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SAP-ORCL – ‘ GL Journal’

Posted on January 16th, 2008 by Sanjit Anand ||Email This Post Email This Post

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In this series SAP-ORCL, here are some question & answers from “GL Journal” functionality wise between these two products. Hope this is good to have for managers who still evaluating Oracle or SAP in there daily operations.Please take a note, the GL functionality which is mapped agaist SAP is Oracle 11.5.10.2, FYI..there is slight change in Journal functionlity in Oracle R12 onward.

double-arrowJournal Import

Can journals be imported into all modules?

In Oracle Journals are only processed in the GL, Payables and receivables would either be an invoice or a payment/receipt or adjustment. Invoices and payments can however also be imported.Other Modules like Inventory, purchasing and others also imported to GL.

SAP : Similar to Oracle, each module in SAP is interfaces with FI and accounting documents are created automatically.

double-arrowReversing a Journal

If you reverse a journal, can the journal be automatically allocated against its reversal?

ORACLE :GL journals can indeed be backed out.Within Payables and receivables incorrect postings can be backed out and allocated returning the invoice etc to its original state and due date but retaining a full audit trail

SAP :Yes, where a journal is selected for reversal it will automatically be set-off and cleared against the original posting.

double-arrowDeletion of Journal

Can journals be deleted once posted?
Oracle :No, it can’t, as the system keeps a full audit trail.

Once a journal is deleted, there is no way to trace it. However, if a journal is posted and reversed instead of deleted, then it can be traced.

SAP :No. They can be only reversed

double-arrowInterCompany Journal

What functionality exists for Intercompany journals? How does the system deal with cross-company authorizations?

Oracle :The General Ledger includes an GIS(AGIS IN R12) which ensures that both entries are approved by each company and provides both with visibility of status. The recipient (have the concept of sender and receiver)company would typically receive a notification to alert them of the transaction. This will ensure that Intercompany balances retain in sync. Transactions not posted via the Intercompany system can also be captured via an Intercompany analysis segment within the GL which can automatically be populated.

In General Ledger 11i, there are four options to automatically account for intercompany transactions in a single set of books.

  • Standard Intercompany Balancing : This automatic Intercompany creates generic balancing lines against the intercompany accounts that are defined for specific sources and categories.
  • Enhanced Intercompany Balancing : This allows definition of separate intercompany accounts to record more detail for the intercompany journals and track the intercompany balances.
  • Intercompany Segment Balancing: This is used instead of using different natural accounts to track intercompany balances, it is possible to use an intercompany segment in your chart of accounts to record the same detail as enhanced intercompany
    balancing.
  • Clearing companies :It allows to define one company to act as the trading partner for all subsidiary companies in the organization for certain types of intercompany transactions.

SAP :When posting, inter-company functionality automatically creates to documents one to the sending company and the other to the receiving company. Only authorized users may access these functions.

double-arrowYear end Processing

How does these two products deal with reversing journals at year-end?

Oracle :Year end is not a special one in oracle.In oracle year end is not any different to any other period when you run open next period , if it happens to be period 365 or 366 FY08 (or12/13 if monthly) it simply opens the next period which would be 01 FY07. The system does not allow journals across periods so within each period (and year) the journals balance. As the system knows which accounts are revenue and equity etc it automatically creates the balance forward(B/F) opening balance.

When you define your calendar you define the from/to dates of each period and there is a flag that can be switched on to say “adjusting” period so a normal period dates cannot overlap but adjusting periods can so you could for example have:
P12 1st Dec 07 –31st Dec 07
P13 31 Dec 07-31-Dec-07 (X-for adjusting)
P14 31 Dec 07-31-Dec-07 (X-for adjusting)

The good point in oracle is that you can have as many adjusting periods as you like (one each month/quarter, 3 at year end etc).

In few cases like ,recurring journal categories can be defined (that have the reversing rules already defined) or journals can be created “on the fly” but a QUARTERLY journal would reverse in period 3,6,9,12 a YEAR END Period12 but you can also tell it whether it should reverse out in next accounting period(i.e. not an adjusting period) or next actual period.

So with above period structure you could enter a journal dates 12 December 07 (i.e. P12) with flag clicked to reverse next accounting period and it would reverse out P1 FY08 OR you could have set up a journal template of YEAR END which already has this rule predefined so whether it was entered P12,P13 or P14 it would all still backout P1.
Any journal can be later reversed or backed out (i.e. you don’t have to have defined it as a type reversing when it was first created). For Details refer earlier post on year end Year End Closing.

SAP : Reversing journals entered into the last posting period of a year, e.g. period 12, are automatically reversed in the first period of the next year. Any adjustment periods defined, for example, period 13 for audit adjustments, are ignored.

double-arrowJournal Security

Can user or user group security be applied to journal types and rules?
Oracle :Security can be applied to journal types. The Code combinations are context sensitive (ie based upon the account the analysis that is required) but also do incorporate a users security profile

SAP :Yes, this is all controlled via the users authorization profile

Can user posting be restricted by period?
Oracle :In oracle it can restrict users security to only be able to post in current period or to change a users security profile from a point in time.

SAP :You can attach authorization group to users and restrict users by period

Can security rules be used to control the posting of journal entries?

Oracle : Security rules apply only with regards to creation/modification of lines within a journal. They do not apply when the journal is posted.

Can users or user groups be restricted from posting to certain companies, account codes or analysis codes?

Oracle :Yes- this is part of the security profile.

SAP :Yes, a users authorization profile will determine his/her access rights to all areas of your system, right down to data item level.

double-arrowFx Rates in Journal

What exchange rates do reversing journals in currency reverse at?

In Oracle we have to provision to define spot, corporate or entered rate but will also depend upon the account range (ie Profit & Loss at different rate to Balance sheet).

For example : If you post a reversing journal in Jan 2008 at Jan 2008 fx exchange rate to automatically in Feb 2008, will this reversal happen at the rate that the journal was originally posted (i.e the Jan 2008 fx rate in this instance) or at the current month rate (i.e. the Feb 2008 fx rate)

It reverses out at the exchange rate of the original transaction .The example below is a journal that was entered originally in Feb 2008 but reversed in March 2008 but the conversion used is the original(Feb 2008) details.

SAP : In the SAP whenever the reversal takes place the exact match to the original transaction, therefore the exchange rate from the original entry will be used.

double-arrowValidation Rule

Can validation rules be added to journal types in addition to the account validation rules?

Oracle :Analysis validation takes place on all journal entry.

SAP :There are inbuilt validations existing. Others can be added too.

double-arrowFuture date Journal

Can you post a journal to a future period?

Oracle :Yes any period defined on the system.

SAP :Yes, provided the posting period is open.

What happens if a future period entry is posted but the analysis code associated with the transaction is closed after posting but before the future period becomes the current period?

Oracle :When the user or system tries to post the journal an error will occur to prevent posting – out of balance journals post to suspense account if enabled but incorrect GL codes would not be posted.

A future period transaction can be entered but it would not actually be posted so it would be revalidated(i.e. posted) when the period is opened (Any entered journals to this period can either be automatically posted when period opened or manually selected ). An alert as described could indeed be setup

SAP:When a document is posted all relevant analysis will be validated as at the posting date. The subsequent blocking of the analysis attribute will not affect the document as posted even if it is in a future period

Is there any limit on the number of journal types available?
Oracle, in oracle there is no limitation for Journal type, you can define source and category.

SAP :It is a two character alphanumeric field which is sufficient to take care of all the various types of journal entries.Normally standard document types are Vendor Invoice, Customer Invoice, Cash Entry, GL Document etc. are provided with SAP. You may create more document types in addition to the defaults. Document types are identified by a two character alphanumeric field to allow for as many variants as required.

double-arrowCapturing Reference

Does the system enforce unique referencing?

Oracle :Yes duplicate entries will be prevented.

SAP :The system allows referencing. You can create a document taking reference to another document or to a sample documentThere are other reference fields available for a line item which can be used depending on the need

What is the maximum field length for the transaction reference?
Oracle :The General Ledger Transaction Reference is 100 Characters with the description allowing 256 characters

SAP :This is 10 characters in length

GLreference

How many transaction reference fields are available?

Oracle :The standard journal has the one unique journal (and optional Journal Batch) reference however up to 15 additional fields can also be enabled

SAP :The system has 3 reference fields at the line item level, one at the header level and a text field is also available at the header and line item level.

double-arrowIntegration with GL

What are the different input formats are supported?
Oracle : In Oracle, excel or directly into the application however Oracle applications comes prepopulated with APIs(application Programmable interfaces) which are the open interface layouts to enable easy integration/interfacing from other systems. ADI is one of such adds-on.

SAP :SAP supports import of data provided in a flat file format.

Can an import file be validated before being imported?
Oracle: Yes can reference a lookup table or use the validations incorporated within the Oracle interface

SAP :All data is validated for system requirements and your own business rules before being imported to SAP. If the accounting document is created from a SAP module then the document is validated automatically and errors are displayed but if it is imported from outside then we can write a program to validate the data.

Will discuss some tips and techniques in designing and developing the Migration activity from SAP system to Oracle System in some other post. Keep watching this space.:)

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