Setting Up Organization in Oracle Applications R12

Setting Up Organization in Oracle Applications:

An Organization represents a business unit in an Enterprise which has a business need to secure transaction data, Setups and Seed data. It can be a major division, sales office, a department, or a separate company within an enterprise. Since the transaction Information is secured at organization level for the various modules within Oracle applications, A single application responsibility can access, process, and report on data for one or more operating units that is assigned to its Security profile.

An Operating unit can be associated to a Single Legal Entity and Ledger. But multiple operating units can be Associated to a Single Legal entity and Ledger.

Organization can be classified in to a set of system-defined attributes that categorize an organization. Examples

• ·        Business group
• ·        operating unit
• ·        project expenditure organization
• ·        inventory organization
• ·        Human resources organization

Organization in Oracle Applications is an autonomous Business Entity having business activities corresponding either of the below Modules like Receivables, Order Management, Payables, Purchasing, Projects, Inventory.

Navigation to define Organization:

HR Responsibility à Work Structure à Organizations

Organization can also be defined and viewed from the accounting Setup manager as well.

Whenever a New Organization is defined in oracle application it needs to be added appropriately in the Security profile if the Security Profile is a List of Organizations based Security profile and The Security List Maintenance programs needs to be run.

Defining an Operating Unit:

In order to use an Organization for transactions in the Oracle Applications in the Modules like Receivables, Order Management, Payables, Purchasing. It is required to define the Organization as an Operating Unit.

It is Mandatory to decide and Setup the below mentioned Oracle application multi organization entities before we setup an Operating unit.

• ·        Business group
• ·        Ledger
• ·        Legal Entity

Operating unit is an Organization classification and once an organization is defined as an operating Unit the Organization Attributes need to be defined. Before setting UP operating unit below Profile options should be defined so that the Organization gets created under appropriate business group

HR: Business Group at Responsibility Level

HR: Security Profile at Responsibility Level

As mentioned above The Ledger and Legal Entity needs to defined in the organization Information. And this is how the Legal Entity and Ledger are assigned to the Operating Unit.

Also It is important to note that in Oracle Applications R12 the Legal Entity which is Attached in the Organization information screen is the Default legal Context. Transnational

Legal Entities Defined at the ledger level can be used on the basis of the Mapping Defined between the Balancing Segment and Legal Entity as per the Ledger Definition.

Ledger Configuration in Oracle R12 Part -3

In this Article we will look in to the Steps and necessary configurations involved in defining Ledger in Oracle R12

Setting Up Ledger:

Create Legal Entity: If it is required to assign a legal entity, It can be crated and assigned to a Ledger from accounting setup manager.

Assign the Legal Entity to Ledger

Setting Up Ledger Options:,

Before setting up Ledger options Decide up on the values that are required to be entered in the corresponding fields in the Ledger options.

Define Ledger:

While defining the ledger you may use the calendar, Chart of Accounts, Currency and Sub-Ledger Accounting method defined earlier. As part of ledger setup it is mandatory to finalize these values before defining Ledger.

Define Ledger options.

As part of the Ledger options Definition Below mentioned are the Values which needs to be defined which will control how journals and transactions are processed for that ledger hence it is very important to have the values for all the below mentioned Options Decided before setting up the Ledger on the basis of business Functional requirement:

• First Ever Opened Period

• Number of Future Enterable Periods

• Retained Earnings Account

• Sub-ledger accounting method,

• Option to track balances using a secondary segment

• Suspense Account

• Rounding Differences Tracking Account

• Intercompany Balancing option

• Journal Approval

• Journal Entry Tax

• Journal Reversal Criteria Set

• Default Period End Rate Type

• Default Period Average Rate Type

• Cumulative Translation Adjustment Account

• Journal Reconciliation

• Budgetary Control

• Reserve for Encumbrance Account

• Average Balance Processing

• Average Balance Consolidation

• Net Income Account

• Transaction Calendar

If there are legal entities that require any one of the above ledger processing options to be different, then define a separate primary ledger for each legal entity and therefore, a new accounting setup

You will not be able to use the Ledger Unless the Ledger options setup Shows as Complete in the ledger setup Screen.

Ledger Configuration in Oracle R12 Part 2

Accounting Setup Steps:

There are mainly three steps for creation of accounting Setups. Each accounting setup is a grouping of accounting-related setup components as mentioned below.

1.       Create an accounting setup structure.

a.      Create and Assign legal entities

b.      Specify the ledger attributes for the primary ledger.

c.      If Secondary Ledger setup is required, Specify the ledger attributes for secondary ledgers

d.      Assign reporting currencies.

2.       Update accounting options.

a.      Complete ledger options as per the requirement.

b.      Assign balancing segment values to legal entities and Ledger

c.      Define Subledger accounting options.

d.      Define and assign operating units to the primary ledger.

e.      Define relevant intercompany setups including Accounts and Intercompany balancing Rules.

f.       Define sequencing options.

3.       Complete the accounting setup

Review and Complete accounting setups. The status of the accounting setup should be completed before it can be used for the transactions.

Ledger Setup Prerequisites:

In Order to create a Ledger in Oracle Applications in R12, It is required to complete certain Prerequisite setups before creating Ledger.

• ·        Chart of Accounts Setup.
• ·        Calendar and Periods related Setup.
• ·        Legal Entity Setup.
• ·        Currency and Conversion Rate type Setups.
• ·        Subledger Accounting Method Setup.
• Define Account Code Combinations and Values that needs to be setup for Ledger Options. 

Ledgers in Oracle R12 Part -1

Ledger in Oracle Applications R12:

Ledger is a financial reporting entity, which represents an accounting representation for an organization that is accountable in a self-contained way. Ledger is the highest level which impacts accounting. Ledger uses below mentioned components to secure and Manage the transaction information such as Journal entries and Balances) by ledger

·        Chart of accounts

·        Functional currency

·        Accounting calendar

·        Sub-ledger accounting method.

Ledger represents the core of a Company’s financial records where every transaction flows through.  It provides balanced ledger accounting for the accounting entity and serves as a repository of financial information. Multiple Legal entities can be assigned to a Ledger. A Ledger can be associated with multiple Legal Entities and operating Units. Ledger in R12 replaces the Set of Books in 11i Version of Oracle applications.

Accounting Setup Manager:

Accounting Setup manager is a new feature in R12 which is a centralized location for setup and maintenance of common financial components within an accounting setup. The status of the accounting setup should be completed before it can be used for the transactions. Each accounting setup is a grouping of accounting-related setup components.

Below Components can be setup and Maintained using Accounting Setup Manager.

• ·        Legal Entities Setup and Assignment to balancing segments and Ledger.
• ·        Ledger and Ledger options Setup and Maintenance (Primary and Secondary Ledger).
• ·        Operating Unit
• ·        Reporting Currencies
• ·        Intercompany balancing Rules and Intercompany Accounts
• ·        Sequencing (Accounting and Reporting Sequence)

HR Locations in Oracle R12

Defining Locations

Locations are the most basic Entity which is the base for setting up a business in Oracle Applications. Locations are a Shared Entity which can be shared between Oracle Inventory, Purchasing, and Human Resource Modules.

Locations are required for setting up important Entities like

• ·        Business group
• ·        Organization (Including all organizations.)
• ·        Legal Entity

Oracle Applications Modules use locations for requisitions, receiving, shipping, billing, and employee assignments.

Navigation:

HRMS Responsibility à Work Structure à Locations

Locations Flagged as Global locations are available to all defined Business groups in the oracle apps instance. Locations have many to one relationship with Organizations. One Organization can be attached only one Location But one Locations can be attached to Multiple Organization.

It is important to select the options such as Ship-to Site, Bill-to Site Etc. to enable the location to be used for those transactions in future in various Modules in oracle Applications.

Business Groups in Oracle Application R12

This Article talks about the Importance of business group in Multi organization Setups, Definition and necessary setups.

Business group:

The business group is the highest level in the organization structure which represents a consolidated enterprise, a major division, or an operation company. Oracle Applications secures human resources information, including organization definition, by business group.

It is mandatory to define at least one business group for defining Organization structure in Oracle applications.

While Implementation even the predefined business group provided by Oracle application can be used but if we intend to define a business group we also need to consider defining the mandatory HR Flexfileds which we will discuss in this article below.

Business group Can be defined using the Navigation :

HR Super user responsibility àWork Structureà Organizations.

(Organization Type: Business group)

For every business group for Organization setup Business Group profile option at the responsibility level for the new business group needs to Assigned before creating the Organizations as the Default business group is assigned on the basis of this profile

Profile option:

HR: Business Group at Responsibility Level

HR: Security Profile at Responsibility Level

Oracle Human Resources also automatically creates a security profile with the business group name when you define a new business group. Please see the Security Profiles article for further details.

Multiple ledgers can share the same business group if they share the same business group attributes, including HR flexfield structures.

Defining Mandatory HR Key Flexfields.

Here we will see the Mandatory HR Key Flexfields which are required for an Oracle Applications implementation.

These Key flexfields are required to be defined even if the HRMS module is installed in Shared mode, because these Key flexfields are required for defining the Business groups.

Below is the list of the Mandatory Key Flex fields Required.

Human Resource Application Key Flexfields

·        Human resource               -- Job flexfield

·        Human resource               -- Position flexfield

·        Human resource               -- Grade flexfield

·        Human resource               -- Competence Flexfield

Payroll Application Key FlexFields

·        Payroll   -- Cost Allocation Flexfield

·        Payroll   -- People Group Flexfield

GL Balances Database Queries

GL Balances Database Queries


Troubleshooting and Understanding GL balances is a important part of any Oracle application Implementation, Support or Design Project.

In Oracle Application R12 The GL Balances are stored in the database table GL_BALANCES
Below are few queries which we can leverage to identify, Actual and Budget Balances.


Actual Balances


SELECT gl.name,cc.concatenated_segments,cc.segment4,bal.period_name,BAL.LEDGER_ID,gl.name,BAL.CURRENCY_CODE,
nvl(sum(bal.begin_balance_dr + bal.period_net_dr - bal.begin_balance_cr - bal.period_net_cr),0) "Actual Balance"
FROM apps.gl_balances bal,
apps.gl_code_combinations_KFV cc,
apps.gl_ledgers gl
WHERE cc.code_combination_id = bal.code_combination_id
and bal.ledger_id = gl.ledger_id
--AND bal.Ledger_id = <'your SOB id'>
AND bal.period_name LIKE 'JAN%2015'
AND bal.actual_flag = 'A'
and gl.ledger_category_code = 'PRIMARY'
--AND bal.currency_code = <'you SOB currency code'>
--and cc.segment1 = '101'
and cc.segment4 = '113113'
--and cc.concatenated_segments in ('202.0000.000000000.251001.0000.000.000000','202.0000.000000000.299000.0000.101.000000')
GROUP by cc.concatenated_segments,cc.segment4,bal.period_name,BAL.LEDGER_ID,gl.name,BAL.CURRENCY_CODE
order by gl.name,cc.concatenated_segments,cc.segment4,bal.period_name,BAL.LEDGER_ID,gl.name,BAL.CURRENCY_CODE;


Actual And Budget Balances


SELECT cc.concatenated_segments,cc.segment2,
nvl(sum(bal.begin_balance_dr + bal.period_net_dr - bal.begin_balance_cr - bal.period_net_cr),0) "Actual Balance",
nvl(sum(balb.begin_balance_dr + balb.period_net_dr - balb.begin_balance_cr - balb.period_net_cr),0) "Budget Balance"
FROM apps.gl_balances bal,
apps.gl_balances balb,
apps.gl_code_combinations_KFV cc,

WHERE cc.code_combination_id = bal.code_combination_id
AND balb.code_combination_id = cc.code_combination_id
AND
--AND bal.Ledger_id = <'your SOB id'>
--AND balb.Ledger_id = <'your SOB id'>
--AND bal.period_name = <'your actual period name'>
--AND balb.period_name = <'your budget period_name'>
AND bal.actual_flag = 'A'
AND balb.actual_flag = 'B'
--AND bal.currency_code = <'you SOB currency code'>
--AND balb.currency_code = <'your SOB currency code'>
and cc.segment1 = '101'
and cc.segment4 = '251011'
GROUP by cc.concatenated_segments,cc.segment2;

Deep Dive in AP/AR Netting In R12

Deep Dive in AP/AR Netting In R12

Prior to Release 12, there were several netting solutions in the eBusiness Suite:

Contra-Charging

This Globalization feature was originally a solution for Germany in Release 11, but then it became a Regional Globalization feature in Release 11i.

US Federal Financials Netting

This solution specifically addresses the needs of US requirements. In Release 12, AP/AP Netting has become "core" functionality and is the only netting solution available, which means Contra-Charging and US Federal Financials Netting are all replaced by this solution. Each of those features has a migration path to the Release 12 Netting

How does it work in R12?

Here is the conceptual diagram behind the Netting Engine.

What is AP/AR Netting

What is AP/AR Netting

Oracle AP/AR Netting allows you to net your Payables invoice balances against your Receivables invoice balances for those Customers who are also your Suppliers.

For example, If you have a customer who is also your supplier, then rather than him paying you and then you paying him, AP/AR netting allows you to pay the net difference between how much you owe the supplier and how much he owes you. After establishing a netting agreement with such trading partners, you set up the agreement and the rules associated with it in eBusiness Suite and you can then start to net AP and AR transactions.

Below is a conceptual diagram of how this works.

AP AR Netting Business Process

Netting Business process

Important Accounts Receivables Database Tables

Important Accounts Receivables Tables

In an Accounts Receivables implementation, Support or trouble Shooting it is very important to have information about relevant Database tables, These details come very handy while any analysis of an issue or even technical architecture / solution designing, sharing some of the AR database Tables for reference

AR invoice Transactions

RA_CUSTOMER_TRX_ALL Transaction Header table
RA_CUSTOMER_TRX_LINES_ALL Transaction Lines table along with Tax lines.
RA_CUST_TRX_LINE_GL_DIST_ALL Distribution for Transaction Lines

Transaction Interface Tables

RA_INTERFACE_LINES_ALL Transaction Lines interface
RA_INTERFACE_SALESCREDITS_ALL Transaction Sales credit information
RA_INTERFACE_DISTRIBUTIONS_ALL Transaction Distribution information
RA_INTERFACE_ERRORS_ALL Transaction errors table

Receipt Interface Tables

AR_PAYMENTS_INTERFACE_ALL Interface table to import receipts
AR_INTERIM_CASH_RECEIPTS_ALL Lockbox transfers the receipts that pass validation to the interim tables
AR_INTERIM_CASH_RCPT_LINES_ALL Lockbox transfers the receipts that pass validation to the interim tables


Receipts tables
AR_CASH_RECEIPTS_ALL Cash Receipt Header tables
AR_RECEIVABLE_APPLICATIONS_ALL stores Receipt Application details
AR_PAYMENT_SCHEDULES_ALL This table is updated when an activity occurs against an invoice, debit memo, chargeback, credit memo, on-account credit, bills receivable
AR_CASH_RECEIPT_HISTORY_ALL This table stores all of the activity that is contained for the life cycle of a receipt.

• Each row represents one step.
• The status field for that row tells you which step the receipt has reached.
• Possible statuses are Approved, Confirmed, Remitted, Cleared, and Reversed.


Customer Tables

HZ_PARTIES A party is an entity that can enter into a business relationship.
HZ_CUST_ACCOUNTS This table stores information about customer/financial relationships established between a Party and the deploying company.
HZ_PARTY_SITES This table links a party (HZ_PARTIES) and a location (HZ_LOCATIONS) and stores location-Specific party information such as a person’s mail stops at their work address.
HZ_CUST_ACCT_SITES_ALL This table stores information about customer/financial account sites information.
HZ_CUST_SITE_USES_ALL This table stores information about the business purposes assigned to a customer account site
HZ_LOCATIONS A location is a point in geographical space described by an address and/or geographical Indicators such as latitude or longitude.


Accounts Receivables Setup tables

RA_CUST_TRX_TYPES_ALL This table stores information about each transaction type for all classes of transactions, for example, invoices, commitments, and credit memos.
AR_RECEIPT_CLASSES This table stores the different receipt classes that you define.
AR_RECEIPT_METHODS This table stores information about Payment Methods, receipt attributes that you define and assign to Receipt Classes to account for receipts and their applications

Procure to Pay (Detailed)

When I started working on the Oracle Applications I always had a desire if I could get a Process Flow of the Business process that I am working on, That could help me Understand how the data and transactions Flow. and I can also get a Good understanding of the Big Picture of what is it that we are trying to achieve.

So as part  of this Blog here is a Process Flow for all new explorers. Below mentioned is a Detailed Process flow of Procure to Pay Process and How are Purchasing, Payables and General Ledger Modules are Used in this Business Process.

This Process Flow also Explains how Different below mentioned Entities in Business play their Roles in this Entire Process

• Requester
• Buyer
• AP Dept
• Supplier