There are many considerations and this article will only focus on the number of segments rather than the segment values which will be handled in a later post.

Some of the considerations are:

• Oracle System requirements
• Legal reporting requirements
• Financial management reporting needs
• Globalisation needs (some countries have special requirements)
• Consolidation needs (some segments may have to be used globally)
• Security needs

Oracle System Requirements

Oracle E-Business suite requires the following segments:

• Balancing
• Natural Account
• Cost Center (for Fixed Assets)

Optionally you can also have:

• Intercompany
• Management (for security)
• Secondary Tracking (for extra year-end tracking)

Usage details can be found in the General Ledger Implementation Guide.

All other requirements vary so below is a few do’s and don’ts:

Do’s

The User Guide details the Oracle requirements for a segment however in addition to that I recommend this:

• Keep it simple – your users will have to type it in a lot of times
• Focus on financial reporting requirements and needs
• Identify segments likely to be consolidated and make global usage rules for these
• Have same number of segments globally (to ease documentation and customisations)
• Have same segment names globally (to ease documentation and customisations)

Don’ts

Could be a very long list but I’ll keep it to the typical errors I have seen in implementations:

• Have too many segments (impacts usability and performance)
• Use of subledger reporting segments like:
  • Product or Item (sales reporting in the GL)
  • Customer (sales reporting in the GL)
  • Project (project accounting in the GL)
• Dual purpose segments (like one segment for both product and department)
• Think you can change the COA after go-live: you cannot

Subledger reporting segments are often driven by the requirement for global reporting on subledger data where the use of the GL and consolidations could provide this.

However implications are huge ranging from simple performance problems to feeble attempts to maintain a customer hierarchy in the GL.

Keep in mind the GL is for financial reporting and not for subledger reporting.

By putting subledger reporting in the GL you will also implicit impose limitations of the GL on your subledger which can cause unintended problems like need for custom segment validation and worst case will limit your business as your subledger reporting needs cannot be accomplished in the GL.

In very rare cases combined purpose segments can be justified but the values must be mutual exclusive as any overlapping will cause problems and is in fact a need for an additional segment.

An Example

Most mid to large scale business could have a structure like this:

• Company (Balancing)
• Department (Cost Center)
• Account (Natural Account)
• Analysis 1
• Analysis 2
• Intercompany (same segment values as Company)

Company, Department and Account segments are self explanatory.

Company and Account is for legal reporting.

Account, Department, Analysis 1 and 2 is used to support management reporting requirements.

Note there is a dual purpose for the Account segment in both legal and management reporting and sometimes this is remedied by adding a separate sub-account segment for the sole purpose of management reporting.

The intercompany segment is used for tracking the source of an intercompany transaction.

Keep the analysis segments to a finite number of values so if any subledger information is to be contained within these use summary levels like product line, customer group and similar as these values are unlikely to change over time.

Technical and performance

Two tables are the focus for performance:

• GL_CODE_COMBINATIONS – stores unique segment values as a single unique value combination id: CCID
• GL_BALANCES – stores summarised GL journals for each CCID

GL_CODE_COMBINATIONS

The content of this table expands for every new segment value combination entered per COA:

So looking at the example above – if we have the following segments and number of segment values:

Placeholder for XML Publisher

In 11i we assign collectors using the profile options and optionally manually override this at account level if needed.

This gets rather hard to manage in large departments especially when people leaves or joins.

However in R12 you have the ability to use Territory Manager which originally is a sales tool for sales territory administration.

You can now also assign collectors at Customer/Party level however this easily cannot be seen as the collector cannot be stored at this level but is stored in an internal table instead.

The Territory Manager will assign collectors to delinquent customers automatically hence removing the need to manage customer profile class plus account and bill to level overrides. When assigning collectors to customer profile class just use the “Default Collector” – this value will be overridden by the Territory Manager if the customer becomes delinquent.

The article below will mainly concentrate on the use of Territory Manager with Advanced Collections.

Overview

• Implementing
• Territories – Intro
• Resources
• Matching Attributes
• Territories – Defining
• Concurrent Programs

Implementing

JTY is a bit tricky to get started with in form of an extra layer of role based access control (RBAC).

In order to setup JTY you need to following:

• Login as user SYSADMIN
• Using responsibility “User Management” grant role to yourself: “Security Administrator”
  or if not allowed then just grant roles to yourself:
  ”Collections Territory Administrator”
  ”Territory Manager Application Administrator”
• Also assign yourself responsibilities “User Management” and “Territory Management”
• Login as yourself
• Using responsibility “User Management” grant roles to yourself (if not done above):
  ”Collections Territory Administrator”
  ”Territory Manager Application Administrator”

Also be aware that JTY uses full MOAC control so be sure to set correct Security Profile.

Note: You must set the profile option “MO: Default Operating Unit” due to an error in the 12.1.2 Territory Definition form. You should however leave “MO: Operating Unit” blank.

Territories – Intro

Territories in Advanced Collections are used to distribute the UWQ workload amongst collectors in large departments.

A single territory has one or more resources assigned and matching attributes that applies to customer attributes.

Territories can form a hierarchy where we have the following territory types:

• Child Territory – Contains resources and matching attributes
• Parent Territory – Contains one or more child territories
• Catch-All Territory – A parent territory containing rules not covered by child territories below
• Placeholder Territory – A parent territory not containing rules but only child territories
• OU Territory – The top level owning parent territory. There is one per OU accessible

All territories can be defined using OAF forms or by using WebADI except for the OU territory which cannot download to Excel. Therefore it is a good idea to have a placeholder territory just below the OU territory.

Territories have the additional following attributes:

• Effective Date Range – Value inherited from parent territory
• Rank – a number where lowest rank wins if customer matches more than one territory.
  Normally just assign value: 1
  This value is inherited from parent territory
• Winners – number of territories a customer can match at any one time.
  Default to 1 when left empty. 2 or higher can cause overlapping territories

Resources

In order to define resources you need to have access to the responsibility “CRM Resource Manager”.

Resources can be any one of:

• Individual – CRM resource
• Group – CRM defined group. Groups can be assigned to multiple individuals
• Team – Similar to group but normally used in lead management

Groups can be a handy way of managing customers so instead of reassigning individuals to customers you assign groups to customers. This enables you to manage your resources by reassigning individuals between groups rather than between specific customers.

Matching Attributes

Matching Attributes are building blocks for creating rules for assigning customers to territories.

Advanced Collections only supports custom made or Customer based matching attributes which is the following:

• Account Classification (this is actually a sales lead item and does not really work with Collections)
• Area Code
• City
• Country
• County
• Customer Category
• Customer Name
• Customer Name Range
• Customer Name Range Group
• D-U-N-S
• Number of Employees
• Party Hierarchy
• Postal Code
• Province
• Registry ID
• SIC Code
• Site Number
• State

So if there is a need to allocate collectors based on something different than the list above you will need to create a custom matching attribute.

In order to use a matching attribute it must be enabled first:

In the above I will be enabling Customer Category and Customer Name Range.

Next step is to define a Territory Type in order to use the enabled attributes above:

So now we have created a territory type allowing the use of Customer Category and Customer Name Range.

Territory – Defining

You start from the OU territory and work your way down:

Note the search default to what you have in your profile options “MO: Default Operating Unit” however if another OU is desired just change the value in “Operating Unit” and click GO. Do not leave “Operating Unit” blank as that may cause problems in pre-R12.1.4 versions.

Select the operating unit “Vision Operations” and click “Create”:

Pick the Territory Type we created earlier and click continue:

Lets create the following hierarchy:

Vision Operations – OU Territory
> Top – Placeholder Territory
>> Other
>>> Commercial – Parent
>>>> NameRange1 – Child
>>>> NameRange2 – Child
>>> Federal – Child

So we want a catch all if a customer has not been assigned to a customer category and we split the commercial customers into two name ranges to level the volume.

So first we create Top:

No resources and matching attributes – so just click Finish:

Lets create the Other territory:

Click Next and add resource:

Assigned just one resource as this is the resource for an exception – the catch all.

I will not show how to add resources to the remaining territories…

Click next:

In spite of what the manual says you need to add a matching attribute for a catch-all territory. To ensure we catch all customers we use name range of 0% to Z%.

To define ranges like the one above you need to follow some basic rules:

• Always use wildcard “%” so A to Z becomes A% to Z%
• Single wildcard range will not work like A% to A%
• If range for one letter is needed use: A0% to AZ%

Next we define Commercial and Federal territories…

Commercial matching attribute:

Federal matching attribute:

The we add another two Commercial child territories…

Name range 1:

and name range 2:

So now we have:

Nice and easy…

Concurrent Programs

When you have finished creating your territory hierarchy you need to run the following in JTY:

• Synchronize Territory Assignment Rules

This is one of these programs with no real purpose except for if you don’t run it – it will not work.

When you want to assign territories to collectors and customers you must run the following in IEX:

• IEX: Territory Assignment

But ONLY after you have run the IEX: Scoring Engine Harness with Delinquencies Management otherwise you may miss any newly delinquent customers.

This article will however not provide a full overview of IEX but only explain some of the basics to get you started with IEX after moving to R12. Beyond that – dig into the manual.

News

• Bulk XML Delivery per default in R12.1.2
• Staged Dunning to be introduced (again) in R12.1.3

11i –> R12 Crash Info

In R12 – Oracle have removed all collections functionality from AR and thereby forced an upgrade to IEX hence this article will cover both existing and new IEX functionality.

First lesson is – it is near impossible to mimic the 11i functionality so there is no easy upgrade path from 11i to R12.

Second lesson is – IEX uses MOAC security so most IEX settings are global and at site level. Transaction security is then handled by MOAC using security profiles.

General Need to Know

A small warning – with R12 the UI is now all over the place:

• Implementation and super user: Mixed old forms, CRM screens and OAF
• User: Forms and CRM screens. CRM screens are made with forms but have a different look and feel

So be sure to plan for loads of user training and testing in addition to the implementation effort.

Another warning – setting up Advanced Collections will need a hybrid consultant – as many areas need both SQL and XML knowledge:

• Scoring Components contains SQL select statements
• Scoring Engine use views to limit transaction scope
• Correspondence Template Query is using SQL select statements to create XML tags
• Correspondence Templates use XML to produce output
• Most output in Advanced Collections uses XML Publisher
• Advanced letters may need both XML and XSL-TEXT knowledge

Overview:

The chapters listed below will give you an overview of the configuration and integration points.

• New Concepts
• Collectors Management (HR and Sales integration)
• Collectors Assignment (Territory Management Integration)
• Collectors Work Queue (Universal Work Queue – UWQ)
• Collections Window (eBusiness Center)
• Aging (AR Integration)
• Activities (Payments,Promise to Pay,Disputes)

New Concepts

First of all the word “delinquency” is new to most 11i users and this means an overdue item.

Advanced Collections introduces many new concepts where the main ones are:

• Operational Level – item level for collections including delinquency determination and correspondence
• Scoring – points system calculated by a scoring engine
• Delinquency Status – status is one of: Current, Pre-delinquent or Delinquent
• Strategies – Handling of delinquencies based on multiple scoring engines
• Dunning Plans – Handling of delinquencies using a single scoring engine with associated aging buckets

During first setup you will have to make the following main decisions:

1. Operational Level which must be one of: customer, account, bill-to or delinquency (overdue transaction)
2. Collections method which must be either Strategies or Dunning Plans

Operational Level

Level defines the operational data level for collection items which includes:

• Delinquency determination
• Work queue items
• Correspondence

The following operational data level can be chosen:

• Customer: Party/customer level
• Account: Account level
• Bill To: Bill To level
• Delinquency: Transaction level

So if your level is account the customer could have one account being marked as delinquent and one being non-delinquent. Also correspondence will be made at this level including details of transactions by account.

So if you use delinquency level then if a customer has two concurrent delinquencies this customer will receive two separate dunning letters even if overdue on the same day.

In 11i delinquency management was normally conducted at account level thanks to the Account Details screen in the old collections workbench and staged dunning.

The operational data level is set when you setup IEX using the Collections Questionnaire.

Scoring

Scoring is a new concept of rating a delinquency based on various factors. The scoring is done by the scoring engine which is run from the concurrent program:

IEX: Scoring Engine Harness

The scoring engine use scoring components for generating score amounts.

Typical score components could be:

• Amount due
• Days overdue
• Time as customer
• Number of delinquent transactions
• Annual sales amount

Example of a scoring component definition:

Each score amount is mapped to a score value as the score amount can vary depending on its source and if it is comparable. If you want to score based on transaction amount and days overdue then those two amount will vary and would not be directly comparable however by mapping them into score values they become comparable.

The score engine values are normally within 0 to 100 and when using multiple scoring components these values will be summarised. The score values can be used with weighting – if enabled – however sum of weights must be 1:

For example if you have a score component returning the amount outstanding you would map this to a score value:

So if you a score component yielding amount due 5000 the score value would be 10 which would be added to any other score value.

If additional score components are used this would result in score values being added up.

The score component must always return a number within the range –999999999 to 999999999 and use 2 decimals precision – see example from a seeded setup:

The score component uses either an SQL select statement or a PL/SQL function.

Using PL/SQL function enables you to use parameters.

The SQL statement is easier to maintain if used with a custom database view.

Segments – which is a database view assigned to the scoring engine – can limit the transactions targeted by the scoring engine:

One one segment can be assigned per scoring engine.

The combination of multiple scoring components and multiple scoring engines with different segment assignments gives endless possibilities to meet business requirements.

Delinquency Status

Delinquency Status indicates if there is a delinquency for the current score value.

The status is determined by mapping score values to statuses.

Status is one of:

• Current
• Pre-Delinquent
• Delinquent

One delinquent transactions are scored so the current status will not yield delinquencies.

So using the example above we could do the following mapping of score values:

Example from seeded data:

Status is updated when a scoring engine run as long as “Used to determine status” check box is set and “concurrent program” is set to:

IEX: Delinquencies Management

Strategies

Strategies works with two scoring engines:

1. Delinquency determination
2. Strategy determination

A strategy is similar to a 11i dunning set but with the difference that a strategy is based on score values and the outcome is a work item which can be one of:

• Manual: phone call or review. This is visible as a task in the collectors work queue
• Automatic: sending of email, fax or letter. Any sent correspondence is recorded in the transaction history
• Workflow: automated customised task

The score values is generated by the score engine for strategies defined in similar way as the score engine for delinquency status determination.

The score value is mapped to a strategy:

The strategy will then map to a number of work items:

So a typical strategy concurrent run is:

IEX: Scoring Engine Harness – for delinquency determination

(IEX: Delinquencies Management – run as part of delinquency determination)

IEX: Scoring Engine Harness – for strategy determination and work item creation

(IEX: Strategy Management – run as part of delinquency determination)

IEX: Create Dunning And Broken Promise Call Backs – to create UWQ actions

So Strategies are very flexible and versatile however keep in mind a very open ended module is also harder to configure and test.

Dunning Plans

Dunning plans is Oracle’s solution for customers upgrading to 11i without having a license for Advanced Collections.

Dunning plans use only one scoring engine and ties delinquency determination and aging buckets together in one.

Dunning plans has the following limitations (quite a few I would say):

• Delinquency scoring engine and dunning plan scoring engine is one and same
• Scoring engine values are used both for delinquency status determination and aging bucket line determination so it can be tricky to obtain desired functionality
• A transaction can only be scored using one scoring engine – if you add a new scoring engine only new transactions will be scored with this (ouch – this is bad during test)
• AR Aging Buckets are used for days overdue determination only – unless you customise scoring components
• Correspondence are assigned to an aging bucket line so every time the aging bucket line are in the score range a letter will be sent – so beware you might want to ensure lines with correspondence only range one day to avoid duplicate letters
• Only one aging bucket can be used per dunning plan
• Each mapped Aging Bucket Line must yield correspondence and optionally a call – so you cannot have a call-only line unless you use a dummy letter or similar

So a typical dunning plan concurrent run is:

IEX: Scoring Engine Harness – for delinquency determination

IEX: Send Dunnings for delinquent customers – to send correspondence

IEX: Create Dunning And Broken Promise Call Backs – to create UWQ actions

Collectors Management (HRMS and CRM integration)

In 11i you just needed to have a normal apps user and a collections use – now in R12 it has become a bit more complicated.

So the Collectors setup in AR is still there to do…

Now you also need to do the following:

• HR: Create HRMS Employee and assignment
• SYS: Assign the HRMS Employee to your apps user
• CRM: Create CRM resource by importing the employee into CRM
• CRM: Assign collections roles and groups to the CRM resource
• CRM: For Territory Management assign Telesales Agent as well

For migrating from 11i to R12 you can create a resource for each collector defined in AR:

IEX: AR Collectors to Resource Collectors

That should help a little bit…

Also collectors can be generated by Collectors Assignment when running:

IEX: Territory Assignment

Collectors Assignment (Territory Management Integration)

In order to assign collectors you can still do as you did in 11i – using collectors at profile class level – however in R12 you have the additional option of using:

JTY: Territory Manager

This enables you to automatically assign collectors to delinquencies based on rules.

This is actually a sales tool but follow the link and it will explain how to use it for IEX.

To create the assignments run the following concurrent program:

IEX: Territory Assignment

Collectors Work Queue (Universal Work Queue – UWQ)

The UWQ is the collectors work-list which shows delinquencies, calls as tasks to be made and broken promises:

The collectors works queue is essentially the Universal Work Queue used by the CRM modules.

Strategy manual work items and dunning plan calls will show up i the collectors work queue as tasks.

The collectors work queue can be customised using EIU% profile options – see a few below:

By clicking an item on the work-list the Collections Window opens up…

Collections Window (eBusiness Center)

The collections window is essentially the CRM eBusiness Center.

This window shows the customer with tabs showing details:

The following tabs are displayed:

• Profile – Credit overview and metrics
  
• History – Correspondence, adjustments, calls and other interactions
  
• Accounts – Accounts and their details
  
• Transactions – List of delinquent transactions but can also include current and closed transactions
  
• Lifecycle – List of delinquent transactions and their current collection status
  
• Strategy – Current assigned strategy and work items pending or completed
  
• Aging – Delinquent transactions summarised by aging buckets
  
• Notes – Notes can be taken here and can optionally be visible to other collectors
  
• Tasks – List of tasks
  

Aging

A familiar term from 11i however yet so different.

Aging and aging buckets as we know them from 11i are still used for displaying or reporting on aging in the following places:

• Collections Windows – Aging Tab
• AR Aging Reports

But then the similarities stop.

For Strategies and Dunning Plans aging buckets are sometimes used in Score Components:

And also used in Dunning Plans for correspondence assignment:

But in very different way than in 11i.

Activities

In the Collections Window you can do the following activities:

• Take Payments or promise to pay
• Make adjustments and credit notes
• Send correspondence

The following payments can be accepted in IEX:

• Credit Card
• Bank Transfer (direct debit)

So no debit card payments.

Also bank transfer requires in most countries a signed agreement at beforehand so  this really narrow it down to credit card payment only.

The credit card payment method must be setup in Payments – IBY.

Activities send confirmation letters automatically:

• Payment Confirmation
• Promise Confirmation
• Dispute Confirmation
• Adjustment Confirmation
• Reversal Confirmation
• Leasing Invoice Confirmation
• Invoice Copy

All correspondence is created and sent using XML Publisher.

The promise to pay will create an event in the UWQ then you run the following concurrent program:

IEX: Promise Reconciliation

Overview

In GL there has been a number of changes:

• Terminology Changes
  • Set of Books (SOB) is now Ledgers
  • Multiple Reporting Currencies (MRC) is now Reporting Currencies
  • Global Intercompany System (GIS) is now Advanced Global Intercompany System (AGIS)
• Obsolete
  • Global Accounting Engine (AX) replaced by Subledger Accounting
  • MRC as a workaround – now fully integrated as Reporting Currencies
• Accounting Setup manager – New central management of legal entities and legers
• Legal Entities – now really used
• Ledgers – new name and setup for SOBs
• Ledger sets – ledger grouping and security feature
• Reporting Currencies – MRC has now been cleaned up and is better integrated
• Period rates – now all daily rates and managed in same way
• Revaluation and Translation – changed functionality
• Journal Reconciliation
• Advanced Global Intercompany System (AGIS) – changed functionality

Accounting Setup Manager

The new Accounting Setup Manager simplifies and centralizes accounting-related setup for common financial components that are shared across financial applications. From a central location, you can define your legal entities and their accounting context, such as the ledgers and reporting currencies that perform the accounting for your legal entities.

The setup steps are:

• Legal Entity
• Primary Ledger
• Reporting Currencies
• Balancing Segment Value Assignments
• Subledger Accounting Options
• Operating Units
• Intercompany Accounts
• Intercompany Balancing Rules
• Sequencing
• Secondary Ledgers

Each of the setup steps is a number of sub screens where some are described later.

Legal Entities

Legal Entities part of Accounting Setup Manager now holds important information for both tax and VAT reporting.

General

Registrations

This is where you would put in information for the Corporations Office

Establishments

List of all locations

Balancing Segments

This is a new important feature that the balancing segment now relates to the legal entity.

Primary Ledger

Ledgers are mostly the same as the old Set Of Books however the setup screens has changed a bit.

Definition

Nothing really new here except for the OFA screen.

Options

Similar to the old screens in a new wrapping.

Advanced Options

Again similar to old days except for the new Journal Reconciliation option.

Ledger Sets and Data Access Sets

The Ledger Set is a great new feature which lets you manage multiple ledgers as one – a especially useful feature for faster closing. However the ledgers must share the following information:

• Chart of accounts
• Calendar/period type combination

You can open/close periods for multiple ledgers at once, run recurring journals that update balances for multiple ledgers. So it goes way beyond report sets or cross COA FSG reports.

Ledger Set

Strange though – this is a non-OFA screen…having thought that all new features was pushed to OFA.

Similar to the Ledger Set the Data Access Set provides security at same level so ledgers must still share the following information:

• Chart of accounts
• Calendar/period type combination

The security can be at the following levels:

• Full Ledger – access to the whole COA
• Balancing Segment Value – access to specific balancing segment values
• Management Segment Value – access to specific management segment values

Note the Management Segment is a new segment qualifier. If you what your cost centre to be secured and used in Data Access sets enable the Cost Centre segment as a Management Segment. Remember if your COA has been used there is a specific procedure for doing this to avoid corruption.

Data Access Set

The system always generate a Data Access Set with same name and full access for each:

• Primary Ledger
• Secondary ledger
• Ledger Set
• Reporting Currency (also creates a Reporting Currency + Source Ledger Data Access Set)

Data Access Set security can be combined with Segment Value Security Rules and will work as a logical AND so only where the two overlaps access will be allowed.

Reporting Currencies

The reporting currency definition is now comprised from the R11i options for reporting sets of books and the MRC profile options.

Period Rates

Period Rates Replaced by Daily Rates and all new OAF screens.

Currency Rates Manager:

Revaluation and Translation

Revaluation sets are now usable across ledgers that share a common chart of accounts. In some cases, you may need to enter the secondary tracking segment for revaluation sets involving a secondary tracking segment before running revaluations with upgraded templates.

General Ledger modifies revaluation templates to use corresponding daily rates for those that used period rates prior to the upgrade.

Journal Reconciliation

Journals can now be reconciled if an account has been marked as such.

The is a useful feature for clearing accounts or tax accounts which should balance to zero.

Account Setup

Note this is a cash clearing account which is a good candidate for journal reconciliation.

So in this case you would enable the segment qualifier “Reconcile” to “Yes”.

Journal Entry

Note the new “Reconciliation Reference” field. This is used both for automatic and manual reconciliation.

Unreconciled Lines

Search for unreconciled journal lines using the parameters above.

Reconcile Journal

No journals to reconcile here – but you see the point?

AR are now fully support new modules like E-Business Tax and Subledger Accounting.

Overview:

• Integration with E-Business Tax
• Integration with Subledger Accounting
• Centralized Banks and Bank Accounts Definitions
• Integration with Payments for Funds Capture
• Balance Forward Billing
• Late Charges Enhancements
• Customer UI Redesign
• Process Changes

Integration with E-Business Tax

Release 12 introduces Oracle E-Business Tax to manage tax across the E-Business Suite. During the upgrade, system and customer options used to control tax calculation and tax code defaulting are migrated from Oracle Receivables into Oracle E-Business Tax entities. See E-Business Tax in this appendix for further details.

Integration with Subledger Accounting

Release 12 introduces Subledger Accounting for managing accounting across subledger transactions. Receivables no longer creates any accounting entries. Existing Receivables accounting options and setups remain and affect the generation of accounting distributions in the Receivables data model. However, the accounting distributions are now simply one of many sources for generation of final accounting in the Subledger Accounting module.

Centralized Banks and Bank Accounts Definitions

In Release 12, all internal banks and bank accounts you had defined for your operations are automatically migrated to the central Cash Management entities. Remittance bank accounts are owned by a legal entity rather than by an operating unit.

Integration with Payments for Funds Capture

Release 12 introduces Oracle Payments, which is used by Oracle Receivables for processing funds capture. See Payments in this appendix for further details.

Balance Forward Billing

Release 12 enhances the Release 11i Consolidated Billing Invoices functionality to include more flexible billing cycles, to consolidate invoices at site or account level, and to present Balance Forward Bills using the user-configurable Bill Presentment Architecture.

Late Charges Enhancements

Release 12 enhances the Receivables Late Charges feature to incorporate the Global Interest Invoice setups, charge calculation logic, and charge generation processes. Charges for delinquent payments can now be generated as adjustments, debit memos, or interest invoices. The Interest Invoice Global Descriptive Flexfield is obsolete.

Customer UI Redesign

Release 12 introduces a new HTML user interface for entering and maintaining customer data. See the Oracle Receivables User Guide for further details.

Process Changes

The following features are obsolete in Release 12:

Collections Workbench – The Oracle Advanced Collections module delivers similar functionality. See the Collections Migration white paper and the Oracle Advanced Collections User Guide for further details.

Trade Accounting – Similar functionality is delivered by integration with the Oracle Trade Management module. Trade Management integration is available in Release 11i.

Bill of Exchange – This functionality has been replaced with the Bills Receivable feature. Bills Receivables is available in Release 11i.

In general the limited per module 11i setup has been changed to become a proper self-contained tax engine. With that however comes complexity to the extent that E-Business Tax almost can be regarded as a module in itself.

Hopefully some best practices can be applied here so over time we will have a good template of standard solutions depending on type of business and geographical region.

E-Business tax fully use the TCA and legal entity data model so all involved parties in tax reporting must be defined in TCA – like HM Revenue and Customs – and your reporting business unit must be defined as a legal entity too.

E-Business Tax also introduces many new concepts like:

• Tax Authority: organisation responsible for collecting taxes
• First Party Legal Entity: your organisations that have taxable transactions
• First Party Legal Establishment: your organisation having tax registration in order to report and settle taxes
• Tax Regime: Name of an area of tax like VAT in the UK
• Tax Zone: Grouping of Tax Regimes
• Tax Jurisdiction: The geographical boundary of a tax related to a tax regime
• Tax: Defines name of a tax within a Tax Regime – like VAT
• Tax Status: Level of taxes within a tax regime – like Standard, Reduced, Exempt and Zero
• Tax Recovery Rate: Rate of a recoverable tax – like Full (100%) and None (0%)
• Tax Rate: Rate of tax applied to an transaction – like Standard would have 14%, 17.5% and 15% depending on date
• Tax Rule: Rule which is applied to a transaction to provide for the tax calculation for:
  • Determine Place of Supply: Determine the location for transaction
  • Determine Tax Applicability: Determine what taxes apply to a transaction
  • Determine Tax Registration: Determine tax registration number for the transaction
  • Determine Tax Status: Determine the level of tax applicable
  • Determine Tax Rate: Determine the rate based on the tax level
  • Determine Taxable Basis: Determine the amount taxable
  • Calculate Tax Amounts: Determine the tax amount
  • Determine Recovery Rate: Determine the recovery rate

So quite an expansion of the 11i definitions in one form having a single line of tax code and tax rate…

Anyway before doing a major setup exercise have a read of the note: in Note 463001.1 – which may save you the setup for Europe.

An example of UK VAT to follow:

The section below is only tested on Vision – which is not a live system.

Tax Regimes

Controls and Defaults

Associations

All first party legal entities and operating units must be associated with the tax regime they are subject to.

Party Tax Profiles

Tax Authority

This is the organisation to whom you must report and settle taxes.

First Party Legal Entity

This is a organisation that creates taxable transactions.

- Configuration Options

First Party Legal Establishment

This defines your organisation that reports and settles tax with the tax authority hence here you define you tax registration details.

- Tax Registration

Taxes

This is the name of the tax and how it is handled.

Controls and Defaults

Tax Statuses

These are names of tax levels so in the UK the STANDARD VAT is for all basic goods and services but a REDUCED rate is paid for fuel and power and ZERO would be paid for food and books. Do not put the actual rate in the name is you would in 11i as this will be defined in the Tax Rates section.

Tax Jurisdictions

Tax Recovery Rate

Tax Rate

This is rate of a tax status like STANDARD VAT would have been 14%, 17.5% and 15% over time.

Country Defaults

Setup the default tax configuration for a country.

Tax Simulator

Use this screen to simulate the tax setup without entering real transaction. This is very useful when changing the configuration on a live system.

Be sure to assign the “Oracle Tax Simulator” responsibility to the user and use this rather than using the menu on the home page of “Tax Administrator” – otherwise you will get this error:

So from the “Oracle Tax Simulator” responsibility use:

And you will see this:

When clicking \Tools\View Tax Log:

A concurrent job will be submitted. You may be get this error:

However this is not any issue – just wait a bit and retry or just monitor the request in \View\Requests:

This report will show how the tax was calculated.

Subledger Accounting is a new application that provides an accounting abstraction layer for subledgers – between subledger accounting events and GL journal entries.

This functionality was in 11i placed in each of the subledgers implemented in different way resulting in different reconciliation processes for each of the subledgers.

Subledger Accounting also replaces the Global Accounting Engine (AX) which essentially in 11i was a add-on or workaround that bypassed the subledger accounting entries to provide a better audit trail and catered for special localization requirements for countries like Italy and Spain.

However the AX was only supported for some countries so in a global implementation you would have different reconciliation processes for the same application depending on the country was using AX or not.

Global Accounting Engine module is therefore obsolete in R12.

Subledger Accounting is now supported for all countries for the following modules:

• Assets  
• Cash Management  
• Contract Commitment  
• Cost Management  
• Federal Financials  
• Financials Common Modules  
• Loans  
• Payables  
• Payroll  
• Process Manufacturing Financials
• Projects  
• Property Manager  
• Purchasing  
• Receivables  
• Trade Management

Subledger Accounting streamlines the accounting and reconciliation process between any of the above subledgers and the GL.

Each of the subledgers interface to Subledger Accounting sending the accounting events and amounts and then Subledger Accounting translates this into accounting entries for GL based on accounting rules.

Subledger Reporting and Reconciliation

WIP

Accounting Method Builder (AMB)

WIP

Accounting Setup

Subledger Accounting setup screen are located as a sub-application General Ledger:

This will give you access to the Accounting Setup form:

As Subledger Accounting setup is always done in the context of the ledger you must first search for this.

Click “Update Accounting Options” and you will get the following form:

For “Subledger Accounting Options” click “Update”:

This provides you with a list of currently supported subledgers for which you can update either the Accounting Options or the System Options.

System Options:

This is most a technical tuning page and has no functional impact.

From the user guide:

You can define the processing unit size at the event class level to process a large
number of items in one commit cycle. A processing unit is the number of
transactions processed by the Create Accounting program in one commit cycle. The
Create Accounting program processes the default processing unit size at the
application level.

Accounting Options:

These options used to be in each individual application but are now moved to a common screen. Great!

A nice new feature is “Stop at Error Limit” – especially handy when designing a new chart of accounts.

Scroll down and you get:

The Journal Category – used to be specified in the subledger as well now much more ordered and can be customized for any application and any event.

Technical

Had a look at the tables in SQL Developer. It looks to me that Subledger Accounting has borrowed the AP concept of the AP_AE_… tables – now in XLA called XLA_AE_… tables.

Main tables are:

• XLA_AE_HEADERS – containing information about source application and accounting event
• XLA_AE_LINES – containing multiple lines of information for each of the above events regarding the financial side of the transaction like DR/CR and CCID

The new tables is also now segmented by LEDGER_ID rather than by ORG_ID as it was in 11i. This completely ties in with the new R12 architecture and is a great improvement.

XLA_AE_HEADERS example:

The XLA_AE_HEADERS relates to XLA_EVENT_TYPES:

So the entity id in XLA_AE_HEADERS is for AP_INVOICES validation event.

This is a completely new module to provide a central payment capture and disbursement facility.

Overview

• New Concepts: Payment Processing Profile, Payment Request and Payment Instruction
• Payment disbursement functionality for Payables
• Credit card functionality for Advanced Collections and Receivables
• Bank account transfer functionality for Cash Management
• Secure storage and encryption of payment data including credit cards
• Payment document formatting uses XML Publisher
• Electronic transfer functionality built-in
• Obsoletes iPayments

New Concepts

A number of new concepts has been introduced but the main ones are:

• Payment Process Profile – governs how a payments for documents payable having a specific payment method is processed
• Payment Request – one or more documents payable in a subledger requested to be paid
• Payment Instruction – payments for one or more documents payable having same Payment Process Profile ready to be printed or transferred to a bank

In 11i – Payables would make all payments however in R12 this task is now split between the subledger and Payments:

The subledger – in this case Payables – select documents payable and create a Payment Request for Payments. After this point Payments takes over and perform the remaining tasks.

New steps are the Payment Request and the Payment Instruction creation.

Payment Process Profile is assigned during Create Payment Request.

Payment Request acts as an interface between the subledger and Payments. So the Payment Requests are a ledger of Payments needed.

Payment Instruction acts as a internal representation of a physical payment or cheque print file. So the Payment Instruction is the ledger of Payments made.

Confirm is changed so now only pre-numbered cheques needs to be confirmed. For other types of payments they will automatically be confirmed in accordance to the Payment Profile which is default at Format Payment time.

Payment Disbursements

All payment disbursements are now performed by the Payments module. This means that the Payables module like any other subledger sends a payment request to the Payments module. Payments will then create payment instructions based on the payment request.

Payment Workbench:

As payment instructions can now be combined across organisations the concept of a payment batch has changed – now there is payment requests and payment instructions:

• Payment Request: One or more documents selected to be paid
• Payment Instruction: One or more payment requests having same payment profile

Payment Request form:

In 11i – one payment batch was one collection of invoices to be paid by one payment method in one file however in R12 the 1:1 relationship has gone and one payment request can be split into multiple payment instructions and multiple payment requests can be combined into one payment instruction if using same payment profile. One payment instruction would then result in one payment file or transfer.

11i logical data model:

R12 logical data model:

The R12 payment profile can be defaulted on the payment request however Oracle Payments will have the final say of which payment profile is being used. The payment process does not always have to be a two step process however in that case the payment profile must be specified at time of payment request.

The ability of combining multiple payment requests into a single payment instruction will significantly reduce number of bank transfers and therefore reduce payment costs especially in larger organisations.

Credit Cards

Mostly used for small business and retail – so parked for now.

Bank Account Transfers

WIP

Security

WIP

Payment Document Formatting

WIP

Electronic Transfer

WIP

The new centralized bank account model provides a single point for defining and managing internal bank accounts for Oracle Payables, Oracle Receivables, Oracle Payroll, Oracle Cash Management, and Oracle Treasury.

Biggest change in cash management is for the users as many screens are now as OAF forms:

Screens has been converted into OAF forms owned by CE but can still be called from AP:

Other changes are logical data model changes and was long overdue so a welcome change.

Overview

• Banks and Branches now managed by Cash Management and data stored in the TCA data model
• Bank Accounts now managed by Cash Management and data is segmented by legal entity so accounts can be shared across organisations
• Payment Document Sequence Numbers is now defined by bank account

Bank and Bank Branches

Banks and branches are now defined in the Oracle Trading Community Architecture (TCA). This makes sense as the organisational model of a bank and its branches is no different from any other business having a party and some sites.

Banks and Bank Branches:

Update Bank:

Note this form actually edits a party in TCA.

Update Branch

Bank Branch Addresses

Branch Contacts

Bank Accounts

A single legal entity is granted ownership of each internal bank account, and one or more organizations are granted usage rights. In addition  bank accounts can be accessed by multiple operating units, but are owned by a single legal entity.

Example of an internal bank account below.

Bank Accounts – Owner and Use

Note the new Bank Account Owner field. Great feature.

Bank Accounts – Account Information

Bank Accounts – Account Controls

Yes – this IS one page. In 11i this was handled by tabs but this concept is not used in R12 OAF.

Bank Accounts – Account Access

This is new as well  – where you can control what organisations has what access per account.

Bank Accounts – Create Contact

Payment Document Sequence Numbers

These are now handled by Cash Management at bank account level using a Payment Document Category on the Payment Document. The Payment Document Category is created as usual when defining sequential numbering.

Payment Documents

Note the new functionality for managing cheque books.