advanced journal entries

Advanced Journal Entries

R12 General Ledger Management Fundamentals

Objectives

After completing this lesson you should be able to do the following:• Describe the key features of the following Oracle

General Ledger advanced journal entries functions– Recurring Journals, Mass Allocation Journals,

AutoAllocations, Journal Scheduling, and Journal Approval

• Identify the key issues and considerations when implementing the advanced journal entry functions of Oracle General Ledger

• Explain the business benefits derived from utilizing Oracle General Ledger's advanced journal entries functions

About Recurring Journals

Define recurring journals for transactions that repeat every accounting period, such as accruals, depreciation charges, and allocations

There are three major types of recurring journals

Dr. Temporary Labor…………..<No Amounts> Cr. Salaries Payable……………..<No Amounts>

Skeleton

StandardDr. Auto Lease Expense………..10,000 dollars Cr. Accounts Payable……………....10,000 dollars

FormulaDr. Bad Debt Expense………..<Variable Amounts> Cr. Bad Debt Reserve………..<Variable Amounts>

Recurring Journal Types

Creating Recurring Journals

Create Recurring Journal Definition

Generate Recurring Journals

Review Entries – Are the Entries Correct?

Post Entries

Yes

Delete the Journal Entry and Correct the

Definition

No

RecurringJE

Lines

Define an unlimited number of journal entry lines for each recurring journal entry

Specify the accounts to update with the recurring journals

Enter the amount to post to the designated account, or a formula to calculate the journal amounts

Indicate an automatic offsetting line for a recurring journal entry by entering the line number 9999

Recurring Journal Entry Lines

Automatic Offset Example

Line Account Debit Credit

10

20

30

9999

AR: Consulting Revenue

AR: Training Revenue

Sales Revenue

Services Revenue (Offset Line)

1,000

4,000

2,000

3,000

(System calculated)

Formula Recurring Journals

For Formula Journals:

Create the formulas that Oracle General Ledger uses to calculate the journal amount for each line

Each formula can contain an unlimited number of steps

For each step in the formula, enter an operator and an argument

Operators Arguments$ 500 or01-100-2100

Generating Recurring Journals

• Generate Recurring Journals to create unposted journal entries from the defined recurring journal templates

• Generate Skeleton Journal Entries and then, use the Enter Journals window to complete the journal information

• Generate Recurring Journal Batches according to schedules defined in Oracle General Ledger

MassAllocations Overview

MassAllocations: A single journal entry formula that allocates revenues and expenses across a group of cost centers, departments, divisions, or cost centers

Chicago rent

Total rent

Paris rent

Tokyo rent

1/31/3

1/3

MassAllocations versus Recurring Journals

Type of Entry MassAllocations Recurring Journals

Formula Entries Yes Yes

Standard Entries Yes Yes

Skeleton Entries Yes Yes

Currency Functional, Foreign, or STAT

Functional or STAT

Formulas per Journal Line

One formula for many lines

One formula per line

Formula A*B/C Any formula

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5

Create MassAllocation Definition

4

Validate Definition

Generate MassAllocation Journals

Review Entries

Post Entries

Step

Steps to Create MassAllocation Journals

Defining MassAllocation Journals

Define a single formula to allocate amounts across a group of balancing segment values, departments, or cost centers. You can create a new MassAllocation batch or copy an existing batch.

Allocate total rent expense.

Dept BDept A Dept C

Defining MassAllocation Formulas

All MassAllocation formulas use the following equation to determine allocation amounts:

Oracle General Ledger uses the following format to represent the equation. Each factor in this equation relates to a separate formula line:

You can enter any combination of fixed amounts and account combinations in formula lines A, B, or C.

Cost Pool * (Usage Factor/Total Usage)

A * B/C

Account Segment Types

When entering an account into a Mass Allocation formula line, assign a segment type for each account segment

Looping

Summing

Constant

Target and Offset Accounts

Lines

Target Offset

MassAllocation Journal Example

Redistribute monthly rent expense to departments based on the amount of space each occupies

Rent Expense for Each Department =

Total Rent Expense X Area Used by Department / Total Area

In January 2002, the organization spends 10,000 dollars for rent

Dr. Rent expense 10,000 functional dollars

Cr. Rents payable 10,000 functional dollars

MassAllocation Journal Example

Allocate rent to three departments:

Human Resources 45% of total floor spaceResearch 30% of total floor spaceFinance 25% of total floor space

The rent expense is redistributed by the following MassAllocation Journal entry:

Dr. Human Resources 4,500 functional dollarsDr. Research rent 3,000 functional dollarsDr. Finance rent expense 2,500 functional dollars

Cr. Total Rent Expense 10,000 functional dollars

Rent Expense Example

Segment Value Description

Department 000 Corporate

Department 101, 102, & 103 Human Resources, Research, and Finance

Department 999 Parent of 101, 102, and 103

Natural Accounts: 5740 SQFT

Total Rent Expense Department Square Footage

Validating MassAllocation Journals

After defining a new allocation batch, or changing an allocation formula:

Run the MassAllocation / MassBudget Validation program

Validate

Use the Request ID to locate the problems on the MassAllocations Validation Report

Ready to Generate Mass Allocation

Journal

Correct Errors

No Errors

Generating Mass Allocation Journals

• Generate MassAllocations to create unposted journal batches based on your validated MassAllocation formulas– The generated journal batch contains one entry for each

allocation formula in the batch• Use MassAllocation journals to reverse existing

balances, post new allocation amounts, or generate journals that increment the existing balances to match the current allocation amount

• Generate MassAllocation journal batches for any range of open or future enterable periods

AutoAllocations Overview

• AutoAllocations is a powerful feature to automate journal batch validation and generation for:– MassAllocations– Recurring Journals– MassBudgets– MassEncumbrances

• Use AutoAllocations to process journal batches you generate regularly, such as month end closing

AutoAllocation Workbench

Allocate any financial data throughout the organization

Create allocation sets

Use step-down and parallel allocation sets

Use any combination of allocation rules

With AutoAllocation

Workbench

Oracle Workflow controls the approval and rollback processes

Workflow notifies users of

results

Business Benefits of AutoAllocation Workbench

Automates allocations

Monitors allocation

processes online

Automated rollback

Use Workflow to incorporate approvals

AutoAllocation Set Types

Step DownYou create journal

batches in a specific sequence

Step-down AutoAllocation sets automatically

validate, generate, and post all journals created

by the process

Parallel

Validates and generates all the journal batches in your AutoAllocation set simultaneously. You can then post the generated journals to update your

balances

Step-Down AutoAllocations

Define allocation formula

Calculate allocation entry

Post allocation entry

Repeat foreach levelof yourallocation

Parallel AutoAllocations

Define Recurring Journals

Define MassAllocation Journals

Enter in a Parallel allocation set

Enter in a Parallel allocation set

Additional Workbench Functionality

Extended functionality in the AutoAllocation Workbench window includes:

Query defined allocation or recurring journal batches to use in Parallel or Step-down AutoAllocation sets

Drill down to use any batch definition form and create new journal batches to use in a AutoAllocation set

Submit or schedule an AutoAllocation set and view the status of your set

AutoAllocation Sets and Oracle Workflow

Generate Batch Validate

ApprovalRequired?

Workflow

Approved Journal ready for posting

Notifies approver End

Yes No

Yes

No

AutoAllocations and Oracle Workflow

• Workflow Processes– Step-down AutoAllocation process– Journal Approval process

• Workflow Activity Settings– Request Approval for Approver Time-out– Reached Manager Notification Resend Limit– Default Error Notification: Performer

• Customizable Processes– Generated Journal Batch Validation– Generated Recurring Journal Batch– MassAllocation Validation process– Select and Validate Journal Batch process

AutoAllocations Constraints

Only an Oracle Projects responsibility can create AutoAllocation sets containing Projects and General Ledger steps

An Oracle General Ledger responsibility can view only General Ledger AutoAllocation steps

Any Step-down AutoAllocation set that includes a Projects allocation rule does not have the rollback option

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Submitting AutoAllocation Set Requests

AutoAllocation Workbench Window

Submit Schedule

Two Buttons for Submission

ImmediatelyScheduled Later

At Specified Intervals

Reviewing the Status of AutoAllocations

• To review the status of your AutoAllocation set, choose the Review Status button in the AutoAllocation Workbench window

• If more than one AutoAllocation set is pending, you can query the set you want to find

Implementation Considerations for AutoAllocation Workbench

What factors should you consider before implementing AutoAllocation Workbench?• Do you need to allocate any financial amount

throughout your organization? • Can you use the AutoAllocation Workbench to

automate your allocations?• Do you need to combine allocations in Oracle Projects

with Oracle General Ledger?• Should Journal Approval be part of the process?• Should AutoAllocation Rollback be an option of the

AutoAllocation process fails?

Choose from the following schedules:

Define your own schedule in

General Ledger, based on your General Ledger

calendar

Choose any defined schedule in the Application

Object Library (AOL), based on

a standard monthly calendar

Define your own AOL schedule or

use an AOL schedule you

previously defined and

saved

AutoScheduling Overview

AutoScheduling Process

Define a Recurring JE, Mass Allocation JE, Budget Formula, Mass Budget, and/or Allocation Set

Create a new General Ledger or AOL schedule, or use an existing schedule

Select one of the objects in Step 1 and select the Schedule button on the Parameters window

Review and post the generated journals after the scheduled process has been run

Step 1

Step 2

Step 3

Step 4

Financial Schedules

FinancialSchedules

Create General Ledger Financial schedules based on different calendars and period types

Schedule Recurring Journals, MassAllocations, Budget Formulas, MassBudgets, and AutoAllocation sets using the schedules you have defined

Share all schedules across ledgers

Define multiple schedules for each calendar and period type in General Ledger

Schedule any concurrent program

Scheduling Journals

You can schedule journals in the Submit Request window or by navigating to the following:

— (N) Journals > Schedule > Recurring— (N) Journals > Schedule > Allocation

Scheduling a Request Using a Financial Schedule

Navigate to the Submit Requests window

In the Name field, select the request that you want to submit

Choose the Schedule button to open the Schedule window

Choose the apply a saved schedule button to open General Ledger defined schedules

Choose the schedule you want and submit your request

Complete the fields in the parameters window

Periodic Submissions

General Ledger increments the period and date parameters based on user-defined resubmission intervals

Resubmission intervals can be based on the standard calendar or the fiscal calendar for your ledger

Incremental Submissions

You can choose to increment your scheduled submissions

Your ledger calendar must include all the schedule start dates for the schedule you are using

You must enter a non–adjusting period when you first submit your scheduled request

Prerequisites

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Implementation Considerations for Journal Entry Automations

• How can you utilize the Journal entry Automations feature in your organization?

• What kind of GL schedules should be set up?• What type of journals should be scheduled versus

being submitted as needed?

GL Journal Approval Process Overview

The GL Journal Approval Process obtains the necessary management approvals for manual journal batches. This process:• Validates the journal batch• Determines if approval is required• Submits the batch to approvers (if required)• Notifies appropriate individuals of the approval results

Journal Approval Features

To use the Approving Journals process:

You must enable the ledger so that journal entries be approved before posting

Create an approval hierarchy and define authorization limits for each user

Oracle Workflow Engine

Approval process is based on Oracle Applications Workflow engine

General Ledger provides a default approval workflow template which you can customize

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432

1Journal Approval Process

Start

End (validation failed)

GL Initialization and Journal Validation Process

End (approval not required)

GL Preparer Approval Process

End (approved)

GL Approval Process

Rejected (end)

Approved (end)

Journal Approval Process

Approver receives notification(N) Other > Notifications (M) Query > Find All

The approver has three choices when notified of a journal batch

for approval

Reassign Respond Open

Reassign notification to another person for approval

Approve or reject journal batch

Opens the Notifications window to monitor the WorkFlow process or view the original journal entry

Journal Approval Process

After examining the journal batch, the approver can take additional action using the More Actions options(N) Other > Notifications (M) Query > Find All (B) Respond (B) Enter Journals (B) More Actions

Option 1 - Reverse the Batch entry

Option 2 - Post the entry

Option 3 - Unapprove a preapproved batch

Journal Approval Process

Preparer receives notification

When the preparer of a journal batch receives notification regarding the approval or rejection of the batch, they can select one of the following three options:

Reassign To reassign the batch

OK To confirm receipt of notification

Open To open the Notifications window to view the full message, WorkFlow process, or the original journal entry

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Journal Approval Process

OpenWhen the Preparer opens the Notifications window to view the full message,

They can:

Drill down to the Enter Journals window to either directly post the batch or make corrections if the batch is rejected or invalid

If the batch was rejected or invalid and they make the appropriate corrections, they can use Journal Approval to resubmit the batch for approval

and

Approval Methods

There are 3 approval methods:• Go up the Management Chain• Go Direct to Person with Sufficient Authorization• One Stop Go Direct

Journal Approval Prerequisites

Before setting up Journal Approval, your system administrator must:

Set up Oracle Workflow

Set General Ledger Profile Options

Configure GL Journal Approval Process in Oracle Workflow Builder

Set three WorkFlow activity settings (Optional)

Setting Up Journal Approval

Enable Journal Approval

Specify journal sources

Create an approval hierarchy

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Summary

In this lesson, you should have learned how to:• Describe the key features of the following Oracle

General Ledger advanced journal entries functions– Recurring Journals, Mass Allocation Journals,

AutoAllocations, Journal Scheduling, and Journal Approval

• Identify the key issues and considerations when implementing the advanced journal entry functions of Oracle General Ledger

• Explain the business benefits derived from utilizing Oracle General Ledger's advanced journal entry functions