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Oracle EBS Valuation and Other Accounts

Valuation Accounts

You choose a default valuation account when you define organization parameters. Under standard costing, these accounts are defaulted when you define subinventories and can be overridden. Under average costing, these accounts (except for Expense) are used for subinventory transactions and cannot be updated.

Material An asset account that tracks material cost. For average costing, this account holds your inventory and intransit values. Once you perform transactions, you cannot change this account.
Material Overhead An asset account that tracks material overhead cost.
Resource An asset account that tracks resource cost.
Overhead An asset account that tracks resource and outside processing overheads.
Outside processing An asset account that tracks outside processing cost.
Expense The expense account used when tracking a non-asset item.

Other Accounts

Sales The profit and loss (income statement) account that tracks the default revenue account.
Cost of Goods Sold The profit and loss (income statement) account that tracks the default cost of goods sold account.
Purchase Price Variance The variance account used to record differences between purchase order price and standard cost. This account is not used with the average cost method.
Inventory A/P Accrual The liability account that represents all inventory purchase order receipts not matched in Accounts Payable, such as the uninvoiced receipts account.
Invoice Price Variance The variance account used to record differences between purchase order price and invoice price. This account is used by Accounts Payable to record invoice price variance.
Encumbrance An expense account used to recognize the reservation of funds when a purchase order is approved.
Average Cost Variance
Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts.




Note: For standard costing, only the Purchase Price Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults to speed your set up.
Note: For average costing, only the Material, Average Cost Variance, Inventory A/P Accrual, Invoice Price Variance, Expense, Sales and Cost of Goods Sold accounts are required. The other accounts are used as defaults or are not required.

Inter-Organization Transfer Accounts

You define default inter-organization transfer accounts in the Organization Parameters window. These accounts are defaulted when you set up shipping information in the Inter-Organization Shipping Networks window.
Transfer Credit
The default general ledger account used to collect transfer charges when this organization is the shipping organization. This is usually an expense account.
Purchase Price Variance
The default general ledger account used to collect the purchase price variance for inter-organization receipts into standard cost organizations. This is usually an expense account.
Payable
The default general ledger account used as an inter-organization clearing account when this organization is the receiving organization. This is usually a liability account.
Receivable
The default general ledger account used as an inter-organization clearing account when this organization is the shipping organization. This is usually an asset account.
Intransit Inventory
The default general ledger account used to hold intransit inventory value. This is usually an asset account. For average cost organizations, this account is the default material account.

Defining Other Account Parameters

To define Receiving Account information:
1. Navigate to the Organization Parameters window.
2. Select the Other Accounts alternative region.
3. Enter a general ledger account to accumulate Purchase Price Variance for this organization.
This is the variance that you record at the time you receive an item in inventory, and is the difference between the purchase order cost and an item’s standard cost. Purchase price variance is calculated as:
PPV = (PO unit price – standard unit cost) X quantity received
Purchase price variance is not used for average costing.
4. Enter a general ledger account to accumulate Invoice Price Variance for this organization. This is usually an expense account.
Invoice price variance is the difference between the purchase order price for an inventory item and the actual invoice price multiplied by the quantity invoiced. Oracle Inventory passes this account to Oracle Purchasing when the requisition or purchase order is created. When Oracle Payables matches and approves the invoice, Oracle Payables uses the invoice price variance account from the purchase order to record invoice price variance entries. In addition, if you have exchange rate variances, Oracle Payables also records invoice price variance for exchange rate gains and losses.
5. Enter a general ledger account to accumulate Inventory Accounts Payable Accrual for this organization.
This is the account used by Oracle Purchasing to accrue your payable liabilities when you receive your items. This account represents your uninvoiced receipts and is usually part of your Accounts Payable Liabilities in the balance sheet. Oracle Payables relieves this account when the invoice is matched and approved.
6. Enter a default general ledger account to accumulate Encumbrance for this organization. This is the default account when you define your subinventories.
To define Profit and Loss Account information:
1. Select the Other Accounts alternative region.
2. Enter a default Sales revenue account.
When you define your items, this account is defaulted to the item’s sales account in the Invoicing attribute group.
3. Enter a default Cost of Goods Sold account.
When you define your items, this account is defaulted to the item’s cost of goods sold account in the Costing attribute group.
To define Average Cost Account information:
1. Select the Other Accounts alternative region.
2. Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before processing your receipts. This account is required only when using average costing.
3. Save your work.

Subinventory General Ledger Account Fields

Material
Enter a general ledger account to accumulate material costs for items received into this subinventory. This is usually an asset account used for the value of goods stored in this subinventory.
For asset items, you use this account as a default when you generate purchase requisitions from MRP, min-max organization level planning, or reorder point planning. However, when you receive the purchase order, you use the appropriate valuation or expense account.
Outside Processing
Enter a general ledger account to accumulate outside processing costs for this subinventory. This is usually an asset account. Oracle Work in Process charges this account at standard cost when you receive items for a job or schedule in Oracle Purchasing. Oracle Work in Process relieves this account at standard cost when you issue components to a job or schedule.
Material Overhead
Enter a general ledger account to accumulate material overhead or burden costs for this subinventory. This is usually an asset account.
Overhead
Enter a general ledger account to accumulate resource or department overhead costs for this subinventory. This is usually an asset account. Oracle Work in Process charges this account at standard cost when you complete assemblies from a job or schedule. Oracle Work in Process relieves this account at standard when you issue components to a job or schedule.
Resource
Enter a general ledger account to accumulate resource costs for this subinventory. This is usually an asset account. Oracle Work in Process charges this account at standard cost when you complete assemblies from a job or schedule. Oracle Work in Process relieves this account at standard cost when you issue components to a job or schedule.
Expense
Enter a general ledger account to accumulate expenses for this subinventory. For expense subinventories, this account is charged when you receive any item. For asset subinventories, this account is charged when you receive an expense item.
Encumbrance
ORACLE PURCHASING ONLY
Enter a general ledger account to hold the value of encumbrances against items in this subinventory. This account is used for purchase order receipts and returns.
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Order to Cash – Technical Flow in R12

This article lists the Order to Cash Flow in R12, with technical flow of data as taught in our FocusThread trainings.

1. Order Entry

This is first stage, When the order is entered in the system, it creates a record in order headers and Order Lines table.

Enter header details: Once you enter details on the order header and save it or move it to lines, record goes to one table oe_order_headers_all flow_status_code = ENTERED, booked_flag = N), Primary key=HEADER_ID

No record exist in any other table for this order till now.

Enter Line details for this order: Enter different item numbers, quantity and other details in line tab. When the record gets saved, it goes to one table. Order header details will be linked with line details by order HEADER_ID. oe_order_lines_all (flow_status_code = ENTERED, booked_flag = N, open_flag = Y) Primary key= LINE_ID

2.Order Booking
This is next stage, when Order is booked then the Flow status changed from Entered to Booked. At this stage, these below table get affected.

oe_order_headers_alL (flow_status_code as BOOKED, booked_flag updated to Y)
oe_order_lines_all (flow_status_code as AWAITING_SHIPPING, booked_flag updated Y)
wsh_delivery_details (DELIVERY_DETAIL_ID is assigned here, released_status ‘R’ ready to release, LINE_ID comes as SOURCE_LINE_ID)
wsh_delivery_assignments (DELIVERY_ASSIGNMENT_ID is assigned for DELIVERY_DETAIL_ID present in wsh_delivery_details, DELIVERY_ID remains blank till this stage)

*In shipping transaction form order status remains “Ready to Release”.

At the same time, Demand interface program runs in background And insert into inventory tables mtl_demand, here LINE_ID come as a reference in DEMAND_SOURCE_LINE

3. Reservation
This step is required for doing reservations SCHEDULE ORDER PROGRAM runs in the background and quantities are reserved. Once this program get successfully get completed, the mtl_demand and mtl_reservations table get updated. LINE_ID gets updated in DEMAND_SOURCE_LINE_ID in both the tables.

4. Pick Release
Pick Release is the process of putting reservation on on-hand quantity available in the inventory and pick them for particular sales order.

Pick release can be done from ‘Release Sales Order’ form or ‘Pick release SRS’ program can be scheduled in background. In both of these cases all lines of the order gets pick released depending on the Picking rule used. If specific line/s needs to be pick release it can be done from ‘Shipping Transaction form. For this case Pick Release is done from ‘Release Sales Order’ form with Pick Confirm=NO.
Once pick release is done these are the tables get affected:

If step 3 is not done then MTL_RESERVATIONS gets updated now.
wsh_new_deliveries (one record gets inserted with SOURCE_HEADER_ID= order header ID, status_code=OP =>open)
wsh_delivery_assignments (DELIVERY_ID gets assigned which comes from wsh_new_deliveries)
wsh_delivery_details (released_status ‘S’ ‘submitted for release’)
MTL_TXN_REQUEST_HEADERS
MTL_TXN_REQUEST_LINES (LINE_ID goes as TXN_SOURCE_LINE_ID)
(move order tables. Here request is generated to move item from Source (RM or FG) sub-inventory to staging sub-inventory)
Mtl_material_transactions_temp (link to above tables through move_order_header_id/line_id, this table holds the record temporally)
MTL_SERIAL_NUMBERS_TEMP (if item is serial controlled at receipt then record goes in this table)
MTL_SERIAL_NUMBERS (enter value in GROUP_MARK_ID )

*In shipping transaction form order status remains “Released to Warehouse” and all the material still remains in source sub-inventory. We need to do Move Order Transaction for this order. Till this no material transaction has been posted to MTL_MATERIAL_TRANSACTIONS

5.Pick Confirm/ Move Order Transaction

Items are transferred from source sub-inventory to staging Sub-inventory. Here material transaction occurs.

Order line status becomes ‘Picked’ on Sales Order and ‘Staged/Pick Confirmed’ on Shipping Transaction Form.

MTL_MATERIAL_TRANSACTIONS_TEMP (Record gets deleted from here and gets posted to MTL_MATERIAL_TRANSACTIONS)
oe_order_lines_all (flow_status_code ‘PICKED’ )
MTL_MATERIAL_TRANSACTIONS (LINE_ID goes as TRX_SOURCE_LINE_ID)
mtl_transaction_accounts
wsh_delivery_details (released_status becomes ‘Y’ => ‘Released’ )
wsh_delivery_assignments
MTL_ONHAND_QUANTITIES
MTL_SERIAL_NUMBERS_TEMP (record gets inserted after putting details for the item which are serial controlled at ‘Sales order issue’)
MTL_SERIAL_NUMBERS (record gets inserted after putting details for the item which are serial controlled at ‘Sales order issue’)

* This step can be eliminated if we set Pick Confirm=YES at the time of Pick Release

6.Ship Confirm
Here ship confirm interface program runs in background. Data removed from wsh_new_deliveries.

The items on the delivery gets shipped to customer at this stage.

oe_order_lines_all (flow_status_code ‘shipped’)
wsh_delivery_details (released_status ‘C’ ‘Shipped’, SERIAL_NUMBER if quantity is ONE)
WSH_SERIAL_NUMBERS (records gets inserted with the DELIVERY_DETAIL_ID reference, only in case of shipped quantity is two or more)
mtl_transaction_interface
mtl_material_TRANSACTIONS (linked through Transaction source header id)
mtl_transaction_accounts
Data deleted from mtl_demand, MTL_reservations
Item deducted from MTL_ONHAND_QUANTITIES
MTL_SERIAL_NUMBERS_TEMP (records gets deleted from this table)
MTL_SERIAL_NUMBERS (Serial number stauts gets updated CURRENT_STATUS=4 , ‘Issued out of store’)

7.Enter Invoice
After shipping the order the order lines gets eligible to get transfered to RA_INTERFACE_LINES_ALL. Workflow background engine picks those records and post it to RA_INTERFACE_LINES_ALL. This is also called Receivables interface, that mean information moved to accounting area for invoicing details. Invoicing workflow activity transfers shipped item information to Oracle Receivables. At the same time records also goes in the table RA_INTERFACE_SALESCREDITS_ALL which hold details of sales credit for the particular order.

ra_interface_lines_all (interface table into which the data is transferred from order management) Then Autoinvoice program imports data from this table which get affected into this stage are receivables base table. At the same time records goes in

ra_customer_trx_all (cust_trx_id is primary key to link it to trx_lines table and trx_number is the invoice number)
ra_customer_trx_lines_all (line_attribute_1 and line_attribute_6 are linked to order number and line_id of the orders)

8.Complete Line
In this stage order line level table get updated with Flow status and open flag.
oe_order_lines_all (flow_status_code ‘shipped’, open_flag “N”)

9.Close Order
This is last step of Order Processing. In this stage only oe_order_lines_all table get updated. These are the table get affected in this step.

oe_order_lines_all (flow_status_code ‘closed’, open_flag “N”)

oe_order_HEADERS_all
In this stage order line level table get updated with Flow status and open flag.
oe_order_lines_all (flow_status_code ‘shipped’, open_flag “N”)

9.Close Order
This is last step of Order Processing. In this stage only oe_order_lines_all table get updated. These are the table get affected in this step.

oe_order_lines_all (flow_status_code ‘closed’, open_flag “N”)

oe_order_HEADERS_all

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Payables Basic setup steps

Payables Basic setup steps
Step 1 Install or upgrade Payables. (Required)
Step 2 Create application user sign-ons and passwords. Users Window. System Administrator responsibility: Users (Required)
Step 4 Define your accounting period types and accounting calendar periods. Defining Period Types, and Defining Calendars.
Step 5 Enable currencies that you plan to use. Currencies Window. (Optional)
Step 6 Define a set of books. Specify a set of books name and assign it a calendar, functional currency, and a chart of accounts structure. Defining Sets of Books. (Required)
Step 7 Use the System Administrator responsibility to assign your set of books to a responsibility. Function Security in Payables. (Required)
Step 8 If you want to enter foreign currency transactions, define additional rate types, and enter your daily rates. Defining Conversion Rate Types, Entering Daily Rates, and Foreign Currency Transactions. General Ledger: 1) Conversion Rate Types and 2) Daily Rates (Optional)
Step 9 Select your primary set of books. Choosing a Set of Books. (Required)
Step 10 After choosing your set of books, use the Application Developer responsibility to set the GL Set of Books ID profile option to Updateable. Overview of User Profiles, and Setting User Profile Options (Required)
Step 11 After choosing your set of books, use the System Administrator responsibility to set the GL Set of Books Name profile option. If you are performing a single set of books installation, set the option for the Oracle Payables application. If you are performing a multiple set of books installation, set the option for each unique combination of organization and responsibility. Overview of User Profiles, and Setting User Profile Options. (Required)
Step 12 Define your payment terms. Payment Terms. (Required)
Step 13 Define your purchase order matching tolerances. Invoice Tolerances. (Optional)
Step 14 If you plan to use automatic withholding tax, define Tax Authority type suppliers. (You must do this before defining tax names and tax groups.) Entering Suppliers. (Required)
Step 15 Define tax names, and if you use automatic withholding tax, define withholding tax groups. Tax Names, Withholding Tax Groups, and Setting Up Withholding Tax. (Optional)
Step 16 Define invoice approval codes. You use these codes to apply and release holds from invoices. Invoice Approvals. (Required)
Step 17 Define distribution sets. You can use a distribution set to automatically enter distributions for an invoice. Distribution Sets. (Optional)
Step 18 Define Payables QuickCodes. QuickCodes. (Required)
Step 19 If you want to use Automatic Interest Calculation, define payment interest rates. Interest Rates. (Optional)
Step 20 If you want to use Payables to enter employee expense reports, create templates for entering expense reports. Expense Report Templates (Optional)
Step 21 If you use Payables to enter employees in your organization, enter employee Quick codes. Adding Quickcode Values. (Optional)
Step 22 Enter locations. Site Locations. (Required)
Step 23 Enter employees. Enter Person. (Required)
Step 24 Define one or more reporting entities for your organization for income tax reporting. Reporting Entities. (Required)
Step 25 Define additional United States 1099 income tax regions. Income Tax Regions. (Required)
Step 27 Define Financials options. Financials Options. (Required)
Step 28 Define Payables options. Payables Options. (Required)
Step 29 Define payment programs. Automatic Payment Programs. Automatic Payment Programs (Required)
Step 30 Define any additional payment formats. Payment Formats.
Note: If you plan to define foreign currency or multiple currency payment formats, you must first enable the Allow Multiple Currencies Payables option in the Payables Options window. Currency Payables Options. (Optional)
Step 31 Update country and territory information and assign flexible address formats.  Countries and Territories, and Flexible Addresses. (Optional)
Step 32 Define bank accounts. Defining Banks. (Required)
Step 33 Open your accounting period. Controlling the Status of AP Accounting Periods. (Required)
Step 35 Define the format for the Expense Distribution Detail Report, and define the format for the Invoice Aging Report. Account Segments for Expense Reporting, and Aging Periods. (Optional)
Step 36           Set up Print Styles and Drivers for the Supplier Mailing Labels Report. Setting Up Print Styles and Drivers for the Supplier Mailing Labels Report. (Required)
Step 37           Define special calendars for key indicators, recurring invoices, and withholding tax. Special Calendar. Special Calendars (Optional)
Step 38           Implement Budgetary Control in General Ledger. Setting Up Budgetary Control (Optional)
Step 39           Implement sequential voucher numbering. Implementing Sequential Voucher Numbering. (Optional)
Step 40           Define descriptive flexfields. Defining Descriptive Flexfields. (Optional)
Step 41           Set Profile Options. Profile Options in Payables. System Profile Values (Optional)
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Important Profiles During Implementation

 Important Profiles
1. Receiving transaction Processor concurrent not visible
TP: INV Transaction processing mode                 —         On-line

RCV: Processing Mode                                   —         On-Line  set to User & Resp.

2. Auto creates tools copy document next document form not pop-up.

PO: Display the Autocreated Document               —         No to Yes

PO: Display the Autocreated Quotation                —         No to Yes

PO: Allow Buyer Override in Autocreate Find        —         Yes or No

PO: Allow Category Override in Autocreate Find   —         Yes or No

PO: Allow Referencing CPA Under Amendment    —         Yes or No

PO: Allow Requisition Approval Forward Action     —         Yes or No

HR: Supervisor Hierarchy Usage —Use Assignment-based  Supervisor Hierarchies
                                                     Use Person-based Supervisor Hierarchies

HR: Display Position Hierarchy                           —         Yes or No

PO: Allow Requisition Approval Forward Action     —         Yes or No       

3. Requisition Import required Internal & Purchase Requisition

PO: Legal Requisition Type                                             —         Both

PO: Restrict Requisition line modify to quantity split         —         No

RCV: Allow routing override                                             —         Yes

OM: Display New Order after Copy                                  —         Yes

OM: Item Change Honors Frozen Price                            —         Yes

OM: Return Item Mismatch Action                                   —         Allow

4. Sales Order Number not automatic sequencing

Sequential Numbering                                                    —         Always Used

AR:Maximum lines per AutoInvoice                                  —        20

AR: AutoInvoice Gather Statistics                                    —         No

AR: Use Invoice Accounting For Credit Memos                 —         Yes

eBTax: Allow Override of Customer Exemptions                —         Yes

WIP:Job Name Updatable                                               —         Yes to No

Drop ship

OM: Population Of Buyer Code For Dropship Lines           —         Order Creator     (not mandatory)

Requisition import & Create release both should run at a time

PO: Release During ReqImport                                        —         Yes

Localization Profiles

Responsibility    —          Purchasing

JG: Application                          —         Purchasing

JG: Product                               —         Asia/Pacific Localizations

JG: Territory                              —         India

JG: Company Operating Unit       —         Operating Unit Name

Responsibility    —          Inventory

JG: Application                          —         Inventory

JG: Product                               —         Asia/Pacific Localizations

JG: Territory                              —         India

JG: Company Operating Unit       —         Operating Unit Name

Responsibility    —          Order Management

JG: Application                          —         Order Management

JG: Product                               —         Asia/Pacific Localizations

JG: Territory                              —         India

JG: Company Operating Unit       —         Operating Unit Name

Any changes from SO Header level it won’t affect to line level need to set the profile – R12 Futures:-

OM: Sales Order Form:
Cascade Header Changes to Line               —    Automatic

QP: Item Validation Organization               —    IMO

OM: Item Validation Organization             —    IMO setting up both should Same
                                     (then only Item should be listing in price list and modifier)

FND: Record History Enabled

FND: Diagnostics                     —    Yes (Customer web page view record history

Personalize Self-Service Defn–>

                                            No to Yes (Customer web page view record history)

HZ: Enable Duplicate Prevention at Party Creation —   Disabled

                                                                               Organization only

                                                                               Organization and Person

                                                                                Person only

HZ: Enable DQM Party Search                          —    Yes

ASO : Price List Override                                   —    Yes

PO: Allow Buyer Override in Autocreate Find       —     Yes

Transaction type added Customer PO mandatory —    Check box enabled
                                                                              Organization Type
In a Human Resources responsibility, the navigation is Other Definitions > Application Utilities Lookup.

    Works
    Non-Works
    Dump
    Branch
    Warehouse
    Goodown

1. Define FOB: AR à Purchasing lookup à Query FOB      —         Add the Value
                                                                             
2. Define Freight carrier: Order Management à Setup à Shipping à Freight Carrier, Cost Type à Freight Carrier      —         Add the value

3. Define Freight Terms: Order Management à Setup à Quick Codes à Order Management à Query Freight Terms   —   Add the Value

AR: AutoInvoice Gather Statistics               —         No to Yes

( AutoInvoice Master Program concurrent error)

AR:Maximum lines per AutoInvoice worker    —         10000 (null to 10000)

Credit Memo Profile

AR: Use Invoice Accounting For Credit Memos         —        Null to Yes

AR: Transaction Batch Source                                 —         Null to
                                                                                    
INV: Advanced Pricing for Inter-Org Transfers        —         Null to Yes

INV: Advanced Pricing for Inter-Org Transfers        —         No

Price list security:-
Price list and Modifier need to set to Operating Unit level or Global
QP: Security Control                                                —         OFF / ON

QP: Security Default Maintain Privilege                    —  Global
                                                                                      None
                                                                                      Operating Unit
                                                                                      Responsibility
                                                                                      UserQP: Security Default ViewOnly Privilege                   —   Global
                                                                                      None
                                                                                      Operating Unit
                                                                                      Responsibility
                                                                                      User

CST: Transfer Pricing Option                                     —         No

 Internal Sales Order Price Defaulted from Inventory Item cost à Sales Order à Line items à pricing tab à Calculate Price flag set Freeze price to Calculate price.

OM: E-Mail Required on new Customers  — No to Yes (When create new customer or add Contact)

Parallel Pick Future R12
Set the profile site level to
1. WSH: Number of Pick Release Child Processes’  –  50

Consigned Inventory functionality set this Profiles
INV: Allow Expense to Asset Transfer = Yes.

Check following 2 condition for your environment.
1) OE: Autobackorder is only effective if the profile, OE: Reservation = Yes
2) only affects items in a kit, model, or ship set during Pick Release.

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Inter Company

More and more companies are doing business globally, and taking advantage of the operations and tax benefits that can be achieved by running operations throughout the world. These companies have multiple operating units and organizations around the world. When goods are shipped or received, the financial ownership through these organizations does not necessarily follow the physical movement of goods. Oracle Applications support three main logistics needs of global organizations – Central Distribution, Central Procurement and Drop Ship.
  • Central Procurement (P2P)
  • Central Distribution (IR ISO)
  • Drop Ship
    1.  External (O2C)
     2. Internal (O2C)
A corporation manages its global operations in various countries through a network of subsidiaries, separate legal entities, licensees and several associated label franchisee. This complex network of operations is necessitated to take care of local legal and fiscal environment, which prevail in each of those countries.
Consider the below example:
Vision Operations (V1) is based in USA. It has a 100 % owned subsidiary company called Vision Asia (VA). VA in turn has two subsidiaries – Vision Japan (VJ) and Vision China (VC). VJ has manufacturing facilities in Osaka (O1) and distribution center at Tokyo (T1). Due to tax advantages, V1 sources all the goods from china through VJ. Though the financial transactions between V1 and VC are routed through VJ, logistic movement of goods takes place directly between V1 and VC.
Continuing the above example, Vision Operations (V1) has another subsidiary company called Vision Singapore (VS), 100 % that it owns. Individual plants procure components from their own suppliers. VS centralizes all the commodity (like steel, Aluminum etc.,) procurement needs of Vision Operations across Overview of Intercompany Invoicing 1 world and procures the material on behalf of all VJ and its subsidiary plants and places purchase orders on its suppliers. However, material is directly shipped from the suppliers to all the manufacturing plants.

Fig1
A key requirement for the global implementation of Oracle applications in such a complex business environment is the ability to process “intercompany transactions,” where one business unit (across OUs)invoices another for transfer of goods and services. Often these intercompany transactions involve transactions related to general expenses, funds transfer, salary transfers, asset transfers, royalty payments and product transfers.
For example, the organization structure depicted in figure 1 can be modeled in Oracle applications as depicted in Figure 2.

Following are the key implementation points you need to look into:
  • Understand the corporation business entities and the relationship between them. Identify selling-shipping relationships and procuring-receiving relationships.
  • Understand Oracle multi org structure and the building blocks in data structure.
  • Breakup the business relationships into manageable process flow and map it to various entities in Oracle applications.
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