Credit Card Payment Processing in AR

Many clients will have the requirement to process customer credit card payments in a seamless fashion within Oracle AR. The Oracle Payments (previously iPayments in Rel 11) module enables this functionality working with Oracle AR using a 3 step process:

• Create Invoices: Create invoices in AR with payment method= ‘credit card’
• Credit Card Authorization: Create and approve receipt which includes getting approval codes through Oracle payments and Payment gateway/Payment Processor. Tyco is currently using Chase Paymenttech as a payment processor which Oracle has certified for R12 (Metalink Doc. ID: 471385.1) so we may want to use the same in the future.
• Credit Card Fund Capture: Generating remittances and capture fund through Oracle payments and Payment gateway/Payment Processor. 

What is PSON?

• PSON stands for Payment Server Order Number and this is used by Payments during the funds capture settlement process. This field is located at receipt workbench and is populated by Oracle Payments after authorizing fund.
• Process for ACH processing:
• Oracle Payment, through Funds capture, supports ACH payment and can be integrated with any Payment system for Electronic fund transfer. For Tyco, Payment system can be their remittance banks. 
• Process for ACH processing is same as credit card processing (Create Invoices, Authorization and Fund Capture/ Settlement) with following differences: 
• Authorization step is optional for ACH
• ACH does not block funds during authorization
• Bank information is validated only once and then it is stored as a profile in Oracle payments whereas credit card payment needs approval (PSON) for every transaction.

   

CAS compliance for Federal Business

Cost Accounting Standards (CAS):

Cost Accounting Standards (popularly known as CAS) are a set of 19 standards and rules promulgated by the United States Government for use in determining costs on negotiated procurements. CAS differs from the Federal Acquisition Regulation (FAR) in that FAR applies to substantially all contractors, whereas CAS applies primarily to the larger ones.



When CAS will be applicable to your enterprise:

• Your enterprise performs work for federal government customers
• Your enterprise may be subject to 'full' CAS coverage (required to follow all 19 standards) when you receive either one CAS-covered contract of US$50 million or more, or a number of smaller CAS-covered contracts totaling US$50 million
• Your enterprise may be subject to 'modified' CAS coverage (required to follow only Standards 401, 402, 405, and 406) when you receive a single CAS-covered contract of US$7.5 million or more
• Your enterprise may be exempt from CAS standards provided:
• Contracts awarded to small businesses are exempt from CAS, regardless of contract size
• Any contract less than US$7.5 million is exempt, provided the company has not been awarded a contract greater than US$7.5 million, and also any contract less than US$700,000 is always exempt
• Contracts for commercial items
• Contracts awarded under sealed bid procedures, or where "adequate price competition" was available (the latter meaning where at least two companies had the ability to bid and perform on a contract, even if only one bid was later received)
• Contracts where the price is set by law or regulation
• Contracts awarded to foreign governments
• Contracts awarded to foreign concerns (only the disclosure statement and CAS 401 and 402 apply in this case)

In general these cost accounting standards and compliance is synchronous with US GAAP for accrual accounting.

Oracle Projects Suite of applications

What is Oracle Projects Suite of Applications?

• Project Foundation (PJF) - Common setups for Projects Suite like templates, project types, expenditure categories, expenditure types etc
• Project Costing (PJC) - Costing related functions for projects
• Project Billing (PJB) - Billing (both Revenue and Invoicing). Billing module license includes access to Costing module features
• Project Resource Management (PJR) - Labor resource management features. Project team role requirements are staffed through this application
• Project Collaboration (PJL) - Project team member collaboration
• Project Management (PJT) - Functionalities relating to workplan management, enhanced budgeting and forecasting, change control & project performance reporting. Seamless integration with all of the above modules.

Projects suite features comparison chart:

BIG DECISION - do you want to turn on Item Serialization?

One of my clients whose primary footprint on the supply chain is Oracle EBS was at the crossroads of making a big decision - whether to turn on item serialization or not. This decision has lots of benefits but also comes with a lot of additional responsibilities to enter and track serial numbers. Here is the journey on how we evaluated the item serialization big decision for the client:



What is Serialization?

Oracle Inventory provides complete serial number support for inventory transactions. You can enable serial number control for specific items in your inventory. For items under serial number control, you assign unique serial numbers to individual units and

thereafter reference the same serial numbers each time you perform material transactions. This allows you to have tight control over every unit of every item in your inventory.



Serialization in Inventory & Installed Base tracking design:

Key considerations for the Client:

• Client does not create its own Serial No upon installing the Products and hence Serialization is applicable only to the Inventory ordered for the Project
• Serialization can be selectively turned on at specific item (A Type?) level

Key questions and design considerations presented to Client leadership team:

• Can we use serialization features at selective A type items such as Cameras?
• Can this be enabled using Item category/Catalogue definitions
• Can we model the Product sold (eg product1 product2 etc) as MTL Items (non tangible, but Item Master record with IB tracking enabled)?
• Can we define/track Client Serial No at that level?
• Is that scalable to future design of serialization turned on at lower levels?
• How does this get IB tracking benefits and for maintenance/upselling?

Based on the above framework and many deep dive sessions later, the client decided to turn on serialization only to key 'A' level high value items to begin with. This enabled them to adapt slowly to best industry practices and also have a scalable design to turn on serialization for 'B' and 'C' level items in the future.

Is Oracle Project Contracts a fit for your organization?

To understand if Project Contracts is the right fit for your organization, let us understand in detail its integration to other Oracle EBS modules:

Oracle EBS Integration:

• Provides several mechanisms to ensure timely delivery and receipt of products, services, and other contractual obligations.
• The Deliverable Tracking System (DTS) is the center of Contract Execution and is used to track all activities related to a contract.
• Deliverables can be inbound and outbound oriented, and can be internal or external.
• Examples of deliverables that can be tracked include planned receipt and shipment of items, mailing of an initial engineering drawing, or monthly submission of progress reports.
• The Deliverable Tracking System is integrated with other major components of the Oracle e-Business Suite, including Oracle Projects, Oracle Project Manufacturing, Advanced Planning and Scheduling, Oracle Internet Procurement, and Oracle Shipping Execution.
• This integration allows you to collect cost against a contract through projects and tasks, feed contractual demand into the planning system, create procurement documents such as purchase requisitions and purchase orders for direct-procured contract material and other items that are not sourced through planning, create shipment requests for shippable deliverables and track shipping and delivery statuses, generate billing events, and recognize revenue.
• All the manufacturing transactions take place at the project or project-task level depending on how the organization parameters are set, and if the project/project-task information is on the deliverable.
• Contract related information from the other products can also be viewed and tracked within the DTS with additional drill down capability.

Fitment and Suitability of Oracle Project Contracts for your organization:

• Project Contracts was designed and built primarily for Aerospace and Defence Industry. Enhancing its features or Web enabling it is on the current roadmap of Oracle Development
• Its powerful features is Contract creation, authoring and maintenance and handling Deliverables associated to the contract Lines (DTS)
• Funding association is at the Contract Line level and hence one contract can fund multiple related projects
• Billing integration is manual and the Application doesn’t call the Billing extension (for both Revenue and Billing)
• Sub Project associations can be modeled through the creation of a Master Project to represent the Contract and the associated projects created as Sub Projects
• Procurement integration is seamless based on Deliverables
• As an organization, you have to determine if you have any other similar modules / systems which provides project contract capabilities
• If not, then because of its powerful features and functionalities and its seamless integration with other EBS modules, you might want to consider implementing Oracle Project Contracts

Understanding Project Contracts (OKE)- features and functionalities

Project Contract structure and relationship:

• OKE Contract structure is similar to that of a Purchase Order.
• A PO could reference multiple Lines. Each PO line could reference multiple shipments. Each shipment could reference multiple distributions, which is the lowest level at which transactions are processed
• Similarly, OKE Contract (Header) contains core information of the Contract and references multiple Contract lines.
• Seeded values for Line style (Data Item, Free Format, Item, Option) are available for the defaulting of appropriate fields for data entry into the Contract Line
• Each Line could be associated with one or more deliverables classified as, inbound (receipt of goods and services) or outbound (shipment or providing of services)
• Contract is associated with a project and the contract line with one or more projects (please see below)

Master and Sub Project association:

• At the Contract Header, we associate the entire contract with a Project. This association is core to the integration with Projects Suite
• Typically, we might have several parallel projects that are being planned and executed for one Master Contract/Agreement. They might reference multiple lines and multiple deliverables, each of which might be a finished item, manufactured and shipped from an inventory organization
• To ensure they are all appropriately linked to the contract line, we need to define the Sub Project Association (at its task level) for the Project selected for the Contract Header
• Sub Project Association does not roll up costs, revenue, etc and is meant primarily to select it at the Contract line level. To achieve the benefit of Performance roll up, if the client is licensing PJT too, the Master project associated at the contract header should be defined as a Program project and the child projects associated with its task, in addition to also associating them as sub project
• Through this design, a Master (Program) project associated at the Header can be used to associate the multiple delivery projects (defined as sub project to its task) at the individual contract line

Contract Funding Process:

• The unique feature of OKE Funding is that a Contract could be funded by multiple parties and can fund multiple projects
• At the Contract level, in the Parties and Contacts Tab, we associate the multiple Fund by Parties, which drives the validation for funding association at the contract line level. Hence, a Contract could be entered into with multiple Fund by parties simultaneously
• The Application validates the Fund by Party assignment at the Contract when we select a party in the Funding Workbench in OKE to fund the applicable Project associated with a line
• OKE funding is initiated and handled only in OKE and upon the funding being definitized, the Application automatically creates the Funding Agreement record in Projects with the Product Source of OKE and populating the Reference field with a unique No that is concatenated with the Currency code of Funding
• We can enforce Hard limits for invoice, revenue, etc as per the normal Funding done in Projects. Maintenance of Funding is done only in OKE. We could also use the functionality of automatic baseline without revenue budget feature from OKE Funding

Deliverables Tracking System (DTS):

• This is the core of OKE functionality. Integration of OKE with other Applications is handled, controlled and monitored from this workbench.
• It displays the relevant information in various tabs the details of integration and provides particulars of records processed there.
• These are Requisition, Purchasing, Receiving, Payables, Shipping, Receivables, etc. For example, Receivables tab would show the Draft Invoice No, AR Transaction No, Amount unpaid, etc.

Project Manufacturing Integration (PJM):

• OKE integration with Manufacturing, for a project centric operation, is through PJM.
• Each of the project referenced in the contract line needs to be PJM enabled in the inventory org referenced in the Contract.
• This ensures that the standard Project Cost Collection Process transfers the summarized costs from Mfg at the cost element level (Material, labor, Outside Processing and Material and Mfg Overheads) to PJC.

Manufaturing Planning Integration (Project MRP):

• Manufacturing Planning integration is another key area of integration.
• We can initiate Deliverables Planning from DTS for the item.
• We need to select the Master Demand Schedule (MDS) Plan Name and the application creates a manual entry for the MDS.
• After that, we need to run MRP with the manual MDS source and the Application plans the execution using the Planning option, pegging levels, BOM, etc of the item.
• Project and Task references default into the various Work Orders and costs appropriately collected in PJC.
• We need to run a process to relieve the MDS demand to avoid duplication of demand creation (upon shipping execution, Planning Manager does not relieve the manual MDS demand created through this integration)

Procurement Integration:

• Expense, Inventory destination items and Non catalogue items can be initiated for Procurement from DTS directly.
• OKE workflow creates the process and we launch Requisition Import with the source as OKE to create the approved Requisition in Purchasing.
• It can be then auto created as PO and processed normally.
• Project information defaults into the Distribution based on the association of the DTS Deliverable with the Project and Task.

Shipping Execution Integration:

• We can also launch Shipping Execution and confirmation from DTS.
• This information is passed to Shipping Execution.
• This would be done when the outbound deliverable item that is planned for execution in Mfg is ready for Shipping

Project Billing Integration:

• When the outbound deliverable item is ready to be billed (item defined as Invoicable and Invoice enabled), we can launch the creation of billing events (for both revenue and invoice).
• In the window we enter the event type and initiate the event creation.
• This creates the eligible event that is then automatically processed when we generate revenue and invoice from Projects.

Why TCA Matters for Clients running Oracle Ebusiness Suite

Why TCA Matters - What clients get from the TCA architecture:

• Architecture to model your customers and other trading partners as you see best for your business
• Architecture that will grow with your requirements
• Features to maintain extremely reliable customer information (e.g. ABC Co. is now sure that their supplier John of XYZ Inc is the same person as their customer, John of XYZ Inc)
• Glue that ties several E-Business Suite flows in a seamless way
• Customer Data Integration solution even if you are not running a single E-Business Suite module
• Platform that can play a key role in your IT landscape for Master Data Management

Why TCA Matters - What clients have to do:

• Take a close look at how you do business and how your business processes are most efficiently performed
• Ask questions about how you should model customer information e.g. which entities should be modeled as parties; when should you create an account; should you create multiple accounts for some parties; should you create multiple billing sites for an account; should you create account relationships
• Even if you are implementing few modules of E-Business Suite to start with, keep in mind the bigger picture about customer information