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Overview of the New Financial Architecture in Oracle EBusiness Suite Release 12
Mary Burns

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 decisions. The development, release, and timing of any features or functionality described for Oracle¶s products remains at the sole discretion of Oracle.

Agenda 
What We Set Out To Address  Release Twelve: The Global Release

± Global Architecture
‡ ‡ ‡ ‡ MultiOrg Access Control Subledger Accounting Ledgers and Ledger Sets Ledger Considerations

± Global Business Functions
‡ Legal Entities
± ± ± ± Accounting Set Up Manager E-Business Tax Advanced Intercompany Banking Model

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What we set out to address

industry or income. Source: 9th Annual Global CEO Survey ± Globalization and Complexity. PwC 2006 Source: PWC. Is this a good thing? Nearly two-thirds of the CEOs we surveyed are positive about the impact that globalization will have on their organizations over the next three years.Doing Business Globally is Complex Top Drivers of Complexity 1 2 3 4 5 6 7 8 National and International Laws & Regulations Actions by Competitors Changing Customer Requirements Industry Standards and Regulations Tax Codes Changing Workforce Attitudes International Reporting Standards Language and Cultural Differences Direct impact on Finance Globalization is unstoppable. 9th Annual Global CEO Survey . companies are globalizing to gain new customers and access new markets. Regardless of geography.

Make it Simpler to do your job Control Costs by Managing Complexity Major Focus Standardizing operating practices and controls Standardizing policies and business rules Standardizing and integrating finance systems Adopting best practices Optimizing the finance organization and its reporting structure Reducing reliance on spreadsheets Source: PWC Management Barometer 69% 66% 59% 58% 52% 50% Senior executives say simplification is driving the Finance agenda 33% .

2005 * Deloitte Consulting. rules. 2006 .Make it Easier to do Your Job How Finance Spends its Time 26% 47% % Yet To« 50% 60% Improve processes or rationalize technologies Standardize policies. and processes across the entire enterprise Implement a shared services model * Adopt best practices or simplify processes across the entire enterprise 27% 73% Transactional Activities Control Activities Decision Support. IBM Business Consulting Services. Performance Mgmt 80% The Agile CFO.

Standardize Work Globally. Simplify. to be more competitive Think Globally. Reconciliation & Drilldown Corp. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar Joint Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar Parent Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar National Compliance Local Regulation National COA Local Calendar $ A$+$ Financial Data for Management . to make the right decisions Manage Globally.Customers: Centralize.and Compliant Analytics ¼+$ + ¼ Comprehensive and compliant processing Controlled Transaction Entry . to lower cost and increase performance Easy Reporting Transparent Audit.

etc. relating to. global.. global monetary policies.. Comprehensive. Of. or involving the entire earth.How Financials Release 12 Can Help The Global Business Release WORK GLOBALLY To Be More Competitive Financial Control & Reporting Credit-to-Cash Procure-to-Pay Treasury & Tax Travel & Expense Asset Management Governance. generalized sense of well-being 2. Risk & Compliance THINK GLOBALLY To Make the Right Decisions MANAGE GLOBALLY To Lower Cost & Increase Performance Integration Data Management Reporting Performance Management Profitability Management Business Intelligence Global: 1. . total: a. worldwide: global peace.

<Insert Picture Here> Release Twelve The Global Business Release: A New Financial Architecture .

2. 5. Ledger and Ledger Sets Multi-Org Access Control Subledger Accounting Tax Engine Intercompany Bank Model MultiMulti-Org Access Control Dr Cr General Ledger Sets Ledger & Ledger Subledger Accounting (SLA) 3. 6. Tax Engine Inter Company Bank Model Inventory Receivables Projects Work in Process Purchasing Payables . 4.Global Financial Architecture 6 Major Initiatives 1.

<Insert Picture Here> Multi-Org Access Control Work Think Manage .

Demand & Purchase Orders  Receiving & Drop Ship  Invoice Receipt. Disbursement  Customer Data Management  Accounting Setup Belgium Operating Unit Holland Operating Unit Denmark Operating Unit Responsibility SingleResponsibility Responsibility Responsibility . Collections. Billing  Requisition.MOAC: Multi-Org Access Control Role based access to Operating Units Perform multiple tasks across operating units without changing responsibilities Belgium Legal Entity Holland Legal Entity Denmark Legal Entity Functional Tasks  Order Management  Dunning.

Collections. Demand & Purchase Orders Receiving & Drop Ship Invoice Receipt. Billing Requisition.Purpose Built Cross OU ³Desks´ Shared Services Shared Service Order Management Dunning. Disbursement Customer Data Management Accounting Setup Product Reference Order Management Receivables Procurement Supply Chain Management Payables Trading Community Architecture Accounting Setup Manager .

like transaction type  OU field on UI  Enhanced Multi-Org Reporting and Processing ± Ledger/Ledger Set parameter on accounting reports and processes ± OU parameter on other standard reports and processes ± For example: submit the Payables Open Interface Import w/OU param null to import all records across all OUs .Multiple Organization Access Control Summary of Changes  Security Profiles for data security ± MO: Security Profile ± List of operating units for a responsibility ± Defined in HR ± all transactions ± setup data specific to OU.

Multi-Org Access Control In practice Select Operating Units In daily use Select Classify Operating Unit Organization classification as operating unit Run Reports Across Operating Units .

<Insert Picture Here> Subledger Accounting Work Think Manage .

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 Greater Control. reconciliation and reporting facilitated by centralized data model Inventory 3rd Party Systems Receivables Projects ‡ Streamline closing process with common posting engine ‡ Auditable and transparent entries accessible with full drilldown Work in Process Purchasing Payables . Rules. Engine and Repository ‡ Single source of truth for all subsystem accounting activity with a common data model and repository ‡ Accounting.

Subledger Accounting Centralized Rules. Common Repository: Global Control Ledger French Rules Plan Comptable French Calendar What it is Some Benefits EUR ‡ Accounting Rules ‡ SarBox & 8th Dir. inquiries. ‡ User Editable ‡ Subledger Daybooks ‡ ‡ ‡ ‡ ‡ (Journals) Subledger Balancing Reports. open items. et cetera Multiple Representations Common Posting to GL Ledgers Real time or Periodic ‡ Faster. Easier ‡ ‡ ‡ ‡ ‡ Reconciliation Corporate Rules = Accounting Standardization Local Rules = Improved Local Compliance Automate ³Apples to Apples´ Adjustments Improved Auditability Improved Internal Control Dr Cr Subledger Accounting Payables Invoice .

000 400 100 300 1.Subledger Accounting Transaction Level Compliance  National Daily Journal Requirements  Internal Control: Central Definitions.9100020.636 Credit 12.9100020.836 12.3100060.636 12.9100020.100 Paris: supplies Underlying Misc expense 01.9100010.000 Accounts Payable 01.200 Nantes: supplies Records´ Misc expense 01.100 Paris: furniture Misc expense 01. Eliminate overrides ± Policy Enforcement in Volume Processing     Transparent Accounting Rules Debits & Credit at the point of the event Automate Foreign Operation adjustments Event Class: Invoices Reconciliation Event: Invoice Approved Ledger: France (EUR) Platform GL Date: 20-Sep-2005 Description: Office supplies  ³In accordance Type Account Description with the Asset purchase 01.000 VAT@17% ABC Supplies Debit 10.300 Nice: supplies VAT 01.7000010.636 .

000 300.000 100.000 2.000 1.000 1.000) .000 250.000) (501.000 300.000 2.750.000) (100.500.000 750.000 3.000 24.000 10.000.800.000) 1.000 50.000 1.000.000 1.100) - Opening Balance Debit Credit Closing Balance 3.000 Debit Credit GENERAL LEDGER Cash Receivables Inventory Assets Prepayments Payables Accruals Shares Previous Results Balance Sheet Sales COGS R&D S&M G&A-Fin G&A-IT G&A-HR Period Income Income Statement 100 1.000 150.000 900.) sources Opening Balance SUBLEDGER ACCOUNTING Receivables Customer Customer Customer Customer Customer Total One Two Three Four Five 250.000 1.000 300.000 150.000 - 24.100 500.000 450.000 300.000 725.000 500.000 1.000 975.000 3.100) (3.000) (225.500.000 500.000 1.000 (650. payment.000 10.000 775.000) (200.000 50.000.800.500.500.000 150.000 - Closing Balance General Ledger SLA Detail Payables Vendor Vendor Vendor Vendor Total I II III IX (250.000 150.000 300.000 2.000.000) (750.000) (100.500.000) (250.000 800.000.000 350.000.500.000 3.000 (150.000 3.000) 1.000 300.000.000 200.000 750.000 1.700.400.Ticked & Tied SLA Controls that GL Balances and SLA Balances tie.000 100.000 200.000 100.000 75.000 500.000 2.000 1.000 400.000 300.000 (750.000) (100.000 150.000.000 150.000 150.000) (300. etc.000 300.000 200. and that both tie to the document (invoice.200.000.000) (501.000) (75.000 2.000 300.000 100.500.500.000) (150.500.000) (650.000.000 3.700.000) (250.

Multiple Accounting Representations Global Compliance ± Statutory and Stock Market Ledger A French Rules Plan Comptable French Calendar Ledger B US GAAP US COA US Calendar Multiple Ledgers EUR EUR or Dr Cr Subledger Accounting Payables Invoice Single subledger transaction can create multiple accounting representations and in multiple currencies Chose to use an alternative Ledger or just an Adjustment Ledger or segment .

SLA keeps the Subledgers & GL tied out Keep the auditors happy! Subledger Applications Accounting Configurations Journal Entry Setup General Ledger Accounting Events Accounting Program Subledger Journal Entries GL Journal Entries and Balances Subledger Accounting Service Transactions (& adjustments) Subledger Reconciled: Docs. SLA. GL in synch Balances .

<Insert Picture Here> Ledgers and Ledger Sets Work Think Manage .

Ledger One Repository of Financial Truth Ledger B US GAAP US COA US Calendar EUR Implements the 4 C s: Accounting Method Chart of Accounts Calendar Currency The balance on Creditors (COA) is 4. 2006 (Calendar) according to IAS/IFRS definitions (Accounting Method) Reporting Currency .2M Eur (Currency) on March 31.

Ledger Sets Global Information At A Glance Ledger A French Rules Plan Comptable French Calendar Ledger B US GAAP US COA US Calendar EUR EUR Reporting Currency .

Ledger Sets Global Information At A Glance Ledger Set Share: Chart of Accounts Calendar Ledger C US GAAP US COA US Calendar Ledger A French Rules Plan Comptable French Calendar Ledger B US GAAP US COA US Calendar USD Ledger D US GAAP US COA US Calendar EUR EUR AUD Key benefits to many Ledgers in one set Decision-driving business information always available Simpler processing and General Ledger management Data and definitions that can be shared and secured Reporting Currency .

Currency in Release 12     Transaction Currencies Accounting Currency in Primary Ledger Reporting Currency in Primary Ledger More Accounting Currencies in Secondary Ledgers ± For every transaction OR ± For SLA Posting level / GL activity level  Balance level Translation or Remeasurement in Ledgers ± within Ledger sets. run at one click  Balance & Activity level Translation or Remeasurement in Financial Consolidation Hub  Enhanced Revaluation  [Functional Currency term dropped: conflicts with IAS 21 / FAS 52] .

restrict definitions. privileges to view. Branches. modify. Privileges Stores. . etc. etc.e.) View GL Manager France Ledger Canada Ledger US Ledger Write Accountant ‡ Definition Access Sets ± separate from data security ‡ Share.Data Access. Companies. Definition Access  Data Access Sets ± Grant and tailor access to Ledgers and Balancing Segment Values (i.

<Insert Picture Here> Ledger Considerations .

Ledger Sets ± Work them your way Management Ledger Set US Ledger Set Legal Ledger US1 Legal Ledger US2 Legal Ledger US3 Adjustment Ledger US Corporate Ledger Set adjustments eliminations UK Ledger Set Legal Ledger UK1 Legal Ledger UK2 Adjustment Ledger UK Adj Ledger Corporate ‡ Automate GAAP / IAS adjustments in an adjusting ledger ‡ Eliminate within a Set with GCS ‡ Consolidate Formally in FCH ‡ Map from a non-conforming COA with a GCS Ledger ‡ Set of 26 Ledgers in one country ‡ Euro Zone in One Ledger Set ‡ My Corporate Set in US GAAP ‡ Statutory Set for Country Y Subs ‡ Division X Worldwide Ledger Set .

Corp GAAP administered See they¶ve been properly adjusted to our rules Secondary Ledger Corp.When to use a Secondary Ledger. wants ³Just the adjustments. US parent Every petty cash slip .Corp GAAP known Balances are enough (Full drill down available) Adjusting Ledger Corp. an Adjusting Segment or an Adjusting Ledger? Adjusting Segment Corp. wants a complete Parent GAAP & Currency edition of the Sub¶s books Subsidiary books are quite alien to parents Inventory is one of the big differences National chart of accounts is radically different from corporate Parent Controllership Mexico plant. thank you´ Mapping gets us most of the way to Parent Inventory is the big difference Manageable series of reclassifications Regional Controllership . wants GL balances per Parent GAAP Subsidiary books are pretty similar to parents No inventory National chart of accounts is clearly related to IAS IFRS or GAAP balances National Controllership .

<Insert Picture Here> Global Business Functions Work Think Manage .

must pick an LE ‡ LEs create commercial transactions . Whatever = ³Decision Making Tags´ ‡ Parent companies (LEs) ³own or control´ subsidiaries (LEs) ‡ No outside ring . LLC. GmBH. SA.. LOBS. ³exist in the outside world´ Managed & analyzed by Subsidiary Company Subsidiary Company Management Orgs Divisions. States. Registrars. Etc. Partnerships« Inc. Agencies. Taxation. Cost Centers. Ltd. Public Company (ultimate parent) Regulates Complies Subsidiary Public Company Company (regional parent) Subsidiary Company Subsidiary Company (business parent) Subsidiary Company Subsidiary Company Legal Entities Registered Companies.Legal Entity: Your Registered Companies Legal Authorities Countries.. Regulators. Funds. Plants. Local.

take care of accounting ‡ LEs comply with whatever needs compliance: ³legal´ in LE What we¶ve done ‡ Addresses. Officers.LEs: Why and What? Why We Care ‡ LEs pay the taxes .need tax registrations ‡ Trade between LEs needs intercompany ‡ LEs own the money and bank accounts ‡ LEs file the accounts. etc. ‡ Enabled First Party stamp ‡ Added Establishments: map Registrations to Authorities ‡ GRE/LE not touched ‡ Authorities as TCA parties ‡ LE Configurator .

Establishments. Jurisdictions.Tabulate your Registered Companies and other forms of LE Tabulate Setup and maintain: Legal Entities. Legal Authorities. Legal Addresses .

11i Legal Files Entity Exists Locally Operating Units Establishments Files Registrations with Authorities Accounts for itself in a Ledger or BSVs Legal Entity: Vehicle for compliance Ledger .Where LE fits in« Transaction Taxes Complies & Files. etc. Maintains its Subledger Documents in many OUs Default Legal Context (DLC) Business Group GRE/LE Et Cetera. Pays Registrations with Authorities Actual Registered Companies.

bookkeeping rules and currency management to with Authorities in many OUs Units your registered companies Default Legal Exists EBusiness Tax Context (DLC) Locally Have your registered companies calculate. Complies & Track your registered companies ‡ GRE/LE Files. and pay the Accounts transaction taxes they owe for itself Establishments Intercompany in a Ledger Do business between and across your registered companies with or BSVs full legal documentation Files Bank Model Legal Entity: Have your registered companies use their money to pay their bills. management needs Group ‡ Isolate legal compliance from etc. file. Pays ‡ Make your compliance flow more easily Maintains Et Cetera. 11i its Subledger Accounting Setup Manager Legal Registrations Documents Operating Files Entity Assign books.Get the LE Right Compliance Falls Into Place TransactionLet¶s put LEs to work Actual Registered Business Taxes Companies. Ledger Registrations Vehicle for compliance with Authorities et cetera .

<Insert Picture Here> Accounting Setup Manager (ASM) Work Think Manage .

Currencies. Ledgers.Centralized Set-up Accounting Setup Manager Define Legal Entities & Associated Rules Ensure Complete & Accurate Setup via Online Checklist Define Multiple Ledgers for Rules & Currencies One Place to manage Your Global Accounting Rules. And Ledger Sets Set Accounting Rules for All EBS Apps .

<Insert Picture Here> E-Business Tax Work Think Manage .

S. and accounting event. rules. . and transactions ‡ Tax registrations and tax reporting codes Local Compliance ‡ Tax lines determine applicable taxes ‡ Configurable tax reporting templates ‡ Single set up for all Oracle applications Information Visibility ‡ Use of E-Business Suite components such as trading partner geography. trading partner classification. ‡ Integrity checks during setup process Constant Changes in Tax Laws and Regulations ‡ Date effective setup ‡ Tax rules flow for change or creating rules ‡ Tax simulator for setup.Centralized Global Tax Less Complex Global Tax Compliance Business Needs Solution ‡ Tax content for certain countries Automation ‡ Vertex and Taxware integration for U. inventory item categorization. legal entity.

Assurance  Efficiency. HTML. RTF . Rules . Global Visibility Single Interface for Transactions Transparent Integration with Tax Partner Services  Extensible  Service Oriented Architecture Receivables « Tax Reports .Security enabled Tax Transactions Taxes.Oracle E-Business Tax Processing taxes for transactions and reporting Transactions Purchasing Parties Payables Places Products Sales Orders Processes Determine Regimes Applicable Taxes Tax Status & Rate Taxable Basis Calculate Tax Amount  Compliance.PDF.

<Insert Picture Here> Advanced Intercompany (AGIS) Work Think Manage .

Advanced Global Intercompany System Address the Top Barrier to a Fast Close Advanced Global Intercompany System Web UI Subledger Invoices & Documents Open Interfaces / API  Generate subledger invoices Excel (Web ADI)  Control transaction entry with Intercompany Calendar  Fully Configurable Approval Rules  Flexible Security Model  Centrally defined Intercompany Accounts XML Publisher Reports Online Reconciliation Reporting Dr Cr General Ledger Subledger Accounting Receivables Payables .

AGIS at Work Rebilling a Corporate Cost from an USA HQ ‡ GL Entries created for US subsidiaries ‡ AP and AR Invoices created for France and Italy Inter Company California Company General Ledger Entries Subledger Invoices & Documents Illinois Company New York Company France Company Italy Company .

<Insert Picture Here> Banking Model Work Think Manage .

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 .

Bank Model: Example of What You Can Do Pay invoices from different OUs with 1 instruction OU A ‡ New Payments Module ‡ New Bank Model ‡ New Bank & Credit Card Features OU B OU C Single Payment Instruction Bank Payments Sub Ledger Accounting Invoices .

Banks Legal Entity Operating Units .

<Insert Picture Here> Sharing Services Work Think Manage .

SAS 70. Distributed impact Formal SSCs At home or overseas Call Centers. On Demand Informal Service Sharing Process Efficiency Decentralized Depts..All Together: Easier To Share Services Central processing. Tax Engine MOAC across LEs. Bank Internal Controls Manager Ledgers & Ledger Sets Ledgers with Balancing Segments MOAC across OUs Intercompany Bank Model Tax SSCs (Formal) SLAs & Tax Inter-LE Shared Service Infrastructure (Serves Informal and Formal) Organizational Access Cross Org Processes Banking Model Inter Unit Accounting . Centralized Depts. Normal Business Practice Ledger and Ledger Sets Subledger Accounting Intercompany. Outsourcing Offshoring.

What the Architecture Gets You Work Globally Global Order Desk Global Procurement Global Billing Global Dunning Release 12 Subsidiary LEs«. Company Company Company «account for themselves in Ledgers. and« Think Globally Global Ledger Sets ± worldwide insight Global Reporting Ledger Set manage their subledger data in Operating Units MultiMulti-Org Access Control Manage Globally Global Accounting Rules Global Set-up Global Integration Inventory Receivables Projects Work in Process Purchasing Payables .

Share Services.no partitioning R12: Introduce partitioning without sacrificing processes Ledgers in Ledger Sets. maintain privacy Exploit Cross-OU Processes Yesterday: An LE Group in 1 SoB with 1 OU . New OUs Inventory Inventory Work in Process Work in Process Receivables Projects Inventory Receivables Projects MOAC Purchasing Payables Assets Work in Process Purchasing Payables Assets .

Bank. +300 Features  . Payments TCA. to make the right decisions Manage Globally. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar Joint Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar Parent Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar National Compliance Local Regulation National COA Local Calendar A$+$ ¼+$ Profitability Mgr. to be more competitive Think Globally. EPB + ¼ Subledger Transactions Intercompany. Ledgers SLA. Tax XML Publisher Reporting DBI. FCH General Ledger $ Corp.Release 12: The Global Business Release Work Globally. LE MOAC. to lower cost and increase performance OICM Ledger Sets.

QUESTIONS .

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