Thursday, November 22, 2007

New Intercompany features in R12

R12 introduces the new product Advanced Global Intercompany System (AGIS), which takes forward the features provided by GIS in 11i GL and adds a number of important new capabilities. The major new capabilities are:

  • Creation of Documentation (ie. Payables and Receivables Invoices) for AGIS transactions

  • Web ADI Integration to facilitate uploading transactions from Excel

  • One Sender to many receivers in the same transaction batch (the receivers can be in different ledgers, with different chart of accounts, currencies, periods etc)

  • Integration with Oracle Approvals Manager for fully flexible approval rules with no coding

  • Introduction of Intercompany Periods, which can be opened and closed by AGIS transaction type

  • New user grants based security so many subsidiaries can be accessed from the same responsibility

  • Online Reconciliation reporting tool, allows drilldown from account balances to the transactions. Uses XML Publisher to provide export to Excel and customization of outputs


The Intercompany balancing feature in GL is now under the AGIS product and has some new features

  • Define Intercompany Payables and receivabls accounts by Legal Entity

  • Define separate Payables and Receivables accounts for each direction of Intercompany trading relationships

  • Intercompany Balancing performed in the subledger when transactions are accounted by SLA


An important point to note is that although we add a lot of new features any GIS set up you have in 11i will be upgraded and you can keep running as in 11i and start taking advntage f the new features if and when you are ready and it makes sense to you.

In future posts I can get into the detail of how some of these new features work and are set up and who may want so use them and why.

32 comments:

Leslie said...

Hi David,

I have a question on your first bullet point (Creation of Documentation (ie. Payables and Receivables Invoices) for AGIS transactions).

In R12, can these invoices be printed when we enter an I/C transaction in AGIS as physical back-up (as some countries require this)? Is this what you mean my "documentation"?

If so, what is this invoice/report called in R12 and where would it be available (e.g. AGIS)?

Thank you for your help!
Leslie

davidhaimes said...

We create 'real' invoices in the receivables payables applications of the sender and receiver.

So the receiver who needs a hard copy can do an invoice print form their own payables - which should satisfy the legal requirement as it will have all the appropriate tax registration numbers on it etc. I would imagine this is the best solution.

If they want they can ask the sender to print the invoice from their receivables system, or they could use iReceivables to print the invoice off themselves form there.

Leslie said...

Hi David,

Let me make sure I understand. So an invoice is created in the receiver's AP and sender's AR? A hard copy would need to be printed from sender's AR then as there's no invoice print in AP. Isn't that right? If this is the case, then wouldn't you be double-booking your journal entries (one from AGIS to GL and another from AP/AR to GL)?

Thanks again!
Leslie

Leslie said...

Hi David,

Another question on R12 AGIS..

There's an enhancement request (bug #4260174) which basically requests that users be able to manually enter a foreign currency exchange rate (ie, "User" rate type) in intercompany transactions in GIS. I see a note in the R12 AGIS documentation that user rate is still not possible.

What is the reason behind not allowing users to manually enter rates in GIS? Any future direction on this?

Thanks!
Leslie

davidhaimes said...

This is a good idea for a future post/posts.

It is a contentious issue, there could be a compliance issue there - am I trying to keep more profits in my LE as it is low tax, so I use the correct transfer price but inflate the profit with the exchange rate. You also will give yourself problems when you consolidate balances as the rates don't triangulate. The other problem is I put a rate on that you don't like so you reject it and that slows the whole process down.

I would like some detailed business cases for doing this - contact me directly if you prefer. We can discuss with some of our domain experts as so far our feeling has been it is not something we want to open up, but no final decision has been made.

davidhaimes said...

I wasn't aware there was no invoice print in AR, but you may find a screen print is sufficient as long as contains all the items requires, tax ID, invoice number etc. Or yes you may need to do an AR invoice print.

Maybe invoice print is an ER for AP :)

regarding double booking this does not happen. It goes from AGIS either to GL or to AR/AP, but never both.

Thanks
David

Leslie said...

Hi David,

Thanks.

In terms of currency, the scenario could be that one company funds another company resulting in IC transactions. These transactions should be entered in the exchange rate that was used to fund the other company to accurately reflect the rate that was used to clear the bank. So users would need to enter this transaction in GIS using the exchange rate that was used for funding..

Any idea how this can be handled?
Thanks again!!

davidhaimes said...

To clarify your example are you saying - I loan them 1,000 EUR from my USD bank account and so have a cleared rate from the bank on that ? I send an IC trx to them in EUR and want to add the bank rate on that?

What if my ledger currency is say CAD, what rate do I use then?

Leslie said...

Ledger currency = USD
Send 1,000 EUR from my USD bank account to an entity that's in EUR ledger currency

I want to enter this IC trx in GIS in EUR and manually enter the exchange rate that was used for this transfer (the rate that was used to clear the bank account).

davidhaimes said...

For your example - I would create the AGIS transaction in USD for whatever USD cost I incurred.

Doing it in EUR with a user rate raises tough questions:

So I am the recipient in the UK and my ledger currency is GBP, what rate do I use?

Consolidation will become a problem, my GBP is consolidated first to EUR with all of EMEA and then that EUR is consolidated to USD for group reporting. How do I get the rates to make sure when my GBP amount finally gets to USD it equals your USD amount?

What Exchange Rate to use for Intercompany « David Haimes Oracle Intercompany Financials Blog said...

[...] Rate to use for Intercompany Posted on December 6, 2007 by davidhaimes Leslie posted some excellent comments, which touched on the exchange rates to use on intercompany transactions, a very interesting and [...]

Leslie said...

Hi David,

What if you only have two currencies involved in the transaction?

Also, I read that in R12 Cash Management, you can do bank account transfers between legal entities (IC transaction) which would then create a payment request in AP. How would the system handle currency rates if there are three currencies involved in this scenario?

I also read that you can create legal entity exceptions in R12 since the system assumes that a legal entity has a relationship with all other entities. With this exception, does that mean I won't be able to enter an IC transaction with a legal entity listed as an exception? In other words, there's a system restriction on who I can enter IC transactions with? This would be nice since there is no such functionality in 11.5.9.

Thanks!

Alessandro said...

Hi David,

Do you know the differences between the reconciliation process between Oracle GIS and Cartesis Intercompany Server (now Business Objects Finance)?

Is it possible to use Oracle GIS as a standalone solution to enhance the intercompany reconciliation process in order to achieve a fast closing process?

Thanks,
Alessandro

davidhaimes said...

Alessandro,

I have seen GIS used as a central Intercompay 'hub' and AGIS is R12 could also be used in that way.

GIS has been set up on it's own instance and the journal lines it pushes to GL_INTERFACE are then routed to the appropriate Oracle or potentially non-Oracle system.

AGIS uses a workflow and business event architecture, which makes implementing is as an Interompany hub should be much easier as the integration points are increased.

Anjana said...

Can you give some insights on how Tax will be handled in case of AGIS Invoicing. For example if there is an AGIS transaction between two LE's following different Tax - US and Canada.

David Haimes said...

The new eTax product is used for tax calculation on the invoices. It can easily handle goods or services provided in the US to a trading partner in Canada.

How do I define my Legal Entities? « David Haimes Oracle Intercompany Financials Blog said...

[...] stamped with an owning (first party) Legal Entity and that will be used to drive tax, accounting, intercompany and Legal [...]

AGIS Out of the Box « David Haimes Oracle Intercompany Financials Blog said...

[...] designing AGIS for R12 we tried to minimize the time it would take to get started entering transactions in an initiative [...]

Dan C said...

Hi David,

Great topic! Here is my question: I have found that if i assign any balancing segment values to either the ledger or to an LE, that those values no longer auto-balance for Intercompany EXCEPT with other BSV values assigned to the same ledger or LE, AND you can never remove the BSV to correct the issue if you didn't mean to do this. This seems perilous!

What are you recomending as to the Assignment of BSV's to still have autobalancing intercompany as a feature! I personally am not assigning them to either Ledger or LE to avoid this issue.

I look forward to your comments :)

David Haimes said...

Dan

Sorry to be so late replying. You make a good observation and I probably should blog about this topic in a little more detail.

This is not really a balancing feature, it is a GL feature. If you start to assign BSV to a ledger you need to assign all the BSV you plan to use for that ledger. If you decide to do no assignment of BSV then they are all available for use.

The reason you cannot undo and assignment is that once you start creating accounting for that BSV in the ledger you don't want to unassign it and then move to another ledger and create accounting there - that would cause problems in your GL.

NEEL said...

HI ALL,
WHEN I GO TO THE PAGE BANK ACCOUNTS TRANSFER FROM FOLLOWING NAVIGATION

CASH MANAGMENT RESO>BANK ACOUNTS TRANSFER

AND WHEN I CLICK ON SOURCE BANK ACCOUNTS AND DESTINATION BANK ACCOUNTS

HERE I AM NOT GET ANY VALUE

I ALSO DONE FOLLOWING SETUP.........

1. In System Administrator responsibility assign the CE: Bank Account Transfers system profile to your responsibility in Cash management.

2.
I ALSO CREATE THE SUBTYPE


3. Login as sysadmin and go to User Management responsibility and setup the UMX
Security for Bank Account Transfer module for your specific Legal Entity, this can be
Done using the UMX wizard for Cash Management, this wizard can be launched by
querying the relevant responsibility you are using from Roles and Responsibilities
module.

4. In the Search region enter the following information:
· Type: Roles & Responsibilities
· Category: Miscellaneous
· Code: Enter the code assigned to the Cash Management responsibility (e.g. FND_RESP|CE|CASH_MANAGEMENT_OPERATIONS|STANDARD)
· Application: Cash Management.

5. Click in the Update icon, then you will see a new form called “Update Role” click in the
security wizard button save and proceed.

6. Run the CE UMX Security Wizard, then you will see a new form called “bank Account
Security Management, enter the bank account grants for USE, MAINTENANCE and BANK ACCOUNT TRANSFER and clink in the APPLY button.

7. i also define the intra company setup also.

David Haimes said...

@NEEL

You should post this question on the OTN Forums, there are more eyes of cash management experts there.

Dinesh SV said...

Hi David,
I am doing GL intercompany Transfer migration from 11i to R12 . Please help me if you (any one) is Having the migration code or the Details of the required datas to be imported from 11i Instance.

Please help me its an urgent requirement.

David Haimes said...

Dinesh,

You should refer to the R12 upgrade guides and documentation available on metalink.

pcreddy said...

Hi David,

In AGIS, when I tried to setup for the Intracompany accounts, my ledger is not appearing in the Transacting Ledger field which is required field in the JSP page. Am I missing any prerequisite setup?

Also please let me know how intracompany feature works in AGIS and also how can we setup the Clearing House concept in AGIS.

Thanks!!!

pcreddy said...

How can we leverage the SLA: Transaction Account Builder feature to generate the Bridge and Clearing House entries (based on the rules) from AGIS for Intercompany Transactions (Accross Ledgers)

Cornelia said...

Thanks for the information. I understand how intercompany work between 2 LE's. How does intercompany work when projects are the main driver? I would like to do an intercompany transaction between e.g. the US and Japan for Project XXX.

David Haimes said...

You might need to enable Intercompany Balancing for the ledger?

David Haimes said...

You should look at the cross project nilling feature set in Oracle Projects. This will generate invoices and has its own set up to determine what accounts are used giving a lot of flexibility.

Cornelia said...

thanks for the info. I will for sure look into that!

Regards
cornelia

Cornelia said...

I looked into the cross billing feature for R12 but couldn't establish what it does or where I can find it (I'm not projects expert). In 11i
PA: Allow Cross-Charging in Multi-Org
If you have implemented multiple organization support, this profile indicates whether to allow users to charge expenditure items to projects in other operating units that share the same Business Group, PA Period Type, and Set of Books as the user's operating unit.

Besides being able to do intercompany between 2 LE's, we want to do intercompany at the detail level of timesheets and expenses. E.g. you allocate 10 hours to a project in Japan (different LE). Can AGIS be defined for such a low level for data entering?

konya sohbet said...

hey thanks very good admin