Webinar Materials - Oracle Subledger Accounting (SLA) The Myth and Mystery - SmartDog Services 2014

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Oracle Subledger Accounting (SLA)

The Myth and Mystery Unlocked
SmartDog Webinar Series
This webinar focuses on what is Subledger Accounting aka SLA, perhaps
we can unlock the myth for you. I often wondered what the 11i and even
R12 community thinks about the term SLA, is it just another one of those
Oracle buzz words like MOAC, Ledgers, Ledger Sets, and AGIS.
Copyright 2014 SmartDog Services, LLC
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Agenda
Subledger Accounting (SLA) Overview
What is SLA?
Main Features of SLA
Accounting Methods Builder
Multiple Representations
Technical Architecture
Oracle Subledger Accounting (SLA)
The Myth and Mystery Unlocked
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Tony Piacente,
Financial Solutions Practice Director
at SmartDog Services
I have worked with Oracle Financials for many years (too many to count), and have
been a consultant for most of my career and have advised and assisted many
organizations along the way.
Oracle E-Business Suite 11i/R12 Functional/Technical expertise
T Solutions Sales & Delivery Leadership
+ CURRENT 'hands-on' expertise with R12.1.3 Financials and P2P
Oracle Business Intelligence Architecture & Implementation (OBIA & OBIEE)
MDM including Data Governance
Oracle Certified Professional
Collaborate 14 Session: Project Billing Custom Extension Design for New Types of
Project Revenue and Cost Accrual Processes Thursday, April 10, 2014; Session ID:
14088

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Subledger Accounting Overview
Businesses require accounting systems that provide:
Accurate and reliable information
In order to achieve a competitive advantage, companies must continue to lower the
cost of doing business. One way that many companies are making this happen is by
standardizing and centralizing administrative processes - with accounting at the top of
the list. When an organization standardizes its accounting policies, it needs to document
the policy, communicate it to those who must apply it, and ensure the standard policy is
enforced EASIER SAID THAN DONE
Adhere to the highest standards of transparency and controls
The transparency of Oracle Subledger Accounting rules and journal entries helps you
stand up to those visits from your auditors. SLA rules are defined and stored within the
system and can be queried and reviewed at any time by interested parties. These rules
are even date-effective, so changes to them over time can be recorded as historical
backup. The journal entries that are created when the rules are applied are stored with
references to the accounting rules that generated them and linked to the transactions
from which they originated. These links allow you to drill down from journal entries to
the underlying transactions so you can access the details quickly. The subledger journals
combined with the accounting rules offer full disclosure of how the accounting was
created for every subledger transaction and provide assurance that it was done
correctly.
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Subledger Accounting Overview contd
Businesses require accounting systems that provide:
Fulfill varied legal and management reporting requirements
Many non-configurable accounting systems are only capable of generating accounting by one set of
hard-coded rules. If your reporting requirements demand accounting that is different from the hard-
coded rule, you must enter manual journal entries to adjust the results. Auditors tend to question
manual journal entries because they are a common source of accounting errors and omissions; they
override existing standard accounting policies, and they generally provide no audit trail. SLAs
configurable accounting rules minimize the need for manual adjustments because you can configure
the SLA accounting rules to create the accounting in exactly the way that you need it. Users cannot
touch the defined accounting rules unless you give them access. Thus, integrity of the accounting
data is protected by the security of SLA accounting rules and decreased need for manual
adjustments.
Regarding Reporting Requirements, Oracle Subledger Accounting leverages Oracle BI Publisher, the
combination of it and SLA allows you to create reports without expensive customizations.
BI Publisher lets you create and maintain your own report formats with familiar desktop tools. These
reports are based on XML data extracts directly from Oracle Subledger Accounting. At runtime, BI
Publisher merges the custom report template with the SLA data extract to generate the output in
the desired format (PDF, HTML, RTF, and EXCEL). The flexibility of BI Publisher is a result of the
separation of the presentation of the report from its data structure. Basically, BI Publisher has
nothing to do with the data extraction logic, only the formatting of your report.
Enable the books to be closed as fast as possible.
Faster period closure is a huge benefit as the amount and complexity of those many typical end-of-
period journal entries can be minimized.

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SLA collaborates with your GL providing a centralized accounting and repository to
enable true Global Accounting.

Lower costs with streamlined accounting processes
The general ledger is the foundation of any accounting system because it represents the
convergence of accounting data from different sources and applications to provide a complete
financial picture of a company or organization. In order to keep the GL streamlined, most
enterprises typically store only summary level data. This begs the question Fat Ledger vs.
Skinny Ledger? The downside of maintaining only summary level data in the general ledger
becomes apparent when you need to see the detail behind the accounting data. You need to go
back to each individual source system or application that affected the general ledger account
balance to get the information you want. This can be a tedious and time-consuming task.
Just as GL stores balances and journals, Subledger Accounting stores subledger balances and
subledger journals for all of your transaction systems that require accounting. Oracle Subledger
Accounting, coupled with Oracle General Ledger, gives you the best of both worlds. It allows
your GL to be free of extraneous data, so that you can maintain a simple chart of accounts and
store only what is needed for general ledger reporting and analysis. However, the moment you
need to access more detailed information, you can go directly to SLA to see the detail from all
transaction sources that fed the GL account balance without having to go back to multiple
source systems and applications.

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Meet diverse global accounting requirements and maintain internal controls
Companies frequently want to analyze account balances and financial results by different
transaction attributes. For example, they want revenue and receivables broken down by sales
rep, profitability by customer, cost of goods and payables by vendor, and so on. However,
transaction information like sales rep, customer, vendor, etc. is typically not stored in the
general ledger due to the volume of GL data it would create, so users were not be able to
analyze GL data categorized by transaction attributes. SLA enables you to perform this type of
reporting and analysis using supporting reference information from subledger transactions.
This feature allows business users to select relevant transaction information by which to report
their accounting data, so that they can report on an account balance, like receivables for
example, by transaction attributes like sales rep, customer, credit risk category, item, or any
combination thereof. More importantly, these supporting references can be applied to
accounting data coming from multiple products or even multiple systems (if you are integrating
external systems into SLA), so if you need to know total bank charges paid for the year and you
have bank accounts in multiple applications SLA allows you to maintain and report on that
value without manual or external processes.
As I mentioned in the previous slide, SLA rules are defined and stored within the system and
can be queried and reviewed at any time by interested parties ONLY.

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Access better information and provide better reporting
By Building Relevant End-User Reports
Similar to hard-coded accounting rules, hard-coded reports that are not user-
configurable seldom meet the needs of most companies who usually have differing
reporting requirements. To address the gap, users often resort to creating expensive
custom reports to extract the information that they need from their accounting
systems. Not only are custom reports resource-intensive to create, but they also
make upgrades and maintenance more expensive and arduous. In order to eliminate
the need for customized reports, Oracle Subledger Accounting has fully embraced
Oracle BI Publisher. The combination of BI Publisher and SLA allows end-users to
easily create reports that are relevant to the business requirements at hand with no
expensive customizations required.

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What is SLA?
Definition:
Oracle Subledger Accounting is a rules-based engine for
generating accounting entries based on source transactions from
all Oracle Applications.

A behind the scenes glimpse of SLA in a nutshell is the leveraging of a process
known as Financial Accounting Hub or FAH.
FAH allow you to create detailed, auditable, reconcilable accounting for external
or legacy source systems or processes. It includes an account transformation
engine with extensive validations, plus accounting and rules repositories. The
transformation engine consistently enforces accounting policies; the repositories
provide centralized control, detailed audit trails, and facilitate simultaneously
meeting diverse corporate management and reporting requirements.
The bottom line for FAH is it facilitates a bolt-on capability as a net new subledger
or could be used for a standalone process such as a third party legacy credit card
merchant billing system.
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What is SLA?
Subledger Accounting is a Service, not an Application
Rules-based accounting engine, toolset & repository to support EBS
modules There are no SLA responsibilities
Users do not login to SLA
SLA is a service provided to Oracle Applications
SLA forms and programs are embedded within standard Oracle
Application responsibilities (e.g. Payables Manager)
SLA provides the following services to Oracle Applications:
Generation and storage of detailed accounting entries
Storage of Subledger balances
Subledger accounting entries (with bi-directional drilldown to / from transactions)
Subledger Reporting
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Projects Receivables
Payables
Centralized Accounting Model,
Rules, Engine and Repository
Dr Cr
Inventory
Ledgers & Ledger Sets
Work in Process Purchasing
E-Business Suite
Banking Global Tax
Intercompany
Accounting
Multi-Org
Access Control
- MOAC
MULTIPLE
LEDGERS
Legal Entity
Global Architecture
More Control, Greater Flexibility, Lower Costs
CENTRALIZED
ARCHITECTURE
Now lets look at the R12
Global Architecture diagram
to show you how SLA fits
into the scheme of things
There are six major
initiatives:

Ledgers and Ledger Sets

The Centralized
Architecture includes:
Subledger Accounting
Tax Engine
Intercompany Model

And, Multi-Org Access
Control aka MOAC
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Main Features of SLA
Replaces various disparate 11i setups, providing single source of truth for financial
and management analysis
Introduces a common data model and UI across subledgers
Retention of highly granular level of detail in the subledger accounting model
Accounting Model separate from Transactional Model
Catering to custom requirements of accounting of transactions in subledgers
Allows multiple accounting representations for a single business event
Optionally Post subledger accounting entries to Secondary Ledgers
Resolves conflicts between Corporate and Local Accounting Requirements
Accounting created in Draft or Final mode
Draft: Review Report, Correct errors
Final: Transfer to GL, Post in GL
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Flexible Rule-Based Engine
Transaction
US GAAP
US COA
US Calendar
USD
Primary Ledger Centralized
Accounting
Dr Cr
Take Source System
Accounting
Conversion Table Nested Condition Statements
Risk
Class
Single segments, or
complete string
01-402-7620-0000-000
01-402-7620-0000-000
Debtor
Account
High
Med
Low
2301
2302
2301
IF Source System = Order
Management
AND Customer Type = Related Party
AND Country = USA
OR Customer Type = Internal
Source
Field Result Rule
WIP
Account
Result
2505
Here is the process flow for a standard transaction and below it some SLA
options we could leverage:
The first section shows how we could examine our entire COA account string or a
single segment. The second section shows how we could engage a cross
reference table based on conditions you define. And lastly, here is a sneak peek
at some logic (in simple terms) how we can transact in different ways based on
our argument.
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Multiple Accounting Representations for Parallel Financial Reporting
French Rules
Plan Comptable
French Calendar
EUR
Secondary Ledger
US GAAP
US COA
US Calendar
USD
Accounting
Dr Cr
Transaction
Account
10.000.100.000
15.000.101.000
18.000.102.000
22.000.212.000
65.000.267.000
Account
100.001.2120.000
120.001.2120.000
130.001.2120.000
140.001.2120.000
150.001.2120.000
Translation Table
In our example, we are Enabling Compliance with Multiple Accounting Standards
Here a US based company has operations in the US and France and must produce financial
statements for reporting authorities in both countries. Specifically:
1. The US operation reports in USD per the US business calendar, US COA, and US GAAP.
2. The French operation is subject to the French accounting regulations, and thus has to report its
activities to the local authorities denominated in Euros, according to the French business calendar,
French chart of accounts, and the French Fiscal accounting rules. But it also needs to report its financial
results to the US parent company for consolidation purposes.
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Accounting Methods Builder (AMB)
Enables you to define, create, and maintain Accounting Rules
using standard Oracle Forms, reducing the number of Manual
Journal Entries and Customizations
Definitions define the journal entries that enable an organization to
meet specific fiscal, regulatory, and analytical requirements.
Definitions are then grouped into subledger accounting methods and
assigned collectively to a ledger.
User defined accounting rules will be retained during EBS upgrades or
patching
AMB supports logic such as prioritization and conditional statements
without using SQL.

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Features of ABM
Accounting options that determine different characteristics of
the journal entry
Descriptions that appear on the subledger journal header and
lines which provide additional information about the journal
entry
Account derivation rules to construct the accounts for a
subledger journal entry line
Conditions that determine when subledger journal entry
accounts and lines are created
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Elements of a Subledger Journal Entry

With Journal Line Types: You
control journal entry line
options such as balance type,
side, and summarization

With Account Derivation
Rules: You control the
derivation of Accounting
Flexfield combinations for the
journal entry lines, and

With Journal Entry
Descriptions: you control the
description for the journal
entry headers and lines
Lets take a look the elements of a subledger journal entry:
The AMB includes journal entry setup components to configure each of
these elements:
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Accounting Methods Builder Components
This diagram shows how the AMB
predefined components, standard
sources, event entities, event classes,
and event types, can be used to create
journal entry descriptions, journal line
types, account derivation rules, and
mapping sets. The mapping sets are used
in the setup of account derivation rules.

The journal line types, account
derivation rules, and journal entry
descriptions are assigned to journal lines
definitions.
The journal lines definitions and optional journal entry descriptions for the journal headers, are
assigned at the application accounting definition level. Application accounting definitions are
grouped in a subledger accounting method.

Oracle Applications development provides startup application accounting definitions and at least
one subledger accounting method for all products using Oracle Subledger Accounting. If users do
not have any special accounting requirements, these startup definitions may meet their needs and
the only required setup step is to assign subledger accounting methods to the ledger.
If users have specific accounting requirements that are not met by the startup
definitions, they can copy and modify the seeded definitions or create new
definitions.
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AMB Components Accounting Definitions
Startup data seeded by Oracle
Modify these definitions or create new ones
Copy and Modify Functionality provided
Comprises of the following components
Subledger accounting methods
Application accounting definitions
Journal lines definitions
Journal line types
Account derivation rules
Journal entry descriptions
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Accounting Definition Model
Journal Entry Descriptions: Control the description for the
journal entry headers and lines and provide additional
information about the journal entry
Journal Line Types: Control journal entry line options such as
balance type, side and summarization
Account Derivation Rules: Control the derivation of
Accounting Flexfield combinations for the journal entry lines
to construct the accounts
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AMB Components- Accounting Definitions
Journal Lines Definition
Use journal lines definitions to create sets of line assignments
for an event class or event type.
These sets can be shared across application accounting
definitions.
Link Journal Types, Descriptions and Derivation rules by
assigning account derivation rules and descriptions to journal
line types
Define multi-period accounting rules for a journal line type
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Application Accounting Definitions
Use application accounting definitions to group journal lines
definitions and header assignments for event classes and
event types.
Indicate whether to create accounting for a particular event
class or event type e.g., when using cash basis accounting,
you would not create a journal entry to record the accrual of
an invoice.
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Subledger Accounting Methods
Group application accounting definitions that comply with a
common set of accounting requirements into a subledger
accounting method. Each subledger accounting method can
be assigned to one or more ledgers.
This is startup data seeded by Oracle. Modify these
definitions or create new ones.
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Multiple Accounting Representations for Parallel Financial Reporting
French Rules
Plan Comptable
French Calendar
EUR
Secondary Ledger
US GAAP
US COA
US Calendar
USD
Accounting
Dr Cr
Transaction
Account
10.000.100.000
15.000.101.000
18.000.102.000
22.000.212.000
65.000.267.000
Account
100.001.2120.000
120.001.2120.000
130.001.2120.000
140.001.2120.000
150.001.2120.000
Translation Table
Remember our Multiple Accounting Representations slide with our France
secondary ledger?

Lets walk through the screen shots required to set this up.Please keep in
mind I am only trying to give you an idea of what it looks like behind the scenes,
this is not a training session so there will not be a lot of gory details
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From the GL Responsibility (obviously,
your credentials need to have these
permissions)
Navigate to: Setup: Accounts: Chart of
Accounts Mapping
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We identify our target and source Chart
of Accounts
Then click on Segment Rules
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PP
.
Next, we assign our actions
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PP
Determine Rollup Rules Target Segment

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PP
Identify Source Segment Ranges for the
Department Segment
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PP
Lets go back to our COA Mapping Screen
and work on the accounting rules, click
on Accounting Rules
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PP
Heres we do the specific cross-reference
mapping
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This is what a transacted Journal Entry looks like when
posting to a primary ledger and affiliated secondary ledger
Some things to point out:
SSC France Primary Ledger (top); SSC France 2
Secondary Ledger (bottom)
Look at the difference in the account numbers
Back to the issue of transparency and divulging
everything which has transpired for this transactions => in
the secondary ledger transaction below, we have
Transacted Amounts and Account Amounts (before &
after)
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Functional Process Flow 11i vs R12
Before lightly touching on the high level Technical Architecture; I wanted to show
you how data flows functionally for 11i and R12
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Now lets move over to little bit on the high level Technical
Architecture (see info on next page)
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Over 2000 objects have been added to EBS database just to accommodate Subledger
Accounting. It is evident that the core data model has undergone a change within the
R12 Architecture. For further details an analysis may help you understand the extent of
this impact on the database, overall architecture by

Running this simple query:
select object_type, count(*)
from dba_objects
where object_namelike '%XLA%'
group by object_type

Drilldown from General Ledger takes us to the SLA Journal details. Drilldown is
performed from Journal lines in the General Ledger. This data is stored in the table
GL_JE_LINES. The link between SLA data and data in GL is through the table
GL_IMPORT_REFERENCES. The data can be mapped from GL_JE_LINES to
GL_IMPORT_REFERENCES table using the columns je_header_id and je_lines_num. The
SLA Journal line data is stored in the table XLA_AE_LINES. The header details are stored
in XLA_AE_HEADERS. The data in GL_IMPORT_REFERENCES can be mapped to
XLA_AE_LINES using the columns gl_sl_link_id and gl_sl_link_table.

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Subledger Accounting Methods
1. Drilldown from General Ledger takes us to the SLA Journal details.
2. Drilldown is performed from Journal lines in General Ledger. Data is
stored in the table GL_JE_LINES.
3. The link between SLA data and data in GL is through the table
GL_IMPORT_REFERENCES. The data can be mapped from GL_JE_LINES to
GL_IMPORT_REFERENCES table using the columns je_header_id and
je_lines_num.
4. The SLA Journal line data is stored in the table XLA_AE_LINES. The
header details are stored in XLA_AE_HEADERS.
5. The data in GL_IMPORT_REFERENCES can be mapped to XLA_AE_LINES
using the columns gl_sl_link_id and gl_sl_link_table.
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Main Tables
XLA_TRANSACTION_ENTITIES
XLA_EVENTS
XLA_AE_HEADERS
XLA_AE_LINES
XLA_DISTRIBUTION_LINKS-Stores the link between
transactions and subledger journal entry lines.
XLA_CONTROL BALANCES
GL_IMPORT_REFERENCES

AP to GL Integration Details
Finally, these are the tables of particular significance when it comes to
technically understanding SLA behind the scenes
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Contact Us For More Information:

1.800.309.1213 Toll Free

www.smartdogservices.com/who-we-are

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