Introduction:
In the Oracle Fusion Apps, a line manager could handle the transactions of an intercompany with the real-time visibility of the native collaboration for resolving disputes. These types of transactions can create both receivables and payables transactions. Although these kinds of features are present in the Oracle EBS R12 for PeopleSoft and having R11.5.10 customers, the Generation of intercompany invoices was lacking for the manual transactions of the intercompany. Support for various balancing segments can also benefit when compared to the EBS, but we haven’t seen any user use this kind of feature in the future.
Intercompany Transactions in Oracle Fusion Applications: The typical job roles in the Oracle Fusion Applications required by the customer to operate on intercompany transactions are “Line Manager” and “Intercompany Accountant.”
The Line Manager’s role allows rejecting and approving transactions of an intercompany. Typically, companies give Line Managers access to the AGIS in order to enter the transactions of an intercompany. Companies that allow intercompany accountants to enter intercompany transactions can enter both sides of the transaction in the intercompany, hence the requirement for the next approval in the system.
Various features involved in Fusion:
Case 1:
Typical Pain Point: The Intercompany Accountant or GL Manager is required to ensure all the intercompany transactions are posted in the general ledger, hence if any of the transactions are in error, incomplete, or awaiting approval, he should be aware that he can facilitate the completion. Typically, it needs the user to search for the information on various pages and by running several queries.
Fusion Feature: Incompany Transactions are processing the work area.
Benefit of Fusion: It offers a consolidated view of intercompany transactions that require further action or immediate attention.
Case 2:
Typical Pain Point: Suppose an intercompany transaction involves various ledgers, the users must enter the transaction in the same period and for the same amount in both the receiving and initiating ledgers to make sure the intercompany transaction is balanced, and it will not lead to problems during the reconciliation.
Fusion: Intercompany Transaction Processing.
Benefit: Offers a highly automated solution of intercompany accounting that performs the required checks and balances to prevent balance entries. Also, the intercompany transactions can be recorded to the general ledger when all the transaction amounts of the trading partners balance and offset each other.
Enables the accounting department to monitor the intercompany activity throughout the company and proactively resolve the disruption during the critical period.
Case 3:
Typical Pain Point: All the parties to an intercompany transaction don’t agree to the amount.
Fusion: Approvals Manager integration.
Benefit: Very flexible approval rules could be configured in order to obtain the agreement of trading partners before the recorded transactions. Further, the workflow automated the process of intercompany approval by offering notifications about the approval status.
Case 4:
Typical Pain Point: Intercompany Accountant has a good volume of intercompany transactions in order to enter into the system.
Fusion: Spreadsheet integration to create the intercompany transactions.
Benefit: By entering the transactions in the spreadsheet interface in increasing customer productivity, all the excel functions like copy and paste are available according to your convenience.
Case 5:
Typical Pain Point: Sometimes, customers enter the wrong accountants for various types of intercompany transactions.
Fusion: Automatic Accounting.
Benefit: Offers generated accounts for intercompany transactions in order to minimize errors.
Case 6:
Typical Pain Point: Few countries need physical invoices to support the documentation of the intercompany transaction.
Fusion: Intercompany Invoices.
Benefit: Meets local statutory compliance needs for the physical invoices by generating receivables and payables invoices between the partners of intercompany trading.
Case 7:
Typical Pain Point: Financials, Projects, and SCM all have intercompany functionality, and customers had to set the same intercompany relationships and intercompany accounting in three various places previously.
Fusion: Centralized intercompany setup.
Benefit: Intercompany setup is centralized in Oracle Fusion, such that the users/customers have to perform the setup once. It also ensures that intercompany rules are consistently applied across many product families.
Case 8:
Typical Pain Point: Often, the customers/users want to cut off the additional intercompany transactions from entering towards the end of the accounting period.
Fusion: Intercompany period.
Benefit: It offers users the control and flexibility to define a cut-off for the intercompany transactions in a given period, even before the general ledger is closed.
Case 9:
Typical Pain Point: Users/customers could only balance intercompany by one segment of their chart accounts previously.
Fusion: Multiple balancing segments.
Benefit: Offers greater visibility into the financial information, enabling the balance sheets to be created by the cost department or center by supporting the balance by up to 3 segments.
Case 10:
Typical Pain Point: While a sub-ledger journal/transaction is out of balance, customers/users are willing to balance it before it is summarized with some other transactions and is imported to the general ledger.
Fusion: Transaction-level journal balancing.
Benefit: Accurately balances subledger journals/transactions at the level of the transaction.
Case 11:
Typical Pain Point: Users/customers have some difficulty isolating intercompany invoices in AP and AR for analysis and reporting purposes.
Fusion: Intercompany transactions’ simplified identification.
Benefit: Offer greater visibility into the financial data by making intercompany transactions.
Setup Data Required:
- Multiple legal entities are transacting across various primary ledgers. A few legal entities need intercompany invoices, but some don’t.
- Approval rules.
- Ledger balancing options and intercompany balancing rules defined.
- Internal supplier/customer relationship if generating the invoices of an intercompany.
- Define employee setup required for the contextual actions.
- An intercompany segment in accounts charts.
- Define TAB rules for defaulting the accounts onto the intercompany transactions.
Transaction Data Required:
- The work area of Intercompany Transactions Processing must include transactions in various statuses- approved, awaiting approval, incomplete, rejected, reversed, errors, import errors, etc.
- Intercompany transactions defined in the spreadsheet for the upload.
- Be sure to stage the information/data to adequately showcase all the benefits of the Intercompany Transaction Processing work area. While drilling down from the work area to the pages of other applications, also be sure each of the application pages has enough information/data for it to look full.
Intercompany Reconciliation:
Now, let’s know how an Intercompany Accountant reconciles intercompany account balances during the accounting period.
Given below, the job role needs to be allocated to the user/customer, “Intercompany Accountant.”
Pain/Feature/Benefit:
Type1:
Pain Point: User/customer sees the reconciliation issues between account balances in the report, but to resolve these types of issues, he is required to view all the supporting details.
Feature: Drill down from the account balances in the report to subledger and GL journals detail.
Benefit of Oracle Fusion Intercompany Feature: By accessing subledger details and supporting journals increase user/customer productivity through direct drill down.
Type 2:
Pain Point: Intercompany accountants should resolve discrepancies while the intercompany accounts are completely out of balance.
Feature: Intercompany account’s automatic reconciliation balances in the general ledger.
Benefit: Improving the efficiency of accounting departments by offering visibility into the balances of intercompany accounts.
Type 3:
Pain Point: Users are willing to see the reconciliation report that is formatted differently or includes other data/information not provided in the delivery format.
Feature: User-configurable report layout.
Benefit: Users can also change the report content or format without depending on the developers.
Type 4:
Pain Point: The user wants to analyze the information/data in the report by using the available functions in the spreadsheet.
Feature: Export the data to a spreadsheet and drill back in order to live the data in the system from the spreadsheet.
Benefit: By analyzing the report output in a spreadsheet, increase user productivity along with all the excel functions like sum, copy and paste, find, etc., that are available for your convenience.
Conclusion:
Hope this article helps you to know the complete details about the intercompany transactions in Oracle Fusion Applications. Still, if you have any queries, feel free to contact Gologica: 82969 60414.
