ERP OVERVIEW

What is ERP?

Enterprise Resource Planning or ERP is an industry term for integrated, multi-module application software packages that are designed to serve and support multiple business functions.
ERP provides the backbone for an enterprise-wide information system.
Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer.
At the core of this enterprise software is a central database which draws data from and feeds data into modular applications that operate on a common computing platform, thus standardizing business processes and data definitions into a unified environment.

Brief History of ERP

The focus of manufacturing systems in the 1960′s was on Inventory control. Most of the software packages then (usually customized) were designed to handle inventory based on traditional inventory concepts. In the 1970′s the focus shifted to MRP (Material Requirement Planning) systems that translated the Master Schedule built for the end items into time-phased net requirements for the sub-assemblies, components and raw materials planning and procurement.

In the 1980′s the concept of MRP-II (Manufacturing Resources Planning) evolved which was an extension of MRP to shop floor and Distribution management activities. In the early 1990′s, MRP-II was further extended to cover areas like Engineering, Finance, Human Resources, Projects Management etc i.e. the complete gamut of activities within any business enterprise. Hence, the term ERP (Enterprise Resource Planning) was coined.

Why is it Necessary?

By becoming the integrated information solution across the entire organization, ERP systems allow companies to better understand their business.
With ERP software, companies can standardize business processes and more easily enact best practices.
By creating more efficient processes, companies can concentrate their efforts on serving their customers and maximizing profit.

Market Leaders

The top five ERP vendors, SAP, Oracle Corporation, Peoplesoft, Inc. (now Oracle Corp.), JD Edwards & Company, and Baan International, account for 64 percent of total ERP market revenue. These vendors continue to play a major role in shaping the landscape of new target markets, with expanded product functionality, and higher penetration rates. SAP dominates the $6.7 billion ERP applications market in Europe with 39% market share. Oracle and PeopleSoft come second and third respectively, followed by SAGE Group and Microsoft Business Solutions.

Overview of popular ERP Products

Oracle E- Business Suite

Oracle E-Business Suite is the industry’s only complete and integrated set of enterprise applications, working together seamlessly to streamline every area of your business—from sales, service, and marketing, through financials and human resources, to supply chain and manufacturing.

Oracle E-Business Suite is your fastest path to high-quality enterprise intelligence, bringing your company a true 360-degree view of your finances, your customers, and your supply chains, so you can make faster, better decisions and grow profitability in a competitive marketplace.

Oracle E- Business Suite – Industry Applications

Oracle E-Business Suite 11i.10 offers over 2,100 new capabilities, half of which meet specific industry needs, including:

Financial Services: SOP documentation and auditing for compliance with Sarbanes-Oxley and other regulations

Healthcare: Medication administration, patient encounter-specific financial information, integrated patient care and operational intelligence

Manufacturing/High Technology: Option-dependent sourcing, automated spare parts return and repair processing, international drop shipments, distribution planning

SAP

What is SAP?

SAP (Systems, Applications, and Products in Data Processing) is the leading ERP (Enterprise Resource Planning) software package.
SAP was the first to integrate a corporation’s worldwide functions tightly into one application.
SAP R/2 was released as the first version of their software in 1979. Its domination of the market occurred during the 1980s, expanding first throughout Europe (early 1980s) and then North America (1988).
SAP R/3, an advanced, client-server based version of the popular R/2 product, was released in 1992 and sparked a stunning takeover of America’s largest businesses — 44% of US companies were using it within five years of its expansion.

In 1999, SAP introduced its newest major product upgrade. Named mySAP.com to emphasize its shift to an e- business focus, mySAP.com builds on the strengths of the SAP R/3 product in a fully Internet enabled architecture

SAP R/3 Overview

SAP R/3 is SAP’s integrated software solution for client/server and distributed open systems. SAP’s R/3 is the world’s most-used standard business software for client/server computing. The software is highly customizable using SAP’s proprietary programming language, ABAP/4.
R/3 is scalable and highly suited for many types and sizes of organizations. SAP R/3 is based on various hardware and software architectures, running on most types of UNIX, on Windows NT and OS/400. SAP R/3 runs on several databases Oracle, Adabas D, Informix, DB2 for UNIX, DB2/400, and Microsoft’s SQL Server 6.0.

mySAP ERP

mySAP ERP combines the world’s most complete, scalable, and effective software for enterprise resource planning (ERP) with a flexible, open technology platform that can leverage and integrate SAP and non-SAP systems. It provides end-to-end software functionality for enterprise management and support — plus support for systems management — all powered by the SAP NetWeaver platform.

mySAP ERP comes with four individual solutions that support key business processes:
mySAP ERP Financials
mySAP ERP Human Capital Management
mySAP ERP Operations
mySAP ERP Corporate Services

PeopleSoft

PeopleSoft Enterprise is a suite of best-in-class applications built on our Pure Internet Architecture and designed for the most complex business requirements. Ideally suited for large, company-wide functions across all industries, it provides industry-leading web services integration with multi-vendor and homegrown applications. PeopleSoft Enterprise can be easily configured and adapted to meet the most unique customer requirements. In addition, it supports the broadest choice of technology infrastructure in the industry.

Campus Solutions
Customer Relationship Management
Financial Management
Human Capital Management
Service Automation
Supply Chain Management
Enterprise Tools and Technology
Siebel

What Is Siebel?

Siebel Systems is an eBusiness solutions company and a market-leading provider of Customer Relationship Management (CRM) software.
Tom Siebel (CEO) and Pat House (Executive Vice President) founded Siebel Systems in July 1993. Headquartered in San Mateo, California.

Siebel’s initial product set out to organize and automate the sales force with calendars and contact management systems. It has since added numerous other Customer Service, Marketing and e-Commerce applications to its product line.

Siebel Product Overview

Siebel’s applications allow companies to access information about their customers whenever they need it. Siebel’s main product line includes its Call Center, Field Services and Sales, and Marketing applications, which allow employees located in different parts of a company to have access to the information they need to assist, service and make additional sales to customers.

Advantages of Oracle E-Business Suite

Oracle ERP Suite is based on Oracle Apps framework. What that essentially means to the customers is that no matter which component of the suite you buy, you get the same look and feel.

Oracle Database

The biggest USP of Oracle ERP is that it is based on Oracle Database, which in itself is a market leader. So the Oracle ERP is best placed to take advantage of the advances in the database technology. The buzzword is “If it is in the database, you will get it and get it fast!!”

Consultants

As far as the components of the suite itself are concerned Oracle Financials is a market leader, Oracle HRMS and Payroll they are catching up pretty fast. So the market indications are pretty positive and you have enough consultants in the market to cash in.

UI

Oracle Apps UI comes in two flavours – The Oracle Forms and the Oracle Self Service Application (HTML). The former is meant for the power user and provides incredibly quick learning curves for people from the finance and other domains who are used to Fox pro and dBase forms.

The Oracle Self Service Application is an HTML based solution and specifically caters to the global organization where Internet plays a major role.

Role Based Security

Oracle has been a pioneer in Database Security systems and the buzz word of Oracle Database is “Unbreakable”. Oracle Apps seem to gain from this legacy of secure systems. The role based security system offered by Oracle Apps is one of the better security models available currently.

Advantage over Best of Breed Software

Best of breed software cater to specific areas like HRMS, Financials etc. If your business is looking for software in only one specific area and you don’t think s/w for the other areas are required, you might be tempted to go for these offering… But one word of caution, in case you go for s/w for other areas where you select another best of breed s/w, you might end up paying exceptional amount of money in integrating the two softwares.

This is where Oracle Apps and other Suite vendors like SAP score over the best of the breed software. Implementing different parts of the suite would be much less costly than best of breed software and getting them to talk to each other.

Fast adoption of standards

By past record Oracle has a good record of adoption of new legal and technological standards which keep arising from time to time. So standards like Rosettanet, uccnet would be adopted as they solidify.

Ease of customization and installation

Oracle has a good record on supporting products. Oracle Apps are quite easy to install and customize according to your business needs.

Journal Entries-Accounts Payable Process

FREQUENTLY ASKED QUESTIONS IN ACCOUNTS PAYABLES

How many types of Invoices we can create in Oracle Payables?

A. Standard

B. Debit Memo

C. Credit Memo

D. Pre-Payment

E. Expense Report

F. Withholding Tax Invoice

G. Miscellaneous Invoice

Describe the 4-Way Matching?

2 – Way Matching: The Invoice Amount Should match with PO, (Invoice with PO)

3 – Way Matching: The Receipts Should match with Invoice, (Invoice, PO with Receipts)

4 – Way Match: The Goods Should match with Inspection/Accepted (Invoice, PO, Inspections & Receipts)

2-Way (Invoice to Purchase Order)

Quantity billed vs. quantity ordered on shipment line

Invoice unit price vs. purchase order line unit price

3-Way (Invoice to Purchase Order and Receipt)

2-Way match criteria AND

Quantity billed vs. quantity received

Item = Receipt Required

4-Way (Invoice to Purchase Order and Receipt and Inspection)

3-Way match criteria AND

Quantity billed vs. quantity accepted

Note: Quantity accepted = (Quantity received – quantity rejected)

Item = Inspection Required

How many Holds we have?

System Holds: Tax, Quantity Match, Po amount with Invoice Amount

Manual Holds: Invoice Limit, Hold on Invoice

Can you Release Manual Holds? If Yes, How?

Yes. Holds – Release Holds

How many ways you can pay the Invoice Amount?

Apply in Full

Schedule Payments

Installments

What is the difference between Debit and Credit Memo?

Debit Memo will raise the Customer

Credit Memo will raise the Vendor

Can you create a Duplicate Vendor ?

No

Vendor Number Should be Generate Automatic or Manually?

Both, Manual And Automatic

How many key flexfields are there in Payables?

No key flexfields in PO,AP

What are Payment Terms?

Payables uses payment terms to automatically calculate due dates, discount dates, and discount amounts for each invoice you enter. Payment terms will default from the supplier site. If you need to change the payment terms and the terms you want to use are not on the list of values, you can define additional terms in the Payment Terms window.

What are the Payment Methods available?

• Check – You can pay with a manual payment, a Quick payment, or in a payment batch.

• Clearing – Used for recording invoice payments to internal suppliers.

• Electronic – You generate an electronic payment file that you deliver to your bank to create payments. Use Electronic if the invoice will be paid using EFT or EDI.

• Wire – Used to manually record a wire transfer of funds between your bank and your supplier’s bank.

What are the line types of an Invoice?

Item: Item lines capture the details of the goods and services billed on your invoice.

Freight: Freight lines capture the details of your freight charges.

Miscellaneous: Miscellaneous lines capture the details of other charges on your invoices such as installation or service.

Tax: Payables integrates with Oracle E-Business Tax to automatically determine and calculate the applicable tax lines for your invoices.

What are the Invoice Distribution Types?

Item

Freight

Miscellaneous

Tax

Withholding

Prepayment

What are Holds in AP?

Holds can be placed by the system and some holds can be placed manually. Holds prevent payment and, sometimes, accounting of an invoice. Payables applies holds to invoices that fail the Invoice Validation process. Release holds from invoices to allow payment and accounting entry creation for the invoices.

What are the Interface Tables in AP?

AP_INVOICES_INTERFACE

AP_INVOICE_LINES_INTERFACE

AP_INTERFACE_CONTROLS

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AP_SUPPLIERS_INT

AP_SUPPLIER_SITES_INT

AP_SUP_SITE_CONTACT_INT

AP_SUPPLIER_INT_REJECTIONS

What is the API to cancel single AP Invoice?

AP_CANCEL_PKG.AP_CANCEL_SINGLE_INVOICE

What is the API to find invoice status?

AP_INVOICES_PKG.GET_APPROVAL_STATUS

Give some of the Oracle Payables interface?

a) Credit Card Transaction Interface

b) Invoice Import Interface

c) Payables Open Interface

d) Purchase Order Matching

What are the key tables where supplier bank information are stored?

IBY_EXTERNAL_PAYEES_ALL

IBY_EXTERNAL_PAYERS_ALL

IBY_EXT_BANK_ACCOUNTS

IBY_PMT_INSTR_USES_ALL

What is meant by with-holding tax invoice?

A separate tax invoice generated for withholding tax amount. Later this invoice will be knocked of when making the payment made to the authority.

What are all the Modules Interacting with AP?

Cash Management

Oracle iExpenses

General Ledger

Oracle Assets

Subledger Accounting (R12)

HRMS

Project Accounting

Purchasing/iprocurement

Global Accounting Engine (11i)

What are the mandatory setups in AP?

1- Financial Options

2- Define Suppliers

3- Define Payment Terms

4- Define Payment Methods

5- Define Banks and Banks Accounts And Banks Accounts Documents

6- Open AP Accounts Periods

What is pay date basis?

The Pay Date Basis for a supplier determines the pay date for a supplier’s invoices.

• Due

• Discount

What is the difference between quick payment and manual payment?

Quick Payment: It allows you to make a single payment against one or more invoices at a time to one supplier through payables.

Manual Payment: This is the process of entering the check details which has been paid manually in some emergency requirements into the payment form and selecting the invoices of the concerned supplier and check whether the total of the invoices and the paid amount at the header are same and save.

What is terms date basis?

Terms Date Basis is to calculate due date.

Due date is calculated 4way. Eg: payment term is 30days

• Due date = Sysdate + 30days
• Due date = Invoice date + 30days
• Due date = Goods Receive Date + 30days
• Due date = Invoice Received date + 30days

How you will transfer payables to general ledger?

When the payable accounting entries are created, then run the program called ‘Payables Transfer to GL’ Program, which sends the invoice entries and payable entries to GL interface. Then submit a request called Journal import to import journal entries to GL.

What are Aging Periods?

Aging periods are nothing but the periods that we setup to control and maintain the supplier outstanding bill towards the invoice. From this we can able to study the due date of the supplier form the generation of invoice.

What is a “Mixed” Invoice and how do I enter one?

Mixed Invoices are invoices or credit/debit memos for which you can perform both positive and negative matching to purchase orders and to other invoices.

For example, you can enter an invoice for -$100 with Invoice Type Mixed. You can match to an invoice for $-200, and match to a purchase order for $100.

To enter a Mixed invoice:

1. Enter the invoice or credit/debit memo in the Invoices Summary, and enter Mixed as the invoice Type. You can enter either a positive or negative invoice amount.

2. Match to purchase orders, and/or invoices.