It was request from one of reader to provide some information for new organization Hierarchy model between two release of 11i and R12.Therefore invite you to run through the following diagram as below with some basics.

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What two program responsible for creating events in R12 CM

They are

• bank account transfers
• bank statement cash flows

Once events created and the accounting program is run, the journal entry setup and the accounting configurations are referenced to produce journal entries. The journal entries are then transferred to GL which had visibility upto source transactions. This way CM user can drill down from the transaction level to the journal entry details.

How it is differ from R11i

In 11i release Cash Management produced journal entries for bank statement activity based on simple rules and sent them to the GL interface

A bit on Bank account transfers

For those who are new to R12, should note The bank account transfer functionality of R12 is one in which you can take action on the projected closing balances calculated by the system. This is integrated with the Payments application that allows you to send payment instructions to the bank in a variety of payment formats.

We already aware for changes for new Bank Account Model feature of R12.

Lets investigate how bank model drive some changes in Bank statement Reconciliation.

1….R12, Bank Transaction Codes is linked to multiple sources.

In 11i each bank transaction code had to be linked to a single source, such as Accounts Payable. This could create an issue if the bank was using the same transaction code to report back a payment that was initiated from an application other than Accounts Payable. With this enhanced changes link with bank transaction code to sources can easily manage and this way you can assign a priority number which can be used in the auto reconciliation for sequencing.

2..Another feature is Reconciliation tolerances.This R12 feature is moved from the system level to the bank account level. This moves simply means that each bank account can manage unique set or reconciliation tolerances. The options for setting tolerance is still distinct for at both manual and auto reconciliation. You should also note auto reconciliation tolerances is unique with sources, that mean each source like AP,.AR,CM, and Open Interface can have there own level.

3… Most important,now it is possible to use the same bank account, created in the centralized model, in multiple organizations, the bank statement reconciliation can also done across Operating Units.

Underline Setup

Most of setup is now attached at Bank level which includes your Transaction codes. There is provision to manage and assign transaction code to multiple transaction sources.

Another changes you can see in R12 accounts Control in which you can easily manage reconciliation control parameters.

Post of your Intrest

• XML based statement for Cash Management
• Oracle EBS & SWIFT
• R12 : Bank & Trading Community Architecture(TCA)
• R12 : EBS Banking Model in demanding and Changing World
• R12 :Bank Statement Reconciliation

MOAC allows users of a single responsibility to perform task in multiple operating units without having to switch responsibilities.Out of Box functionality of MOAC, there is something called “Multi-Org Preferences”.

What is “Multi-Org Preferences”?

Multi-Org Preferences allows you to control the list of operating units to which you have access.

Lets say you have around 20 OU’s divided into three major Region (North America, Europe and APAC). Lets say within APAC region you are responsible for all 7 OU’s within Region.

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As we know in R12 , the existing Multiorg architecture includes a new feature Multiple Organizations Access Control (MOAC). Lot of queries and question were asked by my readers, therefore this post completely focus on some of technical Insight because of architectural change.The minimum you should suppose to know is that Access Control feature has backward compatible. Technically means that there are no code or procedural changes if MOAC is not implemented (i.e. The user is assigned one operating unit for a responsibility).

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There is one white papers from Oracle in area R12 Oracle Subledger Accounting. This was released sometime in last year Sept 2007, seems this is updated with latest version of April 2008.

• The Business Benefits of Oracle Subledger Accounting
  An Oracle White Paper
  September 2007 (latest version is of April 2008 )

Subledger & General Ledger

Those who are not having accounting background should understand , every accounting system will have a number of subsidiary ledgers (called subledgers) for items such as cash, accounts receivable, accounts payable, inventory , purchasing like wise. All the entries that are entered (called posted or booked) to these subledgers will transact through the general ledger account. For example, when a credit sale posted in the account receivable subledger turns into cash due to a payment, the transaction will be posted to the general ledger and the two (cash and accounts receivable) subledgers as well.

There are instances when items will go directly to the general ledger without any subledger.These items will be linked to your balance sheet but not to your profit and loss statement.

The Concept is more or less addressed same in newly R12 SLA accounting , therefore you should note:

• A transactional application that generates accounting impact.
• Used to store detailed information not needed for a general ledger
• Subledgers post summarized activity to a general ledger periodically to maintain centralized account balances for the company

More Reading on SLA

• R12 SLA: Analyzing Subledger Accounting
• R12 SLA: From Product Accounting to Subledger Accounting
• R12 SLA: Transaction Account Builder
• R12 SLA: Accounting Methods Builder

Background

Once the entries have been made and before any report are extracted from the accounts, a trail balance is drawn up.This is standard accounting practice. This is just what it says it is - a try at balancing the figure before the profit is worked out and the balance sheet drawn up. By rule of thumb,If the double entry is correct, ie all debit entry for every credit entry and viceversa, then the total of debit balance and total of the credit balances equal .

In release 12:

o 11i Trial Balance is known as the Open Account Balances Listing report in R12
o It runs based on the Open Account Balances Listing Definition that you define.
o You can define the Listing Definition at a Ledger or Ledger Set level

It runs based on the Open Account Balances Listing Definition that you define then select as a parameter when you submit the Open Account Balances Listing report.

As a prerequisite, you must run the Open Account Balances Data Manager and select the Open Account Balances Listing Definition in the parameter labeled “Trial Balance Definition”.

Now , you can define the Listing Definition at a Ledger or Ledger Set level such that when you run the report, you can view open liability balances for operating units belonging to a given ledger or ledgers within a ledger set as shown below:

Similar Post

• Welcome to R12 Account Payable
• Month End Process -Useful Payable Reports
• Month End Process for Account Payable
• R12 : AP Trail Balance

In R12 apart from AWB,there is yet another toolset which is called Transaction Account Builder aka TAB which normally used to derive default accounts for a particular transactions using sources , which is defined in the Accounting Methods Builder (AMB).

Normally this derives accounting codes from the TAB which internally driven the AMB setup attributes.

This is used derive default accounts for transactions before they are accounted and then it is used the AMB to generate the accounts that appear in the accounting.

TAB only derives default accounts for transactions. These accounts may not be the ones that appear on the subledger journal entries since these are generated by the Create Accounting program based on the application accounting definitions.

What are key components

The TAB Components figure below shows the components

Moreover you can see the source and account derivation rules(ADD) are shared with the AMB which was discussed in one of the last post.

Will discuss some more details for this utility in some another post and we will try to compare how its different from Autoaccounting?

Similar Post

1. R12 SLA: Analyzing Subledger Accounting
2. R12 SLA: From Product Accounting to Subledger Accounting
3. R12 SLA: Accounting Methods Builder
4. R12 SLA: Transaction Account Builder

In Subledger Accounting, have you heard something called Accounting Methods Builder, which is sort of toolset to define journal entry rules for the transactions and events of a subledger application . This allows us defining multiple sets of rules to be used concurrently for different requirements.

How AMB work?

Lets try to understand on the basis of Journal entry. Normally a journal are split into three main components:

• Descriptions
• Line Types
• Account Derivation rules

A particular Journal can be best described as figure 1.0(adopted) as below.

Description : Description can be on the entry or its individual lines. You set up descriptions, as many as you want, by using pieces of data from the transaction and constant values.

Purposely it identify the journal line types, descriptions, and account derivation rules that will be used to create a journal entry for a particular event type

Type :The Line Type is another component, actually one of the two main components of the entry. The line type defines whether this is a debit or a credit, what the accounting class is, where the amount should come from etc. Again, you set up as many as you need of these for a particular entry. You can have a single invoice line or distribution create as many debits or credits as needed.

• Under type you can identify the natural side of entry like Debit,Credit,Gain/Loss
• This will determine the accounting class
• You can set under which conditions the rule will create a line
• This can be tighten by defining the values needed for entry line generation, such as amount, currency, conversion rate information

Account derivation rule : This determines to which GL account a line should be booked. You can have lot of flexibility around the account derivation rules. You can also set up a rule for each flexfield to be used, or you can make it more complex and build each flexfield segment by segment by combining multiple rules.

Normally these rules can be setup to derive the accounts or segment values from transactional data, including conditions of when to use a particular rule versus another.

You can also note,this will:

• Determine which rule will be generic or specific for a given chart of accounts
• This will identify what will be derived like Accounting flexfield or there respective segment or qualifier value or Value from a value set
• This will also have a provision to define how the value will be derived for defaulting some Constant values or any Source value or any mapping set

Accounting Methods Builder
The transaction objects and the sources carry transaction information into the rules defined for each component of an entry.

These components, for example, journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event.

Take a case if you set up a Journal line description for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular sub ledger application is called the application accounting definition. And the set of application accounting definition for multiple applications is called the sub ledger accounting method.

In reality this accounting methods is assigned to each ledger, which determines which rules are applied when accounting is being generated for a particular ledger. If you have a setup with a primary and a secondary ledger, you could have different accounting methods attached to and used for each. Sounds good.

Your Navigation

• Setup - Application Accounting Definition (Navigation)
  • Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Methods and Definitions > Application Accounting Definitions
• Setup - Subledger Accounting Method (Navigation)
  • Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Methods and Definitions > Subledger Accounting Methods
• Setup - Account Derivation Rule (Navigation)
  • Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Journal Entry Setups > Account Derivation Rules

Similar Post

1. R12 SLA: Analyzing Subledger Accounting
2. R12 SLA: From Product Accounting to Subledger Accounting
3. R12 SLA: Accounting Methods Builder

Do you know, in R12 there is a new management segment qualifier for your chart of accounts. This would qualify a segment to be the management segment if that segment has management responsibility and you can facilitate setting of Read, Write access permissions while defining Data access set in GL.

With this new concept you can:

• Enables management reporting and analysis
• Provide a better controls access to specific MSVs based on management responsibility and this can be
  • prevents managers/line managers from viewing or updating data for cost centers, lines of businesses, product lines, etc. that are outside their responsibility
  • Secures access to ledgers and management segment values
  • Grants read only or read and write access to management segment values

This can be best understood as with this simple example,assume you Business COA is based out of three thing like

• line of business
• cost center
• product line

You can set Qualifier with any of the segement, The added benefit of using a management segment is that you can now secure management segment values using data access sets. So you can grant read only or read and write access to specific management segment values to prevent certain managers from viewing and updating data for cost centers, lines of business, or product lines outside of their management authority.

Defining and Designing your Management segment qualifier

Define a management segment if you want to perform management reporting and secure read and write access to segment values for the managementsegment. This segment can be any segment, except the balancing segment, natural account segment, or intercompany segment.

How it works

This can be understood as, lets we have four cost center like C0699,C0101,C0201,C0312 and these cost center have Vice President, director A, director B and Director C respectively.The Orginaztional Chart of cost center hierarchy is as figure below.

If you assign the cost center segment as the management segment, read and write access can be secured to certain management segment values based on the cost center manager.

In above example , Director A has read and write access to only cost center C101. Director A does not have access to Director B’s or Director C’s cost center or to the Vice President’s cost center. This will true for others when you set to other. This way you can secure Managment reporting.

If you have given Read/Write to Parent Cost center 0699 to the Vice President, on the other hand, would have full read and write access to cost center C0101,C0201 and C0312 which is the parent of the direct reports. Thus,in that case the VP has full access to all direct reports’ data.

Benefits of Management Reporting Security

The new management segment qualifier in combination with data access sets paves the way for management reporting and analysis.You can restrict access to different management segment values and assign them to different managers in your organization.

How this can be achieved in EBS

This can be achieved by setting three steps

1. Fisrt step you have to to find designate a Management Segment for Chart of Accounts
2. Then you have to define Data Access Set to Secure the above designate Specific Management Segment Values
3. Then you have to assign Data Access Set To Responsibility.
   That all, to make security takes effect for that responsibility.

Your Naviagation should be from Responsibility: General Ledger

Navigation: Setup : Financials : Data Access Sets

Data Access Set and Management segment Value

As we know in Release 12,data access sets control which ledgers can be accessed by different responsibilities. Data access sets can also limit a user from accessing certain balancing segment values or
management segment values or grant read–only or read and write access to data in a ledger.

GL automatically creates a data access set when you define a ledger or ledger set. This system-generated data access set provides full read and write access to ledgers. You can also provide more limited access to your ledgers and ledger sets by defining your own data access sets.

Suggested Reading

• Oracle® General Ledger User’s Guide Release 12 ,Part No. B31218-01