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A single Query covering P2P life Cycle

Posted on January 31st, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

In Finance, transaction management processing is one of labor intensive task in ERP, as it requires extensive data entry , chance are very very high for duplication/re-entry. As we know Procure to Pay life cycle start itself from contract management till making payment.

As we know the efficient Procure to pay process have these sub processes;

  • Contract Management
  • Purchase Requisitions
  • Purchase Orders
  • Accounts Payable - Managing invoice
  • Supplier Payment

p2p

In real business world, many time when system is running external/internal auditor are more interested in scrutiny of:

  • Goods received / invoices received
  • Inaccurate or duplicate vendor & material master records
  • Discrepancies in payment terms
  • Delays / long processing times
  • Detect duplicate vendor
  • Unusually large or small payments
  • Unauthorized changes made to invoices
  • Detect Duplicate invoice
  • Detect Duplicate payment
  • Approval status

Therefore, it is Inhouse ISD/Finance IT or implementing company responsibility is to provide such kind of adhoc reporting for auditor so that they can satisfy the audit requirement.

A 'P2P' query that made Auditors happy

It was brought by ISD team , as part year end audit for a ERP system which went live 3 month back. It was a one of requirement to display data for a particular PO which covers data from there all 5 five phases, means a particular PO line consist of:

  1. Requisition Detail
  2. Purchase Order Details
  3. Receiving Details
  4. Invoicing Detail
  5. Payment Details

Therefore thought to share this query, hope this would be great help who have such kind of adhoc requirement from daily life.

Here is query:

SELECT
A.ORG_ID "ORG ID",
E.VENDOR_NAME "VENDOR NAME",
UPPER(E.VENDOR_TYPE_LOOKUP_CODE) "VENDOR TYPE",
F.VENDOR_SITE_CODE "VENDOR SITE",
F.ADDRESS_LINE1 "ADDRESS",
F.CITY "CITY",
F.COUNTRY "COUNTRY",
TO_CHAR(TRUNC(D.CREATION_DATE)) "PO DATE",
D.SEGMENT1 "PO NUMBER",
D.TYPE_LOOKUP_CODE "PO TYPE",
C.QUANTITY_ORDERED "QTY ORDERED",
C.QUANTITY_CANCELLED "QTY CANCALLED",
G.ITEM_DESCRIPTION "ITEM DESCRIPTION",
G.UNIT_PRICE "UNIT PRICE",
(NVL(C.QUANTITY_ORDERED,0)-NVL(C.QUANTITY_CANCELLED,0))*NVL(G.UNIT_PRICE,0) "PO Line Amount",
(SELECT
DECODE(PH.APPROVED_FLAG, 'Y', 'Approved')
FROM PO.PO_HEADERS_ALL PH
WHERE PH.PO_HEADER_ID = D.PO_HEADER_ID) "PO STATUS",
A.INVOICE_TYPE_LOOKUP_CODE "INVOICE TYPE",
A.INVOICE_AMOUNT "INVOICE AMOUNT",
TO_CHAR(TRUNC(A.INVOICE_DATE)) "INVOICE DATE",
A.INVOICE_NUM "INVOICE NUMBER",
(SELECT
DECODE(X.MATCH_STATUS_FLAG, 'A', 'Approved')
FROM AP.AP_INVOICE_DISTRIBUTIONS_ALL X
WHERE X.INVOICE_DISTRIBUTION_ID = B.INVOICE_DISTRIBUTION_ID)"Invoice Approved?",
A.AMOUNT_PAID,
H.AMOUNT,
I.CHECK_NUMBER "CHEQUE NUMBER",
TO_CHAR(TRUNC(I.CHECK_DATE)) "PAYMENT DATE"
FROM AP.AP_INVOICES_ALL A,
AP.AP_INVOICE_DISTRIBUTIONS_ALL B,
PO.PO_DISTRIBUTIONS_ALL C,
PO.PO_HEADERS_ALL D,
PO.PO_VENDORS E,
PO.PO_VENDOR_SITES_ALL F,
PO.PO_LINES_ALL G,
AP.AP_INVOICE_PAYMENTS_ALL H,
AP.AP_CHECKS_ALL I
WHERE A.INVOICE_ID = B.INVOICE_ID
AND B.PO_DISTRIBUTION_ID = C. PO_DISTRIBUTION_ID (+)
AND C.PO_HEADER_ID = D.PO_HEADER_ID (+)
AND E.VENDOR_ID (+) = D.VENDOR_ID
AND F.VENDOR_SITE_ID (+) = D.VENDOR_SITE_ID
AND D.PO_HEADER_ID = G.PO_HEADER_ID
AND C.PO_LINE_ID = G.PO_LINE_ID
AND A.INVOICE_ID = H.INVOICE_ID
AND H.CHECK_ID = I.CHECK_ID
AND F.VENDOR_SITE_ID = I.VENDOR_SITE_ID
AND C.PO_HEADER_ID IS NOT NULL
AND A.PAYMENT_STATUS_FLAG = 'Y'
AND D.TYPE_LOOKUP_CODE != 'BLANKET';

The important section which cover in the query output is as:

1. Information for Supplier

1

2.Purchase Order details

2

3. Receiving Items Details

3

4.Invoice Details

4

5.Payment Details

5

You download the query and details here.download btn

Posted in Oracle Payable, Oracle Purchasing | 12 Comments »

R12 “AGIS” : What makes “Advanced”

Posted on January 30th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Since last fortnight,I was looking into R12 GIS Module, seems some of the old features and functionlity have been greatly enhanced with addition of some more new features introduced.The point which should be noted here is,R11i GIS get new name commonly known as "Advanced Global Intercompany System" in short 'AGIS'. The difference is the prefix 'A', therfore will take a close microscopic view on feature that makes 11i GIS into Advanced GIS of R12. Here are the candidate features :

double-arrow Ability to create invoices (AR and AP)
Oracle Advanced Global Intercompany System can create invoices in payables and receivables sub ledger from intercompany transactions.

Using Oracle Advanced Global Intercompany System user can enter transactions for multiple recipients within a single batch. This allows user to submit intercompany transactions from one initiator to one or more recipients in a single batch.

double-arrowProration of transaction distribution amounts

When user allocates more than one distribution account in a batch that has multiple recipient transactions, Oracle Advanced Global Intercompany System can automatically prorate the distribution amounts based on the recipient transaction amounts. The proration of amounts is also used by Oracle Advanced Global Intercompany System to adjust the distribution amounts in the batch when a recipient transaction is deleted or it is rejected.

double-arrowUpload Transaction Batches created in Excel

This was a missing link in the earlier version, as earlier product does not have capability to use direct upload functionality, rather than interfacing through Open GIS interface. In Release 12 ADI is heavily used in this module, which is replacement of external integration for AGIS System using by mean of Microsoft based Excel spreadsheet. Now flexibility is provided to user that can generate spreadsheet templates that have features of intercompany entry pages and using the templates the user can enter transactions in the spreadsheet and upload them into Oracle Advanced Global Intercompany System. The good thing has found the standard templates can be customized by removing or adding the entry fields from a list of available fields. This feature is used to create a template that contains only the entry fields that are important for the business. The required fields cannot be removed from the template. Once the templates are generated, user can save them in their local computer to reuse them in the future. This figure describe the options available in both the versions.

intercompany

double-arrowMultiple recipients Support

double-arrowReversal of batch/transaction

This changed feature enables a user to reverse a whole batch or an individual transaction in a batch. When the user reverses a batch or a transaction, a new reversal batch is created, which displays the references to the original transaction. One point to be noticed is that new batch is submitted automatically immediately after it is created. Not both the parties (Sender /receiver), its only users with access to the initiator organization can reverse its batches or transactions. The set up is there where a user can choose a reversal method determining if the new batch will be created with opposite signs, or with switched debits and credits.

double-arrowDescriptive flexfield support

In AGIS descriptive flexfields is supported on the batch and also on individual transactions within the batch. Descriptive flexfields allow user to enter any additional information specific to the nature of business, in the batch and in the transactions. Important to note that these DFF can be used by sender. The user can enter descriptive flexfield information for the recipient in the Recipient Accounting section.

double-arrowFlexible Approval Rules and Workflow Notifications

In R12, AGIS very similar to other module, home page displays notifications about approval or rejection statuses of intercompany transactions. You should note that notifications can be sent to the users via email. The rules for approvals and notifications can be customized using Oracle Approval Management Engine (AME), which allows the user to add extra approval rules and hierarchies to suit their business needs.

double-arrowDocument attachment

The user can attach the documents for the batch as well as for each of the transaction. When user submits the batch, the documents are transferred to respective recipients.

double-arrowTransaction security

Intercompany transactions entry pages incorporate various security features. The user can enter transactions only for those intercompany organizations that are assigned to the user. Other security features include minimum transaction amount, control amount and function security.

For example:

Intercompany accountant processes intercompany transactions for many intercompany organizations in the enterprise.What is different between these two is :

  • R11i - Each responsibility has only one subsidiary assigned, therefore a user can initiate intercompany transactions for one subsidiary from each responsibility
  • R12 – the user can initiate intercompany transactions for many trading partners without changing responsibility

double-arrowIntercompany Periods

The new Intercompany calendar gives the user the option to control intercompany transaction processing by periods status.

What is observed in this functionality can be best describe as:

If a user wants to control intercompany cut-off dates, then the user can choose which General Ledger calendar will be used to control transaction entry by intercompany period status. Intercompany Calendar prevents users from entering transactions in closed periods and from closing the period if open transactions exist for the period user wants to close. When the user tries to close General Ledger accounting period, or Oracle Payables period or Oracle Receivables period while Intercompany Period is still open, the warning message can be displayed informing user about the status of intercompany period.

double-arrowSetup Profile Options

In AGIS there is no profile options that means these three as below intercompany profile options used in R11i are obsolete in this release.

  • Intercompany: Protect Receiver Natural Account
  • ntercompany: Subsidiary
  • Intercompany: Use Automatic Transaction

double-arrowIntercompany Reconciliation and Reporting

There are two new reports avaible in XML Publisher format

  • Intercompany Transaction Summary report
  • Intercompany Account Details report.

These reports replace reports that were available in the Global Intercompany System (GIS) in Release 11i.

The new reports offer all of the functionality of the obsolete reports plus additional benefits.

A bit on these 2 reports:

1)Intercompany Transaction Summary report replaces the Intercompany Transaction Detail report and Unapproved Transaction Listing report.

The purpsoe of this report is to give user a clear overview of intercompany transactions and their statuses, there so that day-to-day tasks and speeds up period close activities.

This report also provides supporting documentation for intercompany reconciliation and helps keep intercompany in balance by uncovering any potential discrepancies.

2) Intercompany Account Details report replaces the Transaction Activity Summary report

This new report provides a detailed listing of all accounting lines for intercompany batches, grouped by transaction.

The report is divided into two sections:

  • one section for outbound batches
  • one section inbound transactions.

The outbound section shows transactions initiated by the organizations to which the user has an access, the inbound section shows transactions received by these organizations. The user can choose whether to include inbound, outbound, or both sections in the report.

The user can run the report for one or many organizations to which the user is given the access.

User can select what parameters like initiator, Recipient, GL Date range, Batch Number range, Transaction Status, Currency, Batch Type, Invoice Number, and many more to run the report by. User can run the report by ranges of initiator and recipient accounts to see what transactions make up their balances.

Posted in Oracle General Ledger | 9 Comments »

Guest Post: : Its all about BPEL (Business Process Execution Language)

Posted on January 28th, 2008 by Hub Contributor |Print This Post Print This Post |Email This Post Email This Post

dgreybarrowBPEL Concepts

BPEL aka Business Process Execution Language is a programming abstraction that allows developers to compose multiple discrete Web Services into an end-to-end process flow. It has built-in support for asynchronous interactions, flow control and compensating business transactions. It integrates with XPath, XSLT and XQuery for XML data manipulation

BPEL (Business Process Execution Language) has emerged as the clear standard for composing multiple synchronous and asynchronous services into collaborative and transactional process flows. BPEL benefits from the years of research poured into its predecessor languages, XLANG and WSFL.

  • Web Services/WSDL as component model
  • XML as data model (data loose-coupling)
  • Sync. and async. message exchange patterns
  • Deterministic and non-deterministic flow coordination
  • Hierarchical exception management
  • Long-running unit of work/compensation

dgreybarrow BPEL Process Manager

The Oracle BPEL Process Manager provides a developer-friendly and reliable solution for designing, deploying and managing BPEL business processes.

The BPEL Designer provides a graphical and user-friendly way to build BPEL processes. Most important thing about the Oracle BPEL Designer is that it uses BPEL as its native format. This means that processes built with the Designer are portable and in addition it enables developers to view and modify the BPEL source at any time.

The core BPEL engine provides the most mature, scalable and robust implementation of a BPEL servers. The Oracle BPEL Process Manager executes standard BPEL processes and provides a "dehydration" capability so that the state of long-running flows is automatically maintained in a database, enabling clustering for both fail-over and scalability. The BPEL Server leverages an underlying J2EE application server, with support for most major commercial application servers and a bundled version available.

The Built-in integration services enable advanced connectivity and transformation capabilities from standard BPEL processes. These capabilities include support for XSLT and XQuery transformation. Workflow is provided as a built-in BPEL service to enable the integration of people and manual tasks into BPEL flows. The JDeveloper BPEL Designer provides wizards to build these complex workflows and a simple GUI to map transformations.

BPEL Process Manager

Figure 1 BPEL Process Manager

The extensible WSDL binding framework enables connectivity to protocols and message formats other than SOAP. Bindings are available for Java, JMS, email, JCA, HTTP GET and POST and many other protocols enabling simple connectivity to hundreds of back-end systems. WSIF allows you bind directly and transparently to any backend protocol or programming construct, so you get the benefits of a loosely-coupled Web services architecture with the performance and transactionality of native protocols.

The BPEL Console provides a mature web-based interface for management, administration and debugging of processes deployed to the BPEL server. Audit trails and process history/reporting information is automatically maintained and available through the BPEL Console

[This post is written by guest author. Author is a technical consultant worked for 7 yrs in Oracle Technical domain with one of Big 4 consulting company . His Focus area is Integration , interfacing within EBS]

Posted in Emerging Technologies | No Comments »

You can View the “Status Monitor” of other user’s workflow

Posted on January 27th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

To allow user to view different user’s workflow, you must make user can select “Workflow Owned By” field in “Status Monitor“. To enable user to do that , follow these steps :

1. Log in the responsibility “Workflow Administrator Web Applications” with sysadmin user and password and then go to Administration tab

2. Change “Workflow System Administrator” to user name, responsibility name or “*”.

If user name, the user can view all workflow and other user can only view his/her own workflow;
If responsibility name, the user who has this responsibility can view all workflow;
If *, anyone can view all workflow.

Posted in Tool | No Comments »

Oracle FA :From 10.7SC, 10.7 ,11 , 11i & Release 12

Posted on January 26th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Know the difference in product version functionality.This document might be very helpful to those group and team, who is still working on some older version of OracleApps and same time exploring the new feature of higher versions release. This document is compiled for Fixed asset and put all five different version's new and enhanced feature in one place.

You can download the document here for Fixed Asset.download

Posted in Oracle Asset | 3 Comments »

Release 12: 6 New and Changed Feature in “Oracle Assets”

Posted on January 25th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Here are the six new and Changed features for Oracle Assets in Release 12 .

  • Sub Ledger Accounting Architecture
  • Enhanced Mass Additions for Legacy conversions
  • Automatic Preparation of Mass Additions
  • Flexible Reporting using XML publisher
  • Automatic depreciation rollback
  • Enhanced functionality for Energy industry

1

Fixed Assets tied with SLA(Sub Ledger accounting)

As we have already seen in few earlier post "Oracle Subledger Accounting " is a rules-based engine for generating accounting entries based on source transactions from ALL Oracle Applications. Therefore Fixed Asset module does integrated with such functionality to cater the asset accounting at ledger level. With this feature:

  • Oracle Assets is fully integrated with SLA, which is a common accounting platform for Sub Ledgers.
  • Customers can use the seeded Account Derivation definitions or modify them as required.
  • Continue to support Account Generator functionality for existing Asset Books.
  • New SLA Accounting report and online account inquiry.

What you will notice create Journal Entries (FAPOST) process feeding into the GL_INTERFACE table is no more exist .This is replaced with the Create Accounting – Assets process (FAACCPB). With this replacement, the some of high point in term of benefits are:

  • It leads to faster closings: Since there is no requirement of having to close the period, accounting can be created for FA transactions and sent to GL on a continual basis throughout the period.
  • There is no need to wait until the end of the month to run Create Accounting in order to get the data to GL.

Therefore with this new enhancement allows clients to meet multi-GAAP, corporate, and fiscal accounting requirements. The tool, Accounting Methods Builder, allows you to determine the accounts, lines, descriptions, summarization, and dates of your journal entries.

This can be best understood as this example, if you do a large amount of asset additions on the first day of the month, you can run Create Accounting and get all the Cost and Cost Clearing lines over to GL at the close of business that day.

2 Enhancements have been made to the FA_MASS_ADDITIONS table.

Now with this enhanced feature, we can populate the values for the new attributes directly in the FA Mass Additions interface table rather than accepting default values from the asset category. Legacy conversion can be completely automated.These are new adds-on:

  • Asset Life
  • Depreciation Method
  • Prorate Convention
  • Bonus Rule Ceiling Name
  • Depreciation Limit

What it is understood , is that Web ADI has also been upgraded to include the new Attributes.

  • New columns in the Asset Additions WebAdi
  • Additional attribute can be used to populate values directly thereby eliminating the need to override the defaults from the Asset Category
  • These new data fields will benefit data conversion by allowing the converted data to be brought into Oracle with the asset life information.

3New Automatic Preparation of Mass Additions

  • This new feature consists of default rules and Public APIs that can be used by customers to complete the preparation of mass addition lines automatically.
    • Auto populate required fields such as Expense Account, Asset Category etc.
    • Avoid manual intervention during the Mass Additions prepare process
    • Avoid customization and use public APIs to effect custom business logic.
  • Assets now uses Flexible Reporting using XML publisher
    • Major Asset Transaction reports have been modified to support XML publisher.
    • Users can modify or use new templates to view report output.

Those who are very new to Asset module must have question, What is maent by Default Rules.

  • Asset Category – this is derived from the asset cost clearing account, as long as there is a one to one relationship between the account and asset category. This process will only impact items in the ‘New’ and ‘On Hold’ queue names.
  • Expense Account – this is derived from the clearing account combination and overlaying the natural account segment with the value of the natural account segment of the depreciation expense defined in the asset category. If the program cannot derive an expense combination, the queue name is set to ‘On Hold’.

So what is meant for Consultant by this feature..please note

  • This should minimize the amount of manual efforts involved in the Prepare Mass Additions Process. Manual updating is still required some fields may not be populated but are required.
  • Asset Category – a one to one relationship between cost clearing account and asset category – this will expand the COA of many companies.
  • Expense Account – the expense combination is going to be derived from a BS account. Oracle will simply overlay the natural account segment, replacing the cost clearing account with the depreciation expense account leaving all other segment values alone. If there are certain requirements for P&L accounts versus BS accounts, I.e. cost center required for P&L, this may present issues.
  • Manual efforts are required to perform Merging, Splitting, Add to Assets, and Merge Then Split functionality.

4Flexiable Reporting into XML Publisher

These Thirteen asset reports have been converted in XML Publisher based report.

  • Create Accounting – Assets
  • Transfer Journal Entries to GL – Assets
  • Journal Entry Reserve ledger Report
  • Asset Additions Report
  • Asset Transfer Report
  • Asset Retirement Report
  • Transaction History Report
  • Asset Reclassification Report
  • Mass Additions Create Report
  • Mass Additions Posting Report
  • Cost Adjustment Report
  • Cost Detail report
  • Cost Summary Report
  • Reserve summary Report
  • Reserve Details Report
  • Mass Revaluation Preview Report
  • Revalution Reserve Details Report
  • Revalution Reserve Summary Report
  • CIP Capitaliization report
  • CIP Detail Report
  • CIP Summary Report

You can design and control how the report output will be presented in separate template files. Publish in PDF format that can support colors, images, font styles, headers and footers, and other formatting. You can create new report templates, or modify existing templates to view your report output.

5Automatic Depreciation Rollback

Depreciation is rolled back automatically by the system when any transaction is performed on an asset if the following conditions are met:

  • Depreciation has been processed in that period
  • The period is not closed

That mean, it is no longer required to run depreciation rollback program manually as we have seen in release 11i.

Depreciation rollback is executed only on select assets as required and not on the entire Asset Book this enhances performance of the program.

Since release 11i, users have been able to run depreciation for an asset book without closing the period. If additional adjustments are required in the current period, then the user submits a process to roll back depreciation for the entire book, performs the necessary adjustment(s) and then resubmits the depreciation program. In Release 12 the intermediate manual step of rolling back depreciation for the entire book in order to process further adjustments on selected assets is no longer necessary. As before users may submit depreciation for the entire book prior to closing the period. If it becomes necessary to process financial adjustments on one or more assets, the user may proceed with the transaction normally via the asset workbench or mass transactions.

Oracle Assets automatically rolls back the depreciation on just the selected assets (instead of the whole book) and allows the transaction(s) to be processed normally. The asset(s) for which depreciation was rolled back is automatically picked up during the next depreciation run or at the time that the depreciation period is finally closed.

6Enhanced functionality for Energy Industry

As per RCD , this can be understood as;

  • Energy Units of Production Method for Group Assets

In the oil & gas industry, asset properties may include fields, leases and wells. These assets are typically associated with units of production (UOP) and are depreciated using a special UOP depreciation method. ‘Energy’ assets are generally structured into two levels, group and member assets, where the group asset is a collection of several members.

  • Allow Production method for Group Assets
  • Allow Production upload to Group Assets
  • Energy Straight line Method

This feature is used in oil & gas industry ,where non-producing assets are depreciated using the energy straight-line method based on the asset’s net book value. Assets that depreciate using the energy straight-line method may either depreciate at the member asset level or group asset level.

A note on Straight-Line Depreciation – Assets that depreciation using energy straight-line method may either depreciate at the member asset level or group asset level.

  • When at the member level, depreciation is calculated based on each member’s life and then summarized up to the group asset.
  • When at the group level, depreciation is calculated at the group asset level, the life of the group asset is used.
  • Net Book Value / Remaining Life
  • Asset Impairment – this is basically an unplanned depreciation and will utilize this feature to perform asset impairments. Now the ‘impairment’ expense account may be derived from the asset category setup or manually entered.

Suggested Reference

  • Note:421352.1 :Release 12: Where is the Option for Rollback Depreciation?

Posted in Oracle Asset, R12, Release12 | 4 Comments »

Difference between “Cash Clearing Account” and “Clearing Account” in AR

Posted on January 25th, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

This is in response of one offline mail as one of consultant asked some more information for Cash Clearing Account and Clearing Account, so thought to share here. His question was:

What is difference between "Cash Clearing Account" and clearing account in AR?

If you are using Oracle Cash Management, you need to define

  • Bank Errors Account
  • Bank Charges Account
  • Cash Clearing Account

That mean for each bank account you plan on reconciling by using Cash Management. If you use Payables, you can override these accounts for
each payment document you define.Right.

If you set up Oracle Receivables to account for payments at clearing time, enter the cash clearing account you are associating with a bank account. When you create accounting entries for your unreconciled invoice payments, you credit your cash clearing account using this account. After you reconcile your invoice payments using Oracle Cash Management, when you create accounting entries for the cleared payments, you debit this cash clearing account and credit this bank account's cash account. The account you enter here defaults to the Cash Clearing Account field in the GL Accounts region of the Payment Documents window.

If you are using future dated payment methods, enter the clearing account you are associating with a payment document. When you pay an invoice with a payment document that uses a Manual Future Dated or Future Dated payment method and post payments within Payables,Receivables automatically debits your liability account and credits this account. When you clear this payment using automatic or manual reconciliation within Oracle Receivables or Oracle Cash Management then post payments within Payables, Receivables debits this cash clearing account and credits this bank account's cash account.

Clearing Accounts are used for AutoInvoice

The clearing account is for your imported transactions. Receivables uses the clearing account to hold any difference between the specified revenue amount and the selling price times the quantity for imported invoice lines. Receivables only uses the clearing account if you have enabled his feature for the invoice batch source of your imported transactions.

Normally, cash clearing account is used if your accounting is accrual Based.

Is there any relation between Cash Clearing and Reconciliation?

Cash clearing and reconciliation have no relation. You can use cash clearing if you want to account for the payment after its cleared in the bank and not on payment issue.

More over, you should note that reconciliation is a activity of matching a Payment / Receipt with bank statement.

Have a nice weekend.:)

Posted in Oracle Receivable | 5 Comments »

Netting : An Overview

Posted on January 23rd, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

My last two post was on netting , lot of people asked me to provide some more insight view for netting, so this post is meant to walk through ,the concept to someone not very familiar with accounting in real world...so here to go..(adopted)

When trading partners agree to offset their positions or obligations, they are netting. By doing so, they reduce a large number of individual positions or obligations to a smaller number of positions or obligations, and it is on this netted position that the two trading partners settle their outstanding obligations. Besides reducing transaction costs and communication expenses, netting is important because it reduces credit and liquidity risks, and ultimately systemic risk. For a non accounting personal risk can be best understood as :the risk of a trading partner not fulfilling his obligations in full on due date or at any time thereafter is a risk that affects all aspects of business.

redarrow-1Definition of Netting

In this method of reducing credit, settlement and other risks of financial contracts by aggregating (combining) two or more obligations to achieve a reduced net obligation.

  • Netting rules a basic part of master agreements.
  • Netting rules define precisely the netting of positions or claims between counter parties.

redarrow-1Benefits of Netting

Netting potentially address four major risk in financial area, there are

  • Reduction of credit risk
  • Reduction of settlement risk
  • Reduction of liquidity risk
  • Reduction of systemic risk

redarrow-1Types of Netting

  • Payment Netting
  • Novation Netting
  • Close-Out Netting
  • Multilateral Netting

1Payment Netting

Also called “Settlement Netting” or Also called "Position or Accounting Netting".

On a payment date, each party will aggregate the amounts of a currency to be delivered by it, and only the difference in the aggregate amounts will be delivered by the party with the larger aggregate obligation.

PAYMENT

This can be best understood as:

  • Daily settlement or offsetting of several, due claims in the same currency
  • Reduction of transaction costs, settlement risk and liquidity risk.
  • No impact on credit risk.

Types of Payment Netting Agreements

  • Master Agreement with a Payment Netting Clause
  • Stand-Alone Payment Netting Agreement
  • Informal, “ad hoc” agreement

 

2Novation Netting

If the parties enter into a transaction which gives rise to an obligation for the same value date and in the same currency as an existing obligation, then the two obligations are cancelled and simultaneously replaced with a new obligation for the net amount.

  • Settlement of not yet due claims in the same currency and the same maturity.
  • Reduction of limit usage and credit risk.

Two Types of Novation Netting:

  • Matched Pair Novation Netting
  • “Comprehensive” Novation Netting

Matched Pair Novation Netting

Netting only occurs if the two transactions involve the same pair of currencies.

Example1: Matched Pair Novation Netting

Deal 1: Buy JPY / Sell USD
Deal 2: Buy USD / Sell EUR
Deal 3: Buy EUR / Sell JPY

No two deals involve the same currency pair, and therefore no netting under matched pair novation netting.

Example 2: Matched Pair Novation Netting

example2

Example 3: Comprehensive Novation Netting

EXmaple3

 

redarrow-1A Payment Netting vs Novation Netting

  • Payment Netting reduces settlement risk, but does achieve netting for balance sheet or regulatory capital purposes because the transactions remain in gross.
  • Contrast with Novation Netting, which achieves true netting through the cancellation of offsetting transactions and their replacement with a new, net transaction.

3Close-Out Netting

Effective upon a default:

  • Existing transactions are terminated
  • Termination values are calculated
  • Termination values are netted to arrive at a single net amount
  • Recourse to credit support, if any

That mean:

  • Settlement/offsetting of not yet due claims in different currencies in case of a default event or an early termination event of the contractual relationship.
  • All outstanding gross obligations or payments are replaced by a single obligation or payment

4Multilateral Netting

Bilateral Netting is between two parties.

Multilateral Netting involves netting among more than two parties, using a clearing-house or central exchange.

netting

 

When it come to party , it may be two party interacting with third party. Th two party may be your other entity in the same instance, which do business internally, what we called Intercompany.

Multilateral netting is a settlement mechanism used by companies to pay for goods and services purchased from affiliated companies. The netting process consolidates
intercompany transactions and calculates settlement requirements internally instead of using external payment systems. Netting is typically used by companies with a number of affiliates in different countries. By netting, these companies reduce bank fees, currency conversion costs, bank balances and improve operating efficiency.

Will take this in some more details in another post.

redarrow-1Requirement Mapping with Existing Oracle EBS Product

Still these two processes are not fully enabled in Oracle EBS suite. Though first type of netting somehow mapped as Contra Charging in post 11i10 releases where as in R12 this functionality can be mapped as part of AP/AR netting, a new feature of R12.

Here is summarize list of the different types of netting and there corresponding netting.

Netting as per EBS

Feel Free to comment or share any information.:)

Posted in Basic Accounting, Finance | 9 Comments »

10 Min Guide for “Internal Requisition To Internal Sales Order Flow”

Posted on January 22nd, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

You already aware , Internal requisition is a requisition in the Purchasing system that will directly result in the generation of a sales order in the Order Management.

Internal Requisition/Internal Sales Order provide the mechanism for requesting and transferring material from one inventory organization to other inventory
organization or expense location.

When Purchasing, Order Management, Shipping Execution, and Inventory are installed, they combine to give you a flexible solution for your inter-organization
and intra-organization requests.

dgreybarrow Where : First you need to understand , where demand comes for Internal requisitions in company.

Demand for internal requisitions can come from the following sources

  • Online user's request for stock items out of inventory
  • Inventory Replenishment Requests
  • Inventory generates replenishment requests automatically using the following methods:
    1. Min-Max Planning
    2. Reorder Point Planning
    3. Subinventory Replenishments for Replenishment Counts
    4. Kanban Replenishments

Oracle Master Scheduling/MRP creates requisitions for buy items when you release them using the Planner Workbench.

For External system's requests, you can automatically import internal requisitions from other Oracle Applications or existing non-Oracle systems using the Requisitions Open Interface.

dgreybarrow How : here are steps which helps you to understand the flow from IR to ISO.

The key setup Steps Includes for IRO should be:

Item to be used on Internal requisition should have the following flags enabled.

  • Purchasing -> Purchasable
  • Order Management -> Internal Orders Enabled
  • Order Management -> Internal Ordered
  • Order Management -> OE Transactable

More important is , Item needs to be assigned to both source and destination inventory organizations.

Then you need to create shipping network between source and destination Inventory organizations.

Follow this navigation

Inventory responsibility -> Setup -> Organizations -> Shipping Networks

Once your shipping network should be created from source to destination organization.

You can setup transfer type can be either Direct or Intransit and internal Order required checkbox should be checked.

When you are using Internal Requisition/Internal Sales Orders, it is required to create an internal customer for each destination organization and a customer ship-to site for each deliver-to location within the destination organization.

Make sure you have defined the same address for your customer ship-to-site as your deliver-to location.

The Customer must be created in the Operating Unit of the Source Inventory Organization that is used on the Internal Requisition.

Make sure Profile option PO: Legal Requisition Type should be setup correctly which should be either BOTH or INTERNAL

  • PO: Legal Requisition Type = BOTH - That means items can be purchased from a vendor or from on hand inventory
  • PO: Legal Requisition Type = INTERNAL - that means items can only be obtained from on hand inventory

Thats all.

Next, refer to previous Post "Understanding data flow for “Internal Orders” helps you to understand the data flow table to table level.

Posted in Oracle Purchasing | No Comments »

Data Migration – Data Profiling

Posted on January 22nd, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

In Typical Data Migration activity, the most effective way of delivering a data migration program is to fully understand the datasources before starting to migration code. This is best achieved with a complete profiling and audit of all source data within the scope at an early stage, doing this it gives these benefits:

  • With complete visibility of all source data, you can identify and address potential problems that might have remained hidden until a later stage.
  • The rules for planning, mapping, building, and testing migration code can be based on a thorough analysis of all source data rather than a small sample set.
  • Decisions can be based on proven facts rather than assumptions.
  • Early data validation can assist with the choice of the migration method.

dgreybarrow Data Profiling

This is defined as "assessment of the existing source data that determine the relative levels of data quality based upon predefined parameters"

Data profiling is an initial step in the data quality analysis that focuses on understanding the attributes of the data (e.g., completeness, uniqueness, range of values). In addition to overall data statistics, profiling also provides information related to:

 

Dimension Description
Reasonable Values Some attributes have a certain range of acceptable values based on another field. These types of business rules will analyze the field to identify outlier values.
Validity Test for valid fields based on the type of data. For example, all Supplier must have a valid address.
Completeness Business rules that analyze data to determine if required fields are populated. These rules are necessary to ensure attributes that are required for a successful data load are populated
Format Format business rules will analyze the data for proper formatting based on target product (Oracle if you are doing in Oracle) requirements. Different code fields as well as other required fields within the legacy data are analyzed to determine if the format is appropriate for Oracle.
Uniqueness

A particular field might need to be unique depending on another field.

Required vs. Non-Required

When creating business rules, some are categorized as required vs. others as non-required. Required business rules are necessary to be remediated before the data can be loaded into Oracle.

Non-required rules are categorized as those that are needed in order for data to be business ready.

In data Profilic, the base source tables/files having been identified, profiling and auditing tools are now used to look at the data content of all potential sources to understand the data and identify what needs to be migrated.This stage helps in detecting possible conflicts and drilling down to a detailed level to resolve any issues and inconsistencies.

Key benefits of profiling and auditing are that they enable you to:

  • Create a single repository for all analysis, regardless of source system
  • Gain clear visibility into and access to all data problems, with the ability to investigate anomalies to any required depth
  • Identify unknown data issues by making it easy for nontechnical staff to find the answers to questions they didn’t know they needed to ask
  • View any inconsistency across the full scope of the data to be migrated and assess its impact on the whole migration project
  • Establish a single way of conducting analysis across the project
  • Remove dependence on technical source system owners and their time
  • Use a simple, business-friendly interface to review issue
  • Ask questions about technical and business inconsistencies through the same user interface

Posted in Conversion | No Comments »

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