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Oracle Applications
Release12.1.1


Oracle SLA

White Paper







GreenChain Software Solutions Pvt Ltd
www.greenchain.biz






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Contents
Oracle SLA ............................................................................................................................................................................ 4
Transaction flow of SLA to GL: ......................................................................................................................................... 5
Account Generators vs. SLA ............................................................................................................................................. 6
Prerequisites Setups ........................................................................................................................................................... 7
Subledger Accounting Options Setup ............................................................................................................................. 7
SETUP PAGES ....................................................................................................................................................................... 7
Accounting Method Builder (AMB) ..................................................................................................................................10
NAVIGATION TO SLA FORM: ................................................................................................................................................. 11
COMPONENTS OF AMB ........................................................................................................................................................ 12
STEPS TO DEFINE RULES IN SLA ......................................................................................................................................... 20
User Configurable - Scenarios .........................................................................................................................................21
SCENARIO 1 DEFINE DIFFERENT LIABILITY ACCOUNT BASED ON SUPPLIER TYPE ................................................................. 21
SCENARIO 2 - DISPOSAL CHARGED TO SPECIFIC COST CENTRE ........................................................................................... 33
Commonly Used Reports ..................................................................................................................................................33
Important Backend Tables ................................................................................................................................................33
Glossary ...............................................................................................................................................................................34





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Oracle SLA

Oracle Sub Ledger Accounting is a set of services for R12 that significantly enhances accounting support
across the E-Business Suite.
Subledger Accounting is a Service, not an application. There are no SLA Responsibilities and there is no direct
login to SLA. SLA forms and programs are embedded within the Standard Oracle Application responsibilities
(Eg. Payable Manager)
SLA is :
Simply a rule-based engine, tool set & repository supporting Oracle E-Business Suite Modules
Allows multiple accounting representations for a single business event, resolving conflicts between
corporate and local fiscal accounting requirement
Retains the most granular level of detail in Subledger accounting model, with different summarization
options in General Ledger, allowing full audibility and reconciliation
Introduces a common data model and UT across Sub-ledger, replacing disparate 11i setups, proving a
Single source of truth for financial and management Analysis

Participating sub-ledgers include:
Payables
Receivables
Projects
Assets
Cash Management
Purchasing
Cost Management
Process Manufacturing






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Transaction flow of SLA to GL:




Create Accounting



Journal Import



Posting












Transaction
Creation
SLA Journal Entry
GL Journal Entry
GL Balances



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Account Generators vs. SLA

Account Generators are special workflows which automatically construct Accounting Flexfield combination
using Oracle or User-defined business rules. Seeded Account Generators can be utilized to generate
accounts. If special business needs exists, Users can modify the Account Generator based on Oracle rules
that must be followed when customizing the Account Generators.
Below are the Cons which has resulted in transition to SLA:
Some Account Generators require Customization
Patching can often overwrite Customized Account Generator
Customizations are not protected during Upgrades
Database has to be bounced for changes to account generators to go into effect
There are a couple of key points worth highlighting here as well:

Most of the sub-ledgers continue to use their existing (11i) methods to derive the accounting which
users see in Distribution windows. For example:
- Receivables still uses Auto Accounting to default invoice accounting
- Projects still use Auto Accounting to default revenue accounting and an Account Generator to default
P2P expenditure accounting
- Assets may use an Account Generator to derive its account codes

In most cases SLA picks up this account code as the default source for its account derivation rules. By
default, it will simply pass this through to GL, however SLA also allows you to modify this if you wish to

In cases where you have a choice between methods (for example in Assets where the profile option
FA: Use Workflow Account Generation allows you to opt to bypass the use of the Account Generator),
its recommend to consider going directly to the newer technology i.e. SLA, (rather than investing
further in a workflow based method whilst knowing that workflow technology will not be used in the next
generation Fusion Applications)











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Prerequisites Setups
1. Set up a subledger application in the Accounting Methods Builder (AMB) Please refer Accounting
Method Builder
2. Set up ledgers in General Ledger Please Oracle General Ledger Student User guide for setup
Sub ledger Accounting Options Setup
Set up Pages

What:
Define how journal entries are generated from subledger transactions at the subledger application level for
both Primary and Secondary Ledgers

Why :

To customize basic accounting attributes like entered amount, accounted amount, Date, Currency code etc and the complex attributes
like Ledger, Code Combination ID, Periods etc. and there interface to GL from SLA

How :
Below are the Subledger Accounting Options Setup Pages which are accessed from General Ledger :
1. Subledger Applications
(N): Setup > Financials > Accounting Setup Manager > Accounting Setups

In this page, select the application to update and the Update Subledger Accounting Options page opens. You
can choose to disable Subledger Accounting for a particular application in the Update Accounting Options
page of a secondary ledger



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2. Update Accounting Options
(N): Setup > Financials > Accounting Setup Manager > Accounting Setups > Accounting Options > Subledger
Applications > Click on Update


This page displays the Subledger Accounting options for the ledger and the Subledger application. Review and
update the options. The view for this page depends on the Subledger application type (valuation method or
nonvaluation method) and the ledger type (primary or secondary).

Click on Update Accounting Options against the relevant Application to update the Accounting Options.


Update Accounting Options
General Ledger Journal Entry Summarization: Determines the level of summarization of subledger journal
entries, whether by GL Period /GL Date / None, when transactions are transferred to General Ledger



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Reversal Method: Determine how the reversal subledger journal Entries are generated in Subledger
Accounting for a given application and ledger, whether by reversing the Debit for a credit or sign is changed
keeping reversal entry same side as the original entry

Rounding Rule: Determines the option for rounding to Up/ Down / Nearest value

Third Party Merge Accounting Options: Determine the option of merging third party account
Accounting Program Defaults
Default options are used when running the Create Accounting program and are applied to the following:
Primary ledgers
Secondary ledgers for applications subject to value method subledger
Accounting Program Mode: Determines a default value for the parameter in the standard report submission
window to determines how subledger journal entries are created

Allow Mode Override: Determines whether users can override the value specified in the Accounting Mode
parameter

Transfer to GL: Predefines whether the Transfer to GL and the General Ledger Import should occur
automatically

Allow Transfer Override : Determines whether users can override the value specified in the Transfer to GL
parameter in the previous field

Post in GL : Predefines whether the GL Posting should occur automatically

Allow Post override : Determines whether users can override the value specified in the Post in GL

Accounting Report Level : Determines whether the Create Accounting report is generated in Detail or
Summary mode

Stop at Error Limit : Controls the execution of the Create Accounting program. Users can set the Create
Accounting program to stop when a certain number of events, specified in the Error Limit field, fail to create
subledger journal entries

Error Limit : Specifies the maximum number of failed events allowed before the Create Accounting program
stops creating subledger journal entries when submitting a batch of documents

Event Class Options
Describes the defaults for event class options that can be overridden at a Journal Category and Use Document
Sequence

3. Update System Options



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(N): Setup > Financials > Accounting Setup Manager > Accounting Setups > Accounting Options > Subledger
Applications > Click on Update > Click on Update System Options



Defines the processing unit size at the event class level to process a large number of items in one commit
cycle.The
Create Accounting program processes the default processing unit size at the application level.
Accounting Method Builder (AMB)

A set of Screens which provide the flexibility to create your own Subledger accounting setup or use the seeded
subledger accounting setup

Enables to create and modify subledger Journal line setups and application accounting definitions. These
Definitions define the Journal Entries that enable the organization to meet the fiscal, regulatory and analytical
requirements. It Supports logic such as prioritization and conditional statements without using SQL. Also, User-
define SAM retained can be during patching and upgrades




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Each Ledger is assigned to Subledger Accounting Method (SLAM)
Subledger Accounting method tells what type of accounting method is used i.e., Cash or Accrual in the
ledger
Under SLAM, set of Application Accounting Definition (AAD) is defined for different Subledger
Under AAD, set of Journal Line definitions( JLD) for each Event Class (Ex. Invoices, Prepayment,
Payments) and Event Type (Ex. Invoice Validation, Prepayment application, Payment Created)
combination is defined
Each JLD, hold group of Journal Line Types (JLT Ex. Liability, Item Expense, Gain, Loss etc.,) ,
Account Derivation Rules ( ADR Ex. GL Accounts ) and Journal Entry Description ( JED Ex. Check
Details)
JLT type contains:
Accounting Attributes (Ex. Accounting Date, Accounting amount, Party Id etc.,)
Basic info which determines Journal line properties (Ex. Side Dr/Cr, Balance Type Actual
/Encumbrance, Transfer to GL - Summary or Details etc., )
Condition


Navigation to SLA Form:

Although SLA is a separate product, it may be helpful to think of it as a service rather than a separate
Application, since it is accessed via the existing sub-ledgers

For instance, below screen shows SLA for Payables :



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Components of AMB

Subledger Accounting Method (SLAM) :
Its a collection of accounting definition for all the applications that you will be generating accounting for.Each
Primary and Subledger Level or Secondary Ledger is associated with a SLAM, which determines the rules and
standards that will be applied when generating entries for a ledger
Example:
Standard Accrual, Standard Cash etc.,



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Application Accounting Definition (AAD):
Use the Application Accounting Definition to Assign Journal Line Definitions and headers to event classes and
event types. AADs must be included in a SLAM and assigned to Ledger. You can group AAD from multiple
products, such as Oracle Payables, Receivables Assets into a Single Accounting Method



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Journal Line Definition (JLD)
Journal Line Type, description, account derivation rules grouped together as a Journal Line Definition to create
the rule for a particular event type



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Journal Line Type (JLT)
Its specifies if the Journal line is to be debit, credit or gain/loss line.
Business Flow method determines of and how a journal line should inherit journal entry values
It specifies whether to apply a multiperiod accounting to a journal line type
Switch Debit/Credit is Yes, always keep positive amounts in Journal lines.For example, Dr -500 is
displayed as Cr +500



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Account Derivation Rules (ADR)
ADR are used to determine the account combination for Subledger journal entries. We can various rules to
determine how a journal entry account is derived. The account code combination can be derived segment by
segment or as a complete account code combination.
The below accounting derivation rule is placed with conditional logic. If the condition holds for priority 1, then
this source (Invoice Liability account) is used. If not, SLA uses the source for the priority 2 (if its available)




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Journal Entry Description ( JED)
This is useful in finding the the actual transaction object details (Ex. Invoice/Payment details from Journal line)
Transaction Objects
Transaction object is nothing but a view which all the transaction information required to create Journal line
for particular event class
AP_INVOICE_EXTRACT_HEADER_V, AP_INVOICE_EXTRACT_DETAILS_V are transaction objects for
even class invoices. So, accounting for all the invoice type events gets the transaction information from the
transaction objects



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Sources
Each Column in the transaction object is define as source in the AMB. AMB uses these sources to get the
transaction information from transaction objects.



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Accounting Attributes
Sources are mapped with accounting attributes. Accounting attributes is the bridge between JLT and Sources.
For example, GL Date, Entered currency code, Entered amount , Accounted amount, Conversion rate date




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Steps To Define Rules in SLA

The screens used are Accounting Methods Builder (AMB). Below are the Steps which need to be followed for
modifying the Subledger Accounting Method:
1. Determine Accounting Requirement
2. Create a new Sub-ledger Accounting Method.
3. Create a new Application Accounting Definition by copying the existing one for Receivables.
4. Create a new Journal Line Definitions by copying the seeded one. Provide the chart of accounts name
in the Accounting Field.
5. Create a Mapping Set ( Optional)
6. Attach the new Journal Line Definitions to the Application Accounting Definition and remove the seeded
value.
7. End date the existing Application Accounting Definition assigned to the Subledger Accounting Method
and attach the new Application Accounting Definition.
8. Assign the new Subledger Accounting Method to the Ledger.

Note Pre Work: Before customizing the subledger definition, ensure that new Subledger Accounting Method,
Application Accounting Definition and Journal Line Definitions are created. It is best to copy the seeded
definitions given by Oracle. Ensure that the Accounting Chart of Accounts is given in each of the three
definitions.














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User Configurable - Scenarios
In most of the cases we would not need to customize SLA. Some of the typical business scenarios where we
would need to customize SLA in Payables are as follows:
To have a different Liability account based on Operating Unit for which the invoice is entered.
To have different natural account (expense) based on different Invoice Type and Invoice Line type.
To have different natural account (expense) and different liability account based on different criteria like
supplier type, entering currency, pay group, etc.
The cost center segment of Invoice distribution Liability account shall be picked from the Invoice
distribution Account while the other segment values from the Liability account defined at supplier site.
To cater to some of the above requirements we can use other alternatives like using distribution sets also. But
setting up a custom SLA for such scenarios is an easier approach with lower user maintenance.
Below scenarios explain, how a customization is carried in SLA :
Scenario 1 Define different Liability Account Based on
Supplier Type

Business Scenario: We need to define different liability account (natural account segment) based on Supplier
Type so that business can track the liability by supplier type. The other segment values will default from
supplier site. I am limiting this example to only one supplier type Contractor". The objective would be to have a
different natural account for Liability account for invoices of supplier type "Contractor" alone, while for other
supplier types the normal liability account should default
Solution:
Step1: First define a mapping set for various supplier types.
(N): Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders > Journal
Entry Setups > Mapping Sets



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Step2: Define ADR (Account Derivation Rules)
Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups >Accounting Methods Builders >
Journal Entry Setups > Account Derivation Rules



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Step3: Define JLD (Journal Line Definition)
Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder >
Methods and Definitions > Journal Line Definitions
Always create a copy of the seeded JLD and do not modify a seeded JLD. We will create a copy of
ACCRUAL_INVOICES_ALL for our Chart of Accounts Operations Accounting Flex only. Add the custom ADR
created to Liability, Basic (Line Assignment)




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Step 4: Setup AAD (Application Accounting Definition)
Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder >
Methods and Definitions > Application Accounting Definition
Create a copy of seeded AAD only and do not modify existing AAD. I am creating a custom AAD called
TEST_AAD for COA Operations Accounting Flex.





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Step 5: Setup SAM (Subledger Accounting Methods)
Navigation: Setup > Accounting Setups >Sub Ledger Accounting Setups > Accounting Methods Builder >
Methods and Definitions > Subledger Accounting Methods
Create a copy of a seeded SAM and do not modify seeded SAM. Add the custom AAD to the Event Class
Payables.




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Step 6: Assign the custom SAM to Primary Ledger
Navigation: Set ups > Accounting Setups > Ledger Setup > Define > Accounting Setup





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Verification of new SLA rule:
Create an invoice for supplier type Contractor and create accounting
Liability Account for Supplier Type Contractor is 01-000-2990-0000-000




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Liability Account for other Supplier Types is 01-000-2210-0000-000









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Scenario 2 - Disposal Charged to Specific Cost Centre

Business Scenario: Client requires that Asset disposals ( Natural Account 8101) be charged to a specific
cost centre 210 instead of to the balance sheet i.e. 000
Commonly Used Reports

List of Frequently Used Reports:
S.no Report Name
1 Journal Entries Report
2 Account Analysis Report
3 Third Party Balances Report
4 Period Close Exceptions Report
5 Open Account Balances Listing
Important Backend Tables
XLA_EVENTS : The table Stores records for accounting events generated by Subledger applications. Each
Product team populates this table by calling Subledger accounting API and the respective product team will
decide when this table is to be populated during the transaction life cycle
XLA_AE_HEADERS: The table stores Subledger Journal Entries. There is one-to-many relationship between
accounting events and journal entry headers
XLA_AE_DISTRIBUTION_LINKS: The table stores detailed distribution for Journal Entries. This table Stores
the data at the most granular level and represents data contained in the respective subledger products
distribution tables. The detailed distribution stored in this table are merged into accounting lines and stored in
XLA_AE_LINES table. Subledger Accounting uses this table for processing reversals and business flows.
XLA_AE_LINES : The table stores the Subledger Journal Entry lines. There is one-to-many relationship
between the subledger journal entry headers and subledger journal entry lines. This table will store at least one
row for debit and one row for credit for each accounting entry created. If multiple debit or credit journal entry
lines exists for any specific event type and if the journal line type allows merging matching lines then these will
be merged into Single line.The unmerged granular level of detail for each accounting line will be available in
XLA_DISTRIBUTION_LINKS table






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Glossary

Processing Unit
A processing unit is the number of transactions processed by the Create Accounting program in one commit
cycle

Event Model:
Its defined as a Subledger transaction types and life cycle
Event Entity:
Group event classes into technical transaction models called Event Entities. For instance, group the event
classes invoices and prepayments into the event entity Invoices, because both classes of transaction are
stored in payables invoice transaction table (AP_INVOICES_ALL). Event entities enable you to treat events for
a single transaction model in the same way. The event entity often logically corresponds to a single document
used as a basis for several related transactions
Event Class:
It classifies transaction types for accounting rule purposes. For example, group the event types invoice
approved, invoice adjusted and invoice cancelled into event class invoices. Then assign AMB components,
such as JLT, by event class within the application accounting definition. This assignment simplifies setup when
the accounting requirement for all the event types in a class is the same. Also, sources assigned to an event
class are available for accounting of all event types in that event class
For example Payables: Invoices, Debit Memo, Credit Memo, Prepayments and Refunds
Event Type:
Each accounting event should be represented by an accounting event type. These types are registered in
AMB. When subledger journal entries are created, the event type determines which application accounting
definitions should be used to process the accounting event. Application accounting definitions created in the
AMB determine the lines, description, accounts and other elements of Subledger journal entries
For example AP Invoice Events: Validation, Adjusted and Cancelled
Transaction Chart of Accounts:
The transaction chart of accounts is the chart of accounts for the primary ledger and is referenced when users
enter Accounting Flexfields for their transactions. This chart of accounts is employed when users enter and
maintain the data required to support the daily operations of a company






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Accounting Chart of Accounts :
Use the accounting chart of accounts to create the Accounting Flexfields for subledger journal entries. It is
taken from the ledger for which the journal entries are created. Account derivation rules derive accounts for a
specific accounting chart of accounts. The creation of all journal entries by Subledger Accounting is therefore
done in the context of the accounting chart of accounts.

The transaction and accounting charts of accounts are always the same for the primary ledger. They can be
different in cases where users create secondary multiple representations

Mapping Set :

Mapping sets helps to associate a specific output value for an Accounting Flexfield or Accounting Flexfield
segment. Based on the input value, a specific value can be assigned to a single segment or to the entire
Accounting Flexfield. Use mapping sets in account derivation rules to build the Accounting Flexfield

Multiperiod Accounting:

Multiperiod accounting enables users to create accounting for a single accounting event for more than one GL
period. The functionality is primarily used to recognize revenue or a prepaid expense or revenue across
multiple GL periods

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