Presentation is loading. Please wait.

Presentation is loading. Please wait.

Overview of the New Financial Architecture in Oracle E-Business Suite Release 12 Mary Burns.

Similar presentations

Presentation on theme: "Overview of the New Financial Architecture in Oracle E-Business Suite Release 12 Mary Burns."— Presentation transcript:

1 Overview of the New Financial Architecture in Oracle E-Business Suite Release 12
Mary Burns

2 The following is intended to outline our general product direction
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

3 Agenda What We Set Out To Address Release Twelve: The Global Release
Global Architecture MultiOrg Access Control Subledger Accounting Ledgers and Ledger Sets Ledger Considerations Global Business Functions Legal Entities Accounting Set Up Manager E-Business Tax Advanced Intercompany Banking Model

4 <Insert Picture Here>
What we set out to address

5 Doing Business Globally is Complex Top Drivers of Complexity
National and International Laws & Regulations Actions by Competitors Changing Customer Requirements Industry Standards and Regulations Tax Codes Changing Workforce Attitudes International Reporting Standards Language and Cultural Differences 1 2 Globalization is unstoppable. Regardless of geography, industry or income, companies are globalizing to gain new customers and access new markets. Is this a good thing? Nearly two-thirds of the CEOs we surveyed are positive about the impact that globalization will have on their organizations over the next three years. Source: 9th Annual Global CEO Survey – Globalization and Complexity; PwC 2006 3 4 5 6 7 Globalization Changes Everything Complexity: Managing the Inevitable 8 Direct impact on Finance Source: PWC, 9th Annual Global CEO Survey

6 Make it Simpler to do your job Control Costs by Managing Complexity
Major Focus Standardizing operating practices and controls 69% Standardizing policies and business rules 66% Standardizing and integrating finance systems 59% Adopting best practices 58% Optimizing the finance organization and its reporting structure 52% Reducing reliance on spreadsheets 33% 50% Senior executives say simplification is driving the Finance agenda Seeking High Performance, Corporate Finance Departments Turn to Simplification, PricewaterhouseCoopers Finds Standardization and Best Practices their Primary Focus These findings are from interviews with 117 top executives of large, U.S.-based multinational businesses, for PricewaterhouseCoopers' Management Barometer.NEW YORK, April 17, Senior executives believe that their company's finance department lags competitively in its effectiveness and performance--with the leveraging of technology seen as a particular vulnerability. To regain their edge, more than half are going back to basics--turning to simplification, standardization, and best practices to improve performance and management information for decision-making. Source: PWC Management Barometer

7 Make it Easier to do Your Job
How Finance Spends its Time % Yet To… 50% Improve processes or rationalize technologies 60% Standardize policies, rules, and processes across the entire enterprise 73% Implement a shared services model * 80% Adopt best practices or simplify processes across the entire enterprise 26% 47% 27% Even though many Finance organizations have aspired to a more strategic role in the business for some time, what’s surprising is how far they still have to go to achieve that goal. An IBM study of 250 CFOs in 2005 shows that Finance still spends nearly half its time on transaction processing, a quarter on control-related activities, and only a quarter on decision support. The figures on the right explain why progress has been slow. Only half the CFOs interviewed have tackled the basics of finance transformation by improving processes or rationalizing technologies. The Agile CFO, IBM Business Consulting Services, 2005 * Deloitte Consulting, 2006

8 Customers: Centralize, Simplify, Standardize
Work Globally, to be more competitive Think Globally, to make the right decisions Manage Globally, to lower cost and increase performance National Compliance Local Regulation National COA Local Calendar Corp. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar $ Joint Compliance US GAAP / IAS-IFRS A$+$ Parent Compliance US GAAP / IAS-IFRS Corp COA €+$ + Easy Reporting Transparent Audit, Reconciliation & Drilldown Financial Data for Management - and Compliant Analytics Comprehensive and compliant processing Controlled Transaction Entry

9 How Financials Release 12 Can Help The Global Business Release
WORK GLOBALLY To Be More Competitive THINK GLOBALLY To Make the Right Decisions MANAGE GLOBALLY To Lower Cost & Increase Performance Financial Control & Reporting Performance Management Integration Credit-to-Cash Profitability Management Data Management Procure-to-Pay Business Intelligence Reporting Treasury & Tax Global: Of, relating to, or involving the entire earth; worldwide: global peace; global monetary policies, etc. Comprehensive; total: a... global, generalized sense of well-being Travel & Expense “My business will be more competitive with better support for global work that crosses applications, divisions, and regions” “I can make more informed and compliant decisions with a global view of customer / supplier / partner / operations.” “R12 makes it easier and less expensive for me to implement , manage, and scale global applications.” Business will be more competitive with better support for global work that crosses applications, divisions, and regions Maintain a common system for global compliance. Internal Controls Manager provides a single system to standardize, document and audit internal controls and monitor ongoing compliance. Operate more efficiently with single global access across multiple lines of business. The new Ledgers and Ledger Sets allow for processing and reporting across different accounting entities. With multi-organization access control (MOAC) transactions can be managed across multiple operating units. Pre-built, adaptable vertical flows accelerate industry-specific business processes Asset Management Governance, Risk & Compliance

10 <Insert Picture Here>
Release Twelve The Global Business Release: A New Financial Architecture

11 Global Financial Architecture
General Ledger Ledger & Ledger Sets 6 Major Initiatives Ledger and Ledger Sets Multi-Org Access Control Subledger Accounting Tax Engine Intercompany Bank Model Subledger Accounting (SLA) Dr Cr Bank Model -% Tax Engine Inter Company Projects Receivables Inventory Work in Process Purchasing Payables Multi-Org Access Control

12 <Insert Picture Here>
Multi-Org Access Control Think Work Manage

13 MOAC: Multi-Org Access Control Role based access to Operating Units
Perform multiple tasks across operating units without changing responsibilities Belgium Legal Entity Holland Legal Entity Denmark Legal Entity Functional Tasks Order Management Dunning, Collections, Billing Requisition, Demand & Purchase Orders Receiving & Drop Ship Invoice Receipt, Disbursement Customer Data Management Accounting Setup Single Responsibility Belgium Operating Unit Holland Operating Unit Denmark Operating Unit Responsibility Responsibility Responsibility

14 Purpose Built Cross OU “Desks” Shared Services
Product Reference Order Management Dunning, Collections, Billing Receivables Requisition, Demand & Purchase Orders Procurement Receiving & Drop Ship Supply Chain Management Invoice Receipt, Disbursement Payables Customer Data Management Trading Community Architecture Accounting Setup Accounting Setup Manager

15 Multiple Organization Access Control Summary of Changes
Security Profiles for data security MO: Security Profile List of operating units for a responsibility Defined in HR OU field on UI all transactions setup data specific to OU, like transaction type Enhanced Multi-Org Reporting and Processing Ledger/Ledger Set parameter on accounting reports and processes OU parameter on other standard reports and processes For example: submit the Payables Open Interface Import w/OU param null to import all records across all OUs

16 Multi-Org Access Control In practice
Select Operating Units In daily use Now, I’m going to explain how to define a security profile. Using Oracle HRMS, you can define your security profile using two forms: The Security Profile form or the Global Security Profile form that is shown here. Both forms look almost identical. The Security Profile Form allows you to select operating units from only one Business Group. The Global Security profile Form allows you to select operating units from multiple Business Groups. The decision on which form to use is really up to you and depends on your HR implementation and how you want to partition data. All you need to do is enter a name, and select the Security Type called “Secure organizations by organization hierarchy and/or organization list”. This allows you to assign multiple OUs. When assigning operating units, first select classification Operating Unit, and then select the organization or Operating Unit name. You can assign as many operating units as you want. Run Reports Across Operating Units Select Operating Unit classification Classify Organization as operating unit

17 <Insert Picture Here>
Subledger Accounting Think Work Manage

18 Centralized Accounting Model, Rules, Engine and Repository
Centralized Accounting Policies Greater Control, Transparency and Auditability General Ledger Internal control and compliance with multiple accounting policies through user-defined accounting rules Single source of truth for all subsystem accounting activity with a common data model and repository Accounting, reconciliation and reporting facilitated by centralized data model Streamline closing process with common posting engine Auditable and transparent entries accessible with full drilldown 3rd Party Systems Centralized Accounting Model, Rules, Engine and Repository Dr Cr Receivables Inventory Projects 3rd Party Systems Work in Process Purchasing Payables

19 Subledger Accounting Centralized Rules, Common Repository: Global Control
Payables Invoice French Rules Plan Comptable French Calendar EUR Ledger Subledger Accounting Dr Cr Accounting Rules SarBox & 8th Dir. User Editable Subledger Daybooks (Journals) Subledger Balancing Reports, inquiries, open items, et cetera Multiple Representations Common Posting to GL Ledgers Real time or Periodic What it is Faster, Easier Reconciliation Corporate Rules = Accounting Standardization Local Rules = Improved Local Compliance Automate “Apples to Apples” Adjustments Improved Audit- ability Improved Internal Control Some Benefits

20 Subledger Accounting Transaction Level Compliance
National Daily Journal Requirements Internal Control: Central Definitions, Eliminate overrides Policy Enforcement in Volume Processing Transparent Accounting Rules Debits & Credit at the point of the event Automate Foreign Operation adjustments Reconciliation Platform “In accordance with the Underlying Records” Event Class: Invoices Event: Invoice Approved Ledger: France (EUR) GL Date: 20-Sep-2005 Description: Office supplies Type Account Description Debit Credit Asset purchase Paris: furniture 10,000 Misc expense Paris: supplies Misc expense Nantes: supplies Misc expense Nice: supplies VAT ,836 Accounts Payable ABC Supplies 12,636 12,636 12,636

21 Ticked & Tied General Ledger SLA Detail
SLA Controls that GL Balances and SLA Balances tie, and that both tie to the document (invoice, payment, etc.) sources General Ledger SLA Detail

22 Multiple Accounting Representations Global Compliance – Statutory and Stock Market
Ledger A Ledger B Multiple Ledgers French Rules Plan Comptable French Calendar EUR US GAAP US COA US Calendar EUR or Dr Cr Subledger Accounting Single subledger transaction can create multiple accounting representations and in multiple currencies Chose to use an alternative Ledger - or just an Adjustment Ledger or segment Payables Invoice

23 SLA keeps the Subledgers & GL tied out Keep the auditors happy!
Subledger Applications Accounting Configurations Journal Entry Setup General Ledger Subledger Journal Entries Accounting Events Accounting Program GL Journal Entries and Balances Subledger Accounting Service Subledger Balances Transactions (& adjustments) Reconciled: Docs, SLA, GL in synch

24 <Insert Picture Here>
Ledgers and Ledger Sets Think Work Manage

25 Ledger One Repository of Financial Truth
US GAAP US COA US Calendar EUR Ledger B Implements the 4 C’s: Accounting Method Chart of Accounts Calendar Currency The balance on Creditors (COA) is 4.2M Eur (Currency) on March 31, 2006 (Calendar) according to IAS/IFRS definitions (Accounting Method) Reporting Currency

26 Ledger Sets Global Information At A Glance
Ledger A US GAAP US COA US Calendar EUR Ledger B French Rules Plan Comptable French Calendar EUR Reporting Currency

27 Ledger Sets Global Information At A Glance
Share: Chart of Accounts Calendar Ledger Set Ledger C US GAAP US COA US Calendar USD Ledger A US GAAP US COA US Calendar EUR Ledger B French Rules Plan Comptable French Calendar EUR Ledger D US GAAP US COA US Calendar AUD Key benefits to many Ledgers in one set Decision-driving business information always available Simpler processing and General Ledger management Data and definitions that can be shared and secured Reporting Currency

28 Currency in Release 12 Transaction Currencies
Accounting Currency in Primary Ledger Reporting Currency in Primary Ledger More Accounting Currencies in Secondary Ledgers For every transaction OR For SLA Posting level / GL activity level Balance level Translation or Remeasurement in Ledgers – within Ledger sets, run at one click Balance & Activity level Translation or Remeasurement in Financial Consolidation Hub Enhanced Revaluation [Functional Currency term dropped: conflicts with IAS 21 / FAS 52]

29 Data Access, Definition Access
Data Access Sets Grant and tailor access to Ledgers and Balancing Segment Values (i.e. Companies, Stores, Branches, etc.) Accountant Privileges France Ledger Canada Ledger US Ledger GL Manager View Write Definition Access Sets – separate from data security Share, restrict definitions; privileges to view, modify, etc.

30 <Insert Picture Here>
Ledger Considerations

31 Ledger Sets – Work them your way
Corporate Ledger Set adjustments eliminations UK Ledger Set US Ledger Set Legal Ledger UK1 UK2 Adj Ledger Adjustment Ledger UK Ledger US US1 US3 US2 Management Ledger Set Automate GAAP / IAS adjustments in an adjusting ledger Eliminate within a Set with GCS Consolidate Formally in FCH Map from a non-conforming COA with a GCS Ledger Set of 26 Ledgers in one country Euro Zone in One Ledger Set My Corporate Set in US GAAP Statutory Set for Country Y Subs Division X Worldwide Ledger Set

32 When to use a Secondary Ledger, an Adjusting Segment or an Adjusting Ledger?
Corp. wants GL balances per Parent GAAP Corp. wants “Just the adjustments, thank you” Corp. wants a complete Parent GAAP & Currency edition of the Sub’s books Subsidiary books are pretty similar to parents Mapping gets us most of the way to Parent Subsidiary books are quite alien to parents No inventory Inventory is the big difference Inventory is one of the big differences National chart of accounts is clearly related to IAS IFRS or GAAP balances Manageable series of reclassifications National chart of accounts is radically different from corporate National Controllership - Corp GAAP known Regional Controllership - Corp GAAP administered Parent Controllership Mexico plant, US parent Balances are enough (Full drill down available) See they’ve been properly adjusted to our rules Every petty cash slip

33 <Insert Picture Here>
Global Business Functions Think Work Manage

34 Legal Entity: Your Registered Companies
Public Company (ultimate parent) Public Company Subsidiary Company (regional parent) Subsidiary Company (business parent) Subsidiary Company Legal Authorities Countries, States, Local, Agencies, Taxation, Registrars, Regulators... Regulates Complies Legal Entities Registered Companies, Funds, Partnerships… Inc. LLC. Ltd. SA. GmBH. Etc. “exist in the outside world” Managed & analyzed by Parent companies (LEs) “own or control” subsidiaries (LEs) No outside ring - must pick an LE LEs create commercial transactions Management Orgs Divisions, LOBS, Plants, Cost Centers, Whatever = “Decision Making Tags”

35 LEs: Why and What? Why We Care What we’ve done
LEs pay the taxes - need tax registrations Trade between LEs needs intercompany LEs own the money and bank accounts LEs file the accounts, take care of accounting LEs comply with whatever needs compliance: “legal” in LE Addresses, Officers, etc. Enabled First Party stamp Added Establishments: map Registrations to Authorities GRE/LE not touched Authorities as TCA parties LE Configurator Why We Care What we’ve done

36 Tabulate your Registered Companies and other forms of LE
Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses

37 Legal Entity Legal Entity: Where LE fits in…
Transaction Taxes -Complies & Files, Pays Actual Registered Companies, etc. Business Group Maintains its Subledger Documents in many OUs Default Legal Context (DLC) GRE/LE Et Cetera, 11i Legal Entity Registrations with Authorities Files Operating Units Accounts for itself in a Ledger or BSVs Exists Locally Establishments Files Legal Entity: Vehicle for compliance Ledger Registrations with Authorities

38 Get the LE Right Compliance Falls Into Place
Transaction Taxes -Complies & Files, Pays Let’s put LEs to work Isolate legal compliance from management needs Track your registered companies Make your compliance flow more easily Accounting Setup Manager Assign books, bookkeeping rules and currency management to your registered companies EBusiness Tax Have your registered companies calculate, file, and pay the transaction taxes they owe Intercompany Do business between and across your registered companies with full legal documentation Bank Model Have your registered companies use their money to pay their bills, et cetera Actual Registered Companies, etc. Business Group Maintains its Subledger Documents in many OUs Default Legal Context (DLC) GRE/LE Et Cetera, 11i Legal Entity Registrations with Authorities Files Operating Units Accounts for itself in a Ledger or BSVs Exists Locally Establishments Files Legal Entity: Vehicle for compliance Ledger Registrations with Authorities

39 <Insert Picture Here>
Accounting Setup Manager (ASM) Think Work Manage

40 Centralized Set-up Accounting Setup Manager
Define Legal Entities & Associated Rules Ensure Complete & Accurate Setup via Online Checklist One Place to manage Your Global Accounting Rules, Currencies, Ledgers, And Ledger Sets Define Multiple Ledgers for Rules & Currencies Set Accounting Rules for All EBS Apps

41 <Insert Picture Here>
E-Business Tax Think Work Manage

42 Centralized Global Tax Less Complex Global Tax Compliance
Business Needs Solution Automation Tax content for certain countries Vertex and Taxware integration for U.S. Integrity checks during setup process Constant Changes in Tax Laws and Regulations Date effective setup Tax rules flow for change or creating rules Tax simulator for setup, rules, and transactions Local Compliance Tax registrations and tax reporting codes Tax lines determine applicable taxes Configurable tax reporting templates Information Visibility Single set up for all Oracle applications Use of E-Business Suite components such as trading partner geography, trading partner classification, legal entity, inventory item categorization, and accounting event.

43 Oracle E-Business Tax Processing taxes for transactions and reporting
Tax Transactions Purchasing  Compliance, Assurance  Efficiency, Global Visibility Payables Parties Places Products Processes Determine Regimes Taxable Basis Calculate Tax Amount Tax Status & Rate Applicable Taxes Single Interface for Transactions Transparent Integration with Tax Partner Services Sales Orders Receivables  Extensible  Service Oriented Architecture Tax Reports - PDF, HTML, RTF - Security enabled Taxes, Rules

44 <Insert Picture Here>
Advanced Intercompany (AGIS) Think Work Manage

45 Advanced Global Intercompany System
Advanced Global Intercompany System Address the Top Barrier to a Fast Close Advanced Global Intercompany System Subledger Invoices & Documents Web UI Open Interfaces / API Online Reconciliation Reporting XML Publisher Reports Generate subledger invoices Control transaction entry with Intercompany Calendar Fully Configurable Approval Rules Flexible Security Model Centrally defined Intercompany Accounts Excel (Web ADI) Subledger Accounting Dr Cr General Ledger Receivables Payables

46 AGIS at Work Rebilling a Corporate Cost from an USA HQ
GL Entries created for US subsidiaries AP and AR Invoices created for France and Italy Inter Company California Company Subledger Invoices & Documents General Ledger Entries Illinois Company New York Company France Company Italy Company Company California Initiates a Manual Intercompany Transaction, either via the ‘Self Service’ Web Interface or form and Excel Spreadsheet (using Web ADI) Intercompany determines if invoices are required based on AGIS set up and Legal Rules, A Legal Rule will take precedence over AGIS System Options.

47 <Insert Picture Here>
Banking Model Think Work Manage

48 Centralized Banking Shared Services Disbursements
Bank account is now associated with LE entity rather than Operating Unit Single bank account serves multiple Operating Units Any and all Operating Units associated with a ledger can be permitted to use the bank account LE OU A OU B OU C Inventory Receivables Receivables Projects Projects Work in Process Plus Purchasing Payables Payables Assets Centralized Credit Card Model Credit Card Encryption Supplier & Customer Banks in TCA

49 Single Payment Instruction
Bank Model: Example of What You Can Do Pay invoices from different OUs with 1 instruction OU A OU B OU C Bank Single Payment Instruction Invoices Payments Sub Ledger Accounting New Payments Module New Bank Model New Bank & Credit Card Features

50 Banks Legal Entity Operating Units

51 <Insert Picture Here>
Sharing Services Think Work Manage

52 All Together: Easier To Share Services Central processing, Distributed impact
Formal SSCs At home or overseas Call Centers, Outsourcing Offshoring, SAS 70, On Demand SSCs (Formal) SLAs & Tax Inter-LE Ledger and Ledger Sets Subledger Accounting Intercompany, Tax Engine MOAC across LEs, Bank Internal Controls Manager Shared Service Infrastructure (Serves Informal and Formal) Organizational Access Cross Org Processes Banking Model Inter Unit Accounting Informal Service Sharing Process Efficiency Decentralized Depts. Centralized Depts.. Normal Business Practice Ledgers & Ledger Sets Ledgers with Balancing Segments MOAC across OUs Intercompany Bank Model Tax

53 What the Architecture Gets You
Work Globally Global Order Desk Global Procurement Global Billing Global Dunning Think Globally Global Ledger Sets – worldwide insight Global Reporting Manage Globally Global Accounting Rules Global Set-up Global Integration Release 12 Subsidiary LEs…. Company Company Company …account for themselves in Ledgers, and… Ledger Set manage their subledger data in Operating Units Multi-Org Access Control Inventory Receivables Projects Work in Process Purchasing Payables

54 Share Services, maintain privacy Exploit Cross-OU Processes
Yesterday: An LE Group in 1 SoB with 1 OU - no partitioning R12: Introduce partitioning without sacrificing processes Assets Projects Receivables Payables Purchasing Inventory Work in Process Ledgers in Ledger Sets, New OUs MOAC Inventory Work in Process Assets Projects Receivables Payables Purchasing

55 Release 12: The Global Business Release
National Compliance Local Regulation National COA Local Calendar Corp. Compliance US GAAP / IAS-IFRS Corp COA Corp Calendar $ Joint Compliance US GAAP / IAS-IFRS A$+$ Parent Compliance US GAAP / IAS-IFRS Corp COA €+$ + Work Globally, to be more competitive Think Globally, to make the right decisions Manage Globally, to lower cost and increase performance XML Publisher Reporting OICM DBI, FCH Ledger Sets, Ledgers Profitability Mgr, EPB General Ledger Transactions Subledger SLA, Tax MOAC, +300 Features Intercompany, Bank, Payments ü TCA, LE

56 Q & Q U E S T I O N S A


Download ppt "Overview of the New Financial Architecture in Oracle E-Business Suite Release 12 Mary Burns."

Similar presentations

Ads by Google