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Contents
Chapter 1: System Analysis and Designing business process .................................... Page 6-8
System Analysis ................................................................................................................
Designing business process ..............................................................................................
Chapter 2: Overview of ERP ................................................................................ Page 9-11
Chapter 3: Oracle E-Business Suite Essentials ..................................................... Page 12-21
Login to Oracle E-Business Suite ..............................................................................................
Create a New Employee ...................................................................................................... 12
Create a New User ..................................................................................................................
Responsibilities in Oracle E-Business .......................................................................................
Oracle Toolbar Icons ...............................................................................................................
Navigator Window .............................................................................................................. 16
Entering Data in Oracle ...........................................................................................................
Keyboard Shortcuts .................................................................................................................
Setup Steps Type .....................................................................................................................
Part B - ERP Financials ........................................................................................................
Chapter 4: General ledger .................................................................................. Page 22-63
General ledger-setup ..........................................................................................................
Creating Chart of Accounts ......................................................................................................
Defining Key Flexfield Accounting Flexfield ......................................................................
Defining Segments ...........................................................................................................
Defining Flexfield Qualifiers .............................................................................................
Defining Values ................................................................................................................
Defining Calendars ..................................................................................................................
Creating New Calendar ....................................................................................................
Defining Currencies .................................................................................................................
General ledger-Journal Entry ..............................................................................................
Journal Entry Types .................................................................................................................
Manual Journal Entry ..............................................................................................................
Recurring Journals ...................................................................................................................
MassAllocations ......................................................................................................................
Explanation of Buttons on Different Forms ......................................................................
General ledger-Journal Inquiry ...........................................................................................
Account Inquiry .......................................................................................................................

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General ledger-Budgeting ...................................................................................................
Chapter 5: Financial Reporting ........................................................................... Page 64-70
Designing Financial Statements Generator (FSG) Reports .................................................... 64
Row definition.........................................................................................................................
Columns ..................................................................................................................................
Content Sets ...........................................................................................................................
Row Order...............................................................................................................................
General Ledger Closing............................................................................................................
Steps prior to Period Closing ............................................................................................
Period Closing Steps .........................................................................................................
Chapter 6: Financials – Accounts Payable ........................................................... Page 71-92
Payable-Overview ...................................................................................................................
Invoices ...................................................................................................................................
Standard Invoice ..............................................................................................................
Entering Credit Memo / Credit Note ................................................................................
Oracle Payable Set up .............................................................................................................
Financial Options ......................................................................................................... 80
Period End Closing ..................................................................................................................
Steps prior to Closing .......................................................................................................
Reconciling Payables ........................................................................................................
Chapter 7: Financials – Accounts Receivables .................................................... Page93-133
Receivables- Overview ............................................................................................................
Creating an Invoice in Receivable ........................................................................................ 94
AutoInvoice for All Outstanding Sales Order ...........................................................................
Transaction Types ...................................................................................................................
Generating Accounting............................................................................................................
Quick Transactions ..................................................................................................................
Entering Advance / Deposit from Customers ...........................................................................
Credit Memo ...........................................................................................................................
Adjusting Invoices ...................................................................................................................
Approving Adjustment .....................................................................................................
Entering Receipts ....................................................................................................................
Standard Receipt ..............................................................................................................
Miscellaneous Receipts ....................................................................................................
Reversing Receipts ...........................................................................................................

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Opening / Closing Accounting Period ......................................................................................
Period Status ....................................................................................................................
Steps prior to Closing .......................................................................................................
Steps required for Closing ................................................................................................
Chapter 8: Oracle Assets ................................................................................ Page 134-138
Setup Steps Oracle Assets .......................................................................................................
Required / Mandatory Setup Steps ..................................................................................
Oracle Assets Operations ........................................................................................................
Adding Assets ...................................................................................................................
Chapter 9: Oracle Cash Management ............................................................. Page 139-148
Setup Steps Oracle Cash Management ....................................................................................
Required / Mandatory Setup Steps ..................................................................................
Cash Management Operations .......................................................................................... 140
Creating Bank ...................................................................................................................
Creating Bank Branches ...................................................................................................
Creating Bank Account .....................................................................................................
Creating Transaction Codes ..............................................................................................
Entering Bank Statement .................................................................................................
Chapter 10: Oracle Inventory ......................................................................... Page 149-163
Receipt to Issue Life Cycle of Inventory ...................................................................................
Receiving Inventory..........................................................................................................
Transferring Inventory ............................................................................................... 151
Issuing Inventory ..............................................................................................................
Setup Steps Oracle Inventory ..................................................................................................
Required / Mandatory Setup Steps ..................................................................................
Operations Oracle Inventory ...................................................................................................
Create Items ....................................................................................................................
Items Assignment to Inventory Organization.............................................................. 155
Chapter 11: Supply Chain Management ......................................................... Page 164-166
Chapter 12: Purchasing Fundamentals ......................................................167Page 167-173
Raising Requisitions for Items .................................................................................................
Approving Requisition .............................................................................................................
Request for Quotation ............................................................................................................
Purchase Orders ......................................................................................................................
Receiving.................................................................................................................................

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Chapter 13: Order Management .................................................................... Page 174-175
Chapter 14: HRMS & Payroll Overview ........................................................... Page 176-179
Oracle Human Resources (HR).................................................................................................
Oracle Payroll ..........................................................................................................................
Oracle Self-Service Human Resources (SSHR) ..........................................................................
Oracle Performance Management ..........................................................................................
Oracle iRecruitment ................................................................................................................
Oracle Time & Labor (OTL) ......................................................................................................
Oracle Learning Management .................................................................................................
Chapter 15: ERP Implementation Strategy & Challenges................................. Page 180-187
ERP Implementation Strategies ...............................................................................................
ERP Implementation Challenges ..............................................................................................
Key Terms ..................................................................................................... Page 188-190

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Part-A Overview of ERP
Chapter 1: System Analysis and Designing Business Process
System Analysis:
The Merriam-Webster dictionary defines system analysis as "the process of studying a
procedure or business in order to identify its goals and purposes and create systems and
procedures that will achieve them in an efficient way".
While performing the system analysis the business analyst study the current business
processes, identifies improvement opportunities, and develops a concept for the new
system. There are three phases of system analysis:

Analysis Strategy: The analysis strategy usually includes a study of the current system and
its challenges / problems. It is called the as-is System study. The business analyst also thinks
about ways to design a new system. It is called to-be system study.

Requirements Gathering: The next step is requirements gathering. This is usually done by
analyzing information, conducting interviews, group workshops and using questionnaires.
This leads to development of concept for new system. The system concept is used
afterwards as a basis to develop a set of business analysis models that describes how the
business will operate if the new system were developed. It includes models that represent
the data and processes necessary to support the underlying business process.

System Proposal: The analyses, system concept, and models are combined into a document
called the system proposal. This report is presented to the key decision makers / top
management who will decide whether the project should continue to move forward.

Designing business process

Business process design is the method by which an organization understands and defines
the business activities that enable it to function. Process design is concerned with designing
a business’ process to ensure that they are optimized, effective, meet customer
requirements, and support and sustain organizational development and growth. A well-
designed process will improve efficiency and deliver greater productivity.

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The most common initiatives behind business process design projects are:

• Customer and supply chain management

• Operational performance improvement
• Business process integration and automation
• Cost reduction
• New business opportunities.

In a process improvement project, the focus of the business process design phase is to
streamline the process: to understand and measure the requirements, and to eliminate the
risk of losing value through inefficient or inappropriate activities. In a technology
implementation project, the focus is on understanding the processes that are being
automated, and ensuring that the appropriate technology is selected, configured and
implemented to support them. In both cases, the process designs activities can range from
modest (e.g. tweak existing processes and look for some quick wins) to aggressive (e.g.
identify major opportunities to increase value or drive down costs through radical process
improvement or outsourcing). In short, business process design is a tool that can serve many
different kinds of projects.

The aim of the analysis phase of a business process design project is to understand how the
processes of a business function and interact; the aim of the design phase is to improve the
way that those processes operate and interact. The purpose of the analysis phase is to:

• Understand the organization and its purpose or “mission” and relate this to the
organization’s current business processes
• Identify and analyze the collection of processes and activities currently operational
within the organization, and ascertain how far they achieve the business’s
objectives.

The results of the analysis phase are then fed into the design phase, whose purpose is to:

• investigate options for achieving improvement by redesigning the processes

currently in operation
• identify and prioritize areas for improvement
• Implement process design according to an agreed schedule.

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One of the decisions that needs to be made early in the project is what kind of analysis is
needed – strategic (“top down”) or tactical (“bottom up”):

• A strategic perspective is higher level (i.e. managers) and seeks to understand the
processes that make up the business and deliver its value.
• A tactical perspective is lower level (i.e. practitioners) and seeks to understand the
activities that support processes. It is driven by the task requirements for operational
efficiency.

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Chapter-2: Overview of ERP
Enterprise resource planning (ERP) system is a business management system that comprises
integrated sets of comprehensive software, which can be used, when successfully
implemented, to manage and integrate all the business functions within an organization.
These sets usually include a set of mature business applications and tools for financial and
cost accounting, sales and distribution, materials management, human resource, production
planning and computer integrated manufacturing, supply chain, and customer information
(Boykin, 2001; Chen, 2001; Yen et al., 2002). These packages have the ability to facilitate the
flow of information between all supply chain processes (internal and external) in an
organization (Al-Mashari and Zairi, 2000a).Furthermore, an ERP system can be used as a tool
to help improve the performance level of a supply chain network by helping to reduce cycle
times (Gardiner et al., 2002).

ERP or Enterprise Resource Planning is a module based software system. The key
functionality of the ERP is the integration of the functional areas of an organization’s
business processes into a unified system. The ERP may include the multiple modules in the
different functional areas of an organization.

ERP packages touch many aspects of a company’s internal and external operations.
Consequently, successful deployment and use of ERP systems are critical to organizational
performance and survival (Markus et al., 2000b). Potential benefits include drastic declines
in inventory, breakthrough reductions in working capital, abundant information about
customer wants and needs, along with the ability to view and manage the extended
enterprise of suppliers, alliances and customers as an integrated whole (Chen, 2001). In the
manufacturing sector, ERP implementation has reduced inventories anywhere from 15 to 35
per cent (Gupta, 2000). Among the most important attributes of ERP (Nah et al., 2001; Soh
et al., 2000) are its abilities to:

 automate and integrate business processes across organizational functions and

locations;
 enable implementation of all variations of best business practices with a view
towards enhancing productivity;

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  share common data and practices across the entire enterprise in order to reduce
errors; and
 Produce and access information in a real-time environment to facilitate rapid and
better decisions and cost reductions.

ERP allows companies to integrate various departmental information it has evolved from a
human resource management application to a tool that spans IT management. For many
users, an ERP is a “does it all” system that performs everything from entry of sales orders to
customer service. It attempts to integrate the suppliers and customers with the
manufacturing environment of the organization. For example, a purchase entered in the
order module passes the order to a manufacturing application, which in turn sends a
materials request to the supply-chain module, which gets the necessary parts from suppliers
and uses a logistics module to get them to the factory. At the sometime the purchase
transaction shows in general – a ledger module as revenue. The traditional application
systems, which organizations generally employ, treat each transaction separately. They are
built around the strong boundaries of specific functions that a specific application is meant
to cater for. ERP stops treating these transactions separately as standalone activities and
considers them to be a part of interlinked processes that make up the business (Gupta,
2000).

An overview of ERP systems including some of the most popular functions within each
module. However, the names and numbers of modules in an ERP system provided by
various software vendors may differ. A typical system integrates all these functions by
allowing its modules to share and transfer information by freely centralizing information in a
single database accessible by all modules (Chen, 2001).

The various modules of ERP include engineering data control (bill of materials, process plan
and work center data); sales, purchase and inventory (sales and distribution, inventory and
purchase); material requirement planning (MRP); resource flow management (production
scheduling, finance and human resources management);works documentation (work order,
shop order release, material issue release and route cards for parts and assemblies); shop
floor control and management and others like costing, maintenance management, logistics
management and MIS. Also, the model of ERP includes areas such as finance (financial

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accounting, treasury management, enterprise control and asset management), logistics
(production planning, materials management, plant maintenance, quality management,
project systems, sales and distribution), human resources (personnel management, training
and development and skills inventory) and workflow (integrates the entire enterprise with
flexible assignment of tasks and responsibilities to locations, positions, jobs, groups or
individuals) (Siriginidi, 2000).

Some of the top ERP’s include:

1. Oracle E-Business Suite

2. SAP ERP Solutions
3. Microsoft Dynamics ERP
4. Oracle JD Edwards
5. Oracle PeopleSoft

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Chapter 3: Oracle E-Business Suite Essentials
Login to Oracle E-Business Suite

Enter your User Name and Password. Click on Login

Create a New Employee

Responsibility: Human Resources

People > Enter and Maintain

If you have items to act on in your Work list, you

will now see them on the Oracle Applications
Home Page. You can act on them from here or
access your Work list from within a

Click on a link in the left pane of responsibility.

the Oracle Applications Home

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Page to choose a responsibility.
Create a New Employee

Create a New User

Responsibility: System Administrator

Security>User > Define

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14
Responsibilities in Oracle E-Business
A responsibility is a predefined set of data, menus and forms that define your particular
level of authority while using the system. Each responsibility provides you access to an
application, menus and set of functions through online screens. Oracle Application menus
present only the functions for which your responsibility is given permission. Each user has at
least one responsibility and several users can share the same responsibility. Choose your
initial responsibility from your home page. Within the Oracle Applications window, you can
change your responsibility by clicking the Switch Responsibilities button or select File >
Switch Responsibility from the menu bar.

Oracle Toolbar Icons

The Toolbar provides the most commonly used actions on the menu with icon buttons.

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Navigator Window
The Navigator window provides access to all forms for your responsibility via the Navigator
menu. The Navigator window consists of two tabs Functions and Documents. You can
expand and collapse the Navigator menu.

When a plus sign appears, you can expand to show more menu choices.

When a minus sign appears, you can collapse to hide menu choices.

You
u can double click the menu selection or click the open button to open the highlighted
form. Use the plus and minus buttons on the left hand side to expand and collapse the
menu.

Opens first level of menu selection

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 Closes first level of menu selection

Opens all levels of current menu selection

Opens all levels of all menu selections

selection

Closes all levels of all menu selections

selection

Entering Data in Oracle

Entering data into Oracle Applications is much like entering data into any database form.
You may:

 Highlight
ighlight data in any field to type over it
 Use your Tab key to move from field to field
 Use a list of values (LOV) to find valid values for certain fields

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  Click the Save icon (or press Ctrl-S) to save your data once you've entered the
required fields

Oracle uses different field colors to let you know about the type of field. Fields are color
coded to indicate their type as follows:

Field Color Description

Yellow Required Data Entry

Blue Field to Use in Query Mode

White Permit Data Entry

White with Green Text Indicates Drill Down Capability

Grey with Black Text Display Only

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Keyboard Shortcuts

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Setup Steps Type
There are three setups steps types at a broader level.

 Required
 Optional with defaults
 Optional

Required Setup Steps

These setup steps must be completed in order to run the application / module.

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Optional Setup Steps with Default

These are functionalities that come with pre-seeded, default values in the database. You can
review these defaults and decide whether to use these as it is or change them to suit your
business needs. In case you need to change these defaults, you should perform that setup
step.

Optional Setup Steps

You perform optional setup steps only, if you plan to use the related features or complete
certain business functions.

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Part-B ERP Financials
Chapter 4: General ledger
The General Ledger (GL) is the collector of all data—financial and accounting—that is
eventually used to produce financial reports for the enterprise. Transactions are transferred
from the Subledgers (AP, AR, PO, Inventory, and so on) to the General Ledger typically at
month-end or at periodic intervals.

The General Ledger gathers data as transactions from AP and AR are transferred to GL from
the Subledgers. A new Subledger Accounting layer manages all accounting representations
and is the conduit for accounting entries into the GL and the basis for accounting reports in
R12.

Manufacturing Other
Subledgers

Customer
Relationship
Management
Oracle General
Ledger
Projects

Oracle Financials

Human Resources
Management

Oracle General Ledger is a comprehensive financial management solution that enables you
to:
 Record and Review Accounting Information
 Import data from subsidiary ledgers, or enter journals to record actual or budget
transactions directly into Oracle General Ledger.

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  Enter encumbrance journals to track encumbrances through the purchase
process and to control spending against budgeted amounts.
 Review account balances online or through reports.
 Analyze, correct, and adjust accounting information.
 Correct actual, budget, and encumbrance information.
 Revalue and translate balances denominated in foreign currencies.
 Consolidate balances from multiple ledgers.
 Analyze Accounting Information
 Integrate Oracle General Ledger with Oracle Enterprise Planning and Budgeting,
Oracle Discoverer, or Web Applications Desktop Integrator to simplify the
budgeting and forecasting process.

Functions and Features

Information Access
Access information stored in the General Ledger through online inquiries or reporting
and analysis tools. Oracle General Ledger is the repository of your organization's
financial information.

Financial Controls
Use security features to control access to specific areas and functions of General Ledger.

Data Collection
Collect data from Oracle subledgers and non-Oracle feeder systems.

Financial Reporting and Analysis

 Select from a variety of Standard Reports and Listings.
 Use the Financial Statement Generator to build customized reports with reusable
report objects.
 Use Web ADI (Web Applications Desktop Integrator) Report Manager to build
reports and drilldown on balances within a spreadsheet environment.

General Ledger Accounting Cycle

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1. Open period
2. Create/reverse journal entries
3. Post
4. Review
5. Revalue
6. Translate
7. Consolidate
8. Review/correct balances
9. Run accounting reports
10. Close accounting period

General ledger-setup

Creating Chart of Accounts

Creating Calendar
Creating Currency
Creating Accounting Setups
Defining Ledger Sets

Creating Chart of Accounts

Responsibility: General Ledger Super User

Defining Key Flexfield Accounting Flexfield

Setup -> Financials ->Flexfields -> Key -> Segments

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Click on Segments

Query Application as General Ledger and Flexfield Title as Accounting Flexfield

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You can place your cursor on structures code and click on new to define new structure
You can also explore the existing structures as well
Click on Segments

Defining Segments

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You can use the Segments window to define segments for your flexfield. The window title
includes the current selected flexfield's name. If your flexfield definition is frozen (that is,
the Freeze Flexfield Definition check box is checked), this window becomes display-only.
You can define as many segments as there are defined segment columns in your flexfield
table. You can create a new segment for your flexfield by inserting a row.
Note: If your flexfield definition is frozen, the Segments window fields are not updateable.

Defining Flexfield Qualifiers

Click on Flexfield Qualifiers in the window above.

You can use the above window to apply flexfield qualifiers to your key flexfield segments.
The window title includes the current flexfield and segment names. For each qualifier,
indicate whether it is enabled for your key flexfield segment.
Since you can set up your key flexfields in any way you prefer, Oracle Applications products
use flexfield qualifiers to identify certain segments used for specific purposes. You should
consult the help for your key flexfield to determine whether your key flexfield uses qualifiers
and what purposes they serve.
Some qualifiers must be unique, and you cannot compile your flexfield if you apply that
qualifier to two or more segments. Other qualifiers are required, and you cannot compile
your flexfield until you apply that qualifier to at least one segment.

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You should consult the Key Flexfields in Oracle Applications section for your key flexfield to
determine whether your key flexfield uses qualifiers and what purposes they serve.
After defining your flexfield qualifiers, you can proceed towards defining Value Set.

Defining Value Set

You can click on Value Set to define Value Set against each segment.

You can share value sets among segments in different Flexfields, segments in different
structures of the same Flexfield, and even segments within the same Flexfield structure. You
can share value sets across key and descriptive Flexfields. You can also share value sets with
parameters for your concurrent programs that use the Standard Request Submission
feature. Many Oracle Applications reports use predefined value sets that you may also use
with your Flexfield segments. However, any changes you make to a value set also affect all
requests and segments that use the same value set.

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Next save and close.
You can define Value Set against your segments in this way one by one.

Enable Freeze Flexfield Definition check box and Click on Compile in Key Flexfield Segments
window

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Select the Cross-Validate Segments check box if you want to cross-validate multiple
segments using cross-validation rules. You can define cross-validation rules to describe valid
combinations using the Cross-Validation Rules form. Uncheck the box if you want to disable
any existing cross-validation rules.

Indicate whether you want to freeze your rollup group definitions. If you do, you prevent
users from modifying rollup groups using the Segment Values form.
You can freeze rollup groups before or after you define your flexfield structure.

If you want to allow dynamic inserts, check the Allow Dynamic Inserts check box. You would
allow dynamic inserts of new valid combinations into your generic combinations table if you
want users to create new combinations from windows that do not use your combinations
table. You should prevent dynamic inserts if you want to enter new valid combinations only
from a single application window you create to maintain your specific combinations table.

After defining new Flexfield structure and compiling it, click on View > Requests at the menu
bar

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Click on find

Next close the request form

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Defining Values
Setup> Financials>Flexfields> key> Values

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Click on find

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Defining Calendars
Each ledger has an associated period type. When you assign a calendar to a ledger using
Accounting Setup Manager, the ledger only accesses the periods with the appropriate
period type. Thus, you can define an accounting calendar with periods of more than one
period type; however, each ledger will only use periods of a single period type.
Note: If you close your balance sheet using the Create Balance Sheet Closing Journals
program, define enough accounting periods for your period type to allow for two adjusting
periods.
Warning: Do not change the number of accounting periods per year for a period type. Doing
so will cause data corruption.

You can define your own period types to use in addition to the General Ledger standard
period types Month, Quarter and Year. You use these period types when you define the
accounting calendar for your organization.

Setup> Financials> Calendars> Types

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35
To define a new period type:
 Navigate to the Period Types window.
 Enter a unique Name for your accounting period type.
 Enter the number of accounting Periods per Year. For example, you could define a
Week period type and specify 52 periods per year. You can assign up to 366
accounting periods per fiscal year for any period type, and maintain actual balances
for those periods. However, for budgets you can only use the first 60 periods.
 Enter the Year Type to specify whether the period is part of a fiscal or calendar year.
General Ledger uses the year type to assign a year in the accounting period system
name when you set up your calendar.
o Choose Calendar to use the year in which an accounting period begins for the
system name.
o Choose Fiscal to use the year in which your fiscal year ends for the system
name.
For example, assume your fiscal year spans from July 1 to June 30 and the current date is
July 15, 2017. If you choose the Calendar year type, General Ledger appends the year 2017
to the period name (JUL-17) because July begins in 2017. If you choose the Fiscal year type,
General Ledger appends 2018 to the period name (JUL-18) because the fiscal year ends in
2018.Using the same July to June fiscal year example, if the current date is March 15, 2017
and you choose the Fiscal year type, General Ledger appends the year 2017 to the period
name because the fiscal year ends in 2017.

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  (Optional) Enter a Description for the period type.
 Click Save.

Creating New Calendar

You can define multiple calendars and assign a different calendar to each ledger. For
example, you can use a monthly calendar for ledger, and a quarterly calendar for another.
Calendars you create are validated online. Full calendar validation is launched whenever you
exit the Accounting Calendar window. Navigate to Help>View My Requests to view or print
the Calendar Validation Report. You may also choose this report from the Standard Reports
list to identify any errors associated with the calendar you created.

Setup> Financials> Calendars> Accounting

To explore existing calendar, query your calendar

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When you create a new Calendar, a dialogue box appears “Do you want to validate the
currently displayed calendar or all your calendars?”
Click on Current and Close the form
Calendars you create are validated online. Full calendar validation is launched whenever you
exit the Accounting Calendar window. Navigate to Help>View My Requests to view or print
the Calendar Validation Report. You may also choose this report from the Standard Reports
list to identify any errors associated with the calendar you created.

To define a new calendar:

 Navigate to the Accounting Calendar window.
 Enter a Name and Description for the calendar.
 Add the periods that make up the calendar year.
 (Optional) Select the Enable Security check box to apply definition access set security
to the Calendar definition.
If you do not enable security, all users who have access to this calendar definition
will be able to view and modify the calendar definition.
If the Assign Access function is available for your responsibility, the Assign Access
button is enabled once you check the Enable Security check box. Choose the Assign

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 Access button to assign the calendar definition to one or more Definition Access Sets
with the desired privileges.
If the Assign Access function has been excluded from your responsibility, you will not
be able to view the Assign Access button in the Accounting Calendar window. You
can still secure the calendar by checking the Enable Security check box, but only
Definition Access Sets that are Auto Assigned will be automatically assigned to this
calendar. See your System Administrator for more information on Function Security.
 Save your work.
Note: When you exit the Accounting Calendar window, full calendar validation is
launched. You can choose to validate all calendars or the current calendar. Navigate
to Help > View > My Requests to view or print the Calendar Validation Report. This
report helps you identify any errors in your calendar that might interfere with the
proper operation of General Ledger.

Defining Currencies

Setup> Currencies> Define

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40
To define a new currency:
 Navigate to the Currencies window.
 Enter a unique Code to represent your currency.
 Note: You cannot change a currency code after you enable the currency, even if you
later disable that currency.
 Enter the Name and Description of the currency.
 (Optional) Select the name of the Issuing Territory. Oracle Applications has
predefined the names of countries (per ISO Standard #3166) that issue standard
currencies.
 Enter the Symbol for your currency.
 Note: Some Oracle Applications use currency symbols when displaying amounts.
Others, like General Ledger, do not.
 Enter the Precision of the currency to designate the number of digits to the right of
the decimal point used in regular currency transactions.
 Enter the Extended Precision to designate the number of digits to the right of the
decimal point used in calculations for this currency. The extended precision must be
greater than or equal to the standard precision.
 Note: Some Oracle Applications use the extended precision. Others, like General
Ledger, do not.
 Enter the Minimum Accountable Unit to designate the smallest denomination used
in this currency. Note that this might not correspond to the precision.

41
  (Optional) Enter Effective Dates for your currency. You can only enter transactions
denominated in this currency for dates within the range. If you don't enter a start
date, the currency is valid immediately. If you don't enter an end date, the currency
is valid indefinitely.
 Enable your currency.
 Save your work.

To enable or disable a currency:

 Navigate to the Currencies window.

 Query the Code or Name of the currency that you want to enable or disable.
 Mark the Enabled check box to indicate that the currency can be used to enter
transactions and record balances. Clear the check box to indicate that the currency
cannot be used.
 Save your work.

General ledger-Journal Entry

You can create Journal Entries in the General Ledger (GL) by importing them from both
Subledgers as well as third-party systems via the import interface; by manually entering
them directly into the GL; by using Web ADI (Application Desktop Integrator) to create a
journal or convert a text file to an ADI journal, or by generating allocations, reversing
journals, or recurring journals. The ultimate goal is to reduce the manually created journal
entries and increase the accuracy of all automated journals. Automated journals include any
imported journals from third-party systems and Subledgers, and journals created by the EBS
process for allocations, reversing entries, and recurring entries.

Journal Entry Types

Below are the main types of entries that you can record in oracle general ledger.

 Manual: These are basic entry types and used for majority transactions.
 Reversal: These are created by reversing an existing journal entry. You can post
these to the current or future open accounting period.

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  Recurring: These are created once and are repeated in the subsequent accounting
periods.
 Mass Allocations: These journal entries use formula to allocate balances to cost
centers, departments and divisions.

Manual Journal Entry

You can follow the below steps to enter Manual Journal Entry:
1. Switch to General Ledger Super User Responsibility.

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2. Navigate to Journals➔Enter.

If you wish to enter your Journal Entry in an existing Journal, you can find it by searching in
the above screen. You can also create New Batch or New Journal from here.

 Click on New Journal

 Enter the Journal name select the effective date on which entry is created. If you do
not enter a journal name, General Ledger automatically assigns a name using the
following format: Source Journal ID Date.

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1. Go to Journals Lines Level and enter the Line no1, Account Code and Debit amount.
In the next line enter the Account Code and enter the Credit amount. Next click Post.

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2. Click, Yes and Ok, Ok.

3. Select View menu and click on Requests. In the Find Request click on Find

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4. In the Request, the Phase is completed. If it is not completed Refresh Data till the
program gets completed normal

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 7. Navigate to Journals➔Enter and enter the Batch in the below dialogue box and click
on Find.

8. Check the Batch Status as Posted and you can Review the Journal by Clicking on Review
Journal button

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Recurring Journals
You can use recurring journals for transactions that repeat every accounting period. For
example accruals and depreciation
There are three types of recurring journals.
Skeleton: In this type you define journal entries without amounts as the amounts vary in
each accounting period. You enter the amounts in each accounting period
Standard: You use both journal entries and fixed amounts for each accounting period.
Formula: You use Journal entries along with formulas to calculate amounts of each
accounting period.
You can use the below steps to define a skeleton recurring Journal.
1. Switch to General Ledger Super User Responsibility.

2. Navigate Journals➔Define➔Recurring.

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1. Enter Batch name, Journal name, Category and Currency

2. Click on Lines button. In the line enter 10, select the Account code in Account field
and in Line Description field enter description.

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3. To enter further lines click on ( ) new. In the line enter 20, select the Account code
in Account field and in Line Description field enter description.

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4. Save your work and close Journal entry Lines form.

5. Click on Generate button to create the skeleton journal in the decision click on
Submit or Schedule button. Alternatively you can navigate to

Journal➔Generate➔Recurring to create skeleton journal.

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6. In the Recurring Journal Parameters select the Period for your skeleton journal and
click on Submit button.

7. In the Submit Request form click on Submit button.

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8. Next select the View in menu and click on Request. In Find request form click on
Find button. The Recurring Journal Entry request is completed with Normal status.

9. Click on View Output in Requests and see the below report.

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Now you will verify your skeleton journal by using the below steps.

1. Navigate to Journals ➔ Enter. In find Journal query with Batch name and Period.

2. You will find your skeleton journal with unposted batch status. Next click on Review
Journal button to see your journal entries.

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Mass Allocations
Mass Allocations is a journal entry formula which allocates revenue and expenses to cost
centers, departments or divisions.

Use the below steps to define Mass Allocations journal:

1. Navigate to Journals➔Define➔Allocation.

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2. Enter Batch name, Balance Type Actual or encumbrance, Description (optional) for
your Mass Allocation. Click on Formulas button.

3. Enter your Mass Allocations formulas and close your Formulas form.

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Mass Allocation works on the simple formula of A * B / C. In the Formulas form
 The first line is Value for A; this is the balance you want to allocate.
 The second line is the value for B; this is based on the balance that you want to allocate.
It is numerator in the formula.
 The third line is the value for C; this is based on the balance that you want to allocate. It
is the denominator in the formula.
 Each of the lines are combinations of segments and the balances within them; the
normal progression is to use the denominator to sum (get the total for the combination)
and the numerator to loop (get each value in each segment).
 The last two lines are the target, where you want to allocate the calculated balances and
the offset, for the new entry created. These can be the same as in A.
4. In Define Mass Allocations form click on Validate All to validate your Mass
Allocation batch. View the request to check the status.

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5. After your request completed successfully the Validation Details changed from Not
Validated to Validated.
6. You can click on Generate button to create unposted journal batches from your

Mass Allocation. Alternatively you can navigate to Journal➔Generate➔Allocation to

create unposted journal batches.

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Explanation of Buttons on Different Forms

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Post: To post the journal / batch. EBS posts journal batches, not individual journals.
Autocopy Batch: To copy the entire batch including the journals. If you enter a journal, EBS
creates a batch for that single journal.
Approve: Only enabled if journal approval is configured to be used, click to approve Line
Drilldown.
Line Drilldown: Allows you to drilldown to the transactional system AP or AR if the journal
was imported from the subledgers.
T Accounts: You can view the T Accounts in the traditional manner using this button.
Check Funds: Enabled only, if Encumbrance Accounting is configured. Click on this button to
check if funds are available against a budget.
Reserve Funds: Enabled only, if Encumbrance Accounting is configured. Click on this button
to reserve funds.
View Results: Enabled only, if Encumbrance Accounting is configured. Click on this button to
review result.
Change Period: Once saved the period cannot be changed on the form, you will need to
click this button to change the period.
Change Currency: Once saved the currency cannot be changed on the form, you will need to
click this button to change the currency for this journal.

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Review Journal: Based on your cursor, review the journal.
Review Batch: Based on your cursor, review the batch.
Post: Based on your cursor, post the journal and batch.
Reverse Batch: Reverse the batch. It can only be done after the batch is posted.
New Journal: Opens the detail form to enter a new journal.
New Batch: Opens the form to enter a new batch.
Tax Batch: A tax transaction journal entered in GL.
Approve: Enabled only, if journal approval is configured to be used, click to approve.
Autocopy: Autocopy the journal.

General ledger-Journal Inquiry

You have three options to view detail and summary information for account balances,
journal entries and subledger accounting transactions:
 Account Inquiry
 Journal Inquiry
 Journal Enter
You can view the T Account and Activity Summary in Journal and Account Inquiry. Drilldown
option is also there for subledger transactions that created the journal entries.

Account Inquiry

General ledger-Budgeting

Oracle EBS allows budgets to be managed in the same way as normal transactions, for each
unique combination of your Chart of Accounts. You can use summary accounts or rollup
groups to manage and maintain budget values:

1. Budgets can be directly entered into EBS using forms.

2. Budgeting requires the creation of the following two elements:
 Budget Year that can span multiple years

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  Budget Organization, typically departmental or a group of departments this will
contain all the account combinations for which you will create a budget amount.

3. Budgets are not required for all the account combinations. Budget is only for those
that you need to report budget variances.
4. Budgets are managed within Budget Organizations.

You can also load budgets using Web ADI (a functionality that allows you to manage data
using Excel and a plug for Oracle), which will download the Budget and Budget Organization
accounts for a span of periods as specified by your template.
Note: You can also use Oracle Planning and Budgeting to update budget balances in General
Ledger

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Chapter 5: Financial Reporting

Online Account and Transaction Analysis:

You can Drilldown to account balances and journal entries to their source. For example, you
can drill down from a Payables journal entry to the original transaction in Oracle Payables.
Standard Reports and Listings:

Oracle General Ledger provides over 70 different standard reports and listings to help you
view financial and non-financial information.

Financial Statement Generator reports:

The Financial Statement Generator (FSG) is a powerful tool that allows you to create custom
financial statements without programming. Standard reports in E-Business Suite do not
provide for an income statement or balance sheet. This is facilitated by the Financial
Statement Generator (FSG). FSG functionality normally generates output in text format, but
with the introduction of BI (XML) Publisher you have the capability to generate these
reports in PDF, Excel, and HTML.

Web ADI Report Manager:

With Report Manager, you can define reports graphically in Excel, and then upload the
report definitions to General Ledger as Financial Statement Generator (FSG) report objects.
You can also download existing FSG reports; modify them in Report Wizard, then save the
modified definition to General Ledger. You can select amounts from spreadsheet-based FSG
reports and drill into the underlying financial information within Oracle Applications.

Designing Financial Statements Generator (FSG) Reports

Financial Statement Generator (FSG) enables a column and a row combination to generate a
report. Primarily the rows show all the data elements and the column can be used for
identifying the period for which you are reporting. One important thing to note is that FSG
can only report on GL balances, so the rows will—in most cases—contain a GL Account

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string (your Account Flexfield segments) and the columns contain a period identifier. This
would give you a monthly column for say the balance in your cash account.

Row definition
Rows are used to identify the account balances that would be shown in the report. The
following screenshot shows the row definition screen where you can define the
characteristics of the row and the account that will be shown.

In the Row Set some of the fields can be explained as follows:

 Line Number for each row for internal identification.

 Format Options allow you to use characters to underline or number of lines you
want to skip.
 Balance Control Options: This primarily used in the column set—Amount Type,
Currency, Control Value, and Offset.
 Display Options: Format Mask to show how the number will be displayed— with or
without decimals or commas, and so on.
 Factor: This can be used to reduce the display size of the amount by choosing
Thousands, and so on.

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  Level of Detail: Three levels of detail are available—Financial Analyst, Supervisor,
and Controller. Shows varying level of detail of the report based on what is chosen.
 Display Row: This should be checked if you want to display this row on the report.
 Display Zero: To display the row even if all the balance values retrieved are zero.
 Change Sign: Change sign of the value in the balances column for example, Revenue
amounts always are credit balances that show up as negative number. You may want
to show positive numbers on the report.
 Change Sign on Variance: Same as the previous, but on variance only.
 Row Name: You can name the row for easier identification.
 Percent of Row: Calculates the display in this row based on another row (specified
here) as a percentage.

Account Assignments button at the bottom of the row definition form allows you to specify
the accounts that the report will use to retrieve data from the GL Balances table. In the
account assignments screen, not specifying a Ledger allows the row set definition to be used
across ledgers.

The options are available to show Total, Expand, or Both. Expand is used if the segment
value is a parent/rollup. You can also use both for this type so that it will expand all the
values in that parent and show a total. Total is used to display only one line item as a total.

Columns
The column is typically used to identify the time element for a report – so the column would
show the account balance for a period (based on the intersection of the row and the
column). The following screenshot shows the column definition screen. The column can also
specify the Ledger that you want to report the balance for. If left blank it allows for the
column definition to be used across ledgers.

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The Column Set has the same characteristics as the Row Set. The Column Builder is also
available as a graphical view of the form.
Balance Control Options:
Amount Type: This is used to identify the type of balance (Actual, Budget, and
Encumbrance) and the term of the balance (PTD, YTD, QTD, and so on).
Currency: Currency of the balances that you want to report on (can be used on the Row if
reporting STAT balances.
Control Value: If a budget is used this is where you would define a Control Value equal to
the number of the Control Value definition form, defined as part of the report.
Offset: If the reporting is in columnar format for multiple time periods then you specify each
column as an offset from the period you are running for. In the previous screenshot the
column 1 is 0, which means it is the period you are running for, Offset 1 is the next month
and so on. If you want the previous month you would use -1.
You can use these additional features to control how the amount is displayed on each
row/column.

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Content Sets
Content Sets are used to reduce the data content displayed on a report. An example would
be if you had a standard report showing the Income Statements for all companies and
departments; you would use Content Sets to restrict companies and departments on the
report.

Content Sets can be used to manage this without having to write another report:

 N (No Override): Use the display option you entered in the row set definition.
 RE (Row Expand): Expand the range and display all segment values.
 RT (Row Total): Total the range and display only the total for the segment values.
 RB (Row Both): Expand and total the range displaying each segment value and the
total for the segment values
 CT (Column Total): Total the range and display only a total for the segment values.
This option has no effect on the appearance of your report.
 PE Report Expand: Expand the range and create a separate report for each segment
value in the range.
 PT Report Total: Override the row set segment value range but retain the Expand,
Total, or Both displays.

Row Order

Row Order allows control of the correct information displayed for a chart of accounts –
Segment Value and Description. In each row, appropriate use of a row order will show
segment values and/or description. The width defines what is displayed on the report.

General Ledger Closing

An accounting period is closed in the General Ledger after all the accounting transactions
have been completed for the period. The status of the period will determine whether
transactions can be entered in the period. The status of the period can be Never Opened,
Future Enterable, Open, Closed, or Permanently Closed. A Permanently Closed period
cannot be reopened.

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Steps prior to Period Closing
1. Complete all Subledger transactions – run the Create Accounting from the
Subledgers to create the Subledger Accounting transactions. This populates the
GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES tables.
2. Import all Journals. This process populates the GL_INTERFACE tables.
3. Post all Journals. This updates the GL_BALANCES tables.
4. Run the Period Close Exception report in GL to ensure that there are no outstanding
transactions in the Subledgers and GL.
5. Run the trial balance.
6. Perform reconciliations.
7. Reverse previous period accruals.
8. Enter Adjustments and Accruals and Post the journals.

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Period Closing Steps
1. Select the General Ledger responsibility.

2. Navigate to Setup➔Open/Close.

3. Click on the Find button.

4. Select the status field for the Jul-19 period and change the status to Closed.
5. Click on the Save icon This triggers a concurrent program to close the period.
6. A Subledger Period Close Exception Report is also created for transactions that need
to be reviewed from the Subledger.
7. View the Subledger Period Close Exception Report.

8. Select View➔Requests from the Menu.

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Chapter 6: Financials – Accounts Payable

Payable-Overview
An organization purchase goods and services. The invoices for these goods and services are
sent from the supplier. The payments for these are made to the suppliers based on the
amount on the invoice. Oracle Payable is used for the below major business functions.

1. Supplier Entry
2. Invoice Import / Entry
3. Invoice Validation
4. Invoice Payment
5. Invoice and Payment Accounting

You need to enter Supplier and Supplier sites information in payable first to enter and pay
invoices.

Invoices
Standard Invoice
An Invoice has two parts:
The header: This contains common invoice data such as Invoice Type, Date, Number,
Supplier Name, Site, Payment Terms, and Payment Information.

The lines: Lines contains the details of the Items, Freight, Miscellaneous, or Tax charges. An
invoice can contain multiple lines. Invoice lines also contain accounting distributions. An
invoice line can contain multiple distributions.

Note: Tax lines are added on the basis of E-Business tax setup.

You need an approved Purchase Order with some items received against it.
1. Select the Payables responsibility.

2. Navigate to Invoices➔Entry➔Invoices

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3. Select Standard in the Invoice type field.
Note the below invoice types available on Payables:
Standard: Amounts due for goods or services purchased. They can be matched to a
purchase order.
Credit Memo: A document from the supplier representing a credit amount towards
goods or services
Debit Memo: An entry to record a credit for a supplier where a credit memo does
not exist.
Expense Report: Amount due to an employee for expense reimbursement
Prepayment: An advance payment to a supplier or employee.
Withholding Tax: Entry of remittance of taxes withheld to the appropriate tax
authority.
Mixed: Entry of positive or negative amounts to purchase orders and invoices

4. Enter 10025 in the PO Number field. The Trading Partner, Supplier Number, and the
Supplier Site are populated automatically.

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5. Enter the Invoice Date, Invoice Number and Invoice Amount and Click on Match
button to match the invoice to the Purchase Order.

6. Click on the Find button to find the Purchase Order.

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7. Select the line on the purchase order to match to the invoice
8. Enter the Quantity Invoiced of 10.
9. Click on the Match button to match the invoice to the Purchase Order

10. Now you have to enter Freight if any. Select the Lines tab. Select Freight as the Type
in line 2. Enter 10 in the Amount field. Click on the Distributions button.

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11. The Amount 10 will be allocated to 01-510-7220-0000-000account. You can also
allocate Freight to more than one account.

12. Click Save. The Distribution class status change to Saved, close the distributions
form.

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13. Next you can calculate the Tax. Note that the tax lines are added based on the E-
Business tax setup.
14. Click on the Calculate tax button.

15. Click on the Actions…1 button.

16. Click on the Validate checkbox.

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17. Click on the OK button to validate the invoice.
18. The invoice Status changes to validated.

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Entering Credit Memo / Credit Note
Credit memos or Credit Notes are credit invoices from a supplier representing a credit
toward goods or services.
Some time when you return goods to Supplier and have not received Credit Memo / Credit
Note from Supplier, you issue a Debit Memo / Debit note. These can be netted with an
invoice, when the invoice is paid. The steps for recording a debit memo are similar to
recording a credit memo.
The below steps will be followed for creating Credit Memo / Credit Note.
1. Switch toPayables responsibility

2. Navigate to Invoices➔Entry➔Invoices

3. In the invoice Type field, select Credit Memo.

4. Enter Consolidated Supplies in the Trading Partner field.
5. Select DALLAS-ERS as the Supplier Site.
6. Enter the Invoice Date, for example, 16-AUG-2019.
7. Enter the unique Invoice Number from the supplier, for example, CM-19.
8. Enter the Invoice Amount of -50.00.

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1. Click on the horizontal scrollbar and select the Distribution Set field.
2. Select Cleaning Expense (Full) from the list of values.
3. Click on the Quick Credit checkbox.
4. Select the 10140101 from the list of values in the Credited Invoice field.
5. Select Invoice as the Match Action.

1. In the Lines tab, enter -50 in the Amount field.

2. Click on the Actions…1 button
3. Click on the Validate checkbox.
4. Click on OK
5. The Credit Note is validated.

Oracle Payable Set up

Define two types of Options as follows:

 Financial Options
 Payables Options

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Financial Options
Use the Financials Options window to define the options and defaults that you use for your
Oracle Financial Application(s). Values you enter in this window are shared by Oracle
Payables, Oracle Purchasing, and Oracle Assets. You can define defaults this window to
simplify supplier entry, requisition entry, purchase order entry, invoice entry, and automatic
payments. Depending on your application, you may not be required to enter all fields.
Although you only need to define these options and defaults once, you can update them at
any time. If you change an option and it is used as a default value elsewhere in the system, it
will only be used as a default for subsequent transactions. For example, if you change the
Payment Terms from Immediate to Net 30, Net 30 will be used as a default for any new
suppliers you enter, but the change will not affect the Payment Terms of existing suppliers.

Setup > Options > Financial Options

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Accounting Financials Options
Future Periods: Payables display the number of future periods you use in your set of books.
Payables uses this value to limit the number of future periods you can maintain in the
Control Payables Periods window. You can enter invoices in future periods.

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GL Accounts

Liability: Payables assign this account as the default Liability Account for all new suppliers
you enter. You can override this value during supplier entry. If you use Accrual Basis
accounting, then the Liability Account for an invoice determines the liability account(s)
charged when you create accounting entries for invoices.

Prepayment: The Prepayment account and description for a supplier site's invoices.
The Financials option value defaults to new suppliers, and the supplier value defaults to new
supplier sites.

Future Dated Payment: If you use future dated payments, then enter a value for Future
Dated Payment account. This value defaults to all new suppliers and new bank accounts.
The supplier value defaults to all new supplier sites. The bank account value defaults to new
payment documents.
When Payables accounts for future dated payments, it uses the Future Dated Payment
Account from either the supplier site or the payment document, depending on the option
you select in the Payment Accounting region of the Payables Options window.
If you relieve liability payment time, this should be an asset account. If you relieve liability at
future dated payment maturity, then this should be a liability account.

Discount Taken: If you choose to distribute your discounts to the system Discount Taken
Account, Payables uses this account to record the discounts you take on payments. Use the
Payables Options window to select your method for distributing discounts for your invoices.

PO Rate Variance Gain/Loss: Payables use these accounts to record the exchange rate
variance gains/losses for your inventory items. The variance is calculated between the
invoice and either the purchase order or the receipt, depending on how you matched the
invoice. These accounts are not used to record variances for your expense items. Any
exchange rate variance for your expense items is recorded to the charge account of the
purchase order. Payables calculate these amounts during Payables Invoice Validation.

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Expenses Clearing: This account is required when you use the Company Pay payment option
of Oracle Internet Expenses. Payables use this as a temporary account to record credit card
transaction activity. Payables debit this account when you create an invoice to pay a credit
card issuer for credit card transactions. Payables credits this account with offsets to the
original debit entries when you submit Expense Report Import for an employee expense
report entered in Internet Expenses that has credit card transactions on it.

Miscellaneous: Used only when importing invoices submitted via Supplier Portal or XML
Gateway. If you enter a value here then the system uses this account for all miscellaneous
charges on invoices your suppliers enter in iSupplier Portal. If you do not enter a value here
then the system prorates miscellaneous charges across Item lines on iSupplier Portal
invoices.
The system also uses this value for any miscellaneous charges your suppliers send in XML
invoices. If you do not enter a value here then import prorates miscellaneous charges across
Item lines for XML invoices.

Retainage: This account is required when you use the Withholding tax supplier

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Supplier - Purchasing Financials Options

The options you define in this region, except for Inventory Organization, are used as default
values for the Purchasing region of the Suppliers window. The supplier values default to new
supplier sites for the supplier, which default to new purchasing documents for the supplier
site.

Note: If you use the Multiple Organizations Support feature, values you enter in this window
will default to both the Supplier and Supplier Site.

You can override defaulted values during entry of the supplier, supplier site, and purchasing
documents.

Ship-To /Bill-To Location. The name of the ship-to/bill-to location for the system default
value. If the name you want does not appear in the list of values, use the Location window
to enter a new location.

Inventory Organization: You need to choose an inventory organization if you use

Purchasing. You can associate each of your Purchasing operating units with one inventory
item master organization. When you associate your Purchasing operating unit with an
inventory organization, items you define in this organization become available in
Purchasing. You can only choose an inventory organization that uses the same set of books
as your Purchasing operating unit. Do not change the Inventory Organization after you have
already assigned one to Purchasing.

Ship Via: Freight carrier you use with suppliers. If the type of freight carrier you want does
not appear in the list of values, use the Freight Carriers window to define a new shipping
method. The value you enter here is the value in the Description field of the Freight Carriers
window in Purchasing.

FOB: If the type of FOB you want is not in the list of values, use the Oracle Purchasing
Lookups window to define a new FOB.

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Freight Terms: The freight terms for a supplier identify whether you or your supplier pays
for freight charges on goods you receive. You can define new freight terms in the Oracle
Purchasing Lookups window.

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Encumbrance Financials Options
To use encumbrance accounting or budgetary control, you must install Payables,
Purchasing, and General Ledger. Use this region to enable encumbrance accounting and to
specify the default encumbrance types Payables assigns to your invoices, and Purchasing
assigns to your requisitions and purchase orders.
If you enable encumbrance accounting or budgetary control, Purchasing creates
encumbrances when you reserve funds for a requisition or purchase order. If you use the
perpetual accrual method in Purchasing, Purchasing reverses purchase order encumbrances
when you inspect, accept, and deliver the units. If you are using the periodic accrual method
in Purchasing, Payables reverses the purchase order encumbrances when you create
accounting entries for invoices.
Payables creates encumbrances when there is a variance between a matched invoice and
the purchase order to which it is matched, and when the invoice encumbrance type is
different from the Purchasing encumbrance type.
Oracle Financials provides two predefined encumbrance types that you can use to identify
requisition, purchase order, and invoice encumbrances: Commitment and Obligation. You
can define additional encumbrance types in Oracle General Ledger in the Encumbrance
Types window.

Use Requisition Encumbrance. Enable this option to encumber funds for requisitions. If you
enable this option, Purchasing creates journal entries and transfers them to General Ledger
to encumber funds for purchase requisitions.

Reserve at Completion. If you enable Use Requisition Encumbrance, indicate whether you
want requisition preparers to have the option to reserve funds. If you do not enable this
option, only requisition approvers will have the option to reserve funds.

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Use PO Encumbrance. Enable this option to encumber funds for purchase orders, purchase
order and receipt matched invoices, and basic invoices (not matched). If you enable this
option, Purchasing encumbers funds for purchase orders and Payables encumbers funds for
variances during Payables Invoice Validation for purchase order and receipt matched
invoices. If you enable this option and enter a non-purchase order matched invoice,
Payables will encumber funds for it during Payables Invoice Validation. All Payables
encumbrances are reversed when you create accounting entries. If you enable Use
Requisition Encumbrance, you must also enable this option.

Member State: The location of your company or organization. Payables use this country
name to determine if your company or organization is located in a member state of the
European Union (EU).

VAT Registration Number: The Value-Added Tax (VAT) registration number for your
organization. Your organization is assigned a VAT Registration Number if you register to pay
VAT. The first two characters of a VAT registration number are the country code for the
country or state where the registered company or organization is located. Payables print
this number on the header of the Intra-EU VAT Audit Trail Report.

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Human Resources Financials Options
Use this region to enter the options and defaults for entering employee information in the
Enter Person window.

Business Group: Enter the name of the business group that you want to associate with
Purchasing. If you use Purchasing jointly with Oracle Human Resources, you must reference
the business group that you define in Oracle Human Resources. If you use Purchasing
without Human Resources, you can use the default value. The default for this field is the
Human Resources default of Setup Business Group.
The business group determines which employees you can use in Purchasing. In Purchasing,
you can see only the employees in this business group.

Expense Reimbursement Address: Select the default address you want to use on payments
for employee expense reports: Home or Office. The system uses this default for each new
employee you enter. You can override this default during employee entry or expense report
entry.

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Use Approval Hierarchies. Enable this option to use positions and position hierarchies to
determine approval paths for your documents within Purchasing. Disable this option of you
want approval paths based on the supervisor structure.

Employee Numbering Method: You can enter your employee numbers manually or let the
system generate sequential employee numbers. The system prevents you from entering a
value in this field if you install Oracle Human Resources or Oracle Payroll. You can change
the numbering method at any time.
Automatic The system automatically assigns a unique sequential number to each
employee when you enter a new employee.
Manual You enter the employee number when you enter an employee.
Use National Identifier Number. The system automatically enters the employee's National
Identifier Number as the employee number. For example, a Social Security number for a
United States employee.

Attention: Be careful if you switch from manual to automatic entry. The employee number
must be unique. When you use manual entry, you can assign any number and in any order.
If you switch to automatic after having entered employee numbers manually, the system
may try to assign a number that you already assigned. If you switch from manual to
automatic entry, make sure the next available number for automatic entry is larger than the
largest number you have already recorded.

Next Automatic Number: If you select the Automatic Employee Numbering method, enter
the starting value you want the system to use for generating unique sequential employee
numbers. After you enter a number and save your changes, the system displays the number
that it will assign to the next new employee you enter.

Payable-Payment

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Period End Closing
At the end of a period, payables transactions are transferred to the General Ledger and
Fixed Assets module.

Steps prior to Closing

Before you close Payables, you need to complete the following:
 Bank statements in Cash Management must be reconciled and all issues resolved.
 Miscellaneous transactions are completed for transactions in Cash Management, for
example, bank charges are entered in Payables from Cash Management.
 Transactions for the period have to be completed. For example, invoices, prepayment,
and payments.
 Review the Uninvoiced Receipts Report from Purchasing for receipts not yet invoiced.
When the receipt accrual is run from purchasing at the end of the period, journal
entries are created for the amount of the receipt liabilities.
 Ensure that eligible invoices are approved in readiness for payment.
 Review and resolve holds placed on the invoices.
 Complete all payment runs for outstanding invoices due for payment.
 Run the Create Accounting program to transfer approved invoices and payments to the
General Ledger.
Before you close a period, you need to resolve all exceptions. Let's run the Period Close
Exceptions Report for your selected Jul-19 period to view the exceptions:
1. Select the Payables Responsibility.

2. Navigate to Accounting➔Control Payables Periods.

3. In the Period Status field, select Closed for the Jul-19 period.
4. You receive a note to review the exceptions.
5. Click on the OK button.
6. Click on the Exceptions button.
7. In the decision box, select the review button.
8. The Concurrent Program is submitted. Click on the OK button.

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View the Period Close Exception Report:

1. Select View➔Requests from the Menu.

2. Click on the Find button to view the completed requests.

3. In the Request window, click on the View Output button
4. The transactions that need to be reviewed are displayed.

Let's run the Create Accounting Program to account for the transactions:

1. Navigate to Other➔Requests➔Run.

2. Select Single Request in the Submit a New Request window and select the
3. OK button.
4. In the Name field, enter Create Accounting.
5. Select Vision Operations in the Ledger field.
6. Enter 31-JUL-2019 in the Date field.
7. Click on the Submit button to submit the request.

Let's sweep transactions to the next period:

1. Select the Payables responsibility.

2. Navigate to Accounting➔ Control Payables Periods.

3. In the Period Status field, select Closed for the Jul-19 period.
4. You receive a note to review the exceptions.
5. Click on the Ok button.
6. Click on the Exceptions button.
7. In the decision box, select the Sweep button.
8. Select AUG-19 in the Sweep to Period field.
9. The Concurrent Program is submitted. Click on the Ok button.
10. The period status is set to Closed.

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Reconciling Payables
After the journals are posted in the General Ledger, you need to reconcile the payables
transactions to GL.
Use the below reports to reconcile the Payable transactions to the General Ledger for your
selected period:

Report Total Value

Previous Month Accounts Payable Trial Balance X
Current Month Posted Invoice Register X
Current Month Posted Payment Register (X)
Current Month Accounts Payable Trial Balance (X)
Difference Nil

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Chapter 7: Financials – Accounts Receivables

Receivables- Overview
Oracle Receivables allows you to streamline invoicing, receipt, and customer deduction
processing while improving cash flow, optimizing customer relationships, and providing
strategic information. As a subledger, Oracle Receivables provides the flexibility to meet the
demands of a global market with strong financial controls to assist in instilling corporate and
fiscal discipline.

Enhance Value by Combining with the Entire Oracle E-Business Suite

Oracle Receivables works seamlessly with other Oracle E-Business Suite products to drive
better decision-making, sustainable financial discipline, regulatory compliance, and
optimized business processes at the lowest cost.

Benefits

Streamline Your Operations and Increase Your Cash Flow

Oracle Receivables seamlessly manages your invoicing needs and offers importing
capabilities to extend this service to non-Oracle ordering systems. Facilitate account
collection with correspondence tracking, instant access to current customer account
information, and collector task scheduling.

Instill Corporate and Fiscal Discipline

Ensure compliance with accounting standards and company policies by mapping your
business model to the appropriate revenue schedules. Promote strong internal controls
through function security, approval processes, and appropriate dissemination of
information.

Expand to Global Markets

With Oracle Receivables, your enterprise has the flexibility to respond to global needs,
support diverse regulatory requirements, and optimize customer relationships in the global
economy.

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Creating an Invoice in Receivable
Invoices can be entered in Oracle Receivable manually, you can also import invoices from
external sources in Oracle Receivable. Follow the below steps to create a manual invoice in
Oracle Receivable.
1. Switch to Receivables responsibility.

2. Navigate to Transactions➔Transactions

3. Select Manual in the Source field. The Date and GL Date are automatically updated.
4. In the Class field, select Invoice.
5. In the Type field, select Invoice.
6. In the Bill To region, enter customer in the Name field, and the Location and
Address field are populated.
7. Save the invoice.
8. Transaction number 16313 is generated. This is the invoice number

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Now you have to enter the Line Items.
1. Click on the Line Items button.
2. In the Description field, enter Consulting Services.
3. In the UOM field, enter HRS.
4. In the Quantity field, enter 15.
5. In the Unit Price field, enter 200.
6. In the Tax Classifications field, enter Exempt.

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Next enter the Distributions
1. Click on the Distributions button.
2. Enter 01-001-0004-0001-100in the GL Account field. The accounting codes can also
be generated using the auto accounting rules.

1. Save the Transaction and close the form

2. Click on the complete button to complete the transaction.

3. Click on the View Invoice icon to view the invoice as per below screen.

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AutoInvoice for All Outstanding Sales Order
You can also create Invoices for all outstanding Sales Order in Order Management Module.
The order must be shipped to create invoice. You will run AutoInvoice by following the
below steps:

1. Switch to Receivables responsibility.

2. Navigate to Interfaces➔AutoInvoice.

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1. Click on OK, in the Submit a New Request

98
2. Select AutoInvoice Master Program

99
3. Enter Order Entry in Invoice Source and 18-Aug-19 in Default Date

4. Leave default for the remaining fields and click on OK button

100
5. Click on Submit button

6. Click No. To check the status of your request, click on View and select Request.

101
7. Click on Find button.

102
 8. Your AutoInvoice Master Program request has been completed successfully.

To view the invoice detail of an order, follow the below steps:

103
1. Navigate to Orders, Returns➔Quick Order Organizer.

2. In the Order Number field, enter Order number.

3. Click the Find button. The Order details are displayed.
4. Click the Open button to display the Order details.
5. Click the line Item 1.1.
6. Click the Actions button and select the Additional Order Information.
7. Select the Invoices / Credit Memos tab.
8. Click on the Invoice Details button to view the details in Receivables.

Transaction Types
The Accounting, Customer Balances and postings to GL are controlled by Transaction Types
in Oracle Receivable. You can follow the below steps to Set up the Transaction Types.
1. Switch to Receivables responsibility.

2. Navigate to Setup ➔ Transactions➔Transaction Types

104
3. Press F11 to enter the query mode.
4. In the Name field, enter Invoice and press Ctrl+F11.

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Let’s have a look at some of the important fields in the above form.
1. The Legal entity field recognizes the default legal entity to use for the transaction
type.
2. The Name of the transaction type recognizes the transaction type and it is unique
across receipt method, adjustment, and receivable activity.
3. The Class field recognizes the transaction as an Invoice. You can use the Transactions
form to create a Chargeback, Credit Memo, Debit Memo, Deposit, or Guarantee.
4. The Creation Sign can be either positive or negative. The creation sign cannot be
changed once transactions are entered.
5. The Transaction Status field can be Open, Closed, Pending, or Void.
6. The AutoAccounting rules can use the accounts set up in transaction types. These
values can also be overridden by the Subledger Accounting rules.

Generating Accounting
Let’s generate and view accounting of Invoice 101126.

1. Navigate to Transactions➔Transactionsin Receivable Responsibility

2. Press F11 to enter the query mode, enter 101126in Number and press Ctrl+F11.

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3. Navigate to Tools➔Create Accounting in the menu

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 4. In the Create Accounting form, select Create Final Accounting Post to GL.
5. Click on the OK button

6. Click on Ok in the note displayed.

Let's have a look at the accounting transactions.

1. Navigate to Tools➔View Accounting in the menu

2. Review the Transactions

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 3. Receivable account 01-000-1040-0000-000 is debited and Revenue account 01-001-
0004-0001-100 is credited.

Quick Transactions
You can use “Quick Transactions” available in Oracle Receivables to enter Invoice
information quickly using default values. Follow the below steps to enter invoice using Quick
Transactions.
1. Switch to Receivables responsibility.

2. Navigate to Setup ➔ Transactions➔Transactions Summary

3. In the Source field, select Manual.

4. In the Bill To Customer field, enter ABC Corporation Asia.
5. In the Class field, enter Invoice.
6. Click on the Open button to display the Transactions page.

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7. Click the Line Items button to enter invoice lines.
8. In the Description field, select H.W maintenance. The UOM of HRS and the Price of
150 are entered by default.
9. In the Quantity field, enter 100.
10. Click the Save button to save the transaction.
11. The Transaction Number of 101127 is created.
12. Click on the complete button to complete the transaction.

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Entering Advance / Deposit from Customers
Your customers can pay you in advance for goods or services. Let's look at how to enter an
advance of $1000 from ABC Corporation Asia.

1. Switch to Receivables responsibility.

2. Navigate to Transactions➔Transactions

3. In the Source field, select Manual.

4. In the Class field, select Deposit.
5. In the Type field, select Deposit.
6. In the Ship To: Name field, enter ABC Corporation Asia.

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7. Click the Commitment tab. This is used to specify the debit and credit accounts for
the commitment.
8. In the Amount field, enter 1000.
9. In the Description field, enter Generic Commitment.
10. Click the Save button.
11. Click the Complete button.

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Credit Memo
You have decided to offer 5% discount against invoice number 101126.
1. Switch to Receivables responsibility.

2. Navigate to Transactions➔Transactions Summary

3. Press F11 on the keyboard to enter the query mode.

4. In the Number field, enter 101126.

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5. Press Ctrl+F11 to execute the query

6. Navigate to Actions➔ Credit.

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7. In the Credit Memo region, select Discount in the Reason field.
8. In the Transaction Amounts tab, select Lines Only in the Credit Allocation drop-down
box. The credit can also be applied to specific lines by selecting the Credit Lines
button.
9. In the Credit Memo Region, enter 5 in the % field; the amount of <150.00> is
automatically populated in the Amount field.
10. The Balance due is also reduced to 2850.

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11. Click on the complete button.

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Adjusting Invoices
You may need to adjust invoices after they are complete.
1. Select the Receivables responsibility.

2. Navigate to Transactions➔Transactions Summary.

3. Press F11 on the keyboard to enter the query mode.

4. In the number field, enter 101126.

5. Press Ctrl+F11 to execute the query.

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6. Click on Actions menu and select Adjust

7. In the Activity Name field, enter Line Adjustment

8. Select the Type list, and select the Line list Item
9. In the Amount field, enter 1000.

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10. A warning is displayed to indicate that you cannot approve this adjustment. Click on
the OK button.
11. Select the comments tab and enter Charges in the Reason field.

12. Click the Save button.

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Approving Adjustment
1. Log in as an approver.
2. Select the Receivables responsibility.

3. Navigate to Control ➔ Adjustments ➔ Approve Adjustments.

4. Click the More tab and enter 101126 in the Transaction Number field.

5. Click on the Find button.

6. In the Status field, enter a status of Approved.
7. Click the Save button.

Entering Receipts
Collections from customers are accounted for in Oracle Receivables. Non-Invoice based
revenue like bank interest etc. is also recorded in Oracle Receivables.

Standard Receipt
You have received cheque of 500 for invoice number 101126 from ABC Corporation Asia.

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Follow the below steps to record receipt.

1. Switch to Receivables responsibility

2. Navigate to Receipts➔Receipts

3. In the Receipt Method field, select Manual.

4. In the Receipt Number field, enter RN-1514.
5. In the Receipt Type field, select Standard.
6. In the Receipt Amount field, enter 500.00.
7. Select the Main tab.
8. In the Customer region, select the Name field and enter ABC Corporation Asia
9. Click the Save button to save the transaction.

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 10. Click the Apply button
11. In the Apply To field, enter 101126
12. In the Apply Date field, select the date if it is other than today date.
13. Click the Save button.

Next, generate accounting transactions

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1. Navigate to Tools➔Create Accounting in the menu.

2. In the Create Accounting form, select Create Final Accounting Post to GL.

3. Click on the Ok button.

4. Click on Ok in the Note displayed.

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Next, view the Accounting Transaction

1. Navigate to Tools➔View Accounting in the menu.

2. Review the transactions.

3. Note that the cash account 01-000-1110-0000-000 is debited and the receivable
account 01-000-1040-0000-000 is credited.

Miscellaneous Receipts
Investment Income and Bank Interest are examples of non-invoiced transactions. These are
Miscellaneous Receipts and you need to follow the below steps to account for these in
Oracle Receivables.

1. Select the Receivables responsibility.

2. Navigate to Receipts➔Receipts.

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3. In the Receipt Method field, select Manual.
4. In the Receipt Number field, enter RN-1512.
5. In the Receipt Amount field, enter 50.00.
6. In the Receipt Type field, select Miscellaneous.
7. In the Activity field, select Interest Income.

8. Click on the Distribution button.

9. In the % field, enter 80. The Amount field automatically changes to 40.00.
10. Enter 01-740-7810-0000-000 in the GL Account field.
11. Click on the second line and enter 20 in the % field.
12. Enter 01-720-7810-0000-000 in the GL Account field.
13. Click on the Ok button.

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Reversing Receipts

The bank has returned the cheque of 500 with reason “Insufficient Fund”. You need to
follow the below steps to reverse receipt.

1. Select the Receivables responsibility.

2. Navigate to Receipts➔Receipts.

3. Press F11 to enter the query mode.

4. In the Receipt Method field, enter Manual.
5. In the Receipt Number field, enter R-1514.
6. Press Ctrl+F11 to run the query.
7. The Receipt is displayed.

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8. Click the Reverse...1button.
9. The today date of 15-Aug-2019 populates automatically.
10. In the Category field, select Non-Sufficient Funds.
11. In the Reason field, select NSF.
12. Click the Reverse button. The transaction is saved.

13. To review the History, click on the Receipt History button

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Opening / Closing Accounting Period

You can Open and close accounting periods in your calendar to control the recording of
accounting information for these periods. Receivable lets you open future accounting
periods while your current period is still open. Receivables also lets you reopen previously
closed accounting periods and enter receivables activities without transferring transactions
to the general ledger when you set your accounting periods to 'Future.'
Define your receivables calendar in the Accounting Calendar window. Receivables reference
the statuses of these accounting periods to control transaction entry and journal entry
creation to your general ledger. You cannot enter an activity in a closed accounting period.
Note: If you are using the Oracle Applications Multiple Reporting Currencies (MRC) feature,
open and close accounting periods in your primary set of books. Receivables automatically
open and close periods in all of the associated reporting sets of books. You can’t close a
period if outstanding transactions exist in your primary or associated reporting sets of
books.

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Period Status
An accounting period can have one of the following statuses:
Closed: Journal entry, posting, and transaction entry are not allowed unless the accounting
period is reopened. Receivables verify that there are no unposted items in this period.
Receivable does not let you close a period that contains unposted items.
Close Pending: Similar to Closed, but does not validate for Unposted items. Journal entry,
posting, and transaction entry are not allowed unless the accounting period is reopened.
Future: This period is not yet open, but you can enter transactions in this period. However,
you cannot post in this period until you open it.
Not Opened: This period has never been opened and journal entry and posting are not
allowed.
Open: Journal entry and posting are allowed.

Steps prior to Closing

Prior to closing the period, the following steps need to be completed:
• Reconcile Bank Statements in Cash Management and receivables adjustments
processed, for example, bank interest.
• Complete all transactions – invoice, adjustments, credits, reversals, and receipts.
• Reconcile transactions – customer balances, transactions, receipts, and bank
statements.
• You can use the following formula to reconcile the Period-End balance:

Outstanding Balance at Start of Period X

Transactions for the period X
Adjustments for the period X
Invoice Exceptions for the period (X)
Applied Receipts for the period (X)
Unapplied Receipts for the period (X)
Period End Balance (X)
Difference Nil

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Run the following additional useful reports for reconciliation:
1. Journal Entries report
2. Aging report
3. Transaction Register
4. Adjustment Register
5. Invoice Exceptions
6. Applied Receipts
7. Unapplied and Unresolved Receipts Register
8. Aging report – last day
9. Post outstanding transactions to General Ledger
10. Print invoices
11. Subledger Period Close Exceptions report
12. Perform the end of period transactions for Order Management.

Run the revenue recognition program by following these steps:

1. Select the Receivables responsibility.

2. Navigate to Control➔Accounting➔Revenue Recognition.

3. Select Single Request in the Submit a New Request window and select the OK
button.
4. In the Name field, enter Revenue Recognition
5. Accept the default parameters and click on the OK button.
6. Click on the Submit button to submit the request.

You have to run the AR to GL Reconciliation Report to compare the account balances in
Receivables and the General Ledger. The report displays journal sources where
discrepancies might exist. We can do this by carrying out the following steps:

1. Select the Receivables responsibility.

2. Navigate to Control➔Accounting➔AR to GL Reconciliation.

3. Select Single Request in the Submit a New Request window and select the

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 1. OK button.
4. In the Name field, enter AR to GL Reconciliation Report.
5. Select Jul-19 in the Period Name field.
6. Click on the Submit button to submit the request.
7. View the AR to GL Reconciliation Report.

8. Select View➔Requests from the Menu.

9. Click on the Find button to view the completed requests.

10. In the Request window, click on the View Output button.

Steps required for Closing

1. Select the Receivables responsibility.

2. Navigate to Control➔Accounting➔Open/Close Periods.

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3. Navigate to the Open/Close Accounting Periods window

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4. In order to update the status of an accounting period, place the cursor in the Status
field next to that period, then enter a new status.
5. To open the next accounting period after the Latest Open Period, choose Open Next
Period. Receivables change the status of the next period to 'Open.'

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Chapter 8: Oracle Assets
You can manage your assets effectively using Oracle Asset Module. You can also track
financial information of both expensed and depreciable assets in this module. Oracle Fixed
Assets is fully integrated with Oracle Payables, Oracle Projects, and Oracle General Ledger
Modules. Oracle Assets uses Supplier information from Oracle Purchasing, Units of Measure
and Items information from Oracle Inventory, and Employees from Oracle Human Resources
Modules. It also interfaces directly with the Application Desktop Integrator. You can use
Mass Additions to load into Oracle Assets invoice and asset information from any feeder
system, such as Oracle Payables or another payables system. You can also import CIP
(Construction in Process) assets from Oracle Projects. Oracle Assets facilitates general ledger
integration by automatically generating asset journal entries for the general ledger module.

Web ADI

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Oracle Web ADI is being used by the End Users in the Oracle E-Business Suite to perform
some of their day-to-day data entry tasks in the commonly used Microsoft desktop
applications like Excel and upload the data to EBS.

Setup Steps Oracle Assets

Required / Mandatory Setup Steps
 Ledger
 Asset Key Flexfield
 Asset Category Flexfiled
 Location Flexfield
 System Controls
 Fiscal Years
 Calendars
 Book Controls
 Prorate / Retirement Conventions

Oracle Assets Operations

 Adding Assets
 Adjusting Assets
 Depreciating Assets
 Retiring Assets
 Reviewing Asset Accounting

Adding Assets
You can purchase, leased or built assets. You use the Oracle Payable Module to add the
purchased assets. You can also add assets from Subledger, manually or from an external
source using ADI. The following conditions must be satisfied before adding any asset from
the Oracle Payable Module:

• The distribution lines in the payable module are charged to an asset or CIP clearing
account.

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 • The Track as Asset flag is checked. It is automatically checked if the charge account is
an asset or CIP clearing account.
• The distribution lines have transferred to GL.
• The asset account is defined as a clearing account or CIP Clearing Account in an Asset
category.
• The GL Date on the distribution line is on or before the GL date you specify in the
Mass Additions Create program.
• The Payables configuration is linked to the same ledger as the Asset Book.

Use the below steps to Run the Mass Additions Create program in payables.

1. Select the Payables responsibility

2. Navigate to Other➔Requests➔Run

3. Select Single Request and click on the OK button

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 4. In the Submit Request form, enter Mass Additions Create in the Name field

5. In the Parameters field, enter 30-AUG-2019in the GL Date and VISION_BR-CORP in

the Book field.
6. Click on the OK button.

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 7. Click on the Submit button to submit the request.
8. In the Submit another Request Decision box, select the Yes button to review the
Mass Additions.
9. In the Submit Request form, enter Mass Additions Create Report in the Name field.
10. In the Parameters field, enter VISION_BR-CORP in the Book field.
11. Click on the Submit button to submit the request.
12. In the Submit another Request Decision box, select the No button.

Run the Prepare Mass Additions Program

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Chapter 9: Oracle Cash Management

Setup Steps Oracle Cash Management

Required / Mandatory Setup Steps
 General Ledger Setup Steps
 Define your chart of accounts
 Define your accounting period types and accounting calendar periods
 Enable currencies that you plan to use
 Define a ledger
 Define a transaction calendar to determine which days are business days to
be used in cash forecasting
 Payable Setup Steps
 Choose a primary ledger for Oracle Payables
 Set the Payables Option

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  Open your Payables accounting periods
 Define your bank accounts, and assign GL accounts
 Receivables Setup Steps
 Choose a ledger for Oracle Receivables
 Open your Receivables accounting periods
 Define a receipt class for miscellaneous receipts
 Define receivables activities for miscellaneous transactions
 Set up receipt sources
 Define your bank accounts, and assign GL accounts
 The Cash Management setup steps for data may be shared with other oracle
applications. The shared data include:
 Currencies
 Exchange Rates
 Organizations
 Ledgers
 Bank Accounts

Cash Management Operations

Creating Bank
You have to provide the Bank Information, Bank Address and Bank Contact to create a new
Bank.

1. Navigate to Cash Management Responsibility

2. Click on Setup➔Banks➔Banks

3. In the Banks tab, click on the Create button

4. Select the Create new bank option

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5. In the Country field, enter Pakistan
6. In the Bank Name field, Bank name
7. In the Bank Number field, enter bank code if any
8. Click on the Finish button.
9. Next update the Bank Address and Contact Information

141
Creating Bank Branches
Click the Create Branch icon. The Country and the Bank Name are automatically entered.

142
Enter the Branch address and Branch contact information and click on finish button.

Creating Bank Account

Bank Account will be created in following five steps

• Account owner and use

• Account information
• Account controls
• Account Access
• Account Contact

1. Navigate to Cash Management Responsibility

2. Click on Setup➔Bank Accounts

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 3. In the Manage Bank Accounts tab, click on the Create button.
4. In the Country field, enter Pakistan
5. In the Bank Name field, enter HBL
6. In the Branch Name field, enter Gulberg
7. Click on the Continue button.
8. Select Vision Operations LE for the Bank Account Owner field.
9. Select Payables, Payroll and Receivables for the Account Use field and click on the
Next button.
10. In the Account Name field, enter Gulberg Karachi Account
11. In the Account Number field, enter 272741118
12. In the Currency field, enter PKR
13. Select the Multiple Currencies Allowed option
14. Click on the Save and Next button

15. In the General Controls enter the below information

144
16. In the Account Access form, click on the Add Organization Access button

17. Select Payables and Receivables for the Account Use field.
18. Select Vision Operations for the Organization field and click on the Continue button.
19. Click on the Apply button.
20. Click on the Save and Next button.
21. Click on the Finish button, we should receive a confirmation that the account has been
created.
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Creating Transaction Codes
You can automate the Bank Reconciliation Process, but first of all you have to define the
transaction codes for different types of transactions on the bank statement

1. Select the Cash Management responsibility

2. Navigate to Setup ➔ Bank ➔ Bank Transaction Codes

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3. In the Bank Transaction Codes window, select the 272741118, Gulberg Karachi
Account bank account.
4. In the Type field select Payment.
5. Enter 100 in the Code field.
6. Enter Regular Payment in the Description field. The Trans Source of AP Payments is
automatically entered.
7. Select the next line.
8. In the Type field, select Misc Payment.
9. Enter 110 in the Code field.
10. Enter Miscellaneous Payment in the Description field.
11. Select the next line.
12. In the Type field select Receipt.
13. Enter 200 in the Code field.
14. Enter Regular Receipt in the Description field. The Trans Source of AR Payments is
automatically entered.
15. Select the next line.
16. In the Type field select Misc Receipt.

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 17. Enter 210 in the Code field.
18. Enter Miscellaneous Receipt in the Description field.
19. Select the next line.
20. In the Type field select Rejected.
21. Enter 300 in the Code field.
22. Enter Rejected in the Description field.
23. Select the next line.
24. In the Type field select Stopped.
25. Enter 400 in the Code field.
26. Enter Stopped in the Description field. The Transactions Source of AP Payments is
automatically entered.
27. Select the next line.
28. In the Type field select NSF.
29. Enter 500 in the Code field.
30. Enter Insufficient Funds in the Description field.
31. Click on the Save icon, to save your work.

Entering Bank Statement

1. Select the Cash Management responsibility.

2. Navigate to Bank Statements ➔ Bank Statement Interface Lines

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Chapter 10: Oracle Inventory

In Oracle Applications the inventory can be of the below types:

 Finished Goods – for sale to Customers

 Services – that you provide to Customers
 Spare Parts – for maintenance
 Raw Materials – for use in the Manufacturing Process
 Inventory on Consignment – which you purchase from supplier

Oracle Inventory is integrated with the financial modules as per below:

In addition to the above Oracle inventory is also integrated with Oracle Purchasing, Oracle
Order Management, Oracle Manufacturing, and Oracle Work in Process, Oracle Bills of
Materials, and Oracle Advanced Supply Chain Planning Modules as well.

Receipt to Issue Life Cycle of Inventory

The three steps in the life cycle of inventory are:

 Receiving Inventory
 Transferring Inventory

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  Issuing inventory

You use receipt to issue process to manage inventory in Oracle. You receive inventory in
your warehouse upon receipt. After receipt you have the option to transfer it within your
organization or some other organization as well. Lastly, you can issue material out of Oracle
Inventory.

Receiving Inventory
You can receive inventory in your organization using any of the below ways.

Purchasing

Oracle Purchasing is used to receive material from outside of your organization. You can
receive:

• Purchase order receipts

• Internal requisitions
• In-transit receipts
• Return material authorizations
• Unexpected receipts

Work In Process

In order to receive material from the manufacturing floor, you can use Oracle Work in
Process. You can receive:

• Component returns
• Negative component issues
• Assembly returns

Inventory

You use Oracle Inventory to receive materials in to your warehouse. You can receive:

• Miscellaneous account receipts

• Receipt from projects
• User-defined receipts
• Inter organization transfers

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Transferring Inventory
You can transfer inventory using any of the below ways.

Shipping

You can use Oracle Shipping Execution to generate a transfer to move material from a
warehouse to a staging for shipping.

Order Management

You can use Oracle Order Management to generate a transfer to move material from a
warehouse to a staging area for shipping.

Work In Process

You can use Oracle Work in Process to generate a transfer to acquire components for a
project.

Inventory

Oracle Inventory can be used to:

• Transfer material between organizations

• Transfer material within an organization
• Replenish materials
• Request transfers

Issuing Inventory
You can use any one of the below ways to issue inventory in Oracle.

Order Management

Inventory issued can be captured in Order Management through:

• Sales orders
• Internal orders

Purchasing

Oracle Purchasing can generate an inventory issue for:

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 • Return to vendor materials

Work in Process

Oracle Work in Process can generate an inventory issue through:

• Component issues
• Assembly returns

Inventory

Oracle Inventory can issue stock through:

• User-defined material issues

• Inter - organization transfers
• Cycle count negative issue
• Issue requests

Setup Steps Oracle Inventory

Required / Mandatory Setup Steps
 Define Item Flexfield
 Define Item Categories Flexfield
 Define Item Catalog Group Flexfield
 Define Stock Locators Flexfield
 Define Account Aliases Flexfield
 Define Sales Orders Flexfield
 Define Organizations
 Change Organizations
 Define Intercompany Relations
 Define Unit of Measure Classes
 Define Sub inventories
 Define Item Attribute Controls
 Define Categories
 Define Category Set
 Define Default Category Sets

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  Define Statuses
 Define Cost Types
 Define Accounting Periods
 Set Profile Options

Note: For detailed setup steps, please explore the Oracle Documentation Online.

Operations Oracle Inventory

Create Items

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154
Items Assignment to Inventory Organization

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Assigning Items to Categories

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157
Item Attributes

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160
161
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Chapter 11: Supply Chain Management
Supply Chain Management (SCM) is a set of various activities in which raw materials are
purchased and transformed into semi-finished or intermediate goods, which eventually
become the finished goods. These finished goods are then distributed to the customer using
the distribution channel. This complete cycle from supplier to customer is called the Supply
Chain Management process.

Supply Chain
Management
Supplier

Procurement
Planning and Scheduling

Inventory / Logistics

Manufacturimg

Distribution

Customer

As we can see in the Supply Chain Management process, all the activities are interconnected
with each other. Therefore, for a smoother process flow, these activities should be clearly
defined and all of them should have a proper Standard Operating Procedure, which ensures
their smoother running.

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Supply Chain Management is a set of activities through which we can arrange and integrate
the stakeholders of the Supply Chain process, as follows:

 Suppliers
 Customers
 Distributer
 Transporter
 Warehouse
 Production

Supply Chain activities are very important in any organization. However, at the same time,
they are very hectic and time consuming as we have to keep a track of thousands of
suppliers and customers. In the same manner our internal process of procurement,
inventory, manufacturing, planning, scheduling, and distribution can also get very complex.
It would be very difficult for us to manage these activities manually by using spreadsheets.
Oracle E-Business Suite gives us a complete solution to map our business process and
performs different types of planning related to our business process and the management
of our master data in the system, giving us a great ease of control over the process.

Supply Chain Management and Oracle E-Business Suite

Oracle E-Business Suite provides us with a number of application parts, also called modules
that can be used to manage business processes and cater to complex scenarios that are
encountered in the organization.
Oracle E-Business Suite offers the following modules for the Supply Chain process:

 Oracle Procurement
 Oracle Logistics
 Oracle Manufacturing
 Oracle Order Management
 Oracle Marketing and Sales

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Oracle E-Business Suite Supply Chain process flow

The core processes that are listed under the Oracle E-Business Suite SCM domain are plan,
source, deliver, and make. A number of Oracle Application modules reside under these
broad-level processes. Some common modules are shown in the following figure.
Oracle's SCM domain contains the following business suites:

 Advanced Procurement
 Value Chain Execution (Logistics)
 Product Lifecycle Management
 Asset Lifecycle Management
 Manufacturing, Value Chain Planning
 Order Fulfillment

Oracle Supply Chain Management

Source
Purchasing
Sourcing
Supplier Portal

Deliver Make
Order Management Oracle Process Manufacturing
Inventory Management E-Business Discrete Manufacturing
Transport Management Suite Shop Floor Management

Plan
Demand Planning
Supply Chain Planning
Inventory Optimization

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Chapter 12: Purchasing Fundamentals
Procurement is the process of acquiring goods and services from external parties at the
most effective price and possibly over a period of time. This concept obviously excludes
one-time purchases that may be made with disregard for the process of negotiation and
pricing agreements.

Let's start by looking at the procurement process.

1. Requester completes the requisition based on demand. You can automate the
Requisition creation through the Requisition Import program, based on demand
from various sources. For example, drop shipments in Order Management and min-
max planning in Inventory.
2. The Approver approves the requisition.
3. The Supplier is selected based on business sourcing rules, including Request for
Quotations (RFQ). If the supplier does not exist, a new supplier is created.
4. The Procurement department creates the purchase order.
5. The Approver approves the purchase order. The purchase order is created and sent
to the Supplier.
6. The Supplier receives the purchase order, and fulfils the order by sending the Items.
If the purchase order is for a service, the service is provided to the organization.
7. The Receiver receives the Items and enters the receipts on the system.

Raising Requisitions for Items

You can create requisitions manually from the Purchasing or iProcurement Modules. You
can also import requisitions from external systems and these can also be generated from
other modules including Order Management, Work in Process, and Inventory.
1. Switch to Purchasing responsibility.

2. Navigate to Requisitions➔Requisitions

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3. In the Lines tab update Item, Quantity, Need by, Destination Type, Organization and
Location

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 4. In the Source Details and Detail tab update the information as per requirement. For
example Note to Buyer or Note to Receiver etc.
5. Save your requisition and note the requisition number.
6. Click the Approve button to Approve the Requisition
7. Check the Submit for Approval option and click OK

Approving Requisition
Only authorized user can take approval action on a purchase requisition. Approving a
purchase requisition is only a two steps process.

1. Navigating to the Notification Summary window

2. Taking approval action
When a requisition is approved the requisition preparer is automatically notified.

Request for Quotation

You can create a Request for Quotation (RFQ) from an existing approved requisition or
directly in the form used to enter RFQs. These can be sent to suppliers who can send

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quotations electronically (if configured) for the products/services requested. Alternatively,
quotations can be created manually in the system. These quotation data sets can be copied
to purchase orders to process actual delivery and fulfillment of products and services as
needed. Purchasing lets you create supplier lists so that you can predefine groups of
suppliers to whom you want to send RFQs. You can establish the approved supplier lists
according to the criteria you define (item, manufacturing category, geographic location, and
so on) and you can combine these supplier lists to produce multiple copies of your RFQ
automatically. RFQs and quotations are more the norm in manufacturing enterprises where
these are automated using sourcing rules. Sourcing rules allow an enterprise to build rules
based on location, the item, and other related information that will be used when a material
resource plan is run to create requisition transactions to replenish stock.

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If quotations require approval, the same hierarchies configured for requisitions and
purchase orders can be used.

Purchase Orders
A purchase order (PO) is a commercial document issued by a buyer to a seller (supplier),
indicating types, quantities, and agreed prices for products or services the supplier will
provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy
products or services. Acceptance of a purchase order by a supplier usually forms a one-off
contract between the two. A buyer or purchasing agent is a person who purchases goods
and services for an enterprise. A purchase order document allows buyers to communicate
their intentions clearly and explicitly to suppliers. Suppliers are protected in case of a
buyer's refusal to pay for goods or services. A purchase order document is the last step of
the procurement cycle. The PO is a contract detailing the deliverables and timeline to a
supplier. The purchase order document is the only transaction that allows receipts (of goods
and services) to be transacted. Below are the different types of Purchase Orders:

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Standard Purchase Orders: These are created for one-time purchases of various items when
you know the details of the goods or services you require, estimated costs, quantities,
delivery schedules, and accounting details.
Blanket Purchase Agreements (BPA): These are created when you know the detail, of the
goods or services you plan to buy from a specific supplier over a period, but you do not yet
know the detail of your delivery schedules. You can use blanket purchase agreements to
specify negotiated prices for your items before actually purchasing them.
Global Blanket Agreements: These are Blanket Purchase Agreements created for a single
organization or to be shared by different business units of your organization. These are
created when you have negotiated based on an enterprises' total global purchase volume to
enable centralizing the buying activity across a broad and sometimes diverse set of business
units. Enterprise organizations can then access the agreement to create purchase orders
that leverage pre-negotiated prices and terms.
Blanket Releases: It can be issued against a blanket purchase agreement to place the actual
order (as long as the release is within the blanket agreement affectivity dates).
Contract Purchase Agreements: These are created with your suppliers to agree on specific
terms and conditions without indicating the goods and services that you will be purchasing.
You can later issue Standard Purchase Orders referencing your contracts.
Planned Purchase Orders: These are long-term agreements committing to buy items or
services from a single source. You must specify tentative delivery schedules and all details
for goods or services that you want to buy, including charge account, quantities, and
estimated cost.
Scheduled Releases: These can be issued against a Planned Purchase Order to place the
actual orders. You can change the accounting distributions on each release if they are
different from the Planned Purchase Order against which this scheduled release is being
created.

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Receiving
You can perform transactions against PO in Receiving. As you know that a PO is a contract
between the buyer and a supplier to deliver goods/services for a price. Receiving process
facilitates invoicing and payments.

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Chapter 13: Order Management
Order Management provides an end-to-end solution for processing a simple quote through
the negotiation process and automating the transition of the quote to a sales order
document and to fulfillment of that order. A quote can pass through various stages from its
initial preparation to fulfillment (as a sales order or sales agreement). These stages include
preparing a draft, negotiating with a customer, obtaining internal and external business
approvals, versioning, and converting the quote to an order. Oracle Order Management
includes a workflow process to support the activities that occur within a negotiation
process, such as internal approval and customer acceptance. This enables creating and
managing quotes during the negotiation phase and transforming the quote to a firm order
after internal and external approvals.

There are differences in tasks and processes that are not supported for a quote transaction.
The following cannot be managed/transacted for quotes:

• Holds
• Scheduling
• Copy return transactions
• Independent line process flows

The following are a few important considerations for a transaction type when entering an
order. To process an order (or a quote) you will need to define a transaction type to manage
a couple of the activities that will happen on the sales order transaction, as follows:

• Document Type: Sales order or agreement

• Order Category: Mixed, order, or return
• Fulfillment Flow: To drive processes around completing the transaction with or
without approval
• Credit Check Rules: To manage credit checks and rules to put order on hold if needed
• Shipping Defaults: To identify where the items ordered will ship from
• Invoicing Details and Accounting: This defines invoicing parameters and COGS
accounting

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Once the transaction type is created you can start using it to enter an order. The default
source is always manual if you are entering on the screen, but there may be other sources
that could be used for importing orders from external data sources. These also require a
transaction type with the previous details. The Quick Order screen allows users to enter a
manual order quickly and efficiently. Oracle Order Management provides defaulting rules to
allow data entry to be managed as a seamless process.

A customer record also contains the basic information you can default to when creating an
order transaction. A hierarchy is available on how these data elements are sourced in a
transaction. This is important when you are automating or need to bring efficiency into the
order capture process.

The following is a list of data elements needed to complete an order booking activity:

• Order transaction type

• Order number
• Customer
• Price list
• Salesperson
• Item (on the price list specified)
• Quantity ordered
• Warehouse (Inventory Organization) from where the order should be fulfilled

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Chapter 14: HRMS & Payroll Overview
Oracle Human Resources Management System (HRMS) is a major component of the Oracle
E-Business Suite of applications. Oracle HRMS is an integrated suite of applications that
supports all aspects of the HR function. It includes:

 Oracle Human Resources (HR)

 Oracle Payroll
 Oracle Self-Service Human Resources (SSHR)
 Oracle Performance Management
 Oracle iRecruitment
 Oracle Time & Labor (OTL)
 Oracle Learning Management
 Oracle Advanced Benefits (OAB)
 Oracle HRMS Intelligence (HRMSi)

All Oracle HRMS applications share tables in the Oracle database, which eliminates data
redundancy, reduces the possibility of error, and creates a consistent record of every
worker. Within this framework, however, you can define a human resources model that
supports your enterprise's structures and policies.

The Oracle HRMS applications meet the requirements of a global workforce. For example,
HRMS enables you to manage information in a variety of national languages and supports
multiple address styles, legislation-specific date formats, and national identifiers (such as
social security numbers), which can be validated according to the rules in each country.

Oracle Human Resources (HR)

Oracle Human Resources (HR) is a proactive management solution that helps control costs
while developing and supporting an effective workforce. Among the many features of
Oracle HR is the ability to:

 Manage the entire recruitment cycle.

 Design organizational models that match current and future business strategies and
objectives.

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  Perform position management by defining and recording required skills,
competencies, experience and qualifications for positions, jobs and organizations.
 Perform career management functions relating to the definition of competencies,
assessments, suitability matching, graphical ranking, and succession planning.
 Administer and maintain benefits plans, coverage levels, and contribution
allocations.
 Manage salary proposals, and approve these by component.
 Use spreadsheets to export compensation and benefit details for comparison with
external survey figures.

Oracle Human Resources provides the shortest route to fast, smart human resource
management.

Oracle Payroll
Oracle Payroll is a high-performance, rule based payroll management system designed to
keep pace with changing enterprises and workforce needs.
Payroll managers require a solution to address unique requirements, and offer complex
calculations without losing the benefits of a standard supported package. Oracle Payroll
offers that capability via a unique, data driven approach that enables the definition and
management of diverse payroll requirements.
Among its many capabilities, Oracle Payroll delivers the power to:
 Process many payrolls quickly and easily in a single day.
 Define comprehensive personal payment methods.
 Quickly create complex calculation rules, such as union overtime, without
programming.
 Efficiently check, double check, and reconcile payrolls.
 Make retroactive adjustments to past earnings and deductions.
 Examine employee payment histories at any time.
 Track and monitor employee costs via online access to payroll data.
 Disburse in multiple currencies.
 Transfer payroll information to the general ledger and to other accounting systems,
including project costing systems.

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  Report on payroll results to the tax office and company executives.
 Maintain full security and integrity of payroll information, including historical
information.
 Enable access to information when required for inquiries and responses to pay
queries.
Oracle Payroll enables fast, flexible, and accurate payroll processing from time capture to
ledger costing.
Oracle HR and Oracle Payroll constitute a closely integrated HR system. Oracle HR and
Oracle Payroll windows are available under a single menu structure, sharing windows and
underlying tables wherever possible to eliminate redundant data entry, maintenance, and
storage.

Oracle Self-Service Human Resources (SSHR)

Oracle Self-Service Human Resources (SSHR) enables your workforce to use a web browser
to access HR information and perform personnel actions. The information an individual can
access is tailored to the individual's roles and information needs. You can: authorize
employees to maintain their own information, including personal profiles, benefits, and
expenses; enable managers to conduct performance reviews, transfers, and time and
expense approval; and deliver workforce intelligence to managers, HR professionals, and
executives. Oracle SSHR is designed for the needs of the casual or untrained user, with
simple, intuitive navigation and configurable user assistance integrated with the user
interface.

Oracle Performance Management

Oracle Performance Management is a self-service product that enables enterprises to
implement an effective performance management system. It enables managers and
employees to manage performance management functions including objectives setting and
appraisals process. Enterprises can create and administer questionnaires for the various
potential participants in the appraisal process.

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Oracle iRecruitment
Oracle iRecruitment is a self-service module that offers a fully automated recruitment
process. It enables managers, recruiters, and candidates to manage all phases of
recruitment, from vacancy definition through recruiting and hiring new employees. Oracle
iRecruitment supports both internal and external users (such as visitors to recruitment sites)
and is highly configurable to reflect the enterprise image. It can provide reports of your
recruitment process, allowing you to monitor its effectiveness.

Oracle Time & Labor (OTL)

Oracle Time & Labor (OTL) is a web-enabled time-recording application that enables you to
reduce the costs associated with time and attendance record keeping. OTL ensures all
employees are paid correctly and on time, it reduces administration costs by providing self-
service time reporting for workers, and it shares worker time-related information with other
Oracle applications, such as Oracle Projects and Oracle Payroll.

Oracle Learning Management

Oracle Learning Management is an enterprise learning management system (LMS) that
enables you to train your workforce effectively and at lower cost. Oracle Learning
Management enables you to manage, deliver, and monitor your online and classroom-based
training: you can efficiently assemble and deliver learning content; you can provide the
most appropriate combination of classroom and online training; and you can measure the
effectiveness of your training initiatives.

In Oracle Learning Management, self-service access is available not only to the learner but
also to those responsible for administration and content management, offering improved
efficiency and a lower cost of implementation for managing the learning environment.

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Chapter 15: ERP Implementation Strategy & Challenges
ERP Implementation Strategies
You’ve done the hard part and chosen your Enterprise Resource Planning (ERP) platform.
Now it’s time to implement. The smartest strategies for getting your ERP up and running
allow you to facilitate a more effective and successful changeover.

Don’t make the mistake of failing to properly handle data migration, system implementation
and user training. It’s not worth the risk. No one wants to struggle, and everyone should
enjoy the benefits a system that provides streamlined workflow and a feature-rich working
environment.

The right implementation strategy will ensure that you are better prepared, able to
maintain focus on the original scope of your project and guarantee that your staff is
properly trained and prepared.

Clearly Define Requirements before Taking Action

The scope of your project can be a critical concern. Businesses that fail to keep tight focus
on specific processes and system requirements will find that ERP implementation may
require additional time and costs. A well-defined scope will ensure your project does not
grow out of hand.

Evaluate Your Options

Poorly handled and mismanaged evaluation efforts create serious issues during every step
of the implementation process. Vague requirements may lead businesses to choose the
wrong vendor, handle data migration poorly or result in delayed completion. Prepare
yourself properly, obtain input from users and team leads and a carefully evaluate both your
legacy systems and planned ERP implementation before making any big decisions.

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Document User Procedures

Proper documentation can be essential for understanding how users interacted with legacy
systems, evaluating and improving workflow and providing users with the concise
instructions needed to navigate a new feature-rich working environment. Create and
maintain documents detailing key user procedures and routines, both before and during
ERP implementation.

Single-Step Implementation

This model of implementation requires all users to migrate to the new system at once. Ideal
for smaller operations and businesses that may have few users, single-step ERP
implementation offers a simple and straightforward way to handle the process so you can
more easily focus on your project scope and implementation parameters. But it’s not for
everyone.

Phased Rollout

Changing to a new system incrementally over an extended period of time can allow for early
implementation of key features, and ensures that any issues or complications are isolated
from working processes that have already been brought online. While more flexible than a
single-step approach, this strategy may entail a lengthier process, especially for businesses
that keep changing the parameters of an implementation project.

Parallel Adoption

This strategy involves both new ERP and legacy systems operating simultaneously. Ideal for
businesses and organizations that have concerns regarding the effective training and
education of users, parallel adoption allows users to learn how to navigate the new system
while retaining access to a familiar and established working environment.

Consider Customization Options Carefully

You should consider the amount of customization required to configure and implement a
new ERP system. Systems that have been heavily customized often lead to higher
deployment and operational costs. Many of the most basic business processes are the same

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for the vast majority of companies, and you should always evaluate the need for
customization carefully, making sure to weigh it against potential costs.

Choose the Right Project Leader

Designate an internal project or team lead to spearhead your implementation efforts. A

vendor-selected project manager can be a terrific asset, but it’s an inside partner who gets
what’s really going on, with a complete understanding of your working process or the needs
of your staff. Select a team lead with experience managing software systems and task him
or her with assessing all end-user requirements as well as fully learning the new system. An
internal project lead is an invaluable resource for handling many aspects of data migration
and staff training.

Don’t Forget Mobile Users

Limiting access to ERP systems to desktop working environments would be a major liability.
The growing popularity and sophistication of mobile devices should not be overlooked when
it comes to your ERP implementation strategy. A recent Nielsen study found that mobile has
now surpassed desktop usage of the Internet. With that in mind, it’s important to roll out a
mobile ERP strategy that allows users to stay productive when using smartphones and
tablets, and will not create additional security issues.

Allocate Sufficient Time and Resources for Training

Learning and mastering a new way of operating can often require a considerable investment
of time and effort. Provide your staff with the time needed to get acquainted with the new
ERP system and ensure they have access to ample training resources and opportunities
during migration and rollout, and in an ongoing capacity.

ERP Implementation Challenges

Enterprise resource planning (ERP) systems or similar IT packages have become widely used
in businesses of all sizes and types for a number of years now. Even small businesses and
family-owned companies have joined the mainstream trend of implementing ERP software,
with many ERP providers offering solutions just for smaller-sized organizations.

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The ERP trend has become so strong that the vast majority of small- to medium-sized
businesses (SMBs) have performed an ERP implementation at least once (some of them
twice or even more often). But even though ERP usage is widespread and the norm for most
companies of any size these days, there are still challenges for each new implementation, as
each organization is different and comes with its own needs, expectations, and processes

At Technology Evaluation Centers (TEC) we deal with many companies embarking on ERP
selection and implementation projects. In this article we’ll look at the main challenges facing
organizations starting out with an ERP system implementation.

Although implementation issues vary according to a number of factors, the major challenges
faced are the same across different regions and sizes of businesses. I’ve ordered the
categories of problems in ascending order based on the degree of “entanglement.”

The Selection Problem

Say a company has decided for many reasons to launch a managerial information system
implementation project. The very first question that managers will face is what type, size,
and scope of system they actually require and how to choose the most suitable solution
among the hundreds of enterprise software options available on the market.

There is no single answer on how to find what you need, and there are multiple factors to
consider on top of size, scope, and type, including price and specific functionality
requirements (there are often hundreds to thousands of features and functions for each
software system that each need to be considered in terms of priority and utility).

Many companies may consider themselves immune to this challenge as they have already
decided what they need and want in a new system. Be careful about coming to this
conclusion without proper background work though, as selecting a new software system,
especially one as all-encompassing for a company as an ERP system, is one of the most
complex and important decisions your company will ever make.

ERP selection should be considered as seriously as possible for the reason that ERP system
choice predefines a company’s strategy for at least the following 6 to 10 years and, no
doubt has a huge impact on the future success of the entire business.

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A comprehensive enterprise software consulting and research industry exists to serve the
needs of companies facing the selection issue for the first (or second or third!) time. For
example, TEC offers a range of software selection programs available for organizations
starting out on an ERP selection process.

Technical Issues

How to successfully select a software package is important but not the last problem that will
appear on the thorny path toward getting the whole system (software and hardware,
server, and users) working together and bringing any value back to the company. Another
set of implementation issues is related to the technical part of the project.

More than likely servers and workstations will need to be revised to accommodate the new
system, and new and more modern ones may need to be ordered, purchased, and replaced.
The internal network also has to be analyzed and modernized if required, and the speed and
bandwidth of the existing Internet access should be taken into consideration along with
possible technical concerns about the mobile devices being used.

If these needs are underestimated, they can dramatically impact the overall results of the
project (and easily delay the “happy hour” once the new system is finally in place and
working as planned), or poison the first few weeks (or even months) of using a new system
with slow performance, resulting in a slackening of the existing pace of business.

However, changes during the last few years in delivery models have caused a shift in how
ERP and other types of organizational software are made available to users.

Plenty of “as a service” and in the cloud options have become available, offering hosted
infrastructure, data storage and software services, which now allow the cost and headache
of applications, hardware, network, and storage problems to be minimized. These include
software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service
(IaaS).

With an on-premise environment, everything is hosted on-site—data, applications, servers,

network, and software solutions. With “as a service” hosting or cloud option, data,
middleware, networks, hardware, and applications can be hosted on or offsite depending on
the service model chosen

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For example, SaaS enables companies to run a software application hosted offsite, generally
through a network interface like a Web browser, but they have the choice of whether they
want their data associated to the offsite software application or not. For more information
on “as a service” or cloud options, read Back to Basics: Cloud Computing 101.

In short, cloud or hosted delivery models can make the implementation much easier and
less costly than with an on-premise solution, but there are caveats with going with an “as a
service” option (data security and software customization, for example) and these need to
be explored fully before a decision is made as to which delivery model to go with.

The options are now much more numerous than in the past, and smart organizations will
explore all of the options and figure out the technical requirements at the start, so there are
no nasty surprises along the way.

Data Quality Issues

This issue is particularly symptomatic of companies that are implementing ERP for the first
time and transferring their legacy data into the new system from Excel spreadsheets,
manual records, or old disparate applications. Basically, the issue is that old data that have
been used and stored for years can for many reasons appear approximate or even incorrect
in the new ERP reality. In fact, according to our research, replacing a legacy system and
consolidating disparate solutions are the top two common challenges companies face.

For example, take this situation from my previous work experience (during an ERP
implementation project for a midsize metal manufacturer): in the middle of the project, we
converted existing bills of materials (BOMs), BOM routings, and hour tariffs into the new
system and realized that the products’ new lead times exceeded real ones by a factor of two
or more.

Thanks to adequate time allotted for the conversion phase during project planning, we had
some time to fix the data by dedicating engineers and analysts to this task full-time for a few
months and modifying the implementation plan accordingly; but even in this case, the
project was delayed for two months. So, be careful with your old information, as it can be
far from reflecting the current reality, and always make “pilot” tests of new system outputs
using legacy data before converting or transferring all the data over to the new system.

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Business Philosophy Changes

ERP implementation brings significant changes to a company’s conventional business model

and the day-to-day practices it has been using for years or even decades. Take these
examples of likely changes to business processes with a new ERP:

• some employees’ level of responsibility is dramatically increased, as with the new

system it is more difficult (sometimes impossible) to fix erroneous data or typing
errors;
• new approaches to data reporting and mining and, thus, new managerial principles
and practices have to be established; and
• Business models and business processes might require massive changes because of
new real-time opportunities and data availability.

These are only a few examples of how serious and meaningful business transformation can
be, post-implementation.

Using wise and forward-looking ideas and conceptions when implementing ERP, it is
definitely possible to get a return that is something much more appreciable than a simple
change in format of data or an updated user interface. This is a real challenge, but at the
same time it is a great opportunity to refresh the business and bring new ideas as well as
laying a strategic foundation for your organization’s future.

Mindshift Issues

This is the most difficult type of issue to resolve. It’s easy to forget that the success of the
implementation of a software system depends mainly upon the users. The system itself is a
non-living and logical entity that follows logical steps and processes as it has been
programmed to, but the users of the system are humans who were used to processes with
software being one way and will more than likely find it hard to switch to a new way of
doing things, especially if the benefit of the new methods is not immediately obvious or
forthcoming.

Learn About Change Management

This is an ERP project manager‘s “favorite” variety of problem (meaning their worst
nightmare), arising from users’ habits and their understanding of what is good for the

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business in general and for the user in particular. “It’s always been like this, long before you
came in,” “I don’t think it will ever work,” “It’s not working on my PC,” “I will be talking with
the CEO about this system,” or “You don’t understand how it should work”—these
comments should sound familiar to anyone who’s ever tried to implement a new system or
change users’ requirements.

It is really difficult to describe or classify the possible problems that can arise among the
user base when a new enterprise software system is implemented; actually, almost any
question can appear. Unfortunately, change is hard to accept without seeing the visible
advantages of it, and if you don’t take steps to help your employees see these advantages
before the implementation begins you will likely regret it later. I would recommend trying to
predict such problems at the planning stage in order to reduce the potential negative
impact of users’ contra-collaboration activities.

Also, gaining the interest of different groups and categories of system users well ahead of
the project’s start date and keeping them involved during the implementation will help to
encourage the “mindshift” required in your employees for a successful implementation.
Consider following these steps to keep employees informed and engaged before, during,
and after a big software implementation project:

• inform all employees of news and project milestones as the project progresses
• establish reliable feedback communication channels for employees
• stimulate employees to generate new ideas and provide suggestions
• organize interesting and promising training sessions
• celebrate the best user achievements in training and with the new software system

Affected employees at all levels must become allies to the ERP project team for a new
system implementation, as ignoring users’ experience and concerns puts in doubt the
success of the entire project and can kill any excellent undertakings.

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Key Terms

What is Encumbrance?

Encumbrance is a commitment to pay in the future, although the goods or services have
been ordered, however, they have not been received yet. For a company, Encumbrance
reserves the money for paying for goods or services in the future; the amount is called
Encumbrance. And the amount(s) will subsequently become expenditure when goods and
services are received.

What is Encumbrance Accounting?

Encumbrance Accounting is also known as Commitment Accounting. It deals with

accounting for expenses from the time that the intent to incur that expenditure becomes
clear, that is, the commitment to incur the expenditure becomes certain. Usually, the
majority of spend in an organization happens in the procurement process; when purchase
requests are created and approved, there is a greater degree of certainty about incurring
that expense over a certain period. Encumbrance Accounting ensures that this expense is
accounted for, against the sanctioned budget, when the request is approved. This implies
that funds are set aside in accounting for meeting this expense which is not liable to be paid
unless the requests are received and billed. Encumbrance Accounting also ensures that a
reduced budget is available for other competing purchase requests. When the budget is
completely utilized, it is no longer possible to create fresh purchase requests.

What is Encumbrance Accounting in Oracle e-Business Suite?

Encumbrance Accounting ensures that money or budgets are set aside for meeting
anticipated future expenses. There may be multiple scenarios in the procurement process
that use Encumbrance Accounting: creation of purchase orders with backing purchase
requisitions, creation of purchase orders without a backing requisition, directly accounting
for an invoice and paying it, without a backing purchase order, etc. Encumbrance
Accounting in Oracle e-Business Suite ensures that the money is correctly set aside and
appropriately accounted for during the entire procurement lifecycle.

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Flexfield

A flexfield is a flexible data field that your organization can customize to your business
needs without programming. Oracle Applications uses two types of flexfields, key flexfields
and descriptive flexfields.

Key Flexfields

Key Flexfields are mandatory. A key flexfield is a field made up of segments, where each
segment has both a value and a meaning. You can think of a key flexfield as an "intelligent"
field that your business can use to store information represented as "codes". Key Flexfields
include the following: Accounting Flexfield, System Item Flexfield, Asset Flexfield, Location
Flexfield, Territory Flexfield etc. One organization may choose to customize the Accounting
Flexfield to have three segments called Company, Department, and Account, while another
organization may choose to customize the flexfield to have six segments called Company,
Cost Center, Account, Product, Product Line, and Subaccount.

Descriptive Flexfields

Descriptive Flexfields are optional. A descriptive flexfield gives you room to expand your
forms, since Oracle Applications cannot predict all the possible information you may want to
track. Your organization can use descriptive flexfields to capture additional information that
is important and unique to your business.

A descriptive flexfield appears in a block as a two character, unnamed field enclosed in

brackets. A descriptive flexfield window appears when you move your cursor into a
customized descriptive flexfield. Your organization's implementation team can customize a
descriptive flexfield to include as many additional fields as your organization needs. These
fields, also called segments, appear in the descriptive flexfield window.

Web ADI

Oracle Web ADI is being used by the End Users in the Oracle E-Business Suite to perform
some of their day-to-day data entry tasks in the commonly used Microsoft desktop
applications like Excel and upload the data to EBS.

Required Setup Steps

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These setup steps must be completed in order to run the application / module.

Optional Setup Steps with Default

These are functionalities that come with pre-seeded, default values in the database. You can
review these defaults and decide whether to use these as it is or change them to suit your
business needs. In case you need to change these defaults, you should perform that setup
step.

Optional Setup Steps

You perform optional setup steps only, if you plan to use the related features or complete
certain business functions.

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