R12 SUBLEDGER

Krithivasan N

WHAT IS SLA?
SLA is not a module or is an application It is not separately licensed Embedded in Application Responsibilities no separate log in It is a service Event and Rule based Accounting Engine, tool set and repository Common data model across all modules (XLA) Consolidates and Standardize Accounting across various sub ledgers

WHY SLA?
To enable compliance with different geographic, legislative and industry requirements To provide flexibility while maintaining necessary transparency, audit trial and control

To support user defined Accounting Rules

To enable balancing at sub ledger level To minimize customization and manual journal entries To facilitate simultaneous multiple representation of a single accounting event

WHAT SLA DO?

Generate and store detailed Accounting Entries Store Sub-ledger balances (Third Party Control Accounts) Provide drill down from Ledger(s) to Sub ledger and from Sub ledger to Ledger(s) Enables maintaining two sequences Accounting and Reporting Enables definition of Reconciliation Accounts

Facilitates 4th C Accounting Convention

FROM RELEASE 11i

Features that were available in individual sub ledger modules of R11i have been consolidated in to a common data model across modules with enhanced features Events based Accounting features of Payables 11i has been extended to all sub ledgers

Global Accounting Engine of 11i has been enhanced and replaced by SLA
Account Generators in 11i which was used to automatically construct Accounting flexfield based on Oracle Seeded Rules or user defined rules has been enhanced and built into SLA

R 11i Vs R12 SLA

Release 11i process SUBLEDGER Payable Sub ledger Receivable Sub ledger Project Sub ledger Costing Sub ledger Export Temp Table GL INTERFACE TABLE Import & Posting Generation of Journal GENERAL LEDGER

Transactions are exported to interface table and imported into GL from interface table Journal Balancing occurs in General Ledger Error transactions get trapped in interface table until it is cleared often causing delay in closing books

R 11i Vs R12 SLA

Release 12 process SUBLEDGER Payable Sub ledger Receivable Sub ledger Project Sub ledger Costing Sub ledger Create Accounting SLA AP SLAM AR SLAM PA SLAM CS SLAM GL INTERFACE Generation of Journal GENERAL LEDGER

Journals are created in the sub ledger

Error transactions are reported at SLA level itself and no journal gets created
GL Interface table contains only error free entries

IMPACT OF SLA ON GL Drilldown

Drilldown from GL to SLA to Transaction Drilldown from summarized posting in Primary, Secondary and Consolidation Ledger is possible Preview effect of a journal in Primary / Secondary Ledger(s) Drilldown in web-based and not form based No change in drilldown navigation Security can be enabled as a combination of SL and GL

IMPACT OF SLA ON GL Journal Import

The way journal import is triggered has undergone a major change in R12 Journal Import process has been standardized across all sub ledger applications. Create Accounting concurrent request from the respective Application will generate Journal in the SL Transfer to GL option will always triggers Journal Import In case of any error, the error journal is rolled back to SL

Unlike 11i, there is no need to run Journal Import in the same language as the language used for exporting journal

IMPACT ON PO ACCOUNTING
Unlike 11i, Encumbrance to be specifically opted while choosing SLAM for a Ledger On reserving and approving PO, encumbrance entries are generated Create Accounting concurrent Request from purchasing responsibility will transfer encumbrance entries to GL Accounting entries created can be viewed from SLA menu in Purchase responsibility Credit for Reserve for Encumbrance is created while reserving encumbrance (PO Reservation)

Impact on Receiving
In 11i, Receiving Transaction processor will create receipt accounting entry in Receiving sub ledger as well as GL Interface. In R12, RTP will create entries on in SL. Create Accounting Program to be run In case of expense destination, PO Receipt will fire Create Accounting process and SL & GL will get populated In case of Inventory Destination with online accrual, when PO is received and delivered, Create Accounting will happen and SL & GL will get populated In case of Inventory Destination with period end accrual, Receipt Accrual Period End program will create entries only when Receipt Qty is greater than Bill Quantity. Create Accounting Program to be run for generating Actual and encumbrance entries

Impact on Accrual Accounting

In the case of period end accrual, the accrual entry should be reversed manually in 11i, where as in R12, the accrual entry will be reversed automatically

In 11i, the Accrual Rebuild Reconciliation Report which was required to be run to populate the accrual reconciliation table is now replaced by "Accrual Reconciliation Load Run" program in R12
In R12 there are 3 different reports, one for AP-PO individual transactions, one for Miscellaneous transactions showing the individual transaction details for source INV and AP and one for showing the summarized accrual balance for all transaction types as against one Accrual Reconciliation Report in 11i. In 11i, accounting will not get created for the write off transaction and accrual entry has to be manually adjusted in GL whereas in R12, Create Accounting program will create the accrual entry for the write off transaction in SLA as well as in GL and hence manual adjustment of accrual entry is not required.

SLA AND RECEIVABLES

In Release 11i AutoAccounting is used by SLA in R12 to facilitate definition of code combination AutoAccounting is used to generate Code Combination with limited sources and limited flexibility. R12 provides more sources and flexibility Receipts can be applied at line level Event based Revenue Management enables definition Revenue deferral rules.

Contingency based Revenue Recognition is built into SLA

COGS and Revenue Matching feature is enhanced

SLA AND COSTING

Oracle ships 3 application definitions for Cost Management Cost Management US GAPP (Standard Accrual) Cost Management with encumbrance US GAPP with encumbrance Federal up is US Default set Costing GAPP All setups to use pre-R12 functionality are migrated automatically SLA removes11i pain points regarding revenue recognition SLA replaces MAC

MODULES USING SLA

PAYABLE RECEIVABLE CASH MANAGEMENT ASSETS

COSTING
PROJECTS

PAYROLL
PROPERTY MANAGEMENT LEASE MANAGEMENT GLOBALISATION PUBLIC SECTOR FINANCIALS FEDERAL FINANCIALS

JOURNAL IMPORT
Journal can be imported directly into GL from nonoracle feeder system by using GL Interface table. There is no change in the functionality

Journal can be imported into SLA by using tables provided by under Financial Services Accounting Hub. Refer Chapter 12 of FSAH Implementation Manual. No FSAH Licensing is required for using the tables. Refer Metalink Note: 737370.1 dated 30/03/09

LEDGER

SLAM

Entity / Events

AAD

AAD

AAD PAYABLE

AAD

AAD

Event Class Event Type

Credit Memo

Invoice

Prepayment

Payment

Modify

Validate

Cancel

Journal Header Assignment

Journal Line Definition

Journal Entry Description

Journal Line Type

Account Derivation Rule

AAD: Application Accounting Definition

SLAM: Sub ledger Accounting Method

SLA CONCEPTS
With SLA, Event based accounting has been extended to all sub ledger modules

An Event is a business activity having an accounting effect Example creation of PO in Purchasing and life cycle of a Transaction is defined in the event model An Event Class is a category of business events for a particular transaction type or document e.g., Requisition, PO, Invoice, Credit Memo, Prepayment Payment In other words, Event class groups together similar event types and enable sharing of Accounting definitions An Event Type is a business operation that can be performed on an Even Class Eg. Invoice Validated, Invoice modified or Invoice Cancelled are Event Types for the Event Class Invoice

One or more Event Classes are associated with Even Entities Example Payables

SLA CONCEPTS
Oracle provides seeded components for each level of the SLA hierarchy to meet standard requirement Seeded components cannot be modified but can be copied with another name and modified to suite requirements

Users have the flexibility of using seeded components with user defined components
Definitions created by users are not overwritten during upgrade. However, in case seeded components are used as part of user defined components, Merge Analysis feature is provided to verify the effect Definitions can Exported and Imported to enable testing before migrating to Production environment