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R12 FINANCIALS Oracle Advanced Collections Release 12 of Oracle Advanced Collections extends transactional and customer data in collection

management processes within and across operating units (OUs). New Multi-Org Access Control security profiles manage each collectors access to operating units to which they are assigned. This provides them with the visibility to customer data and balances within or across OUs on their collector work list and specific screens for a more complete understanding of each customers collections situation. Other new features in release 12 Oracle Advanced Collections include:

New Implementation Checklist and Setup Screens Improved Payment Processing and Customer Funds Capture through integration with Oracle Payments Use of Oracle Territory Management to Define Collections Territory Hierarchies

Finally, the collections workbench in Oracle Receivables has been replaced with functionality from Oracle Advanced Collections. Details on the collections features available in Oracle Receivables and Oracle Advanced Collections are provided in Oracle MetaLink Note 389443.1. Planning Considerations If you have used the Collections Workbench in Oracle Receivables you must upgrade to either Oracle Advanced Collections or the new functionality in Oracle Receivables. Oracle Advanced Collections provides the flexibility and high degree of configurability required by enterprise collections agents and managers responsible for managing delinquent customers and collections-related issues. It includes configurable scoring and strategy management tools, configurable customer metrics, later-stage collections tracking capability, and is directly integrated to a number of other Oracle EBS products including Oracle Territory Manager, Oracle Trade Management, Oracle Leasing and Oracle Loans. The collections functionality available in Oracle Receivables is intended for AR clerks who occasionally perform collections activities. Receivables users who have not purchased a license for Oracle Advanced Collections are not authorized to use the full feature set of this product. Therefore, your planning team should consider the long-term operational requirements of your collections group and upgrade to the appropriate collections management capability that best fits those requirements.

Process Change

Pay heed to the order and frequency in which the concurrent programs that automate the collections processes are run. For instance, some organizations run their scoring or dunning processes in synch with their billing cycles while others run them more frequently. Based on MOAC security, collections agents will be able to see across operating units and will need to consider this additional information as they review and work with customer accounts. For collections organizations where collectors or collector groups are responsible for managing specific customers, collections territories can be created in Oracle Territory Manager to facilitate and manage customer assignment and customer-related work assignment. Customer call activity created in Oracle Receivables prior to upgrading to Release 12 can be viewed from the Collections History tab by selecting Receivables Calls from the Type List of Values.

Configuration Change

Start by using the new Collections Implementation Setup tool to create preproduction collections systems for conference room pilots and testing. Once you go live, your production collections system settings can be easily modified with the Setup Tool when changes are Review and use the pre-configured elements (correspondence templates, scoring models, strategies and work items, and metrics) in pre-production phases of your upgrade. Then add or adjust those elements as Aging-based dunning plans in R12 (for either Advanced Collections or Receivables users) include: Configurable dunning letter templates using Oracle BI Publisher Output as email, fax or print Optional dunning calls assigned to collector for follow up


Collections scoring and collections strategies are not extended to OU level. Highest level for these are still Dunning plan capability is available for both Advanced Collections and Receivables users. Configurable collections strategy management (which also supports dunning activities) is available in Oracle Advanced New collections scoring models and customer metrics in Oracle Advanced Collections are best configured by qualified DBAs. New scoring and metrics are usually created during your upgrade project, prior to going live with the module.

Oracle Advanced Global Intercompany Systems Oracle Advanced Global Intercompany Systems is a new product in Release 12, replacing the Global Intercompany System in earlier releases. It allows companies to streamline intercompany processing and facilitates intercompany reconciliation. The key components of the Advanced Global Intercompany System are: Intercompany Balancing Manual Intercompany Transactions Intercompany Invoicing Intercompany Reconciliation

Intercompany Balancing Overview: Intercompany Balancing calculates intercompany accounting when transactions are entered directly in the Advanced Global Intercompany system, and also when intercompany transactions occur in Oracle General Ledger and Oracle Subledger Accounting. Intercompany Balancing uses the same single set of intercompany accounts and rules for consistent accounting treatment throughout Financials. During the R12 upgrade, GIS data is upgraded to AGIS, and you can then use R12 functionality to:

Define all intercompany accounting definitions Support true legal entity for intercompany transactions between legal Maintain separate intracompany accounting for transactions between balancing segments in the same legal

Track trading partners in a separate optional intercompany segment.

Process Change

Accounting Setup Manager in Release 12 has a separate setup screen for Intercompany / Intracompany Release 12 supports legal entity integration with intercompany balancing rules for intercompany accounts when two legal entities trade. Legal entity configuration is not needed for intracompany balancing between pairs of balancing segment values within the same legal Intercompany balancing supports separate Intercompany Payables and Intercompany Receivables accounts rather than a single intercompany due to/due from account. You can create an optional intercompany segment in your chart of accounts structure. It will automatically be populated with the balancing segment value of the trading partner to provide more detail for reporting and reconciliation.

Configuration Change

The R12 upgrade converts intercompany accounts created in GIS into intracompany balancing accounts and rules. Auto-Accounting rules in GIS are not upgraded, and need to be set up as Account Derivation Rules and compiled with the Transaction Account Builder in Subledger To use intercompany accounting rules, you need to setup legal entities for transacting subsidiaries, map them either to ledgers or balancing segment values, and specify them as intercompany organizations. As part of the upgrade, GIS subsidiaries will be converted to intercompany organizations, one for one. You need to verify post-upgrade that the correct legal entity has been assigned to the intercompany organization so that it can be used. In some cases the automatic upgrade may not have been able to identify one and only one legal entity to associate to an intercompany organization. In that case the organization will be inactive and must be updated with the correct legal entity before it can be used in The R12 Grant Based Security Model maps intercompany organizations to users instead of responsibilities. Security grants are created for the users based on the subsidiaries assigned to the responsibilities that each user was assigned. A user may be given access to many different intercompany trading partners regardless of the responsibility used to log in.


Manual Intercompany Transactions Overview

The Manual Intercompany Transaction window facilitates intercompany transaction processing between different legal entities under one or more ledgers. During the R12 upgrade, GIS data is upgraded to AGIS, and you can then use R12 functionality to:

Create Intercompany Batches for transactions to multiple recipients (no restriction on COA, currency, calendar), with optional proration of amounts across recipients. Maintain intercompany periods to control timing of transactions (eg during period close) and close intercompany periods by transaction type. Optionally create intercompany invoices between subsidiaries automatically Use Oracle Approvals Manager for intercompany transaction approvals. Grant user access to multiple subsidiaries from a single responsibility.

Process Change

New workbench for entering manual intercompany transaction All GIS new and completed transactions are upgraded as AGIS transaction batches. Generally, for each GIS transaction a batch is created.

Configuration Change

Approvals Manager setup Optionally create intercompany calendar / periods to control timing of intercompany transaction entry. Setup intercompany invoicing options. When GIS transaction types are upgraded, the Allow Invoicing option is set to Not Required. In order to take advantage of the new invoicing feature in AGIS, you should manually select the Allow Invoicing check box for transaction types where invoicing is required.

Considerations See also configuration changes / considerations for Intercompany Balancing these apply to all intercompany setup (eg setting up legal entities and mapping

them to intercompany organizations, creating intercompany accounts and rules, intercompany function security and data access). Intercompany Invoicing Overview Advanced Global Intercompany System interacts with the subledgers to facilitate creation of a physical invoice for an intercompany transaction in both Receivables and Payables. Release 12 highlights for Intercompany Invoicing: Intercompany uses Oracle Receivables to produce invoices for the initiator. Once the Receivables transaction is completed, the invoice number is then automatically used to create a consistent mirror-image invoice in Oracle Payables. Process Change

Create intercompany invoices automatically where statutory or business practices require GIS transaction types are upgraded to the new intercompany system transaction types. When GIS transaction types are upgraded, the Allow Invoicing option is set to Not Required. In order to take advantage of the new invoicing feature in AGIS, you should manually select the Allow Invoicing check box for transaction types where invoicing is required.

Configuration Change

Setup and assign operating units to ledgers (as part of Accounting Setup Manager) in order to use intercompany invoicing within the subledgers. Create additional AR customers and AP suppliers to represent your companys subsidiary legal entities. Map the intercompany organizations that are trading partners to AP Suppliers and AR Customers in TCA


Intercompany invoices are only created for manual intercompany transactions (i.e. not for intercompany journal entries entered directly in Creation of additional customer / supplier records and mapping to intercompany organizations is not done automatically as part of the upgrade

Intercompany Reconciliation Overview Intercompany provides reconciliation tools to sort out any discrepancies in accounting balances between the intercompany organizations. Release 12 highlights for Intercompany Reconciliation;

View intercompany out-of-balance accounts and drill down to details of the subledger accounting and BI Publisher technology for reconciliation reporting: the layout is fully customizable and can be downloaded to desktop tools (eg Excel or Word) for further analysis.

Process Change

Need to run data extract program to populate XML data before using the intercompany reconciliation Optionally download report output to Excel for additional analysis.

Configuration Change Optional customize BI Publisher report layouts. Oracle Assets

In release 12, Oracle Assets has introduced several enhancements to improve the efficiency of key Assets processes like mass additions and period end close. Subledger Accounting(SLA) Architecture and Inquiries

o Oracle Assets is fully integrated with SLA, which is the common accounting platform for all E-Business Suite sub ledgers. o It enables you to comply with multiple legislative, industry or geography requirements concurrently in a single instance through configurable rules. Enhanced Mass Additions for Legacy Conversions:

o Populate depreciation attributes directly in the FA Mass Additions interface table or via? Web ADI (application desktop integrator), rather than accepting default values from the asset category. This means complete automation of legacy conversions.

o Asset life, depreciation method, prorate convention, bonus rule ceiling name, depreciation limit are some of the attributes that have been added to the interface table in Release 12. Automatic Preparation of Mass Additions

o Default rules and public APIs can be used to populate expense account, asset category and other required fields to complete the preparation of mass addition lines automatically. o Could significantly reduce the overhead associated with manual preparation of mass addition lines. Automatic Depreciation Rollback

o Depreciation is rolled back automatically when any transaction is performed on an asset if the period has not yet been closed. o No longer required to run depreciation rollback program manually.

o Executed only on select assets as required and not on the entire asset book; resulting in a faster period close. Flexible Reporting using XML Publisher Enhanced Functionality for Energy Industry

Process Change Prepare Mass Additions process provided in Release 12 automatically populates all the required information for mass additions lines. Mass

additions data may be optionally verified before posting the mass additions lines. New SLA Accounting report and online account inquiry provided. The Account Drill Down report has been replaced the Account Analysis report. The Create Journal Entries and Rollback Journal Entries programs are now obsolete. Create Journal Entries has been replaced by Create Accounting. The Create Deferred Depreciation Journal Entries program is now obsolete. Users now need to run Calculate Deferred Depreciation followed by Create Accounting. During upgrade, transactions in the current fiscal year in Assets books will have their accounting lines migrated to the Subledger Accounting model. Accounting for current period depreciation will be upgraded only if depreciation has

already run for the period, and the period remains open. After the upgrade, you can run the SLA post-upgrade process to update accounting for past transaction data as needed. Prior to Release12, accounting records were not created until after depreciation had run. For example, if you added an asset and went to the Transaction History form, you would not see any addition accounting lines if depreciation had not been run. Post upgrade, however, these records would appear in the Transaction History form for additions, backdated additions, backdated transfers and retirements. Configuration Change New configurable rules for automatic preparation of mass additions.

o You can use default rules provided by Oracle where the expense account is derived from the clearing account by replacing the natural account segment from the asset category. o In addition, default rules populate the asset category based on the clearing account from the asset category setup (if there is a one to one match). o If the default rules do not satisfy your requirements, you can create custom logic coded in a public API to pre-populate these values. Generic Subledger Accounting Architecture configuration has been discussed in a separate section of this document. In summary, the key setup steps are: o Compile the Application Accounting Definition in SLA. Please note that the pre-seeded account derivation definitions have been provided for Assets. You can use the seeded account derivation definitions or modify them as required. o Complete the Accounting Setup flow in Oracle General Ledger.

Considerations You may have to look carefully at the clearing account in your category setups if you are planning to use default rules for automatic preparation of mass addition lines. If you have been using the same clearing account across different categories, the default rules will not work effectively. In Release 12, Oracle continues to support Account Generator functionality for existing asset books. However, the common SLA platform provides many opportunities to implement complex accounting rules without customizations. For instance, some of our customers have requirements where the retirement account is different based upon the type of retirement (missing, sale, theft, etc). These

accounting rules can be configured in SLA without complex customizations on your part. Oracle Cash Management Oracle Cash Management is an enterprise-wide solution for managing liquidity and controlling cash. In Release 12, Oracle Cash Management starts leveraging several architectural cross-product features such as Multi-Org Access Control and Subledger Accounting. The key new features in Release 12 are: Centralized Internal Bank Account Model Bank Account Transfers Bank Account Balances and Interest

Centralized Internal Bank Account Model Overview In Release 12, internal bank accounts for use in Oracle Payables, Oracle Receivables, Oracle Payroll, Oracle Treasury and Oracle Cash Management are centrally defined and maintained in Oracle Cash Management. Process Change Internal bank account usage in Oracle Payables, Oracle Receivables, Oracle Payroll, Oracle Treasury and Oracle Cash Management does not change in Release 12. Internal bank account maintenance, however, is done differently as described below. Configuration Change There is new user interface in Oracle Cash Management for bank, bank branch and bank account maintenance. Windows related to internal bank account maintenance in Oracle Payables and Oracle Treasury have been made obsolete.

Privileges to maintain bank accounts are granted to a user role by legal entity in the Oracle User Management security wizard. Internal bank accounts are owned by legal entities. Any operating unit under the same legal entity can be granted access to the same bank account. Bank account reconciliation parameters are now defined at the bank account level.

Before you can enable bank account usage in Oracle Treasury, you will need to link a bank-counterparty in Treasury to the bank branch in Cash Management, using Treasurys Counterparty Profiles window. The system supports country specific validations for the bank account and address format. When creating new bank accounts, the format and content of the Bank Number, Branch Number, Account Number and Check Digit will vary according to the country specific rules. The countries that are supported are Austria, Belgium, Denmark, Finland, France, Netherlands, Norway, Portugal, Spain, Brazil, Colombia, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Poland, Sweden, Switzerland, United Kingdom, and United States. Considerations During the upgrade, existing internal bank accounts defined in Oracle Payables and Oracle Treasury are migrated one-to-one into the new bank account model in Oracle Cash Management. If you previously had to create two separate bank account records to represent the same real life bank account because it was used by two different operating units, after the upgrade you will have the option to disable the duplicate bank account and allow both operating units to use the single bank account. This will simplify bank account maintenance and bank reconciliation. Bank Account Transfers Overview In Release 12, users can create cash transfers between internal bank accounts, settle them through Oracle Payments and account for them using Oracle Subledger Accounting. Process Change New user interface is available for capturing and, separately authorizing bank account transfers. Bank account transfers can be created intra-company (between two bank accounts belonging to the same legal entity) or inter-company (between two bank accounts belonging to two different legal entities). Reusable bank account transfer templates can be created for accelerated data entry.

Configuration Change

Privileges to create bank account transfers are granted to a user role by legal entity in the Oracle User Management security wizard. Accounting configuration for bank account transfers is done in subledger accounting. Seeded journal line definitions are provided for bank account transfer clearing and un-clearing. Users can define additional journal line definitions for bank account transfer creation and cancelation. Settlement of bank account transfers is done via Oracle Payments.

If you plan to create inter-company bank account transfers, you will need to define inter-company accounts in Oracle Advanced Global Intercompany System in order to create proper journal entries. Considerations Bank account transfers can be created in the system automatically if you have zero-balance accounts (ZBAs) with your banks. Bank Account Balances and Interest Overview In Release 12, Oracle Cash Management provides robust functionality for bank account balance reporting, both online and via concurrent programs with Oracle BI Publisher. In addition, bank balance interest can be calculated for bank fee or credit verification. Process Change There is new bank balance maintenance user interface in Oracle Cash Management. Bank balance maintenance in Oracle Treasury is disabled. The data, however, is replicated between Cash Management and Treasury for bank accounts used in Treasury, so that the interest accrual and settlement can still be performed in Treasury. Configuration Change There is a new user interface to manage interest rate schedules. Before bank balance interest can be calculated, interest rate schedules have to be defined and assigned to bank accounts. Basis, Interest Rounding, Day Count Basis and Interest Includes parameters, previously defined at the bank account balance level in Oracle Treasury, are now a part of the interest rate schedules in Oracle Cash Management. Portfolio Code, Pricing Model and Limits, previously defined at the bank account balance level in Treasury, are now a part of the internal bank account definition in Cash Management.

Considerations Interest amount can be calculated for both standalone bank accounts and notional cash pools. For each bank account and balance date, you can keep track of multiple balance types: ledger, available, value dated, 1-day float, 2-day float, projected month-to-date average, and year-to-date average. It should be noted that the system does not calculate any of these balance types. They can be populated manually or from the bank statement. Projected closing bank account balance can be saved alongside actual bank account balances using the new button in the Cash Position window. Oracle General Ledger In Release 12, Oracle General Ledger is significantly enhanced to support multinational companies and shared services centers. You can perform simultaneous accounting for multiple reporting requirements. You can also gain processing efficiencies by setting up, accessing, and processing data across multiple ledgers and legal entities from a single responsibility. Release 12 highlights for Oracle General Ledger include; Centralized Accounting Setup Data Access Sets Ledger / Ledger Set Architecture Replacement for Disabled Accounts

Note: There is also a terminology change between Release 11i and Release 12: Sets of Books are upgraded and renamed to Ledgers the upgrade retains all 11i settings. Centralized Accounting Setup Overview: In Release 12, the Accounting Setup Manager centralizes the setup and maintenance of common accounting-related setup that is shared across Oracle Financials applications, for example:

Definition of legal entities and associated accounting setup to meet different accounting principles and reporting requirements of multiple countries using different currencies, charts of accounts and/or calendars.

Secondary ledgers and reporting ledgers to create alternate accounting representations automatically. Process Change Accounting Setup Manager is used to create and maintain accounting setups. An accounting setup defines the accounting context for one or more legal entities or other business entities. The upgrade creates a separate accounting setup for each primary ledger that is upgraded from a set of books. o Legal Entities: HR Organizations classified as GRE/LEs in Release 11i will be upgraded legal entities in Release 12. Legal entities can be assigned to a ledger and balancing segment values can optionally be mapped to legal entities to help identify transactions by legal entity. o Operating Units: All HR Organizations classified as operating units will be preserved in Release 12. If operating units are assigned to a set of books, then they will be associated to a primary ledger in an accounting setup. o Primary Ledger: Most sets of books in Release 11i will become primary ledgers in Release 12. o Secondary Ledgers: Multiple-posting set of books (Global Accounting Engine) will upgrade to secondary ledgers. o Reporting Currencies: Multiple Reporting Currency (MRC) reporting sets of books become reporting currencies in Release 12. o Intercompany Accounts: The Release 11i Global Intercompany System (GIS) will be replaced by Advanced Global Intercompany System (AGIS) and GIS features will be migrated to the corresponding features in AGIS. o Subledger Accounting Method: All upgraded ledgers in Release 12 will have a subledger accounting method assigned during the upgrade. Any reporting currencies assigned to the ledger inherit the subledger accounting method from the source ledger. The subledger accounting method enables Oracle General Ledger to integrate with Oracle subledgers using Subledger Accounting. All upgraded, nonpublic-sector ledgers will have a subledger accounting method assigned called Standard Accrual or Standard Cash. All upgraded public sector ledgers will have a subledger accounting method assigned called Encumbrance Accrual or

Encumbrance Cash. For US Federal customers, all upgraded ledgers will have the US Federal Accounting subledger accounting method assigned to them. Configuration Change Create legal entities and assign them to accounting setups either assigned to ledgers or mapped to balancing segment values. Create primary and secondary ledgers and mappings for alternate accounting representations from single transaction (replacement for the Global Accounting Engine Dual Posting solution in Release 11i). Considerations Sequencing is determined by the ledger. Journal entries may have multiple legal entities (each accounting line may be different), so there is no distinct legal entity of the journal header. In Release 11i, users could change settings for certain options on a primary set of books independently of its reporting set of books. The upgrade will preserve the Release 11i settings, but in Release 12 these options cannot be manually updated for reporting currencies because the reporting currency will inherit its settings from its source ledger. If you modify any of the ledger options for the source ledger after the upgrade, the settings on the reporting currency will automatically be changed to be synchronized with the source ledger. You can run the Accounting Setup Manager Pre-Update Diagnosis Report to view your Release 11i setup for Multiple Reporting Currencies, General Ledger, Global Accounting Engine, Assets, Payables, and Receivables. This report identifies potential problem areas where you may want to modify your setup in order to take advantage of new Release 12 functionality.

Data Access Sets Overview Data access sets allow users to access multiple ledgers and ledger sets within General Ledger from a single responsibility. This allows you to: Secure user access to data by ledger, balancing segment value or management segment value. Grant read-only user access, or read and write access.

Process Change

Process changes do not directly impact users, but rather control General Ledger security behind the scenes. Security allows you to secure users access to data, or portions of data.

Privileges allow you to grant users read only or read/write access to specific Balancing segment values within a ledger, or to specific ledgers. Data access sets work with crossvalidation rules and flexfield value security rules. If flexfield value security rules are defined that prevent certain responsibilities from accessing certain segment values, those rules are combined with data access set security.

Configuration Change The General Ledger Accounting Setup Program automatically creates a data access set for each ledger and reporting currency (journal level or subledger level) assigned to a completed accounting setup. The system-generated data access sets created for each ledger and reporting currency provide full read and write access to the ledger and all of its balancing segment values and management segment values. (Optional) Manually create data access sets to further control read and write access to ledgers, ledger sets, or specific balancing segment values or management segment values for a ledger or ledger set. For example, if you have a shared accounting setup where multiple legal entities share the same primary ledger, you can limit a user's access to a legal entity's data by creating a data access set that secures read and write access to specific balancing segment values or legal entities. To associate a data access set to a responsibility, you must assign a data access set to the GL: Data Access Set profile option at the Site, Application, or Responsibility level. Considerations All ledgers and ledger sets assigned to a data access set must share the same chart of accounts and accounting calendar/period type combination. Use data access sets instead of flexfield value security rules to secure read and write access to balancing segment values and management segment values. Flexfield value security rules are still applicable for the other segments of the accounting flexfield.

If you have read-only access to a ledger, or read and write access only to some of its balancing segment values and management segment values, you will not be able to open and close its accounting periods. FSG report output takes into account data access set security and only shows the data accessible for your responsibility. You must have at least read access to the data to view it on a report.

Ledger / Ledger Sets Architecture Overview Sets of books are upgraded to ledgers in Release 12. Ledger sets allow grouping of ledgers with the same chart of accounts and calendar / period type, to allow processing across multiple ledgers simultaneously. They do not have to share the same currency. This allows you to group the primary or secondary ledgers with their associated reporting currencies to reduce maintenance efforts and streamline processing. Ledger sets facilitate the following accounting operations across ledgers:

Open / close periods for multiple ledgers simultaneously Submit concurrent programs for all ledgers in a ledger set Cross ledger allocations, recurring journals and year-end closing journals Currency translation for multiple ledgers simultaneously Financial reporting (FSGs) across ledgers Account inquiry across ledgers

Process Change sets Management of multiple ledgers simultaneously by grouping them into ledger

Configuration Change Create ledger sets to group ledgers with the same chart of accounts and calendar / period type. Assign ledger sets to data access sets for user access and security. The system automatically creates a data access set each time you define a new ledger

set. The system generated data access set provides full read and write access to the ledgers in the ledger set. Before you can begin using the ledgers contained in your ledger set for transaction processing, you must assign the ledger set to the profile option GL: Data Access Set. Considerations The same ledger can belong to multiple ledger sets, and ledger sets can contain other ledger sets. Use a ledger set to combine the source ledger with its reporting currencies (journal and subledger levels) to open and close periods across all ledgers simultaneously. Both the source ledger and its reporting currency must have the same open periods to prevent problems during posting in the general ledger. Replacement for Disabled Accounts Overview Prevent errors & reduce manual intervention in the journal import process by defining a replacement account for disabled accounts. If specified, the alternate account is used by the Journal Import process and the Create Accounting program in Subledger Accounting to replace the original account combination if it is disabled or end-dated. Process Change

None Configuration Change Define alternate accounts when creating GL account combinations.

Oracle Legal Entity Configurator In Release 12, Oracle E-Business Suite is moving from an implicit definition of legal entities to an explicit one. You will be able to define legal entities to meet different statutory principles and reporting requirements of multiple countries and jurisdictions. The Legal Entity architecture allows you to represent the legal organization structure separately from the operational business structure. A highlight of Release 12 is the Legal Entity Configurator which guides the user through the LE creation process. Overview

The Legal Entity Configurator allows you to define legal entities to meet statutory principles and reporting requirements of multiple countries or legal jurisdictions. This legal entity definition is used in the following business processes: o o Payment runs by legal entity Intercompany (legal entity subsidiaries that trade with each other)

o Tax calculations (legal establishments that are registered with a tax authority) o o o Bank account ownership Ownership of subledger transactions (eg in Payables or Receivables) Reporting at the legal entity level

Process Change Subledger transactions are stamped (at header level) with the owning legal entity in addition to an operating unit. The legal entity is determined as follows:

o Each transaction exists within an operating unit and that OU has a ledger which will account the transactions. If that ledger has more than one legal entity associated with it, then a hierarchy of LE derivation is used to default an LE. For example in AR the legal entity derivation hierarchy for transactions is

1. 2.

Transaction Type Batch Source

Assigning a LE to a transaction type or batch source is optional and only the LEs mapped to the ledger associated with the OU are available to assign. o Legal entity can also be defaulted from the default legal context of an operating unit if no other default exists. For values to show up in the LOV associated to a default legal context, an LE must be associated to the ledger that is assigned to the OU. o If no default legal entity value is found from any other source, the user must explicitly provide it during transaction entry. Additional information:

o How do I define my Legal Entities? o Can I assign an operating unit to 2 legal entities? o Release 12: Legal Entity Uptake Configuration Change Migration of existing data into legal entities (eg GRE/LEs, AP Reporting Entities, VAT Reporters, Brazilian Companies and Global Descriptive Flexfields) Create legal entities and assign them to accounting setups. An organization of type GRE/LE is used as a source for creating an LE during the R12 upgrade. But after migration there is no link between an HR organization of type 'GRE/LE' and an LE created using the Legal Entity Configurator UIs. Although it is a source for upgraded legal entities, HR Organization cannot be used for creating a new LE in Release 12. Configure existing organizations to be legal entities or establishments as appropriate. Use Legal Entity Associations to maintain the association between business constructs (operating units, inventory organizations, inventory locations etc) and legal constructs (legal entities and establishments). Assign legal entities to intercompany organizations (if using AGIS).


There is no Legal Entity uptake in Oracle General Ledger or Oracle Assets instead the ledger or balancing segment value is used. Sequencing on transactions is still by ledger, not by legal entity.

If your legal entities share the same ledger attributes (such as chart of accounts, calendar, accounting method), it is possible for them to use the same ledger depending upon your business needs. You can also assign balancing segment values to legal entities that share the same ledger - recommended for easier identification of transactions and for reporting purposes. Note that balancing segments are required for intercompany accounting between legal entities that share the same ledger.

If legal entities differ in any of the 4Cs or require different ledger processing options (like average daily balances, journal approval, or sequencing), separate primary ledgers are required. It may be possible to group multiple ledgers into ledger sets for easier processing if need to setup multiple ledgers for legal reasons. In Release 12 there is no direct relationship between an operating unit and a legal entity. One way of determining the operating units associated with a legal entity is via the ledger associated with both the legal entity and the operating unit. Note that there may not be a unique relationship between a legal entity and an operating unit. See the Oracle Legal Entity Configurator Release 12 Roadmap Document which describes the published information available for Oracle Legal Entity Configurator, Release 12. Use this document to ensure that you leverage all existing resources to learn about, install, implement, and use this product in Release 12. Oracle Payables In R12, Oracle Payables has made some significant changes in the following areas.

Supplier Representation in TCA (Trading Community Architecture) Invoice Lines Payment Process AP-AR Netting

Supplier Representation in TCA Overview Trading Community Architecture is a data model that allows the deploying company to maintain information about its parties (customers, suppliers, banks etc) and their relationships with the deploying company in a centralized place, thereby providing a single source of truth. It also allows easier cross-product integration. Process Change

New user interface presents a clear distinction between the suppliers company details and terms and controls for the trading relationship. Managing the attributes specific to particular functional areas such as Oracle Payables, Purchasing and Receiving can be controlled with the use of Function Security. Adding new locations or relationships with additional operating units is streamlined. Each supplier is associated with a party and each supplier site is associated with a party site. Addresses can be entered and formatted based on country specification.

Configuration Change: When new suppliers are created the system creates a TCA party behind the scenes. The information that will be stored in TCA includes supplier name and legal information, address and contact information. The parties are created with a party usage of supplier Procurement and Payables specific attributes like terms and conditions, accounts etc. are maintained in the supplier sites tables. Some payment and tax related information is no longer maintained in the supplier sites tables - it was moved to the appropriate product tables (Oracle Payments, Oracle E-business tax). Considerations Existing suppliers, sites or locations and their contact information are automatically created in TCA. Existing tables that hold the supplier information are moved to a new set of tables (AP_SUPPLIERS). New views, based on the old supplier table names have been added for backward compatibility. When a supplier or supplier site is merged, the associated party or party site does not change.

During the supplier merge process, when a supplier site is copied from one supplier to a different supplier, a new supplier site must be created. Hence, a new party site will also be created.

When merging suppliers, supplier merge should be performed before initiating the party merge. Supplier or supplier site merge does not affect contacts. The contacts are always transferred to the merged supplier site specified in the supplier merge form. Employees that were defined as suppliers in prior releases will not be migrated, as their information would already exist in TCA. Supplier open interface processes are enhanced to support the creation of TCA entities while importing suppliers. The creation of supplier bank accounts is also supported from the supplier open interface. Invoice Lines Overview The addition of invoice lines allows Oracle Payables to better model the paper or electronic business document by representing the goods or services, as well as tax, freight and other charges. The new invoice structure also more accurately models Oracle Procurements PO shipment, allowing for improved allocation of charges, as well as enhancing the matching function. Process Change The new Invoice Workbench now contains a multi-record block to represent the invoice lines. In a separate window, users can enter one or more distributions for every invoice line. Redesigned matching windows for PO/Receipt matching can be invoked from the Invoice Workbench. Invoice lines that were generated by matching will generate distributions at the time of match. New windows support price/quantity/invoice corrections.

Freight/miscellaneous lines created automatically via request to the matching process from the matching windows do not automatically generate distributions at line creation time. Tax, freight, and miscellaneous type invoice lines can be prorated to all item lines on an invoice. Users can enter freight at the invoice header and then prorate it across all item lines on the invoice.

Configuration Change Users can also do a quick match by entering just the PO number on the invoice header. In this case, the invoice lines are automatically created. With the new invoice lines model, the R12 multi-period accounting is realized at the invoice line level. Once Subledger Accounting is configured for multi-period accounting, users can specify the deferred accounting period as a parameter for each individual invoice line. To invoke this feature, users check the Deferred Option box and specify the deferred period type, start date and number of periods. Later on, when the accounting records are created for this invoice line and distribution, a series of accounting records will be generated reflecting the fact that the invoice expense is first recorded in an accrual account then moved into expense account periodically. Considerations No new setup steps are required for using Invoice Lines.

The standard upgrade process creates one invoice line for every distribution existing in the 11i Payables distribution table. Exchange rate variance (ERV) and invoice price variance (IPV) amounts become separate distributions in the upgrade process and so, are no longer part of the item distributions. Charge (tax/freight/miscellaneous) distributions are created at the maximum level of detail to represent detailed allocation information. In prior releases, the allocations were managed by a charge allocation table which is now obsolete, Payment Process Enhancements Overview The payment process has been significantly enhanced in Release 12. The following are some of the new enhancements that were made in this release: More robust and flexible payment processing engine

Improved visibility into payment processing via the centralized Payments dashboard Improved pay run automation Improved pay run management tools:

o o o

Enhanced cash management report Comprehensive selected invoice information Improved online inquiry of selected invoices Process payments for multiple operating units from single responsibility

Process Change A new Selected Invoices page displays summary and detail information used to view and analyze invoices selected in a pay run. Powerful search tools improve online inquiry to invoices that you may want to review, modify, or remove from a pay run. Users can now view invoices that were not selected due to various reasons (not validated/approved). A Payment Dashboard empowers your payment manager to monitor all current pay run processing and gives them visibility to payment processes that require attention. If payment batch sets were used as a workaround for doing multi-currency pay runs in 11i then, consider combining those pay runs into a single pay run. In addition a single payment run can process multiple banks that includes both electronic and printed payments The Payment Process Request template enables you to predefine invoice selection criteria, thereby simplifying payment processing. Validation errors during the payment build process are automatically handled based on the options that are specified on the payment process request. For example, the process may be stopped for review, payments with errors can be rejected, or all payments may be rejected in the request if errors exist. Usage rules and validations can be set up for a payment method.

Pay runs can be stopped at two points. Users can choose to pause after the invoices are selected. At this point, users can review selected payments, add or remove scheduled payments or change payment and discount amounts. The second point is after the scheduled payments are built into payments. Here, the user can see the final amounts of each payment and can choose to drop any payments. Scheduled Payment Selection report replaces many portions of the Preliminary Payment register report. It can be used for reviewing the invoices selected in a pay run, review invoice selection criteria, determine immediate cash requirements for a pay run etc.

Configuration Change All payment related setup has now been moved to the new Oracle Payments module. Refer to the Oracle Payments User guide. In prior releases, Oracle Payables seeded four payment method types (Check, Electronic, Wire, and Clearing). In Release 12, customers can setup their own payment methods Considerations Scheduled Payment Selection report cannot be run for historical data. Custom document categories for payments will not be upgraded.

Disbursement type has been made obsolete and hence, it has been removed from all reports. IMPORTANT: All custom payment formats must be migrated to XML in order to work in R12. Check Payments and the Electronic Payments document categories have been retained in Release 12. However, Payables no longer supports the Wire Payments and Clearing Payments document categories.

AP-AR Netting Overview The AP-AR Netting feature allows you to offset balances in both Oracle Payables and Oracle Receivables to reduce the outstanding debt owed either from an internal company or from a customer. It also supports foreign currency netting. Accounting for netting is handled in the same way as if it had been closed in the subledgers. This feature allows you to optionally give the trading partner the opportunity to review and approve transactions before they are posted. Process Change A netting batch needs to be created using the Receivables responsibility. It can include various parameters like operating unit, netting agreement, settlement date etc.

Once the batch has been set up, submit the netting batch.

Query the netting batch and view the proposed AP/AR netting amounts online. Users can view the Receivables and Payables transactions that were selected for possible netting. In the header portion of the screen users will be able to see the total dollar amounts of the AP and AR transactions selected as well as the proposed netting amount. Users could also run the proposed AP/AR netting report. Optionally, users can review the netting batch. In this process users can review, remove or add transactions before submitting it. Submit the netting batch and view the final netting report.

Configuration Change o o Both customers and suppliers must be setup as a trading partner in TCA. Here are some of the additional steps that are required: Create a netting agreement. Create a netting bank account.

o Create a netting control account in General Ledger as well as exchange rate types if using multi-currency netting. o Establish a paying relationship for the customers in Accounts Receivable.

o Associate the bank account used in the netting agreement with the AP/AR netting receipt class.

Considerations An internal dummy bank account will be seeded which will process receipts generated in Oracle Receivables. When creating a netting agreement, if the (supplier?) site information is left blank, then the system includes all the sites for the trading partner. If the option to include trading partner approval is selected, only one approver can be selected. The approver name list of values is derived from the customer contact information. No netting batch information will be upgraded.

Netting agreements will be created for every existing customer and supplier relationship that is migrated. Agreement name will be created using customer id and customer name. Users must review the migrated netting agreement setup to add or correct upgraded information. Netting upgrade uses dummy values for certain mandatory information not found in 11i setup. Users must change this to valid values. Transaction data residing in interface tables in 11i is not migrated to Release 12. All in-progress netting batches should be closed or completed before upgrade.

Oracle Payments Oracle Payments is a new product introduced in Release 12 that provides a configurable, robust and centralized engine for disbursing and receiving payments. Oracle Payments has changed payment processing within Oracle products: From proprietary Oracle reporting technology to standardized formatting using XML. From bank accounts stored in multiple products to centralized bank account setup. From credit card information stored in multiple product entities to a centralized credit card entity within Payments. From single operating unit restrictions to cross-operating unit transactions..

From receipt remittance through Receivables to centralized receipt remittance. From payments transmitted by external systems to native transmission capabilities. The key components of Oracle Payments are: Funds Disbursement Funds Capture

Funds Disbursement Overview:

The funds disbursement features delivered in Oracle Payments simplifies user procedures for managing complex payment processes that span multiple payment methods, formats, currencies, organizations and bank accounts. The major features within funds disbursement are: Funds Disbursement Dashboard that enables payment administrators to manage every aspect of the process across multiple organizations from a central location in the application. End-to-end electronic payment processing that includes validation, aggregation, formatting, and secure transmission of payments to financial institutions and payment systems. Remittance advice reporting that notifies a payee of the remittance detail when a payment is made. Country-specific payment formats and reporting that meet global payment requirements.

Process Change: In Release 12, Oracle Payments segregates the process into two major functions: Payment Build process and the Payment process. o Payment Build process first groups documents according to various rules, such as the payment method and currency. o Payment process aggregates payments from multiple document selections and submissions into payment instruction files, formats the files, and handles additional processing, such as printing and transmission. Configuration Change: All payment related setup has been centralized within Oracle Payments.

Oracle Payments offers flexible setup to configure funds disbursement processing. Some of the key areas of impact are: o Payment Methods: each document to be paid requires a payment method to indicate how it should be handled in the funds disbursement process. The upgrade seeds payment methods that existed in Oracle Payables and globalizations. Payment Methods are now user definable.

o Processing Rules: the payment method on a document links it to processing rules configured in Oracle Payments. These setup rules are held in a key entity called the Payment Process Profile. o Payment System: a payment system holds information about the third party involved in processing payments. The upgrade uses various data from Oracle Payables to create the new Payment Process Profiles. See Oracle Payments Implementation Guide for more detailed information. All masking of credit cards, debit cards and bank accounts is centrally controlled. Future Dated Payments are renamed to Bills Payable in release 12. Setup has moved from the payment document on an internal bank account to the payment method in Oracle Payments. Considerations: Both the Automatic Payment Programs and Payment Formats (AP entities) are obsolete in release 12. Also, setup entities related to payment formats within Oracle Payables are obsolete as they are effectively replaced by the new Oracle Payments setup.

Oracle Payments secure electronic payment file and payment message transmission and transmission result processing replaces previously existing electronic transmission features in Oracle iPayment, Oracle Payables, and Oracle Globalizations.

Funds Capture Overview Funds capture supports the processes to electronically receive funds owed deploying companies by debtors, such as customers. Oracle Payments works with AR to authorize and capture funds against credit cards, process refunds to credit cards, perform electronic funds transfers from bank accounts, and to format bills receivable. The major features within funds capture are: Funds Capture Dashboard provides payment administrators an overview of the payment process status.

Supports multiple payment processing systems operating simultaneously for funds capture transactions. Supports authorization and settlement of funds against credit cards and PINless debit cards, refunds to credit cards, electronic funds transfers from bank accounts, and formatting of bills receivable. Supports out-of-the-box integration with leading third party payment systems such as Citibank, Paymentech, First Data Merchant Services, and Concord EFS. Other payment systems, such as VeriSign, offer their own out-of-the-box integrations with Oracle Payments. Process Change Oracle Payments has consolidated notification letters from Oracle Globalizations into an Oracle XML Publisher format. Oracle Receivables retains the functionality of lockbox processing and electronic upload of remittance messages. Configuration Change Centralized, configurable funds capture processing can be setup by Payee, Routing Rules, or Funds Capture Processing Rules. Please refer to Oracle Payments Implementation Guide for more details. Credit card security setup can be easily completed using the Oracle Payments Payment Administrator responsibility. The required setup entities for bank account transfer processing are upgraded for you, but it is important for you to understand the new setup and process so you can successfully test the migrated information Considerations EFT online validation is only offered for United States ACH and not for all payment systems. EFT online validation checks whether a bank account exists and that the account is not flagged fraudulent. EFT online validation does not reserve funds or check if the account has sufficient funds. Oracle Payments does not support risk management for PINless debit card or bank account transfer transactions. Oracle Payments does not automatically reauthorize settlements that are rejected due to expired authorizations.

See Oracle Payments Implementation Guide and Oracle Payments User Guide for more information. Also see Metalink Note733537.1 for more details in the Functional Upgrade Impacts Document for Oracle Payments (FINANCIALS). Oracle Receivables Oracle Receivables streamlines the invoice, receipt and customer deduction processes while simultaneously improving cash flow, increasing efficiency and optimizing customer relationships. In Release 12, significant changes were made in the following areas: Revenue Management Line Level Cash Application Redesigned Customer User Interface Bill Presentment Architecture

Revenue Management Enhancements Overview Enhancements in the Revenue Management area include the ability to distribute revenue in a more granular fashion which includes full and partial periods. Additionally, organizations may create their own revenue deferral reasons to ensure revenue is recognized in accordance with applicable revenue recognition policies.

Process Change New configurable accounting rules to determine the treatment of revenue allocations for partial periods. Enhanced event-based revenue management allows users to define revenue deferral reasons and corresponding revenue recognition events specific to their business practices. o Ability to create user defined revenue contingency definitions seeded examples include: cancellation, customer creditworthiness, etc. New Revenue Manager responsibility that provides the revenue analyst a central location to set up and maintain revenue policies and rule assignments.

Seeded revenue assignment rules have been replaced by a new window that enables the user to create process specific revenue assignment rules. New Contingency tab offers the ability to review and manually manage contingencies from the Revenue Adjustment Manager (RAM) wizard. New Cost of Goods Sold (COGS) and Revenue Matching feature synchronizes the recognition of revenue with recognition of associated COGS. Configuration Change Creation of new accounting rules allows for revenue recognition that meets accounting standards and contractual start and end dates. o Example: Able to create an accounting rule for revenue that will distribute revenue across identified accounting periods that can include a partial period (meaning the period does not start or end on the first or last day of the accounting period). During a partial period, the revenue amount will be prorated based upon the number of days in the period. The table below provides an example of how the new accounting rules would prorate revenue accordingly.

GL Date


Days in Period

Daily Revenue Rate, All Periods

Daily Revenue Rate, Partial Periods

Fixed Schedule

Variable Schedule

January 14



180 280 310

180 295 295

225 225 225

180 240 240

February 14 February 28 March 14 March 31

April 13







Ability to create user defined Revenue Assignment Rules: Example: New Rule for Acceptance: Matching Criteria (must choose from a seeded choice list): Bill to Customer Condition: equals ABC Customer Revenue Contingency: Explicit Acceptance

Result: If a transaction line with Bill to Customer of ABC Customer meets the criteria of this rule -- Receivables will assign explicit acceptance as the contingency to the transaction line, and the revenue will be deferred until customer acceptance is received. New Application Programming Interface (API) automates revenue & COGS matching. Considerations Oracle costing calls the new Receivables API (AR_match_rev_cogs_grp.populate_cst_tables) that triggers earning and un-earning of COGS when revenue is recognized or unearned. COGS and Revenue Matching report has been retired.

No longer necessary to create manual journal entries for revenue & COGS matching. Uptake of SLA does not impact timing and amounts for revenue recognition. It only provides the ability to override the accounts defaulted via auto-accounting. Provides the capability to default contingencies from feeder systems.

o In R12, Order Management (OM) provides this capability for invoicing & customer acceptance contingencies. User will assign a contingency at order entry time based on the contingency defaulting API from Receivables. o Once this order is imported into Receivables from Order Management, the Contingency Defaulting API runs again and can default additional contingencies but will not over-ride the invoicing and/or customer acceptance contingency created during initial order entry. o SLA can only be used to override the accounts created via auto-accounting.

The Revenue Policy System Option available in 11i will be obsolete in R12.

o The system will automatically apply the credit worthiness contingency, refund contingency and extended term contingency for all invoices (that either violate the policy or match the credit worthiness criteria). o The revenue policy data (which is populated for certain customers) will automatically show up in the new revenue policy window. The system will check to see if this revenue policy is populated during the initial set up. Upgrade script will convert the contingency ID from prior releases to the new contingency removal event code. o Only impacts those systems interfacing to Receivables through AutoInvoice or Invoice API. o No User Interface impacts.

Line Level Cash Application Overview With the introduction of line level cash application, receipts can be applied against specific transaction items such as individual lines, group of lines or tax or freight buckets. Process Change o o o New cash application tree to choose the appropriate application level. Receipts can be applied against: one or more transaction lines all transaction lines a specific group of transaction lines

o a specific transaction line type such as tax, freight, late charges or any combination thereof Ability to un-apply and re-apply receipts. Un-apply and re-apply can be done against an entire transaction or to a specific transaction line. Configuration Change None

Considerations o Line level applications apply to manual cash application only. However, automated line level application is available via lockbox.

Receipts cannot be applied at the line level against invoices migrated from Release 11i, as line level balances were not stored prior to R12. Available only for invoices, debit memos and chargebacks with line details. Cannot apply against invoices with installments. Does not use application rule sets.

If necessary, modify the AR profile option Always Default Transaction Balance for Applications profile option. Balances are now stored at the line level regardless of application.

o Ability to set flag on Batch Source window to not store balances at line level in 12.1. Customer Standard User Interface (UI) Redesign Overview The new HTML based user interface provides a streamlined and intuitive customer data management flow. Data quality management tools allow users to maintain the integrity of customer data. Process Change Provides functionality to create a new customer, customer account, customer account site, and a business purpose for the customer account site. Tight integration with TCA allows users to take advantage of the DQM (Data Quality Management) feature. DQM allows the user to perform advanced searches for parties and customer accounts with user defined criteria. In addition to the advanced search feature, it can prevent duplicate entries by determining if the customer that is being created or updated is a potential duplicate.

Ability to classify customers based on industry, location, size, credit worthiness, business volume and payment cycles. Configuration Change

The new Customer Standard UI replaces the five functions that used to exist in prior releases (Customers Standard, Customers Quick, Customers Summary, Customers Standard View, and Customers Quick View). o The pages are built using TCA CPUI (Common Party User Interface) components. By using TCA components, the cost of maintenance is lowered.

Considerations The Customer Standard menu item will launch the new HTML customer form. No data is affected. Display of data has been enhanced to represent the TCA model.

Bill Presentment Architecture Overview Bill Presentment Architecture (BPA) allows you to retrieve billing data from multiple sources, including those external to Oracle Receivables. Enhancements were made to the following features: o o o Balance Forward Bill Presentment More appealing and easier to modify bill layouts Ability to view printed bill exactly as the customer sees it Rules engine provides the ability to select from unlimited formats Enhanced Template Assignment

o New attributes provide more flexibility in how templates are assigned to customers o Attachment Printing Ability to print PDF attachments for specified document categories

Process Change Balance Forward Bill Presentment:

o o o o o

Key set up steps include: Register views Select template items Select assignment attributes Create hyperlinks Utilize balance forward data source for template assignment. Two seeded assignment rules: Default rule for balance forward detail template Default rule for balance forward summary template Must run the Generate Balance Forward Bills program Enhanced Template Assignment Templates can now automatically be assigned by: Any attribute in the invoice header Seeded attributes like Batch Source, Transaction Type or Context Reference

Supplementary data sources, like header and footer flexfields (e.g., Projects interface attributes). New profile option must be set to take advantage of printing attachments for printed bills o o AR:BPA Print Attachment Document Category Applies to both internal & external templates

Considerations Balance Forward Billing replaces Consolidated Billing. See Oracle Receivables Reference Guide, Oracle Receivables Implementation Guide and Oracle Receivables User Guide for more information.

Oracle Subledger Accounting

Oracle Subledger Accounting (SLA) provides a common accounting engine that replaces the existing accounting processes in the subledger applications. The SLA upgrade involves migrating existing accounting data between 11i and Release 12 to ensure a continuous business operation. Oracle Subledger Accounting has changed accounting within Oracle applications: From accounting setups within each Oracle module to a unified accounting definition in Subledger Accounting, with a common posting process to Oracle General Ledger. From separate Global Accounting Engine functionality to a common standard for all Oracle subledgers (Receivables, Payables, Assets, Project Accounting) within SLA. The key upgrade areas impacted by Oracle Subledger Accounting are: Accounting Rules Transaction account builder Standard reports

Accounting Rules Overview: Subledger accounting rules define how journal entries can be created from subledger transactions for both the primary and secondary ledgers. This centralized accounting setup provides greater flexibility as well as supports more simplified and standardized accounting rule creation and maintenance. The intuitive user interface does not require users to know any programming language or to have developer skills. Process Change: In R11i and prior releases, accounting for subledger applications existed within the individual applications. With Release 12, accounting for all subledger applications is unified under SLA, with a common posting process to Oracle General Ledger. Seeded application accounting definitions are provided for all Oracle subledgers. If specific requirements are not met by startup accounting definitions, users can copy and modify the seeded definitions and their assignments.

Configuration Change: In Release 12, each subledger application will maintain its existing accounting rules; and Accounting Methods Builder (AMB), delivered within Subledger Accounting, will work in conjunction with those rules. Implementation teams now have the option to override, modify or use the accounting defined within the subledger applications as the accounting to be transferred to GL. Considerations Standardize your accounting policies by defining a common chart of accounts and accounting method across the enterprise before creating new accounting rules or replicating your existing rules within the SLA model. Accounting Class Codes: In R12, the Accounting Class code is similar to the accounting journal line types in 11i. In 11i, the accounting journal line types are fixed and can be only modified by development. In R12, the Accounting Class code is a lookup type owned by Subledger Accounting. Deploying companies can seed their own Accounting Class codes and assign them to the different journal lines. Application Accounting Definitions and Journal Entry Setup: The seed data includes all the Accounting Derivation rules, Journal Descriptions, and Journal Line Definitions for Actual Accounting, Encumbrance Accounting, Federal Accounting, and Oracle Project Encumbrance Accounting. Test effective-dated changes to accounting rules and verify the impact before the change is implemented. Review existing manual or adjustment journal entries to see if accounting rules can be configured to generate journals that eliminate the need for manual or adjustment journals. As a best practice, determine whether to enter manual subledger adjusting journals exclusively in SLA or GL for easier reconciliation. Accounts that appear on the distributions (either manually entered or generated by account generator mechanisms) of subledger transactions such as Payables or Receivables invoices are not necessarily the final accounts that appear in the SLA and GL journal entries. In Release 12, the accounts on the transaction distributions become the default accounts used by SLA accounting rules. Users may configure SLA accounting rules to further modify the default account by overriding the values for any of the segments in the account combination. If users define SLA

rules to change the default account, then the SLA and GL journal entries will not match the account stored on the subledger transaction distribution.

Account generator mechanisms that existed in 11i still exist and provide the same functionality in R12. Transaction Account Builder (TAB) Overview Transaction Account Builder (TAB) provides a flexible mechanism to derive default accounts for subledger transactions that is fully integrated with Subledger Accounting (SLA). TAB is intended only for applications that allow users to modify the default accounts for a transaction before it is committed. Process Change Advanced Global Intercompany System (AGIS) has adopted TAB in Release 12

o Additional setup in AGIS is required to use TAB to define default accounting for transactions. o Distributed accounts must be defined for each ledger and are generated as defined in Subledger Accounting Transaction Account Builder (SLA TAB). Configuration Change Sources and account derivation rules are shared with Accounting Methods Builder (AMB), while transaction account types and transaction account definitions are introduced by Transaction Account Builder. Dynamic insertion can be enabled for the chart of accounts so that if the combination does not exist, a new code combination can be created. Considerations If the application does not allow modification of the default accounts for a transaction before it is accounted, the implementation team must use AMB. Implementation teams may use the seeded transaction account definitions. They may also create their own definitions either by copying and modifying seeded definitions, or by creating new ones from scratch. If implementation teams decide to create new transaction account definitions, they may need to create new account derivation rules. These rules can be derived

by accounting flexfield or by segment and may have a chart of accounts associated with them.

Standard Reports Overview Subledger Accounting owns tables that store all the subledger journal entries and their associated accounting information. Regardless of which product is used to create accounting, the results are stored in subledger accounting tables. This information may then be used by analytical applications for inquiries and/or reporting. A common data model is designed for efficient inquiry, reporting, and extraction. Oracle BI Publisher reports and templates offer immediate cost savings, greater efficiency, and improved accuracy and reliability for financial reporting. Process Change Oracle BI Publisher is a key reporting tool in Release 12 that enables business users to create financials reports with familiar desktop products like Microsoft Word and Excel. BI Publisher can save reports in many different formats including XML, PDF, RTF, and Excel. It can also publish reports via printer, e-mail, or posting to websites or portals. With Release 12, weve made it easier to locate and use reports by classifying them into three main categories: Journal Reporting Trading Partner Reporting Account Analysis Reporting

Considerations Analyze custom reports to map out a plan/approach to migrate existing reports to Oracle BI Publisher.

Custom reports may need to be modified to extract data from SLA tables rather than subledger distribution tables. Open Account Balance Listing Definitions: In R12, to run the Trial Balance Report for a particular liability account, you must create the Open Account Balance Listing Definition. Implementers need to create their own definitions for any new liability accounts they have created. The upgrade process will create Open Account Balance Listing Definitions for each existing liability account per ledger.