New Oracle Financials Blog

There is a new Financials blogger on the block and her name is Theresa Hickman.  I have been fortunate to work with Theresa during her time managing the product management teams for General Ledger and Accounts Payable products and her time working in the financials strategy team, she's very knowledgeable,  dedicated and a big asset to Oracle.  Already she's doing some good stuff in her new role in Financials Product Marketing.  So check out her Financials Blog, where she covers Oracle product items and general finance topics such as latest news on IFRS.  She also has a twitter account @OracleFMS which is worth following if you even have a passing interest in finance topics.

If you have any other blogs of interest or tweeters, please share them with all the readers in the comments below.

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.

Financial Services Accounting Hub (FSAH)

Financial Services Accounting Hub or FSAH (pronounced F-saa apparently) is a great product and is not only for Financial Services companies either, I understand we'll sell it to anyone.

From a (very) high level perspective it allows you to use Oracle SLA and GL to perform the accounting for third party applications. Companies the Financial services industry tend to build a lot of highly complex applications (e.g. loan systems, trading systems) in house, but they want the final accounting of transactions form these disparate system to end up in the same place and it will be nice if they can re-use the same accounting rules too.

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

Intercompany Invoicing in AGIS

One of the key features introduced with the new Advanced Global Intercompany (AGIS) in R12 of Oracle E-Business Suite is the ability to create documentation for Intercompany transactions. The correct documentation is required in many countries for Intercompany trading, this essentially means I need to provide a Receivables Invoice for the Legal Entity Providing the goods or service and a payables invoice for the receiving Legal Entity. These invoices should have any taxes that are applicable in the jurisdictions, for that type of service.

We do not firce you to create invoices for all Intercompany Activity, you can still create just a GL Journal entry if you prefer. The AGIS transactions flow is illustrated in the diagram below.



You can see that we check if invoices are required and there are two places that we look for that.

Why do I need another period ?

In R12 we introduced AGIS periods that control the transactions entered in AGIS, this is a feature that is often misunderstood. The usual question is - Why do I want another period? I'll give some ideas why you might want one, but if you decide you don't need one, don't worry we made it optional so you don't have to use it. If you decide to use it just pick one of your GL Calendars to use for your Intercompany periods, if you never enter a calendar in the system options periods will not be enabled and you can enter transactions whenever you want with no interference from the system.

So, I ask again - Why do I want another period ?

Friday Night Writes

My primary reason for starting this blog was to discuss issues customers asked me a lot at about at Open World and on various forums. My rationale being that if I blog about our products we might help people understand them and a) Make informed choices implementing them, get more value from them and maybe log less support calls and bugs for us to look at; b) Learn how people use our apps, or why they can't use them and be in a position to engineer better apps. What I didn't have in mind was being able to sound off about whatever I want to on a Friday night and people actually read it and link to it from other blogs, which is dangerous because it just encourages me. I was also encouraged this week reading Meg's girl on a rant, nice to see other people getting things off their chest too. The last few days I've been thinking about what I wrote about Google last week. Why? Because on Monday I was asked by Terrance if I could go to the Google office and talk to them about Intercompany. Doh! My first question was,