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Overview of Oracle E Business Suite Release 12


Contents

• Oracle Financials• Challenges with 11i• The New Architecture of Release 12 (R12)

SOB USA($)

SOB BEL(€)

SOB ATS(€)

SOB DM(€)

SOBs

R11i Areas of Improvement

USA Belgium Austria GermanyLegal Entities

OU USA OU ATSOU BEL OU DMOUs

Modeling Entities with Sets of Books

R11i Areas of Improvement (contd)

• Pros • Cons

• Each legal entity is a separate set of books

• Data is secure

• Easy to secure setup components and definitions such as FSG reports

• Many books to maintain

• Changing responsibilities

• Difficult to share data and setup information

• Cannot perform processes across books

• Time-consuming open/close process

• Difficult reporting

Modeling Entities with Sets of Books


SOB North America

($)

SOB Europe

(€)

SOBs

OU USA OU ATSOU BEL OU DMOUs

LEs(BSVs)

US(01)

Austria(03)

Germany(04)

Belgium(02)

… with Balancing Segment Values


• Pros • Cons

• Fewer books to maintain

• No changing responsibilities

• Share setup information

• Perform processes across legal entities

• Easy reporting

• Consolidated information

• Cannot share setup and data across currency boundary

• No data security• Cannot secure definitions, such

as FSG Reports and Mass Allocations

• No open/close security by legal entity

… with Balancing Segment Values

Why We CareWhy We CareWhy We CareWhy We Care

• Tax• Registered companies calculate,

file, and pay the transaction taxes they owe

• Intercompany• Do business between and across

your registered companies with full legal documentation

• Bank Model• Registered companies use their

money to pay their bills, etc.

• Accounting• Assign books, bookkeeping rules

and currency management to your registered companies

LE’s in Release 12LE’s in Release 12LE’s in Release 12LE’s in Release 12

Getting the Legal Entity Right Compliance falls into place

• LEs pay the taxes• Need tax registrations

• Trade between LEs• Need intercompany

• LEs own the money and bank accounts

• LEs file the accounts• Takes care of accounting

“In-ability to issue one payment instruction to the bank for payments of invoices in multiple operating units.”

“We have 60 sets of books and see tremendous inefficiencies with running processes across these sets of books.”

Why UpgradeStraight Talk from Customers

“Frequent Changing of Responsibilities to access Multiple Operating Units greatly increases work load and brings about control inefficiencies.”

“Banks, taxes, payments, and accounting – everything needs to become centralized to bring tremendous efficiencies to our organization.”

“The existing Intercompany structure does not facilitate automatic reconciliation between transacting entities needing many customizations in this area.”

“Centralization of sub ledger accounting rules would minimize set up and maintenance, providing greater financial control, and enforcing a consistent approach for true global accounting.”

Reporting Currency (INR)Reporting Currency (USD)

R12 Ledger Architecture

SLA

Transaction

Accounting

Subledger Transactions

SLA

A Ltd (INR)(Primary Ledger)

Indian GAAP

A Ltd (USD)(Secondary Ledger)

US GAAP

AP AR FA Others

A Ltd (Legal Entity)

Maintaining Multiple Accounting Representations with Secondary Ledgers or Reporting Currencies

Key Concepts and Terminology

• Main, record-keeping ledger •Optional, additional accounting representation of Primary Ledger

Primary Ledger (PL) Secondary Ledger

• Defined by 4Cs:• Chart of accounts• Accounting Calendar• Primary Currency• Accounting Conventions

(i.e. Subledger Accounting Method)

•Can differ in one or all 4Cs: • Chart of accounts• Accounting Calendar• Primary Currency• Accounting Conventions (i.e.

Subledger Accounting Method)

• Optional, currency representation of Primary or Secondary Ledger

Reporting Currency

• Only differs in:• Currency

Level of Detail Desired

Updating Secondary Ledger

Path to Secondary Ledger

Balance Level Use GL Consolidation to Transfer Balances

Journal Level Use Posting for Automatic Journals

Replication

AP AR FASubledger Level Use SLA for Automatic

Maintenance

Adjustments OnlyManual Adjustments in

GL or Automated Adjustments from SLA

Key features….

• Accounting Setup Manager• Simultaneous Accounting For Multiple Reporting Requirements

• Multiple Currency Support For All Data From All Sources

• Management Reporting• Specify a segment to be a management segment

• Secure access to management segment

Data Access and Data Security using Data Access Sets

• Access to Legal Entities, Ledgers, Balancing Segment Values and Management Segment Values

Multi-Ledger (Ledger Set) Processing

• Overview of features that support ledger sets

Definition and Setup Security

• Security for Setup and Definitions w/ Definition Access Sets

Define Multiple Ledgers for Rules & Currencies

Define Legal Entities& Associated Rules

One Place to manageYour Global Accounting

Rules, Currencies,Ledgers,

And Ledger Sets Set Accounting Rules

for All EBS Apps

Ensure Complete & Accurate

Setup via Online Checklist

Centralized Set-upAccounting Setup Manager

Key features….











OU97

OS69

OX53

Co CC Acct I/C

Primary Ledger

LE

Management Segment……

• Effective Management Reporting

• Enables management reporting and analysis by leveraging a management dimension in your chart of accounts

• Tighter Controls

• Restrict managers from accessing data outside their area of responsibility

Management Reporting and Security

• Benefits

Ledger Architecture Features










• Security for Setup and Definitions w/ Definition Access Setssss

• Data Access Sets • Grant and tailor access to Ledgers and Balancing Segment

Values (i.e. Companies, Stores, Branches, etc.)

Privileges

Taj Hotels LedgerTaj Hotels Ledger

IFRS LedgerIFRS Ledger

GL Manager

Simplify Data Access

AccountantView Write

US Gaap LedgerUS Gaap Ledger

Ledger Sets Global Information At A Glance

Ledger Ledger SetSet

Ledger Ledger SetSet

Key benefits to many Ledgers in one set

•Decision-driving business information always available

•Simpler processing and General Ledger management

•Data and definitions that can be shared and secured

US GAAPUS COAUS Calendar

USD


USD

Ledger CLedger CLedger CLedger C


EUR

Ledger BLedger B

French RulesPlan ComptableFrench Calendar

EUR

Ledger ALedger A

Share:Share:CChart of hart of AccountsAccounts

CCalendaralendar

Share:Share:CChart of hart of AccountsAccounts

CCalendaralendar

Ledger DLedger DLedger DLedger D

Reporting Currency


AUD

Ledger Sets…..

• Open/Close Periods

• Create Journals

• Translate and Revalue Balances

• View Information

• Submit Standard Reports

• Submit Financial Statements

Perform the Following Across Ledgers:

Misc ExpenseReport Definition

Balance Sheet Report Definition

Income Statement Report Definition

Privileges

Secure Definition Access

View Modify Submit

AccountantGL Manager

• Accounting Calendars• AutoAllocations• AutoPost Criteria Sets• AutoReversal Criteria

Sets• Budget Formulas• Budget Organizations• Chart of Accounts

Mappings• Consolidation

Definitions

• Consolidation Sets• Currency Rate Types• Elimination Sets• FSG Reports and

components• MassAllocations • MassBudgets• Recurring Journals• Revaluations• Transaction Calendars

Definition Access Sets Definitions That Can Be Secured


Other Features in R12

Is Oracle IFRS compliant?

Do we have to wait for Fusion or 12.2 for IFRS features?

Our overseas customers have been complying with IFRS using our IFRS features on Release 10.7

(Emirates, Reuters back in 2000) and Release 11 for years.

Our European customer base moved to IFRS on Release 11.5.9 and 11.5.10. Companies like SNCF,

Michelen, Carrefour, Hilton PLC, Musgrave PLC, UBS,…

LIFO Corp Inc.Closing Work, Adjustment from US Principles to IFRS PrinciplesPeriod, Date

Debit Credit Debit Credit Debit Credit

Cash 1,000 1,000 - Receivables 500,000 500,000 - Inventory 450,000 25,000 475,000 - Fixed assets 200,000 200,000 - Depreciation 100,000 - 100,000 Payables 150,000 - 150,000 Accrued Expenses 100,000 - 100,000 Taxes 100,000 - 100,000 Capital 1,000 - 1,000 Retained Earning 500,000 - 500,000 Current Income 200,000 25,000 - 225,000 Subtotal 1,151,000 1,151,000

Revenue 2,000,000 - 2,000,000 Cost of Sales 1,000,000 25,000 975,000 - R&D Expense 200,000 200,000 - S&M Expense 250,000 250,000 - G&A Expense 200,000 200,000 - Other income 150,000 150,000 - Current Income 200,000 25,000 225,000 - Subtotal 2,000,000 2,000,000 2,000,000 2,000,000

US GAAP Results Adjust to I FRS IFRS Results

Multiple Compliance in Release 11Balancing Segment Value

Balancing SegmentValue example: 99

• Manual Adjustment• Adjustment from

subledger data• Recurring Adjustment

All other segments Ledger Total

Other R11 Multiple Compliance Tools

• AX, the Accounting Engine

• MRC Ledgers at FX rate = 1

R12: Multiple Compliance, +Reconciliation

Subledger Subledger AccountinAccountin

gg

Subledger Subledger AccountinAccountin

gg

DrDr CrCr

Payables InvoicePayables InvoicePayables InvoicePayables Invoice

Chose to use Chose to use • A (full) Secondary LedgerA (full) Secondary Ledger

• complete alternative complete alternative accountingaccounting

or or • An Adjusting Ledger, (or An Adjusting Ledger, (or

Segment)Segment)• automatic business automatic business

reconciliationreconciliation• fewer adjusting entriesfewer adjusting entries• easier feed to Hyperioneasier feed to Hyperion

Chose to use Chose to use • A (full) Secondary LedgerA (full) Secondary Ledger

• complete alternative complete alternative accountingaccounting

or or • An Adjusting Ledger, (or An Adjusting Ledger, (or

Segment)Segment)• automatic business automatic business

reconciliationreconciliation• fewer adjusting entriesfewer adjusting entries• easier feed to Hyperioneasier feed to Hyperion

RegulationsRegulationsIFRS COAIFRS COAIFRS CalendarIFRS CalendarCADCAD

Adjusting LedgerAdjusting Ledger

IFRS PrinciplesIFRS PrinciplesIFRS COAIFRS COAIFRS CalendarIFRS CalendarCADCAD

Base LedgerBase Ledger

Secondary Ledgers, Regulated & Corp: 2 SLA rules

Regltd

or: One ledger, Adjustment segment: 1 4-line SLA Rule

Ledger Set:Ledger Set:


Other Features in R12

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

Increased Operational EfficiencyCentralized Accounting

• View Subledger Journal Entries

• Compare the parallel entries created

• Assign different accounting methods to different ledgers

Increased Operational EfficiencyCentralized Accounting

Multi-Org Access Control (MOAC)

TasksAccounting SetupCollectionsRequisition Demand

& POs Invoices & PaymentsCustomer Data

ManagementReceiving & Drop

Ship

TasksAccounting SetupCollectionsRequisition Demand

& POs Invoices & PaymentsCustomer Data

ManagementReceiving & Drop

Ship

Bahrain Legal Entity

USA Legal Entity

India Legal Entity

Single Responsibility

Bahrain Operating

Unit

India Operating

Unit

USA Operating

Unit

Increase the efficiency of shared services and single database operations with streamlined ACCESS, processing, and reporting across operating units

• Enter and pay invoices across OUs• Receive goods across any OU• Define and manage OUs from a central location• View and manage customers across OUs• Negotiate with suppliers for your enterprise, not just your OU

For Example:

Lower Total Procure-to-Pay Costs

Oracle PayablesWHAT’S NEW

• Pay on behalf of a different party with 3rd party payments

• Greater flexibility in defining and calculating discounts for quick payments

RESULTS

• Streamline and automate processing

Click for details

Overdue invoice reference in line

description

Late ChargesView Interest Invoices

Click Apply in Detail for line level applications

Select the invoice to

Apply

Line Level Cash Application Apply at transaction or detail level

• 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 account

PlusCentralized Credit Card Model

Credit Card Encryption

Centralized Banking and PaymentsFunds Disbursements and Capture

LE

OU A OU B OU C

ProjectProjectss

ProjectProjectss

ReceivableReceivabless

ReceivableReceivabless

PayablePayabless

PayablePayabless

InventoInventoryry

InventoInventoryry

Work in Work in ProcessProcessWork in Work in ProcessProcess

PurchasinPurchasingg

PurchasinPurchasinggE-Business SuiteE-Business SuiteE-Business SuiteE-Business Suite

AssetAssetss

AssetAssetss

Bank Account Model

Increase Operational EfficiencyCentralized Payments

• Centralized management of all disbursements

• Centralized management of all funds capture

Bank Account Balances and Interest

Bank Account Transfers

Bank Statement Reconciliation Enhancements

• Bank Transaction Codes can be linked to multiple sources

• Reconciliation tolerances• Defined at the bank account level• Separate tolerances for manual and auto reconciliation• Auto reconciliation tolerances further broken down by source

• Reconciliation across Operating Units

Integrate Out-of-the-Box with Oracle Applications

Templates

XML Publisher

Oracle Applications

CRM

Projects

FMS

HCM

SCM

Output FormatsData Sources

Any XMLData Source

PDFRTF

Business User

PublishingEngine

XML

• Email• Printer• Fax

HTMLXML

Letters

FundTransfers

OnlinePaychecks

OrderConfirmations

BillsGovernmentGrant Forms

Destination

EDIExcel

XML PublisherBusiness Users Format and Deliver Documents

Financial Reporting with XML PublisherNearly 400 Modifiable Formats in Financials

Terminology Changes in R12

• Sets of Books

• Global Accounting Engine

• AX Posting Sets of Books

• Global Intercompany System

(GIS)

• GL Intercompany Accounts

• Translated Currency

• Multiple Reporting Currencies

• MRC Primary Set of Books

• MRC Reporting Set of Books

• Thin MRC Reporting Book

• Full MRC Reporting Book

• Translated Balance

• Ledgers

• Subledger Accounting

• Secondary Ledgers

• Advanced Global

Intercompany System (AGIS)

• Intracompany Balancing

• Balance level RCs

• Reporting Currencies (RCs)

• Primary Ledger

• Reporting Currency

• Journal level RC

• Subledger level RC

• Balance Level RC

Release 11i Release 12