Cost Accounting As You Want It EBS R

Cost Accounting As You Want It ─ EBS R 12 Cost Accounting with SLA UKOUG 2009 Conference Series November 30, 2009 Douglas Volz doug@volzconsulting. com Douglas Volz Consulting, Inc. OAUG Discrete MFG Cost Sub-Committee Lead

Agenda • Oracle Discrete Costing SLA enhancements • Oracle SLA Concepts • Case example: Product Line Accounting • If Time Allows: Oracle Process Costing MAC transitioning to SLA Slide – 2 Cost Accounting As You Want It ─ EBS R 12 and SLA

Oracle Discrete Costing SLA enhancements: Increased Flexibility Release 11 i account recognition “pain points” eliminated by Subledger Accounting (SLA): • SLA removes limitations for recording COGS and Revenue (Cost Account Generator/workflow and A/R Auto. Accounting are still in use) • Gives you the ability to record inventory and WIP accounts with more flexibility Slide–– 33 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Oracle Discrete Costing SLA enhancements: Increased Flexibility Flexible variance account recognition for: – – – – Invoice price and purchase variances Average cost adjustment Standard cost adjustment Manufacturing variances Account aliases Freight charges Most other inventory, manufacturing and related account entries Slide–– 44 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Oracle SLA Concepts Slide–– 55 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Subledger Accounting Method (SLAM) Setup Steps 1. Determine sources of information for your account derivation rules (understand the underlying business logic and data) 2. 3. 4. Create account derivation rules (and optional mapping sets) 5. Create an application accounting definition (copy an existing definition and modify it and then validate it) 6. Create a subledger accounting method (SLAM) (copy “standard accrual” and create a new one) 7. Assign the new SLAM to a Ledger Create journal line types Create a journal lines definition (link the journal line type to the account derivation rule) Slide–– 66 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Key Concepts for SLA Transaction Types Event Model: definition of the subledger transaction types and lifecycle – Entity : Classification of source of transaction – Event Class: Classifies transaction types for accounting rule purposes – Event Type: for each transaction type, defines possible actions with accounting significance ENTITY Material Transaction, Receiving or WIP or Write Off EVENT CLASS Logical grouping of events which have similar accounting EVENT TYPE The most granular level of business event which has accounting impact Slide–– 77 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Setup and Process JOURNAL ENTRY SETUPS PROCESS Enter Transaction(s) Define/copy and modify account derivation rules Cost Manager Define/copy and modify journal line types Create. Accounting* Define/copy and modify descriptions Transfer Journal Entries to GL *Run ‘Create Accounting – Cost Management’ concurrent request for accounting all transactions from the Cost Management – SLA responsibility. Receiving Accounting can be generated in the Purchasing responsibilities using the ‘Create Accounting – Receiving’ concurrent request. These requests have an option to transfer the entries created to General Ledger. A separate process is also available. Slide–– 88 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Setup and Process Accounting Configurations Subledger Journal Entries Transactions GL Journal Entries and Balances Accounting Program Subledger Balances Accounting Events Journal Entry Setup Cost Management Slide–– 99 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA SLA Douglas Volz Consulting, Inc.

Basic Table Structure for SLA Enter Transaction(s) Same Cost Transaction Accounting Tables One Common Accounting Subledger Table Cost Manager Transaction Accounting Tables Create Accounting SLA Accounting Tables G/L Tables XLA_EVENTS GL_LEDGERS XLA_AE_HEADERS GL_ INTERFACE GL_JE_BATCHES XLA_AE_LINES GL_JE_HEADERS XLA_DISTRIBUTION _LINKS GL_JE_LINES Slide–– 10 10 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

Case Example: Product Line Accounting for Discrete and Process Costing Slide–– 11 11 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Example: Purchase Price Variance product Line Say there are two brands of cell phones, Samsung and Nokia • We want to track variances by cell phone brands • We are going to use 2 different ways to address this same requirement – Cost/SLA mapping set capability – using an Item Master DFF – Category Accounting – R 11 i Cost Accounting migrated to SLA in R 12. 1 (only works with Discrete Costing) Slide–– 12 12 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability (for Discrete and Process Costing) Slide–– 13 13 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost SLA Mapping Set Capability: PPV by product Line • Product Line Setup Steps Using SLA mapping set 1. Create the product line information in your item master 2. Enter your SLA account derivation rule for Purchase Price Variance accounts 3. Associate the new account derivation rule to your Journal Line Type 4. Associate the Application Accounting Definition with Subledger Accounting Method Slide–– 14 14 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

Cost/SLA Mapping Set Capability • Product Line Accounting – Descriptive flexfield Slide–– 15 15 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Product Line Accounting – Item Descriptive FF Slide–– 16 16 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Assign product line code to the inventory item TIP: you can use an existing product line category set to populate your item master DFF, you do not need to enter this one-by-one Slide–– 17 17 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Mapping set – Account Derivation Rule Slide–– 18 18 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Mapping set – Account Derivation Rule Slide–– 19 19 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • SLA Journal Line / Derivation Rule Slide–– 20 20 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Associate Journal Lines Definition to the Event Class Don’t forget to validate your new AADs Slide–– 21 21 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Note the same ADR is usable for Standard Cost Update Slide–– 22 22 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Note the same ADR is usable for Standard Cost Update Slide–– 23 23 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • Associate SLA Definition to the SLA Method/Ledger Slide–– 24 24 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • The material subledger from 11 i still exists Inventory Receiving Matl Overhead Absorption Slide – 25 Cost Accounting As You Want It ─ EBS R 12 and SLA PPV

Cost/SLA Mapping Set Capability • SLA Entries That Go to Your G/L Slide–– 26 26 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Cost/SLA Mapping Set Capability • For the Standard Cost Updates That Go to Your G/L Slide–– 27 27 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Category Accounting – Discrete Cost Accounting migrated to SLA in R 12. 1 Slide–– 28 28 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” Slide–– 29 29 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes Slide–– 30 30 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes • Create category set Slide – 31 Cost Accounting As You Want It ─ EBS R 12 and SLA

Product Line Category Accounting • Create a new structure under the key flexfield “Item Category” • Create category codes • Create category set • Assign “Product Line Accounting” functional area category set Slide–– 32 32 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Assign product line category accounts Slide–– 33 33 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Find the correct source name to use Slide–– 34 34 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Product Line Category Accounting • Summary Notes – Product line accounting can be achieved in many ways without using custom programming or using the Costing Hook. – In R 12 SLA is the Oracle R 12 accounting platform and Costing supplies application sources from INV, WIP, RCV… to build the accounting journals. – You could also create a custom SLA source for the Item Master Cost of Sales Account (mtl_system_items_b. cost_of_sales) Slide–– 35 35 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Discrete Inventory Period Close and Upgrade • Inventory Period Close Process – Inventory interim G/L transfer has been replaced by SLA – The Inventory Accounting Period close works just like it did before, however, SLA now sends accounting information to the general ledger (Create Accounting) • Discrete Upgrade Process – Customers have option of migrating the whole historical data to SLA or choose which periods data to be migrated. – Customers get option to either upgrade in downtime when upgrading or anytime after the upgrade process. – Default for Cost management is to migrate the present calendar year data to SLA. Slide–– 36 36 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Release 11 i to 12 Upgrade Caveats • Material and WIP Accounting Distribution Inquiries & Reports – These inquiries and reports don’t show the Subledger journals – You still see the same information as in Release 11 i – This can be confusing • SLA has new accounting reports (such as Journal Entries Report, Accounting Analysis Report…) which can be modified as desired using BI Publisher. • The Standard Costing profile CST: Account Summarization profile no longer exists Slide – 37 Cost Accounting As You Want It ─ EBS R 12 and SLA

R 12: New Journal Sources and Categories Release 11 i Release 12 Inventory - MTL - WIP Purchasing - Receiving Cost Management - Inventory - Receiving - WIP Slide – 38 Cost Accounting As You Want It ─ EBS R 12 and SLA

Acknowledgements of assistance: • Herve Yu – Oracle Cost Management Development Manager • Audrea Auld – Oracle University Senior Financials Instructor • Russell Bayles – Oracle Principal Product Strategy Manager • Michel Basinet – Oracle Director Fusion Costing Product Strategy • Diane Streubel – OAUG Process Cost SIG Lead Slide–– 39 39 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Additional information available from: • R 12 Oracle Subledger Accounting – Implementation Guide • R 12 Oracle Cost Management – User Guide • R 12 Oracle Process Manufacturing Cost Management - User Guide Slide–– 40 40 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

THANK YOU Slide–– 41 41 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA

Appendix • Oracle Process Costing: MAC transitioning to SLA • Professional Background for Douglas Volz Slide–– 42 42 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

Oracle Process Costing: MAC transitioning to SLA Slide–– 43 43 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA • Converged inventory model • Inventory Organizations that are Process will use Process Costing • Process users are denied access to Discrete Costing forms – Process Enabled organizations can not setup costs in the Discrete Costing application • Sub Ledger Architecture (SLA) replaces MAC Slide–– 44 44 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA 11 i OPM GMI (OPM Inventory) Cost Setup Purchasing Calculate Cost Order Management Store Costs Slide–– 45 45 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA GMD, GME MAC Oracle GL Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA R 12 OPM Oracle Inventory Cost Setup Purchasing Calculate Cost Order Management Store Costs Slide–– 46 46 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA GMD, GME SLA Oracle GL Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA • Subledger accounting is an intermediate step between subledger products and the Oracle General Ledger • Each transaction that requires accounting is represented by a complete and balanced subledger journal entry, stored in a common data model. Slide–– 47 47 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA 11 i OPM Subledger GL Export I n t e r f a c e General Ledger Journal Import Journal Posting For G/L integration, discrete costing works the same as OPM costing Slide–– 48 48 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA R 12 OPM Payables Oracle Subledger Accounting Oracle General Ledger Receivables Projects For G/L integration, discrete costing works the same as OPM costing Slide–– 49 49 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA OPM MAC SLA Completed material and/or resource transactions. OPM Costing Engine generates costs. Cost Pre-processor will create accounting Events OPM Subledger processes these transactions to create Journal entries Slide–– 50 50 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA SLA accounting program processes the events to create the journal entries Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA OPM MAC SLA COMMENTS Fiscal Policy Retained with few modifications Event Fiscal Policy Retained with few modifications Source Process Category Event Entity Sub-Event Class Account Titles Journal Line Types (JLT) Accounting Template Application Accounting Definitions (AAD) Users can define their own AADs or modify seeded information Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs Priorities and Account Mapping Account Derivation Rules (ADR) More flexible. Mapping can be done at Accounting flexfield level as well as segment level Test Mapping Test Accounting Builder (TAB) OPM Currency, OPM Ledger, OPM Exchange Rates Slide–– 51 51 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Use GL setups Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA OPM MAC SLA Test and Actual Subledger Accounting Draft and Final Accounting Subledger Program Accounting Pre-Processor Run Subledger for multiple valuation/cost methods for a ledger Supports multiple valuation methods In OPM there can only be one representation at a time. SLA supports multiple representations at the same time Run Subledger process for a functional area Run Pre-Processor by Process Category Flexible. User can have any number of categories. Assigned to one or more event classes Detailed Subledger Report Slide–– 52 52 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA COMMENTS Is retained and has been modified to use SLA repository Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA • Most of the steps are automated using migration scripts • All the Account Definitions would be migrated as ADRs • Manual Steps to be completed are: – Assign Account Derivation Rules to Journal Line Definitions – Validate Application Accounting Definition – Assign User Subledger Accounting Method to Ledger Slide–– 53 53 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA • Historical OPM Subledger distribution data not migrated to SLA – Data refers to OPM Inventory • Historical data available in query mode Slide–– 54 54 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA Slide–– 55 55 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

OPM MAC transitioning to SLA • NO LOSS of functionality by moving to SLA model • New menus created under OPM Financials for new SLA forms • Fiscal Policy and Event Fiscal Policy screens retained with minor modifications. Most of the fields will be read-only. • OPM Event model mapped to SLA event model. Slide–– 56 56 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.

Douglas Volz Professional Background Doug Volz is a Senior Architect and Advisor for Oracle Application projects, with a particular interest in Project and Cost Management. He has over 30 years experience, including 5 years in Oracle Development (co-designing Oracle Cost Management), 12 years in industry for manufacturing and distribution companies, and 14 years consulting. His Manufacturing and Cost systems experience covers project management, software design/development, delivery and consulting services, for both Oracle Corporation, and multiple international consulting firms. Prior to his systems career, Mr. Volz also held numerous management accounting positions for telecommunications, defense, and electronics firms. In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currency with global footprints. Countries include US, Mexico, UK, Netherlands, Belgium, Taiwan, P. R. O. C. , Norway, Japan, Italy and Germany. Doug leads the Cost Sub-Committee, for the OAUG Discrete Manufacturing SIG. He also participates on the Oracle Customer Advisory Board for Fusion Costing and for the Fusion SCM Strategy Council. Core Expertise • • Multi-organization, Multi-currency ERP Implementations Project Management and Senior Project Advisor Core manufacturing processes 4 Cost Management 4 Inventory 4 Bills of Material 4 WIP Systems Integration and Data Conversions Slide–– 57 57 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Experience Sample of clients served: • Celgene (US & Switzerland) • Beckman Coulter (US) • Onninen AS (Norway) • Matsushita (UK, Mexico) • NTL (now Virgin Media) • Idec Izumi (Japan) • Logitech (US, Taiwan, P. R. C. ) Douglas Volz Consulting, Inc.

End of Presentation Slide–– 58 58 Cost. Accounting. As As. You. Want. It──EBS EBSR 12 and and. SLA Douglas Volz Consulting, Inc.