Flow of Accounting entries in Oracle Applications By LOKESH MBA.

,ICSI,
E-Mail:lokesh.klk@gmail.com

Agenda
Understanding the Accounting Flow in Oracle Applications Transaction Flow Modules Covered Set up required in Oracle Applications Defaulting Accounts Posting to General Ledger from Sub-Ledger SubPosting in General Ledger Viewing the Trial Balance

Understanding the flow of Accounting in Oracle Applications

Receivables Payables

Purchasing

Assets
SAP

Other Legacy Sources

Interfaces with GL

General Ledger

Projects Accounting Engine Cash Mgmt Cost Mgmt

Transaction Flow
Create Opening Balances in General ledger and Subledger Place Purchase order Receive the Materials into Stores Receive the Supplier Invoice from Supplier Match the Supplier invoice with PO and make Payment Issue Materials to Production Complete the Production Order and Build Inventory Ship the Material to Customer Raise invoice on Customer Receive Cash from Customer Reconcile the Payment and Receipt in Cash Management Post Sub Ledger Transactions into GL Run Trial Balance and Financial Statements (Profit & Loss Account & Balance Sheet

Modules Covered
Oracle Purchasing Oracle Payables Oracle Inventory Oracle Manufacturing (WIP Accounting) Oracle Order Management Oracle Receivables Oracle Cash Management Oracle General Ledger

Cost Calculation
FG/Sub Assembly
Total Cost

Item Cost

Operations Cost

Purchased Item/ Sub Assembly Cost

Routing Operations
Production / Service Departments Rate X Usage

Department Resources

Usage

Men, Money, Machine

Rate

Set up Required in Oracle Applications

Each Module has a Parameter screen or Controlling Screen through which the Accounts are Defaulting Ex (Inventory Organization for Materials in Inventory Module, Receiving options for Inventory Receipt in Purchasing Module, Financial Options for Payables) There are other places also where we can define the Accounts and there is an inbuilt hierarchy within the Applications as to where from the Accounts need to be defaulted Each Module Needs to set the Accounts for an Accounting Event Happening in that Module

Defaulting Accounts in Case of Purchasing

Defaulting Accounts in Case of Purchasing

Posting to General Ledger from Sub-Ledger Sub Sub-Ledger Accounting Entries are Transferred to General SubLedger Interface table through the Concurrent Programs We can schedule the concurrent Process to Transfer Data to GL instead of manually running the concurrent Programs. You can run the Process Daily, Weekly, Monthly You can transfer the data either in Summary or (Total Transaction for an Account Combination per day) Detail (Each Transaction)

Posting in General Ledger

This Process Transfers Data from GL Interface Tables to GL Main Tables (i.e) From GL_JE_INTERFACE table to GL_JE_HEADERS and GL_JE_LINES Once the Data is Posted No further changes to the Data is permitted

Accounting Events Oracle Purchasing

Oracle Purchasing
Inventory Accruals Transfer to Sub Inventory Purchase Price Variance Invoice Price Variance (IPV) and Exchange Rate Variance Return to Supplier From Receipt of Materials Inter-organization Transfer Inter-

Accounting Events Oracle Payables

Invoices
 Invoice  Invoice adjustment  Invoice cancellation  Prepayment application  Prepayment un-application un-

Payments
 Payment  Future dated payment maturity  Payment adjustment  Payment cancellation  Payment clearing  Payment un-clearing un-

Accounting Events Manufacturing (WIP)

Oracle Inventory
Material Transfer from Stores to WIP WIP Completions and Material Consumption Entry Operations Completion Entry Finished Goods Stock Creation Entry Inter-Org Transfer InterSub-Inventory Transfer Sub-

Accounting Events Order Management

Order Management
Cost of Goods Sold Entry in Inventory Module

Accounting Events Oracle Receivables

Transactions
Invoices Debit Memos Commitments Invoices Against a Deposit Invoice Against guarantee Credit Memos On Account Credit Memo

Accounting Events Oracle Receivables

Receipts
Unapplied Receipts On account Receipt Applied Receipt Reverse Receipt Charge back Adjustments Miscellaneous Receipts Bills Receivables

Accounting Event Cash Management

Oracle Cash Management
Cash Receipt Clearing Cash Payment Clearing  Journals Open Interface

Accounting Event General Ledger

Oracle General Ledger
Journal Entries Created from Sub Ledger Manual Journal Entries created in GL Inter-Company Transfer Entries InterTranslation entries Revaluation Entries

Flow of Accounting in oracle Applications

Case Study