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Overview of the New Financial Architecture in Oracle E-Business Financials Release 12
Terrance Wampler Financials Strategy
Safe Harbor Statement
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
The above reflects Oracle’s current development plans which are subject to change at any time
2 LEGAL ENTITY ACCOUNTING BANK MODEL TAX ENGINE INTERCOMPANY 2 3rd Party Systems Dr Cr Centralized Accounting Model.3 2. Engine and Repository 2.5 Legal Entity Banking Global Tax Intercompany Accounting 3 ROLE BASED ACCESS to Operating Units 3rd Party Systems E-Business Suite Inventory Purchasing Receivables Payables Projects Work in Process © 2006 Oracle Corporation – Proprietary and Confidential .1 2. Lower Costs MULTIPLE LEDGERS General Ledger 1 Centralized Architecture 2. Rules.4 2. Greater Flexibility.Global Architecture More Control.
says Keith Dunkin from Alcoa © 2006 Oracle Corporation – Proprietary and Confidential .Ledger Sets Perform the Following Across Ledgers: • Open/Close Periods • Create Journals • Translate and Revalue Balances • View Information • Submit Standard Reports • Submit Financial Statements “We have 60 Sets of Books and see tremendous efficiencies with running processes across these SOBs using Ledger Sets.” -.
Multiple Ledgers Ledger A US GAAP US COA US Calendar 1 Ledgers and Ledger Sets $ Ledger B US GAAP US COA US Calendar Ledger C US GAAP US COA US Calendar Ledger D French Rules Plan Comptable French Calendar EUR EUR AUD Perform cross-ledger functions: Open/Close Periods Create Journals Translate Balances Perform Allocations View Information Create Reports Ledger Sets © 2006 Oracle Corporation – Proprietary and Confidential .
Rules. reconciliation and reporting facilitated by centralized data model Inventory 3rd Party Systems Work in Process Receivables Projects • Streamline closing process with common posting engine • Auditable and transparent entries accessible with full drilldown Purchasing Payables © 2006 Oracle Corporation – Proprietary and Confidential . Transparency and Auditability • Internal control and compliance with multiple accounting policies through user-defined accounting rules 3rd Party Systems Dr Cr General Ledger General Ledger Centralized Accounting Model.Centralized Accounting Policies 2 Greater Control. Engine and Repository • Single source of truth for all subsystem accounting activity with a common data model and repository • Accounting.
Flexible Ledger Architecture Meet Local Accounting Standards Ledger A Single business transaction can create multiple accounting representations and in multiple currencies US GAAP US COA US Calendar USD Payables Invoice Centralized Accounting Dr Cr Ledger B French Rules Plan Comptable French Calendar EUR © 2006 Oracle Corporation – Proprietary and Confidential .
Accounting Setup Manager Single Page for Accounting Setup 2 •Legal Entities •Ledgers •Currencies •Balancing Segments •Subledger Accounting •Operating Units •Balancing Options © 2006 Oracle Corporation – Proprietary and Confidential .
30000 US.20000 US.10000 US.300.350.350.300.10000 US.Alternate Accounts Prevent Accounting Errors US.50000 US.350.300.50000 © 2006 Oracle Corporation – Proprietary and Confidential .40000 US.30000 US.20000 US.40000 US.300.350.300.350.
Control Accounts Streamline Reconciliation Receivable Account Payable Account Inventory Receivables Projects Manual Journal Purchasing Payables © 2006 Oracle Corporation – Proprietary and Confidential .
Simplify Data Access • Data Access Sets • Grant and tailor access to Ledgers and Balancing Segment Values (i. Stores. Branches.) Privileges GL Manager View France Ledger Canada Ledger US Ledger Write Accountant © 2006 Oracle Corporation – Proprietary and Confidential . etc. Companies.e.
modify. or submit definitions Control definition security independently from data security © 2006 Oracle Corporation – Proprietary and Confidential .Secure Definition Access • Definition Access Sets • • • • Select specific users to share definitions with Restrict those definitions that should not be shared Grant privileges to view.
Secure Definition Access GL Manager View Misc Expense Report Definition Balance Sheet Report Definition Income Statement Report Definition Privileges Modify Submit Accountant © 2006 Oracle Corporation – Proprietary and Confidential .
Definition Access Sets Definitions That Can Be Secured • • • • • • • • 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 © 2006 Oracle Corporation – Proprietary and Confidential .
Suppliers.Rationalize Trading Partners Customers. Legal Entities Global Tax Payments Payables Purchasing Geographies Suppliers Party Information Cash Management Banks and Branches Trading Community Architecture Oracle Fusion Middleware ERP CRM 3rd Party © 2006 Oracle Corporation – Proprietary and Confidential . Banks.
Centralized Banking Shared Services Disbursements • Bank account is now associated with LE entity rather than Operating Unit OU C LE OU A OU B • Single bank account serves multiple Operating Units • Any and all Operating Units associated with a ledger can be permitted to use the bank account Inventory Receivables Projects Work in Process Purchasing Payables Assets Plus Centralized Credit Card Model Credit Card Encryption Supplier & Customer Banks in TCA © 2006 Oracle Corporation – Proprietary and Confidential .
Banks Define Owner of Bank Account Legal Entity © 2006 Oracle Corporation – Proprietary and Confidential .
Banks Grant OU Access to Bank Account Operating Units © 2006 Oracle Corporation – Proprietary and Confidential .
Rules .Oracle E-Business Tax Processing taxes for transactions and reporting Transactions Purchasing Parties Single Interface for Transactions Payables Places Products Determine Applicable Regimes Taxes Tax Status Taxable Basis & Rate Calculate Tax Amount Sales Orders Processes Transparent Integration with Tax Partner Services Receivables … © 2006 Oracle Corporation – Proprietary and Confidential Tax Transactions Taxes.
Centralized Intercompany Faster Period-End Close Web UI 5 Advanced Global Intercompany System Transactions Open Interfaces / API Subledger Invoices & Documents Excel (Web ADI) Balanced transaction Dr Cr Subledger invoices Intercompany calendar to control transactions Configurable approval rules Flexible security model No Intercompany balancing lines Online Reconciliation Reporting Yes Subledger Accounting Centrally defined intercompany accounts XML Publisher Reports © 2006 Oracle Corporation – Proprietary and Confidential .
Financial Reporting with XML Publisher Nearly 400 Configurable Formats Product Assets Cash Collections Common Modules Financials Consolidation Hub General Ledger Globalizations Internal Controls Manager Formats 22 3 15 10 21 14 92 25 Product IT Audit Loans Payables Payments Public Sector Receivables Subledger Accounting Tax Formats 2 6 9 120 6 10 17 23 © 2006 Oracle Corporation – Proprietary and Confidential .
Shared Services Access Control 6 More Productive Shared Services Operations Belgium Legal Entity Holland Legal Entity Denmark Legal Entity Functional Tasks Accounting Billing. Dunning & Collections Procurement Order Management Payments Data Management Belgium Operating Unit Holland Operating Unit Denmark Operating Unit Responsibility SingleResponsibility Responsibility Responsibility © 2006 Oracle Corporation – Proprietary and Confidential .
Payables & Receivables Netting Reduce Costs in Trading Relationships AR Invoices Customer #203 #460 $500 $600 Netting AP Invoices Supplier #699 #982 $400 $400 Payment $800 Receipt $800 © 2006 Oracle Corporation – Proprietary and Confidential .
Comprehensive Integration Repository A Catalog of All EBS Integration Points • Web Services • Public Java & PL/SQL APIs • Business Events • Batch Interfaces • Enable key integration types Business to Business Enterprise Application Integration Business Process Management Business Activity Monitoring • Support industry-standard messages • Support standards-based XML documents • Search and view available interfaces via powerful UI • Automatically keep in step with source code via standard patching © 2006 Oracle Corporation – Proprietary and Confidential .
Straightforward Upgrade Today Set of Books Release 12 Ledger in a Ledger Set Same Responsibilities Product Accounting Subledger Accounting Same Tables and IDs Customization Continuity Operating Unit Operating Unit (MOAC) © 2006 Oracle Corporation – Proprietary and Confidential .
Summary: New Capabilities in R12 • Objective • Simplify the ability to manage across business functions. first party legal entities) Simplified reporting via XML Publisher and DBI Netting across trading partners The above reflects Oracle’s current development plans which are subject to change at any time . organizations and locations • Requirements • Improve support for shared service operations • Ease access to aggregated data for management reporting • Ensure accurate accounting. logical business structures to easily group information • Rationalized trading partner data into a single location • Results • • • • • • • • A single responsibility to access and transact on multiple organizations A single ledger to manage multiple currencies Ledger sets to manage accounting processes across ledgers Centralized rules engines for tax. banks. tax and currency treatment of transactions • Process • Separated operational activities from financial management tasks • Defined new. accounting and inter company A separate and simple payment creation and delivery solution Centralized trading partners (suppliers.
” The above reflects Oracle’s current development plans which are subject to change at any time . and enforcing a consistent approach for true global accounting.Why Upgrade Straight Talk from Customers “We have 60 sets of books and see tremendous efficiencies with running processes across these sets of books using Ledger Sets.” “Ability to issue one payment instruction to the bank for payments of invoices in multiple operating units was viewed as a huge benefit from the user community.” “Multi-Org Access Control (MOAC) will definitely reduce the workload and the number of people performing process related tasks. providing greater financial control. specifically the creation of physical invoices to be created for I/C transactions in Payables and Receivables eliminates many customizations in this area. The users are very excited and the benefits of MOAC were readily visible to them.” “The ability to access multiple operating units with a single responsibility can simplify SOX compliance monitoring. and accounting – everything that becomes centralized will bring tremendous efficiencies to our organization.” “Banks. payments. taxes.” “The functionality offered with Advanced Global Intercompany System (AGIS).” “Centralization of subledger accounting rules would minimize set up and maintenance.
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