Transactions in EBS Very Good Arctical

OAUG Cost Sub-Committee – 1

Discrete MFG SIG – Cost Sub-CommitteeOctober 24, 2007

Standard Processes



What happens when?

Process PO Receipt into Stock

Process PO Receipt/OSP into WIP

Issue materials to a work order

Complete an assembly

Ship to a customer

Average Cost Update

Miscellaneous issues and receipts

Inter-Org transfers



Process PO Receipt into Stock (Oracle Purchasing)

EnterPO Receipt Transaction

RCV Transactions

Interface

RCV_TRANSACTIONS

RCV_RECEIVING_SUB_LEDGER

RCV_SHIPMENT HEADERS

RCV_SHIPMENT_LINES

GL_INTERFACE

Process PO Receipt into Receiving

Start

Receiving Transaction Processor

Receiving Shipments

Created

Accounting Entries Created

Frequently have stuck transactions for both

PO Receipts and RMAs

All Purchasing transactions go into

here in detail without a GL Group ID

Purchasing creates a receipt and delivery transaction (only the receipt is accounted for) and Inventory creates

the delivery transaction

MTL_SUPPLY



Process PO Receipt into Stock (Oracle Inventory)

EnterPO Delivery Transaction

RCV Transactions

Interface

RCV_TRANSACTIONS

MTL_MATERIAL_TRANSACTIONS_

TEMP

MTL_MATERIAL_TRANSACTIONS

Process PO Receipt into Stock – Delivery into InventoryStart



Purchasing creates shadow delivery transaction (only the receipt is accounted for

in Purchasing) and Inventory creates the accounted for delivery transaction

Inventory Transaction Processor

Mat’l Cost Transaction Processor

MTL_TRANSACTION_ACCOUNTS

Here you get stuck uncosted transactions,

mostly Intransit Delivery Transactions

Here you get unprocessed transactions – but they are

considered to be part of your onhand quantities

MTL_ONHAND_QUANTITIES_DETAIL


RCV_SHIPMENT_LINES

MTL_SUPPLY

Supply is relieved since the goods as going into stock



Process PO Receipt/OSP into WIP (same process as before)

EnterPO Receipt Transaction

RCV Transactions

Interface

RCV_TRANSACTIONS

RCV_RECEIVING_SUB_LEDGER


RCV_SHIPMENT_LINES

GL_INTERFACE

Process PO Receipt into Stock

Start


Receiving Shipments

Created


Frequently have stuck transactions for both

PO Receipts and RMAs

All Purchasing transactions go into

here in detail without a GL Group ID

MTL_SUPPLY



Process OSP PO Receipt into WIP (Oracle WIP)

EnterPO Delivery Transaction

RCV Transactions

Interface

RCV_TRANSACTIONS

WIP_TRANSACTIONS

WIP_TRANSACTION_ACCOUNTS

Process PO OSP Receipt into WIP – Delivery into WIPStart



Purchasing creates shadow delivery transaction (only the receipt is accounted for

in Purchasing) and WIP creates the accounted for OSP “delivery” transaction

WIP Cost Transaction Processor

The WIP Cost Processor creates the resource/overhead

entries, & the accounting for resources and resource

overheads

WIP_PERIOD_BALANCES


RCV_SHIPMENT_LINES

MTL_SUPPLY

Supply is relieved since the goods as going into WIP



Issue Materials to a Work Order

EnterComponent

Issue Transactions


TEMP


Issue Materials to a Work Order

Start







These could be manual (push) or automatic (backflush)

WIP_PERIOD_BALANCES


Here you get stuck uncosted transactions



Complete an Assembly

WIP Completion Transaction


TEMP


Complete An Assembly From WIP

Start







This transaction could create backflush transactions, depending on your setup

WIP_PERIOD_BALANCES


MTL_SUPPLY

Quantities in stock are increased

Supply from WIP is

decreased

Here you get stuck uncosted transactions,



Ship to a Customer – Step One – Pick Release

Pick Release & Staging

Material Accounting Entries

Inventory & Cost

Pick ReleaseInventory

Transaction Processor


TEMP

PICK Transaction

Matl Cost Processor


MTL_TRANSACTIONS_INTERFACE

Accounting Entries

InventoryTransaction Processor



Ship to a Customer – Step Two – Ship Confirm

Pick Release & Staging

Ship Confirm

OE Interface


AR Invoice Interface

Auto Invoice


Invoices CreatedCustomerInvoice

Customer ShipmentCOGS

Accounts Receivable

Inventory & Cost

Pick Release

Transactions not OE Interfaced are a major problem – also called “Unprocessed

Shipments”


Matl Cost Processor

MTL_TRANSACTIONS_INTERFACE

Accounting Entries

Accounting Entries


TEMP


Here you get unprocessed transactions – but they are considered to be part of your

onhand quantities



Average Cost Update


TEMP



Average Cost Update

Submit Average Cost Update

Accounting Entries

Creates Entry to be

Processed by the Inv.

Transaction Processor

MTL_CST_TXN_COST_DETAILS

Item Average Cost History

CST_ITEM_COSTS

CST_ITEM_COST_DETAILS

Material Cost Processor


Updated Item Costs

Submit Onninen Update Avg Costs

MTL_TRANSACTIONS_

INTERFACEThe Onninen Update Average Cost

Program inserts into the Transactions Open Interface –

MTL_TRANSACTIONS_INTERFACE table



Miscellaneous Issue / Receipt Transactions

EnterMisc.

Transactions


TEMP


Misc. Issue / Receipt Transaction

Start







These could be Account Alias or Account Issue/Receipt or

Misc. Issue/Receipt


Here you get stuck uncosted transactions



Inter-Organization Transfers

EnterInter-Org Shipment

Transaction


TEMP


Inter-Organization Shipment Transaction

Start







This example assumes use of intransit inventory


MTL_SUPPLY

Intransit Inventory is kept in MTL_SUPPLY, not in

MTL_ONHAND_OUANTITIES_DETAIL table

Uncosted transactions are in this table



Inter-Organization Transfers

EnterInter-Org Receipt

Transaction


TEMP


Inter-Organization Receipt TransactionStart





Here you get unprocessed transactions – but they are considered to be part of

your onhand quantities

This example assumes use of internal requisitions and

intransit inventory


Uncosted transactions are in this table

MTL_SUPPLY

Intransit Inventory is kept in MTL_SUPPLY, not in MTL_ONHAND_OUANTITIES_DETAIL table

If you use internal requisitions, the Inter-Org Receipt transaction will also create

entries into RCV_SHIPMENT_HEADERS, RCV_SHIPMENT_LINES and

RCV_TRANSACTIONS


RCV_SHIPMENT_LINES

Receiving Shipments

CreatedMTL_SUPPLY

RCV Transactions

Interface

RCV_TRANSACTIONS




Pending and Uncosted Transactions



Pending and Uncosted Transactions

Every inventory organization needs to close its accounting period

You can set up an organization hierarchy to centralize the “key entry” part of closing the inventory organization

But every inventory organization has its own item costs

All inventory accounting entries are written in batch

You cannot close the Inventory Accounting Period if there are pending (incomplete) material movement transactions

You cannot close the Inventory Accounting Period if there is material movement that is not costed (accounting entries have not been written)

Pending and uncosted transactions usually reflect the time delay in running the Inventory Processor (for the quantity movement) and the Material Cost Processor (for the accounting entries)



Month End Close

Dis

trib

utio

n C

en

tre

Acco

un

tin

g

7.0 ReconcileInv entory

Balances toSubledgers & G/L

5.0 Close Periodf or Inv entory and

WIP

6.0 Run Reports& Snapshot

reportinginf ormation

3.0 CompleteTransactionsand/or Clear

Errors

Pending?

Mat'l/WIP/POTransaction Detail

Reports

8.0 Book & rev iewaccruals, prepaids,corporate transf ers

in the GL

1.0 Book all miscinv entory / WIP

transactions

Yes

No

Prior to first workday First workday

A/P Closeby COB

workday -1

DC Closecomplete

9.0 Perf orm Massallocations: cost

pool cost centresto f inal cost

centres

Trial BalanceReport

Month End

ClosePurchasing

G/L ImportProcess

CloseProjects

Rev iewPending &uncosted

TransactionInterf aces

4.0 Check f ortransactions with

zero unit costs

2.0 Open nextInv entory period

workday -1

10.0 Notif yCorporate is

closed

ApplicableDiscrete Jobs

Close byworkday -1



Review Pending and Uncosted TransactionsIT

Dis

trib

utio

n A

cco

un

ting

Need toreview forpending oruncostedtransactions

Transactionreview

complete

Are cost/transactionmanagersrunning?

Start Cost/InterfaceManagerprocess

1.0 View AllPending/Uncosted

Transactions

Pendingtransactions

remain?

Yes

Step 5.0 ResubmitPending

Transactions

Pending orUncosted?

Step 2.0 ResubmitUncosted

transactions

Step 3.0 FindPending

Transactions

Step 4.0 Analyzeerror message and

correct pendingtransactions

Pending

Uncosted

Step 6.0 ContactIT

IT PendingTransaction

process

Able tocorrect?

No

Yes

Uncostedtransactions

remain?

Yes

Yes

No

No

IT UncostedTransaction

Process

Pending oruncosted trans.

exist?

Yes

A

A

No

Step 1.1 ViewTransaction

Manager Status

No

Step 1.2 ContactIT

Step 2.1 ContactIT

StartTransactionMonitoringProcess

Step 7.0 InformDistribution Center

Run InterfaceErrors Report



Pending Oracle Transactions


Resolution Required Transactions

Pending Transactions Name

Description Interface Table Name Navigation for Cost Manager

Unprocessed Material

Material transactions “halfway” processed and stuck in the material temporary table. Usually shipment/RMA transactions. This is an internal Oracle table.

MTL_MATERIAL_TRANSACTIONS_TEMP

View Transactions> Pending Transactions

Uncosted Material Material transactions where the quantity movement has been completed, but the accounting entries have not been recorded. The Cost Manager creates the accounting entries for the material transactions. This table is the resting place of all inventory related transactions.

MTL_MATERIAL_TRANSACTIONS where the costed_flag = ‘N’ or ‘E’

View Transactions> Material Transactions, query up all entries where the “Costed” field displays “No” or “Error”





Resolution Required Transactions



Pending WIP Costing WIP resource, OSP resource, and job close transactions that are pending or erred. The Cost Manager creates the accounting entries for the resource, overhead, OSP and job close transactions. This table may be used to populate external resource costs into the Oracle Applications.

WIP_COST_TXN_INTERFACE

View Transactions> Pending Resource Transactions

Unprocessed Shipping Transactions

Pending shipments not yet processed. To clear these, assuming no underlying data issues, you need to go to the Order Management module > Shipping > Trip Stop SRS selection and run the trip stop interface. If this does not work, there may be underlying data issues with the delivery or trip stop.

WSH_DELIVERY_DETAILS

There is no Cost Management Navigation. Go to Order Management > Shipping > Trip Stop SRS to run the Trip Stop interface





Resolution Recommended Transactions



Pending Receiving PO Receipt Transactions that have erred out. The receiving transactions always use this interface table, sometimes, for unexplained reasons, a stray transaction will error out. This table may be used to populate external receiving transactions.

RCV_TRANSACTIONS_INTERFACE There is a Receiving Interface Errors Report using the Purchasing Responsibility.

Pending Material Pending material transactions from an external system, such as EDI or bar-coding. Note that the shipment transactions initially load this table, then clear it, and load the pending material transactions interface, MTL_MATERIAL_TRANSACTIONS_TEMP.

MTL_TRANSACTIONS_INTERFACE View Transactions>

TransactionOpenInterface

Pending Shop Floor Move

Pending WIP shop floor move transactions, internal or external to Oracle.

WIP_MOVE_TXN_INTERFACE View Transactions> Pending Move Transactions



GL Integration



GL Integration with Inventory and Work In Process

Inventory Period Calendars vs. GL Period Calendars

Concept of shared chart of accounts and set of books

Interim GL transfers and transfer options (summary vs. detail)

GL to Inventory drill-down capabilities, online and via reports

Period close processing in Oracle Inventory, and Journal Import in Oracle General Ledger



Inventory Periods Vs. General Ledger Periods

Every GL Set of Books has its own Financial Calendar

Purchasing, Payables, Receivables have their own calendar by Operating Unit

Inventory and WIP share the same financial calendar but have one for each Inventory Organization

This means that you have to open and close each inventory period in each inventory organization, separately from the GL, Purchasing, Payables and Receivables

→Note: if you close Inventory, or Purchasing or General Ledger, you cannot do a PO Receipt or Return or OSP Receipt or Return



Interim GL transfers and transfer options (summary vs. detail)

You can transfer when you want to within the accounting period

You can transfer to the General Ledger in detail or in summary



GL to Inventory drill-down capabilities, online and via reports

Since Release 10 there has been reporting drill down capability

The GL Journal Header stores the inventory org code in the Journal Batch Name, and the Inventory GL Batch ID

Run the Material Account Distribution, WIP Account Distribution Reports by GL Batch ID, to get the appropriate entries you find in the General Ledger.

In Release 11.5.9 + patches and 11.5.10 you can transfer to GL in detail, summarize when you run journal import, AND have drill-down capability from Oracle General Ledger.

→ Note: Due to the transaction volumes, it is not useful to drill-down for large accounts, from the G/L back into the material accounting or wip accounting details. So if you do use the online drill-down capabilities, please be careful or you will “hang” your session.



Period close processing in Oracle Inventory

What Happens?

Transfers entries in summary or detail to the GL Interface table

Marks the entries in the Inventory and WIP subledger as been transferred (cannot do it twice!)

Creates a GL Batch Id for the respective entries, and for the GL Journal Batch Header

Prior to Release 11.5.10, stores summary values by inventory organization by subinventory (blank subinventories are for intransit)

In Release 11.5.10, stores period-end inventory values and costs by inventory organization by subinventory by each individual item

Release 11.5.10 also creates a detailed reconciliation report that compares the cumulative onhand values against the cumulative accounting values



Inventory & WIP Reconciliation



Reconciling Inventory & WIP to General Ledger

Basic reports to use, when to run, timing considerations

Sample spreadsheet

What to do when you can’t reconcile



How to Balance the Receiving Valuation Accounts

Use the Receiving Valuation Reports to get the month-end balances

Use the Receiving Account Distribution Report for monthly increases to the Receiving Valuation Account

Use the Material Distribution Summary Report for monthly decreases to the Receiving Valuation Account

→ Note: the quantities and values for the Receiving Valuation Reports are “on demand” – they must be run at the correct time, after the period is closed and before the new accounting period has transactions.



How to Balance the Inventory (Stores) Valuation Accounts

Use the Inventory Valuation Reports to get the month-end balances

Use the Transaction Historical Summary Report – also called the “Rollback Report” to get a prior balance for subinventories (only)

Use the Period Close Value Summary Report, for a double check

Use the Material Distribution Summary Report for monthly totals

→ Note: the quantities and values for the Inventory Valuation Reports are “on demand” – they must be run at the correct time, after the period is closed and before the new accounting period has transactions.



How to Balance the Intransit Valuation Accounts

Use the Intransit Valuation Reports to get the month-end balances

Choose Yes for the option “Only Display Inventory You Own”

Use the Material Distribution Summary Report for monthly totals

→ Note: the quantities and values for the Intransit Valuation Reports are “on demand” – they must be run at the correct time, after the period is closed and before the new accounting period has transactions.



How to Balance the WIP Valuation Accounts

Use the WIP Valuation Report to get the month-end balances (No cut-off issues!!)

Choose the option to include closed jobs

Use the WIP Account Summary and Material Distribution Summary Reports for monthly totals

→ Note: the quantities and values for the WIP Valuation Reports are stored by accounting period, you may run these any time after period close as needed.



Sample Reconciliation Spreadsheet and Example



What do you do when you can’t Reconcile?

Reasons

Report cut-off issues

Incorrect misc. inventory transactions

Disabling a code combination during the month

Subledger miscodings

Manual GL journal entries

Back-dated transactions from external system feeds

Miscoded purchase orders

Delivering goods to a closed work order



Report Cut-Off Issues

The following reports need to be run at the correct time (before new transactions occur in the following accounting period):

Inventory Value Report

All Inventories Value Report

Receiving Value Report

Intransit Value Report

Corrective action:

Run the reports at midnight on the last day of the month. Also run the Material and Receiving Account Distribution reports to capture daily transactions that need to be subtracted away.



Incorrect Misc. Inventory Transactions

Check for miscellaneous inventory transactions, where the offset account is the same as the subinventory valuation account

When this happens, debits = credits, the accounting effect is zero, but the onhand quantities have changed. Your cumulative accounting is out of balance with your onhand value reports

Use the Transaction Distribution Inquiry to find these transactions. Query for entries that hit your subinventory valuation accounts, but the Accounting Line Type is “Account”

Corrective action:

Reverse the miscellaneous transaction (assuming the standard costs have not changed) and replay the transaction with a correct offset account.



Disabling a code combination during the month

If you disable a code combination during the month, AND it has been used in Inventory or WIP subledger, it will not come over to the GL Interface. For other subledgers it will fail in journal Import (Payables, others)

You can find this by comparing the summary material distribution reports to your GL entries (if able to run journal import and post to GL)

Corrective action:

For Inventory or WIP, manual journal entry to book the difference (or SQL to reset the transaction and run the Interim Inventory Transfer to G/L)

For other subledgers, fix in the GL interface (it will be an unbalanced entry).



Sub ledger Miscoding

Miscoded Purchase Orders cause permanent differences once the corresponding line item is received

Departments such as Accounts Payable and Accounts Receivable intermittently reference inventory accounts during coding, causing permanent differences

You must not code any Receivable or Payable entries to a system account

System accounts include your Inventory Accounts, AP Accrual Accounts (Inventory and Expense), Intransit, Inter-org Clearing Accounts or Receiving Inventory Account

Corrective actions:

Reverse subledger entry if possible, or correct via manual GL entry.



Manual GL journal entries

Manual General Ledger journal entries become an automatic reconciliation item

Typically you only write reversing entries to correct the balances at month-end, but in the new month you should perform the transaction in the respective subledger



Back-dated transactions from external system feeds

Backdated transactions which occur in the following month affect the GL but are not reflected within the perpetual records. This in-turn causes temporary accounting differences from month to month precluding our ability to benchmark perpetual activity

Sources of backdated transactions include:

Late inventory period closes

External system feeds

Corrective actions:

Enter a manual reversing journal entry



Delivering goods to a closed work order

Oracle provides us with the ability to deliver Outside Processing (OSP) vendor receipts to closed work orders

This causes a permanent difference as the corresponding work order is not charged and the costs are not reflected within the perpetual records (WIP balances) accordingly

Corrective actions:

Reopen the work order and make corrections



Release 12 Enhancements



Inventory Value Reports Enhancements

The following reports can now be run with an As-of Date:

Inventory Value Report – By Subinventory

Inventory Value Report – By Cost Group

Elemental Inventory Value Report – By Subinventory

Elemental Inventory Value Report – By Cost Group

All Inventories Value Report

All Inventories Value Report – By Cost Group

Intransit Value Report

Receiving Value Report



Period Close Diagnostics

Drilldown from Pending Transactions form to transaction details forms, that allows users to more quickly view the details of the transactions that are preventing period close

Diagnostic report (in XML Publisher) showing all transactions holding up period close

System Alert messages and e-mail notifications to users in case of costing errors to ensure timely resolution of erred transactions and prevent panic at period end



Wrap Up



Topics for the remainder of 2007

November – Period Close Interfaces, November 27th

December – No meeting, next meeting in January 2008



Other Issues/Concerns

Start enhancement list for discussion in 2008



Conclusion

This group is what we make it to be.

Lets help each other out and have fun doing it.

Thanks for your participation, tell your friends and associates and grow the network!

Documents

Transactions in EBS Very Good Arctical