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New Intercompany features in R12

Posted on November 22, 2007 by David Haimes

R12 introduces the new product Advanced Global Intercompany System (AGIS), which takes forward the features provided by GIS in 11i GL and adds a number of important new capabilities. The major new capabilities are:

  • Creation of Documentation (ie. Payables and Receivables Invoices) for AGIS transactions
  • Web ADI Integration to facilitate uploading transactions from Excel
  • One Sender to many receivers in the same transaction batch (the receivers can be in different ledgers, with different chart of accounts, currencies, periods etc)
  • Integration with Oracle Approvals Manager for fully flexible approval rules with no coding
  • Introduction of Intercompany Periods, which can be opened and closed by AGIS transaction type
  • New user grants based security so many subsidiaries can be accessed from the same responsibility
  • Online Reconciliation reporting tool, allows drilldown from account balances to the transactions. Uses XML Publisher to provide export to Excel and customization of outputs

The Intercompany balancing feature in GL is now under the AGIS product and has some new features

  • Define Intercompany Payables and receivabls accounts by Legal Entity
  • Define separate Payables and Receivables accounts for each direction of Intercompany trading relationships
  • Intercompany Balancing performed in the subledger when transactions are accounted by SLA

An important point to note is that although we add a lot of new features any GIS set up you have in 11i will be upgraded and you can keep running as in 11i and start taking advntage f the new features if and when you are ready and it makes sense to you.

In future posts I can get into the detail of how some of these new features work and are set up and who may want so use them and why.

Possibly related posts: (automatically generated)

Filed under: AGIS, Intercompany, Oracle Intercompany | Tagged: , , , , ,

« Oracle Intercompany is FUN Cleaning Out My Closet »

18 Responses to “New Intercompany features in R12”

  1. Leslie, on December 4th, 2007 at 3:06 pm Said:

    Hi David,

    I have a question on your first bullet point (Creation of Documentation (ie. Payables and Receivables Invoices) for AGIS transactions).

    In R12, can these invoices be printed when we enter an I/C transaction in AGIS as physical back-up (as some countries require this)? Is this what you mean my “documentation”?

    If so, what is this invoice/report called in R12 and where would it be available (e.g. AGIS)?

    Thank you for your help!
    Leslie

  2. davidhaimes, on December 4th, 2007 at 7:53 pm Said:

    We create ‘real’ invoices in the receivables payables applications of the sender and receiver.

    So the receiver who needs a hard copy can do an invoice print form their own payables - which should satisfy the legal requirement as it will have all the appropriate tax registration numbers on it etc. I would imagine this is the best solution.

    If they want they can ask the sender to print the invoice from their receivables system, or they could use iReceivables to print the invoice off themselves form there.

  3. Leslie, on December 5th, 2007 at 11:02 am Said:

    Hi David,

    Let me make sure I understand. So an invoice is created in the receiver’s AP and sender’s AR? A hard copy would need to be printed from sender’s AR then as there’s no invoice print in AP. Isn’t that right? If this is the case, then wouldn’t you be double-booking your journal entries (one from AGIS to GL and another from AP/AR to GL)?

    Thanks again!
    Leslie

  4. Leslie, on December 5th, 2007 at 11:04 am Said:

    Hi David,

    Another question on R12 AGIS..

    There’s an enhancement request (bug #4260174) which basically requests that users be able to manually enter a foreign currency exchange rate (ie, “User” rate type) in intercompany transactions in GIS. I see a note in the R12 AGIS documentation that user rate is still not possible.

    What is the reason behind not allowing users to manually enter rates in GIS? Any future direction on this?

    Thanks!
    Leslie

  5. davidhaimes, on December 5th, 2007 at 11:19 am Said:

    This is a good idea for a future post/posts.

    It is a contentious issue, there could be a compliance issue there - am I trying to keep more profits in my LE as it is low tax, so I use the correct transfer price but inflate the profit with the exchange rate. You also will give yourself problems when you consolidate balances as the rates don’t triangulate. The other problem is I put a rate on that you don’t like so you reject it and that slows the whole process down.

    I would like some detailed business cases for doing this - contact me directly if you prefer. We can discuss with some of our domain experts as so far our feeling has been it is not something we want to open up, but no final decision has been made.

  6. davidhaimes, on December 5th, 2007 at 11:29 am Said:

    I wasn’t aware there was no invoice print in AR, but you may find a screen print is sufficient as long as contains all the items requires, tax ID, invoice number etc. Or yes you may need to do an AR invoice print.

    Maybe invoice print is an ER for AP :)

    regarding double booking this does not happen. It goes from AGIS either to GL or to AR/AP, but never both.

    Thanks
    David

  7. Leslie, on December 5th, 2007 at 1:03 pm Said:

    Hi David,

    Thanks.

    In terms of currency, the scenario could be that one company funds another company resulting in IC transactions. These transactions should be entered in the exchange rate that was used to fund the other company to accurately reflect the rate that was used to clear the bank. So users would need to enter this transaction in GIS using the exchange rate that was used for funding..

    Any idea how this can be handled?
    Thanks again!!

  8. davidhaimes, on December 5th, 2007 at 3:40 pm Said:

    To clarify your example are you saying - I loan them 1,000 EUR from my USD bank account and so have a cleared rate from the bank on that ? I send an IC trx to them in EUR and want to add the bank rate on that?

    What if my ledger currency is say CAD, what rate do I use then?

  9. Leslie, on December 5th, 2007 at 6:03 pm Said:

    Ledger currency = USD
    Send 1,000 EUR from my USD bank account to an entity that’s in EUR ledger currency

    I want to enter this IC trx in GIS in EUR and manually enter the exchange rate that was used for this transfer (the rate that was used to clear the bank account).

  10. davidhaimes, on December 5th, 2007 at 9:04 pm Said:

    For your example - I would create the AGIS transaction in USD for whatever USD cost I incurred.

    Doing it in EUR with a user rate raises tough questions:

    So I am the recipient in the UK and my ledger currency is GBP, what rate do I use?

    Consolidation will become a problem, my GBP is consolidated first to EUR with all of EMEA and then that EUR is consolidated to USD for group reporting. How do I get the rates to make sure when my GBP amount finally gets to USD it equals your USD amount?

  11. What Exchange Rate to use for Intercompany « David Haimes Oracle Intercompany Financials Blog, on December 6th, 2007 at 10:00 pm Said:

    [...] Rate to use for Intercompany Posted on December 6, 2007 by davidhaimes Leslie posted some excellent comments, which touched on the exchange rates to use on intercompany transactions, a very interesting and [...]

  12. Leslie, on December 11th, 2007 at 8:41 am Said:

    Hi David,

    What if you only have two currencies involved in the transaction?

    Also, I read that in R12 Cash Management, you can do bank account transfers between legal entities (IC transaction) which would then create a payment request in AP. How would the system handle currency rates if there are three currencies involved in this scenario?

    I also read that you can create legal entity exceptions in R12 since the system assumes that a legal entity has a relationship with all other entities. With this exception, does that mean I won’t be able to enter an IC transaction with a legal entity listed as an exception? In other words, there’s a system restriction on who I can enter IC transactions with? This would be nice since there is no such functionality in 11.5.9.

    Thanks!

  13. Alessandro, on December 19th, 2007 at 7:18 am Said:

    Hi David,

    Do you know the differences between the reconciliation process between Oracle GIS and Cartesis Intercompany Server (now Business Objects Finance)?

    Is it possible to use Oracle GIS as a standalone solution to enhance the intercompany reconciliation process in order to achieve a fast closing process?

    Thanks,
    Alessandro

  14. davidhaimes, on December 19th, 2007 at 9:57 am Said:

    Alessandro,

    I have seen GIS used as a central Intercompay ‘hub’ and AGIS is R12 could also be used in that way.

    GIS has been set up on it’s own instance and the journal lines it pushes to GL_INTERFACE are then routed to the appropriate Oracle or potentially non-Oracle system.

    AGIS uses a workflow and business event architecture, which makes implementing is as an Interompany hub should be much easier as the integration points are increased.

  15. Anjana, on January 21st, 2008 at 11:27 am Said:

    Can you give some insights on how Tax will be handled in case of AGIS Invoicing. For example if there is an AGIS transaction between two LE’s following different Tax - US and Canada.

  16. David Haimes, on January 21st, 2008 at 7:43 pm Said:

    The new eTax product is used for tax calculation on the invoices. It can easily handle goods or services provided in the US to a trading partner in Canada.

  17. How do I define my Legal Entities? « David Haimes Oracle Intercompany Financials Blog, on February 13th, 2008 at 4:28 pm Said:

    [...] stamped with an owning (first party) Legal Entity and that will be used to drive tax, accounting, intercompany and Legal [...]

  18. AGIS Out of the Box « David Haimes Oracle Intercompany Financials Blog, on March 24th, 2008 at 12:05 pm Said:

    [...] designing AGIS for R12 we tried to minimize the time it would take to get started entering transactions in an initiative [...]

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