Advanced Global Intercompany System (AGIS) Functional Setup – Part 1OVERVIEW .....

Part one on setup offers a broad view on how AGIS is Setup in R12The setups are divided into four parts1. Environmental setups2. General Ledger (GL) setups3. Receivable (AR) setups4. Payables(AP) setups5. Advanced Global Intercompany System (AGIS)

Part two on transaction processing discusses the setups those are required for processing the transaction in AGISTransaction Processing in AGISThe summaries of steps those are used for AGIS transaction processing are As follows.1. Initiation of a transaction by an intercompany organization2. Completion of accounting from the initiator side3. Completion of accounting from recipient side4. Approval of the transaction by the recipient

If the invoicing is opted for, in transaction type setups then,1. Processing of Invoice from Receivables(For the initiator subsidiary side)2. Processing of invoice in Payables(For the Recipient subsidiary side)Part three discusses the reports in AGIS and reconciliation features in AGIS1. Standard reports Available in AGIS2. econciliation features in AGISThe setup steps are explained in the subsequent sections, from start to finishThe details of the examples used in this document is as follows,-Initiator Subsidiary-‘Blink AGIS INV ORG’. This organization is a part of BCR Singapore Legal Entity. This Legal Entity uses 001 balancing segment value. The user that is having access to initiator subsidiary is called BCR_S-Recipient Subsidiary–‘Blink AGIS INVJ ORG’. This organization is a part of BCR Japan Legal Entity. This Legal Entity uses 002 balancing segment values. The user having access to initiator subsidiary is called BCR_J

PART ONE- AGIS SETUPWelcome to the Advanced Global Intercompany System (AGIS) setupDescription of the setup that is used in this viewlet is as followsOne ledger called Blink ledger.Two legal entities under that ledger called BCR Singapore legal entity and BCR Japan legal entity. Two operating units Blink AGIS Singapore OU, Blink AGIS Japan OU respectively.*Note: Setting up of receivable setup is mandatory, for using invoicing functionality. And for setting up of receivables mandatory that inventory Organization are created as well.The transactions in this example are assumed to be happening from BCR Singapore to BCR Japan. For theses two createTwo employees: BCR Singapore and BCR JapanTwo Users : BCR_S and BCR_JCreate receivables and GL Responsibilities.As the first step we should define employees in HRMS. These employees are used later on in the AGIS security setups.Navigation: HRMS, Progress Admin S&L>>People>>Enter and Maintain

Define an employee ‘BCR, Singapore’ .This person will be attached to the user initiating the transaction in AGIS. In our example transaction gets initiated by BCR Singapore

Similarly create another employee (Recipient) BCR Japan and Save your new creations.

Create a users like BCR_S & BCR_J. Note the Person attached to this User is (BCR, Singapore) he is now the contact PersonNext step is to define Custom responsibilities like GL Super User, AP Super User, AP Super User, HRMS Management, OM, & AGIS Super user Resposibilities and attach it to our users.Our next setup in AGIS set id to define a business groupLogin to HRMS Responsibility and create Business group called Blink AGIS, Which you will later require to attach with the operating Units.Navigation:HRMS Management>>HRMS Manager>>Work Structures>>Organization>>Description

Click on Other button at line Level and set the Business Group settings:

Next step is to set some of the system profile options.Navigation: System Administrator>>Profile>>System Profile options where set for1. HR: Business Group,2. HR: Security,3. MO: operating Unit,4. MO: security profile,5. MO: Default Operating Unit Profile,6. GL Ledger nameOne might already know, If MO: Security profile is defined the MO: Operating unit profile becomes redundant.

Advanced Global Intercompany Setup – Part 2In this part we will see about GL ,AR, AP, setupsNow our next step is to create Legal entities namely BCR Singapore legal entity and BCR Japan legal entity of which one will be Our Initiator and other will be Recipient for our Intercompany transactions.In BCR General Ledger Super User Responsibility*Note: When you create our business group HRMS security profile gets automatically created with the same name of our Business Group.Navigation: Setup>>Financials>>Accounting Setup Manager>>Accounting SetupClick on Legal Entity tab in Accounting Setup Manager page to create new legal entity. Fill in all the mandatory columns like Territory, Legal Entity Name, Organization name, RCB Number and Legal Address. The screen shot below shows the sample of legal entity creation. Values such as Place of Registration, Inspection date, Primary Activity, Secondary Activity, Type of Company, and Fiscal year end are optional fields.

Similarly Create BCR Japan Legal Entity. And query the names in Legal entity form for confirming the creation of legal entities.

Our next step in the process is to create a valid ledger. Here I have a valid ledger called Blink Ledger highlighted on the screen shot below. Now attach the legal entities we have created in the previous step to this valid ledger. 

In the screen shot below you can see the legal entities attached to the Ledger. Then define the operating unit by clicking the Operating unit update icon as shown below.

Create Operating units Namely ‘Blink AGIS Singapore OU’ and ’Blink AGIS Japan OU’. While creating attach the business group we created in the initial steps. (Blink AGIS)

Query the operating Units as show below for confirming the creation. Here you can see your operating units, Short code, Business group to which they are attached and the corresponding legal entities they are assigned to

So far what is covered is assignment of Legal entities and Operating units to Ledger.Next step would be to define Inter-company Balancing Rules. Options to define inter- company rules would be visible, If and only if the inter company option is enabled.

Clink on Update icon to define Intercompany balancing rule

Under Intercompany company accounts link, there is a link called ‘Define Relationships’

where one can create relationship between various legal entities. This is the place where GL is noticed of ‘from where’ and’ to where’ the transactions are going to flow.In case, define the relationships for the BCR Singapore Legal Entity to BCR Japan Legal entity. As of now reverse way transactions is not happening so only one way relationship (Singapore LE to Japan LE) would suffice.

Define the relationship here. There are two parties in a relationship. First one is the Transacting Entity and the second is Trading Partner Entity.Note: The relationship can be defined individual / multiple Balancing segment values of the transacting and trading entity.Now we have just finished the required setups in GL for AGIS. Before entering AR setup the prerequisite is to have a Inventory organization. Below screen shots will tell you the creation of INV organization:

Complete the Accounting Information, Receiving Information, Inventory Information to complete the INV. Organization creation.Now set the following system profile option at this responsibility levelProfile options where set for1. HR: Business Group,2. HR: Security,3. MO: operating Unit,

4. MO: security profile,5. MO: Default Operating Unit Profile,6. GL Ledger name*Note: When you create our business group HRMS security profile gets automatically created with the same name of our Business Group.Now we will move on to Payables setups.In AP Define Financial Options,Payable Option, and System profile Option.setting up of Financial & payables options are more are less similar to 11i. We will see obout AGIS

Advanced Global Intercompany Setup – Part 3Login to Intercompany Super user responsibility assigned to our user. The First step is defining organizations. These are the organizations which will be used by AGISNavigation: Intercompany Super user>>Setup>> Organization

Define Organization as shown below.

Similarly create organization for Japan legal entity also. And Query the same in organization form for confirming your creation. Note that in the above Screen while creating organization select ‘Yes’ for enabled column. This flag indicates that this organization is enabled for intercompany transactions. Without this processing of transactions in those organizations, through AGIS is not possible

 Next Step is to security definition. Security is defined as, which user/person will have access to which and how many intercompany organizationsNavigation: Intercompany Super User>>Setup>>securityQuery the Person name and the Respective organization on which the person should be given access. And enable “Yes” for the options as shown below

In the same way shown above give access for BCR_S to Singapore Org. and BCR_J to Japan Org.Next set is to define Transaction types in AGIS.Your transaction type will decide whether invoicing is required for the transaction and manual approval is required.

Our next step inthe process is to define AGIS system options

Next we will define invoicing options

Under invoicing option Define Receivable Assignment and Customer/Supplier association as shown in the below screen shots

Example setup of one of the operating unit is shown in figure.Note that Receivables Transaction Type and Receivables Memo lines can be linked only id Receivable setups are complete.If those setups are not complete then trhe LOV will not appear.The values like “Intercompany” , “Global Intercompany” respectively are seeded values in Receivables. These have been specifically seeded in Receivables for AGIS

In the above step definition of Customer/ Supplier Association is done.There are two tabs in the setup.1.Customer/Supplier association tab to define the Association2.Trading partner tab to reviewthe earlier Created association.

The second step in the creation of customer supplier association is selection of customer and entering a “Bill To Site” for the customerNote that both are mandatory.

With this we have completed AGIS setup required for processing AGIS transactions We will discuss on AGIS Transaction process in the next part.

Advanced Global Intercompany(AGIS) Setup – Part 4AGIS – Transaction Processing

Now we are ready with the setups for processing AGIS transaction. Login using Initiator Account . In our example BCR_S (Singapore is the initiator) and select Outbound transaction 

This is the first form for data entry. notice the Transaction type, Initiator fields entered at the top of the screen.In the second half, Receipient Details are entered. 

The next screen is to complete accounting from the initiator side. Click on Add line button and enter The second effect of transaction from initiator side.

Once the transaction entry is complete click On Submit button.After submition you can see the status of the transaction appears as “Submitted” which is Shown below

Now Login as Recipient. in our example BCR_J (Japan is Our Recipient)and click on Inbound transaction as shown below

Query for the same batch number. And you will find the Status of the trasaction appears as “Received” for the Recipient.

Click on update icon for entering Recipient side accounting information.

 

R12 “AGIS” : What makes “Advanced” in Oracle AppsR12 “AGIS” : What makes “Advanced”Since last fortnight,I was looking into R12 GIS Module, seems some of the old features and functionlity have been greatly enhanced with addition of some more new features introduced.The point which should be noted here is,R11i GIS get new name commonly known as "Advanced Global Intercompany System" in short 'AGIS'. The difference is the prefix 'A', therfore will take a close microscopic view on feature that makes 11i GIS into Advanced GIS of R12. Here are the candidate features :

Ability to create invoices (AR and AP)Oracle Advanced Global Intercompany System can create invoices in payables and receivables sub ledger from intercompany transactions.Using Oracle Advanced Global Intercompany System user can enter transactions for multiple recipients within a single batch. This allows user to submit intercompany transactions from one initiator to one or more recipients in a single batch.

Proration of transaction distribution amountsWhen user allocates more than one distribution account in a batch that has multiple recipient transactions, Oracle Advanced Global Intercompany System can automatically prorate the distribution amounts based on the recipient transaction amounts. The proration of amounts is also used by Oracle Advanced Global Intercompany System to adjust the distribution amounts in the batch when a recipient transaction is deleted or it is rejected.

Upload Transaction Batches created in ExcelThis was a missing link in the earlier version, as earlier product does not have capability to use direct upload functionality, rather than interfacing through Open GIS interface. In Release 12 ADI is heavily used in this module, which is replacement of external integration for AGIS System using by mean of Microsoft based Excel spreadsheet. Now flexibility is provided to user that can generate spreadsheet templates that have features of intercompany entry pages and using the templates the user can enter transactions in the spreadsheet and upload them into Oracle Advanced Global Intercompany System. The good thing has found the standard templates can be customized by removing or adding the entry fields from a list of available fields. This feature is used to create a template that contains only the entry fields that are important for the business. The required fields cannot be removed from the template. Once the templates are generated, user can save them in their local computer to reuse them in the future. This figure describe the options available in both the versions.

Multiple recipients SupportReversal of batch/transaction

This changed feature enables a user to reverse a whole batch or an individual transaction in a batch. When the user reverses a batch or a transaction, a new reversal batch is created, which displays the references to the original transaction. One point to be noticed is that new batch is submitted automatically immediately after it is created. Not both the parties (Sender /receiver), its only users with access to the initiator organization can reverse its batches or transactions. The set up is there where a user can choose a reversal method determining if the new batch will be created with opposite signs, or with switched debits and credits.

Descriptive flexfield supportIn AGIS descriptive flexfields is supported on the batch and also on individual transactions within the batch. Descriptive flexfields allow user to enter any additional information specific to the nature of business, in the batch and in the transactions. Important to note that these DFF can be used by sender. The user can enter descriptive flexfield information for the recipient in the Recipient Accounting section.

Flexible Approval Rules and Workflow NotificationsIn R12, AGIS very similar to other module, home page displays notifications about approval or rejection statuses of intercompany transactions. You should note that notifications can be sent to the users via email. The rules for approvals and notifications can be customized using Oracle Approval Management Engine (AME), which allows the user to add extra approval rules and hierarchies to suit their business needs.

Document attachmentThe user can attach the documents for the batch as well as for each of the transaction. When user submits the batch, the documents are transferred to respective recipients.

Transaction securityIntercompany transactions entry pages incorporate various security features. The user can enter transactions only for those intercompany organizations that are

assigned to the user. Other security features include minimum transaction amount, control amount and function security.

For example: Intercompany accountant processes intercompany transactions for many intercompany organizations in the enterprise.What is different between these two is :

R11i - Each responsibility has only one subsidiary assigned, therefore a user can initiate intercompany transactions for one subsidiary from each responsibility R12 – the user can initiate intercompany transactions for many trading partners without changing responsibility

Intercompany PeriodsThe new Intercompany calendar gives the user the option to control intercompany transaction processing by periods status.What is observed in this functionality can be best describe as:If a user wants to control intercompany cut-off dates, then the user can choose which General Ledger calendar will be used to control transaction entry by intercompany period status. Intercompany Calendar prevents users from entering transactions in closed periods and from closing the period if open transactions exist for the period user wants to close. When the user tries to close General Ledger accounting period, or Oracle Payables period or Oracle Receivables period while Intercompany Period is still open, the warning message can be displayed informing user about the status of intercompany period.

Setup Profile OptionsIn AGIS there is no profile options that means these three as below intercompany profile options used in R11i are obsolete in this release. Intercompany: Protect Receiver Natural Account ntercompany: Subsidiary Intercompany: Use Automatic Transaction

Intercompany Reconciliation and ReportingThere are two new reports avaible in XML Publisher format Intercompany Transaction Summary report Intercompany Account Details report.These reports replace reports that were available in the Global Intercompany System (GIS) in Release 11i.The new reports offer all of the functionality of the obsolete reports plus additional benefits.A bit on these 2 reports:1)Intercompany Transaction Summary report replaces the Intercompany Transaction Detail report and Unapproved Transaction Listing report.The purpsoe of this report is to give user a clear overview of intercompany transactions and their statuses, there so that day-to-day tasks and speeds up period close activities.

This report also provides supporting documentation for intercompany reconciliation and helps keep intercompany in balance by uncovering any potential discrepancies.2) Intercompany Account Details report replaces the Transaction Activity Summary reportThis new report provides a detailed listing of all accounting lines for intercompany batches, grouped by transaction.The report is divided into two sections:

one section for outbound batches one section inbound transactions.The outbound section shows transactions initiated by the organizations to which the user has an access, the inbound section shows transactions received by these organizations. The user can choose whether to include inbound, outbound, or both sections in the report.The user can run the report for one or many organizations to which the user is given the access.User can select what parameters like initiator, Recipient, GL Date range, Batch Number range, Transaction Status, Currency, Batch Type, Invoice Number, and many more to run the report by. User can run the report by ranges of initiator and recipient accounts to see what transactions make up their balances

AGIS(Advanced Global InterCompany Organization) in R12Intercompany SetupThis chapter covers the following topics:• Introduction• Setting up AGIS

Introduction

Advanced Global Intercompany System (AGIS) enables you to create, settle andreconcile intercompany transactions. Intercompany transactions are transactions thatoccur between two related legal entities in an enterprise or between groups in the samelegal entity.  1) Transactions that occur between two legal entities are called intercompanytransactions. 2)Transactions that occur between two groups within one legal entity arecalled intracompany transactions.

The balances of the intercompany transactions must be eliminated or adjusted whenpreparing the consolidated financial statement, or it might result in overstated financialresults, which in turn might lead to legal repercussions against the enterprise.Intercompany transactions can be identified and eliminated by the use of specificaccounts to book these transactions. Defining these accounts allows you to booktransactions that are identified as intercompany transactions in the specific accounts.These accounts must be defined as a part of the General Ledger setup process.Before you start working on AGIS, you must setup the following:• Complete the Accounting Setup Manager to set up General Ledger and legal

entities• Set up AGIS

Intercompany Transaction Processing

Intercompany Home Page

Use the Intercompany Home and Transaction pages to receive, respond to, and initiateintercompany transactions for multiple recipients. The transactions that you receive areinbound transactions and the transactions that you initiate are outbound transactions.The Intercompany Home displays the most recent transactions that require yourintervention. This page displays a summary of your open notifications, and a list of fivemost recently received transactions.On the Home page, you can search transactions by Inbound or Outbound BatchNumber, or navigate to the Create Batch page to create an intercompany transaction.The Intercompany Transaction pages enables you to enter transactions addressed tomultiple recipients thereby speeding up data entry and simplifying management ofintercompany allocations.

Intercompany Transaction Page

There are two distinct flows for the Intercompany transaction entry and processing: anoutbound transaction flow, and an inbound transaction flow. These flows areimplemented in the Transactions pages as tabs: Outbound and Inbound. The Outboundtab provides all the functions an initiator of an intercompany transaction can perform.The inbound tab provides all the functions a recipient of the transaction can perform.

Outbound Transactions Page

Use the Outbound Batches page to create intercompany transactions in batch mode,submit them to the recipients for approval. Additionally, you can search, personalizeviews, create, and update batches. You can personalize and create new views.

You can create a batch for organizations you can access and include any number ofrecipients in the batch.Creating a batch is a two-step process:• Enter the batch header and transactions.• Enter the batch expense or revenue distributions.

Transferring Transactions to General Ledger

Intercompany transactions that do not need invoices are directly transferred to GeneralLedger once approved.Before you transfer the transactions, ensure the following:• The transfer options are set in the Setup tab• The corresponding period in general ledger is open• The transaction status is approved• The exchange rate exists between the intercompany and general ledger currency ifthey are different• The transaction date is specified for calculating the exchange rateThe workflow process transfers the intercompany transactions depending on theoptions set in the System Options page of the Intercompany Setup tab. If you selectOnline mode, then no intervention is necessary, the initiator and recipient workflowtransfers transactions on approval. If you select Batch mode, then you must run theconcurrent request to transfer the transactions or schedule the concurrent request.

Note: On successful transfer, the transaction status changes toTransferred to Initiator GL or Transferred to Recipient GL respectivelyfor the initiator and recipient workflows. The Batch and Transactionstatus is set to Complete once the transactions are transferred to bothinitiator and recipient ledgers.Intercompany only populates an interface table in General Ledger forintercompany transactions. After Intercompany transfers thetransactions to the GL Interface tables, you must run or schedule theGL Journal Import concurrent program to import these journals intoGeneral Ledger for both the Online and Batch mode. The actual postingof the transactions into the appropriate General Ledger accountingtables is performed separately by the GL Posting process after thejournals are imported into General Ledger. 

Transferring Transactions to Receivables and Payables

The initiator workflow transfers the intercompany transactions to Receivables to createinvoices as required by legal or business requirements. After creating the invoices,Receivables updates the intercompany transactions with the invoice numbers andpasses the number to the recipient workflow, which updates and transfers thetransaction to Payables.Before you transfer the transactions, ensure the following:• Transfer options are set in the System Options page of the Intercompany Setup tab.

• Receivables Transaction Type, Receivables Memo Line are mapped tointercompany transactions in the Invoicing Options subtab.

• Customer and supplier associations are defined in the Invoicing Options subtab.

• Transaction status is approved.

• Transaction date is specified for calculating the exchange rate.The application transfers the transactions to Receivables and Payables depending on theoptions set in the System Options page of the Intercompany Setup tab.Execute the following steps to transfer the transactions in Online and Batch modes.

To transfer the transactions in Online mode:

1. The user must approve the transaction.The initiator workflow transfers the intercompany transaction details to theReceivables Interface tables and the transaction status changes to Transferred toReceivables.

2. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.On successful completion of the Receivables AutoInvoice Program, the invoicenumber is updated on the Intercompany transaction and the recipient workflowtransfers the intercompany transaction details to Payables Interface tables and thetransaction status changes to Complete.

3. Run the Payables Open Interface Program or schedule it to run at regular intervals.

To transfer the transactions in Batch mode:

1. The user must approve the transaction.2. Run the Transfer Intercompany Transactions to Receivables or schedule it to run atregular intervals.The transaction status changes to Transferred to Receivables.3. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.On successful completion of the Receivables AutoInvoice Program, the invoicenumber is updated on the intercompany transaction.4. Run the Transfer Intercompany Transactions to Payables or schedule it to run atregular intervals.The transaction status changes to Complete.5. Run the Payables Open Interface Program or schedule it to run at regular intervals