Cost Accounting As You Want It

EBS R12 Cost Accounting with SLA

Collaborate09
May 3 - 7, 2009
Diane Streubel
diane.streubel@schreiberfoods.com
Schreiber Foods
Manager for Cost & Systems Development
OAUG Process MFG Cost Sub-Committee Lead

Douglas Volz
davolz@comcast.net
Douglas Volz Consulting, Inc.
President / Managing Director
OAUG Discrete MFG Cost Sub-Committee
Lead

Agenda
Oracle Discrete Costing SLA enhancements
Oracle Process Costing MAC transitioning to SLA
Oracle SLA Concepts
Case example: Product Line Accounting

Slide 2 Cost Accounting As You Want It EBS R12 and SLA

Oracle Discrete Costing SLA enhancements:

Increased Flexibility
Release 11i account recognition pain points eliminated by
Subledger Accounting (SLA):
SLA removes limitations for recording COGS and
Revenue (Cost Account Generator/workflow and A/R
AutoAccounting are still in use)
Gives you the ability to record inventory and WIP accounts
with more flexibility

Slide 3 Cost Accounting As You Want It EBS R12 and SLA

Oracle Discrete Costing SLA enhancements:

Increased Flexibility
Flexible variance account recognition for:
Invoice price and purchase variances
Average cost adjustment
Standard cost adjustment
Manufacturing variances
Account aliases
Freight charges

Most other inventory, manufacturing and related

account entries

Slide 4 Cost Accounting As You Want It EBS R12 and SLA

Oracle Process Costing:

MAC transitioning to SLA

Slide 5 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

Converged inventory model
Inventory Organizations that are Process will use Process
Costing
Process users are denied access to Discrete Costing forms
Process Enabled organizations can not setup costs in
the Discrete Costing application
Sub Ledger Architecture (SLA) replaces MAC

Slide 6 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

11i OPM
GMI
(OPM Inventory)

Cost Setup

Purchasing

Calculate Cost

Order
Management

Store Costs

Slide 7 Cost Accounting As You Want It EBS R12 and SLA

GMD, GME

MAC

Oracle GL

OPM MAC transitioning to SLA

R12 OPM
Oracle
Inventory

Cost Setup

Purchasing

Calculate Cost

Order
Management

Store Costs

Slide 8 Cost Accounting As You Want It EBS R12 and SLA

GMD, GME

SLA

Oracle GL

OPM MAC transitioning to SLA

Subledger accounting is an intermediate step between
subledger products and the Oracle General Ledger
Each transaction that requires accounting is represented
by a complete and balanced subledger journal entry,
stored in a common data model.

Slide 9 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

11i OPM

Subledger

GL Export

I
n
t
e
r
f
a
c
e

General Ledger

Journal Import

Journal Posting

For G/L integration, discrete costing works the same as OPM costing
Slide 10 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

R12 OPM
OPM

Payables

Oracle Subledger
Accounting

Oracle General
Ledger

Receivables

Projects

For G/L integration, discrete costing works the same as OPM costing
Slide 11 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

OPM MAC

SLA

Completed material
and/or resource
transactions.

Completed material
and/or resource
transactions.

OPM Costing Engine

generates costs.

OPM Costing Engine

generates costs.

Cost Pre-processor
will create
accounting Events
OPM Subledger
process processes
these transactions to
create Journal entries
Slide 12 Cost Accounting As You Want It EBS R12 and SLA

SLA accounting
program processes
the events to create
the journal entries

OPM MAC transitioning to SLA

OPM MAC

SLA

COMMENTS

Fiscal Policy

Retained with few modifications

Event Fiscal Policy

Retained with few modifications

Source

Process Category

Event

Event Entity

Sub-Event

Event Class

Account Titles

Journal Line Types (JLT)

Accounting Template

Application Accounting
Definitions (AAD)

Users can define their own AADs or

modify seeded information

Account Mapping Attributes

(SLA) Sources

SLA sources are used in ADRs

Priorities and Account

Mapping

Account Derivation Rules (ADR)

More flexible. Mapping can be done

at Accounting flexfield level as well
as segment level

Test Mapping

Test Accounting Builder (TAB)

OPM Currency, OPM Ledger,

OPM Exchange Rates
Slide 13 Cost Accounting As You Want It EBS R12 and SLA

Use GL setups

OPM MAC transitioning to SLA

OPM MAC

SLA

Test and Actual Subledger

Accounting

Draft and Final Accounting

Subledger Program

Accounting Pre-Processor

Run Subledger for multiple

valuation/cost methods for
a ledger

Supports multiple valuation

methods

In OPM there can only be

one representation at a
time. SLA supports
multiple representations at
the same time

Run Subledger process for

a functional area

Run Pre-Processor by Process

Category

Flexible. User can have

any number of categories.
Assigned to one or more
event classes

Detailed Subledger Report

Slide 14 Cost Accounting As You Want It EBS R12 and SLA

COMMENTS

Is retained and has been

modified to use SLA
repository

OPM MAC transitioning to SLA

Most of the steps are automated using migration
scripts
All the Account Definitions would be migrated as
ADRs
Manual Steps to be completed are:
Assign Account Derivation Rules to Journal Line
Definitions
Validate Application Accounting Definition
Assign User Subledger Accounting Method to Ledger

Slide 15 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

Historical OPM Subledger distribution data not
migrated to SLA
Data refers to OPM Inventory

Historical data available in query mode

Slide 16 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

Slide 17 Cost Accounting As You Want It EBS R12 and SLA

OPM MAC transitioning to SLA

NO LOSS of functionality by moving to SLA model
New menus created under OPM Financials for new
SLA forms
Fiscal Policy and Event Fiscal Policy screens
retained with minor modifications. Most of the fields
will be read-only.
OPM Event model mapped to SLA event model.

Slide 18 Cost Accounting As You Want It EBS R12 and SLA

Oracle SLA Concepts

Slide 19 Cost Accounting As You Want It EBS R12 and SLA

Subledger Accounting Method (SLAM)

Setup Steps
1.

Determine sources of information for your account derivation

rules (understand the underlying business logic and data)

2.

Create account derivation rules (and optional mapping sets)

3.

Create journal line types

4.

Create a journal lines definition

(link the journal line type to the account derivation rule)

5.

Create an application accounting definition

(copy an existing definition and modify it and then validate it)

6.

Create a subledger accounting method (SLAM)

(copy standard accrual and create a new one)

7.

Assign the new SLAM to a Ledger

Slide 20 Cost Accounting As You Want It EBS R12 and SLA

Key Concepts for SLA Transaction Types

Event Model: definition of the subledger transaction types and
lifecycle
Entity : Classification of source of transaction
Event Class: Classifies transaction types for accounting rule
purposes
Event Type: for each transaction type, defines possible actions
with accounting significance
ENTITY

Material Transaction, Receiving

or WIP or Write Off

EVENT
CLASS

Logical grouping of events which

have similar kind of accounting

EVENT
TYPE

The most granular level of

business event which has
accounting impact

Slide 21 Cost Accounting As You Want It EBS R12 and SLA

Setup and Process

JOURNAL ENTRY SETUPS

PROCESS
Enter Transaction(s)

Define/copy and modify

account derivation rules
Cost Manager
Define/copy and modify
journal line types
Create Accounting*
Define/copy and modify
descriptions

Transfer Journal Entries to GL

*Run Create Accounting Cost Management

concurrent request for accounting all transactions
from the Cost Management SLA responsibility.
Receiving Accounting can be generated in the
Purchasing responsibilities using the Create
Accounting Receiving concurrent request.
These requests have an option to transfer the entries
created to General Ledger. A separate process is also
available.

Slide 22 Cost Accounting As You Want It EBS R12 and SLA

Setup and Process

Accounting
Configurations
Subledger
Journal Entries

Transactions

GL
Journal Entries
and Balances

Accounting
Program
Subledger
Balances

Accounting Events
Journal Entry Setup

Cost Management

Slide 23 Cost Accounting As You Want It EBS R12 and SLA

SLA

Basic Table Structure for SLA

Enter Transaction(s)

Same Cost
Transaction
Accounting
Tables

One Common
Accounting
Subledger Table

Cost Manager

Transaction
Accounting Tables

Create
Accounting

SLA Accounting Tables

G/L Tables

XLA_EVENTS

GL_LEDGERS

XLA_AE_HEADERS

GL_
INTERFACE

GL_JE_BATCHES

XLA_AE_LINES

GL_JE_HEADERS

XLA_DISTRIBUTION
_LINKS

GL_JE_LINES

Slide 24 Cost Accounting As You Want It EBS R12 and SLA

Case Example:
Product Line Accounting for Discrete and
Process Costing

Slide 25 Cost Accounting As You Want It EBS R12 and SLA

Example:
Purchase Price Variance product Line
Say there are two brands of cell phones, Samsung and Nokia
We want to track variances by cell phone brands
We are going to use 2 different ways to address this same
requirement
Cost/SLA mapping set capability
(works for Discrete and Process Costing)
Category Accounting R11i Cost Accounting migrated to
SLA in R12.1
(only works with Discrete Costing)
Slide 26 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

(for Discrete and Process Costing)

Slide 27 Cost Accounting As You Want It EBS R12 and SLA

Cost SLA Mapping Set Capability:

PPV by product Line

Product Line Setup Steps Using SLA mapping set

1. Create the product line information in your item master
2. Enter your SLA account derivation rule for Purchase Price
Variance accounts
3. Associate the new account derivation rule to your Journal
Line Type
4. Associate the Application Accounting Definition with
Subledger Accounting Method
Slide 28 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Product Line Accounting Descriptive flexfield

Slide 29 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Product Line Accounting Item Descriptive FF

Slide 30 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Assign product line code to the inventory item

TIP: you can use an existing product line category set to populate
your item master DFF, you do not need to enter this one-by-one
Slide 31 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Mapping set Account Derivation Rule

Slide 32 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Mapping set Account Derivation Rule

Slide 33 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

SLA Journal Line / Derivation Rule

Slide 34 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Associate Journal Lines Definition to the Event Class

Dont forget
to validate
your new
AADs

Slide 35 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Note the same ADR is usable for Standard Cost Update

Slide 36 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Note the same ADR is usable for Standard Cost Update

Slide 37 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

Associate SLA Definition to the SLA Method/Ledger

Slide 38 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

The material subledger from 11i still exists

Inventory
Inventory
Receiving
Matl
Overhead
Absorption

Slide 39 Cost Accounting As You Want It EBS R12 and SLA

PPV

Cost/SLA Mapping Set Capability

SLA Entries That Go to Your G/L

Slide 40 Cost Accounting As You Want It EBS R12 and SLA

Cost/SLA Mapping Set Capability

For the Standard Cost Updates That Go to Your G/L

Slide 41 Cost Accounting As You Want It EBS R12 and SLA

Category Accounting
Discrete Cost Accounting migrated to
SLA in R12.1

Slide 42 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Create a new
structure under
the key flexfield
Item Category

Slide 43 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Create a new
structure under
the key flexfield
Item Category
Create category
codes

Slide 44 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Create a new
structure under
the key flexfield
Item Category
Create category
codes
Create category
set
Slide 45 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Create a new structure
under the key flexfield
Item Category
Create category codes
Create category set
Assign Product Line
Accounting functional
area category set

Slide 46 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Assign product line category accounts

Slide 47 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Account Derivation Rule would have used a source directly

Slide 48 Cost Accounting As You Want It EBS R12 and SLA

Product Line Category Accounting

Summary Notes
Product line accounting can be achieved in many ways without using
the Costing Hook.
In R12 SLA is the Oracle R12 accounting platform and Costing
supplies application sources from INV, WIP, RCV to build the
accounting journals.
One caveat: Pre-Release 12 subledger accounting reports are
reading data from Costing distribution layer (such as the Material
Account Distribution Summary or Detail Reports). Those reports will
not show SLA journals. SLA provides a set of new accounting
reports (such as Journal Entries Report, Accounting Analysis
Report) which can be modified as desired using BI Publisher.
Slide 49 Cost Accounting As You Want It EBS R12 and SLA

Discrete Inventory Period Close and Upgrade

Inventory Period Close Process
Inventory interim G/L transfer has been replaced by SLA
The Inventory Accounting Period close works just like it did
before, however, SLA now sends accounting information to the
general ledger

Upgrade Process
Customers have option of migrating the whole historical data to
SLA or choose which periods data to be migrated.
Customers get option to either upgrade in downtime when
upgrading or anytime after the upgrade process.
Default for Cost management is to migrate the present calendar
year data to SLA.

Slide 50 Cost Accounting As You Want It EBS R12 and SLA

Acknowledgements of assistance:
Herve Yu Oracle Cost Management Development Manager
Audrea Auld Oracle University Senior Financials Instructor
Russell Bayles Oracle Principal Product Strategy Manager
Michel Basinet Oracle Director Fusion Costing Product Strategy

Slide 51 Cost Accounting As You Want It EBS R12 and SLA

Additional information available from:

R12 Oracle Subledger Accounting Implementation Guide
R12 Oracle Cost Management User Guide
R12 Oracle Process Manufacturing Cost Management - User Guide

Slide 52 Cost Accounting As You Want It EBS R12 and SLA

THANK YOU

Slide 53 Cost Accounting As You Want It EBS R12 and SLA

Appendix

Professional Background for Diane Streubel

Professional Background for Douglas Volz

Slide 54 Cost Accounting As You Want It EBS R12 and SLA

Diane Streubel
Professional Background
Diane Streubel is the Cost & Systems Development Manager for Schreiber Foods. A process
manufacturing company, Schreiber is the worlds largest supplier of private label dairy products and has
been using Gemms/OPM for the past 13 years. Diane has been involved with OPM from its inception
at Schreiber with Gemms 3.1. She has been involved in implementing additional products within Oracle
at Schreiber and has played a key role in all of the upgrades within the company. Schreiber Foods is
currently at 11.5.10.
Diane is also actively involved in the Process Manufacturing SIG. She has been the Costing SubCommittee chairperson and the Membership chairperson for the Process SIG since 2001. As the
Process SIG Enhancements chairperson, she has worked with the Process Manufacturing team at
Oracle to develop and coordinate an Enhancements Voting process each year since 2001. She has
been on the paper selection team for OAUG conferences for the past four years. Diane has also
presented numerous papers at OpenWorld and OAUG conferences over the past several years on OPM
Costing topics.

Core Expertise

Upgrades for Process Manufacturing

Project Management
Core manufacturing processes
OPM Cost Management
OPM Inventory
OPM Formulas

Experience
Within Schreiber Foods:

Slide 55 Cost Accounting As You Want It EBS R12 and SLA

Responsible for OPM Costing and Inventory testing and

validations for all upgrades
Develop and improve processes within Company related
to Costing, Inventory and Formulas
Establish Cost Accounting methods, cost and production
formula structures, inventory and production transaction
processes and system documentation.
Train Finance employees at 17 plant facilities on OPM
processes

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 experience, including 5 years in Oracle Development
(co-designing Oracle Cost Management), 12 years in industry for manufacturing and distribution
companies, and 14 years consulting. 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 firms.
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 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 and for the
Fusion SCM Strategy Council.

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

Slide 56 Cost Accounting As You Want It EBS R12 and SLA

Experience
Sample of clients served:
Beckman Coulter (US)
Onninen AS (Norway)
Matsushita (UK, Mexico)
NTL (now Virgin Media)
Idec Izumi (Japan)
Motorola (UK, US)
Logitech (US, Taiwan, P.R.C.)

End of Presentation

Slide 57 Cost Accounting As You Want It EBS R12 and SLA