Accounting Flows in Oracle Applications

Given below are the accounting entries generated by ERP in case of Procure to Pay,
Production and Order to Cash Cycles. his is given in the the conte!t of OP" being used in
the i#ple#entation.
Cycle: Procure to Pay
$. Enter PO% Accounting &#pact 'il
(. Enter a receipt%
)))))))))))))*ebit ))))))))&nventory Receiving Account
)))))))))))))Credit)))))))) AP Accrual Account
+. &nspect and Accept% Accounting &#pact 'il
,. *elivery to stoc-%
)))))))))))))*ebit )))))))))&nventory Account
)))))))))))))Credit ))))))))&nventory receiving account .&/P0
1. Enter PO "atched &nvoice
)))))))))))))*ebit )))))))))AP Accrual Account
)))))))))))))Credit ))))))))/upplier 2iability Control Account
3. Enter pay#ents against the invoice
)))))))))))))*ebit )))))))))/upplier 2iability Account
)))))))))))))Credit ))))))))Cash 4 5an- Account
As can be seen inventory receiving account which gets debited in step ( above, gets
reversed in step ,. his is an account re6uired by the ERP and #ay not be found in the
standard chart of accounts of the organi7ation. 5alance in this account i#plies that either
the received ite#s are yet to be delivered to the store .8uantity is not available in stores0 or
that the accounting entries in step , have not yet been posted to G2. &n the OP" scenario,
since the posting to G2 ta-es place at #onth end, the second reason is #ost li-ely the
cause of balances in this account.
he finance user nor#ally ta-es so#e ti#e before he clearly understands the significance
of this account. his is a contra to inventory account and hence is to be considered as a
balance sheet account. he above two factors vis. the non fa#iliarity of the user and this
being a balance sheet account #eans that in a P92 focussed accounting environ#ent, this
account generally goes unobserved and so#eti#e piles up huge balances which causes
#uch heartburn at year end when the auditor as-s so#e probing 6uestions.
his account is set up for each receiving organi7ation and is set up in the purchasing
#odule under receiving options.
Another contra account is the AP Accrual Account. his is the contra to the liability and it
recogni7es an accrued liability where the incidence is not clear. &n &ndia so#eti#es this
account is called :Provision for purchases:. his account will get a credit entry in step ( and
will get reversed in step 1 when PO "atched invoice is entered in the syste#. As this
i#plies, the balance in this account #eans that PO "atched invoices are not entered in the
syste# or that the accounting entries for those invoices are not transferred to G2.
&n OP" scenario, this account gets pic-ed for# the account #apping in OP" Cost
"anage#ent #odule under "AC ."anufacturing Accounting Controller0 set up for account
title :AAP:.
/upplier liability account is the Creditor Account, co##only called as :/undry Creditors: in
&ndia. &n Oracle it is called the A P 2iability account. his account is set up when you set up
the supplier site infor#ation in Oracle Purchasing 4 AP.
5an- 4 Cash account is lin-ed to the ban- that you set up in AP.
&n OP" /cenario, the &nventory Account is #apped in OP" Cost #anage#ent #odule
under "AC set up for account title :&';:
he accounting entries #entioned in step ( above auto#atically #ove to G2 interface table
on creation. hese will be available in the G2 &nterface table under the source :Purchasing:.
hese entries #ove to G2 <ournal tables when you run the i#port =ournals progra# in G2
for that period and that source
he accounting entries in step , will be generated in OP" "AC under *ocu#ent type
:PORC: and will get generated when you run the :/ubledger >pdate: Process and will be
#oved to G2 interface when you run the G2 update process in OP" "AC. hese will be
available in the G2 interface table under source :Purchasing 4OP":. hese entries #ove to
G2 <ournal tables when you run the i#port =ournals progra# in G2 for that period and that
source
he accounting entries generated in step 1 and 3 above will #ove to G2 &nterface when you
run the :Payables ransfer to G2: process in AP. ?hile the entries in step 1 will lie under
source :AP &nvoices: .this need to be validated0, those in step 3 will lie under source :AP
Pay#ents: .this need to be validated0. he payables transfer to G2 allows you to
auto#atically #ove the entries to G2 =ournal tables.
Cycle: OPM Manufacturing
$. 5atch Release
))))))))))*ebit ))))))))?&P
))))))))))Credit )))))))&nventory
(. /tep certification
))))))))))*ebit ))))))))?&P
))))))))))Credit )))))))RCA
+. 5atch Certification
))))))))))*ebit ))))))))&nventory
))))))))))Credit )))))))?&P
,. 5atch Close
))))))))))*ebit 4 Credit ))))))?&P
))))))))))Credit 4 *ebit ))))))C2/
All the above accounts ?&P, RCA and C2/ are set up in OP" Cost "anage#ent #odule
under "AC set up.
RCA is otherwise -nown as :Overhead absorption control account:. his is nor#ally a P92
Account and a credit to this account i#plies that the overheads used in production are
absorbed by the finished product inventory and hence the finished product inventory value
has gone up. his gets reversed when the actual overhead e!penses .wages, power, water,
rent etc0 are e!pensed in the #onth end.
/ince RCA is a P92 account with a credit balance, this could te#porarily inflate the profits
of the organi7ation. he consultant should clearly understand the significance of this
account which is nor#ally used by the cost accountants.
C2/ is the the :?&P clearing account:. his nor#ally gets a balance in the standard costing
scenario if the su# of the costs of the raw #aterials and the resources is different fro# the
standard cost of the finished product. his account can also get a balance in the OP"
P"AC .Period "oving Average Costing0 scenario when a batch is released in one costing
period and co#pleted 4 closed in the ne!t account period. &n such scenario, this account is
to be clubbed with ?&P.
he accounting entries in the above , steps will be generated in OP" "AC under
*ocu#ent type :PRO*: and will get generated when you run the :/ubledger >pdate:
Process and will be #oved to G2 interface when you run the G2 update process in OP"
"AC. hese will be available in the G2 interface table under source :OP" Production
"anage#ent:. hese entries #ove to G2 <ournal tables when you run the i#port =ournals
progra# in G2 for that period and that source.
Cycle: Order to Cash
$. Enter /ales Order% Accounting i#pact 'il
(. /hip ite#s
)))))))))))*ebit )))))))))PCO
)))))))))))Credit ))))))))&nventory
+. Enter invoice
)))))))))))*ebit )))))))))Receivables
)))))))))))Credit ))))))))Revenue
,. Enter receipts
)))))))))))*ebit )))))))))Cash 4 5an-
)))))))))))Credit ))))))))Accounts Receivables
PCO is set up in OP" "AC. &t is also called the COG/ .Cost of Goods /old0 account. his
consists of two parts% Cost of #aterials sold .nor#ally -nown as #aterial consu#ption0 and
cost of Overheads .Overheads consu#ption0. hrough the use of :/election Priority: "AC
allows you to direct the accounting entries to different accounts thereby #a-ing the
preparation of P92 reports #uch easier.
Accounts receivables .also -nown as :/undry *ebtors: in &ndia0 and Revenue Accounts are
set up in the Accounts Receivables #odule. he autoaccounting set up feature in Oracle
AR provides a lot of fle!ibility to consultant to account different transactions through
different accounting rules if re6uired.
'ote% Oracle Provides a lot of fle!ibility to the consultant in accounting the transactions.
@owever it is better to stic- to -nittings and provide a si#ple and intuitive accounting
solution rather than using a lot of accounting rules which could increase the intensity of
training and -nowledge transfer re6uire#ent in the organi7ation.
he accounting entries in step ( above will be generated in OP" "AC under *ocu#ent
type :O"/O: and will get generated when you run the :/ubledger >pdate: Process and will
be #oved to G2 interface when you run the G2 update process in OP" "AC. hese will be
available in the G2 interface table under source :OP" Order "anage#ent:. hese entries
#ove to G2 <ournal tables when you run the i#port =ournals progra# in G2 for that period
and that source.
he accounting entries in step + and , above will be generated in Accounts receivables
#odules and will #ove to G2 &nterface table when you run the :G2 ransfer: Progra# in AR.
?hile the entries in step + will lie under source :&nvoices: .'eed to be validated0, those
under , will lie under source :Receipts: .'eed to be validated0. hese entries #ove to G2
<ournal tables when you run the i#port =ournals progra# in G2 for that period and that
source.
And finally , the :Posting: process in G2 #oves all the transactions fro# G2 =ournal tables to
the G2 5alances able fro# where you can print out all the re6uired financial reports.

E#ail his 5loghisA /hare to witter /hare to Fa
Below is the collection of most widely used API's in Oracle Process Manufacturing.
We will post the wrapper programs for these api's soon.
OPM Area API Name DESCRIPTION
Formula GMD_FORMULA_PUB Public Formula
eader pac!agethat the user
defined functioncalls. "he
business API can be used for
creating# modifying# ordeleting a
formula header. While creating a
Formula header the API also
creates $etail and %ffecti&ity
associated with this header.
Formula GMD_FORMULA_DETAIL_PUB Public Formula
$etail pac!agethat
the wrapper or user
defined function calls.
"he business API can be used
for creating# modifying#
ordeleting a formula detail.
Formula GMD_FORMULA_EFFECTIVITY_
PUB
Public Formula
%ffecti&itypac!age that
the wrapper or user
defined function calls. "he
business API can be used for
'reating# Modifying# or deletinga
formula effecti&ity.
Recipe GMD_RECIPE_EADER Public (ecipe API that the user
defined function calls.
Recipe GMD_RECIPE_DETAIL Public (ecipe API that the user
defined function calls.
Recipe GMD_RECIPE_FETC_PUB Public (ecipe API that (ecipe
eader and (ecipe $etail APIs
call.
Recipe GMD_FETC_VALIDITY_
RULES
Public (ecipe API that (ecipe
eader and (ecipe $etail APIs
call.
Rou!i"#$ GMD_ROUTINGS_PUB Public (outing pac!age that the
user defined function calls. "he
business API is used for
creating# modifying# or deletinga
routing header.
Rou!i"# S!ep$ GMD_ROUTING_STEPS_PUB Public (outing pac!age that the
user defined function calls. "he
business API is used for creating
or modifying routing steps
associated to the routing header
Rou!i"#
Depe"%e"c&
GMD_STEP_DEPENDENCY_
PUB
Public (outing pac!age that the
user defined function calls. "he
business API is used for creating
or modifying routing step
dependency information
associated to the routing steps.
Opera!io"$ GMD_OPERATIONS_PUB Public Operation pac!age that
the user defined function calls.
"he business API is used for
creating# modifying# or deleting
a operation header. When
creating an operation header#
the API also creates acti&ities
and resources associated with
this header.
Opera!io"
Ac!i'i!ie$
GMD_OPERATION_
ACTIVITIES_PUB
Public Operation Acti&ities
pac!age that the wrapper or
user defined function calls. "he
business API is used for
creating# modifying#
or deletingoperation acti&ities.
When creating an operation
acti&ity# the API also creates
operation resources associated
with this operation acti&ity.
Opera!io"
Re$ource$
GMD_OPERATION_
RESOURCES_PUB
Public Operation (esources
pac!age that the wrapper or
user defined function calls. "he
business API is used for
creating# modifying# or deleting
operation resources.
Ac!i'i!ie$ GMD_ACTIVITY_PUB Public Acti&ity pac!age that the
user defined function calls. "he
business API is used for
creating# modifying#
or deletingacti&ity information.
S!a!u$ GMD_STATUS_PUB Public API that modifies the
status for routings#
recipes#operations# and &alidity
rule)
Re$ource$ GMP_RESOURCES_PUB Public le&el pac!age used for
creating# updating#
and deletinggeneric resources in
OPM.
Re$ource$ GMP_RESOURCE_DTL_PUB Public le&el pac!age used for
creating#updating#
and deletingplant resources in
OPM.
Re$ource$ GMP_RSRC_AVL_P(G Public le&el pac!age used for
resource
a&ailability calculations.
Ge"eral *MP+'A,%-$A(+API Pu)lic le'el pac*a#e u$e% +or
+e!c,i"# %a!a +rom !,e OPM
S,op Cale"%ar- T,e$e API$
are u$e% )& OPM Proce$$
E.ecu!io"