1. Cost Accounting As You Want It ─ EBS R12 Cost Accounting with SLA
Douglas A. Volz
Douglas Volz Consulting, Inc.
OAUG Discrete MFG Cost Sub-Committee Lead
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

2. Agenda Oracle Discrete Costing SLA enhancements
Case example: Discrete Costing-Product Line Accounting
Oracle Process Costing MAC transitioning to SLA
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

3. 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
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

4. 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
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

5. Subledger Accounting Method (SLAM) Setup Steps
Create account derivation rules
Create journal line types
Create a journal lines definition (link the journal line type to the account derivation rule)
Create an application accounting definition (copy an existing definition and modify it)
Create a subledger accounting method (copy “standard accrual” and create a new one)
Assign it to a Ledger
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6. 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
The most granular level of business event which has accounting impact
EVENT TYPE
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7. Setup and Process
PROCESS
JOURNAL ENTRY SETUPS
Enter Transaction(s)
Define/copy and modify account derivation rules
Cost Manager
Define/copy and modify journal line types
Create Accounting*
Transfer Journal Entries to GL
Define/copy and modify descriptions
*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.
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

8. Setup and Process Accounting Configurations Transactions
Accounting Events
Cost Management
SLA
Accounting
Configurations
Subledger
Balances
Journal Entries GL
Journal Entries
and Balances
Accounting
Program
Journal Entry Setup
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9. Case Example: Discrete Costing-Product Line Accounting
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10. 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 R (only works with Discrete Costing)
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

11. Cost/SLA Mapping Set Capability
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12. Product Line Setup Steps Using SLA mapping set
Cost SLA Mapping Set Capability: PPV by product Line
Product Line Setup Steps Using SLA mapping set
Enter your SLA account derivation rule for Purchase Price Variance accounts
Associate the new account derivation rule to your Journal Line Type
Associate the Application Accounting Definition with Subledger Accounting Method
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

13. Product Line Accounting – Descriptive flexfield
Cost/SLA Mapping Set Capability
Product Line Accounting – Descriptive flexfield
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14. Product Line Accounting – Item Descriptive FF
Cost/SLA Mapping Set Capability
Product Line Accounting – Item Descriptive FF
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15. Mapping set – Account Derivation Rule
Cost/SLA Mapping Set Capability
Mapping set – Account Derivation Rule
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16. Mapping set – Account Derivation Rule
Cost/SLA Mapping Set Capability
Mapping set – Account Derivation Rule
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

17. SLA Journal Line / Derivation Rule
Cost/SLA Mapping Set Capability
SLA Journal Line / Derivation Rule
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18. Cost/SLA Mapping Set Capability
Associate Journal Lines Definition to the Event Class
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19. Cost/SLA Mapping Set Capability
Note the same ADR is usable for Standard Cost Update
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20. Cost/SLA Mapping Set Capability
Note the same ADR is usable for Standard Cost Update
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

21. Cost/SLA Mapping Set Capability
Associate SLA Definition to the SLA Method/Ledger
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22. Assign product line code to the inventory item
Cost/SLA Mapping Set Capability
Assign product line code to the inventory item
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23. Matl Overhead Absorption
Cost/SLA Mapping Set Capability
The material subledger from 11i still exists
Inventory
Inventory
Receiving
Matl Overhead Absorption
PPV
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24. SLA Entries That Go to Your G/L
Cost/SLA Mapping Set Capability
SLA Entries That Go to Your G/L
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

25. Cost/SLA Mapping Set Capability
For the Standard Cost Updates That Go to Your G/L
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

26. Category Accounting – Cost Accounting migrated to SLA in R12.1
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27. Create a new structure under the key flexfield “Item Category”
Product Line Category Accounting
Create a new structure under the key flexfield “Item Category”
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28. Create a new structure under the key flexfield “Item Category”
Product Line Category Accounting
Create a new structure under the key flexfield “Item Category”
Create category codes
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

29. Create a new structure under the key flexfield “Item Category”
Product Line Category Accounting
Create a new structure under the key flexfield “Item Category”
Create category codes
Create category set
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

30. 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
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

31. Assign product line category accounts
Product Line Category Accounting
Assign product line category accounts
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

32. Product Line Category Accounting
Account Derivation Rule would have used a source directly
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33. Summary Notes Product Line Category Accounting
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.
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

34. 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.
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

35. Oracle Process Costing: MAC transitioning to SLA
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36. 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
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

37. OPM MAC transitioning to SLA
11i OPM
GMI
(OPM Inventory)
Order Management
Purchasing
GMD, GME
Cost Setup
Calculate Cost
Store Costs
Oracle GL
MAC
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

38. OPM MAC transitioning to SLA
R12 OPM
Oracle Inventory
Order Management
Purchasing
GMD, GME
Cost Setup
Calculate Cost
Store Costs
Oracle GL
SLA
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

39. 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.
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

40. OPM MAC transitioning to SLA
11i OPM
General Ledger
I n t e r f a c e
Subledger
GL Export
Journal Import
Journal Posting
For G/L integration, discrete costing works the same as OPM costing
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

41. Oracle Subledger Accounting
OPM MAC transitioning to SLA
OPM
R12 OPM
Payables
Receivables
Oracle Subledger Accounting
Oracle General Ledger
Projects
For G/L integration, discrete costing works the same as OPM costing
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

42. Cost Pre-processor will create accounting Events
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
SLA accounting program processes the events to create the journal entries
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

43. OPM MAC transitioning to SLA
COMMENTS
Fiscal Policy
Retained with few modifications
Event Fiscal Policy
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
Use GL setups
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

44. OPM MAC transitioning to SLA
COMMENTS
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
Is retained and has been modified to use SLA repository
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

45. 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
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

46. OPM MAC transitioning to SLA
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

47. OPM MAC transitioning to SLA
NO LOSS of functionality by moving to SLA model
A new sub-menu created under Cost Management for 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.
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

48. Acknowledgements of assistance:
Herve Yu – Oracle Cost Management Development Manager
Diane Struebel – Schreiber Foods Cost Manager – OAUG Process MFG Cost Sub-Committee Lead
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

49. Additional information available from:
R12 Oracle Subledger Accounting – Implementation Guide
R12 Oracle Cost Management – User Guide
R12 Oracle Process Manufacturing Cost Management - User Guide
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

50. THANK YOU
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

51. Appendix Professional Background for Douglas Volz
Douglas Volz Consulting, Inc. 
Helping clients use Oracle Applications since 1990
US Cell: 
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

52. Professional Background
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 accumulated experience, including 5 years in Oracle Development (co-designing Oracle Cost Management) and 12 years in industry in Cost and Accounting Management positions. 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 companies.
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.
Core Expertise
Experience
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
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.)
Douglas Volz Consulting, Inc. “Helping clients use Oracle Applications since 1990”

53. End of Presentation
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