Account Generators in the Order to Cash Cycle

Thomas J. Simkiss, Jr., J.D., CPA BizTech King of Prussia, PA

Agenda
Introduction • Objectives • Order to Cash Process • Journal Entries from Order to Cash • Account Generator • Modifying an Account Generator • Account Generation in R12 • Q&A

Introduction
• Thomas Simkiss, Jr., J.D., CPA – 10 years Oracle Experience as an end user and implementation consultant – Financials, Supply Chain, Discoverer, DBI – Managing Partner with BizTech – CPA in NJ • BizTech
– – – – – – Certified Advantage Partner Based in the Mid-Atlantic Clients in CT, NJ, NY, DE, MD, and VA Applications Implementations Custom Development Oracle Hosting

Objectives
• Review the Order to Cash Process and related sub-processes • Introduce the Account Generator • Understand the journals created during Order to Cash • Demonstrate how a basic account generator modification

Order to Cash Process
• Touches many business areas
– Customer management, Order entry, Order fulfillment and distribution, finance and accounting

• Two sub-processes
– Order to Fulfillment – Customer Invoice to Cash

Order to Fulfillment
Order Entry & Scheduling
OF1069 OF1069 PF2036 PF2036 PF2051 PF2051 OF1071 OF1071

Manage Manage Customer Customer Orders Orders
• Sales orders submitted by customers or sales reps are entered into the system.

Check Check ATP ATP
• Calculate Available to Promise (ATP) for the customer order.

Check Check CTP and CTP and CTD CTD
• Calculate Capable to Promise (CTP) and Capable to Deliver (CTD) for the customer order.

Schedule Schedule Sales Order Sales Order Ship Date Ship Date
• The planner schedules sales order lines ship dates.

Order Entry & Scheduling
OF1073 OF1073 OF1076 OF1076 OF1054 OF1054

Send Sales Send Sales Order Order Acknowledgement Acknowledgement
• CSR sends sales order acknowledgement to the Customer

Manage Manage Sales Order Sales Order Holds Holds
• Research and resolve shipment holds associated with open sales orders.

Release Release Credit Holds Credit Holds on Sales Orders on Sales Orders
• Review and release specific credit holds on individual sales orders.

Enterprise Roles

Planner

A
Copyright © 2006, Oracle Corporation. All rights reserved.

Credit Manager Shipping Clerk

Order to Fulfillment (Con’t)
Customer Invoice to Receipt

A

Shipping
MM1090 MM1090 MM1923 MM1923 MM1924 MM1924 MM1149 MM1149

Pick Pick Material Material
• Shipping Clerk picks and transfers orders to Staging

Prepare Prepare Material for Material for Shipment Shipment
• Shipping Clerk packages, consolidates material to be sent to the customer.

Load Load Material Material
• Shipping Clerk loads the material to the dock for shipment.

Ship Ship Material Material
• Shipping Clerk packs, weighs, counts, ships and records shipments

Copyright © 2006, Oracle Corporation. All rights reserved.

Customer Invoice to Cash
Customer Invoice
OF1027 OF1027

Generate Generate Customer Customer Invoices Invoices • Bill for materials, services, projects, etc
OF5882 OF5882 FM0960 FM0960 OF1049 OF1049 OF1035 OF1035

Order to Fulfillment

Present Present Customer Customer Invoices Invoices
• Present invoices to customer or third party. • Send electronically or by mail.

Manage Manage Prepayments Prepayments

Maintain Maintain Customer Customer Invoices Invoices
• Process invoice corrections, adjustments and updates.

Maintain Maintain Credit Credit Memos Memos
• Enter and process customer credit memos.

OF1028 OF1028

Enter Manual Enter Manual Customer Customer Invoices Invoices
• The AR clerk creates a manual invoice online.

• Enter Prepayments, Receive Payment, • Enter Invoice, Match Invoice to Prepayment

Enterprise Roles Accounts Receivable Clerk Accounts Receivable Manager

B
Copyright © 2006, Oracle Corporation. All rights reserved.

Customer Invoice to Cash (Con’t)
B
Accounts Receivables
OF1032 OF1032 OF1050 OF1050

Process Process Customer Customer Debit Memos Debit Memos
• Enter and process customer debit memos.

Apply Customer Apply Customer Receipts – Receipts – Cash Applications Cash Applications
OF1034 OF1034

• Payment is received. Receipt is created and applied to invoice(s).
OF1037 OF1037

Apply Customer Apply Customer Receipts – Receipts – Adjustments Adjustments • Adjust payment including Receipt Application reversal and corrections

Remit Remit Customer Customer Receipts – Receipts – Bank Deposits Bank Deposits
• Deposit customer receipts.

OF1031 OF1031

Apply Customer Apply Customer Receipts – Receipts – Credit Card Credit Card • Payment is received. Receipt is created and applied to invoice(s).

Enterprise Roles Accounts Receivable Clerk Accounts Receivable Manager

Copyright © 2006, Oracle Corporation. All rights reserved.

Journal Entries from Order to Cash

• External Order
– Journal Entries Made AFTER Ship Confirm
• For Shippable Orders
– There is no COGS entry for non-shippable orders

• Internal Orders
– Many journal accounts determined by Shipping Networks and delivery/ receipt type (immediate or in transit)

Journal Entries – External Order
Inventory
Cost of Goods Sold
Current Cost

Accounts Receivable
AR/Unbilled
Sales Order Price

Inventory
Current Cost

Revenue
Sales Order Price

Inventory JE made after ship confirm

AR JE made after Autoinvoice

Journal Entries – Internal Order
Inventory Accounts Payable
I/C Accrual*
Current Cost

Accounts Receivable
Intercompany AR
Transfer Price

Cost of Goods Sold
Current Cost

Inventory
Current Cost

Intercompany AP
Current Cost

Intercompany Revenue
Transfer Price

* Credit to I/C Accrual and Debit to Inv that is made on receipt of items is not shown

Account Generator
• Uses Workflow technology to construct key flexfield combinations • Allows generation of account combinations based on system variables

Account Generators in Order to Cash

• OM: Generate Cost of Goods Sold Account (OECOGS) • AR: Substitute Balancing Segment (ARSBALSG) • Inventory Cost of Goods Sold Account (INVFLXWF)

Account Generator - Terms
• • • • • • Workflow Builder Item Type Attribute Function Process Lookup Type

Modifying an Account Generator

1. Open the Account Generator to be modified 2. Save to a local / network drive 3. Make modifications 4. Save to the database 5. Test

1. From the Workflow Builder, open the account generator
• • • User – APPS Password – APPS Password Connect – Applications Database

2. From the Hidden Items list, select the Account Generator to be modified

3. 4.

Open the Generate Default Accounts Process, right click on the process icon and select copy, then paste Enter an Internal Name, Display Name and Description

5. 6. 7.

Open the new COGS process Remove the link from Copy Values from Code Combination to Validate Code Combination Insert the function Get CCID from Salesrep's revenue segment and click OK

8. Insert the Function Copy Segment Value from other Structure Code Combination 9. Update the Node Attributes

10. Connect the new functions to the existing workflow functions (right click at the first function and drag to the second) 11. Select the result type (where appropriate)

12. File Save As Database 13. From GL Super User, select the new COGS Account Generator

Test the Account Generator
• Take an order through to ship confirm • Test via COGS_11i.SQL available from Metalink (Note: 159998.1)

Account Generator in R12
• Still available in R12 • FA Account Generator
– Option to use it or Subledger Accounting Engine after upgrade

• Receivables

Thomas J. Simkiss, Jr., J.D. CPA BizTech Tsimkiss@biztech.com

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