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Oracle e-Business suite - Financial Accounting Hub an Overview

Presented By : Kaviraj Math

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ERP
• ERP General Concepts
• What is ERP ?
• Evolution of ERP
• Why ERP ?
• Future of ERP
• Benefits of ERP
• ERP’s Today

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ERP General Concepts
• What is ERP
ERP is integrated enterprise wide platform which ….
 Enables information gathering across value chain
 Has linkages in its sub-systems to provide an ‘integration’ advantage
 Supports global operations
 Consolidates information from bottommost individual functions for a
single view
 Can scale up easily and offer flexibility in the growth journey
 Will enforce controls at right points consistently across organization
 Transparency and trail of who acted on what
 Provides Top Management a bird’s eye view and if required provide a
drill down facility
 Brings in sustainable best practices in the Organization
…is ERP
• Basic components for ERP
• Strategic planning
• Management control
• Operational control

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ERP General Concepts
• Evolution of ERP
• 1960’s - Systems Just for Inventory Control
• 1970’s - MRP – Material Requirement Planning
(Inventory with Material Planning & Procurement)

• 1980’s - MRP II – Manufacturing Resources Planning


(Extended MRP to shop floor & distribution Mgmt.)

• Mid 1990’s - ERP – Enterprise Resource Planning


(Covering all the activities of an Enterprise)

• 2000 onwards – ERP II – Collaborative Commerce


(Extending ERP to external business entities)

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ERP General Concepts
• Why ERP ?
Challenges Impact
• “Minimum” to “No” integration across • No end to end view of the
applications process
• Information availability in functional • Inadequate system controls on
silos transaction processing
• Constrained architecture to gather
information • Difficulty in getting audit trail of
transactions
• Non interoperable platforms of
applications • Delay in MIS
• Lack of standardization across • Dependency for information
entities • Incomplete traceability of
• Data cleansing and massaging to presented information
produce information in required form • Inability to slice/dice, drill
• Customization and maintenance of up/down “MIS” information at it
multiple applications lowest level
• Time lag in availability of the same
information across applications

Delays, Lost Orders, Keying into different computer systems invites errors

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ERP General Concepts
• Benefits of ERP  Cost reduction
 Cycle time reduction
• Operational  Productivity improvement

 Improved resource management


 Better decision making
• Managerial  Better planning
 Performance improvement

 Support business growth


• Strategic
 Support business alliances
 Build business innovations
• IT Infrastructure  Build business flexibility
 Increased IT capability
 Facilitate business learning
• Organizational
 Empower employees
Oracle eBusiness Suite - Financial BuildHub
Accounting common
an Overviewvision 6
ERP is market for professional Services Automation
• ERP’s Today
MS DYNAMICS

AUTOTASK
ORACLE
PEOPLESOFT
JD EDWARDS
SAP BAAN
BUSINESS ENGINE
RAMCO MFG/PRO
PROTEAN
SAGE
OPENAIR
LAWSON
DELTEK
CHANGEPOINT
TENROX
PLANVIEW

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Oracle eBusiness Suite an Introduction
• Advent of Oracle e-Business Suite
• The Future of ERP
• Difference between ERP and eBusiness Suite
• Features of eBusiness Suite

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Oracle eBusiness Suite an Introduction

Business Intelligence
(Visibility ,Control ,Efficiency)

Receivables Purchase

Payables, Expenses Inventory & Manufacturing

Cash Management Custom Modules

CRM &Order Management


Fixed Assets

Payroll Project Management

General Ledger Human Resources

Oracle Applications

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Oracle eBusiness Suite an Introduction
• Advent of Oracle e-Business Suite
• The Future of ERP (Think Globally ! Work Globally ! Manage Globally)
• Difference between ERP and eBusiness Suite
• Features of eBusiness Suite

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Advent of Oracle eBusiness Suite
• Future of ERP the emergence of SME’s

• Oracle e-Business Suite is a business strategy and a set


of collaborative operational and financial processes
internally and beyond the enterprise

• New multi-enterprise business models like Value


Collaboration Networks (VEN’s) that coordinate all
players in the supply chain, are becoming popular as we
enter the 21st century

• These new business models reflect an increased


business focus on external integration

• There is movement away from Client-Server System to


Internet Based Architecture

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Advent of Oracle eBusiness Suite

• Difference between ERP and e-Business Suite

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Advent of Oracle eBusiness Suite
• Features of Oracle e-Business suite
• E-Commerce (Electronic Commerce)
• M-Commerce (Mobile & Wireless Technologies)
• C-Commerce (Collaborative Commerce)
• RFID
• Analytical Capabilities (Data Warehousing & Data
Mining)
• Knowledge Management
• Business Intelligence

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Oracle EBS – Financial Accounting Hub
• Oracle Financial Accounting Hub
• What is General Ledger & a Sub ledger ?
• What is Sub Ledger Accounting?
• What is Financial Accounting Hub ?
• Why Financial Accounting Hub ?
• Difference between Sub Ledger Accounting and
Financial Accounting Hub
• How the Accounting Engine works
(Architecture)?
• Benefits of Financial Accounting Hub
• What is not in the hub?
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Oracle EBS- Financial Accounting Hub
• What is a General Ledger & a Sub Ledger
• General Ledger
• General Ledger is a central repository it contains the
consolidated balance of all the accounts coming from Sub
Ledgers.
• Oracle EBS can have one Primary Ledger and ‘N’ Number
Secondary ledgers depending on the reporting
requirements.
• Sub Ledgers
• The sub-ledgers are those that support certain specific
functions and the participating Sub ledgers of Oracle EBS
include
o Payables
o Receivables
o Projects
o Assets
o Cash Management
o Purchasing
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Oracle EBS- Financial Accounting Hub

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Oracle EBS – Financial Accounting Hub
• What is Sub Ledger Accounting
• Rule-based accounting engine, toolset & repository to support E-Biz
modules
• SLA provides the following services to Oracle Applications:
• Generation and storage of detailed accounting entries
• Storage of Sub ledger balances
• Sub ledger accounting entries (with Bidirectional drilldown to /from
transactions)
• Sub ledger reporting

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Oracle EBS- Financial Accounting Hub

• Why Financial Accounting Hub ?


• Most companies basically the Financial services industry tend
to build a lot of highly complex applications (e.g. loan systems,
trading systems, Insurance systems etc.) in house resulting in

• Difficulty Enforcing Corporate Wide Standards

• Duplication of Accounting treatments for each source systems

• Difficulty reconciling accounting with source systems

Financial Accounting Hub resolves these problems by


centralizing the definition and maintenance of accounting
rules in a business user oriented centralized repository

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Oracle EBS- Financial Accounting Hub

• What is Financial Accounting Hub ?


• A in built platform of Oracle EBS for accounting transformation
of information from disparate systems into centrally and
consistently maintained accounting repository.
• A highly efficient Oracle EBS seeded technology which
provides the provision to create and store rules for the above
accounting transformation
• Load journal entry information into the accounting repository ie
General Ledger
• Generate, enforce accounting policies
• Details of Sub ledger accounting entries
• Storage of balances from External systems
• Enable Diverse Corporate management reporting

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Oracle EBS- Financial Accounting Hub
• What is the difference between SLA & FAH ?
• The technology leveraged by FAH and SLA is indeed
exactly the same. The difference is within the way you’re
allowed to use the technology.
• Sub Ledger Accounting (SLA):
• Deals with the E-Business Suite Sub ledger applications.
• Seeded event models which cannot be changed
• Seeded accounting methods which can be customized
• Integral part of E-Business Suite Financials (R12 onwards).
• Financials Accounting Hub (FAH)
• Deals with external (i.e. non-E-Business Suite) applications.
• No seeded event models – event models need to be build from
scratch.
• No seeded accounting rules – accounting rules need to be build
from scratch.
• Requires purchasing a separate license.

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Oracle EBS- Financial Accounting Hub
• Financial Accounting Hub Vis a Vis Sub Ledger Accounting

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Oracle EBS- Financial Accounting Hub

• How it works ? Architecture


Application Accounting Definition Create Journal Line Definition Sub Ledger
Accounting Method

Dr (Cash Basis or Accrual


Journal Entry Description
Event Entities (eg in Payables ) Basis )
( JE Header & line Description )
( INVOICE or PAYMENT ) Cr

DECIDE JE Line TYPE


( Credit or Debit )
Sub Ledger or Event Classes Dr Cr
Other External (Invoice, Debit Memo ,Credit Memo,
system Expense Report ) General Ledger

Event Type Consolidated Balances


ACCOUNT DERIVATION RULE
(Adjustment , Cancellation, ( Generate CCID for the Line)
Validated)

XLA Schema
Financial Accounting Hub or Sub ledger Accounting Engine

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Oracle EBS- Financial Accounting Hub
• Benefits of Financial Accounting Hub
• Visibility
 One source of financial and operational information
 One source for summarized performance results and detailed
transactions
• Integration
 Provide a single source of accounting
 Enterprise-wide processing
 Enhanced control
 Common set of rules
• Control
 Meet evolving compliance and enterprise risk requirements
 A secure, reliable, scalable and flexible architecture
 Transactional accuracy and consistency ensured
• Efficiency
 Improve business processes at the lowest cost
 Flexibility to continually evolve with the business
 Efficient use of resources

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Oracle EBS- Financial Accounting Hub

• What is not in the Hub ?


• Extract process: Doesn’t retrieve information
from product systems
• Creation of accounting events (stores, but
doesn’t create)

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Management Control
• Questions & Open Discussions

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Thank You !

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