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R12 SLA: Analyzing Subledger Accounting

Posted on November 25th, 2007 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

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As in last post about subledger accounting we understood with this new feature:

  • All accounting performed before transfer to the GL.
  • and this is achieved by user setup who can do by definable accounting rules.

At the data level, it’s a big change for all the subledgers, though there is a first generation changes we have noticed sometime when 11i Payables where concept of “Accounting Events ” introduced first time and accounting performed at subledger level first before moving into GL.

The same idea has been incorporated in new sub ledger accounting model , indeed a was a real need because of some uneven functionality likes:

  • Inconsistencies in Accounting Generation like Summary vs. Detail
  • Direct to General Ledger vs. Open Interface
  • Inconsistent Drilldown from General Ledger
  • Also it has been seen inconsistent Mechanisms for controlling Accounting as certain options has been used in existing version:
    • flex builder
    • Account Generator
    • Automatic Offsets

What is sub ledger mean for a non finance person?

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

With these accounting at this level the respective sub ledgers & General Ledger is tied out, as below.

gltiedconnected

bluHow Receivables Accounting happen in 11i

As we know the final accounting data not generated prior to transfer to GL as only distribution level information is passed to GL.

In 11i , we know three distinct distributions tables for invoices / Credit Memos / Debit Memos have to capture accounting class & amounts information but not debits & credits.

    • Receipts & Adjustments
      • Unapplied, applied
      • Both debits & credits
    • Misc. Cash Receipts
      • Both debits & credits
  • As we know "View Accounting” is a report against distributions to see the accounting information.

ar

purpHow Payables Accounting happen in 11i

We know accounting data generated and stored in “Accounting Events” tables prior to transfer to GL in Payable. Once Transaction get completed it was need to run the “Create Accounting” process which basically populate data into accounting events tables.Then the actual line information move takes place from accounting events table to General Ledger Tables.The existing 11i accounting Process is can be best understood by figure below.

paybale

red1Subledger to Ledger Reporting in 11i

It means complete, final accounting only available in the GL

  • All debits and credits
  • All journal entries
  • All balances

The only issues in pre R12 versions was to link summarized accounting data with source details.

greHow it is resolved in Release 12 Subledger Accounting

All sub ledger accounting data generated and stored in shared SLA tables prior to transfer to GL , and this is achieved by running “Create Accounting” to populate SLA tables(Very very similar to Payable events). Once this can be done , user can “View Accounting” only after “Create Accounting” is run and completed successfully.

Transferring Accounting information from AP/AR to GL in R12

The Create Accounting process has similar options, you can create accounting in Final or Draft mode and if Final mode is selected, the Transfer to GL parameter can be used to automatically transfer the accounting created by the corresponding run. When the Create Accounting process transfers the journal entries to GL it only transfers the accounting created by the process that calls it. If there is accounting created by the online option = Final or a previous Create Accounting program that was not transferred, that accounting will not be transferred. The Transfer Journal Entries to GL program needs to be ran separately to transfer any accounting created online or created by a previous Create Accounting process that did not transfer the entries.

redIs/was link an issue in 11i?

Yes, From Distributions to SLA

  • Create Accounting process
  • Applies accounting rules
  • Loads SLA tables, GL tables
    Creates detailed data per accounting rules,stores in SLA “distribution links” table

1

SLA Distribution Links Table

  • Must join through to get true Distribution ==> SLA journals matches
  • Holds finest granularity of accounting data
  • Multiple distributions may be aggregated into a few SLA journal lines

2

and Final picture looks like:

accounts

purpSLA Key attribute :Something called Event Model ? What is all about?

Event Model are basically definition of the sub ledger transaction types and there life cycle.

It has three levels

  • Event Entity: Highest level, often 1 per sub ledger application
  • Event Class: classifies transaction types for accounting rule purposes
  • Event Type: for each transaction type, defines possible actions with accounting significance.

It is very important that applications must tell SLA when an event has occurred.When a user runs the SLA Create Accounting program, it processes all events with the appropriate status

we have notice some of event classes in Payable and Receivable.

  • Payables
    • Invoice
    • Debit Memo
    • Prepayment
    • Payments
    • Refunds
  • Receivables
    • Invoice
    • Deposit
    • Receipt
    • Bill Receivable

and typical event Types are like

  • AP Invoice Events
    • Validated
    • Adjusted
    • Cancelled
  • AR Receipt Events
    • Created
    • Applied
    • Unapplied
    • Updated
    • Reversed

Related Posts

Posted in EBS Suite, R12, Release12 | 16 Comments »Email This Post Email This Post | Print This Post Print This Post

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16 Responses
  1. Paul Says:

    Thank you for all your articles, great source of information.
    In our organization we have over 40 countries (global), set of book for each entity, multiple currencies, and configuration and setup for each. Very complex.
    Question – We are going to run the SLA on our set of books (testing) on our POC instance. AND would like to know of any important changes we should pay attention.

    Thank you.
    Paul

  2. Yugandhar A Says:

    Thanks a lot This is great information for us. It is very very useful for all Oracle Functional and Technical People.

    Thanks
    Yugandhar Appani

  3. Durga Says:

    Paul,

    I guess your question is related to upgrade to R12.
    Normally the upgrade should take you to the standard SLA method.Mean to say that when you upgrade the default subledger method must be standard. So no real changes are required from SLA point of view. However, the following may require consideration.

    1. The number of periods of past accounting data you want to upgrade to SLA model. This has to be determinied in advance to upgrade. There is also a post upgrade process which can be run after actual upgrade to upgrade the historical accounting data as and when need arises.

    2. Usage of account generator. All the account generator WFs like FA account generator should work fine. However you may avoid the usage of WFs if you can have your SLA model redesigned as per the need.

    Thanks,
    Durga

  4. R12 SLA: Accounting Methods Builder Says:

    […] R12 SLA: Analyzing Subledger Accounting […]

  5. White Paper : R12 Oracle Subledger Accounting Says:

    […] R12 SLA: Analyzing Subledger Accounting […]

  6. GOVINDA RAO Says:

    Anand,

    Thanks a ton, your articles contains so much useful information for latest upgradations.

    Once again Thanks a lot

    Govinda

  7. Senthil Kumar Kaliyamurthy Says:

    Thanks a lot, Your article contains verious information about SLA and These information very much useful to Functional Consultant and me.

    Once again Thanks a lot..

    Senthil Kumar

  8. deji abioye Says:

    Is it possible to enter gross amount on invoice while oracle(R12) distributes into item and 2 diff. taxes?.

  9. Sub Ledger Accounting - Technical perspective | OracleApps Epicenter Says:

    […] discussed in earlier post, all subledger table is tighten with SLA specific table. Here is one of the example of […]

  10. Invoice 3-way match Says:

    Hi ,

    We are on Oracle Applications Release 12. In Account Payables, we need to setup reversal of accruals when invoice is matched to 3WAY POs. I did set up the accounting rules for invoices and reversal of accruals. The problem that I am encountering is with the dollar amounts recorded against reversal of accruals.

    Example :
    Invoice Tolerance is set to $20
    PO is for $100
    Receipt is for $50
    Invoice is for $60
    Now when I match the $60 invoice to the PO the invoice should be validated successfully.
    The Create Accounting Process should create the following entries:
    1. invoice entry for $60
    2. accrual reversal for $50
    The problem that we are facing is that the accrual reversal is being done for $60 (invoice amount).
    Is there a way we can mention the dollar amount that should be reversed?

    Thank You…

  11. raheel Says:

    As i am new in Orcale Apps so this article let me understand that if i map the concept “SubLedger” to the normal(manual) accounting practice then it is simple a “Journal”.

    So every “SubLedger Applications” like projects , Payable and etc use a “SubLedger Accounting Service” to create a “Journal” to be import into “General Ledger” later on.

    Please reply whether I undertood right or wrong?

    And many thanks of this post because this article helps me to map the Accounting concepts in Oracle to the theoritical concept of Accounting.

  12. Egochigo Says:

    Thanks for this wonderful article.How will I setup subledger accounting for Prepayments

    Thanks

    Egochigo

  13. Uday Says:

    Hi,
    this article is great. I have question what type of entries goes in gl_interface table. I read that create accounting directly creates the acccounting entries in xla tables and after transfer to GL will transfer these entris to GL_je_header and gl_je_lines tables not in gl_interface with posted flag U.
    Please suggest

  14. Yadav Says:

    Good and simple information…..good read.

  15. Shailendra Agarwal Says:

    Your Explanation is Superve. Can you also explain the MultiOrg concept in R12.

    Regards,
    Shail

  16. Mihir Says:

    thx for putting it so nicely

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