Subledger Accounting- An overview18-OCT-2012

By: Sirisha Nagavalli

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Agenda

•Subledger Accounting Overview•Create Accounting Process•Drilldown and Inquiries•Third Party Control Accounts•Manual Subledger Entries – Creating, Updating, Deleting•Reports•Impact on period close process

SUBLEDGER ACCOUNTING OVERVIEW

What is Subledger Accounting

• A rule based engine for generating accounting for subledger transactions from all Oracle Applications

• Single repository for subledger accounting data.

What is a Subledger

• Subledgers are applications where the operational transactions are recorded and stored.

• Subledgers store the transaction level accounting detail.

• Subledgers post summarized activity information to a general ledger periodically to maintain the centralized account balances for the company.

SLA Overview:Features• Provides rule-based accounting for all sub-ledgers.• Allows multiple accounting representations for a single business

event to meet corporate and local fiscal accounting requirements.• Retains transaction level detail with different summarization

options in general ledger. This allows drilldowns to transactions and ensures auditability.

• Introduces a common data model and user interface across subledgers and hence provides consistency in reporting and user experience.

• Not a separate product with different responsibilities. The forms and programs are embedded within standard oracle application responsibilities.

SLA Overview

SLA Overview: Multiple Representations

SLA Overview• Payables SLA Entry : An example

SLA Overview- Transaction to Entry• This graphic shows how SLA tracks a

transaction to its journal entry.

Applications that use Subledger Accounting

• Payables• Receivables• Projects• Assets• Costing• Process Manufacturing• Federal Financials• Payroll• Property Manager• Loans• Lease Management• Cash Management

CREATE ACCOUNTING

Create Accounting - Overview

• The create accounting program processes eligible accounting events to create subledger journal entries. To create the subledger journal entries the Create Accounting program applies application accounting definitions that are created in the Accounting Methods Builder.

• An eligible event is one that is :– Completed– Rules must be defined to process the transaction type/

event type.

Create Accounting - Overview

• Validates and creates subledger journal entries• Optionally transfers the journal entries to GL• Optionally posts the journal entries in GL• Generates the Subledger Accounting Program

Report which documents the results of the Create Accounting program.

Create Accounting - Overview

• Create accounting can be online or in concurrent mode. Online accounting can be created for a transaction without submitting the concurrent process. This is available for payables and receivables transactions.

Draft Accounting• You can choose create accounting in draft mode. In this mode Subledger Accounting

creates the journal entries so that you are able to view them but you can go back and update the transactions or the accounting rules and rerun the process to see your changes.

• Useful when testing the accounting for a transaction.

Final (without posting)When you create accounting in the final mode the journal entries are

created in final status and are ready to be transferred to General Ledger. Any changes in rules after this will not update the journal entries.

Final Post (Straight-Through accounting)

• If you select Final Post, Subledger Accounting posts the journal entries all the way through to General Ledger. This means that you can update GL balances straight from the invoice entry (or any other transaction entry) window.

Create Accounting Parameters

Create Accounting Parameters

Transfer Journal Entries to GL Program

• The Transfer Journal Entries to GL program enables you transfer any eligible journals entries to GL. These could be entries created by earlier runs of create accounting but not transferred at the same time.

• Transfers all journal entries in the status “Final”

Transfer Journal Entries to GL Program

• Parameters:– Ledger– Process Category– End Date– Post in General Ledger– General Ledger Batch Name

INQUIRIES AND DRILLDOWN

Accounting Events Inquiry- Features

• Perform and inquiry on accounting events, journal entries, and lines based on multiple selection criteria.

• View information about an accounting event or journal entry error.

• View detailed information about the subledger journal entry

• Compare subledger journal entry information for any two journal entries

• View subledger journal entry in T-Form• View transactions underlying the subledger journal entry.

Accounting Events Inquiry Process• Navigate to the Accounting Events Inquiry page.

- Payables: Accounting > Subledger Accounting > Journal Entries (T) Accounting Events- Receivables: Inquiry > Accounting > Subledger Journal Entries (T) Accounting Events

• Execute a search for specific accounting events.• View accounting events.• View subledger journal entry information by clicking View Journal Entries.• View detailed entry information about the subledger journal entry by clicking the ledger

link.• View the T-account by clicking View T-Account.• View reversing entry. Note that this button is only available if you are viewing an accrual

entry that has been reversed.• View multiperiod accounting associated with the accrual journal entry by clicking the

Multiperiod icon in the Lines region.• Compare two journals by clicking Compare.• Click View Transaction to view the underlying transaction.

Subledger Journal Entry Lines Inquiry Process

View the subledger journal entry lines for a number of different documents or transaction by selecting the Subledger Journal Entry Lines menu option.

Subledger Journal Entry Lines Inquiry Process

Payables: Accounting > Subledger Accounting > Journal Entries (Lines)Receivables: Inquiry > Subledger Accounting > Journal Entries (Lines)• Navigate to the Subledger Journal Entry Lines page from a subledger application.• Execute a search.• View subledger journal entry lines in the results region.• View subledger journal entries for a selected journal entry line by clicking View

Journal Entry.• View journal line information in T-account format by clicking View T-account in the

View Subledger Journal Entry page.• View reversing entry. If viewing an accrual reversal journal entry in the View Subledger

Journal Entry page, the View Accrual Entry button is displayed to view the accrual journal entry details. If viewing an accrual journal entry, the View Reversing Entry button is displayed to view the accrual reversal journal entry details.

• View multiperiod accounting. View multiperiod lines associated with the accrual journal entry line by clicking the Multiperiod icon in the Lines region.

Drilldown from GL

THIRD PARTY CONTROL ACCOUNTS

Third Party Control Accounts• Certain accounts in GL can be classified as third party control accounts for

suppliers or customers or both.– Manual adjustments cannot be entered against such accounts in general ledger– Subledger accounting maintains balances for these accounts by the third party

(supplier/ customer)• Normally balance sheet accounts would be classified as a third party control

account.• Available Segment qualifiers:

– Supplier– Customer– Yes– No– Restrict Manual Journals

• 'Program - Inherit Segment Value Attributes’ needs to be run after the value is set.

Third Party Control Accounts

MANUAL SUBLEDGER ENTRIES

Manual Subledger Entries

• These subledger journal entries are not associated with any transaction directly.

• These entries can be created manually within the subledger

• The entries are considered adjustments for the subledger and are transferred and posted to GL like any other entry.

Manual Subledger Entries

• Features:– Adjustments to subledger entries can now be made

in the subledger itself. Provides better subledger reporting.

– These manual entries can optionally have third party information. This makes reconciliation easier.

– Any adjustments to a third party control account should be made using a manual subledger entry. Ensures better control.

Creating Subledger Entries• Navigation Paths:• Payables: Accounting > Subledger Accounting > Journal Entries• Receivables: Inquiry > Subledger Accounting > Journal Entries• The ledgers available are determined by the data access set profile assigned to the

responsibility/ user.• Default Currency Options - Opens the Default Currency Options page to default an

entered currency, conversion type, conversion date, and conversion rate information for each new subledger journal entry line. Use the currency controls available in the Details region of each journal entry line to override the default set.

• Third Party Type - Defaults from the application associated with the responsibility used to access the manual subledger journal entry pages. The values for name, site, number, and taxpayer ID must match the third party type. These values are required if the account on the line is a third party control account. If the account is not a third party control account, but party type is selected, party information should be provided.

• Conversion Rate - If the conversion type is User, you must enter a conversion rate.• Continue - Select to review the manual subledger journal entry and complete it.

Subledger Journal Entry Completion

• Subledger accounting does the following when completing a journal entry:– Validates the accounts– Assigns the corresponding sequence to the entry if

completed with a final status.– Updates the status of the subledger journal entry

(Final or Error).– Invokes the balance update program

Duplicating Subledger Journal Entries

• You can create a new subledger journal entry from any existing subledger journal entry. The existing journal entry should not be in error.

Reversing Subledger Journal Entries

• You can reverse an existing manual subledger journal entry that is in final status. The Reversal options are :– Switch DR/CR– Change Sign

Delete Subledger Journal Entries

• You can delete manual subledger journal entries that are in Draft or Incomplete status.

SUBLEDGER ACCOUNTING REPORTS

Reports• Subledger accounting provides the following reports:

– Journal Entries Report– Account Analysis Report– Third Party Balances Report– Period Close Exceptions Report– Open Account Balances Listing

• This reports can be customized by defining new BI Publisher Templates that use a subset of the data elements included in these reports.

• These reports are comprehensive and can be used in lieu of the General Ledger based journals and account analysis reports.

Journal Entries Report

• The Journal Entries Report displayed detailed journal entry information including transaction details for subledger journal entries as well as adjustments entered in the General Ledger and entries posted to General Ledger from other sources.

• NavigationPayables: Other > Requests > RunReceivables: (M) View > Requests (B) Submit a New Request

Journal Entries Report parameters

Journal Entries Report parameters

Account Analysis Report

• The Account Analysis Report provides drill-down information about the movement on a particular account for a period or range of periods. It only includes journal entries transferred to and posted to General Ledger.

Account Analysis Report Parameters

Account Analysis Report Parameters

Third Party Balances Report

• This report retrieves the following information:– Third party balances for third party control accounts– Subledger journal entry lines that add up to the

total period activity for each control account, third party, and third party site

– Third party and third party site information– User transaction identifiers for the associated event

Third Party Balances Report Parameters

Third Party Balances Report Parameters

Third Party Balances Report Parameters

Subledger Period Close Exceptions Report

• The Subledger Period Close Exceptions Report lists all accounting events and journal entries that fail period close validation. It is automatically submitted by General Ledger when closing a GL period if there are unprocessed accounting events or untransferred journal entries.

• You can also generate the Subledger Period Close Exceptions Report through a concurrent request as follows:– For the application associated with the responsibility– For all applications in the General Ledger responsibility

• The report lists the following:– Unprocessed Accounting Events– Incomplete, draft or error journal entries– Final journal entries not transferred to General Ledger

Subledger Period Close Exceptions Report Parameters

Subledger Period Close Exceptions Report Parameters

Open Account Balances Listing

• The Open Account Balances Listing identifies General Ledger accounts with outstanding balances and displays the subledger transactions that contribute to the balance.

• This report needs pre-processing using the Open Account Balances Listing Data Manager.

• This report displays:– Account– Actual Account Balance– Listing of transactions contributing to that balance

Creating and Updating Open Account Balances Listing Definitions

• You can defined the accounts to be tracked in the Open Account Balances Listing

• Define the report definitions either by account combination or by segment and associate each definition with a ledger.

• The chart of accounts of the associated ledger sets the context for the following information in the details region:– General Ledger accounts– General Ledger account segments

Open Account Balances Listing Parameters

Open Account Balances Listing Parameters

PERIOD CLOSE PROCESS

General Close ProcessComplete

Transactions

Create Accounting

Resolve Exceptions

Post to GL

Reconciliation

Impacted by Subledger Accounting

Create Accounting

• Subledger accounting replaces the individual subledgers’ different types of accounting processes with “Create Accounting”.

• The create accounting process determines the final accounting for a transaction and also generated balancing lines if required as opposed to 11i where the accounts in the transaction distribution were the final accounts and the balancing lines were generate by General Ledger.

Resolve Exceptions

• The Subledger Period Close Exception Report can be and must be used before closing subledgers and general ledger to review accounting events that are unprocessed, incomplete, in error or not transferred to General Ledger.

• The Create Accounting program can be run only for errors to review the details of the exceptions for events in error.

Post to GL

• All subledgers use the same processed to post their journal entries to General Ledger. The journals may be posted using one of the following options:– Transferred and posted by the “Create Accounting”

process when the journal entries are created.– Transferred and posted by the “Transfer to General

Ledger” program– Posted in General Ledger after the entries have been

transferred to GL by one of the above listed processes.

Reconciliation• The most important point to note is that you should not use

the accounts on the transaction distributions for reconciliation as they are not the final account necessarily.

• New reports introduced by R12 assist in reconciliation such as the Third Party Balances Report but the existing reports have also been updated in R12 to look at the subledger accounting data rather than the transaction data where applicable.

• E.g. of modified reports– Aging report in Receivables– Trial Balance in Payables– AP/PO accrual reconciliation report

Period End Accrual

• Period End Accrual process generates the accrual entries for expense purchases that have been received but not invoiced yet.

• The process remains the same as 11i except for the following:– The Create Accounting process generates the accounting

entries as opposed to the Period End Accrual Process– Subledger accounting generates the reversal for the accrual

entry too. The accrual entry does not have to be manually reversed in general ledger. This requires the “Complete Multiperiod Accounting” process to run.

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