costing topics.
Core Expertise
•Upgrades for Process Manufacturing
•Project Management
•Core manufacturing processes
OPM Cost Management
OPM Inventory
OPM Formulas
Experience
Within Schreiber Foods:
•Responsible for OPM Costing and Inventory testing and
validations for all upgrades
•Develop and improve processes within Company related
to Costing, Inventory and Formulas
•Establish Cost Accounting methods, cost and production
formula structures, inventory and production transaction
processes and system documentation.
•Train Finance employees at 17 plant facilities on OPM
processes
Slide –55Cost Accounting As You Want It ─ EBS R12 and SLA

56. 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 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 andCost 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 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 and for the
Fusion SCM Strategy Council.
Core Expertise
•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
Experience
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.)
Slide –56Cost Accounting As You Want It ─ EBS R12 and SLA

57. End of Presentation
Slide –57Cost Accounting As You Want It ─ EBS R12 and SLA