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Oracle Landed Cost Management : DataFlow and Integration…..

Posted on November 30th, 2012 by Sanjit Anand ||Email This Post Email This Post

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If you refered to earlietr Post on Oracle Landed Cost Management , you might seen this consists of

  • Charge Management, where users can defines the charges and proration methods
  • Landed Cost Calculator, which performs estimated and actual cost calculations
  • Cost Repository, which consists of estimated and actual cost information corresponding to each receipt in Oracle Receiving.

Therefore you can conclude Purchase Order, tax and charge information flows from Purchasing, EB Tax and Advanced Pricing respectively. This information is used by Oracle Landed Cost Management to calculate the estimated landed cost.

Invoice information flows from Accounts Payable to Oracle Landed Cost Management for actual cost calculations.

Estimated and actual cost information flows from Oracle Landed Cost Management to receiving and costing for costing and accrual accounting.Let’s take a deep dive .

Integration of Oracle LCM with other modules

Oracle Landed Cost Management integrates with several other Oracle E-Business suite applications during the processing of estimated and actual landed costs for an item as per fig 1 in context to data flow and Integration:

Oracle Landed Cost Management

Oracle Landed Cost Management is fully integrated with other Oracle E-Business Suite modules. The following are the modules that are integrated with Oracle Landed Cost Management:

Oracle Purchasing

PO information is the baseline information used to itemize expected shipment or receiving lines on which extended supply chain charges will be applied, beacuse of this LCM provides visibility into Oracle Purchasing purchase order data to build expected shipments for charge application and subsequent landed cost estimation calculations.

Thats means , when you entering expected shipments the reference information provided by PO module saves time and decreases errors that might occur without automated access to this information. After the purchase order information is available in LCM , expected values received from the purchase order such as, quantity and price can be edited for estimated cost calculation purposes and thenafter all the necessary data is provided to help arrive at an accurate three way match after an invoice for a purchase order line or charge is entered into Oracle Payables.

ost Important , Landed Cost Management recovers the tax lines associated to the purchase order that was originally calculated by EB-Tax, in order to include the non-recoverable amounts into the landed cost.

Oracle Purchasing (Receiving)

Oracle LCM integrates tightly with the PO Receiving module, as this completely relies on the Receiving transactions to calculate the estimated landed costs for a Landed Cost Management shipment. These helps in estimating landed costs and then forwarded to Oracle Cost Management to update inventory valuations and accounting.

Oracle Payables

Invoices created in Oracle Payables provide the actual cost information that supports the actual landed cost calculations that occur in Landed Cost Management.

Oracle Cost Management and Oracle Process Manufacturing (OPM) Cost Management

After actual values are received from invoices the actual landed cost is calculated in Oracle Landed Cost Management.

The variances between the actual landed cost and the estimated landed cost are determined. Those variances are passed to Oracle Cost Management which in turn updates the proper accounts and valuation.

If you are using Oracle Process Manufacturing than you must first run a concurrent program that will pass the variances to OPM Cost Management and that application will in turn update the proper accounts and valuation. Both process and discrete Costing applications follow similar flows:

Landed Cost Management calculates the estimated and actual landed costs and the variances, which are used for costing valuation and accounting.

Oracle Advanced Pricing (Optional)

Integration with Oracle Advanced Pricing enables you to set conditions for the automatic application of the required charges, fees, duties and taxes for a Landed Cost Management shipment. This means that estimated charges can be applied automatically to a shipment.

Additional Reference

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