6. Agenda
• What is different about R12 Financials?
• What is good and not so good about the
changes?
• What do I need to worry about for upgrade?
• Q & A
7. What is Different about R12 Financials?
• “Halfway to Fusion”
• Foundational restructuring to
support globalization
• Improved Interface
8. R12 Financials Structures
R12’s globalization approach has restructured six key
foundational dimensions of EBS financials by consolidating
functionality into separate layers. These layers now underlie all
of the applications.
•Ledgers/Ledger Sets
•Multiorg/MOAC/Legal Entity
•Subledger Accounting
•E-Business Tax Engine
•Intercompany
•Cash/Banking Management
9. Global Financial Management
Shared services and single database operations with streamlined
processing, reporting, and access across operating units
Single
Global
Database
Shared
Service
Center
Org 3Org 2Org 1
Examples: Payables, Purchasing, Collections, HR
Shared
Services
with R12
Financial
Management
Initiatives
Think Work Manage
10. Global Financial Architecture
BankBank
ModeMode
ll
TaxTax
EngineEngine
InterInter
CompanyCompany
General LedgerGeneral LedgerLedger & LedgerLedger & Ledger
SetsSets
General LedgerGeneral LedgerLedger & LedgerLedger & Ledger
SetsSets
Subledger Accounting (SLA)Subledger Accounting (SLA)
DrDr CrCr
ProjectsReceivable
s
Inventor
y
Work in
Process
Purchasing Payable
s
Multi-Multi-
OrgOrg
AccessAccess
ControlControl
6 Major Initiatives
1. Ledger and
Ledger Sets
2. Multi-Org
Access
Control
3. Subledger
Accounting
4. Tax Engine
5. Intercompany
6. Bank Model
11. MOAC In Action
Setup – Define Security
Profile
Select OU Classification
Setup – Define Security
Profile
Select OU Classification
Reporting
Across
OUs
Reporting
Across
OUs
Selecting
one or all
OUs in an
AP action
Selecting
one or all
OUs in an
AP action
12. Legal Entity Setup
Description
Support for Registrations
Single Legal Entity Data Model
Support for Establishments
Legal Entity IN 11i Legal Entity IN R12.0
HR Organization - GRE/LE (General Reporting
Entity/Legal Entity)
HR Organization – Operating Unit (OU)
HR Organization – Inventory Org (IO)
SOB (Set of Books, Ledger in 11i11)
BSVs (Balancing Segment Values)
Customer account sites and site uses
Reporting Entities
13. Legal Entity Setup
Dependencies and Interactions
Legal Entity
GL
DataModelApplications
TCA Intercompany
E-Business Tax
Legal Reporting
to enable…
APARIBY
APIs and UIs
CE
Legal Entity provides a foundation
15. Oracle Subledger Accounting Integration
Release 11i
Accounting model and
transaction model are tightly
integrated
Release 12.0
Accounting model is separated
from the transaction model
Subledger
Products
Projects
Payables
Receivables
General
Ledger
Subledger
Products
Projects
Payables
Receivables
Subledger
Accounting
AR Rules &
journal entries
PA Rules &
journal entries
AP Rules &
journal entries
General
Ledger
16. Introduction to Subledger Accounting
Accounting Methods Builder
FR Statutory Ledger
Standard IAS Subledger Accounting Method
Payables Application Accounting Definition
Journal Line
Types
Account Derivation
Rules
Journal Entry
Descriptions
Payment Journal Line Definition
Transaction Objects
Sources
17. SLA
Introduction to Subledger Accounting
Dependencies and Interactions
Transactions
Accounting Events
Subledger Application
Accounting
Configurations
Journal Entry Setup
Accounting
Program
Subledger
Balances
Subledger
Journal Entries
GL
Journal Entries
and Balances
General Ledger
18. Tax
Transactions
Taxes,
Rules
Oracle E-Business Tax
Processing taxes for transactions and reporting
Determine
Regimes
Taxable
Basis
Calculate
Tax
Amount
Tax Status
& Rate
Applicable
Taxes
Single Interface for TransactionsSingle Interface for Transactions
Transparent Integration with Tax Partner ServicesTransparent Integration with Tax Partner Services
Parties
Places
Products
Processes
Payables
Receivables
Purchasing
Transactions
Sales Orders
…
Tax Reports
- PDF, HTML, RTF
- Security enabled
Extensible Service Oriented Architecture
Compliance, Assurance Efficiency, Global Visibility
19. Tax Authority Tax Regime Tax
California State Board
of Equalization
California Sales Tax State Sales Tax California (State)
HM Customs and
Excise (U.K.)
UK VAT UK VAT UK
Canadian Customs and
Revenue Agency
(Canada)
Canadian Goods and
Services Tax
GST Ontario
Federal (Brazil)
Secretaria da Receita
RICMS -
Regulamento do
ICMS
CMS São Paulo
Oracle E-Business Tax
Key Concepts
Tax
Jurisdiction
20. Web UIWeb UI
OpenOpen
Interfaces /Interfaces /
APIAPI
ExcelExcel
(Web ADI)(Web ADI)
Advanced Global
Intercompany
System
SubledgerSubledger
Invoices &Invoices &
DocumentsDocuments
Generate subledger invoicesGenerate subledger invoices
Control transaction entry withControl transaction entry with
Intercompany CalendarIntercompany Calendar
Fully Configurable Approval RulesFully Configurable Approval Rules
Flexible Security ModelFlexible Security Model
Centrally defined IntercompanyCentrally defined Intercompany
AccountsAccounts
OnlineOnline
ReconciliationReconciliation
ReportingReporting
XMLXML
PublisherPublisher
ReportsReports
Advanced Global Intercompany System
SubledgerSubledger
AccountingAccounting
DrDr CrCr
GeneralGeneral
LedgerLedger ReceivableReceivable
ss
PayablePayable
ss
21. • Bank account is now
associated with LE
entity rather than
Operating Unit
• Single bank account
serves multiple
Operating Units
• Any and all Operating
Units associated with
a ledger can be
permitted to use the
bank accountAssets
Project
s
Receivabl
es
PayablesPurchasin
g
Project
s
Receivabl
es
Payables
InventoryInventory
Plu
sCentralized Credit Card
Model
Credit Card Encryption
Supplier & Customer
Banks in TCA
Centralized Banking
Shared Services Disbursements
Work inWork in
ProcessProcess
LE
OU A OU B OU C
22. A New User Experience for R12
• Reduced pop-ups and
duplicate screens
• Re-designed and streamlined
entire workflows
• Reduced the number of steps
to complete key tasks
• Improved overall look & feel
and visual style
• Increased personalization
capabilities
• Campaign Management
• Customer Support
• Collections & Payments
• Loan Management
Improved Workflow in Targeted Areas
• Financial Consolidation
• Online Candidate Registration
• Absence Management
• Salary Administration
• Self-Service Purchasing
• Sourcing
• Supplier Collaboration
• Business Intelligence
Think Work Manage
23. One dashboard (R12) vs. multiple steps across many forms (11i)
Assign/view legal entitiesAssign/view legal entities
Define ledger (set of books)Define ledger (set of books)
Define operating unitsDefine operating units
Define legal entities dashboardDefine legal entities dashboard
Accounting Setup Manager
31. What is good and bad about the
changes?
GOOD
• “Globalized” features more flexible
• Navigation more intuitive
• New wizards are extremely helpful for
setup
• Enhanced diagnostics are more useful
32. What is good and not so good about
the changes?
GOOD
• New structures allow much greater
flexibility for organizations with complex
organizational structures
• Better ability to accommodate
organizational changes
• New interface does navigate more easily
33. What is good and not so good about
the changes?
NOT SO GOOD
• System documentation still in “catch up”
mode
• Bugs – though improving
• Dual navigation methods annoying and
sometimes confusing
34. What Do I Need To Worry About For
Upgrade?
• Think carefully about foundations
– Organization structure
– Tax jurisdictions
– Legal Entities
– Security, roles and responsibilities
• Be prepared to relearn some concepts
• Confirm hardware capacity
35. 35
Next Steps
Contact Emerging Solutions for a
complimentary R12 Upgrade
Workshop
Utilizes proven analytical tools and
our extensive industry expertise to
identify quantifiable improvements
in your transportation operations
and to your bottom line.
www.emergenow.com/R12-Workshop
As this cartoon portrays, upgrades have been around for a long time. All of us working with software applications are continually advised to take advantage of the latest and greatest version of whatever programs we have.
In some cases, for example, MS Word, the pain may not be great, but with a major ERP system such as Oracle EBS, an upgrade isn’t always an easy choice.
What we want to do this morning is walk you all through some of those kinds of considerations for Oracle’s most recent version of R12.
Our agenda will be to give some background on what’s new in R12, focused on Financials, and what it might mean for your organization. Some of you may have already seen some of Oracle’s description of what it offers, but since many of you may not have seen a lot as yet, I’d like to set some context.
Then we’ll talk about what good and bad about these changes. Having lived through the past year with R12, I can say that, in general, I like it, but there are some cautions I’ll discuss.
After that we’ll summarize some of the considerations you should think about if you’re contemplating an upgrade.
At the end, we’ll have a chance for some Q&A. If you have questions during the webinar, just use the Q&A menu option on your meeting screen to submit your questions, and then we’ll try to respond to them in the order received.
As you may have seen, when Oracle released R12 early last year, it touted it as the “Halfway to Fusion” version. Fusion apps, which are supposed to begin rolling out in the next year or two are Oracle’s exercise in merging the best of EBS, PeopleSoft and JDE to evolve into a single ERP vision for the future.
At the same time, the EBS suite has been criticized for not supporting very well companies that have been evolving their global, cross-organizational operations. R12 incorporates a number of structural changes that move EBS forward in supporting globalization, particularly in the Financials area, since Financials underly all of the modules, We’ll walk through an overview of the most important of these changes.
Finally, R12 also brings an improved web-based user interface, (which looks suspiciously more like PeopleSoft than earlier Oracle forms-based screens). This interface is used for all of the new wizard-type functionality in R12, however, most of the areas that haven’t changed much remain in forms-based mode, with not much more than a change in color scheme.
What Oracle has done in R12 is to “tease out” the functionality in individual modules that support some pervasive foundational concepts and consolidate them into “layers” of centralized functionality, so that definitions, rules and processes can be configured in one place on a globally consistent basis.
Ledgers are comparable to Sets of Books in earlier versions, but now all
What has changed between Release 11i and this new feature?
In Release 11i
One approach, found in much of Oracle’s documentation, suggested modeling Legal Entity as one or more balancing segment values in the Set of Books, as the Set of Books itself, or as an Operating Unit – dependant on each customer’s needs. Global enterprises operating in countries with strong sequencing, reporting, and auditing requirements, were advised to create a Set of Books for each Legal Entity – an assumption around which all of our localizations were built.
Another approach, centered on Oracle HRMS, allowed users to assign to an organization a Legal Entity classification (GRE/Legal Entity), and attach various attribute level information.
Oracle Manufacturing had a ‘legal’ cost group concept, where a cost group was made up of various Inventory Organizations representing a Legal Entity. (The cost group was then linked to a “dummy” Set of Books, utilizing its calendar and periods to set the periodicity of the average cost that is calculated for that legal entity.)
These approaches felt short of providing the full functionality of Legal Entity as required by many global enterprises. Such ambiguity behind the concept of Legal Entity in Oracle Applications has left the concept open to misuse and misinterpretation, Therefore, this new feature provides a secure setup to define a Legal Entity together with Establishments and Registrations in one place such that this Legal Entity definition can then be used across the E-Business Suite for reporting and other legal compliance tasks handled by the application.
This feature supports various modules in the E-Business Suite via Maintenance APIs that allow users to create and update a Legal Entity, as well as stamp the Legal Entity which owns the transaction on transaction headers.
Legal Entities exist as TCA parties classified as Legal Entities with legal information stored in the Legal Entity Data Model. The subsidiaries of the Legal Entities are defined as Establishments. The Establishments are also defined as parties with legal information stored in the Legal Entity Data Model. Intercompany Parties are also associated to a Legal Entities using TCA Relationships. The Intercompany system uses the Transacting Entity Flag to know if the initiator and the recipient of a transaction operate on the same Oracle instance.
Legal Entity enhances the ability to manage one’s legal corporate structure and track data from the legal perspective. The solution provides the foundation for features that help daily operations comply with local regulations. For example, strengthening the recognition of legal ownership enables accurate intercompany documentation as well as sophisticated tax calculations specific to local jurisdictions. The legal functions set for each legal entity provide basic process controls that facilitate internal control management. Tracking one’s data from the legal perspective enables detailed reporting at legal entity, establishment, and registration level.
In 11i the accounting and transaction models were closely related. Each application had its own way of setting up the accounting rules necessary for creating the journal entries. Each subledger had its own set of programs that is used to transfer the accounting entries to GL.
With the introduction of Oracle Subledger Accounting in Release 12, the infrastructure has been put in place to:
Separate the accounting model from the transaction model.
Uniformly define and derive the accounting through out the company.
As Oracle Subledger Accounting has partitioned the accounting rules and journal entries by application we see separate boxes for each of these applications.
Hierarchy of AMB, how components fit together.
The transaction objects and the sources carry transaction information into the rules defined for each component of an entry.
These components ie. journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event. For example, you will set up a JLD for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular subledger application is called the application accounting definition. And the set of AADs for multiple applications is called the subledger accounting method.
Remember that it is possible to maintain multiple accounting methods. You can set up as many components as you like, and use them for different accounting methods. You can set up an accounting method that creates entries in compliance with US GAAP, and another one with IFRS. Because the JE components are modular, these two methods could share components, such as entry descriptions.
The accounting methods would then be assigned to each ledger, which would determine what 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.
NOTE (DELETE THIS NOTE): LIST THE DEPENDENCIES ON OTHER PRODUCTS. THIS IS ONLY NECESSARY FOR TOI - DO NOT COVER THIS FOR ANY SALES RELATED POSITIONING
Tax Jurisdiction is a geographic area where a tax is levied by a specific tax authority.
Some examples of Tax Jurisdictions:
TaxGeographic ZoneJurisdiction
---------------------------------------------------------------------
ICMSSão PauloSao Paulo ICMS
IPIBrazilBrazil IPI
State Sales TaxCalifornia (State)California State Sales Tax
County Sales taxSan Francisco (County) SFO County Sales Tax
GSTCanadaCanada GST
PSTOntario Ontario PST
Excise TaxIndiaIndia Excise Tax
GSTSingaporeSingapore GST
UK VATUKUK VAT
This is a sample report created by the offline accounting program. It shows any errors encountered during the process, and suggests the ways to correct the errors.
Accounting report and other standard reports provided, such as journal entries report, account analysis report, and third party balances report all utilize the XML technology and allow you to change the layout of the reports, change the default sorting and grouping, customize further by adding company logos etc.