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R12 FINANCIAL NEW FEATURES OVERVIEW

AgendaWhy R12 CreatedR12 architectureNew R12 Features MOAC Sub ledger Accounting and Ledger Sets Legal Enhancement eBtax Global Intercompany system Centralized banking Reporting including XML PublisherQ & A

Multi Org Access ControlMulti-Org architecture was first introduced in Oracle Applications Release 10.6.Its primary objective was to secure data from unauthorized access by individual in different Operating Unit in enterprise. Although security by Operating Units has been widely used as a reliable method to protect from unauthorized access to information, many customers have requested to increase flexibility to enable user to access one or more Operating Units per user responsibility.Multi-Org Access Control feature allows reduction in operating costs, but more importantly, it lays a more flexible software foundation to allow Oracle Applications to support complex business model such as Shared Services without compromising data security.

Access ControlThe Multi-Org Access Control feature, also known as "Security by Operating Unit", will enable users to access to secured data in one or more Operating Units within one responsibility.The feature uses Security Profile concept introduced in Release 11i Oracle Human Resources Management System, which allows system administrator to predefine the scope of access privilege as a profile option.A security profile may be defined in hierarchical or listing mode, which may consist one or more Operating Units.A profile option, "MO: Security Profile", is used to associate predefined security profile to a user responsibility.

In 11i the sub ledger accounting method (cash/accrual) was used to be defined at the sub ledger setup (AP/AR).

However in R12 things have changed. You define the sub ledger accounting method at the ledger level.

All sub ledgers tied to that ledger will use that particular accounting convention.

So there is a difference in 11i and R12. The accounting "Convention" is now married to the ledger and hence the term 4Cs.

If you are not planning to use sub ledgers then you do not have to choose a value in the accounting method field. You can leave it blank.

Your GL functionality will remain unaffected. However you will have to specify an accounting method at the ledger setup, before you could use a sub ledger.

Advanced Global Intercompany SystemAdvanced Global Intercompany System (AGIS) enables you to create, settle and reconcile intercompany transactions. Intercompany transactions are transactions that occur between two related legal entities in an enterprise or between groups in the same legal entity. Transactions that occur between two legal entities are called intercompany transactions and transactions that occur between two groups within one legal entity are called intercompany transactions. The balances of the intercompany transactions must be eliminated or adjusted when preparing the consolidated financial statement, or it might result in overstated financial results, which in turn might lead to legal repercussions against the enterprise. Intercompany transactions can be identified and eliminated by the use of specific accounts to book these transactions. Defining these accounts allows you to book transactions that are identified as intercompany transactions in the specific accounts. These accounts must be defined as a part of the General Ledger setup process.

R12 TCA-Trading Community ArchitectureIn Oracle R12, Suppliers are now part of TCA(Trading Community Architecture), where suppliers are defined as parties and supplier sites as party sites.

Each supplier, supplier sites and contact details can be defined globally in TCA level.

It means, any changes to supplier/supplier sites/address reflects across Operating Units with out really updating every OU and all the supplier information can be leveraged by multiple Operating Units.

Supplier bank information can also be handled at TCA level.

Invoice Entry & CancellationIn Oracle R12, there is an additional level of detail called Invoice lines between Invoice Header and invoice distribution to capture the data related to Items, freight, miscellaneous, Tax, Prepayment or withholding tax. An invoice line can have one or more invoice distributions.With the introduction of invoice lines, there is lot of significant improvement in the data flow to other modules which are integrated with Payables.For example: 1. Fixed Assets use the data stored in the Invoice lines fields such as Manufacturer, Model, Serial Number, Warranty Number, Asset Book and Asset Category to track the assets. 2. E-Business tax takes information from the AP invoice lines and creates summary and detail tax lines in E-Business tax repository.3. Sub ledger Accounting require the invoice distributions should be stored at the maximum level of detail. With additional level in the invoice hierarchy, data flow will be improved to the Sub ledger accounting.

Cancellation of InvoicesAn invoice line may be discarded on its own or as a part of invoice cancellation. A discarded invoice line will have an amount as 0, marked as discarded and creates a negative respective transaction in the distributions. If a line is discarded as a part of invoice cancellation it will be marked as cancelled.

Payment ProcessIn R12, Oracle Payments is a new module introduced to centralize the payment process into one payment engine, so that multiple applications can leverage the same functionality. In R12 Payables, user can find Payments manager under payment entry, which will re-direct the page to a OAF page. So unlike in 11i, user need to use Payables Payments dashboard to begin the payment process.

BanksBank accounts are moved into TCA architecture which needs to be defined in R12> Cash Management now owns Banks Set up Definition.> All the internal bank accounts of 11.5.10, will be migrated into Centralized Bank model automatically during the upgrade.

Transfer journal entries to General LedgerUsers can transfer journal entries to General Ledger in two ways.1. RunCreate Accounting Programwith Transfer to GL option as Yes.2. RunTransfer Journal Entries to GLafter running Create Accounting Program with Transfer to GL parameter set to NO or after create accounting online in Final mode.

Create Accounting Program:Payables Accounting Process is obsolete in R12 and is replaced with Create Accounting program. The create accounting program creates sub ledger journal entries by processing eligible accounting events. The Create Accounting program uses application accounting definitions, which are created in Accounting Method Builder(AMB) to create sub ledger journal entries.

The Create Accounting program1. Creates and validates sub ledger journal entries.2. Transfers the final journal entries in the current batch run to General Ledger and starts General Ledger Posting Process.3. Generates Sub ledger Accounting Program Report.

The create Accounting program creates journal entries in three modes.

Draft: Users can create the journal entries in SLA in draft mode and can review and make changes again.

Final: With this option users can create journal entries in SLA which can not be modified again. Here users need to run Transfer Journal Entries to GL to post the sub ledger journal entries to GL.

Final Post: With this options users can create the journal entries and post to GL with out using Transfer Journal Entries to GL program.

Invoice Approval WorkflowInvoice work flow has been enhanced to include line level invoice approval. Based on rules setup for Payables Invoice Approval Transaction Type in AME, the work flow determines if the invoice Header (invoice document) needs approval or invoice lines needs approval or both.If both invoice lines and document need approval, all the lines of the invoice requiring approval must be approved before the invoice document can be approved.The approval status both at header level as well as line level shows whether the invoice document or invoice lines need approval or not.

AP AR NettingThe Payables and Receivables Netting feature enables the automatic netting of Payable and Receivable transactions within a business enterprise. You can predefine a netting agreement that incorporates the netting business rules and transaction criteria needed to run your tailored netting process. The netting process automatically creates the Payables payments and Receivables receipts required to clear a selected number of Payables and Receivables transactions.