Flow of Accounting entries in Oracle Applications By Sivakumar Ganesan E-Mail:sivakumar3009@gmail.com

Agenda Understanding the Accounting Flow in Oracle Applications Transaction Flow Modules Covered Set up required in Oracle Applications Defaulting Accounts Posting to General Ledger from Sub-Ledger Posting in General Ledger Viewing the Trial Balance

Understanding the flow of Accounting in Oracle Applications Cost Mgmt Cash Mgmt General Ledger Purchasing Accounting Engine Assets Payables Receivables Projects Interfaces with GL Other Legacy Sources SAP Subledgers supporting MRC: AP, AR, PA, PO & FA GL Any journal source (even legacy system) MRC integrated with AX (Global Accounting Engine) Cash Management - through AP and AR Cost Management - reporting solution only Key differentiator

Transaction Flow Create Opening Balances in General ledger and Subledger Place Purchase order Receive the Materials into Stores Receive the Supplier Invoice from Supplier Match the Supplier invoice with PO and make Payment Issue Materials to Production Complete the Production Order and Build Inventory Ship the Material to Customer Raise invoice on Customer Receive Cash from Customer Reconcile the Payment and Receipt in Cash Management Post Sub Ledger Transactions into GL Run Trial Balance and Financial Statements (Profit & Loss Account & Balance Sheet

Modules Covered Oracle Purchasing Oracle Payables Oracle Inventory Oracle Manufacturing (WIP Accounting) Oracle Order Management Oracle Receivables Oracle Cash Management Oracle General Ledger

Cost Calculation FG/Sub Assembly Purchased Item/ Routing Total Cost Item Cost Operations Cost Purchased Item/ Sub Assembly Cost Routing Operations Rate X Usage Department Production / Service Departments Usage Resources Men, Money, Machine Rate

Set up Required in Oracle Applications Each Module has a Parameter screen or Controlling Screen through which the Accounts are Defaulting Ex (Inventory Organization for Materials in Inventory Module, Receiving options for Inventory Receipt in Purchasing Module, Financial Options for Payables) There are other places also where we can define the Accounts and there is an inbuilt hierarchy within the Applications as to where from the Accounts need to be defaulted Each Module Needs to set the Accounts for an Accounting Event Happening in that Module

Defaulting Accounts in Case of Purchasing

Defaulting Accounts in Case of Purchasing

Posting to General Ledger from Sub-Ledger Sub-Ledger Accounting Entries are Transferred to General Ledger Interface table through the Concurrent Programs We can schedule the concurrent Process to Transfer Data to GL instead of manually running the concurrent Programs. You can run the Process Daily, Weekly, Monthly You can transfer the data either in Summary or (Total Transaction for an Account Combination per day) Detail (Each Transaction)

Posting in General Ledger This Process Transfers Data from GL Interface Tables to GL Main Tables (i.e) From GL_JE_INTERFACE table to GL_JE_HEADERS and GL_JE_LINES Once the Data is Posted No further changes to the Data is permitted

Accounting Events – Oracle Purchasing Inventory Accruals Transfer to Sub Inventory Purchase Price Variance Invoice Price Variance (IPV) and Exchange Rate Variance Return to Supplier From Receipt of Materials Inter-organization Transfer

Accounting Events – Oracle Payables Invoices Invoice Invoice adjustment Invoice cancellation Prepayment application Prepayment un-application Payments Payment Future dated payment maturity Payment adjustment Payment cancellation Payment clearing Payment un-clearing

Accounting Events – Manufacturing (WIP) Oracle Inventory Material Transfer from Stores to WIP WIP Completions and Material Consumption Entry Operations Completion Entry Finished Goods Stock Creation Entry Inter-Org Transfer Sub-Inventory Transfer

Accounting Events – Order Management Cost of Goods Sold Entry in Inventory Module

Accounting Events – Oracle Receivables Transactions Invoices Debit Memos Commitments Invoices Against a Deposit Invoice Against guarantee Credit Memos On Account Credit Memo

Accounting Events – Oracle Receivables Receipts Unapplied Receipts On account Receipt Applied Receipt Reverse Receipt Charge back Adjustments Miscellaneous Receipts Bills Receivables

Accounting Event – Cash Management Oracle Cash Management Cash Receipt Clearing Cash Payment Clearing Journals Open Interface

Accounting Event – General Ledger Oracle General Ledger Journal Entries Created from Sub Ledger Manual Journal Entries created in GL Inter-Company Transfer Entries Translation entries Revaluation Entries

Flow of Accounting in oracle Applications Case Study