Professional Documents
Culture Documents
Contents
Preface
Overview
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Implementing
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Specifying Events That Apply Documentation and Accounting Rules: Procedure ..................................................... 10
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Incoterms: Explained
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What happens if I modify the supplier or customer for the legal entity? ................................................................... 16
When can I delete an intercompany buyer or seller profile?
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Preface
Preface
This Preface introduces information sources available to help you use Oracle Applications.
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Chapter 1
Overview
Overview
Chapter 1
Overview
buyer and seller relationship. It includes an intercompany transaction that occurs in Vision Corporation, which is a fictitious
company that makes and sells computer products.
In this example, a financial orchestration flow exists between the Vision Distribution Center, located in Singapore, and Vision
Operations, located in North America. The Vision Distribution Center sends the physical product that is involved in the
transaction to retailers. It also sends the financial information and transfers ownership of the product in the financial books
for the transaction to Vision Operations in North America. Each of these organizations constitutes a separate legal entity that
resides in Vision Corporation. However, they reside in different countries, and they each require separate accounting and tax
reporting. You can use Oracle Fusion Supply Chain Financial Orchestration to capture, process, and perform an accounting
of the events that occur during an intercompany transaction in an enterprise that is similar to Vision Corporation. For example,
you can use it to do the following work:
Create documentation and accounting rules that specify the type of accounting documentation to create.
For example, whether or not to create an intercompany invoice, to track profits in inventory, or to track trade
distributions.
Chapter 1
Overview
Create transfer pricing rules that specify whether to use the transaction cost, a purchase order price, or the sales
order price as the basis to calculate the intercompany transfer price between the seller and the buyer. You can
create transfer pricing rules that apply a markup or markdown percentage on the internal sale.
Create buy and sell terms that specify the selling and buying legal entities, the business units within these entities
that constitute the buyer and seller, the documentation rules, accounting rules, and transfer pricing rules to use, the
payment terms to use, incoterms and incoterm locations, and tax determinants.
Create intercompany buyer profiles and intercompany seller profiles that Financial Orchestration uses to create the
intercompany invoice. You can specify the business units that provide the procurement and payables invoicing for
the profit center business unit, the business unit that provides receipt accounting information, the bill-to business unit
and bill-to locations, and the procurement business unit.
Create financial orchestration qualifiers that specify when and under what conditions to run a financial orchestration
flow. For example, you can create a rule that specifies to run an orchestration flow only if a particular supplier is
involved in the transaction, and only if the flow is a procurement flow.
Create financial orchestration flows. You can specify the legal entities and business units that are involved in a flow,
the financial orchestration qualifiers that control when to use the flow, the financial routes to use for the flow, the
buy and sell terms to use with the flow, and the date when the flow goes into effect. You can also specify a priority
among different flows.
In summary, Oracle Fusion Financial Orchestration helps your company to meet the following business objectives:
Support complex, global structures without compromising supply chain efficiency.
Model your corporate tax structures in a global environment efficiently without impacting the physical movement of
goods. This capability helps to make sure you can get goods and services to your customers as quickly as possible,
and lower your total supply chain costs at the same time.
Optimize operational efficiency by centralizing sourcing and order management functions.
Run financial orchestration flows without impacting the physical movement of goods.
Define business rules for financial orchestration flows that support a variety of physical movements in your supply
chain. This capability can reduce implementation costs and cycle time, and it allows you to react effectively to
corporate reorganizations or acquisitions.
In general, this implementation guide uses the phrase Financial Orchestration to describe the Financial Orchestration work
area and the work that it does. This work area is part of the Oracle Fusion Financial Orchestration product offering.
Chapter 1
Overview
Explanation of Callouts
A financial orchestration flow includes the following steps:
1. A Fusion Supply Chain application, such as Inventory and Receiving, sends a notification that a supply chain event
occurred, such as a shipment transaction.
2. Financial Orchestration receives the supply chain event. For more information, see Specifying Events That Trigger
Documentation and Accounting Rules: Procedure.
Chapter 1
Overview
3. Financial Orchestration identifies the financial orchestration flow that it must use in reply to the event. It uses the
configuration that you specify on the following pages to identify this flow:
4. Financial Orchestration creates an instance of the financial orchestration flow that it identified in step 3.
5. Financial Orchestration creates the tasks that it uses to run the instance.
6. Financial Orchestration interacts with one or more Fusion applications. It can interact with the following Fusion
applications while the instance runs. It can exchange information about the instance with these applications
automatically, so you are not required to do any configuration to enable these interactions:
Distributed Order Orchestration. Provides the Orchestration Order information for shipment flows.
Procurement. Provides the Purchase Order information for procurement flows, and confirms whether or not a
financial orchestration flow that does validation is available when it creates or updates a global procurement
purchase order.
Product Information Manager. Provides information about the products that Financial Orchestration uses for
each supply chain transaction.
Financials. Provides information about the supplier and customer that Financial Orchestration associates with
each legal entity. To get this information, Financials uses the advanced global intercompany that you specify
when you set up Financials. Financial Orchestration interfaces the intercompany receivables and payables
invoices to Financials.
Materials Management and Logistics. Sends a notification to Financial Orchestration that indicates that a
transaction occurred in the physical supply chain, such as a shipment or a receipt. It also sends other details
about each transaction.
Managerial Accounting. Tracks cost elements. For more information, see Cost Components, Cost Elements,
and Analysis Groups: Explained.
7. Financial Orchestration uses various Web services to interact with other Fusion applications that provide and store
costing, receivables, and payables data.
8. After you complete the setup, you can use the Monitor Financial Orchestration Execution page to monitor and
correct problems that might occur during the financial orchestration flow.
Chapter 2
Implementing
Implementing
Make sure the Implementation Status for the Supply Chain Financial Orchestration offering is Implemented. If
it is not implemented, then implement it now.
Make sure the Implementation Status for the Materials Management and Logistics offering is Implemented. If
it is not implemented, then implement it now.
If these offerings do not exist, or if you cannot implement them, then consult with your system administrator to
determine how to implement them, implement them, and then resume this procedure.
On the Manage Implementation Projects page, click Actions, and then click Create.
In the Name field, enter a value that describes your project, and then click Next.
For example, enter My Financial Orchestration Project.
On the Create Implementation Project: Select Offerings to Implement page, include the Supply Chain
Financial Orchestration offering, and then click Save and Open Project.
The application creates an implementation project that you can use to customize Financial Orchestration.
7. In the Task list, expand the Supply Chain Financial Orchestration folder.
Chapter 2
Implementing
Define Common Applications Configuration for Supply Chain Financial Orchestration. Includes all the
tasks that Financial Orchestration requires for common applications. You do not need to modify any of these
tasks.
Define Supply Chain Financial Orchestration. Allows you to customize Supply Chain Financial
Orchestration. You can expand this folder to view the tasks that you must perform to set up Financial
Orchestration.
8. Use the Define Supply Chain Financial Orchestration folder and the tasks that it contains to set up Financial
Orchestration.
It is recommended that you complete these tasks in the following sequence:
Manage Supply Chain Financial Orchestration Manage Buy and Sell Terms
In the Search Results list, choose the Financials product offering, and then click Export.
Chapter 2
Implementing
In the Export Offering dialog box, specify a file to export, and then click Export.
You must export your customizations so Financial Orchestration can use them when it processes order
information. For more information, see Exporting and Moving Customizations: Points to Consider.
2. Repeat step 1 for the Materials Management and Logistics product offering.
3. Repeat step 1 for the Supply Chain Financial Orchestration product offering.
4. Import the Financials product offering:
Log into the environment where you are setting up Financial Orchestration.
In the Import Offering dialog box, locate the file that you exported in step 1, and then click Import.
Repeat step 4 for the Materials Management and Logistics product offering.
Repeat step 4 for the Supply Chain Financial Orchestration product offering.
Create a file that includes information about your suppliers and customers.
Fusion Applications do not define suppliers and customers in the Functional Setup Manager, so you must
import them. You must create and upload a file that includes information about each supplier and customer.
This file must use a comma-separated value (CSV) format.
Import the file. For more information, see Importing Data from a File: Getting Started.
Chapter 3
Chapter 3
Forward Flow. Specifies the trigger to use when the seller sells a good or service to the buyer.
Return Flow. Specifies the trigger to use when the buyer returns a good or service to the seller.
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Chapter 3
For Release 9, Financial Orchestration does not support returns for an interorganization transfer.
You can specify multiple events for a single rule. For example, to apply this rule when Financial Orchestration receives a
purchase order from the buyer, or when it creates a shipment order, you do the following:
1. Click the Forward Flow tab.
2. In the Procurement dropdown list, choose PO Receipt.
3. In the Shipment dropdown list, choose SO Receipt.
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Chapter 4
Procurement. Use the value that the line item of the purchase order contains.
Shipment. Use the selling price from the fulfillment line that Oracle Fusion Distributed Order Orchestration
specifies.
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Chapter 5
Incoterms: Explained
As an option, you can specify the Incoterm (International Commercial Terms) and Default Incoterm Location on the Manage
Supply Chain Financial Orchestration Manage Buy and Sell Terms page. Financial Orchestration uses these items as
part of the matter of record for the intercompany transaction. The incoterm and incoterm location that you choose does not
affect how Financial Orchestration handles the transaction or does calculations, but it does provide audit trail information.
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Chapter 6
14
Chapter 7
Procurement Business Unit. Specify the business unit that provides procurement services and that stores
the supplier site data that Financial Orchestration uses to create the intercompany payables invoice.
Bill to Business Unit. Specify the business unit that Financial Orchestration must use to get the attributes that
it uses to create the receipt accounting in the Fusion Cost Management application.
Customer Locations for Seller's Receivables Invoice and Sales Order. You can use the following dropdown
lists:
Seller's Customer Address Set. Choose an address set. The address set that you choose includes the billto locations that you can specify for the buyer. If your organization does not require an intercompany invoice,
then you do not need to specify an address set or bill-to location.
Bill to Location. Choose a location that identifies the profit center business unit that Financial Orchestration
must use as the buyer. Financial Orchestration uses this bill-to location to create the intercompany receivables
invoice that it sends to the selling business unit. Note that the Manage Legal Entity Supplier Customer
Association task from Advance Global Intercompany System (AGIS) of the Financials product offering provides
the customer and supplier record for the legal entity.
If you modify any values for the intercompany buyer profile, then Financial Orchestration does not do any of the validations
for the buy and sell terms that you specify, or for the financial routing that you specify. For more information, see Buy and Sell
Terms: Explained and Primary Financial Routes: Explained.
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Chapter 7
Buyer's Procurement Business Unit. Choose the profit center business unit that acts as the seller in the buy
and sell relationship.
Buyer's Bill to Business Unit. Choose the business unit where Financial Orchestration sends the bill.
Supplier Site. Choose the supplier site that Financial Orchestration uses to create the intercompany payables
invoice.
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Chapter 8
17
Chapter 9
Priority
Shipping
Business Unit
Selling Business
Unit
Qualifier Rule
10
BU A
BU B
Category =
Category B
20
BU A
BU B
Category =
Category A
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Chapter 9
Financial
Orchestration
Flow
Priority
Shipping
Business Unit
Selling Business
Unit
Qualifier Rule
30
BU A
BU B
None. Applicable
to all documents.
The following table summarizes how to set up the priority for each financial orchestration flow in this example.
Source Document
Financial
Orchestration Flow
Priority
Result
Flow 1
Financial Orchestration
assigns Flow 1 the
highest priority.
Flow 2
Financial Orchestration
assigns Flow 2 the
highest priority.
Flow 3
Financial Orchestration
does not use the Priority.
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10
Chapter 10
20
Chapter 10
illustrates the financial orchestration flow for this example, and demonstrates how this flow separates the physical flow of
goods for this transaction from the financial flow for this transaction:
Description
Flow type
Shipment
Vision Operations
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Chapter 10
Item
Description
Customer
Qualifier
$100.00 USD
USD
Intercompany invoice
Required
Yes
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Chapter 10
transfer. It must handle returns in the same way that it handles shipments, so make sure you set the forward flow and the
return flow to use the same events. To create the documentation and accounting rules, do the following work:
1. In the Navigator, click Setup and Maintenance.
2. In the Task list, expand the Supply Chain Financial Orchestration folder, and then expand the Define Supply
Chain Financial Orchestration folder.
3. Click Go To Task next to Manage Supply Chain Financial Orchestration Documentation and Accounting
Rules.
4. On the Manage Documentation and Accounting Rules page, Click Actions, and then click Create.
5. On the Create Documentation and Accounting Rule page, set the following values.
Field
Value
Name
Currency Option
Source document
Conversion Type
Corporate
Trade Distributions
Intercompany Invoices
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Chapter 10
Field
Value
Name
Markup Percentage
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Value
Name
Intercompany
Payment Terms
Immediate
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Chapter 10
Field
Value
Incoterm
Leave empty
Vision Operations
Vision Operations
Leave empty
Value
Vision Operations
V1
Ship-to Location
Leave empty
4. In the Profit Center BU Profiles section, edit the Intercompany seller profile. Set the following values. Leave all
other fields at their default value, and then click OK.
Field
Value
Vision Operations
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Chapter 10
Field
Value
Vision Operations
5. In the Profit Center BU Profiles section, edit the Intercompany buyer profile:
Set the Business Unit to Vision Operations.
In the Customer Locations for Seller's Receivables Invoice and Sales Order section, add the following
locations, and then click OK.
Seller's Customer Address Set
Bill to Location
9685
CDRM_112
CDRM_116
Vision Operations
6. On the Create Profit Center BU to Party Relationships page, click Save and Close.
Value
Name
Description
Procurement
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Chapter 10
4. Click Actions, Add Before, and then set the following values.
Field
Value
Parameter
Asset Item
Operator
Equals
Value
Yes
5. Click Actions, Add Before, and then set the following values.
Field
Value
Parameter
Operator
Equals
Value
Value
Name
Shipment
Priority
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Chapter 10
Field
Value
3. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add
Row, and then set the following values. Leave all other fields at their default value.
Field
Value
Vision Operations
Vision Operations
4. On the Create Financial Orchestration Flow page, in the Primary Routes section, click Actions, click Add
Row, and then set the following values. Leave all other fields at their default value.
Field
Value
Vision Operations
Vision Operations
Leave empty.
Vision Operations
5. Click Save.
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Chapter 10
Value
V1
Service Item
RR_RP_Item24
100
Log into your order capture system, and then use it to create a sales order that will start the financial
orchestration flow that you configured in this example.
Make sure the order includes an asset that the Vision Distribution Center must ship to the Schatze Toy
Company. The following values are examples that will start this flow. Your order capture system might use
different fields:
Field
Value
Business Unit
Vision Operations
Ship to Customer
Warehouse
D1
Source Order ID
Vision12345
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Chapter 10
2. On the Manage Financial Orchestration Qualifiers page, click Actions, and then click Create.
Notice the value that the Orchestration Order field displays, such as 181094.
Navigate to the Financial Orchestration work area, and then the Monitor Financial Orchestration
Execution page.
Issue a query that locates the order. For example, in the Sales Order field, enter the Orchestration Order
number that you noticed in step 2, such as 181094.
Verify that the Search Results section contains the following values.
Navigate to the Edit Shipment page, notice the value that the Shipment field displays, and then verify that the
value in the Shipment Status field is Closed.
3. Verify that the customer received the goods:
Field
Value
Orchestration order
Source Order
Vision Operations
Sales Order
Vision12345
Verify that the first record in the Financial Route Details tab contains the following values.
Field
Value
Type
Financial Route
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Chapter 10
Field
Value
Vision Operations
Vision Operations
Verify that the second record in the Financial Route Details tab contains the following values.
Field
Value
Type
Status
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Glossary
Glossary
buy and sell term
Term that you can use to specify the conditions that determine the nature of an agreement to use during an intercompany
transfer, such as the documentation and accounting rule to use, the transfer pricing rule to use, and so on.
documentation and accounting rule
A type of rule that determines how Financial Orchestration creates intercompany invoicing, uses financial routes, and uses
different routes in reply to the different supply chain events that might occur during a transaction.
financial orchestration flow
A flow of information that defines a trade relationship between two different entities. It tracks and stores data that involves
financial instruments, such as accounts receivables, accounts payable, billing, and so on. This flow is different from the
physical flow that goods and services travel because it can include intermediary steps that the physical route does not
include. Internal organizations might perform these intermediary steps, such as wholesalers, distributors, agents, or retailers.
financial orchestration qualifier
A rule that specifies when to run one of the financial orchestration flows that you create in the Manage Supply Chain Financial
Orchestration Flows task. If you do not create any qualifier, then Financial Orchestration runs the flow for all transactions that
it receives
financial orchestration system option
A type of option that affects all financial orchestration flows.
intercompany buyer profile
A type of profile that specifies information about the buyer that Financial Orchestration uses to create the intercompany
invoice.
intercompany invoice
A type of invoice that Financial Orchestration creates when a seller provides a product or service to a buyer, and this buyer
resides in the same organization as the seller but in a different legal entity. It captures accounting and tax information about
an intercompany transaction.
intercompany seller profile
A type of profile that specifies information about the seller that Financial Orchestration uses to create the intercompany
invoice.
intercompany transaction
A type of transaction that occurs between a seller and a buyer, where the seller provides a product or service to the buyer,
and the buyer resides in the same organization as the seller but in a different legal entity. For example, one division of a
business might sell goods to another division that resides in the same business, or a parent company might sell goods to a
foreign subsidiary. An intercompany transaction typically includes a transaction of financial information.
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Glossary
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