r11i pjm reconciliation

Can We Actually Reconcile Project MFG to Inventory, WIP, Projects & G/L? What

Was I Thinking?

Catherine Gauchat TCI International & Douglas VolzDouglas Volz Consulting

Background

Through Project Partners, TCI requested help reconciling PJM

One Ledger (set of books), one operating unit, one inventory organization

About 50 to 80 projects per month

50,000 to 80,000 inventory and WIP transactions each month

Project MFG, configurator, FIN modules (G/L, PO, A/P, A/R, F/A, Project Costing, Project Billing)

Manufactures antenna systems for commercial and defense clients

Background

Military Customers

Commercial Customers

Inventory / WIP G/LProjects

Agenda

Business Requirements Reconcile Inventory & WIP & Projects & G/L all

together

Lay of the Land – Built-In PJM Issues PJM Inventory/WIP Accounting Design Issues Cost Collector Design Issues Lack of Reconciliation Reporting

Reconciliation Opportunities – Release 11i & 12 Reconciliation Association Table Reconciliation Reporting

Agenda (Continued)

Using Subledger Accounting for PJM Reconciliation Use Subledger Accounting Rules to Populate attribute

columns Coupled with Custom Reconciliation Reporting Pros and Cons with SLA vs. Custom Reconciliation

Table

Presentation Summary Business Requirements Built-in PJM Reconciliation Issues Solution Summary

Business Requirements

Ability to ReconcileAll at the same

time!

Inventory & WIP Value

G/L

Project Accounting G/L

Inventory & WIP Value

Project Accounting

Business Requirements

Identify Differences

Inventory & WIP compared to Projects

Inventory & WIP compared to G/L

Background Information for Project Manufacturing

Manufacturing has the following transactions:

Purchasing

Delivery

Purchasing

Receipt

Material

Transactions

WIP

Transactions

Time & Attendance

Borrow / Payback, etc.

MTL_MATERIAL_TRANSACTIONS

• TRANSACTION_ID• TRANSFER_TRANSACTION_ID• ORGANIZATION_ID• INVENTORY_ITEM_ID• TRANSACTION_SOURCE_TYPE_ID• TRANSACTION_TYPE_ID• PROJECT_ID• TO_PROJECT_ID• SOURCE_PROJECT_ID• SUBINVENTORY_CODE• PRIMARY_UOM• PRIMARY_QUANTITY

MTL_SYSTEM_ITEMS_B• INVENTORY_ITEM_ID• ORGANIZATION_ID• SEGMENT1• DESCRIPTION

MTL_TRANSACTION_ACCOUNTS

•TRANSACTION_ID• ORGANIZATION_ID• INVENTORY_ITEM_ID• TRANSACTION_SOURCE_TYPE_ID• PRIMARY_QUANTITY• BASE_TRANSACTION_VALUE• REFERENCE_ACCOUNT• ACCOUNTING_LINE_TYPE

Inventory Transaction Tables

MTL_PARAMETERS• ORGANIZATION_ID• PRIMARY_COST_METHOD

WIP_TRANSACTIONS• WIP_ENTITY_ID •TRANSACTION_ID• ORGANIZATION_ID• TRANSACTION_TYPE• PROJECT_ID• PRIMARY_QUANTITY

MTL_SYSTEM_ITEMS_B• INVENTORY_ITEM_ID• ORGANIZATION_ID• SEGMENT1• DESCRIPTION

WIP_TRANSACTION_ACCOUNTS•TRANSACTION_ID• WIP_ENTITY_ID• ORGANIZATION_ID• PROJECT_ID• PRIMARY_QUANTITY• BASE_TRANSACTION_VALUE• REFERENCE_ACCOUNT• ACCOUNTING_LINE_TYPE

WIP Transaction Tables

MTL_PARAMETERS• ORGANIZATION_ID• PRIMARY_COST_METHOD

WIP_ENTITIES• WIP_ENTITY_ID• ENTITY_TYPE• ORGANIZATION_ID• WIP_ENTITY_NAME• PRIMARY_ITEM_ID

Project Manufacturing Integration

Cost Collector

PA_EXPENDITURE_ITEMS_ALL

INV and WIPDistribution Accounting

Tables

• PROJECT_ID• TRANSACTION_SOURCE• EXPENDITURE_TYPE• ORIG_TRANSACTION_REFERENCE• SYSTEM_LINKAGE_FUNCTION• PROJECT_BURDENED_COST

Project Balances

Background Information for Project Manufacturing

These transactions are integrated to Projects through:

Project Id Project Id, To Project Id, Source Project Id

Transaction Sources WIP, Inventory, Time & Attendance

Expenditure Types similar to Cost Elements

System Linkage Function similar to Cost Elements ORIG_TRANSACTION_REFERENCE Transaction ID for

Inventory & WIP

Background Information about PSI(Project Status Inquiry)

Certain material transactions are not PSI-related:

(Project Status Inquiry related)WIP

Completions

WIP Completions

Returns

Sales Order Issues

Sales Order Returns

WIP Scrap

WIP Scrap Returns

Background Information about PSI(Project Status Inquiry)

Transfers to / from the same project number and task are not PSI related:

Misc. Project Transfers

Subinventory Transfers

WIP component issues

WIP component returns

WIP negative component return

WIP negative component issue

PJM Inventory/WIP Accounting Design Issues

Too Many Accounting Entries! PJM significantly increases the number of detailed

accounting entries• Transfers by Cost Group on top of normal entries• Accounting by Cost Element

A Cost Group Transfer is required every time goods move from one Cost Group to another

Too Many Accounting Entries – Example 1 Accounting Debits and Credits for Material Issue to WIP

(Average Costing Example from Release 11i)

Matl Issue to WIPCost Group Xfer

WIP Matl Acct INV Matl Acct Cost Group

Xfer Acct

582.75 582.75 582.75

582.75

A two-line detailed transaction is written as a four-line entry

Too Many Accounting Entries – Example 2

Accounting Debits and Credits for Transfer to Project(Average Costing Example from Release 11i)

Transfer to Project(From Subinv PRJ)

To Project 123

INV Matl Acct

13.83 44.40

INVRes. Acct

INV ProdOVHD Acct

INV

OSP Acct

Project Matl Acct

13.83 0.00 0.00 44.40

ProjectRes. Acct

ProjectOVHD Acct

Project

OSP Acct

A four-line transaction is written as a six-line entry

Too Many Accounting Entries – Technical Look

Sample Data from MTL_MATERIAL_TRANSACTIONS and MTL_TRANSACTION_ACCOUNTS

Average Costing Example from Release 11i

Cost Group Xfer

“Real” Entries

Cost Collector Design Issues

The Cost Group Transfer ≠ Inventory Matl Accounting

This example is Material Component Issues to WIP

Cost Collector Design Issues The PA_EXPENDITURE_ITEMS_ALL Table has a

misleading foreign key reference Project transfers has two material transactions

“From”

(Minus Qty)

“To”

(Plus Qty)

INV Matl AcctMTL_MATERIAL_TRANSACTIONS

XXX

XXX

PA_ EXPENDITURE_

ITEMS_ALL

Projects References the “From Entry”

Material Accounting References the “To”

Entry

Cost Collector Design Issues Difficult to Join PA_EXPENDITURE_ITEMS_ ALL with:

MTL_TRANSACTION_ACCOUNTS and WIP_TRANSACTION_ACCOUNTS

Key Reference Columns Column Values

TRANSACTION SOURCE

ORIG_TRANSACTION_REFERENCE

PRJ_EXPENDITURE_TYPE

SYSTEM_LINKAGE_FUNCTION

(‘Inventory’, ‘Work in Process’)

(TRANSACTION_ID from MTL_TRANSACTION_ACCOUNTS & WIP_TRANSACTION_ACCOUNTS)

(similar to cost elements)

(Inventory and WIP values are ‘INV’, ‘WIP’, ‘BTC’)


For Inventory Transactions the SYSTEM_LINKAGE_FUNCTION value of ‘INV’ is not unique:

For miscellaneous project transfers from Inventory to a Project, the value ‘INV’ could be for cost element id = 1 (material) or 2 (material overhead) for the same expenditure type

Sample code:and (decode(peia.SYSTEM_LINKAGE_FUNCTION, 'INV', 1,'BTC', 5, 1)

= xrpm.cost_element_id

or

decode(peia.SYSTEM_LINKAGE_FUNCTION, 'INV', 2,'BTC', 5, 1)

= xrpm.cost_element_id)

• XRPM is the table alias for the reconciliation table XXX_RECONCILE_PRJ_MFG

• peia is the table PA_EXPENDITURE_ITEMS_ALL

Cost Collector Design Issues For WIP Transactions the

SYSTEM_LINKAGE_FUNCTION value of ‘WIP’ is not unique:

For the same project & task, PA_EXPENDITURE_ITEMS_ ALL rows can have the same:

RESOURCE_ID

TRANSACTION_SOURCE

ORIG_TRANSACTION_REFERENCE

PRJ_EXPENDITURE_TYPE

SYSTEM_LINKAGE_FUNCTION


WIP Material Returns Not Picked Up by Cost Collector Going from WIP/jobs related to a project returned into a non-

project subinventory

Transactions that Are Not PSI Related are Picked Up by the Cost Collector Inventory material transactions transferred to/from same

project

For inventory transfers into a project, the Cost Collector picks up the wrong Expenditure Type

Really hard to find these discrepancies

Lack of Reconciliation Tools

New Tools Exist in R12 but: Only summary inquiry screens – Cost Activity

Workbench No easy to use reconciliation reports The new tools help with Project Manufacturing

inquiries and drill-down but don’t directly address an overall reconciliation solution

So how do we solve these reconciliation

issues?

Custom Opportunities In Release 11i and 12

So What Can Be Done for Release 11i?

Create custom reconciliation tables

Create custom reconciliation reports

Simple yet “brute force” design (copy lots and lots of rows)

XXX_RECONCILE_PRJ_MFG

Reconciliation Table Architecture

• TRANSACTION_ID• TRANSACTION_SOURCE• EXPENDITURE_ITEM_ID• PROJECT_ID• PSI_RELATED_FLAG• ORIG_TRANSACTION_REFERENCE • BASE_TRANSACTION_VALUE• PROJECT_BURDENED_COST



WIP_TRANSACTION_ACCOUNTS

LEGENDInventory & WIP tables PA Expenditure Items All tableNew integration column

INSERT_REASON VARCHAR2(50) INSERT_SCRIPT VARCHAR2(30) UPDATED_FLAG VARCHAR2(1) INVENTORY_ITEM_ID NUMBER ORGANIZATION_ID NUMBER TRANSACTION_DATE DATE TRANSACTION_ID NUMBER TRANSFER_TRANSACTION_ID NUMBER TRANSACTION_ACTION_ID NUMBER TRANSACTION_SOURCE_TYPE_ID NUMBER TRANSACTION_SOURCE_ID NUMBER TRANSACTION_SOURCE VARCHAR2(30) TRANSACTION_TYPE_ID NUMBER TRANSACTION_TYPE_NAME VARCHAR2(80) SUBINVENTORY_CODE VARCHAR2(10) TRANSFER_SUBINVENTORY VARCHAR2(10) LOCATOR_ID NUMBER TRANSFER_LOCATOR_ID NUMBER WIP_ENTITY_NAME VARCHAR2(80) PROJECT_ID NUMBER ORIG_PROJECT_ID NUMBER SOURCE_PROJECT_ID NUMBER TO_PROJECT_ID NUMBER

Reconciliation Table Architecture(XXX_RECONCILE_PRJ_MFG)

ACTUAL_COST NUMBER NEW_COST NUMBER PRIOR_COST NUMBER TRANSACTION_COST NUMBER GL_BATCH_ID NUMBER RESOURCE_ID NUMBER UOM VARCHAR2(3) BASE_TRANSACTION_VALUE NUMBER REFERENCE_ACCOUNT NUMBER ACCOUNTING_LINE_TYPE NUMBER COST_ELEMENT_ID NUMBER EXPENDITURE_ITEM_ID NUMBER EXPENDITURE_ITEM_DATE DATE ORIG_TRANSACTION_REFERENCE VARCHAR2(30) WIP_RESOURCE_ID NUMBER UNIT_OF_MEASURE VARCHAR2(30) QUANTITY NUMBER PROJECT_BURDENED_COST NUMBER INV_EXPENDITURE_TYPE VARCHAR(30) PRJ_EXPENDITURE_TYPE VARCHAR(30) PSI_RELATED_FLAG VARCHAR(1) MMT_PRIMARY_QUANTITY NUMBER MTA_PRIMARY_QUANTITY NUMBER PM_COST_COLLECTED VARCHAR(1)

LEGENDInventory & WIP tables PA Expenditure Items All tableNew integration column

Run List – INSERT & UPDATE Scripts

Insert all rows from MTA and WTA into the recon. table for all rows where the accounting line type is ‘Inventory’ and ‘WIP’ (1 and 7) or where the row is related to a project In effect, make a copy of the material and wip accounting

tables for inventory and wip valuation entries Also copy the non-inventory and non-WIP valuation entries

that reference a project so that we can reconcile the PSI inquiry to the G/L

Update the reconciliation table with the corresponding information from PA_EXPENDITURE_ITEMS_ALL

You have all your reconciliation information in one place

Business Requirements – Report Reports

Summary by:• Full account• Organization code• Project• Expenditure Type

• Transaction Name• Amount to Subinventory• Amount to WIP• Amount directly to Projects

Business Requirements – Report Reports

Reconcile to the G/L by full or partial account segments:

Business Requirements – Report Layout Reconcile Project Manufacturing to Project Accounting by

project number, as the values for both are held in the same table:

This example was designed for monthly totals

Business Requirements – Report Differences Report Differences – transactions exist in both but do not agree

(Cost Group Transfer Issue)

PSI-Related transactions exist in MTA or WTA but not in PEIA Transactions related to a project but not PSI Related and still in PEIA (still in the Project Status Inquiry)

How to Implement in Release 12?

Use SLA to populate attribute columns or supporting references But only 5 supporting references are allowed Will need custom sources to help populate attribute

columns Timing issues as SLA has to run for both Inventory/WIP

and Projects, before you can figure out what is missing

So how would we do this in Release 12?

Custom Programs to Populate SLA Tables

CREATE ACCOUNTING

SLA Accounting Tables

XLA_AE_HEADERS

XLA_AE_LINES

XLA_DISTRIBUTION_LINKS

XLA_EVENTS

INV, WIP, ProjectsDistribution Accounting

Tables

XLA_AE_HEADERS

XLA_DISTRIBUTION_LINKS

XLA_EVENTS

CustomUPDATE Programs

To PopulateATTRIBUTE COLUMNS

Create Custom UPDATE Programs

POPULATE ATTRIBUTE COLUMNS FOR:

• TRANSACTION_ID• TRANSACTION_SOURCE• EXPENDITURE_ITEM_ID• PROJECT_ID• PSI_RELATED_FLAG• ORIG_TRANSACTION_REFERENCE• BASE_TRANSACTION_VALUE• PROJECT_BURDENED_COST

Distribution AccountingTables


WIP_TRANSACTION_ACCOUNTS

Project Cost Collection Table


LEGENDInventory & WIP tables PA Expenditure Items All tableIntegration columns

Why is the Release 12 Solution Different?

Attribute columns available in SLA tables

SLA can change the account numbers (accounting flexfield)

Update the MTA and WTA SLA entries for information in PA_EXPENDITURE_ITEMS_ALL (PEIA)

For both entries in inventory (onhand) belonging to a project and entries issued from inventory, not onhand, belonging to a project

INV and WIP Integration Details for SLA

APPLICATION_ID – 707 (Cost Management)

ENTITY_CODE – MTL_ACCOUNTING_EVENTS

– WIP_ACCOUNTING_EVENTS

SOURCE_DISTRIBUTION_TYPE – 'MTL_TRANSACTION_ACCOUNTS – ‘WIP_TRANSACTION_ACCOUNTS

SOURCE_DISTRIBUTION_ID_NUM_1 – INV_SUB_LEDGER_ID – WIP_SUB_LEDGER_ID

Post Processing Program Details for SLA (Cont’d)

FROMinv.mtl_transaction_accounts mta,inv.mtl_material_transactions mmt,inv.mtl_transaction_types mtt,inv.mtl_system_items_b msi,apps.GL_CODE_COMBINATIONS_KFV gcc,inv.mtl_parameters mp, xla.xla_transaction_entities ent,xla.xla_events xe,xla.xla_distribution_links xdl,xla.xla_ae_headers ah,xla.xla_ae_lines al

Post Processing Program Details for SLA (Cont’d)

-- ===========================================-- Material Transaction, Org and Item Joins-- ===========================================where mta.transaction_id = mmt.transaction_idand mmt.transaction_type_id = mtt.transaction_type_idand mta.organization_id = msi.organization_idand mta.inventory_item_id = msi.inventory_item_idand mp.organization_id = msi.organization_id

Post Processing Program Details for SLA (Cont’d)-- ========================================================-- SLA table joins to get the exact account numbers - MTA-- ========================================================AND ent.entity_code = 'MTL_ACCOUNTING_EVENTS'AND ent.application_id = 707AND xe.application_id = ent.application_idAND xe.event_id = xdl.event_idAND ah.entity_id = ent.entity_idAND ah.ledger_id = ent.ledger_idAND ah.application_id = al.application_idAND ah.application_id = 707AND ah.event_id = xe.event_idAND ah.ae_header_id = al.ae_header_idAND al.application_id = ent.application_idAND al.ledger_id = ah.ledger_idAND al.AE_HEADER_ID = xdl.AE_HEADER_IDAND al.AE_LINE_NUM = xdl.AE_LINE_NUMAND xdl.application_id = ent.application_idAND xdl.source_distribution_type = 'MTL_TRANSACTION_ACCOUNTS'AND xdl.source_distribution_id_num_1 = mta.inv_sub_ledger_idAND gcc.code_combination_id = al.code_combination_id

Post Processing Program Details for SLA (Cont’d)-- ========================================================-- SLA table joins to get the exact account numbers - WTA-- ========================================================AND ent.entity_code = ‘WIP_ACCOUNTING_EVENTS'AND ent.application_id = 707AND xe.application_id = ent.application_idAND xe.event_id = xdl.event_idAND ah.entity_id = ent.entity_idAND ah.ledger_id = ent.ledger_idAND ah.application_id = al.application_idAND ah.application_id = 707AND ah.event_id = xe.event_idAND ah.ae_header_id = al.ae_header_idAND al.application_id = ent.application_idAND al.ledger_id = ah.ledger_idAND al.AE_HEADER_ID = xdl.AE_HEADER_IDAND al.AE_LINE_NUM = xdl.AE_LINE_NUMAND xdl.application_id = ent.application_idAND xdl.source_distribution_type = ‘WIP_TRANSACTION_ACCOUNTS'AND xdl.source_distribution_id_num_1 = wta.wip_sub_ledger_idAND gcc.code_combination_id = al.code_combination_id

Summary Overall PJM reconciliation tools do not exist in current releases

You could enlarge this example to include any project subledger or expenditure source, such as: Payables Purchasing Time and Attendance Other outside systems

You can save time just like TCI did two people over three weeks to now less than 3 days

Use the information presented here to help you create your own solution

Summary In Release 11i creating a custom table is your only choice

In Release 12 use similar custom programs to populate attribute columns (ATTRIBUTE1 – 15) with the same information as found in the reconciliation table

LEGENDInventory & WIP tables PA Expenditure Items All tableIntegration columns

POPULATE ATTRIBUTE COLUMNS FOR:

• TRANSACTION_ID• TRANSACTION_SOURCE• EXPENDITURE_ITEM_ID• PROJECT_ID• PSI_RELATED_FLAG• ORIG_TRANSACTION_REFERENCE• BASE_TRANSACTION_VALUE• PROJECT_BURDENED_COST

Appendix

Professional Background for Douglas Volz

Douglas Volz

Professional Background

Doug Volz is a Senior Architect and Advisor for Oracle Application projects, with a particular interest in Project and Cost Management. He has 30 years accumulated experience, including 5 years in Oracle Development (co-designing Oracle Cost Management) and 12 years in industry in Cost and Accounting Management positions. His Manufacturing and Cost systems experience covers project management, software design/development, delivery and consulting services, for both Oracle Corporation, and multiple international consulting firms. Prior to his systems career, Mr. Volz also held numerous management accounting positions for telecommunications, defense, and electronics companies.

In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currency with global footprints. Countries include US, Mexico, UK, Netherlands, Belgium, Taiwan, P.R.O.C., Norway, Japan, Italy and Germany.

Doug leads the Cost Sub-Committee, for the OAUG Discrete Manufacturing Special Interest Group.He also advises and participates on the Oracle Customer Advisory Board for Fusion Costing.

Core Expertise Multi-organization, Multi-currency ERP

Implementations Project Management and Senior Project Advisor Core manufacturing processes

Cost Management Inventory Bills of Material WIP

Systems Integration and Data Conversions

ExperienceSample of clients served: Beckman Coulter (US) Matsushita (UK, Mexico) NTL (now Virgin Media) Logitech (US, Taiwan, P.R.C.) Matsushita (UK, Mexico) NTL (now Virgin Media) TCI International (US) Onninen AS (Norway)

Thanks for allowing us to discuss these topics with you!

For follow-up:[email protected]

[email protected]@volzconsulting.com

r11i pjm reconciliation

Documents

project id project id

id transaction

id wip

id inventory

id slide

id organization

id primary

id entity