Basics of Oracle E-business Suite

8/11/2019 Basics of Oracle E-business Suite

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BASICS OF ORACLE E-BUSINESS SUITE R-12

Oracle EBS suite is a comprehensive set of enterprise wide business applications that runs entirely

on the internet. Here, you have the choice to either implement one module or the enterprise suite.

EBS helps an enterprise make smarter decisions with better information, share unified information

across the enterprise, reduce information technology expenses, and enable business to run more

efficiently.

- The new SWAN user interface in R12 greatly improves the look and feel of Oracle e-

business suite.

- The new user interface brings together some of the best UI concepts from a host of Oracle

applications.

-

The new user interface is a sub-class of browser look and feel (BLAF) and replaces the

former look and feel.

- Oracle E-business suite is a fully integrated, comprehensive suite of business applications

for the enterprise.

- Oracle applications architecture is a framework for multi tiered, distributed computing that

supports Oracle application products.

INTERFACES:

- EBS applications are either forms-based or HTML-based. Forms-based applications are

optimized for processing a large volume of transactions. HTML based applications,referred as self service applications are optimized for ease of first -time use. For example,

to enter a batch of journals, EBS provides a form based application and to submit an

expense report, EBS provides an HTML based application.

FIELD COLORS:

- Each block in Oracle EBS form contains fields you use to enter, view, update, or delete

information. A field prompt describes each field by telling you what kind of information

appears or what kind of information you can enter in the field. Fields are color based to

indicate their type.White : it allows data entry (mostly optional)

Blue with black text : it indicates drilldown capability

Yellow : it requires data entry (Mandatory)

White with green text: it is display only (read only)

Blue : it indicates fields to use in query mode.


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BENEFITS OF EBS:

-

EBS available in multiple languages.

- Supports multiple currencies.

-

Supports flexible management of business process.

- Has a common data model.

- Supports statutory (Government), and customary local requirements.

- Built on open standards.

MAJOR ORACLE EBS PRODUCT FAMILIES:

- Oracle Financials (GL,AP,AR,FA,CM,TRESURY,LEASE MANAGEMENT,ETC).

-

Oracle SCM (PO,INV,OM,SHIPPING, TRADE MANAGEMENT ETC).

- Oracle MFG (BOM, WIP, MRP, PRODUCTION SCHEDULING ETC).

-

Oracle Procurement (PO, SOURCING, ADVANCED PRICING, IPROCUREMENT

ETC).

- Oracle Projects (PROJECT COSTING, PROJECT BILLING, PROJECT CONTRACTS

ETC).

- Oracle HRMS (HUMAN RESOURCES, SELF SERVICE HR, ADVANCED BENEFITS,

PAYROLL ETC).

MAJOR ORACLE EBS KEY BUSINESS FLOWS:

- Procure to pay : p2p cycle

- Order to cash : o2c cycle

-

Demand to build : d2b cycle- Inventory to fulfillment : i2f cycle

- Campaign to order : c2o cycle

- Contract to renewal : c2r cycle

- Benefits to payroll : b2p cycle

This is not the exhaustive list of flows, but these are the major flows in Oracle EBS.

ARCHITECTURE OF ORACLE APPLICATIONS R-12:

- The R12 technical architecture is a direct response to the business needs of the customer.

In support of business needs oracle developed four architectural modes for users that are

accessed and controlled through the personal home page or Portal.

- The basic technical architecture of oracle EBS is based on 3-Tier Architecture.

- A Tier is a logical grouping of services, spread across more than one physical machine.

EBS consists of three-tier architecture.


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- Desktop/Client tier: This provides the user interface that could comprise desktop

computers, laptops, PDAs or mobile devices. Its purpose is to capture or display

information to the user.

- Application tier: This tier also referred as middle-tier is responsible for holding the

application logic that supports and manages the various application components.

- Desktop tier: Supports and manages oracle database and is responsible for storing and

retrieving application data.

The connection between the application tier and database tier can operate successfully on wide

area network, because both tiers exchange a minimum amount of information.

SHARED ENTITIES IN ORACLE EBS:

- A shared entity in oracle EBS enables one time definition of an object and the use of that

particular object across several products. Ex: Define customers in AR and use them across

other modules or applications of Oracle EBS.- Shared entities are owned by a single product for TABLE PURPOSE ONLY.

EXAMPLES OF SHARED ENTITES:

ENTITY DESCRIPTION OWNER

AOL APPLICATIONADMINISTRATION

AOL

LEDGER ACCOUNTING

INFORMATION

GL

UNIT OF MEASURE METHOD OFQUNTIFYING ITEM

INV

ITEMS RAW MATERIAL,FINISHED GOODS,OR SERVICES

INV

SUPPLIERS VENDORS WE BUYFROM

PURCHASING

CUSTOMERS BUYERS OF THEEND PRODUCT

AR

SALES FORCE INDIVIDUALS

CREDITED WITHSALES REVENUE

SALES

EMPLOYEES/LOCATION/ORGANIZATIONS PERSONNEL WHOPERFORMASSIGNEDTASKS/BUSINESSSITES/LOGICALUNITS

HRMS


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This is not an exhaustive list, just for learning and reference only.

BASICS OF SYSTEM ADMINISTRATOR:

-

System administrator application is responsible for EBS security definitions, creating of

users and responsibilities, creating new menus and functions, and concurrent processing

etc.

- Responsibility is a level of authority which determines whether the user/responsibility

holder can access oracle applications, self service web applications or only mobile

applications.

- Responsibility Determines the application functions that a user or responsibility holder can

use, the reports and concurrent programs he/she can run, and the data that those reports and

concurrent programs can access.

COMPONENTS OF RESPONSIBILITY:

REQUIRED OR MANDATORY:

- Data group: A data group specifies the oracle application database accounts to which a

responsibilitys forms and concurrent programs connect.

- Menu: Determines the forms that a responsibility can display and the functions it can access

- Request Group(Optional): Determines the concurrent programs that a responsibility can

run.

First we create our own responsibilities Ex: IVAS PO, IVAS OM etc then we create a user EX:IVAS and we assign all these responsibilities to the user.

PROFILES OR PROFILE OPTIONS:

System administrators control various profile options in oracle applications that determines how

the applications look, feel, and operate.

Profiles or profile options set the Security type of the Organization.

We can use profile options at different levels, setting a user profile affects application users across

one of the four different levels.

- Site level: applies to all users at an installation site.

- Application level: applies to all users of the specified application, ex, a profile option could

be set that applies to all the PO users. This profile level overrides the profile option set at

site level.


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- Responsibility level: applies to all users currently signed in under one responsibility. Ex: a

profile option can be set to all the GL users using GL supervisor responsibility. This profile

level overrides the site and application level profile options.

- User level: applies to individual users, identified by their application usernames, ex: a

profile option can be set that applies only to user IVAS. This level profile option overrides

all the above mentioned profile options. In Other words this is the highest level in terms of

profile options.

FUNDAMENTALS OF FLEXFILEDS:

A Flex field is a configurable field that opens in a window from a regular oracle applications.

Defining flex fields enables you to tailor oracle applications to your own business environment.

You can easily define flex fields to modify or extend oracle applications without programming.

Using flex fields you can:

- Structure certain identifiers required by oracle applications according to your own business

environment. Key Flex Field (to use GL its mandatory to define your Chart of Accounts

Structure).

- Collect and display additional information for your business as required. Descriptive flex

filed.

KFF DFF

Owned by one application, used by many Associated with tables in a specific application.

Required to set up, not always required to use Setup is optional

Supports intelligent keys no intelligence, stores additional information.Identified by Segments Identified by attributes

Identifies entities, and drives reporting Capture additional information only.


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ORGANIZATION STRUCTURE IN ORACLE EBS:

Business Group: A business group is the highest level of the structure and does not have an

accounting impact. The business group determines which employees will be available to ledgers

and operating units related to that business group.

Ledger: A ledger is the highest level that impacts accounting. And all the financial transactions

takes place in a financial year will be posted to ledger and balance sheets are prepare in the ledger.

Legal Entity: A legal entity is a legal company where we prepare tax and fiscal reports.

Operating Unit: An operating unit is a major company, division, or operating hub, in other words

the exact place where the company/organizations OPERATIONS takes place. Ex: A

Manufacturing Unit.

Inventory Organization: An inventory organization typically handles goods, items, and other

operative items which are required for day to day operations; it can be a warehouse, service centreor any other location which look after items or goods.

SAMPLE ORGANIZATION STRUCTURE:

- Business group does not have accounting impact.

- Legal Entities post to a ledger. Each organization classified as a legal entity must specify a

ledger to post accounting transactions. A legal entity can point to only one ledger, but aledger can have multiple legal entities.

- Operating units are part of Legal entity. Each organization classified as a operating unit

must reference a legal entity. An operating unit can point to only one legal entity, but a

legal entity can have multiple operating units.

- Inventory organizations are part of operating units. Any organization classified as inventory

organization must reference to an operating unit. An inventory organization points to only

one operating unit, but through standard functionality can be referenced by any operating

unit having the same ledger as the attached operating unit. Items are defined in the master

inventory organization and added to the appropriate child organizations. Any inventory

transactions are secured by the inventory organization.


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MULTIORG ACCESS CONTROL (MOAC):

This is the new feature in Oracle EBS R-12 applicable for using multiple operating units which out

changing or switching responsibilities.

MOAC applicable to all the applications/Modules of oracle which function on the basis of

operating units. Ex: Payables, Receivables, OM etc.

Overview of Oracle SCM:

- Supply chain Management or SCM of oracle EBS family is widely used application

package which contains many modules like OM, PO, INV, SHIPPING, ADVANCE

PRICING and many more.- A typical supply chain management covers O2C cycle, which based on fulfilling customer

requirements like sales, services and support etc.

- Lets have a look at the typical order to cash cycle:

o We can book orders (OM) from a diverse sources like I stores (online store

applications), EDI, XML or data entry.

o After we enter orders in OM, the items (INVENTORY) on the order are validated in

oracle inventory.

o A price (ADVANCE PRICING) is calculated for the item using the pricing engine.

o The availability of the items (ATP RULES) are checked and reserved if necessary,

the items are then pick released and shipped to the customer.o We can record the customers acceptance of the goods either before the items are

billed or after the billing takes place.

o Customer acceptance is optional and we can enable the customers acceptance

functionality using the system parameter enable fulfillment acceptance.

o We can then invoice the customer (ACCOUNTS RECEIVABLES) for the items

shipped, perform cash management and reconciliations.

So far we have came across the basic stuff of Oracle EBS, so let us begin with the complete flow inthe upcoming pages.

This Document is intended and prepared keeping the theoretical perspective of the students; this

Document will help you prepare for your interview sessions and a broad theoretical understanding

of the major SCM modules of oracle.

EITHER MODIFY YOUR DREAMS. OR MAGNIFY YOUR SKILLS..


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PURCHASE ORDERS:

Now the best quote becomes the purchase order. Purchase order is a legal document which states

the terms and conditions of a particular purchase. Purchase is a liability to the buyer and Revenue

to the seller.

Purchase order is of 4 types:

Document Type Usage

Blanket Purchase Order Created when terms, such as payment terms,and negotiated prices, and goods or servicesare known, but specific delivery dates are not.These can be either set up either for a specificorganization or as global agreements for allorganizations to access.

Contract Purchase Order Created when the terms and conditions of a

purchase are known, but specific goods andservices are not, when a line references acontract purchase order, oracles advancepricing feature can be used for complex pricingschedules.

Planned Purchase Order Created for a long term agreement where theitems or services, terms, and at least a tentativedeliver schedule are known.

Standard Purchase Order One time purchase of goods or services.

Buyers: In EBS employees who set up as buyers only can create purchase orders, requisitions andwhich proper access can approve both documents.

First create an employee in HRMS, Navigating to People>Enter and Maintain. Then add the

employee as a buyer in Purchasing application, Navigating to Setup>Personnel>Buyer.

Now add this buyer to the user using which we are accessing our Responsibilities in System

Administrator Navigating to Security>User>Define, Query our user and assign the employee

created as a buyer to the user at PERSON Column and save the record.


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PURCHASING OPTIONS (REQUIRED)

IMPORTANT TOPIC IN INTERVIEWS

Responsibility: Purchasing

Navigation: Setup>Organizations>Purchasing Options

Purchasing options are created to define defaults and controls for purchase orders and requisitions.

Many of these options can be overridden on individual documents. These are set up for each

individual operating unit separately, and you will be required to select the operating unit prior to

selecting the setups.

Field Name Control

Price Tolerance (%) Tolerances can be set for the amount that apurchase order can exceed a requisition it wascreated from. The % tolerance is the totalpercent any one line on a purchase order canexceed the price on the requisition line it wascreated from. This only refers to overages notshortages.

Enforce Price Tolerance (%) Prevents purchase orders from being approvedwhen the price tolerance is exceeded. Notselecting this option will give the buyer awarning but allow the purchase order to beapproved.

Price tolerance amount (in functional currency) Assigns a hard dollar limit, up to which apurchase order line can exceed the associatedrequisition line. Can either be assigned aloneor with the price tolerance (%) where the lowerof the two tolerances will be enforced.

Enforce price tolerance amount Prevents purchase orders from being approvedwhen the price tolerance amount is exceeded.Not selecting this option will give the buyer awarning but allow the purchase order to beapproved.

Enforce full lot quantity Used to determine how internal requisitionswill create lines for items under lot control.None will allow any amount to be purchased,automatic will default to the item roundingfactor set up on the item, and advisory willsuggest that the line be rounded to the itemrounding factor but allow the buyers tooverride the suggestion.

Receipt close point Determines if a shipment is closed based on


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the inspection, delivery, or receipt of the item.

Cancel Requisition Determines how a requisition is handled whenthe associated purchase order is canceled.Always will cause both the purchase order andthe requisition to be canceled, ever will leave

the requisition open for later use or manualcancellation, and optional will allow the buyerto determine if the requisition should becancelled or not.

SBI buying company identifier Used with the self billing feature of EBS (payon receipt), a unique identifier for buyingcompany can be added to be part of the invoicenumber generated during self-billing. This willappear in the second segment of the self-billedinvoice number.

Gapless invoice numbering Determines if gapless sequence will be

generated for each self bill generated for aunique combination of SBI buying companyidentifier, selling company identifier (supplier)and invoice type.

Output format Output format of the printed purchase order.PDF cannot be modified, and text can bemodified after printing.

Max.attachment size When e-mailing purchase orders, the max sizein megabytes, and will be send as a Zippedformat.

e-mail attachment file name Can be used to overwrite the extension on the

attachment, such as .zip, to prevent theattachments from being stopped by e-mailfilters.

Display disposition messages Determines if the instructors for disposal of aitem are displayed on the requisition. Theseinstructions would have been set up on theitem themselves.

Notify if blanket PO exists Notifies buyers when an active blanketpurchase order exists for an item entered on aline of any documents.

Allow item description update While creating a new item, it is the item setting

that will determine if a specific item on apurchasing document can have its descriptionupdated.

Enforce buyer name Determines if buyers can create purchaseorders with only their names or are allowed tochange it to any qualified buyers name.

Enforce supplier hold Prevents purchase orders from being approvedif the supplier is on hold, as defined in thesupply base>supplier>invoice management


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widow.

RFQ required Prevents requisition from being created intopurchase order if a request for quote is notreceived, this can be overridden on arequisition line.

DOCUMETS DEFAULTS:

It is a region in the same form, (bottom), and defines how information can default onto a document

when it is being created.

FIELD NAME CONTROL

Requisition import group by Controls how requisitions are grouped andcombined when imported through therequisition open interface, including,

requisitions created by WIP, MRP, OM andINV. All or null will not group the requisitions,available grouping fields are include buyer,category, item, location and supplier.

Internal requisition order type Internal requisitions will be released andimported in order management under the ordertype identified here.

Internal requisition order source With only the selection of internal, it is thesource used to transfer internal requisition datafrom purchasing to order management.

Receipt close tolerance (%) Controlling the closing point on documents in

purchasing is a major decision that canincrease or decrease a buyers workload. Ifdocuments do not close automatically, then theuser will need to manually monitor and closethem, the receipt close tolerance tells EBSwhen to close orders for receiving transactions.When the receipts made against an order reachwithin the tolerance percent of the quantityorder, they will close for receiving, but willallow future receipts to be made against aclosed order. This can be overridden when

setting up individual items and purchaseorders.

Invoice close tolerance (%) Determines when EBS will close a purchaseorder that has been matched to an invoice.When the invoice matched to a purchase orderline is within the tolerance percent of the lineamount, the line will close for invoicing, butwill still allow future invoices to e matched theline, this can be overridden when setting up


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individual items and purchase orders.

Quote warning delay Determines the number of days prior to theexpiration date on a quote that a warning willbe sent to the buyers.

Line type Determines the default line type for

requisitions, purchase orders, quotes, andrequest for quote. Line types determine suchthings as the basis for calculating price anddefault category and pricing information.

Rate type Determines the default for where the exchangerate is derived from when entering a foreigncurrency document. Select from any rate typedefined in the system, including user, whichwill require the person entering the documentto provide a rate.

Match approval level Determines how invoices are matched to

purchase orders, and when the orders areclosed.A 2-way match compares both the quantitiesand amounts of purchase orders to theinvoices.A 3-way match adds a quantity invoicedcomparison to the quantities received.A 4-way match includes the same criteria as a3-way match but adds a quantity acceptedcomparison to the quantity received.

Price break type For blanket purchase orders, determines if

price breaks are based on cumulative quantitiesfor all shipments, or only an individual release(non-cumulative).

Price type Set the default for the type of pricing used inthe document. Additional price types can beadded in the purchasing lookup codes.Setup>purchasing>lookup codes.

Minimum release amount Determines the minimum amounts for releaseson blanket, contract, and planned purchaseorders.

RECEIPT ACCOUNTING:

Receipt accounting controls how the system will handle accruals for both inventory and expense

items. While accruing inventory items is mandatory, creating accrual transactions for expense

items is optional. For either inventory or expense, accruals are recorded to reflect items that have

been received but not yet invoiced in payables. Accrue expense itemscan be set either to accrue

only un-invoiced items at period end, or with every receipt. Most commonly used is period end,


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which will create a reversing accrual in the general ledger, but at receiptcan give a more accurate

expense picture on a daily basis when using daily business intelligence. Accrue inventory items is

always set to at receipt,where a clearing account is set up with each inventory receipt and relieved

when it is matched to an invoice.

Automatic offset methoddetermines how the account number for the receiving inspection accountis created. When this option is set to NONE, the receiving inspection account from the destination

organization is used. BALANCING will cause the balancing segment of the receiving inspection

account to be the same as the balancing segment of the charge account that was transacted against

at time of delivery, whereas ACCOUNT will overlay the charge account for all segments of the

account string except for the natural account, which will come from the receiving inspection

account. Enter an account number for the EXPENSE AP ACCRUAL ACCOUNT, used to accrue

expense receipts.

DOCUMENT NUMBERING:

It determines if document numbering is automatic or manual, based on the requirements we can

make changes.


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Over receipt tolerance (%) Determines what amounts over the purchaseorder quantities that can be received against theorder.

Over receipt action When the quantity received is over the receipttolerance, no action can be taken, which will

allow the receipt without a warning, or awarning to appear to the users, or the receipt tobe prevented altogether.

RMA receipt routing Receipts for Return Material Authorizationshave three options for how they are processed;standard, which uses a receiving location priorto delivering an item to its final location, directdelivery, which performs these two steps inone transaction, and inspection required, whichadds an inspection step into the receivingprocess.

Receipt routing PO receipts have three options for how they areprocessed; standard, which uses a receiptlocation prior to delivering an item to its finallocation, direct delivery, which performs thesetwo steps in one transaction, and inspectionrequired, which adds an inspection step intothe receiving process.

Allow substitute receipts Select this option to allow substitute receiptsbased on items set up as related. (Items> ItemRelationships).

Allow unordered receipts When selected, allows receipts for items not on

purchase orders, which can later be matched toa purchase order. This option can beoverridden on both items and suppliers.

Allow express transactions Determines if express receipts and deliveriesare allowed, where EBS will select all lines ona specific order for the transaction, allowingthe user to override them if needed.

Allow cascade transactions Allows receipts and deliveries to beautomatically distributed over multipleshipments and distributions based on thequantity received.

Allow blind receiving EBS normally shows the quantities that are stilldue and were ordered at time of receiving.Blind receiving will hide this information,making users enter the quantities from thedocumentation received with the delivery.

Validate serial numbers on RMA receipts Restricts available serial numbers on an RMAto the numbers originally shipped with theorder.

Receipt number generation Determines if receipt numbers are manually


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entered or generated by the system. Receiptsnumbers must be unique with an inventoryorganization.

Receipt number type Determines if receipts will be numeric oralphanumeric. EBS can only automatically

generate numeric numbers, but alphanumericcan be selected with automatic numbering toallow interfaced receipts from other systems tobe alphanumeric.

Next receipt number When using automatic numbering, determinesthe next number that will be assigned by EBS.

Validate lot on RMA receipts Restricts available lot numbers on RMS to thenumbers originally shipped on the order.

ACCOUNTING OPTIONS AVAILABLE WITH RECEIVING TRANSACTIONS:

Receiving Inventory Account is used when receipts are processed for all inventory purchase

orders. This account is debited when the item is received and credited or cleared when the items

are delivered into inventory location. This clearing transaction can be set up to happen

automatically when the RECEIPT ROUTING is set to direct.

Retroactive Price Adjustment Account is used when price adjustments are processed for items

that have already been received.

Clearing Account is used when an intercompany transaction is created for items received into one

organization but purchased from other.

COST FACTORS FOR RECEIPTS:

Interface to Advance Pricing used when the advanced pricing module is being used to calculate

cost factors.

Interface to Transportation Execution used when transportation cost are being calculated in

oracle transportation execution.


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FINANCIAL OPTIONS:

Financial options are used predominantly by payables but are required for purchasing to function.

Financial options determine default account numbers, purchase order and requisition defaults,encumbrance options and employee defaults for expense reports.

Financial options need to be set up for each operating unit purchasing will be processed for. How

MOAC (multi org access control) is set up will determine whether the operating unit will default in

our will need to be selected when entering the screen.

We have total 5 tabs while defining financial options:

Accounting Tab: Default account numbers are assigned for transactions. LIABILITY,

PREPAYMENT, DISCOUNT TAKEN, PO RATE VARIANCE GAIN, PO RATE VARIANCE

LOSS, all are required, even if you are using purchasing as a stand-alone purchasing systemwithout integrating it with payables or GL.

FIELD REQUIRED/OPTIONAL USAGE

Liability Required Default liability account assignedto new suppliers, which beoverridden on each supplierrecord. This account can be usedas part of SLA setups, or anotheraccount used altogether.

Prepayment Required Default prepayment account

assigned to suppliers, which canbe overridden on each supplierrecord. This account would onlycreate accounting entries ifpayment terms with discountswere used, and the discount wastaken.

Bills payable Optional Default account for future datedpayments

Discount taken Required Account used for discountedamounts when the discount

method is set to system account.N>PayablesManager>setup>options>payablesoption.

Po rate variance gain Required Used to record rate gains forinventory items where thepurchase order or receipt rates arenot the same as the invoice. The


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matching method (purchase orderor receipt) determines whichforeign currency rate is comparedto the invoice.

Po rate variance loss Required Used to record rate gains for

inventory items where thepurchase order or receipt rates arenot the same as the invoice. Thematching method determineswhich foreign currency rate iscompared to the invoice.

Expense clearing Optional Used as a clearing account forcredit card transactions where thecompany pays the credit carddirectly but matches the paymentsup to expense reports entered in

iexpnses.Miscellaneous Optional Used for any miscellaneous

charges received in XML, eithervia the XML gateway or i-supplier. If this is not filled in,miscellaneous charges will beprorated against all the other lineson the XML invoice.

Retainage Optional Account used to recordretainages, or conditionallywithheld payments. Usually

withheld from progress paymentson long-term r high-dollarcontracts.

Supplier-Purchasing Tab: information completed on this will create defaults for several key

supplier setups. Checking RFQ only site will cause all new suppliers to be valid only for request

for quotes, not purchase orders or invoices.

SHIP-TO LOCATION is the default shipping location for all new suppliers. This filed is not

mandatory and it may not be appropriate to have a default if you have more than one location used

by a majority of suppliers.

BILL-TO LOCATION is the default billing address that will appear on purchase orders when

creating suppliers.

INVENTORY ORGANIZATION is a required field even if you are not using inventories; it will

determine which items can be purchased from this organization only items that are set up in this

inventory organization can be purchased. Since this is a required field, you can set up a shell


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inventory organization under PAYABLES MANAGER>SETUP>ORGANIZATION and assign

the ORGANIZATION CLASSIFICATION as an inventory organization. Under the OTHER

button, you will need to add accounting information to link this inventory organization with the

ledger, legal entity and operating unit.

SHIP VIA can be populated if you have a preferred freight carrier that should default on purchaseorders. FOB or free on board are a group of terms that dictates specifics about a sale such as who

owns the product during shipping. The fob entered here will default on all purchase orders.

FREIGHT TERMS determine who is responsible paying the freight charges, and will default on

purchase orders when its populated.

Encumbrance Tab: Encumbrance account records accounting entries for both requisitions and

purchase orders, as opposed to waiting for the receipt or invoice against an order, where

accounting is typically performed and the liability recognized. Encumbrance accounting is often

used in U.S. Federal government accounting or in organizations where budgets strictly control

costs.

Tax Tab: Used exclusively with value added tax. (VAT). A member state can be added and is

used by payables to determine if the state is a member of the European Union. The VAT

registration number is the vat number for your organization and prints on some of the value added

tax reports.

Human Resources Tab:Used to default data when setting up employees in EBS. Employees can

be added to EBS to create a hierarchy for purchasing document approvals, invoice approvals, and

journal entry approvals. When HR is not completely implemented in EBS, in what is called a

shared install, there is a modified people window that allows accounting related information, suchas employee name, address, supervisor, and default distribution account, to be added and used by

purchasing and other sub ledgers.

A business group assigned here, so that the employees will all be registered in that group. When

organizations are created, at least one organization needs to be classified as a business group.

When HR is not fully implemented, an Operating unit can be setup as the default business group.

The EXPENSE REPORT ADDRESS for employees can be set to OFFICE OR HOME and will

determine which address on the personnel record will print on expense reports.

USE APPROVAL HIRARCHIES should be checked when an employees position hierarchy is

going to be used for approving purchasing documents, left unchecked, it will cause EBS to use the

supervisor hierarchies as opposed to positions. POSITION HIERARCHIES relates to the positions,

or jobs, an employee is assigned to, which may be different that the actual supervisor associated

with an employee.

Employee number can be assigned either automatically or manually, as determined with the

METHOD, and the NEXT AUTOMATIC NUMBER will be populated when automatic numbering


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is selected. This next number can be reset at any time, but ensure that it is reset to a number greater

than that the last number assigned to prevent problems when adding employees.

REQUISITION TEMPLATE:

N>SETUP>PURCHASING>REQUISITION TEMPLATE

Requisition templates can be defined and used with the supplier item catalog. The supplier item

catalog not only used to see where to purchase an item, but also to enter lines based on a

requisition using the catalog features. Most commonly, these templates are created to group like

items, such as computer equipment or supplies kept in a supply closet at a specific location.

USING THE SUPPLIER ITEM CATALOG TO CREATE REQUISITION LINES:

N>PURCHSING SUPERUSER>SUPPLIER ITEM CATALOG

Requisition template uses the supplier item catalog to quickly find, review, and selects items for

purchase. Using this feature will decrease data entry for the requestor and allow the requestor to

browse or shop from an existing catalog of items.

This catalog is an accumulation of purchasing information that exists in EBS. There are four tabs

on the supplier item catalog.

Negotiated sources: This tab displays long-term agreements that may exist with a supplier, such

as blanket purchase agreement, quotations, planned purchase orders, and global agreements.

Prior Purchases: Displays prior purchase orders and both scheduled and blanket releases to

display historical purchase information.

Sourcing Rules: Displays any sourcing rules set up to automate requisition creation for items that

are to be linked to purchase agreements or quotations from a supplier. Mostly used for specific

items are specifically sourced from a particular supplier.

Requisition Templates: Displays the templates that are set up for faster purchasing.


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REQUISITION DISTRIBUTIONS:

N>REQUISITIONS>REQUISITIONDISTRIBUTION BUTTON AT THE BOTTOM

OF THE FORM.

Distributions can be added to a requisition by clicking on the DISTRIBUTIONS button, assign

specific accounting or project related information to each line.

We have 2 tabs here.

Accounts: On the accounts tab of the distributions window the line NUM and QUANTITY will

default in from the line on the requisition but can be modified to create multiple distributions for

each line, splitting the accounting between more than one account. For expense requisitions, are a

type of accrual accounting where items are recorded when a commitment is made, such as a

requisition or purchase order as opposed to when the item is received (accrual accounting) orinvoiced (cash accounting).denoted by the DESTINATION TYPE on the preceding window, you

will need to add the CHARGE ACCOUNT. Depending on how your system is set up, this may

default in from an item or category if one was selected, the employee record, a project, or a

combination of these places. These defaults are controlled by the account generator.

Additional accounts that can be added on the distribution are the BUDGET, ACCRUAL, and

VARIANCE ACCOUNTS.

BUDGET ACCOUNT represents the accrual account set up for encumbrances and is only

populated when encumbrances are turned on. Encumbrances

ACCRUAL ACCOUNT is the AP ACCRUAL ACCOUNT set up in the purchasing options for

expense items, and on the inventory organization setups (remember the other accounts tab while

entering information?).

VARIANCE ACCOUNT used to record any invoice price variances that would exist for this line,

defaults from the organization parameters. (Setup>organization>inventory organization>inventory

information> other accounts tab.).

If you can notice at the bottom of the form all the account combinations will be displayed.

When adding tax to the requisition using e-business tax, you can add a RECOVERY RATE to

override any default amounts. The GL DATE, used only with encumbrances, will determine the

date that the encumbrance transaction will have in the GL. The RESERVED check box is only

applicable when budgetary controls are turned on. Budgetary controls will track requisitions,

purchase orders, invoices, and expenses recorded in inventory or the GL against the budgeted

amounts for a given account, they either warn the user or prevent any additional transactions when

the budgets are all used up. This feature is typically used when encumbrance accounting is turned


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on, but can also be used by itself; the TOOLS option on the toolbar allows funds to be checked,

reserved, and unreserved.

Project: if oracle project costing is installed, requisitions, purchase orders, and invoices can all be

charged to a specific project, causing them to interface to the projects sub ledger and record the

expenditure against the identified project.

APPROVING PURCHASING DOCUMENTS: (IMPORTANT FOR INTERVIEWS):

Purchasing documents all required approval prior to being processed. The approval process will be

a different in each organization, but EBS does require that approvals be set up. As mentioned,

employees and approvers, as part of the approval assignments and approval groups, must be set up

prior to entering purchasing documents. EBS uses three main seeded paths for purchasing

approvals.

Employee Hierarchy: Using employee hierarchy is pretty straight forward for approvals. EBS

will look at the employee designated as the requestor for the requisition or purchase order, find his

or her supervisor as set up on the EBS person record (setup>personal>employees), and determine

if that employee is authorized to approve the requisition given the document type, total amount,

destination account number, item and category, and location. If the supervisor has the authority to

approve, the requisition or purchase order is forwarded to him or her for approval. When the

document type is set OWNER CAN APPROVE (setup>purchasing>document types), EBS will

evaluate if the requestor or buyer has the authority to approve the documents, if not, EBS will

move on up the supervisor hierarchy to the next higher supervisor, checking the same criteria.

Position Hierarchy: it is slightly a different way of finding the person who is in line to approve

the documents, but it uses the exact same criteria as the employee hierarchy to determine if that

person is authorized to approve the purchase. For position hierarchies, EBS will look not at

persons supervisor, but instead at that persons position, and find the next position in the

hierarchy, for example if an employee is set up as a shop floor supervisor, and this position reports

to the shop floor manager, then EBS will send the requisition to the shop floor manager position.

Approval Management: EBS has a module called approvals management (AME) that can be set

up by using the employee or position hierarchy, or by creating its own unique hierarchy, as well by

referring to as a group of defined rules to route documents for approval. These rules can be as

simple as this, if the category on the order equals to computer equipment, send it to the CIO for

approval, or they can e as complicated as routing computer equipment purchases first to the

persons supervisor, then to the IT computer specialist for configuration approval, and then to the

CIO for final approval.

Determining the approval path EBS is using (READ IT THRICE VERY IMPORTANT):

There are two places you need to see how EBS is routing its purchasing documents for approval.

By default, EBS will use the supervisor hierarchy for approvals. If on the HUMAN RESOURCE

TAB of the FINANCIAL OPTIONS (setup>organizations>financial options), USE APPROVAL


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HIERARCHIES is checked, then position hierarchies will be used. To determine if approval

management is being called, you will need to look at the document types

(setup>purchasing>document types) for each individual document in question. AME is called for

the document when the APPROVAL TRANSACTION TYPE is populated.

APPROVING AND CONTROLLING REQUISITIONS:

As soon as u create an approval at the bottom right side of the form you can find a button called

Approve, just click on it, it will take you to the another form, which shows SUBMIT FOR

APPROVAL.

All requisitions can be seen in the requisition form with one of the following statuses; incomplete,

rejected, or returned.

Managing requisitions really falls into three buckets. First, there are requisitions still in the

requestors court, which have the status of incomplete, rejected, or returned. Once the requestor

submits the requisition for approval, it moves to the approvers bucket and the status becomes in

process, pending some type of an approval action the last bucket is approved requisitions that are

pending action by a buyer, usually creating a purchase order or rejecting it. In general, incomplete

or rejected requisition can remain as is in the system without affecting reports or other process. The

other statuses should be monitored on a regular basis and action taken as needed.

STATUS MEANING

Approved Requisition has been approved

In process Has been submitted for approval and is stillpending.

Incomplete Requisition has not yet been submitted forapproval.

Pre-approved Approver who has proper authority hasforwarded requisition to another person foradditional approvals

Rejected Approver rejected the requisition.

Requires re-approval Changes were made to an approved requisition,requiring it to be reapproved.

Reserved Budgetary funds are reserved for therequisition.

Returned Approved requisition is returned to requestor

by the buyer. Note that requisitions in thisstatus are still considered in MRP, as they areapproved. Cancelling the requisition willremove it from MRP.

STATUS ACTION REQUIRED

Returned Returned requisitions need to be either reroutedfor approval after changes are made orcanceled.


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Approved Approved requisitions are ready to be added toa purchase order. Running the buyersrequisitions that are waiting to be added topurchase orders. These requisitions appear onthe auto create window and will affect such

processes as MRP and should be monitoredclosely.

In process In process is a normal state for a requisitionand is really only a problem if the requisitionremains in process without approval for a longperiod of time, often, an invalid workflow orinvalid approver is the cause of the problem.Usually, they can be cancelled, sometimes,when the workflow was deleted in error orthere is a problem with approvals, they willneed to be reset to incomplete with a sql script.

Pre approved A requisition in this status should be treatedthe same as the in process status

Required re approval Requires that an approved requisition beresubmitted for approval due to a change onthe document. These documents are managedthe same as any in process documents.

Reserved Requisitions that are in this status must beforwarded on for approval or unreserved.Available funds are reduced by the amount ofthe requisition when it is in this status.

CREATING PURCHASE ORDER FROM REQUISITION:

A requisition is formally the act of asking for something to be obtained. A purchase order on the

other hand is a legally binding offer between the buyer and seller to obtain those goods or services.

Requisitions, in business, are internal documents used by multiple people in an organization to

obtain permission and submit a request to purchase. These are then sent to the purchasing

department, where there are sourced from different suppliers and grouped for purchasing.

In EBS, we can auto create a purchase order using an approved requisition, or else we can use the

standard purchase order form to create a PO.

Auto Create: Turning a document from a request to obtain legally binding documents begins with

finding the grouping the requisitions. This can be done in many different ways in the auto create

find window. A profile option affects the way auto create works after the document is created. PO:

Display the auto created document determines if the document is displayed once it is created.

Setting this to yes allow the buyers to review the purchase order and submit it for approval without

having to query up the document. Documents can be reassigned easily in the manager buyer


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workload from N>purchasing super user>management>manage buyer workload, where documents

can be found ad reassigned.

Requisition can be created for one operating unit at a time, and this is the only required field on the

form (N>purchasing super user>auto create). While an unapproved requisition cannot be turned

into a Purchase order, it can be used for RFQ.

Once the requisition have been queried up, you can auto create them into specific types of

documents, using a variety of methods and tools. Once the requisitions have been approved, they

are grouped by the buyer for purchasing or creating a request for quote, auto create helps assist you

with these tasks.

(N>purchasing super user>auto create), Action=it has two choices, Create and Add to. Create will

start a new document; Add to will add the selected requisition lines to an existing document. Next,

it is the DOCUMENT TYPE that determines what document will be created. Documents include

Standard PO, Planned PO, and Blanket Release against an existing blanket purchase order, RFQ,sourcing RFQ, or via an auction.

The last option is to determine how the requisition line will be grouped for review and selection on

the auto creates form. There are two options for how the lines are grouped on the form for selected.

First is DEFAULT, which groups all requisition lines by item, rev, line type, UOM, supplier item

umber, and transaction reason. REQUISITION is the other, which will create documents based on

the requisition number, not allowing line from multiple requisitions to be combined onto one

document.

(N>purchasing super user>auto create), there are two paths to follow when creating documents;

AUTOMATIC and MANUAL. To create a document automatically, select the requisition lines and

click AUTOMATIC. This will open either the new document form, if the ACTION was set to

CREATE, or an Add to document form, if it was set to ADD TO.

PURCHASING DOCUMENTS:

PURCHASE ORDER HEADERS: Header information on a purchase order is shared by the

entire order. If your responsibility has access to MOAC, then select the operating unit this order is

for, if not, it will default in. The purchase order number is either manually added or generated

automatically based on your setup of purchasing options. REV, which is maintained by the system,

refers to the revision of the order, or the number of times changes have been made to keyinformation it was approved. CREATED will be populated by the system with the date and time

the order was started.

TYPE represents the type of order that is being entered. Changing the type will affect what field

are shown and required.


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HEADER LEVEL INFORMATION ON A PO:

TYPE OF FIELD FIELD NAME

Header fields BUYER, SHIP-TO, BILL-TO

Supplier information CONTACT, CONFIRM, BRIEF NOTE TO

SUPPLIER, ACCEPTANCE REQUIRED,ACCEPTANCE DUE DATE.

Purchase order terms PAYMENT TERMS, SHIP VIA, FOB,FREIGHT TERMS

Line information UNIT PRICE, LINE NUMBER, ITEM, ITEMREVISION, ITEM DESCRIPTION, ITEMCATEGORY, QUNATITY, OR UNIT OFMEASURE ETC.

Shipment and distributions Most updates in these areas will required re-approval, with the acceptance of accountingtype information.

Lines Tab: Lines tab contain item specific information, NUM represents the each line in the

purchase order. EBS will allow you to select the first line number; it populates the rest of the lines

in order after that, allowing you to override the line number that is assigned. EBS can also default

this in on a purchase order that was created from a requisition in auto create if the system

profile option PO: Use Requisition line numbers on Auto created purchase order is set to

YES.

Type (N>SETUP>PURCHASING>LINE TYPES) is used to determine the type of product that

is being purchased. There are four main line types for creating purchase orders.

Amount: usually used when purchasing a service, allow only a quantity to be entered, which

becomes the amount.

Fixed Price:used to purchase either services or temporary labor, will allow the total amount or

amount to be entered on the order.

Quantity:allows a quantity, UOM, and a unit price to be entered on the Order.

Rate:is used with oracles service procurement modules. This is designated to handle the comple x

purchasing requirements involved with services.

Price Reference Tab: For each line, the LIST PRICE and the MARKET PRICE will populate if

an item was entered, and the list price is populated on the item itself,; this can also be changed or

entered by the buyer. Both of these fields are used on the saving analysis reports EBS provides.

These reports assist the buyers in analyzing the savings on each purchase order between the list,

market and negotiated and actual costs.


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Reference Documents Tab: For orders that are created from a contract or a source document, the

information relating to that document is found here. When an order is created against a specific

contract, the CONTRACT NUMBER, the OWNING ORG, and a check box to display if it is

GLOBAL are populated. For documents sourced from another document with sourcing rules or

from a quote, the DOCUMENT TYPE, number and LINE, ad SUPPLIER QUOTATION, as well

as the CONTRACT NUM and REV are displayed. Of these fields, only CONTRACT,

CONTRACT NUM, and REV can be entered by the Buyer.

More Tab: Similar to details tab on a requisition, the MORE tab allows the buyer to add UN

NUMBER information and HAZARD CODES. A NOTE TO SUPPLIER can also be added, which

can be displayed on a purchase order. This field is limited to 240 characters. The CAPITAL

EXPENSE box can be checked to show that this line is a capital item, but this check box is for

information only. A TRANSACTION NATURE can be added for the usage of the line, such as

consumption or fixed assets. This is a purchasing look up code, and more options can be added.

Agreements Tab: This tab is specifically for contract orders only; you can add specificinformation like MINIMUM RELEASE AMOUNT, AMOUNT AGREED Etc.

Temporary Labor Tab: The final tab, temporary labor tab, is only available when the purchase

basis for the line is temporary labor. This allows the contractor information to be added, such as

FIRST and LAST NAME, as well as a START DATE and an END DATE.

SHIPMENT DETAILS: This tab on the PO form utilizes the setups which we have created in the

purchasing options of PO. For ex: match approval levels, tolerances etc.

CONTROLLING PURCHASING DOCUMENTS:

In reality, all purchasing documents are will always be needed, and they will close automatically

when the items are received and paid for. Reality requires a little bit of more care and feeding.

Purchasing documents have two general conditions that need to be monitored; orders that are

created and will never be delivered or invoiced, and orders that will not be used 100 percent and

need to be closed manually.

Cancelling Purchase Orders: Any purchasing document can be cancelled at any time. This

includes a document that has receipts associated with it. While there are valid business reasons

cancelling a PO that is received, be aware that the receiving transactions will not be available for

update or return to the supplier once the document is cancelled. More often it will be un-receiveddocuments that are cancelled.

We can cancel a PO or a particular PO line navigating to Purchase orders>Purchase orders or

Purchase order Summary.

Price Changes on blanket agreements: An additional feature EBS provides is the ability to apply

pricing changes to the releases associated with the blanket agreement. The profile option PO:


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ALLOW RETROACTIVE PRICING OF POS control how this feature works. When this is set to

ALL RELEASES, every release against the blanket agreement can be updated, including releases

that already been received or invoiced.

Close Orders: Orders will self close when the invoice and receiving tolerances are met. The

requirement to close an order is that the lines all be closed for invoicing and receiving. Onecommon misunderstanding about EBS is that a closed order cannot have any additional receipts or

invoices matched to it, which is incorrect. To receive a closed order, ensure the INCLUDE CLOSE

POS check box is selected when finding expected receipts. Invoices can be matched toany POs

except those that are cancelled.

Orders can only be manually closed from the purchase order summer form, N>PURCHASE

ORDERS>PURCHASE ORDER SUMMARY. Find the order you want to control, and select

control from the tools menu. This will open the control document form, from here we can update

the purchase order with the below given actions.

ACTION DESCRIPTION

Cancel PO Cancels the entire PO, allowing no further actions on the order or anyassociated receipts.

Close Po is closed and will not appear on reports.

Close for Invoicing Close the order of invoicing only.

Close for Receiving Close the order for receiving only.

Finally close FINAL IS FINAL. Once an order is finally closed, no additionaltransactions can happen to the order or any of its associatedtransactions. This cannot be undone via any standard functionality inthe applications, and it will lock up any pending or future transactions

that are attempted against the order.Freeze Prevents any future modifications to the order but allows receipts and

invoices against it. This is removed by unfreezing the order.

Place on hold Placing an order on hold will not only un-approve it, but will alsoprevent printing, receiving, invoicing, and re-approval until the hold isremoved by selecting RELEASE HOLD. At this time, the order willrequire re-approval.

Open for invoicing This is only available when the order or line is closed for invoicing; itallows it to be reopened.

Open for receiving This is only available when the order or line is closed for receiving. Itallows it to be reopened. As mentioned earlier, closed lines can still be

received, so this is more about reporting that the actual receipts.


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TRACKING CHANGES TO PURCHASING DOCUMENTS:

When a change is made in purchasing document to key information that requires re-approval and

creates a new revision of the order, EBS tracks these changes. They can be seen in the PO change

History form. M>PURCHASE ORDERS>PURCHASE ORDERS>GO TO TOOLS MENU> PO

CHANGE HISTORY.

RECEIVING:

Receiving is typically thought of as an inventory function where items are received and credited

into inventory. In reality, it is a purchasing process against the purchase order, where the

destination determines whether the purchases are received into inventory and thus increase the

value, or only received against the order, creating a record for accruals and eventual payment.

Users can be notified of expected receipts, reminding them of outstanding receipts and providing a

quick link to receive a particular purchase order by running the workflow notification for the item

type PO confirm receipt. This reminder can be sent to their e-mail if the workflow notificationmailer is turned on in EBS, or as a notification with in EBS.

Receipts: N>RECEIVING>RECEIPTS:

When creating a receipt, EBS provides a large number of fields that can be used to find the

expected receipt, the most obvious being the PURCHSE ORDER or requisition number additional

fields, such as ITEM or CATEGORY, and DATE RANGES for when the receipt is expected, are

also available. Once the expected receipt is found, the actual receipt is performed in two steps; first

by creating a header for the receipt, and then by providing individual line information. The report

called EXPECTED RECEIPTS REPORT also allows purchasing and accounting to track

outstanding receipts.

Headers: Allow users to create a new receipt or add to an existing receipt, as well as add generic

information that will pertain to an entire receipt. EBS defaults the receipt to NEW RECEIPT, but

this setting can be changed by clicking ADD TO RECEIPT and entering a RECEIPT number when

prompted. This will not change the existing receipt but add additional lines to the transaction. The

RECEIPT DATE will default in to the current date and time but can be updated to any open

purchasing period and for items received into inventory and inventory period. This traditionally

represents the date the item is received in the organization, as opposed to the SHIPPED DATE,

which is recorded in the next field.

Lines: lines are used to record the actual receipt for each line on an order. Much of the information

will default in for the receiver, allowing him or her to make updates as required. The QUANTITY

will default in to the remaining amount due on the order, while actual amount on the order can be

found on the order information tab. When allow BLIND RECEIVING s checked in the receiving

options for the organization, then both of these fields will reflect zero, forcing the receiver to use

the hipping paperwork to enter the quantities.


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To receive a specific line, just use the check box on the left of the window, and enter the

QUANTITY received. Information about the receipt will default in from the purchase order,

including delivery information such as DESTINATION TYPE AND SUBINVENTORY. This

information can be accepted as is or updated to the proper receiving data.

Returns: Returns are processed almost exactly as the same way as receipts, using the returnswindow instead N>RECEIVING>RETURS. Instead of finding the expected receipts, the system

find all previously processed receipts that meet the search criteria. The QUANTITY to return will

need to be entered, as well as where product is being RETURNED TO. This is the fieldwhere

most people make mistake. On inventory items, the user needs to select SUPPLIER to remove the

quantities from inventory, where as selecting RECEIVING will move the items back to the

receiving location, but the quantities will still remain in inventory for this location. An RMA

(return material authorization) NUMBER from the supplier can be entered for tracking purposes,

and when the supplier is set up for pay on receipt or (ERS, Evaluated Receipt Settlement),

checking CREATE DEBIT MEMO will automatically create the debit memo when the return is

processed.

Once the return is saved, EBS will create reversing accounting entries for the transaction when

create accounting is run.

UNDERSTANDING EBSS ACCRUAL PROCESS:

Purchasing has two types of accruals available for transactions that have been received but not yet

invoiced to record the organizations liability.

Perpetual Accruals are traditionally used with inventory items, where a liability is set up for

transactions when they are received, and is relieved when the invoice is matched to the receipt or

purchase order. These accruals are created as part of the receiving transaction and relieved with the

invoice transaction.

Reversing Accruals, traditionally used for expense items, can be created each month end as a

journal entry that is reversed on the first of the subsequent month. EBS does allow expense

accruals to also be created as perpetual accruals, but this option is rarely used and requires more

reconciliations.

CONTROLLING PURCHASING PERIODS: Purchasing periods, as in other modules, are

opened and closed each month. Periods should be closed after all the receipts are entered for theperiod, and are accounted and sent to the GL with create accounting process.

Before start processing purchasing, make sure the corresponding GL and payables periods are open

or set to future entry.

Purchasing periods can be opened from N>SETUP>FINANCIALS>ACCOUNTING>CONTROL

PURCHASING PERIODS.


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SUPPLIERS

Technical Update to Suppliers: There are two major changes in the table structures for suppliers

that will affect custom reports, import data, and troubleshooting.

First, suppliers created from employee records no longer have the employee data duplicated in thenew supplier tables; instead, R12 maintains the data in the HR tables for security purposes. This is

for suppliers that are set up with the suppler type of employee, where the employee record is linked

to the supplier.

Second, in the payable schema, there are three new tables for suppliers; AP_SUPLIERS,

AP_SUPPLIER_SITES_ALL, and AP_SUPPLIER_CONTACTS. Their main purpose is to store

supplier specific information. The core supplier information exists in the HZ Schema in the

following tables.

HZ_PARTIES

HZ_PARTY_USG_ASSIGNMENTS

HZ_ORGANIZATIONS_PROFILES

The AP tables and HZ tables linked using the POS_SUPPLIER_MAPPINGS table. The final table

IBY_EXTERNAL_PAYEES_ALL, tracks specific payment information for each supplier. The old

tables for suppliers still exist as views.

Creating Suppliers: N: Payables Manager>Supplier>Entry>Suppliers or

Purchasing>Supplier Base>Suppliers

Supplier setups, used y payables, purchasing, assets, property manager, and I supplier portal,

determine how the suppliers and their addresses are going to be used, as well as storing specific

processing information. The supplier setup is broken down into multiple windows, which group the

setup information by what data or processes it controls. The supplier window can be accessed from

payables and from purchasing applications. Either navigation takes you to the same window.

Important Tabs: Banking Details:

Bank accounts need to be added to supplier records, to use with electronic funds transfer (EFT) of

wire payments. In R12, banks are share within a legal entity and no longer striped by operatingunit, but are grouped by country instead. Bank specific information, such as bank and branch

number, account number, and check digits, are regulated by many countries, and the country

groupings allow the formats of this information to be validated. In addition to the global access

operating units, bank accounts are now owned by the Cash management module (CE Tables).

When adding a bank account to a supplier, it can be set up for the suppliers bank itself, or for a

factors bank account. A factor is an entity or company that purchases the outstanding receivables


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from your company at a discounted rate, in exchange for immediate working capital. When this

happens, the payment for the receivables may be sent directly to the factors bank account.

The data entered to create a factor or supplier bank account are the same, with one exception; when

entering a factor bank account, a PAYMENT FACTOR NAME is selected from the list of values

to show the actual supplier the payment is being made to.

While creating the new account for a supplier, for either an existing or new bank, ensure you save

the changes after clicking APPLY. The data is not committed to the database until it is saved.

(THIS CONCLUDES PO, IN THE OTHER DOCUMENT I WILL PROVIDE INTERVIEW

QUESTIONS).

ORDER MANAGEMENT

Complete Order to cash cycle steps including

1.Entering the Sales Order

2.Booking the Sales Order

3.Launch Pick Release

4.Ship Confirm

5.Create Invoice

6. Create the Receipts either manually or using Auto Lockbox ( In this article we will concentrateon Manual creation)

7.Transfer to General Ledger

8.Journal Import

9. Posting


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Overview:

The below are the steps in short that we will go through in this article:

Enter the Sales Order Book the Sales Order Launch Pick Release Ship Confirm CreateInvoice Create the Receipts either manually or using Auto Lockbox ( In this article we will

concentrate on Manual creation) Transfer to General Ledger

Journal Import Posting

Order management is a central repository for sales. You can get orders from various sources

including your customers, Interfaces etc.

You can manage your orders by restricting the organizations, your orders which can be viewed and

updated in.

With pricing and shipping execution integration, you can ensure that all the orders get progressed

to the place where exactly they meant to be, and all the terms and conditions associated with the

order fully met.
http://erpschools.com/Apps/oracle-applications/Articles/General/Order-to-Cash-Cycle/index.aspxhttp://erpschools.com/Apps/oracle-applications/Articles/General/Order-to-Cash-Cycle/index.aspx


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What is order to cash cycle?

A typical order to cash cycle is as follows:

- You can enter orders from diverse sources like istore, edi, xml or direct data entry.

-

After you enter an order, the items on the order are validated in oracle inventory; a price iscalculated for the items using the pricing engine.

- The availability of the item will be checked and reserved if necessary.

- Items then are pick-released and shipped to the customer.

- You can record the customers acceptance of the goods either before the items are billed

after the billing takes place.

- Customer acceptance is optional and you can set it by using the system parameter enable

fulfillment acceptance.

- You can then invoice the customer for the items shipped, perform cash management and

reconciliations.

Integration: Oracle order management is closely integrated with the advance pricing, shipping

execution, configurator and release management products that are part of the order management

suite.

Order to cash cycle with standard items: N>sales orders>sales orders

- Enter the header information on sales order

- Enter the line information on sales order

-

Procession constraints and default rules (explained in upcoming pages)- The pricing engine

- View the workflow process for the order

- Check availability and book the order

- Pick release the order

- Ship confirm the order

- Use auto invoice to create an invoice.

1) The sales order window consists of two regions. Headers and Lines. The important header

information you would require to enter in the main tab; Customer name or number, ordertypes. Once you enter these values other values like ship-to, bill-to, shipping method,

pricing will default in the window.

Order numbers are generated (not defaulted) based on the order type. A document sequence

assigned to every order type so that a sales order number is generated. The value in the

operating unit field is defaulted from the responsibility that is associated to your user name.

The ware house assigned (others tab) defaults based on the operating unit.


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2) Required fields for order lines are; ordered item and quantity, again, based on default rules

set ups in pricing, inventory and shipping, the other values would default on the sales order

line. If you have entered the item, UOM and item description will default. A standard item

is a finished good that is not assembled or configured item, a service or a component. Other

item types used in orders are; assemble to order models, ATO items, pick to order models

and kits. Please note that sales order window used for entering and processing returns too.

Returns are processed for standard items, configured items for ATO models and option

items for PTO models.

3) Processing constraints are a security framework where you can define rules in oracle order

management that validates back end operations such as create, update delete and cancel.

For example you might want to change the order type on the order header, however if your

order has a status of booked or lines have been entered for the order, processing constraints

prevent you from updating order type field.

Similarly you cannot perform a delete operation on an order line if it has a closed status if itis ship confirmed or invoice interfaced. An error message will be displayed stating why you

cantperform the operation.

There are 3 types of processing constraints USER, EXTENSIBLE AND SYSTEM. You

cannot modify system processing constraints.

Process order API calls the processing constraints framework to validate the order entities

in case of create, update delete and cancel operations. In case of update and delete

operations process order API also checks for the values of dependent attributes and clears

them or sets them to missing value.

Defaulting rules Enable you to speed up data entry by passing values in the window based

on some key values you have entered. For example, in the order header, ship to address and

bill to address will default once you enter the customer name or number, similarly if you

enter an item number, description and UOM default on the order line.

4) Basic pricing is part of oracle order management and advance pricing is part of the order

management suite. The pricing engine is integrated with oracle order management process

and flows. The pricing engine consists of a search engine and a calculation engine.

When you enter an item on sales order line, the pricing engine is called and it calculates the

price on the order line after reading it from the pricelist associated with customer/order

type. The price list may contain some modifiers and quantifiers that may be applied tothe base price and the pricing engine calculates these before placing a final value in

the unit selling price field in the sales order.

A modifier such as discount, surcharge or special charge may be applied to the base price

and may alter the value of an item. You can apply a modifier at the list (order) level or the

line level.


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7) Based on the release criteria you specify, you can pick release order lines. The order lines

are pick released together on a trip, stop or delivery. With pick release you can move the

items from warehouse to the staging area, along with physically moving the items; you can

perform a move order transaction to record the stock movement in inventory.

You can pick release using one, two or three step process.

The one step processconsist of selecting the auto allocate check box on the inventory tab

and the auto pick confirm box on the inventory tab when you pick release, which means

that the pick recommendation is automatically created and pick confirmed without any

manual intervention.

The two step processconsist of selecting auto allocate, which creates a move order that is

automatically detailed. It enables you to view the pick recommendations and provides the

opportunity to change quantity, location and sub-inventory. You can report a missing

quantity at the pick confirmation step in the transact move orders window. Once you havemade your changes, you can transact the move order to pick confirm the inventory.

The three step processconsists of selecting neither the auto allocates or auto pick confirm

check boxes. This creates a move order whose details you can enter manually or

automatically in the transact move orders widow. After the details are entered, you can

transact the move order to pick confirm the transaction.

You can pick release the order using the Shipping>release sales order window to do the

pick release online or using a concurrent program PICK SELECTION LIST

GENERATION.

8) When you need to confirm that your items have been shipped out of the inventory to the

customer as a delivery, use the ship confirm window. Perform Run Ship confirm to indicate

that the items are loaded on to the carrier from the staging location. When you run ship

confirm, the system decreases the inventory and updates the sales order line status. This

information is then transferred through auto invoice to oracle accounts receivables for

invoicing. Finally accounting information can be sent to the general ledger from oracle

inventory and oracle receivables.

9) Auto invoice is a concurrent program in oracle receivables that performs invoice processing

at both the order header and line levels. You can interface orders, returns and charges

information to receivables to create invoices, credit memos and credit on-accounts,

recognize revenue and manage sales credits. Once the order line is eligible for invoicing,

the invoice interface workflow activity interfaces the data into receivables. Oracle order

management inserts records into the following interface tables;


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RA_INTERFACE_LINES

RA_INTERFACE_SALES_CREDITS

Please note that oracle order management does not use

RA_INTERFACE_DISTRIBUTIONS because all account code creation done by auto

invoice based on the auto accounting rules you have defined. For customer acceptance

AR_INTERFACE_CONTS_ALL is populated for all lines that have contingencies attached

to them. This information is interfaced to receivables for lines and discount lines.

Use the auto invoice concurrent program to create invoices for the processed orders. You

cannot use auto invoice to create invoices for the following items;

- Where the item attributes (inventory item creation window), invoice enabled or invoice-

able is set to NO; included item or internal order. If you do use auto invoice, the invoice

interface workflow activity is completed with a status of not eligible.

DROPSHIPMENTS:

Drop shipment is the integration of Order Management and purchasing, where the supplier directly

send the goods to the customer.

Drop shipment is a method of fulfilling sales orders by selling products without the order taker

handling, stocking, or delivering the item. The seller buys a product and the supplier directly sends

the product to the sellers customer. Drop shipments are used due to the following reasons:

- Customer requires an item that is not normally stocked.

-

Customer requires a large quantity of the item which is not available with you.- It is more economical when the supplier ships directly to the customer.

The seller receives a sales order from the customer and sends a purchase order to the supplier. The

supplier ships directly to your customer. The seller receives an invoice from the supplier and sends

an invoice to the customer.

Types of drop shipments:

1) Full Drop shipment: the seller sends the purchase order to the supplier for the full quantity

that the customer has ordered.

2)

Normal shipment and partial drop shipment: if the seller has only part of the quantityavailable for shipping to the customer, then the quantity is shipped. The user looks at the

availability for the order quantity by using the ATP checks and if the whole quantity is not

available, then the balance quantity can be fulfilled using the drop shipment process. A

purchase order will be created for the remaining quantity which the seller cannot fulfill.

3) Normal shipment and Full Drop shipment: The seller ships some goods from the

inventory and other goods always shipped from an external source (supplier).


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Drop shipments are created as sales orders in order management, indicated as drop shipments when

their source type is entered as external. The purchase release concurrent program or workflow in

order management creates rows in the requisition import tables in the purchasing module.

Purchasings requisition process creates requisitions. After the requisition has been approved, it

generates a purchase order. The source type is entered as supplier. The purchase order sent to the

supplier who sends the goods directly to your customer. The supplier notifies you that the goods

have been sent to your supplier via invoice, EDI document, or an Advance shipment notice (ASN).

Additionally when you receive confirmation of a drop shipment or the supplier invoice, you create

a receipt for it. This creates inbound and outbound material transaction in your system for

accounting purposes. Now you generate an invoice to send to your customer.

BACK TO BACK ORDERS:

The process of creating back to back orders involves the close linking of sales orders and purchase

orders. Back to back ordering is used as a replenish to order process for items that you stock ininventory.

To create and use back to back orders, you need to ensure that the purchasing creation process is

automated, that you always have the latest status of the lines progress, and that you can peg (hard

reserve) quantities against the order, so that the items are not allocated to another customer.

The auto creation requisition process creates the requisition for the purchase order from the sales

order in purchasing. The requisition must be identified as CTO (customer sales order). The

purchase order then created automatically from the requisition and sent to the supplier. After the

supplier receives the purchase order, the items are recorded in inventory and a reservation is made

automatically against the sales order line. The sales order can then be picked shipped and invoiced.

SALES AGREEMENTS:

A sales agreement is a suppliers representation of an agreement with a customer for the supplier to

sell and the customer to buy goods and services. Usually the agreement is fulfilled by executing

multiple sales transactions over a period of time. The Sales agreement header includes the

following;

-

The information that other order headers includes , customer, ship to , bill to etc.,

-

Effective dates of the Sales Agreement.-

Payment and freight terms between the customer and supplier.

- Sales agreements minimum and maximum value.

- Control flag to determine whether you can exceeds the maximum value.

- Pricing information like standard price lists, sales agreement specific price lists.


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The Sales agreement line information includes the following:

- Items

- The minimum and maximum quantities agreed by the customer and supplier.

- Price including choice of price list.

-

Effective dates

A sales agreement can start with either the negotiation phase or the fulfillment phase. If the sales

agreement starts with the negotiation phase, it will first follow the negotiation flow and then go

through the fulfillment flow.

The sales agreement is specified for a given time period, indicated by the effective dates on the

agreement. The product/item categories are also entered in the sales agreement. You can specify

the minimum and maximum quantities for the booked sales order. Additionally you can specify the

minimum and maximum amounts in value for the booked sales order.

You can set up a basic price list and also payment and freight terms for the Sales Agreement.

APPROVE SALES AGREEMENT:

You can setup sales agreement types that include or do not include an approval setup. Sales

agreement types are transaction types with a sales document type of sales agreement. The

commonly used seeded negotiation flows are; Negotiation Flow- Generic, Negotiation Flow-

Generic with approval and Negotiation flow- Simple. Once negotiation with the customer is

complete and all necessary sales agreement information has been entered, selecting submit will

launch the approval process and change the sales agreement status from draft to pending internal

approval if the sales agreement type has been set up with an approval step in the process. If thesales agreement type does not include an approval step, submitting the sales agreement will

progress the Sales agreement to the status PENDING CUSTOMER ACCEPTANCE.

The sales agreement window contains the acceptance tab that records the customer acceptance

process. The customer and supplier information are entered here. Clicking customer acceptance

confirms that the sales agreement status changes to customer accepted.

SIMPLE NEGOTIATION WITH IN ORDER MANAGEMENT:

Negotiation cycle includes;

- Creating the draft quote or order

- Internal approval process

- Customer acceptance/rejection

- Conversion to sales order


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The sales order processing incorporates the negotiation phase. The negotiation phased stars when

a quote is saved. It captures all the steps in the process of negotiating a quote and converting it into

an order.

Order Management Profile Option Descriptions and Settings:

OM: Add Customer

ONT_ADD_CUSTOMER

This profile option determines which users who can access the OrderManagement Add Customer window to enter customers, customer addresses,and customer contact information. Select from:

All: Users can create new customers, customer addresses, and

Cus