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ABeam Consulting USA

OPM Production vs. Accounting – The


Month End Battle Continues
Learning Objectives

• Understand how every employee acts as a


cost accountant
• Understand the production floor and
accounting office month end closing
concerns
• Understand how to be proactive during the
month to make an easier closing
• Develop a month end checklist for your
company
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Copyright © 2009 ABeam Consulting
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Speaker’s Qualifications

• Robert Smith is a CPA who is currently a


Senior Manager with ABeam Consulting,
USA
• Spent the last 15 years in the process
manufacturing industry as a user and
consultant.
• Speaks frequently on the capabilities of
OPM and its integration with Oracle
Applications
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Copyright © 2009 ABeam Consulting
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Presentation Agenda

• Rules of the Game


• Manufacturing vs. Accounting
Objectives
• OPM’s Transaction Based System
• OPM’s MAC/SLA module hierarchy
• Month End Checklist
• Proactive review of transactions
• Q&A

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Rules of the Game

• There is no such thing as a dumb question


• Ask questions when you think of them, but
they may not be answered until the end
• Be respectful
• Have fun!

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Objectives

• Manufacturing
– Zero stock outs
– Production output goals
– Accurate inventory levels
– Sales goals
– On-time shipment percentages
• Accounting
– Accurate reflection of company’s business
– Timely reporting
– Inventory level goals Page 6
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Transaction Based System

• In the past we may recall the monthly


lockdown

Non-integrated Lack of reporting


financial system tools

System constraints

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Transaction Based System

• OPM allows users to get rid of lockdown


period
Integrated financial Numerous reporting
system tools

Freezing inventory
capability

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Transaction Based System

OPM Transactions
Shipments
Receipts
Customer Returns
Return to Vendor

Inventory Transfer

Inventory Adjustment
Batch inputs
Inventory Create
Batch outputs
Inventory Move

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Transaction Based System

When making these transactions while


using the MAC or SLA

Everyone with ability to make these


transactions is now a cost
accountant

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MAC Module/Subledger Accounting (SLA)

• MAC (11i) and SLA (R12) module is


where you define the elements needed
to derive financial implications of several
OPM modules
– Purchasing
– Order Processing
– Production Management
– Inventory Management
– Cost Management
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Hierarchy
• MAC • SLA
Events Event Classes

Sub-Events Event Types

Journal Lines and


Account Titles Types

Priorities and Account Derivation


Rules
Mappings
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MAC Module

• MAC Hierarchy
Events are logical groupings of
Events
sub-events
PORC = PO Receipt
BTCH = Batch Processing

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MAC Module

• MAC Hierarchy
Sub-events are detailed ledger
transactions that affect the general
ledger
RELE = Batch Release
Sub-Events
CERT = Batch Certification
CLOS = Batch Close
All are in the event BTCH

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MAC Module

• MAC Hierarchy
Account titles are used to identify
the types of accounts that will
generated for a journal entry
INV = Inventory
WIP= Work in Process

Account Titles
These titles would be used with the
RELE and CERT sub-events
continuing our example
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MAC Module

• MAC Setup
-Account Selection Priorities and
Account Mappings brings us back to
setup steps
-There are many setup steps but
these two affect the relationship
between manufacturing and
accounting at month end

Priorities and
Mappings
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MAC Module

Important
Setup Steps Establish
Selection Priority

Establish
Account Mapping

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MAC Module

Establish
Selection Priority

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MAC Module

Establish
Account Mapping

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SLA Module

• SLA Hierarchy
Events are logical groupings of
event types

Event Classes

Event Types

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SLA Module

• SLA Hierarchy

Journal Lines
and Types

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SLA Module

• SLA Hierarchy

Account
Derivation
Rules

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MAC Module

Example:
Company A wants all inventory
adjustments using the reason code of
Inventory Find for items with a GL Class of
RAW to go to be charged to account
300.3100.0000.000 and all other reason
codes and GL classes to be charged to
account 300.3200.0000.000. This is a
typical request if it is necessary to track
charges for a specific reason. This will
make it very visible on the ledger that
something out of the ordinary has
occurred.
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MAC Module

• Following are the steps to be taken to


accurately map the requirement
– Determine which account title needs to be
mapped
– Ensure the selection priorities for that
account title include the criteria requested
– Create a default mapping for the account
title
– Create the specific mapping to handle the
exception
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MAC Module

• Account Selection Priorities

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MAC Module
• Create Default Mapping

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MAC Module
• Create Specific Mapping

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MAC/SLA Module

• The next time that reason code


is used in an adjustment the
creator just became a cost
accountant
• But there is control as to which
account it goes to

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MAC Month End Checklist

Complete
Inventory
Final transactions Perform
Subledger Costing
Functions

Final Cost
Update General
Correct
Ledger
Costing
Errors

Test
Subledger GL
Cost
Prelim Update
Inventory
Close
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SLA Month End Checklist

Complete
Inventory
transactions
Final Perform
Create Accounting Costing
Functions

OPM Accounting
Processor
General
Prelim
Ledger Cost
Update

Final Cost
Update Draft
Create
Final Accounting
Inventory
Close

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Month End Checklist

Complete
Inventory
transactions

These tasks have the most impact


on manufacturing and accounting
and should be reviewed
proactively throughout month

Test
Subledger Draft
Create
Accounting

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Proactive Transaction Review

• Ensure OPM Receipt/Void/Return


transactions complete
– Looking for past due receipts
– Run Expected Receipts Report
• Ensure OPM Production transactions
complete
– Review batches in WIP and Completed status
– Use Production Workbench and query by status

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Proactive Transaction Review

• Ensure OPM Inventory transactions complete


– Query for ADJI document type transactions
– Also review for CREI transactions
• Ensure OPM Shipping transactions complete
– Looking for past due shipments
– Use Shipping Transaction Form and query by
scheduled ship date

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Proactive Transaction Review

• Ensure OPM Transfer transactions complete


– Looking for past due inventory transfers
– Use Inventory Transfer Report
• Review warehouse Inventory Valuation
– Allows you to review Inventory Valuation report
throughout the month and have ability to
reconcile prior to month end
• Run Test Subledger/Draft Create Accounting
– Allows you to identify and correct unexpected
transactions prior to month end Page 35
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Conclusion

• OPM MAC / SLA module


• Shared month end close checklist
• Proactive transaction review
• Willingness to get along

Bridge the gap between manufacturing and


accounting at month end

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Lessons Learned

Informed manufacturing personnel make for


good cost accountants in the OPM
environment

They should not be feared or scared, rather


trained and utilized to benefit the company

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Thank You

Robert Smith
rsmith@abeam.com
(859) 421-2202
Copyright © 2009 ABeam Consulting
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