The integration process between Oracle Payroll and Subledger accounting engine

1. Oracle Payroll - Sub Ledger Accounting Integration - An Oracle White
Paper
CONTENTS
Title Pg.No.
1. Oracle Subledger Accounting – Overview …………………………………………….. 1
2. Architecture ……………………………………………………………………………. 1
3. A Comparison between 11i and R12 …………………………………………………... 3
4. Payroll Basic Setups……………………………………………………………………. 4
5. Steps involved in setting up Subledger Accounting for Payroll ……………………….. 6
Setting Up Journal Line Definitions ……………………………………… 6
Application Account Definitions …………..…………………………… 11
Sub-Ledger Accounting Method ………………………...……………… 12
6. Creating Ledger …………………………………………………………….………… 13
7. Processes to complete ……………………………………………………….…………14
Transfer to SLA ………………………………………………….……… 14
Create Accounting ……………………………………………….……… 15
8. Tables involved ……………………………………………………………….……… 16

2. Oracle Subledger Accounting
Overview:
Oracle Subledger Accounting is a new product released in R12. Oracle Subledger Accounting enables
corporations to comply with corporate, local and managerial accounting and audit requirements via
increased control, visibility and efficiency.
Oracle Subledger Accounting streamlines the Books closure by providing a common posting engine, so
that all subledger products and non-Oracle products can transfer controlled and summarized data to the
General Ledger using a standard methodology and auditable, reviewable process. By storing journal
entries in a common data model, Oracle Subledger Accounting constitutes a single source of truth for
all accounting, reconciliation and analytical reporting.
Architecture:
The UI and architecture is now common across all the modules. SLA owns the framework and
execution mechanism.
Subledgers own the rules that determine how and what accounting is created.
2
SLA
Transactions
Accounting
Events
Subledger Application
Accounting
Configurations
Journal Entry
Setup
Accounting
Program
Subledger
Balances
Subledger
Journal Entries
GL
Journal
Entries

3. A Comparison between 11i and R12:
11i User Interaction
R12 User Interaction
3
END USER
Perform a
transaction
END USER
Costing/
transfer to GL
END USER
Post in GL
Import to
Journal
END
USER
Accounting event
created
Create accounting,
transfer, and import
into GL
END USER END USER
Post in GL
Enter/validate/
approve
transaction
Perform a transaction
END USER
SLA Setup Transaction
Data Accounting Event

4. Payroll Basic Setups for SLA:
Cost Allocation Flexfield at Business Group level:
4

5. Cost Allocation Key Flex field:
5

6. Steps involved in setting up Subledger Accounting for Payroll
Setting up SLA for payroll involves the following three mandatory steps:
1. Journal Line Definitions
2. Application Accounting Definition
3. Subledger Accounting Method
Setting Up Journal Line Definitions
Journal Line Definitions can be entered for the following Events:
i. Costs - Payroll Costs
ii. Payment Costs – This is the paid expenditure that needs to be moved to GL.
iii. Estimate Costs – This is used when the GL books are to be closed and hence the
costs are estimated for the remaining periods.
iv. Estimate Costs Reversal – Reversal of the estimated costs at the end of the year.
a. Creating Journal Line Types:
Considering the Payroll Costs to be transferred to GL using SLA, query the seeded
‘Credit Cost’ Line type and make a copy of it. Ensure that the ‘Chart of Accounts’ is
provided:
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7. Similarly create a Journal Line Type for the Debit Cost entry by copying the seeded ‘Debit
Cost’ Line type.
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8. b. Creating Account Derivation Rules:
Account Derivation Rules can either be created for all the segments at the flexfield level or at
individual segment levels.
This can be achieved by selecting the appropriate output choices as shown below:
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9. Click on the Conditions button to enter the conditions for which the Rule is applicable:
c. Creating Journal Line Definitions
Journal Line Definitions defines how the Journal Line Entries should appear when the
data are moved to GL.
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10. In Line Assignments region, select the debit and credit lines based on the event selected
earlier. i.e Credit Cost Line, Credit Payment Cost Line, etc.
These Journal Line Types cannot be edited but their definitions can be viewed, by clicking on
the ‘Line Type’ button. Line Description is only for a descriptive purpose.
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11. Application Accounting Definitions:
Subledger accounting definitions are the rules governing the accounting representation of a legal
entity’s accounting events and associated transaction data. Accounting definitions determine how
an accounting event’s amounts and associated transaction data are transformed into subledger, and
subsequently into general ledger, accounting entries.
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12. Sub-Ledger Accounting Method:
An accounting method is the composite of accounting definitions for all products used by an
organization. Each Ledger must use an accounting method to determine how to account for sub-
ledger transactions. Because Ledgers are set up for specific reporting purposes, each Ledger may
require a different accounting method.
The sub-ledger accounting method is the accumulation of all product accounting definitions. With
each product accounting definition, the user can decide whether to create an accounting entry
when invoices are approved/completed or when they are paid.
The sub-ledger accounting method is a cross product set of product accounting definitions which
determine how accounting events will be processed by the accounting program to create sub-
ledger accounting entries. The sub-ledger accounting method is assigned to a legal entity and
ledger.
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13. Create Ledger
The next step is to create a General Ledger and attach it to the above-created Sub Ledger
Accounting Methods
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14. Attach the Subledger Accounting Method that was created earlier in the ‘Subledger
Accounting’ region.
Processes to complete
This completes the mandatory Subledger Accounting setup for payroll. The following
processes needs to be run in the given order:
1. Payroll
2. Pre-payments
3. Costing
4. Transfer to SLA. This needs to be run from the HRMS responsibility.
5. Create Accounting. This process needs to be submitted from Global / Payroll
6. Based on the options provided in ‘Create Accounting’, the next process,
‘Transfer to GL’ may or may not be run.
Transfer to SLA
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15. Create Accounting
Mode:
The mode determines how the sub-ledger entries are created. Test entries may not be transferred to
the General Ledger. They are used to validate setups. Draft entries cannot be transferred to the GL.
They are used to preview (find out) the accounting for the sub-ledger entries. Final entries are
transferred to the GL, may not be changed, and are used for reporting.
This minimizes the need for correcting journal entries and facilitates a clean audit.
Errors Only:
Users can resubmit a request to create accounting and specify that they would like to only process
entries that have previously had errors.
Report:
This allows users the ability to determine whether the report of the results of the accounting
program launch displays the details for the entries successfully accounted. Errors are always
printed in detail.
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16. Transfer and Post to GL:
Users may have corporate policies that establish consistent methods for creating sub and general
ledger entries. Allowing them the ability to predefine whether the GL transfer, import and posting
should occur automatically when the accounting program is launched will facilitate utilization of a
consistent procedure.
Providing this option saves users the time of submitting separate requests for the transfer, import
and posting of GL entries. If a user determines that they do not want to complete the transfer and
post to the GL when they launch the accounting program, they may re-launch the program at a
later date to complete these processors.
Tables involved
Table Name Description
XLA_EVENTS Event_id will be generated when the event is
triggered. The entity_id will be the foreign key
for XLA_TRANSACTION_ENTITIES table.
XLA_TRANSACTION_ENTITIES The column, ‘Transaction_Number’ and
‘Source_id_int_1’ stores the
assignment_action_id of the ‘Transfer to SLA’
process.
The column, ‘Ledger_id’ stores the Ledger id to
which the Subledger Accounting Method is
associated.
XLA_DISTRIBUTION_LINKS Stores the link between transactions and
subledger journal entry lines.
XLA_AE_HEADERS Stores subledger journal entries
XLA_AE_LINES Stores the subledger journal entry lines.
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