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Release 12 : Legal Entity uptake

Posted on December 7th, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

We are well aware of some of Oracle E-Business Suite R12 Architectural changes in the Financials section like:

Let’s uptake to Legal Entity:

Financial books defined as “A Legal Entity is an entity identified through the registration with the legal authority.”

That’s means ,In this compliance world and in Oracle system it corresponds closely and defined as the system “Legal Entity” corresponds with an independently identifiable “legal person” a public company, a private business or limited partnership, a trust, a not-for-profit, a government or a non-government organization (NGO) - that can operate as if it were a real person in conducting business transactions.

What is meant for with LE?

  • Can get the the right to:
    • Own property weather its is assets or inventory or receivable
    • Trade (borrow, sell, buy, incur expenses, employ)
  • And the responsibility to:
    • Repay debt (liabilities, equity)
    • Pay Taxes
    • Account for themselves (legal reports, audits)

Note for R11i with respect to R12

Release 11i GRE/LEs will be upgraded as Release 12 Legal Entities.

Release 11i Operating Units and Inventory orgs will be upgraded as Establishments.

One Legal Entity can have several establishments.

  • In Release 12 there is no specific link between Operating Units and Legal Entities where as in R11 it was.
  • The Legal Entity is linked to a Ledger and the Operating unit is also linked to a Ledger.
  • Every Release 12 transaction must be associated with both an Operating Unit and a Legal Entity.
  • The Legal Entity is also required for e-Business Tax to establish which taxes will be applicable to the transaction.

The New Model called " LEA(Legal Entity Architecture)"

Legal Entity architecture, which is new in this release, provides users with the ability to model an enterprise’s legal organizational structure and define rules and attributes specific to legal entities.

Bank Account whether its is remittance bank or internal bank is now owned by the Legal Entity instead of Operating Unit, and can be used by any of the Operating Units sharing the same Ledger as that Legal Entity.

lemodel

As marked (dotted red line) in above figure the relationship between legal Entity and Operating Unit is no more active. This concept allows Operating Units to be governed by more than one jurisdiction, but the accounting is still performed in a single ledger.

Multiple Legal Entities can be associated with a single Ledger, allowing the LEs to share the same ledger and chart of accounts, calendar and currency. Each LE points to one Ledger.

Multiple Operating Units can also be associated with a single Ledger. Each OU points to only on Ledger.

Thanks to David, who pointed out last week regarding Bank Uptake in LE side in reference to my old post. Check his post for further information.

Take a note; in R12 EBS multiple legal entities can be associated with a single Ledger, allowing the LEs to share the same ledger and chart of accounts, calendar and currency. Each LE points to one Ledger. Multiple Operating Units can also be associated with a single Ledger. Each OU points to only on Ledger.

Where it affects:

"Most of the Financial Application Products"

Cash Management (Bank)

As discussed in earlier, in Release 12 Bank Accounts are owned by Legal Entities and can be accessed by multiple Operating Units.

As we know in 11i the Bank Accounts were Operating Unit Specific.

For all Internal Banks should be assigned to a Legal Entity.

Receivables:

Now all REC activity must have a legal owner, so Legal Entity is stamped on every transaction. Receivables activity such as transaction whether credit memo or debit memo or invoice must have stamps on it and receipt header with the Legal Entity information.

Because there can be multiple legal entities using the same ledger, it may be necessary for the user to assign the LE. Each transaction can only belong to one Legal Entity, so when multiple legal entities exist, either the system or the user will assign the LE.

  • Transaction

The defaulting hierarchy for a transaction comes from the setup of the Transaction Type and Transaction Batch Source. Receivables will look first to the Transaction type. If a LE has not been assigned, then Receivables will look to the Batch Source. The assignment of the LE to the Transaction Type and Transaction Batch Source is option, so if Receivables cannot find a default LE, then it is up to the user to provide the LE value.

  • Receipts

The LE defaulting for receipts works differently than transactions.

Let’s look at how defaulting occurs for the Receipt Header.
As we know , internal Bank Accounts is not owned by legal entities instead of operating units, so LE defaults from internal (remittance) bank account.

The Receipt Method in Receivables has the bank account assignment, which determines what bank account gets assigned to the receipt.

Take a note in version 11 the receipt Method was called the Payment Method. Now in Release 12 this featured with same name “Payment Method” now used by new application called Oracle Payments. Therefore in AR, you will now see a Receipt Method, which is part of receipt setup; and Payment Method, which is part of Payments setup.Once the bank account is assigned to a receipt header, this information can be used to find the appropriate LE.Because the LE comes from only one source, the bank account, there is no special setup to be performed in Receivables.Defaulting of the single LE always occurs, so the user does not need to assign or update LE on receipts.

How LE affects receipts and there applications and refunds

We seen the receipts inherit the LE from the bank account weather its is manual, Automatic, Lockbox and Post Quick Cash Programs.There is no way that user can change the value.

Receipt application across Legal Entities is allowed if the receipt and transactions are in same OU and Sub Ledgers Accounting will performed by inter-company accounting for cross-LE receipt applications or cross-LE receipt clearing.

SLA will create inter-company accounting as long as LE is setup as one of the CCID (Account Code Combination) segment derivation sources in SLA.

Payable

Invoices and Payments indicate the operating unit and the legal entity owner of the transaction. The legal entity can be used as selection criteria when preparing pay runs.

Projects

As we know in 11i in EBS maintains the default legal context on the Operating Unit. There is not much impact in Projects model. Earlier in 11i we used to consider the Legal Entity of the Operating Unit as the Legal Entity of the Projects Transactions. Now the Legal Entity attached at the Default Legal Context of the Operating Unit is the Legal Entity of the Projects Transactions.

So the Legal Entity of the Projects expenditure transactions will be the Legal Entity attached at the Default Legal Context of the Expenditure Operating Unit and the Legal Entity of the Project will be the Legal Entity attached at the Default Legal Context of the Project owning operating unit.

LE and TCA

Legal Entity is still dependent on TCA. A party (supplier, customer, bank, student etc) is an entity that can enter into business relationships. As we know the Oracle TCA's model supports four types of parties: organization, person, group, and party relationship. Under the TCA model, Parties (including Legal Entities) exist just once in our E-business Suite system for single maintenance and consistency. Legal Entities will be stored in TCA as Parties of party type 'ORGANIZATION'. A Legal Profile, containing specific Legal Entity attributes, will be associated to the TCA Party. In addition, other TCA components will be used for Addresses, Contacts, Party Information, etc.

Where to do the setup

There should be no confusion.

May be , some may think if this is just extension of GRE/LE from old version , then Why this required to do set up from both ASM and HR in R12?

In R12 ,it is separate the legal entity from the GRE which is a HR organization. We did not link the 2 entities together as they serve 2 different purposes altogether.

The HR model does not look at the new Legal Entity model. It continues to use the GRE/LE as a legal entity. So the HR requirement can be achieved using the HR organization of type GRE/LE.

Therefore, Legal Entities do have to be set up in both ASM and HR in R12.

Hope this sound interesting for new change in Financial Architecture.

Suggested Reading

  1. Oracle Financials Concepts Guide,Release 12(Part No. B28873-01)
  2. David Haimes Blog : How do I define my Legal Entities?
  3. Release 12 Financial Applications RCD

Posted in Functional, Oracle Legal Entity Configurator, R12, Release12 | 16 Comments »

Database Auditing

Posted on December 7th, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

The Oracle database has sophisticated auditing capabilities and can audit virtually any action within the database. Oracle9i introduces Fine Grained Auditing which allows auditing down to the column level in queries. The Oracle database auditing features and Oracle Applications auditing features are completely separate mechanisms.

By default, only “Instance Startup”, “Instance Shutdown”, and connections to the database with administrator privileges are audited. Usually only session and database user auditing are enabled.

In the init.ora file, set the audit_trail parameter to true and restart the database.

From the SYSTEM user in SQL*Plus, execute the SQL AUDIT commands that coincide with your requirements.

Limitations:

  • Does not provide before and after values for column changes.
  • Audits are at the SQL statement level, they do not reflect the resulting impact to individual records and columns within a table.
  • Provides no standard reporting or access to data from a form.
  • Resulting data in the SYS.AUD$ table is not “end user” ready.
  • Because the table is owned by SYS, cannot provide an event based alert or notification to a user. (Cannot define a trigger on SYS tables.)

Posted in AOL | No Comments »

News: Oracle to acquire Moniforce

Posted on December 6th, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

This time Oracle acquired Moniforce, a Netherlands-based software company whose products monitor the availability and performance of any Web application which likely to strengthen there Enterprise Manager Application Performance management capabilities. Moniforce's existing two product WebStress and WebProbe monitors network traffic to measure the performance and availability of Web applications from the perspective of the end user.

Seems Oracle's interest is Moniforce's UXinsight module. Built on network protocol analysis technology, the software can measure performance without slowing down the monitored application or the network, according to Oracle. UXinsight can also uncover errors in logic in custom and packaged applications on non-Oracle and Oracle infrastructures. see the FAQ

For Oracle customer, what are the benefits from Moniforce’s products and services capabilities?

In a posting of frequently asked questions about the acquisition, the the key benefits highlighted:

  • Enabling application administrators to detect and resolve end-user experience issues before they become emergencies.
  • Improving application performance and availability.
  • Greater value from business applications.
  • Enhancing lifecycle automation.
  • Lowering cost of managing applications

Other similar products like Corvil, Quest Software, OpNet and Hewlett-Packard, which acquired some application performance management products when it bought Mercury Interactive last year.

Read these

Posted in News | 1 Comment »

Release 12 : What’s New in Oracle Receivables

Posted on December 3rd, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

r12logo

Oracle’s Release 12 of the E-Business Suite is also called the “ Global Business Release ”, as it has numerous enhancements designed to make it easier to do business on a global basis. A more flexible, centralized global accounting structure has been introduced which makes it easier to operate between and across operating units and legal entities. Overall, R12 contains 18 new modules and 2443 enhancements to existing functionality.

Oracle's Release 12 (R12) of their E-Business Suite continues to extend the functionality of the Receivables arena , in addition to incorporated new financial architecture and new products , Oracle Receivables is now very natured product.As part of this post, we will look at Oracle's newest/enhanced offerings in Oracle Receivables.

1

Revenue Recognition

In R12 revenue recognition is based on Rules and Events, and they are:

  • Time-Based Revenue Recognition
    • Ratably Over Time
    • Upon Expiration of Contingencies
  • Event-Based Revenue Recognition
    • Payment
    • Customer Acceptance
  • Rule-Based Revenue Recognition
    • Payment Term Thresholds
    • Refund Policy Thresholds
    • Customer Credit worthiness

Lets take a quick look on some of the new changes:

  • Daily Revenue Recognition
    • Revenue distribution over full as well as partial accounting periods.
    • Fulfills stringent accounting standards
    • Accuracy to the number of days in the accounting period.
  • Enhanced Revenue Contingencies :
    • Fully Supports US GAAP and IAS
    • User definable contingencies
    • User definable defaulting rules for contingencies assignment
    • Supports parent-child (e.g. Product and Service) relationship
    • Integration with Order Management and Service Contracts
    • User Interface as well as Programming Interface (API) support
    • Access control through seeded Revenue Managers Responsibility
  • Deferred Revenue Management

Event-Based Revenue Management in Oracle Receivables allows users to define revenue deferral reasons or contingencies and corresponding revenue recognition events. In Release 12, revenue contingencies for customer acceptance that are applied to goods sold in Order Management are now applied to services sold to cover those goods. Revenue is deferred for service ordered in both Order Management and Service Contracts. Acceptance contingencies associated with an item instance are automatically applied to service revenue associated with the item instance when it is covered in a Service Contract as a Covered Product. Revenue for services on other covered levels, subscriptions and usage is not impacted by contingencies applied to goods associated with those services.

2Global Architecturenewfeature

As we know, with in global architecture , these new things has been introduced.

  • Sub ledger Accounting - Journal Creation takes place prior to GL.
  • Bank Model - This unified model enables to park customer Bank as well as Internal bank information into there new model, so that working capital cash flow should be enhanced.
  • EBusiness Tax - Oracle E-Business Tax is a new product that uniformly delivers tax services to all Oracle EBusiness Suite business flows. In Release 12, Receivables is enhanced to support
    integration with the E-Business Tax product.
  • Intercompany - This is enhanced by automatic balancing,

3MOAC Control

moacThis enhance you by enabling and performing tasks across operating Units (OUs), where you have access to without changing responsibilities.As we know , MOAC enables companies that have implemented a Shared Services operating model to efficiently process business transactions by allowing them to access, process, and report on data for an unlimited number of operating units within a single applications responsibility.

In nutshell, once MOAC is enabled, then you can:

  • Perform Setups for any OU
  • Enter invoices across OUs
  • Receive Cash for any OU
  • Manage Customer Credit across all OU
  • Run reports across OUs

Because of this greatly enhanced Role based security options, the ability to access multiple operating units with a single responsibility can simplify SOX compliance monitoring from finance controller side.

4Line Level Cash Applications

The Line Level Cash Applications solution allows the application of receipts to linesspecific transaction items such as individual lines, groups of lines, or tax or freight buckets. From the receipt workbench,you are able choose whether to allocate cash to the entire transaction or to apply amounts against specific items according to the customer remittance.

  • Apply to specific lines or groups of lines
  • Indicate when tax, freight or finance charges only are paid
  • Make changes as needed
  • Easily view activity against receipts
  • Know what historical activity affects your receipt
  • See what prior activity affects a new application

5Enhanced Customer Screen

We have seen 11i Customer standard forms makes easier by simple navigation. This times there is clearer separation of the party and account layers, which makes a consist ant look and feel.More over full backward compatibility with 11i UI Bill Presentment Architecture has been provided.

The AR Create Customer page in R12 has eliminated the navigation to separate windows. Now, users can specify the following on a single page:

  • Customer Information
  • Account Details
  • Address
  • Account Site Details
  • Business Purpose

11icus12cust

6Refunds

Oracle Receivables is fully integrated with Oracle Payables to deliver a seamless, automated process to generate check and bank account transfer refunds for eligible receipts and credit memos.

7Late Charges

As we know oracle receivables delivers enhanced Late Charges functionality enabling the creation of standard late charge policies that can be assigned to customer accounts or account sites.Flexible policy configurations include multiple interest calculation formulas, transaction and account balance thresholds, and currency-level rate setups. With new changes these are the enhanced functionality:

  • Expanded assessment and calculation capabilities
  • Tiered charge schedules
  • Penalty charge calculation
  • Integration with Balance Forward Billing
  • Centralized setup and maintenance of late charge policies
  • Calculation performed independent of Dunning and Statement processing

late

details

8 AR-AP Netting

The matching of open receivables and open payables is automated.

9Balance Forward Billing

This makes easy transaction processing.

Balance Forward Billing is an enhanced version of the existing consolidated billing functionality for industries where customers are billed for all their account activity on a regular, cyclical basis.

Balance Forward Billing provides the ability to setup cycle-based billing at the account or account site levels, enable event based billing, and leverage user configurable billing formats provided by Oracle Bill Presentment Architecture.

A typical case can be best understood as

  • Payment Term defaults
  • from Site profile if Bill Level = Site
  • from Account profile if Bill Level = Account
  • Billing Date derived from transaction date and billing cycle
  • Due Date derived from billing date and payment term
  • Optionally select non-Balance Forward term if Override Terms = Yes

Bill

Posted in EBS Suite, Functional, Oracle Receivable, R12, Release12 | 12 Comments »

MOAC : From Multi-Org….To Multi-Access

Posted on December 2nd, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

MOAC

This new Feature in R12 ,enables companies that have implemented or implementing shared services operating model to efficiently process business transactions by allowing them to access, process and report on data for an unlimited number of operating units within a single applications responsibility. Users are no longer required to switch applications responsibilities when processing transactions for multiple operating units.

Data security is maintained using security profiles that determine the data access privileges associated to responsibilities granted to a user.

Because of this you can perform multiple tasks across operating units without changing responsibilities, the simple case can be best described as diagram in the left, where 3 user from three difference OU's required three separate responsibility to perform the task.

blu MOAC Benefits..

  • Multi-Org Access Control feature allows you to enter, process data and generate reports from a single responsibility
  • This is achieved by providing the Operating Unit field on the forms/pages and while running the concurrent processes
  • To Set this feature you need to define the security profile containing operating units and set it at MO: Security Profile
  • You can default the Operating Unit on forms/pages by setting the MO: Default Operating Unit profile

redWhat are the new changes from Multi Organization(Multi Org) to Multiple Organization Access Control.moac

  • As discussed above, security Profiles for data security
    • MO: Security Profile
    • List of operating units for a responsibility
  • OU field on UI
    • all transactions
    • setup data specific to OU, like transaction type
  • Enhanced Multi-Org Reporting and Processing
  • Ledger/Ledger Set parameter on accounting reports and processes
  • OU parameter on other standard reports and processes
    • For example: submit the Payables Open Interface Import w/OU param null to import all records across all OUs

purpWhere and how to define a security profile?

Using Oracle HRMS, you can define your security profile using two forms:

  • The Security Profile form
  • The Global Security Profile form that is shown here.

moac navi
The Security Profile Form allows you to select operating units from only one Business Group. The Global Security profile Form allows you to select operating units from multiple Business Groups.

The decision on which form to use is really up to you and depends on your HR implementation and how you want to partition data. All you need to do is enter a name, and select the Security Type called “Secure organizations by organization hierarchy and/or organization list”. This allows you to assign multiple OUs. When assigning operating units, first select classification Operating Unit, and then select the organization or Operating Unit name. You can assign as many operating units as you want.

Posted in EBS Suite, Functional, R12, Release12 | 11 Comments »

After ‘GoLive’ what next : A discussion of available tools for ‘Issue Management’

Posted on December 1st, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

ProductWe knows ERP is critical for any company's operation.Once ERP is live , there are n number of transaction happen every hours ,days depending upon how big is your ERP operation. The identification of tool and setting helpdesk is most important task for management and IT .Any deviation from meeting deadlines may hit your operation , thus it is very important to understand the need and evaluate some of tools to cater the need.

Any ERP is meant for three kind of user community some of them purely subject wise user(Super User) also called process owner , end user(Data entry) who enters the data , never bother what is happen inside and third supporting IT group for assisting both of them to best use of tool as they know the process are alien with product processes. Typical characteristic of tools which is required for handling issue management should must these criteria:

  • Manage work orders from submission to resolution.
  • Create work order tickets and assign to technicians automatically.
  • Know where each ticket is in the resolution process and ensure no ticket slips through the cracks.
  • Improve responsiveness by enabling your customer to submit work orders and obtain status via standard Web browsers, 24 hours a day, 7 days a week.
  • Track and enforce your Help Desk processes.
  • Report and measure the effectiveness of your Help Desk processes.
  • Create and maintain search able knowledge base (frequently asked questions) to allow customers to help themselves.
  • The result is streamlined Help Desk, increased customer satisfaction, meeting SLA's, and higher productivity and lower cost.
  • Merge geographically or organizationally separate help desks into a single point of control
  • Identify business services affected by incidents and problems to prioritize resources accordingly

Lets evaluate some of Products options for Issue Management tools

1. Open view

This is one of great tool provided by HP , this will monitor system failures and perform a pre-determined set of actions to resolve the problem. The good things is that it will support for problem management process is unparalleled (root cause analysis, trend analysis and performance reporting capabilities are unmatched).

2. Peregrine Service Center

This is yet another tool provide by vendor Peregrine , it is typically a administrative tool that end users and support personnel use to manage help desk trouble tickets.

3.CA Unicenter Service Plus Service Desk

This is another tool provided by vendor CA, have been observed if the user base is big and operated into different geography, this is one of great product to cater all the need.These are highly scalable across complex IT environments.

4.Microsoft Excel based application

This is typically some sort of excel spreadsheet normally kept on a LAN with columns for SIR, priority, assigned to, status, and resolution.

This good for such kind of this is Simple to create. Everyone has access but the bad is hang problem if someone is updating. Good for small or medium sized company to use such kind of tools.

5.Remedy IT Service Management

This is provide by vendor Remedy which is now part of BMC software.This with Change and Configuration Management this product will provide best practice processes to streamline and automate key activities to identify, respond to, and control changes.This Product also covers ITIL Change Management, Release Management,and Configuration Management like:

  • Identify — IT environment related to critical business services
  • Respond — to changing business and ITrequirements
  • Control — all business critical configurations in the IT environment

Posted in Tool | No Comments »

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