Common Interview Questions in Oracle Fusion Financials

Some common interview questions

• What is your role in last implementation project?
• What are the critical issues you handled?
• Explain the process of Data Conversion
• Period Close Process for all modules
• COA Structure Vs Instance
• Revaluation vs Translation
• CVR Vs Security Rules
• Types of Ledgers(PL, SL and RL) and their conversion levels
• 4Cs
• Mass Allocations
• P2P and O2C process with Journals
• Mandatory setups in AP for Invoicing and Payments
• Ways to create invoices
• Types of AP invoices
• Invoice Match Levels
• Multi Period Accounting
• Prepayment process with journals
• What is PPP and PPR
• WHT and setups
• Auto Accounting Rules
• Transaction Types and Sources importance
• Auto Invoice Setups and common issues
• Different statuses of receipts
• Auto Lockbox setups and exceptions
• Flexfields in FA
• Setups in FA
• Mass Addition Process
• Types of Assets
• Corp Book Vs Tax Book
• Prorate Convention
• What is Amortization
• Can we reopen FA period?
• Auto Reconciliation Setups in CM
• Bank Statement import 
• External Transactions

Multi Period Accounting(MPA)

Multiperiod Accounting (MPA) in Oracle Fusion is a feature that allows users to create accounting entries for a single financial event across multiple accounting periods. It can be useful for situations where a single transaction spans multiple accounting periods, such as prepaid expenses.

There are certain expenses which are incurred once but you want to apportion those expenses over a period of time. Ex: Software licenses, if you purchase a software license which is valid for one year.

Setups Required: In case we want to use Pro-rate expenses by number of periods we don’t to need to configure anything, this is a default setting. If you want apportion the expense based on a number of days in a month, then custom SLA setups are needed.

MPA Process Steps

• Create AP Invoice
• Provide Multiperiod Account details like Start Date, End Date and Accrual Account 
• Validate and Account the invoice
• Run “Create Multiperiod Accounting” program
• View Accounting to check the Accounting Entries

Create AP Invoice

Click on Lines

Distribution Combination account should be Invoice Charge account (Software Expense).

As far as Multiperiod accounting is concerned we need to enter few more details, click at View à Columns à Show all

Go to Multipeiod Accounting tab

Save à Validate à Post to Ledger

Click View Accounting

Run “Create Multiperiod Accounting” program

Ok à

Update parameters

Submit

Once it is process it will create Multi period Accounting Execution Report we can check output to see journal entries, we can also check it at Invoice level as well.

Journal Entry

Initial Entry                       Deferred Item Expense A/C Dr                  12000                    (Accrual Account)
                                                          To Liability A/C                                            12000

Month1                             Item Expense A/C Dr                     1000
                                                          To Deferred Item Expense A/C                 1000

Month2                             Item Expense A/C Dr                     1000
                                                          To Deferred Item Expense A/C                 1000             and so on

Note: Deferred Item Expense Account is an Accrual Account provided at the time of invoice creation under Multiperiod Accounting section in invoice lines.

Item Expense Account is provided in Invoice lines under Invoice Distribution Combination.

Adjustments in Fusion Receivables

What is an Adjustment in Fusion Receivables?

An adjustment is a manual or automatic billing update that increases or decreases the balance on a transactions such as an invoice, debit memo, chargeback or a credit memo. We can make either positive or negative adjustments to your invoices.  We can approve adjustments that are within approval limits and give pending statuses to adjustments that are outside approval limits. We can automatically write off debit items that meet specific selection criteria.

Configurations required:

·       Setup Approval limits for User - Approval limits are going to determine whether a user can approve adjustments. These are defined by document type, amount and currency.

§  A document type - can be adjustment, or it can be something like credit memo refund or receipt write off.

§  Amount - Amount can be part of a defined range. the range can go from a negative number to a positive number.

§  Currency - Approval limits are going to be specific by currency. There will be different limits for the US dollar, for the Euro.

·       Receivable activity for Adjustment - this configuration in the Receivables application allows to generate accounting distributions. 

Setup Approval Limits

Task: Manage Approval Limits

Positive Amount Adjustments: If you want to increase the Invoice amount, then enter positive amount in Adjustments screen. For ex: additional charges

Negative Amount Adjustments: if you want to decrease the invoice amount, then enter negative amount in Adjustments screen. For ex: to reduce customer invoice balance.

Setup Receivables Activity for Adjustment

Task: Manage Receivables Activities

 

Which types of Adjustments can be processed in Receivables?

• ·       Invoice - This means that the adjustment amount will be applied to the entire invoice.
• ·       Line - The adjusted amount is prorated across all lines. If the adjustment includes tax, then the amount is prorated across lines and tax.
• ·       Charges - the adjusted amount is applied to the charges amount on the invoice. Again, if the adjustment includes tax, the amount is prorated across charges and tax.
• ·       Tax - the adjusted amount is applied to the tax amount
• ·       Freight - The adjusted amount will be applied to the freight amount

How to make manual adjustments?

Go to Transactions à Actions à Manage Adjustments à

Click + to create an adjustment and provide details as mentioned in the above screenshot

Click Submit

How Adjustment Feature works in Oracle?

There is no approval workflow in Oracle for Adjustments. Any user who has approval limits assigned for Adjustment document type can create adjustment in Receivables. If the adjustment amount is within approval limit, that adjustment gets automatically approved. In case user does not have approval limit for the adjustment amount, when user submits adjustment it is processed with a status as “Pending Approval”. Any user who has that approval limit can approve it, user does not need to be any supervisor or manager.

Centralized Payments in Oracle Cloud

Centralized payment processing enables you to implement a shared payment service model.

In this model, a single payment business unit provides payment services to multiple invoice business units. That is, any business unit with the Payables Payment business function can provide payment services to other business units with the Payables Invoicing business function.

The designated payment business unit processes invoices from multiple invoice business units and generates a consolidated payment for a given supplier. Because payment processing is centralized, you can exercise better control of supplier payments and reduce the cost of payment processing.

What is Shared Service Concept - When a company operates in different locations, and let us say they have different functions as well -  like Requisitioning, Purchasing (Buy), Invoicing, Payment etc. and decides that one of the Business Unit handles the Invoicing, other Business Unit handles Payments on behalf of other business units, this concept is called Shared Service Model i.e. centralizing some of the business unit functions.

The payment business unit groups standard invoices, prepayments, and credit memos for the same supplier name and site, from all of the invoice business units that the payment business unit services.

Points to note:

•Centralized Payments - Shared Services can't be centralized across ledger (Payment) but could be done across the LE (within the same ledger, ex: US1 LE can pay on behalf of US2).

•Invoicing and Payment functions - these 2 can be shared within the same Ledger.

•Inter company balancing is required

Setups Required

·       Assign Business Unit Business Function: Enable required Business Functions for Invoice and Payment BUs

·       Manage Service Provider Relationships: This is a very important setup as this defines the relationship between the client and provider.

·       Setup for Supplier Site Assignments: In the Supplier Site, we can see how a Site (Procurement BU) needs to have Client BU in the Site Assignments tab. The Procurement BU is your provider and the Client BU are the ones for which you define the relationship to the service provider.

Setups required for Invoice Business Units

·     Manage Common Options for Payables and Procurement
·       Manage Invoice Options
·       Manage Tax Reporting and Withholding Tax Options

Setups required for Payment Business Units

·       Manage Payment Options

Payment Service Models

The different models of payment services that you can implement are:

• Dedicated: In a dedicated payment service model, the payment business unit works solely as an outsourced payment processing unit to service other invoice business units.
• Self-Service: In a self-service model, the invoice business unit services itself, acting as its own payment service provider.
• Dedicated and Self-Service: In a dedicated and self-service model, the payment business unit, in addition to servicing itself, also services other invoice business units.

COA Structure Vs COA Structure Instance

What is Chart of Accounts Structure?

The Chart of Accounts (COA) is the account structure the organization uses to record transactions and maintain financial account balances. GL defines the COA structure in the Accounting Flexfield. The structure enables the organization to categorize accounting information during the recording process.

We are generally confused about about COA Structure and COA Structure Instance in Oracle fusion.

Let us try to understand the significance of both

Chart of account is called accounting flex field and is used for financial reporting of an organization. In chart of account you have to define your segment. Segments are different dimensions of a business. They capture the different element of a business for financial reporting purpose. For example Company, Accounts ,cost center, Product line etc. capture the financial position of a company with different reporting tools.

In each segment of Chart of Account you have to mention two important things- Segment level and Value set code.

Segment level is a qualifier for a segment .This qualifier tells how the segment is be used while creating a financial report. For example if the segment is enabled as a primary balancing segment -then for each and every journal and accounting the segment values should be balanced. Balanced means the debit and credit amount should be same for this segment.

You can notice here that-for each segment we are also assigning a unique value set code. Value set codes contents values for each segment.

Now question is if we have decided our segments and value set code at COA Structure level what is the use of Chart of Account structure instance.

Let us understand carefully.

What is Chart of Accounts Structure Instance?

Chart of Account instance gives us flexibility to design our Accounting hierarchy multiple times with same COA Structure. For example we are implementing Chart of account for a big MNC. They have business operation in different countries and so they have country specific financial reporting requirement for each country.

We can use the same structure and create multiple structure instance for different countries. That means we can create one to many relationship between COA Structure and COA Structure instance.

For ex:  you can see the value set code-it is defaulted from COA Structure definition. But here at instance level you have the flexibility to change the value set code. You can assign a new tree structure or account Hierarchy as per country specific requirement.

Though we are using the same COA structure still we can change the complete financial reporting simply by assigning a different Accounting tree at COA instance level.

We can create as many as COA Instances with same COA Structure. That is the significance of Chart of Account structure instance.

How to move OTBI report from one instance to another?

Oracle Fusion has provided a feature to migrate OTBI reports from one Instance to another Instance. Source code migration is very easy process in Oracle fusion. Migration process helps in Cloud Implementation projects where we have to migrate hundreds of reports from one instance to another instance like from Dev instance to Prod instance. This is one of the great feature for OTBI reports migration.

Step1: Go to the OTBI Report which you want to migrate from one Instance to Another.

Step2: Select the OTBI Report.

Go to Source Instance(means from which instance you want to migrate)

Select report and click More. Click on Archive

System will ask these below options that if you want to keep same permissions like this instance then you should check this checkbox. like the same for Timestamps.

Check both and click Ok

It will be saved. You can save this report in your local desktop.

Step 3: Go to the Target Instance in which we want to migrate this Report Source Code.

This is the Folder in which I want to upload these Reports Source.

Select folder and click Unarchive

Select the file which you saved the file on desktop and then click ok.

OTBI Report has been Upload in the Folder in the Target Instance.

Our OTBI report migration process has now completed and we can see the OTBI reports in Target Instance.

Masking of Bank Account Numbers in Oracle Fusion

There could be a business requirement in any organization where in the bank account information should not be displayed completely for all the users, only the users who setup the bank account might have or should have access. Only last few or first few digits of the bank account to be displayed and remaining digits should be masked.

We have different setups for internal bank accounts and external bank accounts masking.

Internal Bank Accounts Masking

Internal Bank Accounts are those we use to make payments to suppliers or to receive cash collections from customers.

Set the profile option “Mask Internal Bank Account Numbers” using Task “Manage Cash Management Profile Options”

Setup

Go to Setup and Maintenance à Search à Task: Manage Cash Management Profile Options

Search

This can be set at Site level and we would like to set the “Display Last Four” and remaining to be masked.

Save and Close à Done

Go to Internal Bank Account Setup Screen

Task: Manage Bank Account à search for any bank accounts

We can see the digits are masked, not only in this screen, wherever applicable like in AP, AR Receipts screen or Cash Management or any Bank statement screen. In all the screens we will be able to see only last four digits and other digits as masked.

External Bank Accounts Masking

In order to mask the External Bank Account Numbers we need to use the setup called “Manage System Security Options”

Task: Manage System Security Options

Save and Close

Click Yes (Process takes some time to complete it).

Check Supplier and Customer bank accounts

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