Oracle® Fusion Applications Incentive Compensation Implementation Guide 11g Release 5 (11.1.5) Part Number E20381-05

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14 Define Incentive Compensation Shared Configuration

This chapter contains the following:

Manage Profile Options and Flexfields

Incentive Compensation Flexfields: Explained

Manage Calendars

Manage Currencies and Currency Conversions

Manage Profile Options and Flexfields

Incentive Compensation Profile Options: Explained

Oracle Fusion Incentive Compensation has two profile options, which you can set at the site level.

• CN_DEBUG: Select Yes when you want the application to write the debug errors to the CN_PROCESS_AUDIT_LINES table.

• CN_MARK_EVENTS: Select Yes when you want the application to record every event in the Changed Events Log for inclusion in the next incremental calculation and plan deployer processes.

Incentive Compensation Flexfields: Explained

All standard, enabled incentive compensation descriptive flexfields relate to transactions. Use them to map transaction attributes in the source application, which do not exist by default in Oracle Fusion Incentive Compensation, to the CN_TP_TRANSACTIONS_ALL table.

The descriptive flexfields consist of two data types: VARCHAR2 and NUMBER

• VARCHAR2 (240 CHAR): ATTRIBUTE1 -- ATTRIBUTE150

• NUMBER: ATTRIBUTE_NUMBER1 -- ATTRIBUTE_NUMBER50

Enable these attributes for use in the Crediting, Classification, and Calculation processes in the Define Business Unit Configuration for Incentive Compensation task list, Configure Tables and Columns task.

Manage Calendars

Incentive Compensation Calendars, Periods, and Period Types: How They Work Together

This topic covers how an incentive compensation calendar supports processing activities for incentive compensation business units by first definingperiod types and periods, and then exploring how they work together.

Period Type

Determines how you divide your calendar or fiscal year. The following table shows the delivered types and corresponding periods in a year:

Create custom period types as required. Enter the number of periods in a year so that the application can validate the periods that you define for the calendar. Select the shortest required period range (for example, weekly or monthly) to ensure that the application can accumulate attainments, maintain goals and subledger balances, and process payments at this level, or any higher level.

Period

Define for each calendar based on the selected period type, including the definition of period with year, period name, sequence, and start and end date--inclusive of both the dates. Abbreviate the period name if you want, for example Jan for January or W1 for Week1. The application arranges periods based on the sequence values that you enter.

Calendars and Periods: How They Work

The following table shows the various calendar and period tasks that first you and then the application perform.

FAQs for Manage Calendars

Can I use the same incentive compensation calendar for different business units?

Yes, you can use the Calendar choice list in the Define Business Unit Configuration for Incentive Compensation task list, Manage Parameters task to assign the calendar to the business units, if they require the same calendar set up. The application automatically propagates any change to the calendar, such as new periods, to all of the business units using the calendar.

What happens if I assign an incentive compensation calendar to a business unit?

You can update the calendar name and add more periods, but you cannot change the period type.

What happens if I create periods for a new fiscal year in an incentive compensation calendar already used by business units?

The application adds the new period record to the list of periods maintained in period status and interval related tables, in all the incentive compensation business units to which you assigned the calendar. For example, if you assign a calendar to Vision Operations and Vision Services and you created a Jan-2010 period for this calendar, the application adds this period to the tables maintaining period statuses and interval periods for Vision Operations and Vision Services.

• Correct the interval numbers for the new period under various interval types for the business units.

• Open the period in all of the corresponding business units to use it for transaction processing.

Manage Currencies and Currency Conversions

Multicurrency: How Incentive Compensation Uses It

Oracle Fusion Incentive Compensation enables you to maintain and process transactions in multiple currencies. Support your global workforce by processing the transactions, originating in different source currencies, in a single processing currency or in each participant's home currency. Compensate participants selling in various countries or different business units within one or more incentive compensation business units.

Settings That Affect Multicurrency

There are currency as well as conversion rate, rate type, and date parameters in the Define Shared Configuration for Incentive Compensation task list, Manage Currencies and Manage Currency Conversions tasks.

• Operating currency

  Tip

  Set this value to the currency in which your top management wants to view reports.

• Participant home currency

• Processing currency

  Tip

  If you set processing currency to:

  • Operating currency, then the Crediting, Calculation, and Payment processes use the single operating currency for processing.

  • Participant home currency, then the Crediting, Calculation, and Payment processes use each participant's home currency for processing. Also, you may have to individualize participant compensation plan details, such as rates and goals, because you establish compensation plan elements at the business unit level.

  Note

  The application maintains participant subledger balances only in the processing currency. A participant may have subledger balances in more than one currency if you set the processing currency as Participant home currency, and the participant's home currency changes.

  Important

  Reassign incentive plans if you change the participant's currency.

Choose which rate to use to convert amounts among the four currency options. Create rate types such as Corporate, Daily, and Period Average, and define rates differently under each one of them to use in different scenarios. For example, you decide to use Daily rates to convert transaction and credit amounts, and Period Average rates to convert payment amounts. In this case, use these two parameters to set appropriate rate types for these processes.

• Payment Conversion Rate Type: The application uses the rates within the selected rate type to convert the payment amount from processing currency to operating currency or home currency.

• Transaction Conversion Rate Type: The application uses the rates within the selected rate type for conversion during the Collection, Crediting, and Calculation processes as well as while adjusting transactions.

The Payment Conversion Date parameter determines whether the application uses the transaction date or the payment batch pay date to look up the corresponding currency rate to use for payment conversion.

How Currency Is Stored

To support multicurrency processing, the application stores transactions, credits, earnings, and payments in the following currencies.

* Represents the core currency associated with the transactional entity. Other currencies are available for transaction traceability and reporting. For example, when you adjust the amount of a base transaction, the application does the adjustment in the source currency, whereas, by default, the application shows the credit and earning amounts in the processing currency.

Processing in Participant Home Currency Example

Assume you are a compensation manager working for multinational company ABC with a global sales force. You decided to compensate North American salespersons working in Canada and the United States in a single incentive compensation business unit with the operating currency of USD. The processing currency is Participant Home Currency so you compensate the Canadian sales force in its home currency of CAD and the US sales force in USD.

Collection: Since your salespeople are selling in the US and Canada, you collect transactions in USD and CAD, into the same business unit. Now, you track two transactions, one booked in US dollars and another in Canadian dollars, assuming an exchange rate of 1 CAD equals 0.9302326 USD.

Crediting: The application manages credit and roll up creation in source currency and adjustments in the processing currency. It automatically converts and populates the source currency, operating currency, and home currency credit amount in all of the previous cases. Assume that the two orders are for a team of two salespeople, one working from the US and another from Canada, sharing 50 percent credit. The application generates credits in the home currency of the credit receiver because the processing currency is set to participant home currency.

Calculation: The application calculates the earnings in the processing currency and also converts them to, and stores them in, operating currency and home currency. Assume that both salespeople are on the same plan with individualized rates and goals and that they get earnings (10 percent of credited amount) as follows:

Payment: The application computes the payment amounts in the processing currency and also converts them to home currency and operating currency. It does payment and manual adjustments in processing currency and again converts and stores them in home currency and operating currency.

Processing in Operating Currency Example

This example uses the data from the previous example to show how the application processes and stores transactions when you set operating currency to Processing Currency. The changes are shown in processing currency columns in the following tables.

Collection

Crediting

Calculation

Payment

Incentive Compensation Currencies: How They Are Converted

The application maintains incentive compensation currency conversions for instances where the sale currency is different from the operating currency or the participant home currency as well as when you want to use a different conversion rate than the default daily rates, for example, if you want to use period-based rates.

Settings That Affect Currency Conversion

In the Define Shared Configuration for Incentive Compensation task list, Manage Currency Conversions task, create your rate types and associated rates. Then, use the Define Business Unit Configuration for Incentive Compensation task list, Manage Parameters task to make your selections for these parameters:

• Processing Currency: Determines how the application actually converts currencies during processing. There is a Calculation Currency column on each transaction entity, which holds the value of the processing currency. Processing currency is either Operating currency (in which case every transaction would record the same currency) or Participant home currency.

  Important

  After you run the Calculation process or close a period, you cannot edit the value for this parameter.

• Transaction Conversion Rate Type

• Collection Conversion Rate Type

• Payment Conversion Rate Type

How Currency Is Converted

1. Select one of the standard conversion rate types or create a custom one.

   Create custom rate types (using unique names) based on your business requirements. For example, if your business units use period average based rates for conversion, create a new rate type, enter start and end dates (based on your calendar period definition), and provide the period-average rates for the date range.

2. Create or edit conversion rates.

   Enter the required values. If you also enter an end date, the start date must be earlier than the end date for each record. Create two records for each date range and from and to currencies where the second record is the inversion of the first. For example, you create one record with an exchange rate from USD to CAD for the start date 1-Jun-2010 and a second record with an exchange rate from CAD to USD for the same date. The application may use the inverse rate for reference purposes to compute the transactional amount from the operating amount, if required.

   Restriction

   For the from and to currencies and date range for a rate type, you can use only one rate. If you want different rates for the same date range and set of from and to currencies, define a different rate type.

   Restriction

   You can edit rates as long as the incentive compensation period is not closed in any of the associated incentive compensation business units.

FAQs for Manage Currency Conversions

How can I use different incentive compensation rates to process transactions and payments in different incentive compensation business units?

Define multiple incentive compensation currency rate types for the same date, different incentive compensation business units, or different usage and associate the appropriate rate type with each business unit. The rate types may match those in your general ledger, but it is not required. For example, one business unit requires daily-based rates where the rate is different for each day. Another business unit requires period-based rates where the period is monthly and each period has the same rate, which might be the average or end rate for the period. Yet another business unit also requires period-based rates, but its period is weekly instead of monthly.

Where does incentive compensation use the transaction and payment conversion rate types?

The application uses the currency conversion rates that you defined for the rate type (in the Define Shared Configuration for Incentive Compensation task list, Manage Currency Conversions task) , and selected for Transaction Conversion Rate Type and Payment Conversion Rate Type (in the Define Business Unit Configuration for Incentive Compensation task list, Manage Parameters task), to convert transaction and payment amounts from one currency to another during Crediting, Rollup, and Calculation processing.

The application stores transactions, credits, earnings, and payments in various currencies. It uses the rates to convert currencies among the various amounts shown here.

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