R12 SLA: Analyzing Subledger Accounting Posted on November 25th, 2007 by Sanjit Anand | 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: o flex builder o Account Generator o 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.
How 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. o
Receipts & Adjustments Unapplied, applied Both debits & credits o Misc. Cash Receipts Both debits & credits As we know “View Accounting†is a report against distributions to see the accounting information.
How 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.
Subledger 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. How 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. Is/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
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
and Final picture looks like:
SLA 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 o Invoice o Debit Memo o Prepayment o Payments
Refunds Receivables o Invoice o Deposit o Receipt o Bill Receivable o
and typical event Types are like
AP Invoice Events o Validated o Adjusted o Cancelled AR Receipt Events o Created o Applied o Unapplied o Updated o Reversed
Posted in EBS Suite, R12, Release12 |
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8 Responses 1. Paul Says: December 3rd, 2007 at 2:19 pm
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: December 14th, 2007 at 6:56 am
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: February 11th, 2008 at 8:32 pm
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
R12 SLA: From Product Accounting to Subledger Accounting Posted on November 16th, 2007 by Sanjit Anand | Post
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Most of us are well aware that in Release 12 of Oracle Applications, Subledger Accounting (SLA) has been introduced, which is a Rule-based accounting engine, toolset & repository which is supporting most of Oracle business Suite modules. As we know driver for introduction this is to have an option of allowing multiple accounting representations for a single business event, resolving conflicts between corporate and local fiscal accounting requirements. The Functionality is somehow very similar to Global accounting engine, which oracle does offer for European reporting Need. So What is Subledger Accounting?
• SLA is an intermediate step between subledger products and the Oracle General Ledger • Journal entries are created in Subledger Accounting and then transferred to Oracle General Ledger • Each subledger transaction that requires accounting is represented by a complete and balanced subledger journal entry stored in a common data model Is this Module or what? It is good to know ,sub ledger Accounting is a Service, not an Application . The high points of SLA would be:
There are no SLA responsibilities Users do not login to SLA SLA is a service provided to Oracle Applications SLA forms and programs are embedded within standard Oracle Application responsibilities SLA provides the following services to Oracle Applications Generation and storage of detailed accounting entries Storage of subledger balances (e.g. third party control account balances) Subledger accounting entries Subledger reporting (e.g. Subledger journal reports, open account balances listing)
What oracle application Module taking services for SLA? Most of modules which need accounting entry with finance uses service of SLA Modules. This new Product has these many new functionality such as:
Journal Entry Setup and sequencing Date Effective Application accounting Definitions Multiple Accounting Representation Multi-period Accounting Summarization Options Draft and online accounting Replacement for disabled accounts Process category Accounting Transaction account Builder Accrual Reversal Accounting Accounted and Gain/Loss Amount calculations Application Accounting Definition Loader Enhanced Reporting Currency Functionality
The overall advantage of SLA can be summarized by oracle as below:
GL Flow with Subledger-Level Secondary Ledger Lets take a case , with a scenario with basic Finance module, you can find how tightly accounting model is separated with transaction model in release 12.
This is the typical flow within one product with SLA can be best described as:
Posted in EBS Suite, R12, Release12 |
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10 Responses 1. Gareth Roberts Says: November 17th, 2007 at 6:38 pm
Hi Anand, Nice post, I’m keen to know if subledger accounting is just the extension and “exposure” of the ap_ae_headers/lines that the core financials modules have already in 11i? Any thoughts? Gareth 2. R12 SLA: Analyzing Subledger Accounting Says: November 25th, 2007 at 12:53 am
[...] and 2007 report for ERP VendorsOracle OpenWorld 2007 Presentations : Available for DownloadR12 SLA: From Product Accounting to Subledger AccountingSCM SubsystemKNOW WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? : An OverviewDiscrete & Process [...] 3. Release 12 : Legal Entity uptake Says: December 7th, 2007 at 9:09 am
[...] and 2007 report for ERP VendorsOracle OpenWorld 2007 Presentations : Available for DownloadR12 SLA: From Product Accounting to Subledger Accounting [...] 4. Release 12: 6 New and Changed Feature in “Oracle Assets” Says: January 27th, 2008 at 7:35 am
[...] we have already seen in few earlier post “Oracle Subledger Accounting ” is a rules-based engine for generating accounting entries based on source transactions from [...] 5. R12 - Oracle General Ledger - New and enhanced features Says: February 3rd, 2008 at 7:00 am
[...] discussed in couple of earlier post GL is integrated with SLA to enable a unified process to account for subledger transactions and post data to GL, and to [...] 6. Highlights:Release 12 Financials Says: February 5th, 2008 at 12:48 am
[...] R12 SLA: From Product Accounting to Subledger Accounting [...] 7. Ram Ganesh Says: March 20th, 2008 at 5:20 am
Dear Anand it was a excellent article that has given me a good insight into the basic concepts vis a vis the SLA in Release 12. Yet i am having more doubts in SLA Set up. 8. R12 SLA: Accounting Methods Builder Says: April 18th, 2008 at 2:51 am
[...] R12 SLA: From Product Accounting to Subledger Accounting [...] 9. White Paper : R12 Oracle Subledger Accounting Says: May 2nd, 2008 at 4:00 am
[...] R12 SLA: From Product Accounting to Subledger Accounting [...] 10. Fixed Asset & SLA Says: July 2nd, 2008 at 12:38 am
[...] is no need to explaining again , we already seen why this concept brought into Financial application . Fixed asset though one of Application, which heavily utilize the accounting information [...]
R12 SLA: Accounting Methods Builder Posted on April 17th, 2008 by Sanjit Anand |
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In Subledger Accounting, have you heard something called Accounting Methods Builder, which is sort of toolset to define journal entry rules for the transactions and events of a subledger application . This allows us defining multiple sets of rules to be used concurrently for different requirements. How AMB work? Lets try to understand on the basis of Journal entry. Normally a journal are split into three main components:
Descriptions Line Types Account Derivation rules
A particular Journal can be best described as figure 1.0(adopted) as below.
Description : Description can be on the entry or its individual lines. You set up descriptions, as many as you want, by using pieces of data from the transaction and constant values. Purposely it identify the journal line types, descriptions, and account derivation rules that will be used to create a journal entry for a particular event type Type :The Line Type is another component, actually one of the two main components of the entry. The line type defines whether this is a debit or a credit, what the accounting class is, where the amount should come from etc. Again, you set up as many as you need of these for a particular entry. You can have a single invoice line or distribution create as many debits or credits as needed.
Under type you can identify the natural side of entry like Debit,Credit,Gain/Loss This will determine the accounting class You can set under which conditions the rule will create a line This can be tighten by defining the values needed for entry line generation, such as amount, currency, conversion rate information
Account derivation rule : This determines to which GL account a line should be booked. You can have lot of flexibility around the account derivation rules. You can also set up a rule for each flexfield to be used, or you can make it more complex and build each flexfield segment by segment by combining multiple rules. Normally these rules can be setup to derive the accounts or segment values from transactional data, including conditions of when to use a particular rule versus another. You can also note,this will:
Determine which rule will be generic or specific for a given chart of accounts This will identify what will be derived like Accounting flexfield or there respective segment or qualifier value or Value from a value set This will also have a provision to define how the value will be derived for defaulting some Constant values or any Source value or any mapping set
Accounting Methods Builder The transaction objects and the sources carry transaction information into the rules defined for each component of an entry. These components, for example, journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event.
Take a case if you set up a Journal line description for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular sub ledger application is called the application accounting definition. And the set of application accounting definition for multiple applications is called the sub ledger accounting method. In reality this accounting methods is assigned to each ledger, which determines which 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. Sounds good.
Your Navigation
Setup - Application Accounting Definition (Navigation) o Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Methods and Definitions > Application Accounting Definitions Setup - Subledger Accounting Method (Navigation) o Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Methods and Definitions > Subledger Accounting Methods Setup - Account Derivation Rule (Navigation) o Setup > Accounting Setups > Subledger Accounting Setup > Accounting Methods Builder > Journal Entry Setups > Account Derivation Rules
