Subledger Accounting (SLA) - an overview

Introduction:

Oracle introduced Subledger Accounting (SLA) with the Release 12 of Oracle Applications. SLA is a Rule-based accounting engine, toolset and repository supporting Oracle EBS modules (called as subledgers). The main idea behind the introduction of SLA is to have an option of allowing multiple accounting representations for a single business event, resolving conflicts between corporate and local fiscal accounting requirements. 

Oracle SLA is not an Application or a new module. There is are no SLA responsibilities. It is a service provided by Oracle Applications. SLA forms and programs are embedded within standard Oracle Application responsibilities (for e.g. Receivables Manager).

In other words, Oracle SLA supports user-defined accounting rules (to enable compliance with multiple geographic, legislative, or industry requirements).

The following are the participating subledgers:

- Payables

- Receivables

- Assets

- Projects

- Cash Management

- Purchasing

- Cost Management

- Process Management

Invoices in Payables - an overview

An invoice is an itemized list of goods shipped or services rendered, with an account of all costs. Oracle Payables lets you capture all the attributes of real-life invoice documents you receive from your supplier.


Invoice Types:


1.  Standard:  An invoice from a supplier representing an amount due for goods or services purchased. Standard invoices can be either matched to a purchased order (PO) or not matched.


2.  Credit Memo:  A memo from a supplier representing a credit amount toward goods or services.


3.  Debit Memo:  An invoice you enter to record a credit for a supplier who does not send you a credit memo.


4.  Mixed:  An invoice type you enter for matching to both purchase order (PO) and invoices. You can enter either a positive or a negative amount for a Mixed invoice type.


5.  Prepayment:  A type of invoice you enter to pay an advanced payment for expenses to a supplier or employee.


6.  Expense Report:  An invoice representing an amount due to an employee for business-related expenses.


7.  Withholding Tax:  An invoice you enter to remit taxes withheld to the appropriate tax authority.


8.  Interest:  If you allow interest invoices, payables will automatically calculate interest for overdue invoices and create interest invoices for selected purposes.


9.  Retainage Release:  Invoices created for complex work and advance contract financing. 


10. Transportation Invoices:  Invoices from freight payment.


Entering Invoices:


1.  Invoice Import
2.  Invoice Workbench
3.  Quick Invoices windows
4.  Creating Invoices Automatically


1.  Invoice Import:  


a.  From external systems: Invoices can be imported from external sources  (Third Party tools or other Oracle applications).


b.  Payables or Oracle iExpenses expense reports: Expenses reports that your employee enter in Payables or  using a Web browser (iExpenses) are converted into invoices.


c.  From EDI Invoices: Electric invoices transferred from Oracle e-Commerce Gateway or Third Party EDI tool.


d.  XML Invoices:  Electronic invoices transferred from the Oracle XML Gateway. 


e.  Oracle Property Manager invoices:  Lease invoices transferred from Oracle Property Manager.


f.  Oracle Assets lease payments:  The payments transferred from Oracle Assets. 


2.  Invoice Workbench:  


The Invoice Workbench is used to enter any invoice directly into the Payables system. You use this window instead of the Quick Invoices window when entering complex invoices or invoices that require online validation and defaulting. Also, use this window when entering an invoice that needs immediate action, such as payment.


3.  Quick Invoices Window:  The Quick Invoices Window is used for high-volume invoice entry for invoices that do not require extensive validation and defaults. After entering invoices in the Quick Invoices window, import them into Payables. Validation and defaulting occurs during import.


4.  Creating Invoices Automatically:  


a.  Recurring Invoices: You can set up your system to automatically create invoices, for example, rent invoices. 

Trading Community Architecture (TCA)

Oracle Trading Community Architecture (TCA) is a data model that allows you to manage complex information about the parties, or customers, who belong to your commercial community, including organizations, locations, and the network of hierarchical relationships among them.

In other words, TCA provides a single, common definition that can be used to identify customers, suppliers and organizations that provide you with goods or services and are in turn, a customer of your own products or services. The TCA repository stores the key elements that define an organization, identity, business locations, and key contacts, so that different Oracle products use a common trading partner definition.

The Following are defined in the TCA:

1.  Customer

2.  Bank and Bank Branch

3.  Supplier

4.  Student

5.  Employee

6.  Legal entity and intercompany

For example, suppliers can be set up from many different applications, but the date is stored in a single repository, i.e., TCA.

Applications that share supplier information are:

Purchasing:  Purchasing uses supplier defaults, such as freight terms and shipping details, on requisitions, purchase orders, requests for quotations, etc.

Payables:  Payables uses supplier defaults, such as method of payment and bank account information, during entry and payment processing.

Assets:  Assets maintains the supplier name and number for each asset record.

Property Manager:  Property Manager exports lease invoices for suppliers to Payables so they may be paid.

Multiple Organization Access Control (MOAC):  If you are using multiple organization feature, you cannot enter the following information at the supplier level, only at the supplier site level:

Liability Account

Prepayment Account

Distribution Set

Invoice Tax Code

Future Dated Payment Account

iSupplier Portal:  iSupplier Portal allows you to grant access to suppliers to review order, receipt, and payment details for the supplier. Suppliers can enter planned (with PO) or unplanned (without PO) invoices and update supplier information. 

Overview of Payables Processes

The Oracle Payables module allows the corporations to pay its vendors/suppliers for goods and services purchased. 


The Oracle Payables process involve the following steps:


1. Enter Suppliers
2. Enter or Import Invoice
3. Validate Invoice
4. Pay Invoice and Create accounting entries in subledger accounting (or)
5. Create accounting entries in subledger accounting and Pay Invoice
6. Transfer information to General Ledger

Procure to Pay (P2P) Process Flow Overview

The Oracle Procure-to-Pay (P2P) process enables the integration of purchasing department with account payables department of a company. Oracle Procure-to-pay process is designed to provide  organizations with control over the entire life-cycle of a transaction, i.e., from placing an order for goods to the payment of invoice.  

Demand: The procurement process generates and manages requests for the purchase of goods. The demand for purchase items may be a one-time event of may recur in either predictable or random intervals.


Source:  The procurement sourcing covers the business activities related to the search, qualification and selection of suitable suppliers for requested goods and services.


Receive:  The receipt process acknowledges that a purchase order has been duly executed. For orders of physical goods, it will typically include receipts, inspection and delivery of the goods to inventory or to another designated location. For orders of services, it will typically consist of a notification from the requester or the approving person that the service has been performed as agreed. 


Invoice:  The invoice process includes entering supplier and employee invoices.


Pay: The payment process consists of these activities involved in the payment for ordered goods and services.


Oracle Modules involved in P2P Cycle