Oracle Cost Management Flows

This chapter covers the following topics:

• Oracle Cost Management Overview
• Oracle Cost Management Attributes
• Global Procurement Purchase Process between Operating Units
• Purchase Order Receipt and Invoice - Outside Processing (OSP) Item with Shop Floor Destination
• Purchase Order Receipt – Landed Cost Management (LCM) Enabled Organization
• Purchase Order Receipt and Invoice with Price Variance - Asset and Expense Item - Average Costing Organization
• Purchase Order Receipt and Invoice - Encumbrance Enabled - FIFO Costing Organization
• Standard Discrete Job - Lot Based Material - Yield - Phantom-Standard Costing Organization
• Sales Order Shipment – Pick to Order (PTO Model) - Standard Costing Organization
• Internal Drops Shipment Flow between Operating Units
• External Drop Shipment Flow between Operating Units
• Internal Sales Order Flow - FOB Receipt- PAC Organization

Oracle Cost Management Overview

Oracle Cost Management is a comprehensive solution that helps organizations project costs and perform cost accounting for supply chain transactions. These activities serve as a key component for complying with regulatory reporting and accounting requirements, streamlining the use of working capital in organizations, and improving profitability for businesses.

Oracle Cost Management Attributes

This section provides information on the common prerequisites, profile options, and data setups required for executing the Oracle Cost Management flows. Flow specific requirements are documented along with the flow in the subsequent sections.

Prerequisites

The following is a prerequisite for executing the Oracle Cost Management flows:

• The following accounting periods are open:

  1. Inventory

  2. General Ledger

  3. Payables

  4. Purchase Order

  5. Receivables

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Page Name	Field Name	Field Value
Responsibility	Responsibility Name	Manufacturing and Distribution Manager
GL - Accounting Setup Manager -Ledger	Ledger Name	Vision Operations
GL - Accounting Setup Manager -Ledger	Ledger Name	Singapore Distribution Center
Item Costs	Cost Element	Material
Item Template	Template	Purchased Item
Item Template	Template	Finished Good
Sub-Inventory	Sub-Inventory Code	Store

Setup Data

Not applicable.

Global Procurement Purchase Process between Operating Units

A global procurement (centralized) purchase process is one where one operating unit purchases the material on behalf of another operating unit.

The Global Procurement Purchase Process between Operating Units flow creates on-hand stock through global procurement purchase order receipts and verifies its distribution.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Global Procurement Purchase Process between Operating Units flow.

Technical Name

PO_Global_Procurement_Asset_Item_Asset_SubInv

Prerequisites

The following are the prerequisites for executing this flow:

• Organizations are Standard and Average costing organizations

• There are at least two operating units

• Sub-inventory is Asset Subinventory

• There are daily currency conversion rates

• The tax setup is disabled

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	Standard and Average

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Operating Unit	Vision Operations
Organization	Organization	AVG - Average Costing Organization (Average costing enabled org
Organization	Operating Unit	Singapore Distribution Center
Organization	Organization	SNG – Singapore Distribution Center (Standard costing enabled org)
Master Items	Template	Purchased Item Template
Supplier	Supplier Name	Office Supplies, Inc.
Intercompany Transaction Flow	Start Operating Unit End Operating Unit Type Ship Form/To Organization Nodes Tab – From Organization Advanced Pricing Item Pricing Option – Asset	Vision Operations Singapore Distribution Center Procuring SNG AVG Yes PO

Purchase Order Receipt and Invoice - Outside Processing (OSP) Item with Shop Floor Destination

This flow performs the following:

• Creates a bill of material (BOM) and routing with outside processing (OSP) operation

• Releases a standard discrete job

• Raises a purchase order for the OSP operation

• Moves transactions and issues the material

• Completes and closes the job

• Verifies distributions for all transactions in a standard costing organization

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Purchase Order Receipt and Invoice – Outside Processing (OSP) Item with Shop Floor Destination flow.

Technical Name

PO_OSP_Item_Shopfloor_Destination_STD_CST_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is an Average Costing enabled organization

• Subinventory is Asset Subinventory

• The tax setup is disabled

• Moves transactions and issues the material

• Completes and closes the job

• Verifies distributions for all transactions in a standard costing organization

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	Standard

Setup Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization	Organization	M1- Seattle Manufacturing (Standard Costing Enabled org.)
Master Items	Components	Template - Purchased Item
Master Items	Assembly	Template - Finished good
Master Items	Outside Processing Item (OSP)	Template - Outside Processing
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK

Purchase Order Receipt – Landed Cost Management (LCM) Enabled Organization

This flow creates on-hand stock through purchase order receipts, and verifies the distributions in an LCM-enabled, Average Costing organization.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Purchase Order Receipt – Landed Cost Management (LCM) Enabled Organization flow.

Technical Name

Purchase_Order_Receipt_LCM_Average_Costing_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is an Average Costing enabled organization

• Subinventory is Asset Subinventory

• The tax setup is disabled

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	Average

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Organization	Average Costing with LCM Enabled – <Organization Name>
Master Item	Template	Template - Purchased Item
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
Landed Cost Management	Shipment Type	ST-01
Landed Cost Management	Charges Lines Tab – Type	Insurance

Purchase Order Receipt and Invoice with Price Variance - Asset and Expense Item - Average Costing Organization

This flow creates on-hand stock through purchase order receipts and accounting of purchase invoice with quantity and value difference. It also verifies the distributions in an average costing organization.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Purchase Order Receipt and Invoice with Price Variance - Asset and Expense Item - Average Costing Organization flow.

Technical Name

PO_Receipt_IPV_Invoice_Average_Costing_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is an Average Costing enabled organization

• Subinventory is Asset Subinventory

• The tax setup is disabled

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	Average
Purchase Order	Type	Standard Purchase Order

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Organization	AVG – Average Organization (Average Costing enabled organization)
Master Item	Template	Template - Purchased Item
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK

Purchase Order Receipt and Invoice - Encumbrance Enabled - FIFO Costing Organization

This flow creates on-hand stock through purchase order receipts, accounts for purchase invoices, and verifies the distribution in an encumbrance enabled, standard costing organization. The primary purpose of the encumbrance is to avoid overspending on a budget.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Purchase Order Receipt and Invoice - Encumbrance Enabled - FIFO Costing Organization flow.

Technical Name

PO_Receipt_Invoice_Asset_Item_Encumbrance_FIFO_CST_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is an Average Costing enabled organization

• Subinventory is Asset Subinventory

• The budget amounts are defined

• The tax setup is disabled

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	FIFOFO
Purchase Order	Type	Standard Purchase Order

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Operating Unit	Vision ENC
Organization	Organization	EN4
Master Items	Template	Template - Purchased Item
Financials Options, Encumbrance Tab	User Requisition Encumbrance Reserve at Completion Use PO Encumbrance	Yes Yes Yes
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
Define Budget	Budget	ENC Budget

Standard Discrete Job - Lot Based Material - Yield - Phantom-Standard Costing Organization

This flow performs the following activities:

• Creates on-hand stock for the components through purchase order receipts

• Creates bills with phantom items, lot based item, and yield quantity

• Releases and moves the standard discrete job

• Issues material and completes the work in process

• Closes the job

• Verifies distributions for all transactions in a Standard Costing organization

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Standard Discrete Job - Lot Based Material - Yield - Phantom-Standard Costing Organization flow.

Technical Name

WIP_Flow_LBM_Yield_Phantom_STD_CST_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is a Standard Costing enabled organization

• Subinventory is Asset Subinventory

• The discrete job type is Standard

• There are at least three components and one assembly

• There are at least three resources and departments

• Bills with the Basis as LOT and Yield as percent are created

• The tax setup is disabled

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Purchase Order	Type	Standard Purchase Order

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Organization	M1 – Seattle Manufacturing (Standard Costing Enabled org.)
Master Items	Components	Template - Purchased Item
Master Items	Assembly	Template - Finished Good
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
WIP Accounting Classes	Define Ledger Accounts	Discrete

Sales Order Shipment – Pick to Order (PTO Model) - Standard Costing Organization

This flow books a sales order and ships the material to a customer, with a pick to order (PTO) item in a standard costing enabled organization. This flow also verifies distribution for all transactions.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Sales Order Shipment – Pick to Order (PTO Model) – Standard Costing Organization flow.

Technical Name

Sales_Shipment_RMA_PTO_Model_STD_Costing_ORG

Prerequisites

The following are the prerequisites for executing this flow:

• Organization is a Standard Costing enabled organization

• Subinventory is Asset Subinventory

Profile Options

Not applicable.

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Organization Parameters	Costing Method	Standard
Purchase Order	Type	Standard Purchase Order

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Organization	M1 – Seattle Manufacturing (Standard Costing Enabled org)
Master Items	Model Item	Template - PTO Model
Master Items	Optional Item	Template - PTO Option Class
Master Items	Inclusive Item	Template - Purchased Item

Internal Drops Shipment Flow between Operating Units

Internal drop shipment is an order fulfillment method where the order taking organization does not maintain its own inventory, but the goods are directly delivered through the stocking operating unit to the customer.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Internal Drops Shipment Flow between Operating Units flow.

Technical Name

SO_RMA_Internal_Dropship_To_Customer_Across_ORGS

Prerequisites

The following are the prerequisites for executing this flow:

• Organizations are Average and Standard Costing organizations

• Subinventory is Asset Subinventory

• The Inter-company Transaction Flow is set up

• The daily exchange rate is defined

• The price list is defined

Profile Options

The following profile option must be set:

Profile Option Name	Profile Option Value
INV:Advanced Pricing for Intercompany	No

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Item Template	Template	Finished Good
Enter Price List	Price List Name	Corporate
Workflow	Concurrent Request	Workflow process
Auto Invoice	Concurrent Request	Auto Invoice Master Program
Revenue Recognition	Concurrent Request	Revenue Recognition Master Program
COGS Recognition	Concurrent Requests	Execute the following concurrent requests: Record Order Management Transactions Collect Revenue Recognition Information Generate COGS Recognition Events
Intercompany AR Invoice	Concurrent Requests	Execute the following concurrent requests: Workflow process Create Intercompany AR Invoice Auto Invoice Master program
Intercompany AP Invoice	Concurrent Requests	Execute the following concurrent requests: Workflow process Create Intercompany AP Invoice Auto Invoice Master program

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Operating Unit	Vision Operations
Organization	Organization	AVG – Average Organization (Average Costing enabled organization)
Organization	Operating Unit	Singapore Distribution Center
Organization	Organization	SNG – Singapore Distribution Center (Standard Costing enabled Organization)
Master Items	Assembly	Template – Finished Good
Purchase Order	Type	Standard Purchase Order
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
Customer	Customer Name	Computer Service and Rentals (to create a sales order).
Unit of Measure	Code	EA
Intercompany Transaction Flow	Start Operating Unit End Operating Unit Type Ship Form/To Organization Nodes Tab – To Organization Advanced Pricing	Singapore Distribution Center Vision Operations Shipping SNG AVG Yes

External Drop Shipment Flow between Operating Units

The external drop shipment is an order fulfillment method where the order taking organization does not maintain its own inventory, but fulfills the order through a third party vendor who directly ships to the end customer and verifies distributions for all transactions.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the External Drop Shipment Flow between Operating Units flow.

Technical Name

SO_RMA_External_Dropship_To_Customer_Across_ORGS

Prerequisites

The following are the prerequisites for executing this flow:

• Organizations are Average and Standard Costing organizations

• Subinventory is Asset Subinventory

• The Inter-company Transaction Flow is set up

• The daily exchange rate is defined

• The price list is defined

Profile Options

The following profile option must be set:

Profile Option Name	Profile Option Value
INV:Advanced Pricing for Intercompany	No

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Item Template	Template	Finished Good
Enter Price List	Price List Name	Corporate
Workflow	Concurrent Request	Workflow process
Auto Invoice	Concurrent Request	Auto Invoice Master Program
Revenue Recognition	Concurrent Request	Revenue Recognition Master Program
COGS Recognition	Concurrent Requests	Execute the following concurrent requests: Record Order Management Transactions Collect Revenue Recognition Information Generate COGS Recognition Events
Intercompany AR Invoice	Concurrent Requests	Execute the following concurrent requests: Workflow process Create Intercompany AR Invoice Auto Invoice Master program
Intercompany AP Invoice	Concurrent Requests	Execute the following concurrent requests: Workflow process Create Intercompany AP Invoice Auto Invoice Master program

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Operating Unit	Vision Operations
Organization	Organization	AVG – Average Organization (Average Costing enabled organization)
Organization	Operating Unit	Singapore Distribution Center
Organization	Organization	SNG – Singapore Distribution Center (Standard Costing enabled Organization)
Master Items	Assembly	Template – Finished Good
Purchase Order	Type	Standard Purchase Order
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
Customer	Customer Name	Computer Service and Rentals (to create a sales order).
Unit of Measure	Code	EA
Intercompany Transaction Flow	Start Operating Unit End Operating Unit Type Ship Form/To Organization Nodes Tab – To Organization Advanced Pricing	Singapore Distribution Center Vision Operations Shipping SNG AVG Yes

Internal Sales Order Flow - FOB Receipt- PAC Organization

This flow transfers materials from an Average inventory organization to a Standard Costing organization through an internal sales order, and verifies distribution for all transactions. The inventory organization is a different operating unit and the shipping network is FOB-Receipt.

Attributes

This section provides information on prerequisites, profile options, and data setups required to execute the Internal Sales Order Flow - FOB Receipt- PAC Organization flow.

Technical Name

ISO_FOB_Receipt_PAC

Prerequisites

The following are the prerequisites for executing this flow:

• Organizations are Average and Standard Costing organizations

• Subinventory is Asset Subinventory

• A shipping network exists between the two organizations

• The daily exchange rate is defined

• The price list is defined

• The periodic accounting period is open

Profile Options

The following profile option must be set:

Profile Option Name	Profile Option Value
INV:Advanced Pricing for Intercompany Invoice	No
CST: Transfer Pricing Option	Yes, Price As Incoming Cost
INV:Intercompany Invoice for Internal Orders	Yes

Predefined Data

The following predefined data must be used:

Window Name	Field Name	Field Value
Item Template	Template	Finished Good
Enter Price List	Price List Name	Corporate

Setup Data

The following data must be set up:

Window Name	Field Name	Field Value
Organization	Organization	M1- Seattle Manufacturing (Standard Costing enabled org)
Organization	Organization	M1 - Child orgAVG – Average Organization (Average Costing enabled org)
Master Items	Assembly	Template - Purchased Item
Purchase Order	Type	Standard Purchase Order
Supplier	Supplier Name	Office Supplies, Inc.
	Site	NEW YORK
Unit of Measure	Code	EA
Cost Type	Code	CG