For any business organizations, recording accountings for its different transactions taking place with internal or external entities is an obvious objective. It is essential to measure the overall performance of the organization, gain insight to penetrate the new markets and to control cost expenses, fulfil the statutory and regulatory reporting requirements and so on. To efficiently support all these any modern organizations need a reliable, scalable, centralized fulfilling global and local accounting requirements, quick enough to implement a change and importantly economical solution. The answer is Financial Account Hub (FAH) and embarking on it is a first step to plant a foundation for innovation. FAH is an intuitive accounting engine that consumes business transactions' attributes interfaced from legacy systems, apply the accounting rules and mapping to eventually create accounting entries. For a better reference and understanding, it is similar to Sub-Ledger Accounting (SLA). While SLA is an accounting processor for business transactions originated from different sub-ledgers like AR, FA and AP etc within Oracle ERP, FAH is to deal with transactions originated from legacy systems and interfaced to Oracle ERP. Here are the 5 key value enablers that innately help drive organizations to inject FAH in their accounting solution footprint:
Centralized Accounting Solution:
In a traditional approach, consider a scenario where accounting entries are created for 10 different types of business transactions in 10 different front-office systems and finally interface it to Oracle where general ledger operation is supervised. This apparently counts some of the inefficiencies like:
a) Maintaining business accounting rules in 10 different systems
b) Requiring multiple resources with different product specific skills to implement accounting solution, change and support.
c) Lack of governance and control over accounting
d) Lost opportunity of reusing different components e.g. mappings and common accounting rules.
e) Have to invest on front-office applications for something which they don't primarily mean to do.
To overcome all these, FAH is one of the best options that offers centralized accounting engine empowers organizations cultivating a strategic roadmap to consolidate the accounting solutions lying at different places to just one at enterprise level.
Quicker and easier implementation:
Unlike Oracle EBS 11i and prior lower versions, both Oracle EBS and Oracle ERP Cloud offer front-end configurable capabilities to mimic business accounting rules on FAH setup components to eventually derive accounting entries for interfaced business transactions. Configurations are simply divided into logical groups likes Accounting Derivation rules, Journal Line Type rules (Dr and Cr) and optionally line/header descriptions rolling up starting from transaction, application, accounting method and finally to ledger. All these are configured corresponding to its relevant entity, event type and class model. An accounting solution for an interface can be ready in one month or so.
Minimize dependencies on IT teams for maintenance:
Unlike custom accounting solution, most ongoing maintenance requests like capturing additional details to the journal line description can easily be achieved without even involving developer and a code change. Consider another scenario where there is a regulatory requirement to book asset expenditure to expense account instead of asset account for certain asset categories. Unlike in traditional back-end accounting engines where a medium size IT project may require, FAH can deliver it to business as part of the BAU processes without involving IT teams and notably in a quicker, easier and cheaper manner. In this particular case, accounting derivation rule will require a change to accommodate expense account for certain asset categories.
Capability to handle exceptions and complex mapping/rules:
While FAH is capable of handling most of accounting requirements with out-of-the-box configurable features, it also provides a powerful custom source concept where you can code your own accounting logic and link it to a custom source available for use in FAH. Consider a scenario where you want to derive BSV (balancing segment value) of COA based on the complex mapping and exceptions, a custom source can be defined for the same linked to a custom s/w code. FAH invokes the custom source at run time while interface processing to derive the BSV based on the logic coded in the custom s/w program.
With FAH is in place for interface processing, organizations can avoid multiple licensing cost by eliminating the need of licenses for all front-office applications having its own accounting engine. It naturally avoids the salary costs needing for product SMEs with different skills set related to core legacy systems.
Thus, FAH is categorically a strategic accounting hub be it Oracle EBS or Oracle ERP Cloud that offers agility extensively enabling modern organizations gain radical benefits of faster responsiveness to the regulatory and statutory accounting requirements, cost effectiveness, and importantly consolidation of accounting solution on a single platform.