FSAH and AGIS Intercompany Implementation thoughts

Written by David Haimes

As Intercompany transactions are very likely to cross systems they are a good candidate for integration in a 'Hub' of some sort.

In R12 the Financials Services Accounting Hub (FSAH) allows integration of third party systems to Oracle and is incredibly powerful and flexible.

Let's use a simple example:

Company A and B both use two different Ledgers. A Sales Invoice is issued by Company A (to Company B) for $5,000

The accounting needs to be created as below, they need to be booked with the same accounting date in the same period.

In Company A

Debit Intercompany AR $5,000
Credit Intercompany sales $5,000

In Company B

Debit Expense or inventory (per content), $5,000
Credit Intercompany AP, $5,000

So there's a number of options that come to mind (in no particular order).

1) Using Oracle Accounting Hub you can account for transactions form third party systems, it uses the Subledger accounting engine to process accounting events defined for the third party system. If your invoice systems are third party applications, you could create 2 events (one for each company/ledger/party to the transaction) for the sales invoice and get the full accounting out of the single system integration.

2) Enter these transactions in AGIS, the specific accounting will be entered/generated and approvals from company A and B obtained before AGIS either books it direct to GL or generates the Invoice for company A and B if required.

3) It may not be ideal to force users to navigate to a different screen (or change some import process, EDI, XML feed etc) to issue Intercompany invoices from other invoices as in 2) above. So continue to enter in your regular sales invoice system but run a process which detects an invoice is Intercompany and cancels it, then generates a transaction for it in AGIS (via the Open Interfaces) or FSAH.

I don't think any one of these is right for all situations, detailed analysis of the particular implementation environment and requirements needs to be done to figure out the best approach. If you have any thoughts, better suggestions or experience then please share them in the comments.

AGIS Out of the Box

When I was about 10 years old I got a new electric train set for Christmas, but before I got to play with it I had to pinch a plug from one of my siblings toys and fit the only available (and dangerously mismatched) fuse in it. Then I had to read a complicated set of instructions to assemble a delicate set of parts and it was a minor miracle that I had it working before the New Year.

Now when I buy something new, the first thing I do is open the box, turn it on and press buttons to work out how to use it, if I get stuck I maybe look to see if they have a quick start guide. Consumer goods manufacturers make things very intuitive and ready to work right out of the box these days and we have grown to expect that. Remember that iMac add? step 1: plug into power, step 2: plug into a phone line, step 3: - there is no step 3! Wow can I have an ERP system like that please?

When designing AGIS for R12 we tried to minimize the time it would take to get started entering transactions in an initiative we internally called 'AGIS out of the Box'. I have to give credit to this idea to my former bosses Joe and Terrance for initiating this, but the whole team stopped, sat down and thought about what we could do to allow users to open the box and start using AGIS right away.

We came up with a few ideas

1) No profile options

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

Oracle Intercompany is FUN

In release 12 of Oracle financials we decided to pull the existing Global Intercompany System (GIS) functionality out of the GL product, add a whole bunch of new functionality and make it a product in its own right. We decided to call this new product (wait for it...) Advanced Global Intercompany System (AGIS) - I bet you didn't see that name coming!