FSAH and AGIS Intercompany Implementation thoughts

Written by David Haimes

As Intercompany transactions are very likely to cross systems they are a good candidate for integration in a ‘Hub’ of some sort.

In R12 the Financials Services Accounting Hub (FSAH) allows integration of third party systems to Oracle and is incredibly powerful and flexible.

Let’s use a simple example:

Company A and B both use two different Ledgers. A Sales Invoice is issued by Company A (to Company B) for $5,000

The accounting needs to be created as below, they need to be booked with the same accounting date in the same period.

In Company A

Debit Intercompany AR $5,000
Credit Intercompany sales $5,000

In Company B

Debit Expense or inventory (per content), $5,000
Credit Intercompany AP, $5,000

So there’s a number of options that come to mind (in no particular order).

1) Using Oracle Accounting Hub you can account for transactions form third party systems, it uses the Subledger accounting engine to process accounting events defined for the third party system. If your invoice systems are third party applications, you could create 2 events (one for each company/ledger/party to the transaction) for the sales invoice and get the full accounting out of the single system integration.

2) Enter these transactions in AGIS, the specific accounting will be entered/generated and approvals from company A and B obtained before AGIS either books it direct to GL or generates the Invoice for company A and B if required.

3) It may not be ideal to force users to navigate to a different screen (or change some import process, EDI, XML feed etc) to issue Intercompany invoices from other invoices as in 2) above. So continue to enter in your regular sales invoice system but run a process which detects an invoice is Intercompany and cancels it, then generates a transaction for it in AGIS (via the Open Interfaces) or FSAH.

I don’t think any one of these is right for all situations, detailed analysis of the particular implementation environment and requirements needs to be done to figure out the best approach. If you have any thoughts, better suggestions or experience then please share them in the comments.

Author: David Haimes

I'm Senior Director in the Oracle Research and Development Organization, with close to 20 years working in various roles on the development of the Financial Management product suite.  Since the summer of 2016 my focus is exclusively on working with customers and longer-term design work, particularly around next-generation functional and technical architecture. My task is to figure out NOW what the financial management system of the next 3, 5 or more years should look like and start working toward it.  At the moment the majority of my time is spent working on Blockchain or Distributed Ledger Technologies (DLT), leading the effort for all of SaaS applications.  I'm also interested in AI, Machine Learning and new UX and interaction paradigms such as chat bots. I started out in Oracle UK and found my way out to Oracle's Redwood Shores, California HQ in May 2000.  My previous role was product owner for Fusion Accounting Hub, General Ledger, Intercompany and Legal Entity products in Oracle Fusion Financials and eBusiness Suite General Ledger. I have also worked on EMEA Globalizations, Federal and Public Sector Financials, XML Payments and a variety of projects on other products down the years.

11 thoughts on “FSAH and AGIS Intercompany Implementation thoughts”

  1. Hi David,

    At the FSAH implementation I’m currently working on we plan on adding intercompany logic to our FSAH create event procedure. So if we detect that an event requires intercompany to be generated we duplicate the original event and stamp this additional event with the counterparty’s ledger_id. To generate balancing journal lines with the appropriate account / intercompany segment values we use the seeded SLA/FSAH functionality (let SLA do what SLA does best). So this is your option 1.

    Regarding the other possibilities: personally I don’t like the idea of AGIS generating accounting directly in GL because that accounting would be missing from my FSAH/SLA accounting repository. I’m thinking here of the scenario where SLA is being used in the way I think it should be used: as the single source of truth / detailed accounting repository in combination with a thin ledger.

    This is also the main reason why we choose option 1: SLA is our detailed (full) accounting repository so we can feed multiple GL systems and a datawarehouse from FSAH. If you let AGIS generate intercompany accounting then I would only have these entries in my Oracle GL and I would need to either feed them back to the FSAH/SLA accounting repository or feed them from Oracle GL to my other GL’s and datawarehouse. That sounds a bit messy…

    Another reason we choose option 1 is because in this specific implementation we’re not integrating FSAH with EBS GL. So in fact we didn’t have the option to use AGIS in the first place, but even if we did we still would have picked option 1 for the reason stated above.

    I think in the future product AGIS should be allowed to kick in as part of SLA’s Create Accounting program. That way we can add the accounting generated by AGIS directly in the XLA tables thus making them part of the SLA accounting repository.

    Regards,
    Sven

    p.s. there’s a small typo in your title and it’s leaking through to all RSS feeds! ;-)

    Like

    1. hi Sven,

      We also trying to implement the same functionality for one of our client…can you please send me the process you mentioned as the 1 option (through FSAH and SAL) in a bit detail. You can send me directly to my mail id ‘anindya2003@gmail.com’.

      Thanks in advance,
      Anindya

      Like

  2. Hello,

    just wanted know if it is necessary to set up the Intercompany Flexfield Qualifier to be able to do Inter transactions

    Like

  3. Hello David,

    I am facing a problem with customer supplier association in AGIS set up. In fact, for the customer side, its ok, but when the recipient tries approve, an error msg pops up, “Transaction Requires Invoice And A Supplier Association Does Not Exist”. But i have set up an association and the dates are also correct. Can you please help me out urgently please about the customer supplier relation.

    Thnaks

    Like

  4. David
    I have set up AGIS and have transactions flowing through creating invoices in AR/AP and transactions in GL. I have a number of SR’s with Oracle to fix problems with AGIS but have workarounds for most of those. The issues I have which I hope you can help me with are:
    1. I cannot find how to access the SLA. The user guide says SLA responsibility but I cannot find one.
    2. I now have the batch reference in AR. Is there a field to hold this in AP and GL
    3. Can I use AME to reach out to approvers not set up in AGIS i.e. cost centre managers. Is this difficult to set up
    4. The business I am currently working for want to create a settlement transaction type and process settlements via this rather than payment in AP or receipt in AR. What are your thoughts on this?

    Thanks

    Like

  5. Hi,
    I understand that we can copy the Application Accounting Definition with Journal related set up, account derivation rules, mapping set’s through standard export concurrent program. Can anybody please guide me whether a similar concurrent program or script is available for copying Event Model from instance to instance or within the instance.

    Thanks for your help.

    Regards

    Manas

    Like

  6. Multiple dollar amount (for sub accounting event) scenario for single event .

    Following is the business case –

    Event = Withdrawal

    Gross Amount $500 Debit Expense

    Federal Withholding Tax $50 Credit FTX Liability

    State Withholding Tax $40 Credit STX Liability

    Net Amount $410 Credit Suspense

    The issue is how to relate the specific dollar amounts to the particular journal when all four “records” are related to the same event. I mean event model is set up at the withdrawal level.

    I thought about to options to resolve this issue –

    Option 1 – Event model need to set up at the granular level what is deriving the accounting so in this case Event Class should be set up at Federal Withholding tax etc level and source system or IAS transformation should pass individual rows for each entry with the granular level accounting event description

    Option 2 – Event class will set up at ‘Withdrawal’. Source/ IAS will send the individual entry for the above cases with ‘Withdrawal’ event not with the granular accounting event. But each row will have a granular level accounting event identifier. By using that column we will create mapping set through which right granular level of accounting will be derived when needed.

    Please provide comments and guidance.

    Thanks and Regards

    Manas

    Like

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