R12 Ship To Invoicing Transaction Flows v6

Tracing a Sale of Inventory Through Oracle
OAUG Cost Mgmt SIG Meeting

May 17, 2011
Ann Kunes
Snyder’s-Lance
[email protected]
Douglas Volz
Douglas Volz Consulting
[email protected]
Introduction
 Learn about the basic shipping and invoicing processes
 See the available reporting and inquiries at each step
 Note some of the common difficulties
 Discuss current problems you may have
Slide 2
Agenda
 Welcome to Our Session!
 Cost Management SIG Business
 Tracing a Sale of Inventory Through Oracle
 Scenario
 Pick and Ship Confirm
 Trip Stop Interface
 Material Transaction Inquiries
 OE Interface / Order Line Workflow
 AutoInvoicing A/R and Sales Reporting
 Revenue Recognition and COGS Recognition
 Margin Analysis
 SLA Journals & G/L Drill-Down
 Conclusions
Slide 3
OAUG Cost Management SIG Business
- Oracle Conferences
 UKOUG Call for Papers – open to June 5th
 Birmingham, ICC; 5th – 7th December 2011
 Call for papers url: http://techandebs.ukoug.org/default.asp?p=8786
 OAUG Connection Point® — Release 12.1

 July 12-13, 2011
 Westin Chicago Northwest, Chicago, Illinois
 OAUG Connection Point® — EPM/BI

 July 20-21, 2011
 Hyatt Regency Bellevue, Seattle, Washington
 OAUG Connection Point® — EPM/BI

 November 15-16, 2011
 Atlanta, GA, USA
 Call for presentations open through Monday, August 1
 OpenWorld 2011
 October 2-6, 2011
 Moscone Center, San Francisco
Slide 4
OAUG Cost Management SIG Business
- Other SIG Business
 Open vacancy for OAUG Cost SIG Membership Chairperson
 Questions, concerns, ideas for the OAUG Cost Mgmt SIG:

 Doug Volz [email protected]
 Jerry Devore [email protected]
 Sharon Widmer [email protected]
Slide 5
Scenario and Overall Process
Slide 6
What happens when?
 You ship to a customer
 How can you see its progress?
 How can you see the results?
Slide 7
General Shipping & Invoicing Process Flow
1.0 Order 2.0 3.0

Order Input
Enter/Book an Order Booked Schedule Order Pick Release
Released
or Partial
6.0
10.0
Invoicing & Revenue
Close Order
Accounting
7.0
4.0 8.0 9.0
Margin Post to
Ship COGS Create
Analysis & G/L
Confirm Recognition Accounting
Reporting
5.0
Process
Material
Movement
Slide 8
Enter and Book a Sales Order
Menu path: Order Management Super User, Vision Operations => Order Organizer
Slide 9
Sales Order Line Details
Slide 10
Sales Order Workflow
Menu path: Order Management Super User, Vision Operations => Order Organizer => Tools => Workflow Status
Slide 11
Three Steps Within Shipping
 Trip Planning:
This allows you to schedule trips, assign scheduled delivery lines to a planned trip, and sequence
deliveries within a trip. You can create trips and assign delivery lines to the trip, and find delivery lines
and group the lines into trips and deliveries. Every delivery should be associated with a trip. If a trip is
not manually created, it is automatically created during the ship confirmation process.
 Pick Release:
This allows you to release eligible picking lines based on defined picking criteria. You can define Pick
Release criteria / rules which determines which lines will be released, and you can define Release
Sequence Rules to control the order in which picking lines are released. You can also define Pick Slip
Grouping Rules to define how picking lines are grouped on a pick slip. The move order is used in pick
release to move inventory from the warehouse to a pick staging area.
 Ship Confirm:
This defines shipped quantities, defines inventory control information, assigns freight costs, and defines
whether released picking line items are shipped. You can ship confirm an entire trip or delivery, or
backorder an entire trip or delivery. If partial shipments, backordering at ship confirm automatically
splits the sales order into two lines. The first line represents the shipped quantity, and the second line
represents the backordered quantity.
Slide 12
Where Are the Items to be Shipped?
Menu path: Cost Management – SLA Vision Operations => Operational Analysis => Material => On-hand Quantities
Slide 13
Pick Release
Menu path: Shipping Super User => Release Sales Orders => Release Sales Orders
Slide 14
Pick Release
Menu path: Shipping Super User => Release Sales Orders => Release Sales Orders
Slide 15
Pick Release
Menu path: Concurrent Manager => View Requests
Slide 16
Pick Release
Menu path: Concurrent Manager => View Requests
Slide 17
Updated Workflow Status
Menu path: Tools => Workflow Status
Slide 18
Pick Release Material Transactions
Menu path: Cost Management – SLA Vision Operations => View Transactions => Material Transactions
This is the
increase to the
Staging Subinv.
This is the
decrease to
the FGI
Subinv.
Slide 19
Pick Release Material Accounting
 With Standard Costing only one Pick mat’l transaction has accounting entries
 With Average Costing, Pick Release has no material accounting entries
The increase to
Staging has no
accounting
Slide 20
Pick Release Accounting
 With Standard Costing the decrease to FGI has the accounting entries
The decrease
to FGI has the
accounting
entries
Slide 21
Now Where Are the Items to be Shipped?
This quantity
is ready to
ship
Slide 22
Now On to Ship Confirm
Menu path: Shipping Super User => Shipping => Ship Confirm Deliveries SRS
 Ship confirm to relieve inventory and debit deferred COGS
Slide 23
What Happens During Ship Confirm?
Menu path: Cost Management – SLA Vision Operations => Requests => Find Requests
 And see what else was submitted at the same time:
Slide 24
– Interface Trip Stop
Menu path: Cost Management – SLA Vision Operations =>
Requests => Find Requests
=> Interface Trip Stop => View Log
This is a log file, your Shipping Support

Analyst would use this if a shipment
failed
Slide 25
– The Sales Order is Updated
The sales order The quantity was

was closed shipped
Slide 26
Now Where Are the Items that Were Shipped?
The quantity
that was in
Staging has
shipped
Slide 27
Sales Order Issue – Material Transactions
This is the
customer
shipment
transaction
Slide 28
Sales Order Issue – Material Accounting Transaction
Deferred
COGS entries
Inventory
relief entries
Unfortunately in R12,
Unfortunately in R12,
you cannot summarize
you cannot summarize
these material
material distribution
accounting entries
accounting entries
across
across cost elements
cost elements
Slide 29
Deferred COGS Account Setup
Menu path: Cost Management – SLA Vision Operations => Setup => Account Assignment =>
Organization Parameters.
Slide 30
How Else Can You See the SO Shipment?
Menu path: Cost Management – SLA Vision Operations => Reports => Material Account Distribution Detail
Slide 31
How Else Can You See the SO Shipment?
Menu path: Cost Management – SLA Vision Operations => Reports => Material Account Distribution Detail
Slide 32
Now What? Revenue Recognition
 In R12 all customer shipment entries go to deferred COGS
 Revenue and COGS are explicitly matched

• AR: “Autoinvoice” & “Revenue Recognition Master Program”
• CST: “Inventory Cost Processor” or
“Record Order Management”
• CST: “Collect Revenue Recognition Information”
• CST: Then “Generate COGS Recognition Events”
 New Accounting Entries to clear deferred COGS
 Use the COGS Revenue and COGS Matching Report
Slide 33
Now Invoice the Sales Order
Menu path: Receivables, Vision Operations (USA) => Interfaces => AutoInvoice
In R12 you can

set a profile for
invoicing to run
automatically
– eliminating the
Autoinvoice step
Slide 34
Check the Sales Order for Invoice Status
Slide 35
Slide 36
- A/R Distributions
Slide 37
Next Step:
- Revenue Recognition Master Program
Menu path: Revenue Management Super User, Vision Operations => Revenue Recognition
Slide 38
Next Step:
- Inventory Cost Processor or Record Order Management
Menu path: Cost Management – SLA Vision Operations => COGS Recognition => Record Order Management
Normally you don’t need to run Record Order Management since

the Inventory Cost Processor usually runs in the background
and it runs this program for you automatically.
Slide 39
Next Step:
- Collect Revenue Recognition Information
Menu path: Cost Management – SLA Vision Operations => COGS Recognition =>
Collect Revenue Recognition Information
Slide 40
Next Step:
- Generate COGS Recognition Events
Menu path: Cost Management – SLA Vision Operations => COGS Recognition =>
Generate COGS Recognition Events
Tip: put all four programs, Revenue Recognition

Master Program, Record Order Management, Collect
Revenue Recognition Information and Generate COGS
Recognition Events in a report set
Slide 41
So Where Are We Now?
 We have shipped to the customer
 We have deferred COGS
 And based on customer acceptance (100% in this case), we have

recorded entries to Trade COGS
Slide 42
How to See COGS Recognition?
 Material transactions inquiry
 COGS Revenue Matching Report
 G/L or Subledger Accounting Reports
Slide 43
COGS Revenue Matching Report
Menu path: Cost Management – SLA Vision Operations => View Requests => Submit a New Request =>
Generate COGS Recognition Events
Slide 44
Slide 45
Slide 46
Slide 47
Slide 48
How About Margin Reporting? Margin Load
Menu path: Cost Management – SLA Vision Operations => Report => Operational Analysis=> Margin Analysis Load
Tip: you don’t need to run

Create Accounting or COGS
Recognition processes in order
to run this report. It works the
same way in R11i and R12
Slide 49
How About Margin Reporting?
- Margin Analysis Report
Menu path: Cost Management – SLA Vision Operations => Report => Operational Analysis=>
Margin Analysis Report with Order Management
Slide 50
Tip: all of the Cost XML

reports may be found
using the Requests
menu. They are not
set-up in the
Report menu structure
Slide 51
- Margin Analysis Report (XML)
Menu path: Cost Management – SLA Vision Operations => Requests => Submit a New Request =>
Margin Analysis Report with Order Management (XML)
Slide 52
Slide 53
Oops! What About Create Accounting?
 We still need to run Create Accounting

• In both Cost Management and Receivables
• EVEN AFTER CLOSING THE INVENTORY ORG !
 This will create the Subledger Accounting entries
 And optionally, post to the G/L (why not?)
Slide 54
Run Create Accounting in Each Module
Tip: Receivables and Revenue Management

Create Accounting / Process Categories are the same,
run from either responsibility
Slide 55
Example Running Create Accounting
- Cost Management
Slide 56
Now Lets Drill Down From G/L to Inventory (1)
Menu path: General Ledger, Vision Operations (USA) => Inquiry => Account Analysis and Drilldown
Slide 57
Org Code
is missing
in R12,
but
you can
configure
SLA to
add it
back
Slide 58
• Click on View Journal Entry to see the SLA Journal Line

• Click on View Transaction to see the Material Accounting Transaction Slide 59
SLA JE
Slide 60
Slide 61
Slide 62
Slide 63
Menu path: General Ledger, Vision Operations (USA) => Inquiry => Journal
Slide 64
Slide 65
• Click on View Journal Entry to see the SLA Journal Line

• Click on View Transaction to see the Material Accounting Transaction
Slide 66
Subledger Reporting Across All Modules
Menu path: System Administrator => Security => Responsibility => Request
• Use System Administrator to put this on your custom menu

• You should put this on a custom Request Group
There are two G/L SLA

reports to try. You may
prefer the Account
Analysis Report as
it has the account
range parameters
already displayed
(XLAAARPT)
Slide 67
Should be a Custom Menu: General Ledger, Vision Operations (USA) => Reports => Request => Standard
=> Account Analysis Report
Slide 68
Custom Menu path: General Ledger, Vision Operations (USA) => Reports => Request => Standard
=> Account Analysis Report
Tailor this report
in BI Publisher
to add or remove
available columns.
Slide 69
Should be a Custom Menu: General Ledger, Vision Operations (USA) => Reports => Request => Standard
=> Journal Entries Report
Tailor this report in the

Concurrent Program
definition to display
additional parameters
such as account
ranges. They are seeded
but not displayed
(XLAJELINESRPT)
Slide 70
Custom Menu path: General Ledger, Vision Operations (USA) => Reports => Request => Standard
=> Journal Entries Report
Tailor this report
in BI Publisher
to add or remove
available columns.
Slide 71
Take a Different Look At What You Learned
 Lets change gears and view the transaction flows
 See where transactions get stuck
 Get an end-to-end perspective
Slide 72
Ship to a Customer – Step One – Pick Release
Inventory & Cost
Inventory MTL_MATERIAL_ Inventory

Pick Release & PICK MTL_TRANSACTIONS
Pick Release Transaction TRANSACTIONS_ Transaction
Staging Transaction _INTERFACE
Processor TEMP Processor
XLA_
MTL_MATERIAL_ Matl Cost Material Create Accounting Entries
AE_HEADERS GL_INTERFACE
TRANSACTIONS Processor Accounting Entries Accounting Created
XLA_AE_LINES
Slide 73
Ship to a Customer – Pick Release Accounting Transactions
 Pick Release
Account Debit Credit

Staging Subinventory account 130
Subinventory account 130
Average Costing does not have accounting

for Pick Release transactions
Standard Costing now writes this entry by

cost element regardless of your
CST: Account Summarization profile setting
Slide 74
Ship to a Customer – Step Two – Ship Confirm
Pick Release
Pick Release &

Staging
Accounts Receivable
Ship Confirm
Transactions not OE Interfaced are a major
problem – also called “Unprocessed
Shipments”
Customer AR Invoice Invoices Created

OE Interface Auto Invoice Journal Source is Receivables
Invoice Interface
Customer Shipment
COGS Inventory & Cost Journal Source
Cost Management
Inventory MTL_MATERIAL_ Inventory XLA_

MTL_TRANSACTIONS MTL_MATERIAL_ Matl Cost Material Create Accounting Entries
Transaction TRANSACTIONS_ Transaction AE_HEADERS GL_INTERFACE
_INTERFACE TRANSACTIONS Processor Accounting Entries Accounting Created
Processor TEMP Processor XLA_AE_LINES
COGS Recognition
Journal Source is
Revenue Inventory Cost Collect Generate Cost Management
Auto Invoice is
Recognition Processor or Revenue COGS
run / Shipment is
Master Record Order Recognition Recognition
invoiced
Program Management Information Events
Slide 75
Ship to a Customer
–Ship Confirm and COGS Recognition Accounting
 Ship Confirm
Deferred Cost of Goods Sold Account 130
Staging Subinventory account 130
 COGS Recognition
Cost of Goods Sold Account 130
Deferred Cost of Goods Sold Account 130
Standard Costing now writes these entries by

cost element regardless of your
CST: Account Summarization profile setting
Slide 76
Conclusions
 Lots of moving pieces
 Two layers of accounting, Cost Management, Receivables and

Subledger Accounting
 Margin Analysis Report works well with Trade Sales and

Intercompany which has physical movement
 Would like the Margin Analysis Report with work with

Intercompany “Logical” transactions (non-physical transactions)
 Would like the Subledger Journal Entries Reports easily found on

the Receivables and Cost Management menus
Slide 77
Where to get more information
 Oracle Cost Management SIG Minutes

 July 2010: WIIFM Release 12 New Cost Features
 Oracle Corporation
 Metalink: Cost Management White Papers [ID 157326.1]
 Oracle Cost Management User Guide
 Oracle Receivables User Guide
 Oracle Shipping User Guide
 Oracle Subledger User Guide
Slide 78
Acknowledgements
 You, the OAUG Cost Mgmt SIG, thanks for attending this session
 Mohan Iyer, OAUG G/L SIG Coordinator
 Oracle Cost Management Development
Slide 79
Slide 80
Ann Kune ([email protected])
Professional Background
.
With over 25 years total work experience, Ann Kunes is an accomplished Oracle Sales and
Distribution IT Applications Manager, specializing in manufacturing and distribution
companies. She has 20+ years experience implementing Oracle Applications, and over
10+ years in industry for Manufacturing and Distribution companies.
Currently at Snyder’s-Lance (a snack food manufacturer/distributor), Ann has helped clients

and her current company with Oracle implementations (Release 9 through Release 11i)
and process re-engineering for Discrete Manufacturing, Order Management, Distribution,
and Sales business functions. Industries she has worked in include Food Production,
Industrial Products, Distribution, Mining and Metals, and Insurance.
Core Expertise Experience
 Project Management  Industries Served:
 Upgrades, Implementations and
Enhancements  Food Production
 Sales and Distribution Processes  Industrial Products
 Cost Management  Distribution
 Inventory  Mining and Metals
 Warehouse Management  Insurance
 Order Management
Slide 81
Douglas Volz ([email protected])
Professional Background
Doug Volz is a Senior Architect and Advisor for Oracle Application projects, with a particular interest in
Cost and Project Management. He has 30 years accumulated experience, including 5 years in Oracle
Development (co-designing Oracle Cost Management) and 12 years in industry in Cost and Accounting
Management positions. His Manufacturing and Cost systems experience covers project management,
software design/development, delivery and consulting services, for both Oracle Corporation, and
multiple international consulting firms. Prior to his systems career, Mr. Volz also held numerous
management accounting positions for telecommunications, defense, and electronics companies.
In his consulting roles Doug has served over 100 clients. Many of these were multi-org, multi-currency
with global footprints. Countries include US, Mexico, UK, Netherlands, Belgium, Taiwan, P.R.O.C.,
Norway, Japan, Italy, Switzerland and Germany.
Doug leads the OAUG Cost Management Special Interest Group. He also advises and participates on
the Oracle Customer Advisory Board for Fusion Costing.
Core Expertise Experience

 Multi-organization, Multi-currency ERP  Sample of clients served:
Implementations  Beckman Coulter (US)
 Project Management and Senior Project Advisor  Matsushita (UK, Mexico)
 Core manufacturing processes
 Logitech (US, Taiwan, P.R.C.)
 Cost Management
 Inventory  Celgene Corporation (US, Switzerland)
 Bills of Material  NTL (UK, now Virgin Media)
 WIP  TCI International (US)
 Systems Integration and Data Conversions  Onninen AS (Norway)
Slide 82
End of Presentation
Slide 83

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What are the main steps in the sales order process?

What are the main steps in the sales order process?

What are some of the reporting options available at each step of the process?

What are some of the reporting options available at each step of the process?

Tracing a Sale of Inventory Through Oracle

OAUG Cost Mgmt SIG Meeting

 Learn about the basic shipping and invoicing processes

 See the available reporting and inquiries at each step

 Note some of the common difficulties

 Discuss current problems you may have

 OAUG Connection Point® — Release 12.1

 OAUG Connection Point® — EPM/BI

 OAUG Connection Point® — EPM/BI

 Open vacancy for OAUG Cost SIG Membership Chairperson

 Questions, concerns, ideas for the OAUG Cost Mgmt SIG:

 You ship to a customer

 How can you see its progress?

 How can you see the results?

1.0 Order 2.0 3.0

 Ship confirm to relieve inventory and debit deferred COGS

 And see what else was submitted at the same time:

This is a log file, your Shipping Support

The sales order The quantity was

 In R12 all customer shipment entries go to deferred COGS

 Revenue and COGS are explicitly matched

 New Accounting Entries to clear deferred COGS

 Use the COGS Revenue and COGS Matching Report

In R12 you can

Normally you don’t need to run Record Order Management since

Tip: put all four programs, Revenue Recognition

 We have shipped to the customer

 We have deferred COGS

 And based on customer acceptance (100% in this case), we have

 Material transactions inquiry

 COGS Revenue Matching Report

 G/L or Subledger Accounting Reports

Tip: you don’t need to run

Tip: all of the Cost XML

 We still need to run Create Accounting

• EVEN AFTER CLOSING THE INVENTORY ORG !

 This will create the Subledger Accounting entries

 And optionally, post to the G/L (why not?)

Tip: Receivables and Revenue Management

• Click on View Journal Entry to see the SLA Journal Line

• Click on View Journal Entry to see the SLA Journal Line

• Use System Administrator to put this on your custom menu

There are two G/L SLA

Tailor this report in the

 Lets change gears and view the transaction flows

 See where transactions get stuck

 Get an end-to-end perspective

Inventory & Cost

Inventory MTL_MATERIAL_ Inventory

Account Debit Credit

Average Costing does not have accounting

Standard Costing now writes this entry by

Pick Release &

Customer AR Invoice Invoices Created