<Insert Picture Here>

R12 Advanced Global Intercompany System

Overview
Yogendra Joshi
Manager, Product Management
 Agenda

Intercompany Concepts
11i General Ledger - GIS
R12 Advanced Global Intercompany System
Intercompany Balancing
Manual Transactions
Reconciliation
Implementation Considerations
Summary
 <Insert Picture Here>

Intercompany
Concepts
 Intercompany Business Scenario
US Ledger Rent $10,000
France Ledger
Vision Corp

$2,000
Vision California

LE 3 Vision France
$1,000
LE 1 Italy Ledger
Vision Chicago

$4,000

$1,500
LE 3 Vision Italy
LE 2 Vision NY

Key aspects of Intercompany Transactions

Intercompany Invoicing Multi-Source Transaction Entry

Taxation Recipient Entity Approval
Centralized Setups Period / Transaction based Control
Shared Services Reconciliation
What is Intercompany ?

InterCompany Transactions
are between two or more related internal legal
entities within the enterprise
Inter = Latin for BETWEEN
What is Intercompany ?

IntraCompany Transactions
are between two or more entities within the same
legal entity
Intra = Latin for WITHIN
 Inter/Intra Company Transactions
Examples
Cross Charge / Allocation Financial Activities
(With or Without Markup)
Loans, Interest on Loans
Rent / Lease Charges
Funds Transfer
Audit Fees
Centralized Procurement of
Telephone / Maintenance
Goods
Activities
Salary Transfers
Asset Transfers
Consultation Purchase / Sale of
(Head Office to Branches) Goods
General Expenses Services
IT / Server Expenses
 <Insert Picture Here>

11i General Ledger - GIS

11i General Ledger GIS
Basic Setups

Subsidiaries
Transaction Types
11i General Ledger GIS
Intercompany Balancing Rules
11i General Ledger GIS
AutoAccounting

AutoAccounting Rules

AutoAccounting- Sender Clearing Accounts

AutoAccounting- Receiver Distribution Rules

AutoAccounting- Receiver Clearing Rules
11i General Ledger GIS
Intercompany Transaction
 <Insert Picture Here>

R12 Advanced Global

Intercompany System
 Advanced Global Intercompany System
Market Drivers
Legal & Compliance Requirements
Invoicing for Intercompany Transactions
Taxation
Usability
Configurable Approval Management
Centralized Intercompany Accounting Setup
Overcome key hurdle in Fast Period End Closing
Shared Service
Multi-source support for Transactions Entry
Multi Recipient Transactions
Period / Transaction based controls
Ease of Reconciliation
 Advanced Global Intercompany System
Address the Top Barrier to a Fast Close
Advanced Global
Intercompany
System Subledger
Web UI
Invoices &
Documents

Open
Interfaces /
API

Generate subledger invoices Online

Control transaction entry with Reconciliation
Excel Reporting
Intercompany Calendar
(Web ADI)

Fully Configurable Approval Rules

Flexible Security Model

Centrally defined Intercompany XML
Accounts Publisher
Reports

Dr Cr

General Subledger
Ledger Accounting Receivables Payables
 What is Oracle AGIS?

Feature Details

Creates extra lines during accounting process

Intercompany
In 11i only during GL post process
Balancing
Can only occur within a ledger

GIS in 11i provides this, enhanced in R12 to a great extent

Entered by a user to make a Cross Charge
Manual Intercompany
Transactions Can cross Ledgers, Legal Entities, etc
Transactions are generally used as basis to create accounting in
two ledgers

Online, Interactive
Reconciliation Reports
Drilldown from account balance to transactions
 <Insert Picture Here>

Intercompany
Balancing
 Business Example 1
Balancing
Vision NY

3
1 Enter PO for New PC
2 Places PC Order

Dell 3 Ships PC
1 4 Sends Invoice for PC

5 Invoice line matched

Vision California to original PO
(SCC) 2

4
5
 Business Example 1
Balancing

The accounting for the Accounts Payables invoice

BSV-acct-ICSV Dr Cr Description

01-xxxx-00 1,000.00 Vision NY Expense

O4-xxxx-00 1,000.00 Vision California

Liability
01-4102-04 1,000.00 Intercompany Payables

04-2201-01 1,000.00 Intercompany

Receivables

The last two lines are generated by Intercompany Balancing

during the SLA accounting process
 Key Concepts and Terminology
Automatic Balancing

One Ledger:
Within a group of balancing segment values mapped to one ledger,
Debit and credit amounts on each BSV within a journal net to zero
Intercompany Balancing
Two BSV are representing different LEs
Intracompany Balancing occurs
BSVs represents Cost Centres or Mgt Segments within the the same
LE
Key Concepts and Terminology
Automatic Balancing

Enable Balancing
for a ledger
 Key Concepts and Terminology
Intercompany and Intracompany Balancing

Define Intercompany Accounts

For each Legal Entity within the enterprise.
Used in Intercompany balancing process
This is key to eliminating Intercompany transactions during the
consolidation process
Define Intracompany Balancing Rules
For Balancing Segments within one LE
Used in Intracompany balancing process
Key Concepts and Terminology
Intercompany and Intracompany Balancing

Setup Intercompany
Accounts
Setup Intracompany
Balancing Rules
 AGIS Benefits - Balancing

Enhanced Control over Intercompany Setup

Centralized setup
Better monitoring and reconciliation
Subledger Balancing
Balancing directly at Subledger Level (Leveraging SLA)
Better information
Speeding reconciliation
Minimal manual intervention
Reduces attention needed by finance staff
freeing resources to work on more value add activities
 <Insert Picture Here>

Intercompany
Manual Transactions
 Business Example 2
Global Cross Charges

Vision California Enters

Inter the transaction
Company
AGIS Validates and
Vision California processes approvals

Vision Chicago Vision NY Vision France Vision Italy

 Business Example 2
Global Cross Charges

AGIS checks Legal

Inter
Rules
Company
Determines if any
Vision California Subsidiary requires an
invoice

Legal
Rules

Vision Chicago Vision NY Vision France Vision Italy

 Business Example 2
Global Cross Charges

GL Entries created for

Inter
US subsidiaries
Company
AP and AR Invoices
Vision California created for France and
Italy

Taxation

Subledger
General Invoices &
Ledger Entries Documents

Vision Chicago Vision NY Vision France Vision Italy

Business Example 2
Taxation
Inter Transactions first
Company
Created in AR
E-Tax AR Integrates with
ETax to calculate Tax
After successful
Receivables completion of AR
Invoice Invoice, Intercompany
Tax initiates AP Invoice
AP Invoice uses the
same tax used by AR
Invoice
Accounts
Payables
Key Concepts and Terminology
Intercompany Trading Partners

Intercompany Trading Partners are the Legal Entities of

Initiators and the Recipients of intercompany transactions

Recommendation for Accounts Setup

We strongly recommend customers to define specific accounts
for all activity with a specific trading partner to aid reconciliation
(at least for active trading partners)
Key Concepts and Terminology
Intercompany Trading Partners
The Transacting Partner is me
(The 1st Party)
This is where I define my accounts

The Trading Partner is the other LE

I am trading with
(The 3rd party)
 Key Concepts and Terminology
Intercompany Organizations
Intercompany Organizations are the initiators and recipients of
AGIS manual transactions.
They are stored as TCA Parties
They must be associated to a Legal Entity
They may represent whatever the customer wants
Manufacturing plant
Store Locations
Legal Entity
 Key Concepts and Terminology
Intercompany Organizations

If AP and AR invoices will be

A Legal Entity must be assigned to required,
an Intercompany Organization
we need an operating Unit
 Key Concepts and Terminology
Intercompany Org: User Access

We assign access
to an individual
User

This is the list of

organizations this user
has access to (all from the
same responsibility)

We can assign the user

access to more
organizations you do not
need to use MOAC
 Key Concepts and Terminology
Manual Transactions
Created for cross charges in AGIS
Approvals controlled by Oracle Approvals Manager
Timing controlled by AGIS Periods
Interfaced to AR and AP or directly to GL
Multiple Recipients in the same batch
(Automatic or Manual Prorating)
SLA Transaction Account Builder
Accounts defaulting
New Security Model for User Access
Key Concepts and Terminology
Manual Transactions
This is the Outbound batches page.
Where we create and view batches we
submit to other Organizations

Shows all transactions initiated

by Intercompany Organizations this
user has access to
Key Concepts and Terminology
Manual Transactions

A batch can be created from one

initiator to many recipients
Key Concepts and Terminology
Manual Transactions
This the inbound view where I see
transactions others have sent to me
I am the recipient
 Key Concepts and Terminology
Web-ADI

Enter transactions in a spreadsheet and upload them

into Oracle Intercompany

Web ADI Spreadsheet Oracle

Upload,
Generate Data Entry Intercompany
Validation
Templates Transactions
Key Concepts and Terminology
Web-ADI
 Key Concepts and Terminology
Open Interface

Import the external intercompany transactions into

Oracle Advanced Global Intercompany System

External Data loaded Import Validated Data

into FUN_Interface Validations imported to FUN
tables

External Data FUN_INTERFACE Tables Intercompany

Transactions
Key Concepts and Terminology
Transaction Types

If AP and AR Invoices are NOT

required the transaction goes
directly to GL If approval is required we use the
rules set up in Oracle Approvals
Manager
Key Concepts and Terminology
Intercompany Periods

Select which GL Calendar you want to use

for your Intercompany Periods.
Key Concepts and Terminology
Intercompany Periods

For one period we can open and close by

transaction types
Key Concepts and Terminology
Intercompany Periods

We can decide which period to

sweep all the open transactions to
 Key Concepts and Terminology
Customer / Supplier Association
France needs to define customers and
suppliers for each Intercompany
Organization it will need invoices for

That can lead to a lot of customers and suppliers to be set up!

Key Concepts and Terminology
Customer / Supplier Association

We can create these automatically for all

the OU and all the Intercompany
Organizations under one Legal Entity

You an select all the other Legal Entity that

you will need to create invoices for and
Customers and Suppliers, with a default
site for each OU in that Legal Entity are
automatically created.
 AGIS Benefits - Manual Transactions

New Security Model

User Level Access to Intercompany Transactions

Consistent control of intercompany relationships

Allow compliant intercompany accounting without significant

overhead

Multi-Source transaction entry for fast period close

Utilizes workflow processes to route, review, verify and approve

intercompany transactions to increase control and visibility
 <Insert Picture Here>

Intercompany
Reconciliation
 Key Concepts and Terminology
Intercompany Reconciliation

The process of ensuring

All intercompany transactions have the appropriate reciprocal transaction in the
Trading Partners ledger
Looks at Account Balances in General Ledger
Balance of the Intercompany accounts for a pair of trading partners to see if they
match

Drilldown to
Balances by source and category
Journals in GL,
SLA
Actual subledger transactions (if any etc.)
Key Concepts and Terminology
Intercompany Reconciliation

This is the This is the Payables

Receivables Balance Balance in Vision
in Vision Sweden Norway
Key Concepts and Terminology
Intercompany Reconciliation

Totals of the journals posted in each of the

Legal Entities grouped by source and
category

The Payables balance in Vision Norway is

less than the Receivables balance in Vision
Sweden indicating Payables Invoices have
not been posted.
Key Concepts and Terminology
Intercompany Reconciliation

Details of the journals

in Vision Sweden
 Business Benefits - Reconciliation

Real time visibility

Visibility across intercompany transactions
Simplify and accelerate the reconciliation of intercompany entries

Speed up the close process

Ensures ability to identify and eliminate intercompany transactions
during consolidation to simplify and speed the close process
 <Insert Picture Here>

Implementation
Considerations
Implementation Considerations
Impacted Applications

General Ledger Payroll

Financial Services Property Manager
Accounting Hub Loans
Payables Cash Management
Receivables Process Manufacturing
Projects Assets

Anyone that uses SLA, automatically uses AGIS

Applications NOT Impacted

The features below work as in 11i10 and are NOT impacted by the
introduction of AGIS in R12
Projects Cross Project Invoicing
Inventory Intercompany Drop Ship
 New XML Publisher Reports

Transaction Reports
Intercompany Account Details Report
Intercompany Transaction Details Report
Reconciliation Reports
Intercompany Reconciliation Summary
Intercompany Reconciliation Summary by Source
Intercompany Reconciliation Journal Details
Customer Impact Considerations
Non invasive customization options
AGIS raises 19 different Business Events
Add custom processing
Integrate with 3rd Party Applications
Possible to run on multiple instances
Public API for Manual AGIS transaction creation
Open Interface for Manual AGIS transaction creation
Create transactions from 3rd Party Systems
Create transactions based on extract from other apps
 <Insert Picture Here>

Summary
 Intercompany Business Scenario
US Ledger Rent $10,000
France Ledger
Vision Corp

$2,000
Vision California

LE 3 Vision France
$1,000
LE 1 Italy Ledger
Vision Chicago

$4,000

$1,500
LE 3 Vision Italy
LE 2 Vision NY

Key aspects of Intercompany Transactions

Intercompany Invoicing Multi-Source Transaction Entry

Taxation Recipient Entity Approval
Centralized Setups Period / Transaction based Control
Shared Services Reconciliation
 Summary

Market Driver AGIS Feature

Intercompany Invoicing Subledger Invoicing for Intercompany Transactions

EBTax Integration for Intercompany Subledger Invoicing

Taxation
Ensures same Taxation on Payables and Receivables Invoices

Integrated with Accounting Setup Manager

Centralized Setup Enhanced automatic intercompany & intracompany balancing
SLA: Transaction Account Builder

Enhanced security model to enable a user to process transactions

Shared Services across multiple intercompany organizations
Multi-Recipient Transaction Support
 Summary

Market Driver AGIS Feature

Manual Transactions (Web-UI)

Multi-Source
Web-ADI (Excel Templates)
Transaction Entry
Open Interface / API

Recipient Entity Integration with Approvals Manager

Approval Support for recipient rejection

Period / Transaction Intercompany Transaction Control via Intercompany Calendar

based Control New AGIS Period Open/Close Process

Drilldown to the GL journals

Reconciliation SLA journals
Originating subledger transaction
Advanced Global Intercompany System
Initial Customer Reaction

The functionality offered with Advanced Global

Intercompany System (AGIS), specifically the creation of
physical invoices to be created for I/C transactions in
Payables and Receivables eliminates many customizations
in this area.
 Additional Information

Oracle Advanced Global Intercompany System User's Guide

R12 AGIS Whitepaper

Metalink Notes
Oracle Advanced Global Intercompany System Release 12 Roadmap
Document
Advanced Global Intercompany (AGIS) in Release 12 (R12) - Setup,
Transaction Processing and Reports
QUESTIONS
ANSWERS
Thank You.