Oracle Fusion Financials - General Ledger

In this chapter, our aims is to help IT consultants who may be apprehensive about accounting principles like debit and credit. By understanding the basics of accounting, such consultants can improve their implementation work in the field of IT.

• The chapter serves as a guide for IT consultants who lack knowledge in accounting.

• It shares insights and explanations to make accounting concepts more accessible.

• Understanding accounting basics can enhance the consultants' proficiency in IT implementation projects.

You will learn how business activities are transformed into:

• Journals

• Double entry accounting

• Book keeping of various activities

• Trial Balance

• Income Statement

• Balance Sheet

This chapter discusses the evolution of Oracle Fusion product and the concepts behind Cloud-based models. It also provides clarification on the changes faced by those transitioning from an on-premise based model to the cloud. Key points covered include:

• Overview of Oracle Fusion product evolution

• Explanation of Cloud-based models

• Clarifications for transitioning from on-premise to cloud-based models

By utilizing an implementation project, you can efficiently structure your implementation process. This tool is pre-loaded with all the essential steps needed for the implementation, carefully sequenced for easy follow-up. Additionally, you have the capability to assign specific tasks to team members and monitor the progress of their completion. This ensures a streamlined and organized approach to your implementation strategy.

GL implementation can be done in 2 ways:

• Setting up manually each screen

• Using Rapid upload spreadsheets

In this chapter, you will learn how to:

• Prepare the Rapid upload spreadsheets

• Upload the spreadsheets

This process will enable you to:

• Quickly implement GL foundation

• Reuse files in different implementation phases

• Reduce duplicate work

• Improve productivity

General Ledger implementation has 3 main pillars, also called 3Cs

• Accounting Calendar

• Functional Currency

• Chart of Account Structure

Accounting calendar decides your Financial calendar and is one of the most important component of your GL implementation.

Once defined and used, there is no change which you can do to these structures. Impact of change is as good as doing a new implementation in Oracle Fusion. So, you have to be very careful in deciding these 3Cs.

General Ledger implementation has 3 main pillars, also called 3Cs

• Accounting Calendar

• Functional Currency

• Chart of Account Structure

Chart of Accounts is your accounting language using which you will be recording variety of journals in GL. Another very important component of your GL implementation.

General Ledger implementation has 3 main pillars, also called 3Cs

• Accounting Calendar

• Functional Currency

• Chart of Account Structure

Whenever any transaction is done in ERP, currency is a must have component in that transaction. It can be Functional currency or Foreign currency. In case of Foreign currency, you have to provide Exchange rate to convert the balance to your Functional currency.

You will understand what are ledgers and how accounting calendar, chart of account and currencies are embedded in ledger definition. You will also understand various types of ledgers and their business purpose.

A Ledger set is a collection of ledgers that are defined for different business purposes in real business settings. By grouping similar ledgers together within a Ledger set, various General Ledger processes can be efficiently run at the Ledger set level. Some examples of these processes include:

• Opening and closing accounting periods

• Running reports and analyses

Journal sources are essential for identifying the origin of a journal entry. They serve reporting purposes by enabling the generation of lists and reports based on the journal source. Here are key points to consider:

• Seeded journal sources provided:

  • Receivables

  • Payables

  • Assets

• Custom journal sources:

  • Users can define their own journal sources based on their business requirements.

  • These custom sources can reflect specific departments, projects, or any other relevant segmentations within the business.

Journal categories are identifiers used to distinguish different types of journals in a system. Similar to journal sources, they help classify journals for easier organization and navigation.

• Journal categories are predefined in the system, but additional categories can be added based on business requirements.

• Common seeded journal categories include:

  • Purchase Invoices

  • Payments

  • Receipts

When dealing with a large number of journals in a system, assigning unique voucher numbers to each journal is crucial. This ensures proper identification and tracking of transactions. In addition, maintaining a sequential order for voucher numbers is essential for meeting audit requirements.

• Unique voucher numbers are assigned to each journal for identification purposes.

• Sequencing of Journal Voucher Numbers helps in maintaining order and organization.

• Auditors rely on the sequential order of voucher numbers to ensure completeness of transactions.

• Defining the sequencing for journals is important for audit trail and compliance purposes.

In the world of accounting, the general ledger is the central repository for all financial transactions. It maintains records of journals that are either directly entered into the general ledger or transferred from sub-ledgers such as Accounts Receivable (AR), Accounts Payable (AP), and others.

Here are some key points to keep in mind regarding general ledger records:

• Transactions entered directly into the general ledger

• Transactions transferred from sub-ledgers like AR, AP, etc.

• Sub-ledger data recorded under a legal entity and business unit

When it comes to recording data at the sub-ledger level, it is crucial to categorize it under specific legal entities and business units. This helps in organizing and managing financial information effectively.

Throughout this chapter, you will delve into the essential configurations necessary to define a legal entity within the context of the general ledger system.

The journal entry process consists of three stages:

• Creation

• Approval

• Posting

Key points related to the process:

• Trial balances are updated only when a journal is posted.

• Users have the option to post journals manually.

• Alternatively, users can define AutoPost criteria, allowing eligible journals to be automatically posted.

Users in the system create journals, some of which may need to be reversed in the next period, such as accrual-type journals. They have two options for reversing journals:

• Manually reverse the journals.

• Configure AutoReversal rules to automatically mark journals for reversal by the system.

Oracle enables the definition of a Chart of Accounts structure with multiple segments like Company, Cost Center, Account, Product etc. It is crucial to guarantee that users choose the correct/eligible values under different segments to avoid inaccuracies in reporting. Cross validation rules permit the establishment of rules for ensuring across segment validations. Additionally, cross validation combination sets are available for creating more detailed rules based on segment combinations. When generating a new combination, both cross validation rules and combination sets are validated, ensuring data accuracy.

• Oracle allows defining Chart of Accounts structure with multiple segments like Company, Cost Center, Account, Product.

• Cross validation rules can be used to establish rules for across segment validations.

• Cross validation combination sets enable the creation of detailed rules based on segment combinations.

• When generating a new combination, both cross validation rules and combination sets are validated to maintain data accuracy.

Security rules in GL play a crucial role in ensuring data visibility and access control:

• Cross-validation rules in GL ensure that users select only permitted values across different segments of the Chart of Accounts.

• While permitted by cross-validation rules, all values within the Chart of Accounts remain visible.

• To restrict users to view only relevant values, security rules need to be defined.

• Security rules facilitate displaying only the values that a user is authorized to access.

Data access sets allow you to variations of access based on your business need. You can create data access set for single ledger or multiple ledgers and also decide whether the access will be the all the companies or selected company plus read/write or readonly.

Budgeting is crucial for organizational planning. Oracle's system offers a flexible framework for defining and loading budgets, enabling the tracking of expenditures against set budgets. This chapter guides you through:

• Defining budgets in Oracle

• Setting up budgetary controls for transactions

Journal entry rights can be granted to multiple accountants within an organization. However, before these journals are officially posted in the system, they must be reviewed and approved by a senior accountant or manager. The primary aim of this review process is to identify and rectify any inaccuracies present in the journal entries. The process ensures data integrity and accuracy within the financial records.

The chapter provides guidance on enabling and defining journal approval rules. This allows organizations to implement systematic procedures for verifying the accuracy and validity of journal entries before they are integrated into the financial system. By setting up clear approval rules, businesses can maintain financial transparency and accountability.

In order to perform transactions in the General Ledger, it is essential to open the accounting period for the specific time frame during which journals will be posted. Accounting periods can be opened for either a ledger or a ledger set. The following are important points to consider:

• Before transactions are recorded in the General Ledger, the accounting period must be opened for the relevant period.

• Accounting periods can be opened for a specific ledger or for a group of ledgers known as a ledger set.

• This process ensures that financial transactions and journal entries are correctly assigned to the appropriate time frame.

Throughout this chapter, you will gain an understanding of the steps involved in opening an accounting period for a ledger or ledger set, allowing you to efficiently manage and record your financial transactions within the General Ledger system.

Oracle GL provides variety of options for creating journals in the system. You can enter journals manually, upload from Spreadsheet, Import from Subledgers or from external sources.

For any organization with multiple entities, they are bound to have transactions between different entities. This creates a need to have intercompany transactions in the system. Oracle GL provides complete functionality to implement the intercompany functionality. Once the transaction is approved, system will automatically create necessary journal entries for both the entities involved.

This is very similar to Intercompany transaction Journals but the key difference is that in this process, instead of journals, accounts receivables and payables invoices are automatically generated by the system.

One of the key features of Fusion is Account Inspector. This is an online inquiry tool which allows you to inquire the GL balances real-time using pivot based screen.

Account monitor is another inquiry tool which can automatically show you the status of certain accounts based on the configuration done by the user. It can show account balances by default or when a certain even triggers.

These series of chapters related to consolidation will give you complete information about

• What is consolidation

• How it works

• What are various options for configuring consolidation

These series of chapters related to consolidation will give you complete information about

• What is consolidation

• How it works

• What are various options for configuring consolidation

These series of chapters related to consolidation will give you complete information about

• What is consolidation

• How it works

• What are various options for configuring consolidation

These series of chapters related to consolidation will give you complete information about

• What is consolidation

• How it works

• What are various options for configuring consolidation

These series of chapters related to consolidation will give you complete information about

• What is consolidation

• How it works

• What are various options for configuring consolidation

Accountants use lot of clearing account (temporary accounts) which hold balances temporarily and are auto-settled by pairing transaction or allocated out periodically. Accountants have to ensure that they keep track of balances in such accounts and ensure that the balances are zero after the completion of the transaction cycle.

Clearing account reconciliation process is useful to show the completion of transaction cycle so that user can review and mark those as reconciled.

In this chapter, you will learn how to enable accounts for clearing account reconciliation process and also reconciliation process.

Account aliases are used to ease the entry of code combinations.

In this course, you will learn how to define allocation rules using Calculation manager.