Flow of Accounting entries in Oracle Applications

AgendaAgenda• Understanding the Accounting Flow in Understanding the Accounting Flow in

Oracle ApplicationsOracle Applications• Transaction FlowTransaction Flow• Modules Covered Modules Covered • Set up required in Oracle ApplicationsSet up required in Oracle Applications• Defaulting AccountsDefaulting Accounts• Posting to General Ledger from Sub-Posting to General Ledger from Sub-

LedgerLedger• Posting in General LedgerPosting in General Ledger• Viewing the Trial BalanceViewing the Trial Balance

Understanding the flow of Understanding the flow of Accounting in Oracle Accounting in Oracle

ApplicationsApplications

Cost MgmtCost MgmtCash MgmtCash Mgmt

General LedgerGeneral Ledger

PurchasingPurchasing

Accounting Accounting EngineEngine

AssetsAssets

PayablesPayables

ReceivablesReceivables

ProjectsProjects

Interfaces Interfaces with GLwith GLOther Legacy Other Legacy

SourcesSources

SAP

Transaction FlowTransaction Flow• Create Opening Balances in General ledger and SubledgerCreate Opening Balances in General ledger and Subledger• Place Purchase orderPlace Purchase order• Receive the Materials into StoresReceive the Materials into Stores• Receive the Supplier Invoice from SupplierReceive the Supplier Invoice from Supplier• Match the Supplier invoice with PO and make PaymentMatch the Supplier invoice with PO and make Payment• Issue Materials to ProductionIssue Materials to Production• Complete the Production Order and Build InventoryComplete the Production Order and Build Inventory• Ship the Material to CustomerShip the Material to Customer• Raise invoice on CustomerRaise invoice on Customer• Receive Cash from CustomerReceive Cash from Customer• Reconcile the Payment and Receipt in Cash ManagementReconcile the Payment and Receipt in Cash Management• Post Sub Ledger Transactions into GLPost Sub Ledger Transactions into GL• Run Trial Balance and Financial Statements (Profit & Loss Run Trial Balance and Financial Statements (Profit & Loss

Account & Balance SheetAccount & Balance Sheet

Modules CoveredModules Covered• Oracle PurchasingOracle Purchasing• Oracle PayablesOracle Payables• Oracle InventoryOracle Inventory• Oracle Manufacturing (WIP Oracle Manufacturing (WIP

Accounting)Accounting)• Oracle Order ManagementOracle Order Management• Oracle ReceivablesOracle Receivables• Oracle Cash ManagementOracle Cash Management• Oracle General LedgerOracle General Ledger

Cost CalculationCost Calculation

FG/Sub Assembly

Purchased Item/Sub Assembly Cost

Routing

Operations

Department

Resources Rate

Usage

Rate X Usage

Operations Cost

Men, Money, Machine

Production / Service Departments

Item Cost

Total Cost

Set up Required in Oracle Set up Required in Oracle ApplicationsApplications

• Each Module has a Parameter screen or Each Module has a Parameter screen or Controlling Screen through which the Accounts Controlling Screen through which the Accounts are Defaultingare Defaulting– Ex (Inventory Organization for Materials in Ex (Inventory Organization for Materials in

Inventory Module, Receiving options for Inventory Module, Receiving options for Inventory Receipt in Purchasing Module, Inventory Receipt in Purchasing Module, Financial Options for Payables)Financial Options for Payables)

• There are other places also where we can define There are other places also where we can define the Accounts and there is an inbuilt hierarchy the Accounts and there is an inbuilt hierarchy within the Applications as to where from the within the Applications as to where from the Accounts need to be defaultedAccounts need to be defaulted

• Each Module Needs to set the Accounts for an Each Module Needs to set the Accounts for an Accounting Event Happening in that ModuleAccounting Event Happening in that Module

Defaulting Accounts in Defaulting Accounts in Case of PurchasingCase of Purchasing

Defaulting Accounts in Case of Defaulting Accounts in Case of PurchasingPurchasing

Posting to General Ledger from Posting to General Ledger from Sub-LedgerSub-Ledger

• Sub-Ledger Accounting Entries are Transferred to Sub-Ledger Accounting Entries are Transferred to General Ledger Interface table through the General Ledger Interface table through the Concurrent ProgramsConcurrent Programs

• We can schedule the concurrent Process to Transfer We can schedule the concurrent Process to Transfer Data to GL instead of manually running the Data to GL instead of manually running the concurrent Programs.concurrent Programs.

• You can run the Process Daily, Weekly, MonthlyYou can run the Process Daily, Weekly, Monthly• You can transfer the data either inYou can transfer the data either in

– Summary or (Total Transaction for an Account Summary or (Total Transaction for an Account Combination per day)Combination per day)

– Detail (Each Transaction)Detail (Each Transaction)

Posting in General Posting in General LedgerLedger

• This Process Transfers Data from GL This Process Transfers Data from GL Interface Tables to GL Main TablesInterface Tables to GL Main Tables– (i.e) From GL_JE_INTERFACE table to (i.e) From GL_JE_INTERFACE table to

GL_JE_HEADERS and GL_JE_LINESGL_JE_HEADERS and GL_JE_LINES• Once the Data is Posted No further changes Once the Data is Posted No further changes

to the Data is permittedto the Data is permitted

Accounting Events – Oracle Accounting Events – Oracle PurchasingPurchasing

• Oracle PurchasingOracle PurchasingInventory AccrualsInventory AccrualsTransfer to Sub InventoryTransfer to Sub InventoryPurchase Price VariancePurchase Price VarianceInvoice Price Variance (IPV) and Invoice Price Variance (IPV) and

Exchange Rate VarianceExchange Rate VarianceReturn to Supplier From Receipt Return to Supplier From Receipt

of Materialsof MaterialsInter-organization TransferInter-organization Transfer

Accounting Events – Oracle Accounting Events – Oracle PayablesPayables

• InvoicesInvoices InvoiceInvoice Invoice adjustmentInvoice adjustment Invoice cancellationInvoice cancellationPrepayment applicationPrepayment applicationPrepayment un-applicationPrepayment un-application

• PaymentsPaymentsPaymentPaymentFuture dated payment maturityFuture dated payment maturityPayment adjustmentPayment adjustmentPayment cancellationPayment cancellationPayment clearingPayment clearingPayment un-clearingPayment un-clearing

Accounting Events – Accounting Events – Manufacturing (WIP)Manufacturing (WIP)

• Oracle InventoryOracle InventoryMaterial Transfer from Stores to WIPMaterial Transfer from Stores to WIPWIP Completions and Material WIP Completions and Material

Consumption EntryConsumption EntryOperations Completion EntryOperations Completion EntryFinished Goods Stock Creation EntryFinished Goods Stock Creation EntryInter-Org TransferInter-Org TransferSub-Inventory TransferSub-Inventory Transfer

Accounting Events – Order Accounting Events – Order ManagementManagement

• Order ManagementOrder ManagementCost of Goods Sold Entry in Cost of Goods Sold Entry in

Inventory ModuleInventory Module

Accounting Events – Oracle Accounting Events – Oracle ReceivablesReceivables

• TransactionsTransactionsInvoicesInvoicesDebit MemosDebit MemosCommitmentsCommitmentsInvoices Against a DepositInvoices Against a DepositInvoice Against guaranteeInvoice Against guaranteeCredit MemosCredit MemosOn Account Credit MemoOn Account Credit Memo

Accounting Events – Oracle Accounting Events – Oracle ReceivablesReceivables

• ReceiptsReceiptsUnapplied ReceiptsUnapplied ReceiptsOn account ReceiptOn account ReceiptApplied ReceiptApplied ReceiptReverse ReceiptReverse ReceiptCharge backCharge backAdjustmentsAdjustmentsMiscellaneous ReceiptsMiscellaneous ReceiptsBills ReceivablesBills Receivables

Accounting Event – Cash Accounting Event – Cash ManagementManagement

• Oracle Cash ManagementOracle Cash ManagementCash Receipt Clearing Cash Receipt Clearing Cash Payment Clearing Cash Payment Clearing JournalsJournalsOpen InterfaceOpen Interface

Accounting Event – General Accounting Event – General LedgerLedger

• Oracle General LedgerOracle General LedgerJournal Entries Created from Sub Journal Entries Created from Sub

LedgerLedgerManual Journal Entries created in Manual Journal Entries created in

GLGLInter-Company Transfer EntriesInter-Company Transfer EntriesTranslation entriesTranslation entriesRevaluation EntriesRevaluation Entries