SLA and Cost Acctg

Cost Accounting As You Want It
─ EBS R12 Cost Accounting with SLA
Collaborate09
May 3 - 7, 2009
Diane Streubel Douglas Volz

diane.streubel@schreiberfoods.com davolz@comcast.net
Schreiber Foods Douglas Volz Consulting, Inc.
Manager for Cost & Systems Development President / Managing Director
OAUG Process MFG Cost Sub-Committee Lead OAUG Discrete MFG Cost Sub-Committee Lead
Agenda
• Oracle Discrete Costing SLA enhancements
• Oracle Process Costing MAC transitioning to SLA
• Oracle SLA Concepts
• Case example: Product Line Accounting
Slide – 2 Cost Accounting As You Want It ─ EBS R12 and SLA

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

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

Oracle Process Costing:
MAC transitioning to SLA

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

11i OPM
GMI Order
Purchasing GMD, GME
(OPM Inventory) Management
Cost Setup Calculate Cost Store Costs MAC Oracle GL

R12 OPM
Oracle Order
Purchasing GMD, GME
Inventory Management
Cost Setup Calculate Cost Store Costs SLA Oracle GL

• 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.

11i OPM
General Ledger
I
n
t
e
Subledger GL Export r Journal Import Journal Posting
f
a
c
e
For G/L integration, discrete costing works the same as OPM costing

R12 OPM
OPM
Payables
Oracle Subledger
Accounting Oracle General
Ledger
Receivables
Projects
For G/L integration, discrete costing works the same as OPM costing
OPM MAC SLA
Completed material Completed material
and/or resource and/or resource
transactions. transactions.
OPM Costing Engine OPM Costing Engine

generates costs. generates costs.
Cost Pre-processor
will create
accounting Events
OPM Subledger SLA accounting

process processes program processes
these transactions to the events to create
create Journal entries the journal entries

OPM MAC SLA COMMENTS
Fiscal Policy Retained with few modifications
Event Fiscal Policy Retained with few modifications
Source Process Category
Event Event Entity
Sub-Event Event Class
Account Titles Journal Line Types (JLT)
Accounting Template Application Accounting Users can define their own AADs or
Definitions (AAD) modify seeded information
Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs
Priorities and Account Account Derivation Rules (ADR) More flexible. Mapping can be done
Mapping at Accounting flexfield level as well
as segment level
Test Mapping Test Accounting Builder (TAB)
OPM Currency, OPM Use GL setups
Ledger, OPM Exchange
Rates

OPM MAC SLA COMMENTS
Test and Actual Subledger Draft and Final Accounting

Accounting
Subledger Program Accounting Pre-Processor
Run Subledger for multiple Supports multiple valuation In OPM there can only be
valuation/cost methods for methods one representation at a
a ledger time. SLA supports
multiple representations at
the same time
Run Subledger process for Run Pre-Processor by Process Flexible. User can have
a functional area Category any number of categories.
Assigned to one or more
event classes
Detailed Subledger Report Is retained and has been
modified to use SLA
repository

• 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

• Historical OPM Subledger distribution data not
migrated to SLA
– Data refers to OPM Inventory
• Historical data available in query mode

Update the Account Derivation Rule conditions.
Ex: Add Item/Item Class/Organizations
Validate the Application Accounting Definition
Run OPM Accounting Pre-Processor

Run OPM Accounting Pre-Processor
Run Create Accounting in Draft mode
Check Create Accounting report and Journal

Entries report
Run Create Accounting in Final mode to create GL

accounting entries

• NO LOSS of functionality by moving to SLA model
• New menus created under OPM Financials for new
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.

Oracle SLA Concepts

Subledger Accounting Method (SLAM)
Setup Steps
1. Determine sources of information for your account derivation
rules (understand the underlying business logic and data)
2. Create account derivation rules (and optional mapping sets)
3. Create journal line types
4. Create a journal lines definition
(link the journal line type to the account derivation rule)
5. Create an application accounting definition
(copy an existing definition and modify it and then validate it)
6. Create a subledger accounting method (SLAM)
(copy “standard accrual” and create a new one)
7. Assign the new SLAM to a Ledger

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 Logical grouping of events which

CLASS have similar kind of accounting
The most granular level of

EVENT business event which has
TYPE accounting impact

Setup and Process
PROCESS
JOURNAL ENTRY SETUPS
Enter Transaction(s)
Define/copy and modify
account derivation rules
Cost Manager

journal line types
Create Accounting* Transfer Journal Entries to GL

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.

Setup and Process
Accounting
Configurations
Subledger
Transactions Journal Entries
GL
Accounting Journal Entries
Program and Balances
Accounting Events Subledger

Balances
Journal Entry Setup
Cost Management SLA

Basic Table Structure for SLA
Enter Transaction(s) Same Cost One Common

Transaction Accounting
Accounting Subledger Table
Tables
Cost Manager
SLA Accounting Tables G/L Tables

Transaction
Accounting Tables
XLA_EVENTS GL_LEDGERS
GL_JE_BATCHES
Create XLA_AE_HEADERS GL_
Accounting INTERFACE
GL_JE_HEADERS
XLA_AE_LINES
XLA_DISTRIBUTION GL_JE_LINES
_LINKS

Case Example:
Product Line Accounting for Discrete and

Process Costing

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 R12.1
(only works with Discrete Costing)

Cost/SLA Mapping Set Capability
(for Discrete and Process Costing)

Cost SLA Mapping Set Capability:
PPV by product Line
• Product Line Setup Steps Using SLA mapping set
1. Create the product line information in your item master
2. Enter your SLA account derivation rule for Purchase Price

Variance accounts
3. Associate the new account derivation rule to your Journal

Line Type
4. Associate the Application Accounting Definition with

Subledger Accounting Method
• Product Line Accounting – Descriptive flexfield

• Product Line Accounting – Item Descriptive FF

• Assign product line code to the inventory item
TIP: you can use an existing product line category set to populate
your item master DFF, you do not need to enter this one-by-one

• Mapping set – Account Derivation Rule

• Mapping set – Account Derivation Rule

• SLA Journal Line / Derivation Rule

• Associate Journal Lines Definition to the Event Class
Don’t forget
to validate
your new
AADs

• Note the same ADR is usable for Standard Cost Update

• Note the same ADR is usable for Standard Cost Update

• Associate SLA Definition to the SLA Method/Ledger

• The material subledger from 11i still exists
Inventory
Inventory
Receiving
Matl PPV
Overhead
Absorption

• SLA Entries That Go to Your G/L

• For the Standard Cost Updates That Go to Your G/L

Category Accounting –
Discrete Cost Accounting migrated to SLA
in R12.1

Product Line Category Accounting
• Create a new
structure under
the key flexfield
“Item Category”

• Create a new
structure under
the key flexfield
“Item Category”
• Create category
codes

• Create a new
structure under
the key flexfield
“Item Category”
• Create category
codes
• Create category
set

• Create a new structure
under the key flexfield
“Item Category”
• Create category codes
• Create category set
• Assign “Product Line

Accounting” functional
area category set

• Assign product line category accounts

• Account Derivation Rule would have used a source directly

• Summary Notes
– 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.

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.

Acknowledgements of assistance:
• Herve Yu – Oracle Cost Management Development Manager
• Audrea Auld – Oracle University Senior Financials Instructor
• Russell Bayles – Oracle Principal Product Strategy Manager
• Michel Basinet – Oracle Director Fusion Costing Product Strategy

Additional information available from:
• R12 Oracle Subledger Accounting – Implementation Guide
• R12 Oracle Cost Management – User Guide
• R12 Oracle Process Manufacturing Cost Management - User Guide

THANK YOU

Appendix
• Professional Background for Diane Streubel
• Professional Background for Douglas Volz

Diane Streubel
Professional Background
Diane Streubel is the Cost & Systems Development Manager for Schreiber Foods. A process
manufacturing company, Schreiber is the world’s largest supplier of private label dairy products and
has been using Gemms/OPM for the past 13 years. Diane has been involved with OPM from it’s
inception at Schreiber with Gemms 3.1. She has been involved in implementing additional products
within Oracle at Schreiber and has played a key role in all of the upgrades within the company.
Schreiber Foods is currently at 11.5.10.
Diane is also actively involved in the Process Manufacturing SIG. She has been the Costing Sub-
Committee chairperson and the Membership chairperson for the Process SIG since 2001. As the
Process SIG Enhancements chairperson, she has worked with the Process Manufacturing team at
Oracle to develop and coordinate an Enhancements Voting process each year since 2001. She has
been on the paper selection team for OAUG conferences for the past four years. Diane has also
presented numerous papers at OpenWorld and OAUG conferences over the past several years on
OPM Costing topics.
Core Expertise Experience

• Upgrades for Process Manufacturing Within Schreiber Foods:
• Project Management • Responsible for OPM Costing and Inventory testing and
• Core manufacturing processes validations for all upgrades
• Develop and improve processes within Company related
 OPM Cost Management
to Costing, Inventory and Formulas
 OPM Inventory • Establish Cost Accounting methods, cost and production
 OPM Formulas formula structures, inventory and production transaction
processes and system documentation.
• Train Finance employees at 17 plant facilities on OPM
processes

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 experience, including 5 years in Oracle Development
(co-designing Oracle Cost Management), 12 years in industry for manufacturing and distribution
companies, and 14 years consulting. 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 firms.
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 and for
the Fusion SCM Strategy Council.
Core Expertise Experience

• Multi-organization, Multi-currency ERP Sample of clients served:
Implementations • Beckman Coulter (US)
• Project Management and Senior Project Advisor
• Onninen AS (Norway)
• Core manufacturing processes
 Cost Management • Matsushita (UK, Mexico)
 Inventory • NTL (now Virgin Media)
 Bills of Material
• Idec Izumi (Japan)
 WIP
• Systems Integration and Data Conversions • Motorola (UK, US)
• Logitech (US, Taiwan, P.R.C.)

End of Presentation

SLA and Cost Acctg

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Cost Accounting As You Want It

─ EBS R12 Cost Accounting with SLA

Diane Streubel Douglas Volz

• Oracle Discrete Costing SLA enhancements

• Oracle Process Costing MAC transitioning to SLA

• Oracle SLA Concepts

• Case example: Product Line Accounting

Slide – 2 Cost Accounting As You Want It ─ EBS R12 and SLA

• SLA removes limitations for recording COGS and

• Gives you the ability to record inventory and WIP accounts

Slide – 3 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 4 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 5 Cost Accounting As You Want It ─ EBS R12 and SLA

• Converged inventory model

• Inventory Organizations that are Process will use Process

• Process users are denied access to Discrete Costing forms

• Sub Ledger Architecture (SLA) replaces MAC

Slide – 6 Cost Accounting As You Want It ─ EBS R12 and SLA

Cost Setup Calculate Cost Store Costs MAC Oracle GL

Slide – 7 Cost Accounting As You Want It ─ EBS R12 and SLA

Cost Setup Calculate Cost Store Costs SLA Oracle GL

Slide – 8 Cost Accounting As You Want It ─ EBS R12 and SLA

• Subledger accounting is an intermediate step between

• Each transaction that requires accounting is represented

Slide – 9 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 10 Cost Accounting As You Want It ─ EBS R12 and SLA

OPM Costing Engine OPM Costing Engine

OPM Subledger SLA accounting

Slide – 12 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 13 Cost Accounting As You Want It ─ EBS R12 and SLA

Test and Actual Subledger Draft and Final Accounting

Subledger Program Accounting Pre-Processor

Slide – 14 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 15 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 16 Cost Accounting As You Want It ─ EBS R12 and SLA

Validate the Application Accounting Definition

Run OPM Accounting Pre-Processor

Run Create Accounting in Draft mode

Check Create Accounting report and Journal

Run Create Accounting in Final mode to create GL

Slide – 17 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 18 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 19 Cost Accounting As You Want It ─ EBS R12 and SLA

Slide – 20 Cost Accounting As You Want It ─ EBS R12 and SLA

ENTITY Material Transaction, Receiving

EVENT Logical grouping of events which

The most granular level of

Slide – 21 Cost Accounting As You Want It ─ EBS R12 and SLA

Define/copy and modify

Create Accounting* Transfer Journal Entries to GL

Define/copy and modify

Receiving Accounting can be generated in the Purchasing

These requests have an option to transfer the entries created to General

Slide – 22 Cost Accounting As You Want It ─ EBS R12 and SLA

Accounting Events Subledger

Cost Management SLA

Slide – 23 Cost Accounting As You Want It ─ EBS R12 and SLA

Enter Transaction(s) Same Cost One Common

SLA Accounting Tables G/L Tables

Slide – 24 Cost Accounting As You Want It ─ EBS R12 and SLA

Product Line Accounting for Discrete and

Slide – 25 Cost Accounting As You Want It ─ EBS R12 and SLA

• We want to track variances by cell phone brands