Account Generator The Order To Cash Cycle

Account Generators in the Order to Cash Cycle Thomas J. Simkiss, Jr., J.D., CPA BizTech King of Prussia, PA

Agenda Introduction • Objectives • Order to Cash Process • Journal Entries from Order to Cash • Account Generator • Modifying an Account Generator • Account Generation in R12 • Q&A

Introduction • Thomas Simkiss, Jr., J.D., CPA – 10 years Oracle Experience as an end user and implementation consultant – Financials, Supply Chain, Discoverer, DBI – Managing Partner with BizTech – CPA in NJ • BizTech – – – – – –

Certified Advantage Partner Based in the Mid-Atlantic Clients in CT, NJ, NY, DE, MD, and VA Applications Implementations Custom Development Oracle Hosting

Objectives • Review the Order to Cash Process and related sub-processes • Introduce the Account Generator • Understand the journals created during Order to Cash • Demonstrate how a basic account generator modification

Order to Cash Process • Touches many business areas – Customer management, Order entry, Order fulfillment and distribution, finance and accounting

• Two sub-processes – Order to Fulfillment – Customer Invoice to Cash

Order to Fulfillment Order Entry & Scheduling OF1069 OF1069

PF2036 PF2036

PF2051 PF2051

OF1071 OF1071

Manage Manage Customer Customer Orders Orders

Check Check ATP ATP

Check Check CTP CTP and and CTD CTD

Schedule Schedule Sales Sales Order Order Ship Ship Date Date

• Sales orders submitted by customers or sales reps are entered into the system.

• Calculate Available to Promise (ATP) for the customer order.

• Calculate Capable to Promise (CTP) and Capable to Deliver (CTD) for the customer order.

• The planner schedules sales order lines ship dates.

Order Entry & Scheduling OF1073 OF1073

OF1076 OF1076

OF1054 OF1054

Send Send Sales Sales Order Order Acknowledgement Acknowledgement

Manage Manage Sales Sales Order Order Holds Holds

Release Release Credit Credit Holds Holds on on Sales Sales Orders Orders

• CSR sends sales order acknowledgement to the Customer

• Research and resolve shipment holds associated with open sales orders.

Enterprise Roles

• Review and release specific credit holds on individual sales orders. Planner

A Copyright © 2006, Oracle Corporation. All rights reserved.

Credit Manager Shipping Clerk

Order to Fulfillment (Con’t) Customer Invoice to Receipt

A

Shipping MM1090 MM1090

MM1923 MM1923

MM1924 MM1924

MM1149 MM1149

Pick Pick Material Material

Prepare Prepare Material Material for for Shipment Shipment

Load Load Material Material

Ship Ship Material Material

• Shipping Clerk picks and transfers orders to Staging

• Shipping Clerk packages, consolidates material to be sent to the customer.

• Shipping Clerk loads the material to the dock for shipment.

Copyright © 2006, Oracle Corporation. All rights reserved.

• Shipping Clerk packs, weighs, counts, ships and records shipments

Customer Invoice to Cash Customer Invoice OF1027 OF1027

Generate Generate Customer Customer Invoices Invoices

Order to Fulfillment

• Bill for materials, services, projects, etc

OF1028 OF1028

Enter Enter Manual Manual Customer Customer Invoices Invoices • The AR clerk creates a manual invoice online.

OF5882 OF5882

Present Present Customer Customer Invoices Invoices • Present invoices to customer or third party. • Send electronically or by mail.

FM0960 FM0960

OF1049 OF1049

OF1035 OF1035

Manage Manage Prepayments Prepayments

Maintain Maintain Customer Customer Invoices Invoices

Maintain Maintain Credit Credit Memos Memos

• Enter Prepayments, Receive Payment, • Enter Invoice, Match Invoice to Prepayment

• Process invoice corrections, adjustments and updates.

• Enter and process customer credit memos.

Enterprise Roles Accounts Receivable Clerk Accounts Receivable Manager

B Copyright © 2006, Oracle Corporation. All rights reserved.

Customer Invoice to Cash (Con’t) B

Accounts Receivables OF1032 OF1032

OF1050 OF1050

Process Process Customer Customer Debit Debit Memos Memos • Enter and process customer debit memos.

Apply Apply Customer Customer Receipts Receipts –– Cash Cash Applications Applications OF1034 OF1034

• Payment is received. Receipt is created and applied to invoice(s). OF1037 OF1037

Apply Apply Customer Customer Receipts Receipts –– Credit CreditCard Card

Apply Apply Customer Customer Receipts Receipts –– Adjustments Adjustments • Adjust payment including Receipt Application reversal and corrections

OF1031 OF1031

Remit Remit Customer Customer Receipts Receipts –– Bank Bank Deposits Deposits • Deposit customer receipts.

• Payment is received. Receipt is created and applied to invoice(s).

Enterprise Roles Accounts Receivable Clerk Accounts Receivable Manager

Copyright © 2006, Oracle Corporation. All rights reserved.

Journal Entries from Order to Cash

• External Order – Journal Entries Made AFTER Ship Confirm • For Shippable Orders – There is no COGS entry for non-shippable orders

• Internal Orders – Many journal accounts determined by Shipping Networks and delivery/ receipt type (immediate or in transit)

Journal Entries – External Order Inventory Cost of Goods Sold Current Cost

Accounts Receivable AR/Unbilled Sales Order Price

Inventory Current Cost

Inventory JE made after ship confirm

Revenue Sales Order Price

AR JE made after Autoinvoice

Journal Entries – Internal Order Inventory

Cost of Goods Sold Current Cost

Accounts Payable I/C Accrual* Current Cost

Inventory Current Cost

Accounts Receivable Intercompany AR Transfer Price

Intercompany AP

Intercompany Revenue

Current Cost

* Credit to I/C Accrual and Debit to Inv that is made on receipt of items is not shown

Transfer Price

Account Generator • Uses Workflow technology to construct key flexfield combinations • Allows generation of account combinations based on system variables

Account Generators in Order to Cash

• OM: Generate Cost of Goods Sold Account (OECOGS) • AR: Substitute Balancing Segment (ARSBALSG) • Inventory Cost of Goods Sold Account (INVFLXWF)

Account Generator - Terms • • • • • •

Workflow Builder Item Type Attribute Function Process Lookup Type

Modifying an Account Generator

1. Open the Account Generator to be modified 2. Save to a local / network drive 3. Make modifications 4. Save to the database 5. Test

1. From the Workflow Builder, open the account generator • • •

User – APPS Password – APPS Password Connect – Applications Database

2. From the Hidden Items list, select the Account Generator to be modified

3. 4.

Open the Generate Default Accounts Process, right click on the process icon and select copy, then paste Enter an Internal Name, Display Name and Description

5. 6. 7.

Open the new COGS process Remove the link from Copy Values from Code Combination to Validate Code Combination Insert the function Get CCID from Salesrep's revenue segment and click OK

8. Insert the Function Copy Segment Value from other Structure Code Combination 9. Update the Node Attributes

10. Connect the new functions to the existing workflow functions (right click at the first function and drag to the second) 11. Select the result type (where appropriate)

12. File Æ Save As Æ Database 13. From GL Super User, select the new COGS Account Generator

Test the Account Generator • Take an order through to ship confirm • Test via COGS_11i.SQL available from Metalink (Note: 159998.1)

Account Generator in R12 • Still available in R12 • FA Account Generator – Option to use it or Subledger Accounting Engine after upgrade

• Receivables

Thomas J. Simkiss, Jr., J.D. CPA BizTech [email protected]