r12.1 finpreupgradesetupopstips

Oracle E-Business Suite

R12.1 Financials Pre-Upgrade,

Setup and Operational Tips

An Oracle White Paper

Sep 2010

Oracle E-Business Suite R12.1 Financials Pre-Upgrade, Setup and Operational Tips




Product-Specific Considerations and Tips .......................................... 4

Payables ............................................................................................ 5

Overview ...................................................................................... 5

Pre-Upgrade Tips ......................................................................... 6

Setup Tips ..................................................................................... 6

Operational Tips ........................................................................... 6

Payments .......................................................................................... 8

Overview ...................................................................................... 8

Planning Considerations .............................................................. 8

Post-Upgrade Tips........................................................................ 8

Internet Expenses ............................................................................ 9

Overview ...................................................................................... 9

Planning Considerations .............................................................. 9

Pre-Upgrade Tips ......................................................................... 9

Post-Upgrade Tips.......................................................................10

Setup Tips ....................................................................................10

Receivables ......................................................................................10

Overview .....................................................................................10

Planning Considerations ............................................................. 11

Setup Tips .................................................................................... 11

Operational Tips .......................................................................... 11

Advanced Collections ..................................................................... 13

Overview ..................................................................................... 13


Assets............................................................................................... 13

Overview ..................................................................................... 13

Operational Tips .......................................................................... 14

Advanced Global Intercompany System ....................................... 14

Overview ..................................................................................... 14



Post-Upgrade Tips....................................................................... 14

General Ledger ................................................................................ 15

Overview ..................................................................................... 15

Setup Tips .................................................................................... 15

Operational Tips ..........................................................................16

Global Accounting Engine .............................................................. 17

Overview ..................................................................................... 17


Subledger Accounting .................................................................... 17

Overview ..................................................................................... 17


Operational Tips ..........................................................................18

E-Business Tax .................................................................................19

Overview .....................................................................................19

Planning Considerations ............................................................ 20

Post-Upgrade Tips...................................................................... 20

Setup Tips .................................................................................... 21

Troubleshooting Tips .................................................................. 21

Change Record ............................................................................... 23





PRODUCT-SPECIFIC CONSIDERATIONS AND TIPS

This document describes Release 12.1 Financials product-specific changes and

planning considerations. It also provides tips related to pre-upgrade, post-upgrade,

setup, operational, and troubleshooting activities. Many of the changes listed here

were first introduced in Release 12.0. You should use this document in conjunction

with the following documents:

• Planning Your Oracle E-Business Suite Upgrade from Release 11i to

Release 12.1 – Doc ID 987516.1

- Offers upgrade planning tips for the E-Business Suite.

• R12 Upgrade Considerations by Product: Financials – Doc ID 889733.1

- Provides planning considerations, process change, and configuration changes for the

R12.1 Financial products.

• R12.1 Financials Recommended Patches – Doc ID 954704.1

- Review this document for the latest Financials recommended patches released after the

R12.1.x EBS suite-wide release.

• R12.1 Oracle Financials Pre-Upgrade Patch, supplemental patch list for the

R12.1 EBS Consolidated Patch Update (CUP) - Doc ID 1127593.1

- The pre-upgrade patches listed in this document are crucial for

assuring a successful upgrade from 11i to R12.1.x.

This section is by no means a complete treatment of the Financials products or

features; it simply highlights information that you may wish to consider for

planning purposes.

For a complete discussion of Release 12 upgrade impacts to Financials products,

refer to the Oracle Financials and Oracle Procurement Functional Upgrade Guide:

Release 11i to Release 12. For a complete discussion of product-specific

implementation and operation, refer to the standard implementation and user


guides. All Release 12.1 documentation is available via the E-Business Suite Product

Information Center – refer to My Oracle Support Doc ID 806555.1.

Payables

Overview

Release 12 introduced Oracle Subledger Accounting, Oracle E-Business Tax,

Ledgers, Banks, and other common data model components that are used by

Oracle Payables.

The following Payables features are new as of Release 12:

• Suppliers are defined as Parties within the Oracle Trading Community

Architecture (TCA).

• Invoice Lines are introduced as an entity between the Invoice Header and

Invoice Distributions to better match the structure of invoice documents

and to improve the flow of information such as manufacturer, model and

serial number from Purchasing through to Assets.

• Banks, bank branches, and internal bank accounts are defined centrally

and are managed in Oracle Cash Management.

• Document sequencing of payments has moved to the Cash Management

bank account setup.

• A new module called Oracle Payments now handles payments and all

funds disbursement activities.

• Payment features controlled by Global Descriptive Flexfields (GDF) in prior

releases have been consolidated and migrated into the data models of

Oracle Payables, Oracle Payments, and Oracle Cash Management. The

architecture of this solution moves attributes from the GDFs, which are

now obsolete, to regular fields on the appropriate entity, including the

invoice, payment format and document, supplier site, and bank account.

Having a single code base as opposed to GDFs implemented per country

simplifies global implementations and streamlines transaction processing.

• Oracle Subledger Accounting, a new module in Release 12, handles

accounting definitions and all accounting setup associated with a Ledger.

In Release 12, Oracle General Ledger has replaced the term Sets of Books

with Ledgers. As part of this change, centralized accounting reports are

available to all applications. Additionally, Oracle Payables introduces a

new Trial Balance report.

• Oracle E-Business Tax, a new module in Release 12, manages transaction

tax setup associated with trading partners and tax authorities, as well as

transaction tax processing and reporting across the Oracle E-Business

Suite. Part of the architecture of this solution moves tax attributes from

Release 12 introduces

Oracle Subledger

Accounting, Oracle E-

Business Tax, Ledgers,

Banks, and other common

data model components

that are used by Oracle

Payables.


Global Descriptive Flexfields (GDFs), which are obsolete in Release 12, to

regular fields on the appropriate entities.

• A responsibility can be associated with multiple Operating Units using

Multiple Organization Access Control (MOAC). Due to this change, all

processing and some reporting in Oracle Payables are available across

Operating Units from a single applications responsibility. Hence you can

isolate your transaction data by operating unit for security and local level

compliance while still enabling shared service center processing.

Pre-Upgrade Tips

Just prior to the upgrade:

• Import all invoices from the Payables open interface.

• Confirm or cancel all Unconfirmed Payment batches.

• Run the Payables Accounting Health Check script (My Oracle Support Doc

ID 416699.1 to ensure that there are no inconsistencies in your 11i data.

Setup Tips

• Once you have set options for Automatic Offsets, do not change them.

Doing so would represent a major setup change that does not update past

transactions and would lead to accounting issues. A change in Automatic

Offsets should be considered as a project that includes full testing before

being implemented in your production system. Past transactions must be

cleared before such a change.

• When specifying the Open Balances Definition, include all code

combinations that need to be reconciled (accounts that can be attached at

the Invoice header level.) If automatic offsets are on, include the overlay

accounts that can be generated.

• When defining new bank accounts, ensure that cash clearing and cash

accounts have been provided at the bank accounts control level.

Operational Tips

Regular Activities

• Run the Invoice Validation program on a regular basis (at least daily) to

determine if there are invoices that are not getting validated. The best

practice is to schedule a concurrent request so that it runs daily at a time

when load is not high.

• Run the Create Accounting program on a regular basis (at least daily) to

identify invoices that are not getting accounted.

• When you make manual entries to the General Ledger, ensure that proper

descriptions are provided so that they can be tracked back as required

Run the Invoice Validation

program on a regular basis (at

least daily) to determine if there

are invoices that are not getting

validated. The best practice is to

schedule a concurrent request so

that it runs daily at a time when

load is not high.


• For U.S. implementations: Once you begin creating 1099 payment

information for 1099 suppliers, periodically review the information to

verify its accuracy and completeness. Payables provides three standard

reports to help you identify 1099 reporting exceptions:

o 1099 Supplier Exceptions Report - Review this report to identify

1099 supplier exceptions, for example: null, non-standard or

duplicate TIN. Correct any exceptions in the Suppliers form.

o 1099 Invoice Exceptions Report - Review this report to identify

and correct invoices without income tax types for 1099 suppliers,

1099 invoices for a non-1099 supplier, and 1099 invoices with null

or invalid income tax regions.

o Tax Information Verification Letter - Submit the Tax Information

Verification Letter report for each supplier, requesting name,

address, TIN, and type of organization.

Period Closing-related Activities

• Consider doing a mock closing at least 5 days before your actual close.

Check the exceptions report for any unusual activity, for example: Invoices

or Payments that should have been accounted but are still appearing in

the report, or Invoices that should have been validated but are still

appearing in the report.

Reconciliation-related Activities

• Ensure that accounts used as liability accounts, and that need

reconciliation, are not used for any other purpose. For example, such

accounts should not be used in any other Subledger and no manual entries

should be made against them. To ensure this, make these accounts

control accounts using a new feature of Release 12.

• Ensure that accounts used as liability accounts, and that need

reconciliation, are not used as accounts at the distribution level.

Otherwise, reconciliation will become difficult.

• After closing the periods in Payables and General Ledger, please run the

needed reports to balance within Payables. This would typically include

the Trial Balance, Posted Invoice Register, and Posted Payment Register

reports. You’ll also need to run the Account Analysis in General Ledger

and reconcile that to Payables. Ensure that a monthly reconciliation is

performed. Track any unexpected data.


Payments

Overview

In Release 12, the Oracle E-Business Suite introduced Oracle Payments, a

configurable, robust and centralized engine for disbursing and receiving payments.

In addition to new features, Oracle Payments offers functionality previously

released as Oracle iPayment, which becomes obsolete starting with Release 12.

Oracle Payments provides a new formatting solution based on standard XML

technology. In previous releases, payment formats were created using proprietary

Oracle reports technology. In Release 12, payment formats are created as

templates in Oracle BI Publisher, and are applied to XML data extracts produced by

Oracle Payments.

Planning Considerations

The Release 11i iPayments setup is migrated to the Release 12 Payments module.

All Release 12 payment formats are BI Publisher-based; therefore, the 11i payment

formats are obsolete. Oracle seeds payment formats in Release 12 corresponding

to those that were seeded in 11i.

You may need to configure the seeded payment formats using BI Publisher to

satisfy the requirements of your banking partners. This configuration involves

modifying the format files, and then sending them to your banking partners for

validation. You may need to repeat this process a few times before your format

files are validated, so ensure that you allocate enough time. For more information

on upgrading your Release 11i payment formats, see My Oracle Support Doc ID

549024.1.

Post-Upgrade Tips

• Dummy Funds Capture setup in Payments is required to perform

Automatic Receipts transactions in Receivables.

• In Release 11i, bank accounts were not centralized and customer bank

accounts were stored in Receivables tables. Oracle iPayment was

leveraged only for credit card transactions. The Receipt remittance is

done by a format program in Oracle Receivables. In Release 12, Oracle

Payments is required for remitting receipts since bank accounts are

centralized in Payments. Therefore, the minimal Payments setup (for

Payee, Payment System, Funds Capture Process Profile, and so on) is

required in Release 12 for the remittance of receipts.

• A user can create dummy Payments setup per the following My Oracle

Support articles:

o 471418.1 – Oracle Payments Setup for Funds Capture Processing

o 553614.1 – Funds Capture Setup for Credit Card Processing

In Release 12, the Oracle E-

Business Suite introduces Oracle

Payments, a configurable, robust

and centralized engine for

disbursing and receiving

payments.


Internet Expenses

Overview

Release 12 changes to Oracle Internet Expenses include:

• Itemization – Internet Expenses can represent the parent-child

relationship of an itemized expense line by creating a new parent line with

a unique identifier.

• Integration with Payments – Integration with Oracle Payments takes

advantage of encryption capabilities. Credit card transaction data has

been centralized in Payments’ secure payment data repository.

• Per Diem and Mileage – Per diem and mileage transaction data are not

migrated. However, per diem and mileage setup data is automatically

upgraded.

• Expense Reports – Expense Reports that were created prior to the upgrade

display information in a pre-Oracle Internet Expenses minipack (11i.OIE.K)

format. Newly created expense reports use the new user interface.

• Integration with Oracle E-Business Tax – The integration with Oracle E-

Business Tax has no direct tax upgrade impact. Tax lines run through

Oracle Payables.


Prior to the upgrade, it’s important to review your catalog data. A recommended

pre-upgrade procedure for identifying and fixing exceptions in your catalog data is

documented in the “Reducing Downtime” appendix of the Oracle Applications

Upgrade Guide: Release 11i to Release 12.0.x.

You should also remove duplicate suppliers and sites from your supplier data prior

to the upgrade to reduce the number of parties created in Trading Community

Architecture (TCA).

Consider implementing Multiple Organization Access Control (MOAC) for those

responsibilities that are new with Release 12 and designed to be MOAC, for

example, the supplier profile administrator for creating and managing suppliers.

Although the Release 11i per diem and mileage schedules are migrated to Release

12, detailed testing is recommended.

With Release 12, entering and viewing project information in Internet Expenses

changes. Be sure to address these changes in your user training.

Pre-Upgrade Tips

• Since the Expense Report Import program is obsolete in Release 12,

submit it just prior to the upgrade to ensure that all intercompany data in

Internet Expenses interface records is imported into Oracle Payables. Fix

any rejections and resubmit until all records are imported.


• In Release 12, the address for the Employee Supplier cannot be changed; it

is the address in HRMS that is used for making payments to employees.

Before you upgrade, make sure that the address for the Employee Supplier

is the same at the Supplier Site and in the HRMS application.

Post-Upgrade Tips

• In Release 12, tax is always marked as inclusive for the expense report

lines containing a Tax Code. When entering an expense report, a user

should enter an amount that is inclusive of the tax amount for the expense

line.

Setup Tips

• The Cost Center segment should be defined as an independent segment to

render the proper value for cost center on an Expense Report.

• To apply advances to an Expense Report, use one of the following

processes:

o If you would like the User / Auditor / Both to apply advances,

then set the profile option “OIE: Enable Advances” to End User /

Payables / Both.

o If you would like advances to be automatically applied while

exporting expense reports to Payables, then check the “Apply

Advances” checkbox at the Payables Options > Expense Report

tab.

Receivables

Overview

Release 12 changes to Oracle Receivables include:

• Integration with E-Business Tax – Release 12 introduces Oracle E-Business

Tax to manage tax across the E-Business Suite. During the upgrade,

system and customer options used to control tax calculation and tax code

defaulting are migrated from Oracle Receivables into Oracle E-Business

Tax entities.

• Integration with Subledger Accounting – Release 12 introduces Subledger

Accounting for managing accounting across Subledger transactions.

Receivables no longer creates any accounting entries. Existing Receivables

accounting options and setups remain, and they affect the generation of

accounting distributions in the Receivables data model.

• Centralized Banks and Bank Accounts Definitions – In Release 12, all

internal banks and bank accounts you previously defined for your

operations are migrated to central Cash Management entities.

Remittance bank accounts are owned by a legal entity rather than by an

operating unit. However, bank accounts you defined for your customers


are migrated from the Payables entities to the centralized Payments

entities. Oracle Payments centralizes and secures all payment instrument

data, including external bank accounts, credit cards, and debit cards.

• Integration with Payments for Funds Capture – Release 12 introduces

Oracle Payments, which is used by Oracle Receivables for processing funds

capture.


In Release 12, suppliers are modeled in the Trading Community Architecture (TCA),

and there is a new user interface for maintaining suppliers. Backward-compatible

Receivables views to customer and supplier tables no longer exist, so if you have

custom reports running against those views, plan to modify them to run against the

TCA tables.

Setup Tips

• Model your customer accounts and sites according to the best practices

recommended in the white paper, “Oracle Trading Community

Architecture: Modeling Customer and Prospect Data – TCA Best Practices”,

My Oracle Support Doc ID 164519.1.

• Submit the Create Accounting program in draft mode and review the

accounting before submitting in final mode and posting to the General

Ledger.

• Run the Create Accounting program on a regular basis (at least daily) to

identify invoices that are not getting accounted.

Operational Tips

Performance-related:

• To process large volumes, run multiple instances of the “Automatic

Receipts Creation Program (API)” program concurrently for all of the

Receipt Class/Payment Methods that have been set up.

• Leverage the “Remittance Parallelization” feature of Receivables to

improve the performance of the remittance program. You can schedule

multiple instances of the “Automatic Remittances Creation Program (API)”

program to run concurrently for as many remittance bank accounts as you

have.

• To process large volumes, run multiple instances of the Revenue

Recognition Master program, scheduling each instance by operating unit

and specifying the maximum number of workers per run. This will result in

launching multiple workers per scheduled instance.

• You can run multiple instances of the Late Charges program for specific

operating units. The number of parallel workers can be used to distribute


the processing load for the Late Charges program instance across multiple

jobs or workers, resulting in faster generation of your finance charges.

• You can run multiple instances of the Submit Accounting program by

Ledger and End Date combinations for which a unique set of accounting

events associated with Receivables distributions are selected.

Reconciliation-related:

• Perform the following pre-requisite steps before starting the Receivables

to General Ledger reconciliation:

• Ensure that the Create Accounting program in Receivables has successfully

completed.

• Review the Un-posted Items reports to confirm that all items are posted to

the General Ledger.

• Review the Posting Execution Report to check that journal entries

transferred from Receivables are successfully posted to the General

Ledger. Receivables automatically prints the Posting Execution Report

that displays a summary line for each currency within every category of

transaction that you transfer.

• The following steps are recommended for reconciliation of Receivables

with General Ledger:

• Run the Receivables Reconciliation Report as the first step in the

reconciliation process. It displays summary information consistent with

detailed registers and journal reports. It also displays transactional data in

an Activity column, and accounting data in a Journal column. If any

discrepancies exist, run the following reports for more details:

o Transaction Register versus Sales Journal

o Adjustment Register versus Adjustment Journal

o Applied Receipts Register versus Journal

o Unapplied and Unresolved Receipts Register versus Journal

o Invoice Exception Report

• Run the Potential Reconciling Items Report to view items that might have

accounting setup errors. This report suggests journal items that might

potentially post to General Ledger accounts with unexpected account

types, thus creating reconciliation issues in General Ledger. When a

potential reconciling item is an error, correct the individual transaction as

well as the incorrect setup to prevent future occurrences of the error.

• Run the Ageing - 7 Buckets - By Account OR the Ageing - 4 Buckets report

to view beginning and ending customer balances, and to compare with AR

Reconciliation Report balances.


• Run the Journal Entries Report after completing Create Accounting (Final

Accounting) to show the accounting data transferred to Subledger

Accounting. This should be matched with the AR Reconciliation Report to

ensure that Receivables versus Subledger Accounting reconciliation is

done.

• Run the AR to GL Reconciliation Report to ensure that there are no

differences.

o Run this report after transactions in Receivables are posted to

General Ledger and there are no unposted transactions per the

“Unposted Items” report.

o This report compares the account balances in Receivables to

those in General Ledger and highlights the journal sources where

discrepancies might exist.

Advanced Collections

Overview

The Collections Workbench module in Oracle Receivables is obsolete and is

replaced with comparable functionality in Oracle Advanced Collections. This

includes functionality relating to customer interactions and correspondence,

transaction processing, and dunning activities. With Release 12, additional features

such as scoring, collections strategies, enhanced payment and promise processing,

automated promise tracking, and automated collector work assignment are also

available.


Receivables users who have not purchased a license for Advanced Collections are

not authorized to use the full feature set of this product. The Receivables

Collections Workbench has been replaced with a limited version of Oracle

Advanced Collections for Oracle Receivables. Details on the collections features

available in Receivables and the features available in Oracle Advanced Collections

are provided in My Oracle Support Doc ID 389443.1.

Assets

Overview

In Release 12, Oracle Assets adds Subledger Accounting (SLA) functionality. By

default, transactions in the current fiscal year in Assets books will have their

accounting lines migrated to the Subledger Accounting model. Accounting for

current period depreciation will be upgraded only if depreciation has already run

for the period, and the period remains open. After the upgrade, you can run the

SLA post-upgrade process to update accounting for past transaction data as

needed.

The Collections Workbench

module in Oracle Receivables is

obsolete and is replaced with

comparable functionality in Oracle

Advanced Collections.


Operational Tips

• Important reports such as the transaction diagnostics report and

reconciliation reports should be run before closing the period to ensure

that the accounting entries are reviewed and verified.

• Whenever a Retirement or Reinstatement transaction occurs, the Calculate

Gain and Loss program should be run before the Create Accounting

program is run.

• If you are using multiple asset books that link to the same ledger, ensure

that the natural account segment value of the asset clearing account is

unique for each asset book.

• Once Group Asset Advanced Rules options are defined, you cannot change

them. Review group asset options carefully to determine which ones satisfy

your requirements for accounting and tracking of group and member

assets.

Advanced Global Intercompany System

Overview

The Oracle Advanced Global Intercompany System (AGIS) is a new module in

Release 12 that allows companies to streamline intercompany processing and

facilitates the reconciliation of intercompany transactions. It replaces the Global

Intercompany System (GIS) feature provided by General Ledger in Release 11i.


All GIS setup and transaction data are moved to the AGIS data model. It’s a good

idea to review existing 11i intercompany rules and update them as necessary

before the upgrade.

Post-Upgrade Tips

• The Intercompany accounts in GIS are upgraded to AGIS Intra-company

Balancing rules. Auto-Accounting rules in GIS are not upgraded, and need

to be set up as Account Derivation Rules and compiled with the

Transaction Account Builder in Subledger Accounting.

• Creating intercompany organizations in the AGIS module in Release 12 is a

mandatory setup for entering intercompany transactions. Release 11i

subsidiaries are replaced by Release 12 intercompany organizations. For

more information, see My Oracle Support

Doc ID 418649.1.


General Ledger

Overview

In Release 12, Oracle General Ledger is significantly enhanced to support multi-

national companies and shared services centers. These changes allow you to

maximize processing efficiencies while maintaining a high level of information and

setup security.

You can perform simultaneous accounting for multiple reporting requirements.

You can also gain processing efficiencies by setting up, accessing, and processing

data across multiple ledgers and legal entities from a single responsibility. In

addition, General Ledger definitions - such as Mass Allocations and Financial

Statement Generator (FSG) reports - can be more easily shared and secured across

your organization by allowing you to restrict certain users from viewing or updating

these definitions or from using them in processes.

Many global features that were previously available only in localized versions are

included in Release 12 of General Ledger.

Terminology Changes:

“Sets of books” is replaced by “ledgers”. All sets of books options are now called

ledger options. The upgrade retains all Release 11i settings.

“Multiple Reporting Currencies” (MRC) is replaced by “Reporting Currencies”.

Reporting sets of books are replaced by reporting currencies. Reporting sets of

books assigned to primary sets of books automatically upgrade to reporting

currencies that are assigned to a primary ledger. All conversion options for

Multiple Reporting Currencies are retained as part of the reporting currency

definition.

Setup Tips

• The currency in which you do your local statutory reporting (transaction

based, such as VAT or withholding tax, or accounting) must be the

currency of your primary ledger. Oracle supports local compliance by

having local currency as the Primary Ledger currency.

• Ensure that the date range for your calendar includes the 29th

day of

February in leap years. Check the calendar validation report before using

the calendar for setting up ledgers. You can change any of a period's

specifications, except for the period type, so long as the period has not

been used for transaction processing in General Ledger or in the

subledgers. You cannot change a calendar period that is open, closed,

future enterable, permanently closed, or is included in an open budget or

encumbrance year.

• To create a document using Web ADI, the functions

BNE_ADI_CREATE_DOCUMENT, BNE_CREATE_DOCUMENT must be added

to the menu.

In Release 12, Oracle General

Ledger is significantly enhanced to

support multi-national companies

and shared services centers.

These changes allow you to

maximize processing efficiencies

while maintaining a high level of

information and setup security.


• Do not freeze the journal source if you intend to correct journals from the

source during import into General Ledger.

• Do not freeze the journal source if you enabled it for auto-reversal.

• Ensure that you are assigning correct balancing segment values to ledgers

in the Accounting Setup Manager. Once you assign them, you can end-

date the assignment, but you cannot un-assign them.

• Ensure that you have defined a Tax Recoverable/Liability account for tax

rates that you plan to use in General Ledger. The system will generate a

tax line only if a Tax Recoverable/Liability account is defined for your

ledger for the tax rate in E-Business Tax.

• Refer to My Oracle Support Doc ID 367429.1 to resolve FSG performance

and formatting issues.

• Ensure that you disable the legal entity balancing segment value

assignment whenever you disable the legal entity.

• Ensure that the start date of an organization type is set to a valid date

before creating the operating unit in the Accounting Setup Manager.

• Ensure that you run the General Ledger Setup diagnostics test to validate

your overall setup of General Ledger.

Operational Tips

• Run the Segment Value Inheritance Program when changes are made to

the segment qualifiers for segment values of the chart of accounts.

• Before you consolidate your subsidiary ledger to a parent ledger for the

first time, and before you try to run translation from the consolidation

workbench, ensure that you have run translation on the subsidiary ledger

at least once.

• Set the status of the first accounting period in the new fiscal year to

“Future Entry”. Do not open the first period of the new fiscal year until all

of the year-end processing for the last period of the current year has

completed.

• Close the period in your subledgers before closing the period in General

Ledger. This will prevent subledgers from posting entries to a closed

period.

• If you are using a calendar with an adjusting period that represents the

last day of the fiscal year, close the current period and open the adjusting

period. Create and post adjusting entries and accruals in the adjusting

period.

• If Mass Allocation is not creating any journal entries, check for any invalid

or end-dated account combinations used in the Mass Allocation formula.


If yes, either enable the account combinations, or modify the Mass

Allocation formula to exclude them.

• Run the General Ledger Period Closing diagnostics test to verify that a

ledger period is ready to close.

Global Accounting Engine

Overview

In Release 12, Global Accounting Engine functionality is replaced by Oracle

Subledger Accounting, now standard for all feeders (Receivables, Payables, Assets,

Project Accounting.) Related to this change, all secondary and non-MRC posting

Sets of Books in Release 11i are upgraded to secondary ledgers in Release 12, with

automatic posting between the primary ledger and the secondary ledger.


It’s important that all statutory postings are up to date before you upgrade. It is

also important that dual posting from Payables and Receivables be tested

thoroughly.

Subledger Accounting

Overview

Oracle Subledger Accounting (SLA) provides a common accounting engine that

replaces the existing accounting processes in the different Subledger applications.

The SLA upgrade involves migrating existing accounting data between 11i and

Release 12 to ensure a continuous business operation. Depending upon your

business requirements, “existing accounting data” may have different implications.

For the purposes of this discussion, accounting data is defined as:

“All data that has accounting relevance for the customer, including journal entries,

balances, base transactions that have generated journal entries, and related

information, such as accounting events and setup information.”

While the default accounting continues to be stored in the Subledger applications,

the new SLA module is where the true accounting is held. SLA is a behind the

scenes module, largely transparent to end users except when they run the Create

Accounting program to create Subledger accounting entries and to transfer journal

entries.


The upgrade team should fully understand SLA functionality and closing processes,

which vary slightly by application.

Receivables’ and Project Accounting’s auto-accounting rules are migrated to

Release 12, where they are represented as default SLA rules. Run transactions

through to confirm that your auto-accounting rules are correctly reflected in the

SLA tables.

Oracle Subledger Accounting (SLA)

provides a common accounting

engine that replaces the existing

accounting processes in the

different Subledger applications.


Map custom reports, such as custom reconciliation reports, to the new SLA tables.

Upgrading Subledger Accounting Data

During the upgrade, existing accounting data from the subledgers is upgraded into

the new SLA data model. By default, the upgrade updates the data for the current

fiscal year, as well as the necessary periods of the previous fiscal year, to ensure

that at least six periods are included in the upgrade.

You can change the amount of historical accounting data to be upgraded to SLA as

a pre-upgrade step. For example, you can specify that a larger range of periods be

upgraded.

This is an important decision because some SLA functionality relies on the existence

of previous accounting data. For example, if you need to cancel invoices from two

years ago, then you need to upgrade at least two years of accounting data to SLA.

However, you have the flexibility to limit the amount of Subledger data you update

during the upgrade to reduce downtime and save on disk space. If you do not

update all of your accounting data during the upgrade downtime, you can perform

additional updating at a later point, either during daily business operations, or

during a subsequent downtime. Review the document called R12: FAQ for the SLA

Upgrade: SLA Pre-Upgrade, Post-Upgrade, and Hot Patch -- Doc ID 604893.1, for

more information about the SLA Pre-Upgrade, Post-Upgrade, and Hot Patch.

Operational Tips

Review the Period Close Subledger Exception Report

The General Ledger period can be closed even if there are exceptions in the

transfer of journals from Subledger Accounting. Review the Period Close Subledger

Exception report, which is started automatically when General Ledger’s “Close

Period” process is run, to get a clear view of any exceptions.

Run Create Accounting Daily for All Subledger Applications

The Create Accounting program processes eligible accounting events to create

Subledger journal entries based on application accounting definitions that are

created in the Accounting Methods Builder (AMB). Create Accounting should be

run for each Subledger application every day to avoid dealing with large volumes

and possible data exceptions at month’s end. If you deal with large volumes on a

daily basis, you can run the Create Accounting program more frequently, or you can

run it by category: for example, by receipts or invoices, and by date.

Also on a daily basis, review the Subledger exceptions report, and address any

exceptions, for example, invalid GL account code combinations (CCIDs.) Users may

want to develop a protocol for finding and handling such exceptions. For example,

all of the Subledger teams could meet with the General Ledger team to determine

roles and responsibilities for addressing any issues.


Make Account Code Changes with Care

On certain occasions, you may need to make segment changes that invalidate

account codes (CCIDs) that you have previously used. For example, when a cost

center moves from one line of business to another, you need to reflect the change

in your account code validation rules. In this circumstance, you run the segment

inheritance program to invalidate the CCID so that no new transactions can

reference it.

Different business models will dictate the extent to which account code changes

are made during a month. In general, however, it is a good practice to designate a

fixed day in each month when any necessary chart of accounts changes are made

and communicated. This should reduce the need to make ad hoc changes

throughout the month, and will result in a cleaner close cycle.

Maintain Account Code Consistency across Subledger Accounting and General

Ledger

We recommend that you adopt practices to maintain account code consistency

across all of your Subledger applications, as well as Subledger Accounting and

General Ledger. This is especially important if your business is subject to frequent

account code changes.

One way to maintain consistency is, for each of the subledgers, to run Create

Accounting on a regular basis (at least daily), and then immediately to run Transfer

to General Ledger so that there is no disabling of account codes before journal

import occurs. If Create Accounting and the Transfer to General Ledger always run

back to back, then the account codes used by SLA and General Ledger should be in

synch.

To address an account code disconnect between SLA and General Ledger, Release

12 provides a new feature in the “GL Accounts” form that allows you to replace an

invalid account code in Subledger Accounting data, which in turn allows General

Ledger to find a valid account code and for import to proceed without error.

Account replacement is also performed for non-Oracle journal sources during the

import process. However, since a retrospective fix to an account code can cause

Subledger application data to get of synch with Subledger Accounting and General

Ledger data, it is best to avoid the situation altogether by adopting practices for

maintaining account code consistency.

E-Business Tax

Overview

Oracle E-Business Tax provides the infrastructure for transaction tax knowledge

management and delivery using a global system architecture that is configurable

and scalable for adding country-specific tax content. As the single point solution

for managing transaction-based tax, Oracle E-Business Tax uniformly delivers tax

services to all E-Business Suite business flows through one application interface.

Oracle E-Business Tax consists of a tax knowledge base, a variety of tax services

Oracle E-Business Tax provides the

infrastructure for transaction tax

knowledge management and

delivery using a global system

architecture that is configurable

and scalable for adding country-

specific tax content.


that respond to specific tax events, a set of repositories (for tax content and tax

recording) that allows customers to manage their local tax compliance needs in a

proactive manner, as well as the ability to integrate with external tax providers

through a single integration point. In short, Oracle E-Business Tax is the global and

consistent compliance repository that encapsulates fiscal and tax rules in a single

point solution for tax events that is easy to integrate, extend and implement. E-

Business Tax replaces the following tax solutions available in 11i:

• Order to Cash – Global Tax Engine

• Procure to Pay – Automatic Tax Calculation

• General Ledger – General Ledger Automatic Tax Calculation


In Release 11i, tax setups were defined separately in various products. In Release

12, tax setup and calculation have been centralized. Your tax manager, who knows

your organization’s current and future tax needs, should be responsible for

configuring the tax setup.

During the upgrade, Release 11i tax setups are migrated to Release 12. While you

may not choose to utilize the new/advanced features of E-Business Tax

immediately after your upgrade, Oracle recommends that you familiarize your tax

users with the key E-Business Tax features and start taking advantage of them.

Test tax scenarios for all of your countries after the upgrade. In Payables, ensure

that you test your invoice sources (XML, iSupplier, flat file, and manual) to confirm

that each can automatically derive the correct tax regime-to-rate information.

Also, standardize your Release 11i customer and supplier tax setup before your

upgrade, as this will help to ensure that tax is derived correctly in Release 12.

Post-Upgrade Tips

• After the upgrade, you can still provide the tax codes in transactions and

also use defaulting hierarchies and tax groups in the same manner as you

did in Release 11i without changing your setup. Over time, you can

incrementally update your migrated tax data to gradually move from your

Release 11i tax code model to the E-Business Tax regime-to-rate and tax

rules model.

• Group constraints in Receivables are migrated as-is to E-Business Tax.

However, they are migrated as read only and cannot be modified. If you

want to add new conditions, you must use the new E-Business Tax rules

functionality to create rules (expert or guided) with all conditions.

• E-Business Tax provides users the flexibility to share a tax setup across

multiple Operating Units/Legal Entities, or to restrict it to a particular

Operating Unit/Legal Entity. You must decide which setup is appropriate

for your enterprise.


Setup Tips

• On a migrated instance, any new operating unit should be subscribed to

the relevant tax regimes if the subscription of the Legal Entity is not being

used.

• Depending on your business requirements, if you want tax to be calculated

based on tax codes (as in 11i), then you need to set up Configuration

Owner Tax Options for the newly-created operating unit and specify the

Regime Determination set as “STCC”.

• If the Configuration Owner tax option is not created or is not active for a

specific combination of application, event class, and first party Legal

Entity/Operating Unit, then the defaults are taken from seeded Event Class

settings.

• Whenever you add geography, run the “Geography Name Referencing”

program in TCA.

• You can run a transaction in the Tax Simulator to check your tax setup. The

Tax Simulator should be used after any change to your tax setup to test

multiple what-if scenarios without affecting the transaction database.

Troubleshooting Tips

Users may report E-Business Tax problems in the following categories:

• Taxes are not being calculated.

• Tax calculation is erroring out.

• Incorrect tax amounts are being calculated.

Avoid these E-Business Tax problems by following the general, offset tax, and

irreversible options setup tips below:

General:

• Check whether all the required setups are effective on the transaction

date.

• Check whether Tax Applicability is checked on the Configuration Owner

Tax Options for all Event Classes.

• In the Configuration Owner Tax Options, confirm that the Regime

Determination is:

• STCC

• Determine Applicable Regimes

• If Party Tax Profile is changed, ensure that the Tax Applicability flag is

checked.

• Ensure that by default or as a rule result, Tax is Applicable.


• Check whether the “Make Tax available for transactions” is enabled at

the Tax level.

• If the user has subscribed the Regime to a Legal Entity, then in the Party

Tax profile for the Operating Unit, the “Allow subscription of Legal Entity

flag” should be checked. This should be carefully done, as it is an

irreversible setting.

• Run the transaction in the Tax Simulator to obtain details of the

rules/defaults that are evaluated.

• Define all the required Tax Accounts based on your tax setup in the Tax

Rate to avoid errors during transactions.

• For any Recovery Rule to be evaluated, check whether users have

associated at least one Recovery Rate Rule in the “Rule Code of Recovery

Rate” field at the Tax Rate Level.

• Check that the Configuration Owner Tax Options for the Event Class allows

for tax exemptions to be considered.

• Check that you have completed the setup for all the required set up tasks

listed in the E-Business Tax Home Page.

• Use the available Diagnostic scripts to identify any tax setup issues.

Offset Tax and Self-Assessed Tax:

Self-Assessed tax is the Release 12 equivalent of Offset Tax in Release 11i.

However, for backward compatibility, Offset taxes can still be configured in Release

12. Depending upon your business requirements, you can decide which options to

choose:

• Check that “Allow Offset Taxes” is enabled in the Party Tax Profile for the

Offset Taxes.

• Check that “Allow Offset Tax Calculation” is enabled at the Configuration

Owner Tax Options for the Event Class for the Offset Taxes. Check Offset

Tax Basis also.

Irreversible Options:

Note that the following setup changes are irreversible:

• Inactivating the defaulting order in Application Tax Options – Once the

combination of operating unit and application defaulting order is

inactivated, you cannot reactivate the same. Carefully select the

appropriate tax determination method from Oracle E-Business Tax or Latin

Tax Engine.

• The “Use Subscription of the Legal Entity” box in the operating unit party

tax profile - This flag should be checked if the Regime is subscribed to the

Legal Entity.


• The “Make Tax available for transactions” option in the Tax, if enabled,

cannot be updated.

Change Record

Date Author Version Change Reference

09-Jun-2008

Anne Carlson 1.0 First published version

11-Jun-2008 Anne Carlson 1.1 Made Globalization edits under General Ledger and Global

Accounting Engine sections

17-May-2010 Anne Carlson Created Financials-specific excerpt for Chris Cianciolo to use as the

basis for Support Note containing R12.1 Financials Upgrade

Considerations

01-Jun-2010 Chris Cianciolo 1.2 Changed Title from Planning Your Oracle EBS Financials Upgrade

from 11i to R12.1 to Oracle EBS R12.1 Financials Pre-Upgrade, Setup

and Operational Tips

29-Sep-2010 Chris Cianciolo 1.3 Highlight the Financials Pre-Upgrade Patches listed in Doc 1127593.1

Author: Financials Product Development

Contributing Authors: Krithika Bhat, Bill Bounds, George Buzsaki, Robert Farrington, Cliff Godwin, Kevin Hudson, Mazen Khanfar, Adam Lief, Cheryl Ludwig, Amrita Mehrok, Nirajita Mitra, Anand

Naik, Ognjen Pavlovic, Victoria Pickard, Mike Quick, Vasu Rao, Nick Reichenbach, Kirsten Shaw, Nayyar Siddiqui, Murali Subramanian, Terrance Wampler, Mildred Wang

Document Owner: Chris Cianciolo

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