Objective:
This training article is intended to discuss basics of Oracle Financial Accounting Hub. It is to be noted that Financial Services Accounting Hub (FSAH) is now called as Financials Accounting Hub (FAH). This article gives an overview on FAH and in what aspect FAH differs from SLA. In subsequent article we will discuss in detail the benefits of FAH.
What is Financial Accounting Hub
The Financials Accounting Hub (FAH) is a tool designed for non-Oracle Subledgers (Third Party) to leverage Oracle's Subledger Accounting engine and ultimately transfer the Journals to an Oracle General Ledger. The Financials Accounting Hub uses accounting events to generate journals. Accounting Events have financial impact. Using this tool implementers determine how the events should be accounted. The Oracle Financial Accounting Hub (FAH) helps in creating a centralized, auditable accounting system for external and/or legacy systems. FAH has a configurable rules engine and configurable rules repository (user-defined) that keeps the definition and maintenance of accounting rules in one place. FAH acts as the accounting engine for any subledger (Oracle or non-Oracle), create adjusting journal entries, provide drill back from General Ledger (GL) to FAH, validate and transform source data, and fully leverage GL setups (open/close period, COA structure, segment values, cross validation rules, calendar, functional currency) to ultimately provide users with an efficient and compliant financial system.
How Financial Accounting Hub works
Oracle standard FAH provides linkage from GL to SLA Journals i.e. the standard drilldown that works from GL to SLA. Users can drilldown from GL to SLA journal Lines that provides additional sub-ledger details like Event model details, Supporting References, Identifiers and Descriptions etc. These details are useful enough to reconcile the transactions/records between GL and SLA. A custom solution van be build that provides additional drilldown layer in FAH beyond SLA Journal and a custom form presents the view of the Transaction Object/Staging Table in FAH (wherein the transaction data is placed for FAH accounting entry generation). This form can be linked with the SLA Journal form and with the selection of the SLA Journal line, form provides the number of the transaction object lines in the staging area. This way it links the GL data to SLA and SLA data to Transaction data and provides multilevel drilldown views.
There could be different types of solutions in FAH like Pass through, Account derivations, Mappings and combinations of these. Based on the solutions the usability and importance of this custom drilldown can be enhanced. This Custom Drilldown not only helps business support functions like Reconciliations, Error & Suspense handling but also provide end to end view of how a product system transaction is transformed to a Journal. When used in conjunction with standard drill down this solution provides multi-dimensional view and presents summarized data view in GL, detailed accounting view and transaction Data view in FAH. It brings in short and long term benefits to an organization.
What is the difference between FAH and SLA
From a technology perspective, there is zero difference. XLA is the technical label for the FAH/SLA solution. XLA is the common framework which handles all accounting feeds into the E-Business Suite General Ledger. Therefore, technically XLA = SLA = FAH.
The technology leveraged by FAH and SLA is exactly the same and the difference is within the way user are allowed to use the technology. SLA offers seeded Event Models (including Event Class Options) and Application Accounting Definitions for E-Business Suite subledger applications. With SLA users can build customized Subledger Accounting Methods (including customized JLTs, ADRs, JLDs, AADs,) for E-Business Suite subledger applications, while they are not allowed to make any changes to the seeded Event Models / Event Class Options. In case you do come across a requirement in this last area (e.g. an additional Source is needed), then Custom Source functionality can be used for that.
FAH requires an additional license, and basically FAH is standalone SLA: you get the SLA technology but you don’t get any seeded building blocks, because FAH is intended to create accounting based on data which resides in external (non-E-Business Suite) applications. So with FAH you create the Event Model(s) and AAD(s) for external applications entirely from scratch.
Summary: SLA deals with the E-Business Suite subledger applications, while FAH deals with external applications.
Subledger Accounting (SLA):
- Deals with the E-Business Suite subledger applications (AR, AP, etc.).
- Seeded event models which cannot be changed (extensions can be build using Custom Sources).
- Seeded accounting methods which can be customized (copied and modified) at will.
- Integral part of E-Business Suite Financials (R12 onwards).
Financials Accounting Hub (FAH):
- Deals with external (i.e. non-E-Business Suite) applications.
- No seeded event models – event models need to be built from scratch.
- No seeded accounting rules – accounting rules need to be built from scratch.
- Requires purchasing a separate license.
The accounting hub is intended to use the Subledger Accounting (SLA), which is a rules based accounting generation process to create the accounting for transactions from a custom application and then SLA will interface that to the GL Interface table, (or often interface it to a PeopleSoft GL.). You do not build custom logic, you define rules in the SLA UI for the accounting transformations.
FAH is an uptake of SLA. It is basically standalone Subledger Accounting (SLA), it allows you to use Oracle SLA and GL to perform the accounting for third party applications. Using Accounting Method Builder (AMB) Tool, SLA standard application accounting definitions are copied and modified to map SLA application accounting definition with Source Application Accounting Events, Accounting events of source application is mapped and stored in the SLA tables. External/Source Application’s accounting event’s for, accounting attributes and transactions supporting references are kept in FAH transactions objects. When user submits accounting program,
- Accounting program fetches the applicable accounting events which are eligible for processing from SLA Tables.
- Load FAH transactions objects and apply modified application accounting definitions on sources of FAH Transactions Objects.
- SLA journal entries are created and stored in the SLA Tables.
- SLA journal entries are transferred to GL using standard Oracle Transfer to GL Program.
Using FAH, you can drill down from GL to FAH and FAH to External Source/Legacy Application like/similar to drill down from GL to Standard Oracle Subledger (AP, AR etc.) Using FAH, you can get the balances in GL by source/external application’s transactions. Therefore reconciliation becomes easy between the external application and Standard Oracle GL. FAH keeps the source transaction’s accounting attributes and key transactions references. Therefore it is used to keep the audit trail.
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