oaug discrete mfg cost sub-committee presentation

Make Cost Management Work for You! – 1

Douglas Volz Consulting, IncMay 20th, 2008

Make Cost Management Work for You!

20th May 2008

Douglas A. Volz

OAUG Discrete MFG Cost Sub-Committee Presentation

(Revised 13th February 2016)



Welcome to Our Session! Proposed 2008 Schedule - July to December 2008 Introduce the Cost Enhancement List Costing Tips and Tricks Presentation

Agenda



June 17th

Summer Break (no meeting in July or August) September 23rd (Oracle OpenWorld is also during this time) October 21st November 18th

December -- No Meeting

Proposed 2008 Schedule - July to December 2008



The objectives are:– The goal is to compile a list of cost enhancements– Help each other by describing how we currently deal with these limitations– Pass this information to Oracle Development as a source of ideas for future

releases. This list will be discussed during the June 2008 session as a group

discussion (everyone gets to describe their own enhancements) Enter your enhancement ideas into the Cost Enhancement List and send to

[email protected] (or use the Cost email list [email protected])

Cost Enhancement List

mailto:[email protected]



Make Cost Management Work for You!

20th May 2008(Revised 13th February 2016)

Douglas A. VolzDouglas Volz Consulting, Inc.

Helping clients use Oracle Applications since 1990

www.volzconsulting.com

http://www.volzconsulting.com/



Tips and TricksIntroduction – There Has to be a Better Way!



Introduction This presentation is mostly for Release 11i but many topics

still apply to Release 12 Differences between 11i and 12 will be discussed

The objective is to find out about better ways to control cost and inventory and better ways to report profits

Get suggestions on standard features you may not be using

Learn about report and program extensions that add significant value



Agenda Get suggestions on standard features you may not be using:

Currency setup Period open and close by organization hierarchy Material overhead absorption rules Transaction Value Historical Summary Report Sharing costs (when using Standard Costing) Data verification audits Period close snapshots (Release 11.5.10)



Agenda (Continued) Simple reporting extensions that add significant value:

Summarize G/L account activity by journal source and category

Check inventory period close status by operating unit Margin reporting extensions Multiple inventory organization reporting for:

– Inventory value– Material accounting entries

Purchase price variance reporting – for standard costing Invoice price variance reporting – for all costing methods Finding high-value material transaction entries with ease



Agenda (Continued) Solve current problems you may have:

Excess and Obsolete Reporting (Inventory Provision) Inventory to G/L Reconciliation Incorrect cost inputs and how to fix “after the fact” Managing period close interfaces Common item master & cost data setup issues for the Cost

Rollup Better “what-if” cost simulation capabilities

Cost mass edits



Agenda (Continued) Best implementation and data conversion practices for

costing Conclusions Appendix

High-Level Review for Oracle Cost Management (R11i) Release 12 cost enhancements



Standard Features You May Not Be Using Currency setup Period open and close by organization hierarchy Material overhead absorption rules Transaction Value Historical Summary Report Sharing costs (when using Standard Costing) Data verification audits Period close snapshots (Release 11.5.10)



Standard Features: Currency Setup You can change your item cost decimal precision at any time

Change the extended precision to your requirements Used by the Cost Processor and all reports showing item

costs



Standard Features: Period Open/Close by Org Hierarchy In Release 11i you can open and close multiple inventory

periods by organization hierarchy Define your organization hierarchy using an Human

Resources Responsibility, or, if HRMS is not installed use an Inventory responsibility

Using the Inventory Organization Parameters, Costing tab, make sure your “Transfer to GL” settings are all the same for all orgs in the same organization hierarchy

See the next slides for screen shots



Standard Features: Period Open/Close by Org Hierarchy Define your organization hierarchy:



Standard Features: Period Open/Close by Org Hierarchy Inventory Organization Parameters, Costing tab: Transfer to

GL setting has to be the same for all inventory organizations



Standard Features: Period Open/Close by Org Hierarchy Open Period Control request



Standard Features: Period Open/Close by Org Hierarchy Close Period Control request



Standard Features: Mat’l Overhead Absorption Rules

Explicitly say which ones do and do not earn material overhead



Standard Features: Transaction Value Historical Summary Report

Rollback inventory value to any date you choose Choose which columns of information to view

You have four columns to select The fifth column on the report is everything else

Useful as a “roll-forward” audit report Useful to verify month-end inventory value report balances Two reports:

Transaction Value Historical Summary (for Standard Costing)

Transaction Value Historical Summary – Average Costing



Standard Features: Transaction Value Historical Summary



Standard Features: Sharing Costs Under limited circumstances this feature can be quite useful

Gives you the ability to share standard costs across a network of inventory organizations

Useful if you do not track separate freight and duty costs by inventory organization

You set the Costing Organization on your Organization Parameters screen, Costing Tab, when you define your inventory organization

Note: only works for Standard Costing



Standard Features: Data Verification Audits Found under the MRP/MPS/Planning Responsibilities:

Useful for general item setup verification



Standard Features: Data Verification Audits Run the “All Audits” to get:

For bills of materials: Components with zero usage quantity

Costed items not assigned to the costing category set For standard costing: Costed items with no frozen costs Items that have incorrect summary costs: Identify items

whose summary costs do not agree with the detailed cost information

And many more non-costing related data audits



Standard Features: Period Close Snapshot Period close snapshots (Release 11.5.10)

Prior to Release 11.5.10, the inventory period close only stored summary values by inventory organization and subinventory (blank subinventories are for intransit)

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

Release 11.5.10 also automatically runs at period close a detailed Period Close Reconciliation Report that compares the cumulative onhand values against the cumulative accounting values

Use the Period Close Reconciliation Report to find discrepancies between your onhand perpetual values and your cumulative accounting values



Simple Reporting Extensions Simple reporting extensions that add significant value:

Summarize G/L account activity by journal source and category

Check inventory period close status by operating unit Margin reporting extensions Multiple inventory organization reporting for:

– Inventory value– Material accounting entries

Purchase price variance reporting – for standard costing Invoice price variance reporting – for all costing methods Finding high-value material transaction entries with ease



Reporting Extensions: Summarize G/L Account Activity

How to quickly find a summary of monthly activity by G/L journal source?

Use one of the standard G/L journal lines reports Usually too much information

Ask [email protected] for a sample SQL report for the G/L Summary by Journal Source and Category Report Tailor it for your requirements, you can use it as a SQL

Report, or Your IT staff could put it in XML Publisher to make it multi-

currency and easier to download into Microsoft Excel Free for use but please acknowledge the author in your

documentation




Reporting Extensions: Summarize G/L Account Activity

Sample Layout



Reporting Extensions: Summarize G/L Account Activity Other useful ideas for summarizing G/L activity:

You can create Lookup Codes, codes that list your inventory or margin accounts

Take the code example from G/L Summary by Journal Source and Category Report and add logic to it to limit the accounts by lookup code (from mfg_lookups in this example)



Reporting Extensions: Check Inventory Period Close Status

Check inventory period close status by operating unit Useful when you have many inventory orgs to close

No longer need to check each inventory org one-by-one



Reporting Extensions: Margin Reporting In Release 11i you run the Load Margin Analysis program for

each month Puts that month’s sales and COGS into a Margin Summary

table Your IT staff can build queries for custom reporting The underlying table is: CST_MARGIN_SUMMARY



Reporting Extensions: Multiple Inventory Orgs Reports

Multiple inventory organization reporting for: Inventory value Material accounting entries

Recommend two custom reports: Multi-Org All Inventory Value Report Multi-Org Material Account Distribution Summary Report

The Multi-Org All Inventory Value Report uses the existing Oracle*Reports code, and adds an Operating Unit or Organization Hierarchy Parameter(s) to it (or get the White Paper from the Inventory Reconciliation presentation for sample SQL code)

The Multi-Org Material Account Distribution Summary Report can be done either as a SQL Report or an XML Publisher Report (or get the White Paper from the Inventory Reconciliation presentation for sample SQL code)



Reporting Extensions: Purchase Price Variance

Purchase price variance is the difference between your PO unit prices and your Standard Frozen Costs

However the standard Oracle report is difficult to use Ask [email protected] for a sample SQL Purchase

Price Variance Report from www.volzconsulting.com. (Note: this version is from Release 11i, due to changes in Release 12, this version may not work in Release 12.) Tailor it for your requirements, you can use it as a SQL



documentation


http://www.volzconsulting.com/



Reporting Extensions: Invoice Price Variance

Invoice price variance is the difference between your PO unit price and your A/P invoice actual cost

However the standard Oracle report is difficult to use Ask [email protected] for a sample Invoice Price

Variance Report. (Note: this version is from Release 11i, due to changes in Release 12, this version will not work in Release 12.) Tailor it for your requirements, you can use it as a SQL



documentation




Reporting Extensions: Find High Value Mat’l Transactions Finding high-value material transaction entries with ease Standard report does not exist Request the Find High Value Mat’l Transactions Report by sending

an email to [email protected] for a SQL report version for your use. (Note: this version is from Release 11i, due to changes in Release 12, this version will not report any accounting information from the Release 12 Subledger/SLA Accounts.) You select the minimum absolute transaction value to search for

– The report brings back the entire material transaction Tailor it for your requirements, you can keep it as a SQL Report,

or Your IT staff could put it in XML Publisher to make it multi-


documentation




Solve Current Problems You May Have Solve current problems you may have:

Excess and Obsolete Reporting Inventory to G/L Reconciliation Incorrect cost inputs and how to fix “after the fact” Managing period close interfaces Common item master and cost data setup issues for Cost

Rollup Better “what-if” cost simulation capabilities

Cost mass edits



Current Problems: Excess and Obsolete Reporting Oracle Inventory only has a Slow Moving Inventory Report So unfortunately you should consider a custom solution Parameters and decisions to consider:

What is a new item – so you exclude it from the analysis Do you want to include your MRP/ASCP planning as a

source of future demand? How many months of transaction history should you

consider? And don’t forget to include your corporate excess and

obsolete provision policies (amount to reserve based on forecasted usage)

Note: U.S. Sarbanes-Oxley requirements can turn this into a very complex solution!



Current Problems: Inventory to G/L Reconciliation Basic reports to use, when to run, timing considerations Sample spreadsheet What to do when you can’t reconcile Better ways to reconcile multiple inventory organizations

For the latest presentation on inventory reconciliation get the 2014 Inventory Reconciliation presentation from http://www.volzconsulting.com/resources.html.



Use the following formula:Prior cum. balance + monthly accounting activity = month-end cumulative G/L balance

Also compare above formula to cumulative report balances If you do not balance, check for manual G/L journal entries

and entries from other subledgers In Release 11.5.10, there is a new month-end balances/value

table that holds the item quantities and values in detail, thereby eliminating report cut-off issues This information is populated when you close the

inventory accounting period But there is limited reporting from this information

General Reconciliation Principles



How to Balance the Receiving Valuation Accounts Use the Receiving Value Reports to get the month-end

balances Use the Receiving Account Distribution Report for monthly

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

decreases to the Receiving Valuation Account If using outside processing you would also run the WIP

Account Summary ReportNote: in R11i, the quantities and values for the Receiving Value Reports are

“on demand” – they must be run at the correct time, after the period is closed and before the new accounting period has transactions



How to Balance the Inventory (Stores) Valuation Accts.

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

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

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

Use the Material Distribution Summary Report for monthly totals

Note: in R11i, the quantities and values for the Inventory Value Reports are “on demand” – they must be run at the correct time, after the period is

closed and before the new accounting period has transactions



How to Balance the Intransit Valuation Accounts Use the Intransit Value Reports to get the month-end

balances Choose Yes for the option “Only Display Inventory You

Own” Use the Material Distribution Summary Report for monthly

totals

Note: in R11i, the quantities and values for the Intransit Value Reports are “on demand” – they must be run at the correct time, after the period is

closed and before the new accounting period has transactions



How to Balance the WIP Valuation Accounts Use the WIP Value Report to get the month-end balances

(No cut-off issues) Choose the option to include closed jobs

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

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

needed.



Sample Reconciliation Spreadsheet and Example



What do You do When You Have Several Organizations?

Using standard reports may be too time-consuming Four or more reports needed to reconcile each inventory

organization Several firms with multiple inventory organizations have

created a Multi-Org Inventory Reconciliation Report Using stored month-end balances available in 11.5.10 (or

11.5.9 plus patches) Directly compare the General Ledger account balances to

the stored month-end perpetual values Helps to quickly spot problems Get the White Paper from the Inventory Reconciliation

presentation for sample SQL code



What do You do When You Can’t Reconcile? Reasons

Report cut-off issues Incorrect misc. inventory transactions Disabling a code combination during the month Subledger miscodings Manual GL journal entries Back-dated transactions from external system feeds Miscoded purchase orders

For a detailed presentation on reconciliation, go to http://www.volzconsulting.com/resources.html



Current Problems: Incorrect Cost Inputs Two issues:

How to prevent incorrect cost inputs And how to fix “after the fact”

How to prevent incorrect cost inputs Consider custom reports or alerts to compare current cost

with PO unit prices If using Standard Costing, activate an existing alert for

items with no costs (you may have to modify it to ignore old items)

Use item status control to prevent transactions before the item is ready to be used



Current Problems: Incorrect Cost Inputs And how to fix “after the fact”

Consider reporting/SLA solutions to fix your COGS Request SQL report samples, ask

[email protected] for old vs. new comparison reports for COGS and inventory value– You enter the desired new item costs in a simulation cost type– One report compares your “As Booked” COGS against the new

COGS and gives you a report you can use as a manual journal entry

– The second report requires the Release 11.5.10 month-end inventory snapshot and compares the simulation cost type against the month-end inventory value

More complex solutions have also been done, including:– Creating a program that creates sub-ledger COGS entries to fix

the existing COGS transactions (yes, even in Release 12 and SLA!)

– Including the ability to fix transactions as long as the G/L is still open (and inventory is closed)



Douglas Volz Consulting, IncMay 20th, 2008Current Problems: Managing Period Close

Interfaces Until you get to Release 12, Oracle does not provide good

overview reporting for your period close interfaces Consider writing a custom report that reviews your major

inventory, WIP and other financial period close interfaces See How in the Dickens Do I Handle Those Month-End Interfaces?

For detailed information on creating a custom report – http://www.volzconsulting.com/resources.html



Current Problems: Item Master and Cost Setup Issues

Common item master and cost data setup issues for the Cost Rollup Make items where the assembly is set to not be rolled up Buy items that are not included in the cost rollup Buy items set to be rolled up (may double up your costs) Bills of materials with no components (will roll up to a zero

cost) Differences between the summary and detail cost table

settings for:– Rollup source type (detailed cost table)– Rollup flag (summary cost type)

Mistakes happen when you change the item master but not the cost controls for your items

Request SQL report samples, ask [email protected]




Current Problems: Cost Mass Edits Better “what-if” cost simulation capabilities

Since Release 10 Oracle Cost Management allows you to create custom Cost Mass Edits

Common ones include:– Changing material overheads across multiple inventory

orgs– Averaging invoice costs across multiple inventory

organizations– Taking the last cost (instead of an average invoice or PO

cost) Standard PL*SQL templates exist, create a PL*SQL new

package and register it in:– Concurrent program definitions– CST_MASS_EDITS– It will survive upgrades (but may need revisions)



Implementation and Conversion Cost Practices Use the Cost open interfaces

Essential for Standard Costing Used for your material overhead rates for other costing methods

Use miscellaneous receipts to bring in your inventory quantities Do this in the month prior to GoLive If you use average costing you can also bring in your material

costs– And do a Average Cost Update to bring in your material

overheads



Implementation and Conversion Cost Practices After conversion, reconcile by inventory organization

For both onhand values and item costs

Convert your year-end Legacy costs into a simulation cost type Use it at the following year-end to compare inventory values Excellent baseline for your inventory values – use it to convince

management and auditors that the costs are relatively unchanged



Conclusions Adding a few custom reports can save lots of time Take another look at the standard features listed here Release 12 has major enhancements to consider (see

Appendix) A/P accrual functionality has been rewritten All inventory value reports can be run after month-end Revenue and COGS Matching



Where to get more information UKOUG/OAUG Presentations by Doug Volz

(http://www.volzconsulting.com/resources.html)– (R11i) How to Setup, Use and Balance Your A/P Accrual Accounts– (R12) A/P Accruals for Release 12 (OAUG Cost Management SIG)– (R11i) How to Reconcile Your Manufacturing Accounting– (R11i and R12) Reconcile Your Inventory to G/L Balances With Ease, From 1 to

1,000 Inventory Organizations! SQL Report Examples for Your Use

(SQL scripts are free to use providing you acknowledge the author … also note these are old samples from Release 11i, just send an email to [email protected])

– G/L Summary by Journal Source and Category– Invoice Price Variance Report– Purchase Price Variance Report– Inventory Value Report by Org– Recosting and “what-if” reporting for COGS– WIP Value Summary by Org

OAUG Discrete MFG Cost Sub-SIG: http://costmgmt.communities.oaug.org/



Acknowledgements of kind assistance:

People who have contributed to or influenced these materials:Sharon Widmer, Manager, Hitachi ConsultingEspen Ingvoldstad, Cost Controller, Onninen ASVicky Marquez, Manager, Intacct Inc.Ludvig Millfors, Senior Manager, BearingPoint Consulting ASSolution Beacon, Alicia Hoekstra, Public Vision Databases:

http://www.solutionbeacon.com/tools_vision.htm

Douglas Volz Consulting, Inc.


US Cell: +1 510 755-7050 [email protected]



Thank You for Your Attendance and Participation

Douglas A. Volz

Douglas Volz Consulting, Inc.


US Cell: +1 510 755-7050 [email protected]



Appendix High level review for Oracle Cost Management (11i) Major Release 12 Enhancements for Cost Management Professional Background for Douglas Volz



High-Level Review for Oracle Cost Management (11i)

Inventory Structure Costing Methods Oracle Cost Management Structure Organizational Costing Cost Elements Cost Sub-Elements Major Cost Accounts in the System Setup Integration with General Ledger



Inventory Structure

FG Subinventory

STORES Subinventory

MRBSubinventory

WIP Subinventory

Locators Locators

Global Organization(Item Master)

Inventory Organization



Operating Unit



Inventory Structure Global Inventory Organization

Where items are normally defined Inventory Organization

Usually represents a distribution or manufacturing site Where you track on-hand balances, WIP and daily

transactions Unless you are using Project Manufacturing, the lowest level

for costing goods and planning material requirements Subinventory

Physical or logical location to store your inventory goods Generally defined to represent main stores as well as

stocking points on the production floor Locator

Usually a physical area in a storeroom



Costing Methods Average Standard FIFO LIFO Periodic



Cost Structure

Inventory CostOrganization

GlobalOrganization(Item Master)

MatlCost

Element

Matl O/HCost

Element

ResourceCost

Element

OverheadCost

Element

Outside Proc. Cost Element

Matl1

Matl2

Matl O/H1

Matl O/H2

Res1

Res2

O/H1

O/H2

OSP1

OSP2

Sub

-el

emen

ts



Organizational Costing Costing is by Warehouse or Manufacturing Site (inventory

organization) Each inventory organization has its own item material,

material overhead, resource and resource overheads Each inventory organization may have multiple cost types

(versions) You can have any number of cost types that are not active

(unimplemented costs) Each inventory organization can have its own costing method

You set the costing method by organization Within an inventory organization, all items have the same

costing method, Average or Standard or FIFO or LIFO or Periodic

Your costing method defines the “Active” cost type; it is used to transact to your General Ledger



Cost Elements You have five available cost elements for each cost type

Material (supplier purchase costs) Material Overhead (freight in, material handling, etc.) Resource (labor, machines, other factors of production) Outside Processing (subcontracting or outsourcing) Overhead (Resource and Outside Processing Overhead)

And you can have an unlimited number of sub-elements Material (metal, plastic, etc.) Material overhead (inter-co profit, in-bound freight, etc.) Resources (labor, machine groups, etc.) Outside Processing (subcontract vendor service1, service2,

etc.) Production Overheads (Factory Burdens, etc.)



Major Cost Accounts in the System Setup Inventory Parameters Shipping Network Subinventory Setup (mainly used for standard costing) WIP Accounting Classes Receiving Options Purchasing Options Order Types and COGS



GL Integration with Inventory and Work In Process Inventory Period Calendars vs. GL Period Calendars Concept of shared chart of accounts and set of books Interim GL transfers and transfer options (summary vs.

detail) GL to Inventory drill-down capabilities, online and via reports Period close processing in Oracle Inventory, and Journal

Import in Oracle General Ledger



Inventory Periods Vs. General Ledger Periods Every GL Set of Books has its own Financial Calendar Purchasing, Payables, Receivables have their own calendar

by Operating Unit Inventory and WIP share the same financial calendar but

have one for each Inventory Organization This means that you have to open and close each inventory

period in each inventory organization, separately from the GL, Purchasing, Payables and Receivables

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



Interim GL Transfers and Transfer options (summary vs. detail)

You can transfer when you want to within the accounting period

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



GL to Inventory Drill-Down Capabilities, Online and Via Reports

Since Release 10 there has been reporting drill-down capability

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

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

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

Note: Due to the transaction volumes, it is not useful to drill-down for large accounts, from the G/L back into the material accounting or WIP accounting details. So if you do use the online drill-down capabilities,

please be careful or you will “hang” your session.



Period Close Processing in Oracle Inventory What Happens?

Transfers entries in summary or detail to the GL Interface table

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

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

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

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

Release 11.5.10 also creates a detailed Period Close Reconciliation Report that compares the cumulative onhand values against the cumulative accounting values



Caution Use separate accounts for each type of system account:

Expense A/P Accrual Account Inventory A/P Accrual Account Receiving Account(s) Expense Purchase Order Charge Accounts Other inventory, WIP and price variance accounts

Teach your Payables staff to not use the A/P Accrual Account – it should be always assigned automatically



Release 12 Cost Enhancements Inventory Value Enhancements Period Close Diagnostics Inventory A/P Accruals Revenue and COGS Matching



R12 Inventory Value Reports Enhancements The following reports can now be run with an As-of Date:

Inventory Value Report – By Subinventory Inventory Value Report – By Cost Group Elemental Inventory Value Report – By Subinventory Elemental Inventory Value Report – By Cost Group All Inventories Value Report All Inventories Value Report – By Cost Group Intransit Value Report Receiving Value Report



R12 Period Close Diagnostics Drilldown from Pending Transactions form to transaction

details forms, that allows users to more quickly view the details of the transactions that are preventing period close

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

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



Release 12 – Major Rewrite for A/P Accruals Each month’s accrual entries are loaded incrementally

No more cumulative loading each month for the Accrual Temp table (no longer temporary)

PO and A/P entries which balance to zero are matched and removed

Much better performance and less tablespace too Separately define what are valid A/P Accrual Accounts

Easier to exclude invalid PO and A/P entries Matching is done at the PO distribution level (effectively at

the PO Release level if using PO Releases)



Release 12 – Major Rewrite for A/P Accruals Summary and Detail Accrual Reconciliation Reports

Summary reporting by account Detail reporting with separate headings from report detail Uses XML Publisher – all reports can be downloaded into

Excel Separate reports for matching vs. non-matching

miscellaneous entries (A/P, Inventory entries) Ability to do mass A/P Accrual Write-Offs

Write-offs use SLA (sub-ledger architecture) and now create journal entries

Can do write-offs at the PO distribution level Much better write-off reporting for both matched and

unmatched entries



Release 12 – Revenue and COGS Matching Automates the matching of Cost of Goods Sold (COGS) for a

sales order line to the revenue that is billed for that sales order line. Prior to this enhancement, the value of goods shipped from

inventory was expensed to COGS upon ship confirm, despite the fact that revenue may not yet have been earned on that shipment.

This enhancement synchronizes the recognition of revenue and COGS in accordance with the recommendations of generally accepted accounting principles.

Cost Processor now transfers the balance from the deferred account to the COGS account in the same proportion of revenue recognized for an order line. – Oracle Receivables publishes a business event when the

revenue recognition percentage changes. – Oracle Cost Management subscribes to this event and adjusts

the balances in the deferred and actual COGS accounts, ensuring that the COGS percentage equals the revenue recognition percentage.



About DougDoug Volz is a Senior Architect and Business Advisor for Oracle EBS projects, specializing in Cost Management and Intercompany processes. He has over 35 years of accumulated experience, including 5 years in Oracle Development (co-designing Oracle Cost Management), 20 years implementing Oracle EBS in multiple countries and 12 years in industry for Cost and Accounting Management positions. His Manufacturing and Cost systems experience covers project management, software design/development, delivery and consulting services, for both Oracle Corporation and multiple international consulting firms. Prior to his systems career, Mr. Volz also held management accounting positions for telecommunications, defense and electronics companies.

In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currency with global footprints and intercompany accounting requirements. Countries included US, Mexico, UK, Netherlands, Belgium, Taiwan, PRC, Norway, Japan, Italy, Switzerland and Germany.

Doug was recognized as the 2014 OAUG Member of the Year. He leads the OAUG Cost Management Special Interest Group (since 2007) and freely gives out valued business advice to his SIG members and to the Oracle community at large. Doug also presents at OAUG Collaborate, UKOUG and Oracle OpenWorld conferences. In addition he advises and participates on Oracle Customer Advisory Boards and frequently meets with the Oracle Cost Development teams.

Core Expertise Multi-organization, Multi-currency Global

Implementations Cost Accounting Business Solutions for Discrete &

Process Cost Accounting Intercompany and Profit in Inventory Inventory and A/P Accrual Reconciliation Project Management and Senior Project Advisor Core manufacturing and distribution processes

Cost Management Inventory Bills of Material WIP

Over 30 Published Papers at: Go to www.volzconsulting/resources.com

A/P Accruals for Release 12 and 11i Change Your Cost Methods Cost Management & Subledger Accounting Costing Tips and Tricks Discrete and Process Costing Integration EAM Costing Inventory Reconciliation Profit in Inventory Solutions Transaction Interfaces for Period Close And many, many more!

http://www.volzconsulting/resources.com



End of Presentation

oaug discrete mfg cost sub-committee presentation

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