0. Subledger Accounting Implementation Options
Presented to the UKOUG Oracle Financials SIG by Nic Atkin

1. Implementation options for new R12 implementations, and R11i upgrades
Subledger Accounting
Implementation options for new R12 implementations, and R11i upgrades

2. About the presenter
Nic has been implementing, designing or developing solution architectures within the Oracle E-Business Suite arena since Release 7.
Nic spent 15 years with Oracle Consulting UK, and in his last year delivered both the R12 Awareness and Financials Accounting Hub training to consultants throughout EMEA.
Since leaving Oracle Consulting UK he has worked as an independent contractor implementing:
Financials Accounting Hub at Ministerie van Landbouw, Natuurbeheer en Voedselkwaliteit; LNV (Netherlands Ministry of Agriculture, Nature and Food Quality);
Subledger Accounting at LNV and Royal KPN NV (Netherlands landline and mobile telecommunications).
Nic is currently at Balfour Beatty as the R12 Solution owner delivering a common business process and share service centre based solution to 16 disparate Operating Companies in the Balfour Beatty Group.

3. Agenda Introduction to Subledger Accounting
Scope of Subledger Accounting in EBS
11i upgrade options
R12 Implementation options

4. Introduction to Subledger Accounting

5. Introduction to Subledger Accounting
What is Subledger Accounting (SLA)?
Common Accounting Engine embedded in E-Business Suite R12
A specific licence usage of the Financials Accounting Engine
SLA Licence comes free with EBS licence
Financials Accounting Hub (FAH/FSAH) licence is the other licence usage of the Financials Accounting Engine
What does it do?
Creates Journals from the transactional events that happen to a document during its lifecycle, e.g. approval, cancellation, adjustment
Can create Journals in many ledgers (Primary, Secondary, Reporting) from a single accounting event

6. Introduction to Subledger Accounting 11i User Interaction
END USER
Enter/validate/
approve transaction
END USER
Create accounting and transfer to GL
Import into GL
END USER
END USER
Post in GL
Financial Options
System Options
Accounting
Options
NOTE (DELETE THIS NOTE): LIST THE DEPENDENCIES ON OTHER PRODUCTS. THIS IS ONLY NECESSARY FOR TOI - DO NOT COVER THIS FOR ANY SALES RELATED POSITIONING

7. Introduction to Subledger Accounting R12 User Interaction
New in R12
Enter/validate/
approve transaction
END USER
Create accounting, transfer, and import into GL
END USER
END USER
Post in GL
Accounting event created
SLA Setup Transaction Data Accounting Event
NOTE (DELETE THIS NOTE): LIST THE DEPENDENCIES ON OTHER PRODUCTS. THIS IS ONLY NECESSARY FOR TOI - DO NOT COVER THIS FOR ANY SALES RELATED POSITIONING

8. Introduction to Subledger Accounting Key Components (1)
Components configured and used by each Subledger separately
Single journal repository (can report across subledgers using custom reports)
Configuration/Setup
Event and Entity Model
Defines the Events that can happen to a document
Defines Entities to extract data from the source subledger document
Transaction Account Builder
Defines how an account code combination is built up in a subledger*
Account Method Builder
Defines a Journal and its Lines
Uses or overrides account code combination built in the subledger
Subledger Accounting Rules Detail Listing Report
Reports the entire configuration
* If implemented by Oracle Development

9. Introduction to Subledger Accounting Key Components (2)
Master Data Management User Functionality
Mappings Sets
Map any source value to a account segment or an entire account code combination
End User Functionality
Accounting Journals
Create Accounting (Offline) and
Online accounting (not in all subledgers)
Inquiry: Drill-down, Drill-up (GL->SLA->Subledger->SLA->GL)
Reports
Account Analysis Report
Journal Entries Report
Open Account Balances Listing
Subledger Multiperiod Accounting and Accrual Reversal Report
Subledger Period Close Exceptions Report
Third Party Balances Report
Trading Partner Summary Report

10. Introduction to Subledger Accounting Two licenses, Two levels of permission
Financials Accounting Hub
Applies to seeded Subledgers
Subledger Registration
Event Model
Change to seed data NOT SUPPORTED by Oracle
Entity Model
Standard Sources
Supported by Oracle for a new Subledger Registration ONLY
Custom Sources
Account Method Builder
If implemented by Oracle Development
Transaction Account Builder

11. Introduction to Subledger Accounting Accounting Methods Builder (AMB)
FR Statutory Ledger
Standard IAS Subledger Accounting Method
Payables Application Accounting Definition
Payment Journal Line Definition
Journal Line Types
Account Derivation Rules (ADRs)
Journal Entry Descriptions
Hierarchy of AMB, how components fit together.
The transaction objects and the sources carry transaction information into the rules defined for each component of an entry.
These components ie. journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event. For example, you will set up a JLD for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular subledger application is called the application accounting definition. And the set of AADs for multiple applications is called the subledger accounting method.
Remember that it is possible to maintain multiple accounting methods. You can set up as many components as you like, and use them for different accounting methods. You can set up an accounting method that creates entries in compliance with US GAAP, and another one with IFRS. Because the JE components are modular, these two methods could share components, such as entry descriptions.
The accounting methods would then be assigned to each ledger, which would determine what rules are applied when accounting is being generated for a particular ledger. If you have a setup with a primary and a secondary ledger, you could have different accounting methods attached to and used for each.
Document Transaction Entity (Objects, Records)
Sources (Fields)

12. Introduction to Subledger Accounting Transaction Account Builder (TAB)
FR Corporate Ledger
Corporate Chart of Accounts
Receivables Invoice Transaction Account Definition
Receivables Invoice Revenue Transaction Account Type
Account Derivation Rules (ADRs)
Hierarchy of AMB, how components fit together.
The transaction objects and the sources carry transaction information into the rules defined for each component of an entry.
These components ie. journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event. For example, you will set up a JLD for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular subledger application is called the application accounting definition. And the set of AADs for multiple applications is called the subledger accounting method.
Remember that it is possible to maintain multiple accounting methods. You can set up as many components as you like, and use them for different accounting methods. You can set up an accounting method that creates entries in compliance with US GAAP, and another one with IFRS. Because the JE components are modular, these two methods could share components, such as entry descriptions.
The accounting methods would then be assigned to each ledger, which would determine what rules are applied when accounting is being generated for a particular ledger. If you have a setup with a primary and a secondary ledger, you could have different accounting methods attached to and used for each.
Document Transaction Entity (Objects, Records)
Sources (Fields)

13. Scope of Subledger Accounting in EBS
Where and how used up to R12.1.3

14. Scope of Subledger Accounting in EBS Where and how used up to R12.1.3
Accounting for Journals in the following subledgers of the core Financials Suite:
Assets, Cost Management*, Purchasing**, E-Business Tax, Payables, Receivables, Cash Management
*Cost Management covers Purchasing Receipts, Inventory and Manufacturing
**Purchasing covers burden and encumbrance accounting for Requisitions and Purchase Orders
Accounting for Journals elsewhere in EBS:
Payroll, Projects, Lease and Finance Management, Loans, Property Manager, Process Manufacturing, Price Protection, Trade Management, Contract Commitment and Federal Financials.
Transaction Account Builder only used for Financials Common Modules (Advanced Global Intercompany System (AGIS))

15. Scope of Subledger Accounting in EBS Transaction Account Builders up to R12.1.3
Transaction Account Building Functionality
Cost Management
PO Requisition Account Generator
PO Account Generator
Payables
Project Supplier Invoice Account Generator; or
Project Expense Report Account Generator; or
Prior transaction (PO related) or Expense Report Template (Expense Reports); or Distribution Set (Invoices); otherwise entered manually.
Assets
FA Account Generator, or SLA Account Derivation Rules
Payroll
Cost Allocation Flexfield qualifiers and Costing program
Projects
AutoAccounting for Projects
Receivables
AR: Substitute Balancing Segment Account Generator
AutoAccounting for Invoices
Cash Management
SLA Account Derivation Rules
Leasing and Finance Management
Accounting Template Set (optional)
Advanced Global Intercompany System
SLA Transaction Account Builder

16. SLA Transaction Account Builder?
Scope of Subledger Accounting in EBS Transaction Account Builders post R12.1.3?
SLA Transaction Account Builder?
Subledger
Transaction Account Building Functionality
Cost Management
PO Requisition Account Generator
PO Account Generator
Payables
Project Supplier Invoice Account Generator; or
Project Expense Report Account Generator; or
Prior transaction (PO related) or Expense Report Template (Expense Reports); or Distribution Set (Invoices)
Assets
FA Account Generator, or SLA Account Derivation Rules
Payroll
Cost Allocation Flexfield qualifiers and Costing program
Projects
AutoAccounting for Projects
Receivables
AR: Substitute Balancing Segment Account Generator
AutoAccounting for Invoices
Cash Management
SLA Account Derivation Rules
Leasing and Finance Management
Accounting Template Set (optional)
Advanced Global Intercompany System
SLA Transaction Account Builder

17. Scope of Subledger Accounting in EBS Related changes in R12
Replaced Sets of Books with Ledger and Ledgers Sets
Primary
Secondary
Reporting (Currency)
Moved Multiple Reporting Currency functionality to Reporting currency
Moved Taxation functionality embedded in the subledgers to the common tax engine (E-Business Tax)
Legal entities model and functionality extended into most subledgers and supports Inter- and Intra- company accounting
Replaced Global Intercompany System (GIS) with Advanced Global Intercompany System (AGIS)
Replaced Global Accounting Engine with Subledger Accounting

18. 11i upgrade options and considerations

19. 11i upgrade options and considerations Key options
Your existing 11i implementation should upgrade without any changes in configuration or additional development – subject to regression testing.
Factors that may change an upgrade ‘without changes’:
You have accounting (GAAP) issues that are being addressed by manual journals, that could be addressed by changing the seeded accounting
You have customised any one of the Account Generators (dependent Workflow technical skills) Projects AutoAccounting (dependent on SQL technical skills) but want to revert to standard TABs and override account derivation in SLA instead
You want to implement a secondary ledger with a different chart of accounts.
You want implement some of the advanced features of SLA (see R12 implementation options)
Note: this may still require PL/SQL technical skills to develop custom sources.

20. 11i upgrade options and considerations Upgrade considerations
By default, the upgrade updates the data for the current fiscal year, as well as the necessary periods of the previous fiscal year, to ensure that at least six periods are included in the upgrade
How much data must be moved to the new model to support the business?, if more required then:
Get patch
Run SLA Pre-upgrade program to change the number of periods of data to upgrade
How much downtime is available to upgrade old data to the new model?
How many old transactions could possibly be reversed or rely on previous accounted transactions in a flow? (e.g. the accounting of payments related to a payable invoices are in a flow)
Mitigation: “Upgrade by Request” can run SLA post-upgrade program at any time to create the missing data

21. 11i upgrade options and considerations Subledger Specific considerations: Payroll
Use old GL Interface approach
No effort required
Use new SLA approach
Provides GL to Payroll SLA journal drill-down (unlike other subledgers not to HR/Payroll itself as this is secured data)
Full control of accounting
Need to configure all Journal Lines from scratch
On My Oracle Support, see:
Article ID and Article ID
White Paper Oracle Payroll - Sub Ledger Accounting Integration - An Oracle White Paper

22. 11i upgrade options and considerations Subledger Specific considerations: Assets
Use existing Account Generator
Set FA: Use Workflow Account Generation profile option to Yes
SLA Account Derivation rules
Set FA: Use Workflow Account Generation profile option to No
Amend Account Derivation Rules in SLA as required.

23. R12 implementation options

24. R12 implementation options Overview
Choose an Account Building Approach
Implement additional functionality:
Reconciliation References
Journal Header Descriptions
Journal Line Descriptions
Supporting References (for Inquiry)
Supporting Reference Balances
Integrate non-EBS sources via Financials Accounting Hub

25. R12 implementation options Choose an Account Building approach (1)
Document subject to Accounting Events (e.g. Payable Invoice)
Master Data related to Document (e.g. Supplier)
Setup Data related to Document (e.g. Operating Unit System Options)
Sources
Transaction Account Builder
(Account Generator, AutoAccounting, Hard-wired rules, SLA ADR, SLA TAB)
10023
2099
38765
476
00000
Document Distributions

26. R12 implementation options Choose an Account Building approach (2)DR CR
Journal Line
e.g Debit GBP 100
Journal
Document subject to Accounting Events (e.g. Payable Invoice)
Master Data related to Document (e.g. Supplier)
Setup Data related to Document (e.g. Operating Unit System Options)
Sources
10023
2072
38765
421
00000
Accounting Engine
(SLA ADR)
Master Data SLA Mapping Set
Document Distributions

27. R12 implementation options Choose an Account Building approach (3)
Key questions:
Do you want to prevent users entering account code combinations manually anywhere in EBS? – Total Accounting Automation
Do your ‘Organisational’ accounting segments change frequently causing documents with long life cycles to use invalid segment values and invalid combinations in the later part of their life?

28. R12 implementation options Choose an Account Building approach (3)
Two main approaches:
Calculate account code combinations at journal creation time (override ‘dummy’ TAB defaults with ADRs using setup and master data)
KPN approach
TABs calculate using setup and master data. ADRs Use TABs results at journal creation time (accept TAB defaults with minimal override in ADRs)
Oracle Product Development approach
Approach 1:
Change TABs to generate ‘dummy’ account combinations, change SLA ADRs and SLA JLDs – high cost, high complexity, custom development
Approach 2:
Take the seeded functionality: don’t change the TABs, don’t change the SLA ADRs - low cost, low complexity, no custom development
Or, do as you did in 11i implementations: change the TABs, don’t change the SLA ADRs - medium cost, medium complexity, custom development

29. R12 implementation options Reconciliation References
Reconciliation References have to be populated (from a source) to use the new GL AutoReconciliation feature for each journal line.
Scenario:
Two source subledgers imported into GL via FAH
Subledger A, primarily debits a control/clearing account using a Transaction Reference recorded in the reconciliation reference
Subledger B, primarily credits the same control/clearing account using the same Transaction Reference recorded in the reconciliation reference
Reconciliation enabled for the control/clearing account
GL Automatically Reconciles journal lines that have the same reconciliation reference and the sum of the debits equal the sum of the credits
Should be able to prove un-reconciled journal lines balance using reports from the source Subledgers.

30. R12 implementation options Journal Header Descriptions
Journal Header Descriptions have to be populated (from sources)
E.g. Invoice: <Invoice Number> Suppler: <Supplier Number>
Visible in SLA Inquiry screens
Visible in GL Inquiry screens if SLA Journal Lines are not summarised

31. R12 implementation options Journal Line Descriptions
Journal Line Descriptions have to be populated (from sources)
E.g. Invoice: <Invoice Number> Suppler: <Supplier Number> Line Number: <Line Number>
Visible in SLA Inquiry screens
Visible in GL Inquiry screens if SLA Journal Lines are not summarised

32. R12 implementation options Supporting References (for Inquiry)
Supporting References have to be populated (from sources)
E.g. Project Expenditure Type
Can have up to five segments
Allows Journal Lines to be retrieved using this value in the SLA Inquiry screens
Can be a source for a data warehouse

33. R12 implementation options Supporting Reference Balances
Supporting References have to be populated (from sources)
E.g. Project Number
Can have up to five segments
Allows GL Balances to be further analysed
Effectively extends the accounting flexflield by up to five segments
Balances can never reset (inception to date), or reset on year end (year to date)
Can be a source for a data warehouse

34. R12 implementation options Integrate non-EBS sources via Financials Accounting Hub
Requires a FAH licence
Can be a complex development
Needs detailed report requirement analysis
Needs detailed analysis of source system (subledger) to identify the documents and their accounting events
Needs detailed accounting requirements analysis to identify the journals required for each accounting event