How to Create Shipping Burdens for Oracle Cost Management, in Spite of Subledger Accounting!

Transcription

1 How to Create Shipping Burdens for Oracle Cost Management, in Spite of Subledger Accounting! Session ID#: Prepared by: Doug Volz Douglas Volz Consulting, Inc. REMINDER Check in on the COLLABORATE mobile app

2 Learning Points Learn about the business reasons for earning material overheads at time of shipment and why your COGS and other shipping expenses may be at a different from your inventory costs or value Understand the different approaches to solving this for Release 12 and why this was much easier in Release 11i Learn how to use SLA and other techniques for solving this business requirement Find out which alternative a recent client choose and contrast this with other clients

3 Agenda Shipping Burdens Definitions and Accounting Principles Why needed? Why Shipping Burdens? How does SLA work with Discrete Oracle Cost Management? Why was Release 11i so Much Easier? Business Solutions for Shipping Burdens Recent Client Experiences with Release 12 Appendix: Create Material Shipping Burden & SLA Entries Discrete Cost Management SLA Model Inventory Transactions Architecture Create DFFs for Sub-Elements and Material Transactions

4 Doug Volz Professional Summary Helping people use Oracle since years industry, design and consulting experience, specializing in design, implementation and project delivery for Cost Management business solutions Specific areas of expertise: Profit in inventory Intercompany A/P accruals WIP analysis Multi org inventory reporting Inventory reconciliation Product Line & Margin analysis Cost Rollup and Update Presenter at Collaborate (OAUG) and UKOUG since 1996 Multi-national experience in twelve countries Qualification Summary Former co-designer for Oracle Cost Management Lead the OAUG Cost Management Special Interest Group Cost Management industry experience Helping people using Oracle Applications since 1990 Copyright 2014 Douglas Volz Consulting, Inc.

5 Douglas Volz Consulting, Inc. Douglas Volz Consulting started in 2005 to provide: Cost Accounting Business & System Improvements Procure to Pay Business Improvements Project Management and Advisory Services Multi-Org, Global Cost Reporting Solutions Lots of free advice and conference papers: Sample Project Experience: Helping people using Oracle Applications since 1990 Copyright 2014 Douglas Volz Consulting, Inc.

6 Solutions You Can Use OAUG Collaborate & 2007 UKOUG: A/P Accruals How to Setup, Use and Balance Your A/P Accrual Accounts (or How to Manage the Accounts from Hades) 2009, 2013 & 2014: OAUG Collaborate & UKOUG: Cost Management & SLA 2009: Cost Accoun ng As You Want It EBS R12 Cost Accoun ng with SLA 2013: Subledger Accounting for Discrete Cost Accounting: Product Line Accounting Made Easy Through SLA 2014: How to Create Shipping Burdens for Oracle Cost Management, in Spite of Subledger Accounting 2010: OAUG Collaborate: Profit in Inventory Solutions & PJM Solutions Does Rel. 12 Solve Global Inter Company Issues for Multiple Ledgers, Profit in Inventory and COGS? Can We Actually Reconcile Project MFG to Inventory, WIP, Projects & G/L? What Was I Thinking? 2011 & 2014: OAUG Collaborate & UKOUG: Inventory Reconciliation 2011: 60 Inventory Orgs? 6 Ledgers? No Worries, Reconcile Your Inventory With Ease! 2014: Reconcile Your Inventory to G/L Balances With Ease, From 1 to 1,000 Inventory Organizations! 2012: OAUG Collaborate: Transaction Interfaces for Period Close Egads! How in the Dickens Do I Handle Those Month End Interfaces? (And Why Can t I Close My Books)

7 Definitions and Accounting Principles

8 Definitions Burdens: Another word for Overheads or Indirect Costs; as a general term Overheads may include expenses related to product procurement, production, warehousing or distribution as well as non-product related expenses such as G&A and selling expenses Cost of Goods Sold (adapted from Wikipedia): The cost of products or raw materials, including freight or shipping charges; The cost of storing products the business sells; Direct labor costs for workers who produce the products; Factory overhead expenses Discounts that must be deducted from the costs of purchased inventory including trade discounts and manufacturer s rebates

9 Definitions Direct Product Costs: Directly traceable product expenses such as direct material (purchase cost), direct labor and other direct production costs General & Administrative Expenses (G&A): General operating expenses and taxes that are related to the overall operation of the company Handling Costs: US GAAP FAS605: Costs incurred to store, move, and prepare the products for shipment. Generally, handling costs are incurred from the point the product is removed from finished goods inventory to the point the product is provided to the shipper and often include an allocation of internal overhead.

10 Definitions Inventoriable Costs: Acquisition and production costs included in the inventory value, such as direct materials, direct labor, indirect manufacturing overheads and indirect material handling costs US GAAP FAS 151: Inventories are presumed to be stated at cost. The definition of cost as applied to inventories is understood to mean acquisition and production cost IFRS IAS2: The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

11 Definitions Non-Inventoriable Costs: General and administrative (G&A) and selling expenses or any cost which is not related to the acquisition or production product cost US GAAP FAS 151: general and administrative expenses should be included as period charges, except for the portion of such expenses that may be clearly related to production and thus constitute a part of inventory costs (product charges). Selling expenses constitute no part of inventory costs. IFRS IAS2: Certain costs are not included in the valuation of inventories. These costs are recognized as expense when they occur. Following are some of the common examples of these costs: Abnormal wastage of materials, labor and other production costs Storage costs if they are not essential for the production process Selling and distribution costs Administrative costs that are not involved in bringing the inventory to its present condition and location

12 Definitions Selling Expenses: Costs incurred to market products such as advertising, sales commissions, sales salaries, sales offices and other selling expenses Shipping Costs: US GAAP FAS605: Costs incurred to physically move the product from the seller s place of business to the buyer s designated location.

13 Accounting Principles Accrual Matching Principle & Revenue Recognition: Must recognize appropriate costs when revenue is booked or recognized. IFRS IAS2: When inventories are sold and revenue is recognised, the carrying amount of those inventories is recognised as an expense (often called cost-of-goods-sold).

14 Why Needed? Why Shipping Burdens?

15 Why Want Shipping Burdens? Costs of shipping are significant but not part of inventory value May want to recognize some MFG G&A costs at time of shipping Suppliers may offer discounts based on shipping volumes or based on the customer for that shipment Trying to avoid sales staff giving away the product

16 Release 11i COGS Example: Original Entries Shipping Burdens R11i COGS Entries Sales Order Issue DR COGS Account CR Inventory Debit / Credit Acct Line Type 100 Account 100 Inventory Valuation Shipping Burden DR COGS Account 10 Account CR Matl Overhead Absorption 10 Ovhd Absorption

17 Release 12 COGS Example: Original Entries Shipping Burdens R12 COGS Entries Sales Order Issue DR Deferred COGS CR Inventory COGS Recognition DR COGS Account CR Deferred COGS Debit / Credit Acct Line Type 100 Deferred COGS 100 Inventory Valuation 100 COGS 100 Deferred COGS Shipping Burden DR COGS Account CR Matl Overhead Absorption 10 COGS 10 Ovhd Absorption

18 Why Was Release 11i So Much Easier for Adding Shipping Burdens?

19 R10 R11i Transaction Flow for Cost Mgmt Enter Transaction(s) Accounting Processor Receiving Material WIP Transaction Accounting Tables Inventory Period Close G/L Tables GL_SETS_OF_BOOKS Transfer to G/L GL_ INTERFACE Journal Import GL_JE_BATCHES GL_JE_HEADERS GL_JE_LINES

20 Release 11i Solution Enter Material Overhead Sub-Element(s) for Shipping Burdens Enter and store the Shipping Burden rates in an unimplemented cost type, a MFG Lookup Code or in a custom table Create a custom program to insert additional rows into the material accounting distributions: Shipping Burden Example Debit / Credit Acct Line Type DR COGS Account (from existing transaction) CR Material Overhead Absorption (from shipping burden sub-element) 10 COGS 10 Ovhd Absorption All other processing is unchanged (except tweaks to Margin Reporting)

21 How Does SLA Work with Oracle Cost Management?

22 Supply Chain Transaction Processing Release 12 has two transaction models RCV, INV, WIP Transactions SLA transactions Mirror image of the original transactions Supply Chain SLA Txn Sources PO Receipts SO Shipmts Inventory LSPs, Others RCV INV WIP COST RCV INV WIP G/L

23 Key Concepts for SLA Transaction Types Event Model: A set of subledger transaction types with common characteristics Entity : Denotes the transaction source Event Class: Classifies transaction types by accounting rule Event Type: for each transaction type, defines possible actions with accounting significance ENTITY Material, Receiving or WIP or Write Off Transaction EVENT MODEL EVENT CLASS Grouping of transaction events which have similar kind of accounting EVENT TYPE The most granular level of business event which has accounting impact

24 R12 Transaction Flow for Cost Management Enter Transaction(s) Accounting Processor Module Specific Transaction Accounting Tables One Common Accounting Subledger Table Transaction Accounting Tables SLA Accounting Tables XLA_EVENTS G/L Tables GL_LEDGERS Receiving Material WIP Create Accounting XLA_AE_HEADERS XLA_AE_LINES GL_ INTERFACE GL_JE_BATCHES GL_JE_HEADERS XLA_DISTRIBUTION _LINKS GL_JE_LINES

25 Setup and Process ADR SETUPS PROCESS Define or Identify ADR Sources Enter Transaction(s) JOURNAL ENTRY SETUPS Define/copy and modify Define/copy journal line and types modify account derivation rules Cost Manager Define/copy and modify Define/copy descriptions and modify journal line types Create Accounting* Transfer Journal Entries to GL Define/copy and modify descriptions ASSIGNMENT Assign to SLAM and Ledger *Run Create Accounting Cost Management concurrent request for accounting all transactions from the Cost Management SLA responsibility. Receiving Accounting can also 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 as well as post at the same time.

26 Cost Management and SLA Processing Steps The Cost Manager creates the accounting entries for material accounting distributions and calls a special program (CST_XLA_PVT(CSTVXLAB.pls) to create the initial information for Create Accounting (SLA) MTL MTL_MATERIAL_TRANSACTIONS SLA COST MANAGER MTL_TRANSACTION_ACCOUNTS XLA_EVENTS XLA_TRANSACTION_ENTITIES

27 Cost Management and SLA Processing Steps Create Accounting picks up the entries found in XLA_EVENTS and XLA_TRANSACTION_ENTITIES and completes the creation of the SLA accounting entries XLA_EVENTS CREATE ACCOUNTING XLA_DISTRIBUTION_LINKS XLA_AE_HEADERS XLA_AE_LINES

28 Issues with SLA Create Accounting never writes a processed status to either MTL_TRANSACTION_ACCOUNTS or XLA_DISTRIBUTION_LINKS Create Accounting only knows the processing status for the entire material transaction (XLA_EVENTS), but not for each transaction accounting entry Process status by TRANSACTION_ID or EVENT_ID But not by each DR or CR or INV_SUB_LEDGER_ID See next slide for desired transaction flow diagram

29 Desired Transaction Processing Create Accounting and SLA Material Transactions Cost Processor Material Accounting Entries Create New Matl Acct g Entries 1. Cost Processor creates the material accounting entries 2. Shipping Burdens are then created with a custom program 3. The custom program also calls the CSTVXLAB.pls package to create the initial SLA information 4. There are now two SLA events for the same material transaction, one created by the Cost Processor and one by the custom program 5. Create Accounting processes the old and new entries and creates the SLA journal entries with no duplication Create Accounting SLA Journal Entries Standard Program Custom Program

30 Actual Transaction Processing Create Accounting and SLA Material Transactions Cost Processor Material Accounting Entries Create Accounting 1. Cost Processor creates the material accounting entries 2. Create Accounting runs before the Shipping Burdens are created and processes the existing SLA event and material accounting entries 3. Shipping Burdens are created with the custom program 4. The custom program also calls the CSTVXLAB.pls package to create the initial SLA information and a second SLA event for the same material transaction 5. Create Accounting processes the new entries, reprocesses the old entries and by doing so, doubles up the SLA journal entries Standard Program Custom Program Create New Matl Entries Create Accounting SLA Journal Entries

31 Business Solutions for Shipping Burdens

32 Potential Solutions 1. Do this adjustment in a management reporting system only 2. Include the Shipping Burdens in the Frozen Costs (inventory value) and back it out at month-end 3. Create the Shipping Burdens in the original distribution tables (mtl_transaction_accounts) and as SLA accounting entries 4. Only create the Shipping Burdens in the SLA accounting entries (using the same SLA events for material transactions) 5. Interface manual SLA entries for Shipping Burden entries 6. Only create the entries into the G/L

33 Desired Solution Requirements 1. Want good visibility for Cost Accountants using standard material distribution inquiries and reports 2. Follow the Oracle architecture for material distributions & SLA Custom material distribution reporting (which combines the original material distributions and SLA information) must work the same way for Oracle and custom accounting distributions 3. As needed use SLA setups and processes 4. Minimize or avoid creation of custom tables 5. Limit the amount of custom code

34 Pros and Cons 1. Do this adjustment in a management reporting system only Not as easily accessed by all concerned parties Custom solution, all inputs, outputs, inquiries and reports Creates a condition where source of truth is in multiple places Not included in Margin Analysis Load and Report programs 2. Include the Shipping Burdens in the Frozen Costs (inventory value) and back it out at month-end Source of truth in one location But requires month-end manual adjustment for US GAAP and IFRS Requires custom reporting (to back it out) May be best choice depending on complexity of number of interfaces and customizations Margin Analysis Load and Report programs work with no changes

35 Pros and Cons 3. Create the Shipping Burdens in the original distribution tables (mtl_transaction_accounts) and as SLA accounting entries Able to see these new entries in the original reports and inquiries But have to prevent Create Accounting from doubling-up entries SLA setups can be quite extensive and requires SLA expertise May need to modify Margin Analysis Load and Report programs 4. Only create the Shipping Burdens in SLA accounting entries (using the same SLA events/material transactions) Will not show up in any original report or inquiry Needs lots of custom programming, SLA setups and development Needs custom reporting; different from normal Cost Mgmt entries Need to modify Margin Analysis Load and Report programs

36 Pros and Cons 5. Interface manual SLA entries for Shipping Burden entries One of the easiest solutions (open interface) Lack of visibility, needs custom reporting, not easily accessed Not directly tied to the actual COGS entries Cannot easily use this information for margin and performance reporting 6. Only create the entries into the G/L Not in a subledger Lack of visibility, needs custom reporting, not easily accessed Not directly tied to the actual COGS entries Cannot easily use this information for margin and performance reporting

37 Recent Client Experiences with Release 12

38 Release 12 Client Experiences Tried third solution, new material distributions and SLA entries Client had too many customizations, both with the material transactions and as post-processing customizations Even needed to change stored transaction cost information (in mtl_material_transactions) in addition to changing three major custom interfaces At the time could not prevent SLA from doubling-up entries Second solution ended up being easier, put into Frozen costs As new sub-element, put burdens into the Frozen costs Designed month-end inventory value reports to back out these costs at month-end Designed monthly material account summary reports for visibility

39 Summary

40 Summary Life with SLA can be very useful: Configure transactions to use new accounts Multiple representations for the same transactions (by chart of accounts) Better mapping capabilities, can do outside of consolidations Can even create new sources, even integrate entirely new non- Oracle modules and transactions (with FIN Hub) But SLA can be devilishly complex, you have to weigh the pros and cons Make the best choice for your situation, there is not one right answer

41 Appendix A) Create Material Shipping Burden & SLA Entries B) Discrete Cost Management SLA Model C) Inventory Transactions Architecture D) Creating DFFs for Material Transactions and Sub-Elements

42 Appendix A) Create Material Shipping Burden & SLA Entries B) Discrete Cost Management SLA Model C) Inventory Transactions Architecture D) Creating DFFs for Material Transactions and Sub-Elements

43 A) Create Material Shipping Burden & SLA Entries Required Steps 1. Enter Material Overhead Sub-Elements for Shipping Burdens 2. Identify which transactions to apply shipping burdens 3. Enter and store the Shipping Burdens 4. Create custom program to insert additional rows into the material accounting distributions, using the same material transaction 5. Configure SLA to process additional material accounting entries Add Journal Lines as needed Add logic to prevent double-processing Caveat: This Solution is a Prototype, Requires Testing

44 1) Enter Material Overhead Sub-Elements for Shipping Burdens Added a DFF to avoid hardcoding the Sub Element name

45 Choose Material Txn Types for Burdens Click here

46 2) Identify Which Transactions to Apply Shipping Burdens Use the Appendix Section Discrete Cost Management SLA Model Identify which SLA Event Class Names: Sales Order Issue Identify which Event Type Name COGS Recognition RMA Receipt RMA Issue Identify which SLA Journal Line Types to change: Cost of Goods Sold, Deferred COGS, Cost Update Adjustment

47 Identify Which Transactions to Apply Shipping Burdens (Cont d) Have to Correlate SLA Events With Real Material Transactions Material Transaction Definition Material Transactions COGS Recognition RMA Receipt RMA Return Accounting Line Type Cost of Goods Sold Deferred COGS Overhead Absorption (New) SLA Event Definition SLA Event Class Name Sales Order Issue COGS Recognition RMA Receipt RMA Return Journal Line Type Cost of Goods Sold Deferred COGS Overhead Absorption (New) The Oracle EBS Supply Chain transactions loosely correlate to the SLA events and journal lines. Can be confusing.

48 Release 12 COGS Example: Don t Want to Mess With Deferred COGS Original Entries Shipping Burdens R12 COGS Material Transaction Entries Debit / Credit Acct Line Type Sales Order Issue Txn DR Deferred COGS 100 Deferred COGS CR Inventory 100 Inventory COGS Recognition Txn DR COGS Account CR Deferred COGS 100 COGS 100 Deferred COGS Shipping Burden (added to COGS Recognition Txn) DR COGS Account CR Matl Overhead Absorption 10 COGS 10 Ovhd Absorption

49 3) Enter and Store the Shipping Burden Rates Enter the Rates in a Non-Implemented Cost Type Store by Item in Only One Inventory Organization Uncheck Multi Org

50 Enter and Store the Shipping Burden Rates (Cont d) Enter the rate by cost type by item (for this example) You could also use a MFG Lookup Code, custom table

51 Example Values From CST_ITEM_COST_DETAILS CST_ITEM_COST_DETAILS EXAMPLE VALUE MTL_TRANSACTION _ACCOUNTS COMMENTS INVENTORY_ITEM_ID INVENTORY_ITEM_ID MTL_SYSTEM_ITEMS_B ORGANIZATION_ID 207 ORGANIZATION_ID MTL_PARAMETERS COST_TYPE_ID 1207 N/A CST_COST_TYPES LEVEL_TYPE 1 N/A This Level RESOURCE_ID RESOURCE_ID Sub Element Identifier USAGE_RATE_OR_AMOUNT 0.1 RATE_OR_AMOUNT USAGE_RATE_OR_AMOUNT X Original COGS BASE_TRANSACTION_VALUE BASIS_TYPE 5 BASIS_TYPE Percent of Total Value COST_ELEMENT_ID 2 COST_ELEMENT_ID Material Overhead ROLLUP_SOURCE_TYPE 1 N/A User Defined

52 4) Create Custom Program to Insert Additional INSERT INTO mtl_transaction_accounts Accounting Entries (transaction_id, (v_trx_id, Use existing material transactions Adding new material accounting entries using the same material TRANSACTION_ID On the material transaction update ATTRIBUTE15 to indicate Shipping Burdens have been recorded BASE_TRANSACTION_AMOUNT = the item s RATE_OR_AMOUNT X original COGS amount VALUES reference_account, last_update_date, last_updated_by, creation_date, created_by, last_update_login, inventory_item_id, organization_id, transaction_date, transaction_source_id, transaction_source_type_id, transaction_value, primary_quantity, gl_batch_id, accounting_line_type, base_transaction_value, contra_set_id, rate_or_amount, basis_type, resource_id, cost_element_id, activity_id, currency_code, currency_conversion_date, currency_conversion_type, currency_conversion_rate, request_id, program_application_id, program_id, program_update_date, encumbrance_type_id, repetitive_schedule_id, gl_sl_link_id) v_adjust_account, SYSDATE, fnd_profile.value('user_id'), SYSDATE, fnd_profile.value('user_id'), fnd_profile.value('user_id'), v_mtl.inventory_item_id, v_mtl.organization_id, v_mtl.transaction_date, v_mtl.transaction_source_id, v_mtl.transaction_source_type_id, v_trx_val, v_trx_qty, -1, 3, -- Material Overhead Absorption v_trx_val, v_mtl.contra_set_id, v_trx_rate, v_basis_type, v_resource_id, 2, NULL, v_mtl.currency_code, v_mtl.currency_conversion_date, v_mtl.currency_conversion_type, v_mtl.currency_conversion_rate, v_request_id, fnd_profile.value('program_application_id'), fnd_profile.value('program_id'), SYSDATE, v_mtl.encumbrance_type_id, v_mtl.repetitive_schedule_id, '');

53 Values for MTL_TRANSACTION_ACCOUNTS MTL_TRANSACTION_ACCOUNTS SOURCE COMMENTS TRANSACTION_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry REFERENCE_ACCOUNT ABSORPTION_ACCOUNT From BOM_RESOURCES INVENTORY_ITEM_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry ORGANIZATION_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry TRANSACTION_DATE MTL_TRANSACTION_ACCOUNTS Same as COGS entry TRANSACTION_SOURCE_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry TRANSACTION_SOURCE_TYPE_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry TRANSACTION_VALUE MTL_TRANSACTION_ACCOUNTS NULL for COGS PRIMARY_QUANTITY MTL_TRANSACTION_ACCOUNTS Same as COGS entry GL_BATCH_ID MTL_TRANSACTION_ACCOUNTS NULL ACCOUNTING_LINE_TYPE CST_ACCOUNTING_LINE_TYPE 3 overhead absorption 35 cost of goods sold BASE_TRANSACTION_VALUE USAGE_RATE_OR_AMOUNT X COGS BASE_TRANSACTION_VALUE X SIGN(PRIMARY_QUANTITY) For Basis Type Percent of Total Value

54 Values for MTL_TRANSACTION_ACCOUNTS MTL_TRANSACTION_ACCOUNTS SOURCE COMMENTS CONTRA_SET_ID MTL_TRANSACTION_ACCOUNTS Same as COGS entry RATE_OR_AMOUNT USAGE_RATE_OR_AMOUNT From the item cost BASIS_TYPE CST_BASIS_TYPES Lookup Code 5 for % of Total Value RESOURCE_ID BOM_RESOURCES.RESOURCE_ID Sub Element Identifier COST_ELEMENT_ID BOM_RESOURCES. COST_ELEMENT_ID Usually a value of 2 (Material Overhead) CURRENCY_CODE MTL_TRANSACTION_ACCOUNTS Same as COGS entry CURRENCY_CONVERSION_DATE MTL_TRANSACTION_ACCOUNTS Same as COGS entry CURRENCY_CONVERSION_TYPE MTL_TRANSACTION_ACCOUNTS Same as COGS entry CURRENCY_CONVERSION_RATE MTL_TRANSACTION_ACCOUNTS Same as COGS entry GL_SL_LINK_ID Leave NULL Create Accounting / GL INV_SUB_LEDGER_ID Leave NULL From CSTVXLAB.pls

55 5) Steps to Configure SLA Create custom PL/SQL function Define custom sources Can skip this step Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

56 Desired Material Transaction Flow Material Transactions Cost Processor Material Accounting Entries Create Accounting A A Shipping Burdens Exist? No Yes Don t Process the Journal Line Do Process the Journal Line Create New Material Accounting Entries Create Accounting A Standard Program Custom Program SLA Journal Entries New SLA Conditions

57 Create Custom PL/SQL Function Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

58 Create Custom PL/SQL Function Will determine if SLA can process the journal line CREATE OR REPLACE FUNCTION XXX_CST_CNTRL_CREATE_ACCTG (p_transaction_id IN NUMBER) RETURN VARCHAR2 is l_yes_no varchar2(2); BEGIN SELECT nvl((select DISTINCT('Y') from inv.mtl_material_transactions mmt, inv.mtl_transaction_types mtt, inv.mtl_transaction_accounts mta where mmt.transaction_id = p_transaction_id and mmt.transaction_type_id = mtt.transaction_type_id and mmt.transaction_id = mta.transaction_id and ), 'N' ) into l_yes_no ((nvl(mtt.attribute1,'n') = 'Y' -- indicates this transaction is for Shipping Burdens and nvl(mmt.attribute15,'n') = 'Y' -- indicates shipping burden exist ) OR (nvl(mtt.attribute1, 'N') = 'N' -- indicates not for Shipping Burdens ) ) FROM inv.mtl_material_transactions mmt WHERE mmt.transaction_id = p_transaction_id ; RETURN l_yes_no; END XXX_CST_CNTRL_CREATE_ACCTG; /

59 Define Custom Sources Menu path: Cost Management SLA => Setup => Accounting Methods Builder => Sources => Custom Sources Need to use the correct parameters for your PL/SQL inputs

60 Create Journal Line Types and Definitions Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

61 Determine Which Journal Lines to Change Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Journal Lines Definitions Query the Event Class / Sales Order Issue

62 Need User-Defined Journal Lines Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Journal Lines Definitions Sales Order Issue Event Class - Two Material Txn Types Sale Order Issue (Shipment) Deferred COGS (DR) Inventory Valuation (CR) COGS Recognition Cost of Goods Sold (DR) Deferred COGS (CR) Overhead absorption (CR) RMAs with Cost Changes Cost Update Adjustment

63 Need New User-Defined Journal Lines Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Journal Lines Definitions Copy and Change These Journal Lines for COGS Recognition Cost of Goods Sold Deferred COGS Cost Update Adjustment (for RMAs) Create New Journal Line for Material Overhead Absorption as this is not in the SLA transaction model for Sales Orders

64 Create User-Defined Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Query Up Each Journal Line and Copy the Oracle Journal Choose the Event Class Sales Order Issue

65 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Copy the Oracle Journal Line Type Cost of Goods Sold 2) Enter Line Type Code, Name and Description 1) Click Copy Definition 3) Click Done

66 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add New Conditions to the Journal Line Type Click Conditions

67 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add New Conditions to the Journal Line Type (Cont d) Indicates if the journal line is ready to be processed Ensures that COGS is only charged for the COGS Recognition Transaction Type

68 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Copy the Oracle Journal Line Type Deferred COGS 2) Enter Line Type Code, Name and Description 1) Click Copy Definition 3) Click Done

69 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add New Conditions to the Journal Line Type Click Conditions

70 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add New Conditions to the Journal Line Type (Cont d) Indicates if the journal line is ready to be processed Ensures that Deferred COGS is only charged for the COGS Recognition Transaction Type

71 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Copy the Oracle Journal Line Type Cost Update Adjustment 2) Enter Line Type Code, Name and Description 1) Click Copy Definition 3) Click Done

72 Copy Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add New Conditions to the Journal Line Type (Cont d) Indicates if the journal line is ready to be processed Ensures that RMA Cost Updates are only changed for the COGS Recognition Transaction Type

73 New Journal Line Type for Overhead Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Create the New Journal Line Type

74 New Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add Conditions to the Journal Line Type Click Conditions

75 New Journal Line Types Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Add Conditions to the Journal Line Type (Cont d) Overhead absorption accounting line type Indicates if the journal line is ready to be processed Ensures that Overhead Absorption is only charged for the COGS Recognition Transaction Type

76 Create Journal Line Types and Definitions Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

77 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Methods and Definitions => Journal Line Definitions Copy the Oracle Journal Line Definition 2) Enter Definition Code, Name and Description 1) Click Copy Definition 3) Click Done

78 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Replace the Oracle Journal Line Types with User Defined Use default ADR for Cost Mgmt

79 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Delete Oracle Journal Line Type and Replace with User JL Type Use default ADR for Cost Mgmt

80 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Delete Oracle Journal Line Type and Replace with User JL Type Use default ADR for Cost Mgmt

81 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Delete Oracle Journal Line Type and Replace with User JL Type Use default ADR for Cost Mgmt

82 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Delete Oracle Journal Line Type and Replace with User JL Type Use default ADR for Cost Mgmt

83 Create Journal Line Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Journal Entry Setups => Journal Line Types Cost Variance and Inventory Valuation Journal Types Cost Variance and Inventory Valuation is unchanged

84 Create Application Accounting Definition Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

85 Create Application Accounting Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Application Accounting Definitions Copy the standard Oracle Application Accounting Definition 2) Enter Definition Code, Name and Description This limits it to only This limits it to only one COA Structure 3) Click Done 1) Click Copy Definition

86 Create Application Accounting Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Application Accounting Definitions Validate the Copied Application Accounting Definition Validate initial copy

87 Create Application Accounting Definition Now assign new Journal Lines Definition to your Application Accounting Definition: COGS Sale Order Event Accounting Examples: Sales Order Issue => XXX Sales Order Issue Note: there are other COGS-related Event Classes: Logical Transactions Sender-side Intransit Interorg Shipment for FOB Receipt Sender-side Intransit Interorg Receipt for FOB Receipt

88 Create Application Accounting Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Application Accounting Definitions Choose the Event Class to change Then delete the existing row

89 Create Application Accounting Definition Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Application Accounting Definitions To catch errors should validate oneby one Replace with new assignment

90 Create Application Accounting Definition Menu path: Cost Management SLA => Requests => Submit a New Request => Validate Application Accounting Definitions Another way to Validate Application Accounting Definitions

91 Create Application Accounting Definition Menu path: Cost Management SLA => Requests => Submit a New Request => Validate Application Accounting Definitions These should all These should all have a Valid status

92 Create Subledger Accounting Method (SLAM) Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

93 Create Subledger Accounting Method Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Subledger Accounting Methods 2) Enter Definition Code, Name and Description 3) Click Done 1) Click Copy Definition

94 Assign SLAM to a Ledger Create custom PL/SQL function Define custom sources Create account derivation rules (ADRs) Create journal line types (JLTs) Create journal line definitions (JLDs) Create an application accounting definition (AAD) Create a subledger accounting method (SLAM) Assign it to a Ledger

95 Create User-Defined SLAM Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Subledger Accounting Methods 2) Enter Method Code, Name and Description 3) Click Done 1) Click Copy Definition

96 Assign Ledger to SLAM Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Subledger Accounting Methods => Accounting Setups

97 Assign Ledger to SLAM Menu path: Cost Management SLA => Accounting Setup => Accounting Methods Builder => Methods and Definitions => Subledger Accounting Methods => Accounting Setups Click on the pencil to update the ledger

98 Assign Ledger to SLAM Click on the pencil to update the ledger

99 Assign Ledger to SLAM Select the new SLAM Select the new SLAM

100 Testing Your SLA Setups If You AAD Validation Fails Check the Output File Check Output

101 Testing Your SLA Setups Validation Output Valuable Clues Review error text

102 Testing Your SLA Setups Diagnostic Reports to SLA test inputs and outputs Enable profile option SLA: Enable Diagnostics Run Create Accounting Disable profile option SLA: Enable Diagnostics Run Transaction Objects Diagnostics report Run Purge Transaction Objects Diagnostics

103 Appendix A) Create Material Shipping Burden & SLA Entries B) Discrete Cost Management SLA Model C) Inventory Transactions Architecture D) Creating DFFs for Material Transactions and Sub-Elements

104 B) Discrete Cost Management SLA Model

105 Discrete Cost Management SLA Model

106 Discrete Cost Management SLA Model

107 Discrete Cost Management SLA Model

108 Discrete Cost Management SLA Model

109 Discrete Cost Management SLA Model

110 Discrete Cost Management SLA Model

111 Discrete Cost Management SLA Model

112 Appendix A) Create Material Shipping Burden & SLA Entries B) Discrete Cost Management SLA Model C) Inventory Transactions Architecture D) Creating DFFs for Material Transactions and Sub-Elements

113 C) Inventory Transactions Architecture Inventory allows you to define new transaction types Sources + Actions = Transaction Types As a result, material transactions are more complex You can query material transactions by Source or Transaction Type Sources are a group of transactions based on a common origin Actions indicate the behavior for the transaction (decrease or increase onhand quantities for example) Transaction types are the individual kinds of entries for each transaction source Material transactions are defined in MTL_TRANSACTION_TYPES

114 Inventory Transactions Architecture Defined By: Sources and Actions Define Over 90 Material Transaction Types Account Sources Account Alias Cycle Count Internal Order Internal Requisition Inventory Job or Schedule Move Order Physical Inventory Purchase Order RMA Sales Orders Standard Cost Update Assembly completion Assembly return COGS recognition Cost update Cycle count adjustment Delivery adjustments Direct organization xfer Intransit receipt Intransit shipment Issue from stores Logical Intransit Receipt Logical Intransit Shipment Logical Delivery Adjustment Logical Expense Requisition Receipt Logical Intercompany Receipt Sample List of Actions Logical Intercompany Receipt Return Logical Intercompany Sales Logical Intercompany Sales Return Logical Issue Logical Receipt Negative Component Issue Negative Component Return Ownership Transfer Physical Inventory Adjustment Receipt into Stores Retroactive Price Update Staging Transfer Subinventory Transfer WIP Scrap Transaction

115 So Why Care About Inventory Txn Architecture? Menu path: Cost Management SLA => View Transactions => Material Transactions Use Transaction Sources and Transaction Types for Online Queries

116 So Why Care About Inventory Txn Architecture? Menu path: Cost Management SLA => View Transactions => Material Transactions Use Transaction Sources and Transaction Types for Online Queries

117 List of Sources and Transaction Types

118 List of Sources and Transaction Types (cont d)

119 Accounting Line Types Define the Purpose for the Accounting Entry Use these values to understand the accounting entry Example: COGS Recognition Transaction Menu path: Cost Management SLA => View Transactions => Material Distributions

120 List of R12 Accounting Line Types

121 Appendix A) Create Material Shipping Burden & SLA Entries B) Discrete Cost Management SLA Model C) Inventory Transactions Architecture D) Creating DFFs for Material Transactions and Sub-Elements

122 Sub-Elements: Enable DFF to Indicate a Shipping Burden

123 Sub-Elements: Enable DFF to Indicate a Shipping Burden (Cont d) Unclick here

124 Sub-Elements: Enable DFF to Indicate a Shipping Burden (Cont d) Use an existing value set

125 Sub-Elements: Enable DFF to Indicate a Shipping Burden (Cont d) Unclick here Change this these values

126 Sub-Elements: Enable DFF to Indicate a Shipping Burden (Cont d)

127 Sub-Elements: Enable DFF to Indicate a Shipping Burden (Cont d) Click here to refreeze

128 Enable DFF for Material Transaction Types Unclick here

129 Enable DFF for Material Txn Types (Cont d) Change this these values

130 Enable DFF for Material Txn Types (Cont d) Click here to refreeze

131 Acknowledgements Mohan Iyer and John Peters Paper review and support of shared Vision environment Ashish Pathak and Anup Jha Oracle Cost Development Workarounds with SLA and Create Accounting limitations

132 Any Questions? Doug Volz www. volzconsulting.com

133 Please complete the session evaluation We appreciate your feedback and insight You may complete the session evaluation either on paper or online via the mobile app