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Overview of the New Financial Architecture in


Oracle E-Business Financials Release 12
Terrance Wampler
Financials Strategy
Safe Harbor Statement

The following is intended to outline our general


product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.

The above reflects Oracle’s current development plans which are subject to change at any time
Global Architecture
More Control, Greater Flexibility, Lower Costs

MULTIPLE 1 2
Centralized Architecture
LEDGERS
3rd Party
2.1 LEGAL ENTITY
Systems
General Ledger

2.2 ACCOUNTING

Dr Cr
Centralized Accounting Model, 2.3 BANK MODEL
Rules, Engine and Repository
2.4 TAX ENGINE

2.5 INTERCOMPANY
Legal Entity Banking Global Tax Intercompany
Accounting
3
E-Business Suite
3rd Party ROLE BASED ACCESS
Systems Inventory Receivables Projects
Purchasing Payables Work in Process
to Operating Units

© 2006 Oracle Corporation – Proprietary and Confidential


Ledger Sets

Perform the Following Across Ledgers:


• Open/Close Periods
• Create Journals
• Translate and Revalue Balances
• View Information
• Submit Standard Reports
• Submit Financial Statements

“We have 60 Sets of Books and see tremendous efficiencies with


running processes across these SOBs using Ledger Sets.”
-- says Keith Dunkin from Alcoa

© 2006 Oracle Corporation – Proprietary and Confidential


1
Multiple Ledgers
Ledgers and Ledger Sets

Ledger A
US GAAP
US COA
US Calendar
Ledger C Ledger D
$
US GAAP French Rules
US COA Plan Comptable
US Calendar French Calendar
Ledger B
EUR EUR
US GAAP
US COA
US Calendar
AUD
Perform cross-ledger functions:
Ledger Sets
9 Open/Close Periods 9Perform Allocations
9 Create Journals 9View Information
9 Translate Balances 9Create Reports

© 2006 Oracle Corporation – Proprietary and Confidential


Centralized Accounting Policies 2

Greater Control, Transparency and Auditability

• Internal control and


compliance with multiple
accounting policies through
General
GeneralLedger
Ledger
user-defined accounting rules
3rd Party • Single source of truth for all
Systems
subsystem accounting
Dr Cr Centralized Accounting Model,
activity with a common data
Rules, Engine and Repository model and repository
• Accounting, reconciliation
and reporting facilitated by
centralized data model
• Streamline closing process
Inventory Receivables Projects
with common posting engine
3rd Party
Systems • Auditable and transparent
Work in Process Purchasing Payables entries accessible with full
drilldown

© 2006 Oracle Corporation – Proprietary and Confidential


Flexible Ledger Architecture
Meet Local Accounting Standards

Ledger A
Single business transaction can create
US GAAP
multiple accounting representations US COA
and in multiple currencies US Calendar
USD

Payables Centralized
Invoice Accounting

Dr Cr

Ledger B

French Rules
Plan Comptable
French
Calendar
EUR

© 2006 Oracle Corporation – Proprietary and Confidential


Accounting Setup Manager 2

Single Page for Accounting Setup


•Legal Entities
•Ledgers
•Currencies
•Balancing
Segments
•Subledger
Accounting
•Operating
Units
•Balancing
Options

© 2006 Oracle Corporation – Proprietary and Confidential


Alternate Accounts
Prevent Accounting Errors

US.300.10000 US.350.10000
US.300.20000 US.350.20000
US.300.30000 US.350.30000
US.300.40000 US.350.40000
US.300.50000 US.350.50000

© 2006 Oracle Corporation – Proprietary and Confidential


Control Accounts
Streamline Reconciliation

Receivable Account
Payable Account

Inventory Receivables Projects

Manual Journal Purchasing Payables

© 2006 Oracle Corporation – Proprietary and Confidential


Simplify Data Access

• Data Access Sets


• Grant and tailor access to Ledgers and Balancing Segment
Values (i.e. Companies, Stores, Branches, etc.)

Privileges
GL Manager Accountant
View Write
France Ledger

Canada Ledger

US Ledger

© 2006 Oracle Corporation – Proprietary and Confidential


Secure Definition Access

• Definition Access Sets


• Select specific users to share definitions with
• Restrict those definitions that should not be shared
• Grant privileges to view, modify, or submit definitions
• Control definition security independently from data
security

© 2006 Oracle Corporation – Proprietary and Confidential


Secure Definition Access

Privileges
GL Manager Accountant
View Modify Submit

Misc Expense
Report Definition

Balance Sheet
Report Definition

Income Statement
Report Definition

© 2006 Oracle Corporation – Proprietary and Confidential


Definition Access Sets
Definitions That Can Be Secured

• Accounting Calendars • Consolidation Sets


• AutoAllocations • Currency Rate Types
• AutoPost Criteria Sets • Elimination Sets
• AutoReversal Criteria • FSG Reports and
Sets components
• Budget Formulas • MassAllocations
• Budget Organizations • MassBudgets
• Chart of Accounts • Recurring Journals
Mappings • Revaluations
• Consolidation • Transaction Calendars
Definitions

© 2006 Oracle Corporation – Proprietary and Confidential


Rationalize Trading Partners
Customers, Suppliers, Banks, Legal Entities

Global Tax Payments


Payables Cash
Purchasing Geographies Party Management
Suppliers Information Banks and
Branches

Trading
Community
Architecture

Oracle Fusion Middleware

ERP CRM 3rd Party

© 2006 Oracle Corporation – Proprietary and Confidential


Centralized Banking
Shared Services Disbursements
• Bank account is now
associated with LE entity
LE rather than Operating Unit
• Single bank account
OU A OU B OU C
serves multiple Operating
Units
• Any and all Operating
Units associated with a
ledger can be permitted to
Inventory Receivables Projects use the bank account

Plus
Work in Purchasing Payables Assets
Process

9 Centralized Credit Card Model


9 Credit Card Encryption
9 Supplier & Customer Banks in TCA

© 2006 Oracle Corporation – Proprietary and Confidential


Banks
Define Owner of Bank Account

Legal Entity

© 2006 Oracle Corporation – Proprietary and Confidential


Banks
Grant OU Access to Bank Account

Operating Units

© 2006 Oracle Corporation – Proprietary and Confidential


Oracle E-Business Tax
Processing taxes for transactions and reporting

Transactions

Purchasing

Parties
Single Interface for Transactions
Payables Places
Calculate
Determine Applicable Tax Status Taxable Tax
Products Regimes Taxes & Rate Basis Amount
Sales Orders
Processes
Transparent Integration with Tax Partner Services

Receivables

… Tax
Transactions
Taxes,
Rules

© 2006 Oracle Corporation – Proprietary and Confidential


Centralized Intercompany 5

Faster Period-End Close

Advanced Global
Web UI Intercompany
System Subledger
Invoices &
Open Transactions Documents
Interfaces /
API

Excel 9 Subledger invoices


(Web ADI)
9 Intercompany calendar Online
to control transactions Reconciliation
Reporting
Balanced 9 Configurable approval
transaction
Dr Cr rules
Yes 9 Flexible security model
9 Centrally defined
Subledger No intercompany accounts
Accounting XML
Publisher
Intercompany Reports
balancing lines

© 2006 Oracle Corporation – Proprietary and Confidential


Financial Reporting with XML Publisher
Nearly 400 Configurable Formats

Product Formats Product Formats


Assets 22 IT Audit 2
Cash 3 Loans 6
Collections 15 Payables 9
Common Modules 10 Payments 120
Financials
21 Public Sector 6
Consolidation Hub
General Ledger 14 Receivables 10
Subledger
Globalizations 92 17
Accounting
Internal Controls
25 Tax 23
Manager

© 2006 Oracle Corporation – Proprietary and Confidential


Shared Services Access Control 6

More Productive Shared Services Operations

Belgium Holland Denmark


Legal Entity Legal Entity Legal Entity
Functional Tasks
y Accounting
Belgium Holland Denmark y Billing, Dunning &
Collections
Operating Unit Operating Unit Operating Unit
y Procurement
Responsibility y Order Management
SingleResponsibility
Responsibility Responsibility
y Payments
y Data Management

© 2006 Oracle Corporation – Proprietary and Confidential


Payables & Receivables Netting
Reduce Costs in Trading Relationships

AR Invoices
Customer #203 $500 Receipt
#460 $600 $800

Netting

AP Invoices
Supplier #699 $400
Payment
#982 $400 $800

© 2006 Oracle Corporation – Proprietary and Confidential


Comprehensive Integration Repository

A Catalog of All EBS Integration Points • Enable key integration types


• Web Services • Business Events - Business to Business
• Public Java & PL/SQL APIs • Batch Interfaces - Enterprise Application Integration
- Business Process Management
- Business Activity Monitoring

• Support industry-standard
messages

• Support standards-based
XML documents

• Search and view available


interfaces via powerful UI

• Automatically keep in step with


source code via standard patching

© 2006 Oracle Corporation – Proprietary and Confidential


Straightforward Upgrade
Today Release 12
Set of Ledger in a
Books Ledger Set

9Same Responsibilities
Product Subledger 9Same Tables and IDs
Accounting Accounting
9Customization
Continuity

Operating Operating
Unit Unit (MOAC)

© 2006 Oracle Corporation – Proprietary and Confidential


Summary: New Capabilities in R12
• Objective
• Simplify the ability to manage across business functions, organizations and locations

• Requirements
• Improve support for shared service operations
• Ease access to aggregated data for management reporting
• Ensure accurate accounting, tax and currency treatment of transactions

• Process
• Separated operational activities from financial management tasks
• Defined new, logical business structures to easily group information
• Rationalized trading partner data into a single location

• Results
• A single responsibility to access and transact on multiple organizations
• A single ledger to manage multiple currencies
• Ledger sets to manage accounting processes across ledgers
• Centralized rules engines for tax, accounting and inter company
• A separate and simple payment creation and delivery solution
• Centralized trading partners (suppliers, banks, first party legal entities)
• Simplified reporting via XML Publisher and DBI
• Netting across trading partners

The above reflects Oracle’s current development plans which are subject to change at any time
Why Upgrade
Straight Talk from Customers
“We have 60 sets of books and see tremendous efficiencies with running
processes across these sets of books using Ledger Sets.”

“Ability to issue one payment instruction to the bank for payments of invoices
in multiple operating units was viewed as a huge benefit from the user
community.”

“Multi-Org Access Control (MOAC) will definitely reduce the workload and the
number of people performing process related tasks. The users are very excited
and the benefits of MOAC were readily visible to them.”

“The ability to access multiple operating units with a single responsibility can
simplify SOX compliance monitoring.”

“The functionality offered with Advanced Global Intercompany System (AGIS),


specifically the creation of physical invoices to be created for I/C transactions in
Payables and Receivables eliminates many customizations in this area.”

“Centralization of subledger accounting rules would minimize set up and


maintenance, providing greater financial control, and enforcing a consistent
approach for true global accounting.”
“Banks, taxes, payments, and accounting – everything that becomes centralized
will bring tremendous efficiencies to our organization.”

The above reflects Oracle’s current development plans which are subject to change at any time
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