Useful Feature of Oracle Financials - Accounting Automation

Lets learn some quick key points of this feature

1. Accounting automation automatically runs your daily activities of accounting process.

2. Accounting automation takes out the exception errors.

3. Accounting automation sends the error exceptions directly to the concerned user.

How to enable it:

1. Go to setup and maintenance

2. Click on task and then on offerings

3. Select offerings - Financials

 Consolidation Concepts to be kept in mind

Things to keep in mind while doing consolidation

1. Elimination of intercompany entries -  Elimination of entries which are recorded within internal subsidiaries as we don't want to include them in our consolidation as we need to see the true picture of third party transactions.

2. Eliminate Minority Interest - Eliminating minority interest percentage value from the retained earnings account so that true picture of how much the company has the holding percent is shown in financial results.

 Earned and Unearned Discount in Receivables

Lets understand this in easy words

1. Earned Discount - Given to the customer if the payment is received before the payment term expiry. It is given according to the setup done.

2. Unearned Discount - Given to the customer after the payment terms expiry and if the discount is to be given intentionally over and above the invoice amount.

 Receivables - Invoicing rules and accounting rules

Lets learn some quick concepts of Invoicing rules and Accounting rules in Oracle Receivables

So, there are 2 rules  :

1. Invoicing rules - These are applied on the invoice header level. They are of 2 types - bills in arears and bills in advance. 

Bills in arears - Recognize the receivable at the end of the revenue recognition.

accounting entry - unbilled receivable Dr

                              Revenue Cr

                              Receivable Dr

                              unbilled receivable Cr

Bills in advance - Recognize the receivable at the start of the revenue recognition.

accounting entry - Receivable Dr

                               Unearned Revenue Cr

                               

                               Unearned revenue Cr

                               Revenue Dr

2. Accounting rules - Applied at the line level. Could be applied at each line separately. 

Types - Fixed, Variable, Duration, daily revenue all periods and daily revenue partial periods.

 Types of Pre-Payments

Lets understand in simple words the meaning and types of pre-payments

Pre-Payment - 

A payment that you make to the suppliers in anticipation of their goods and services. In other words its an advance payment to a supplier.

Types:

1. Temporary - 

For which you ought to receive an invoice in near future. For eg - Deposit to a hotel

2. Permanent - 

No invoices to be received in the future. For eg - lease deposit.

 Adjustments in Fixed Assets

Cost adjustment of a fixed asset

In this short article, I would quickly tell you the 2 types of adjustments in fixed asset module

1. Expense Adjustment - Prospective

2. Amortized Adjustment - Retrospective

Expense Adjustment - In simple words it is that adjustment which calculates the depreciation on the latest cost adjustment done by dividing it with the life of the asset.

Amortized Adjustment - In simple words it is that adjustment which calculates the depreciation by subtracting the depreciation till date from the new cost adjustment done.

Pre-requisites - Run the depreciation and close the period.

 

Accounting &reporting sequence in oracle cloud

 What is Accounting and reporting sequence in oracle cloud

 

 

In this post we will see accounting and reporting sequence in detail in oracle cloud. We will also see the importance of accounting and reporting sequence. 

 

 

What is a sequence?

 

A sequence is a unique number generated by the system and assigned to an application transaction, which is used to uniquely identify the transaction in the system.

 

For example each transaction in the system in general ledger is assigned a unique sequence in ascending order, a missing number in the sequence would probably denotes that the journal is deleted and raises a flag for auditors.

 

What is accounting and reporting sequence in oracle cloud?

 

What is Accounting sequence ?

 

Accounting sequence is assigned to a GL journal once the journals are posted and is assigned to a subledger transaction / journals once they complete accounting.

 

 

What is Reporting sequence? 

 

Reporting sequence is assigned to a GL journal or a subledger journal transaction once we perform the period closure. Once we close the period in general ledger , the system it self triggers a child program "Create reporting sequence" and assigns reporting sequence to the journals. 

 

 

 

What is journal entry type and sequencing event in accounting and reporting sequence?

 

1) Journal entry type : General ledger 

 

    Sequencing event : Posting 

 

    This combination will create the accounting sequence for the general ledger journals.

 

2) Journal entry type : General ledger 

 

    Sequencing event : Period Close

 

    This combination will create the reporting sequence for the general ledger journals.

 

 

 

3) Journal entry type : Subledger

 

    Sequencing event : Subledger Accounting

 

    This combination will create the accounting sequence for the subledger journals.

 

2) Journal entry type : Subledger 

 

    Sequencing event : Period Close

 

    This combination will create the reporting sequence for the subledger journals.

 

 Accrue at Receipt and Accrue at Period End

'

Accrue On Receipt means that when a receipt is saved, accrual transactions are immediately recorded and sent to the general ledger interface. This is also known as "online" accruals. 


 Accrue at Period End means that when a receipt is saved, the accrual transactions are not immediately recorded and sent to the general ledger; instead, the accounting entries are generated and sent at the end of the month by running the Receipt Accruals - Period-End Process. 

All items with a destination type of either Inventory are accrued on receipt. 

For items with a destination type of Expense, you have the option of accruing on receipt or at period end.

 Related Value Sets

In this article you will about the new feature provided by Oracle - Related Value Sets

Lets look into the below article for more insights.

With new updates to the Cloud Solution, Oracle has now introduced the concept of Related Value Sets in the Chart of Accounts. This functionality enables the users to define the relations between different segments and their values while defining the Chart of Accounts Values. With this functionality, we can now restrict the values in one of the segments based on the value selected in another segment, thus eliminating the need to define cross-validation rules and reducing the dependence on Segment Value Security Rules.

Benefits :

 This functionality offers the following benefits to the organization as a whole:

 • This feature reduces the possibility of entering incorrect account combinations since the value set relationship automatically applies valid value filters to succeeding segments.

 • This reduces the need for having to define large numbers of cross-validation rules and the associated cost incurred for otherwise maintaining them.

 • This results in improved performance during data entry because the application doesn't have to repeatedly scan through a large number of cross-validation rules before determining that a new account combination is a valid one.  

Configuration:

Upload of Values in Related Value Set is possible, which also defines the relationship with the driving segment values.

 Import Method: Upload the File in the below format in File Import & Export under Account fin/general ledger/import 

To process the file, Navigate to Chart of Accounts Value Sets, Search for the Value Sets, in search results, click on Action & Import Related Values. 

 Provide the file names for both value sets and value set values.

ESS Route: After uploading the file in File Import & Export, submit the process - ESS Process for Applcore csv file upload as below

Oracle Financials Cloud 22A Highlights 

To get the information on the latest value additions in 22A, please click on below link.

Oracle Financials Cloud 22A What's New