Objective:

This training article is intended to discuss Fusion Accounting hub and its components.

Fusion Accounting Hub:

Oracle Fusion Applications is designed to work alongside both non-Oracle and Oracle systems without forcing customers to perform a full-scale upgrade. A key component of this coexistence strategy is Oracle Fusion Accounting Hub (FAH). FAH is both an accounting integration platform and a reporting platform.

It eliminates the need to manage custom accounting logic for 3rd party transactional systems to meet statutory, corporate, regulatory, and management reporting needs in a very controlled and consistent fashion reduce integration costs and dependence on IT staff Simultaneously meet diverse corporate, management, and reporting requirements, such as U.S. GAAP, IFRS, and local statutory requirements. It retains current E-Business Suite or PeopleSoft financial systems and have them coexist with Fusion Financials where there is significant business value Perform sophisticated reporting and analytics within a multi-dimensional environment make better decisions with real-time access to information.

Fusion Accounting Hub is truly a hub which incorporates your accounting and reporting application. Oracle fusion accounting hub incorporates the following major sub components:

• The General ledger
• Sub-Ledger accounting rules engine
• Sub-Ledger accounting data repository- enabling you to store sub-ledger transaction and supplemental details that you would not normally incorporate into your general ledger.
• Financial Allocations solution
• Master data management solution – Data effective hierarchy manager (Hyperion DRM)
• Vibrant financial and analytic reporting applications
• Integration with Enterprise Performance management applications

Let us discuss the various components and their value propositions one by one:

The General Ledger:

By incorporating the General Ledger into the hub, Oracle has once and for all settled the debate on the Thin vs. Thick General Ledger. The General Ledger as part of Oracle Fusion Accounting Hub has been broken down into two significant sub-aspects “The transactions” and “The balances”.

Journal transactions flow into the hub, be it from the Oracle Fusion Sub-Ledgers, manual and spreadsheet uploads; entries from non-Oracle systems or from Oracle E-Business Suite, PeopleSoft, etc. applications.

The most exciting aspect of the GL is the fact that the GL balances are not maintained in the relational database anymore and are maintained in multi-dimensional reporting capabilities cubes. The posting to the cubes is in real-time and the journal transaction is not considered as posted until the dimensions have been populated. On top of it hierarchy/tree balances are also real time too. The cubes also offer the scalability to offer summarization of large data volumes without compromising on performance. Oracle has also incorporated the ability to drill down from the cubes to the source transaction in the originating sub-ledger, through Oracle Fusion Accounting Hub and the Source Applications like Oracle E-Business Suite and PeopleSoft.

Sub-Ledger Accounting Rules Engine:

SLA is a rules based accounting engine that introduced the ability to define how transactions originating in sub-ledgers are accounted. As part of Oracle E-Business Suite Release 12, Oracle also included Oracle Financials Accounting Hub that extended SLA to non-Oracle systems. SLA and Oracle Financials Accounting Hub basically sent data into the same schema (XLA). Oracle has retained this functionality in Oracle Fusion - Accounting Hub.

Oracle Fusion Applications has brought these two accounting engines together and has provided us with the ability to define rules and store financial data from both Oracle Fusion Applications and non-Oracle Fusion Application systems in the same data structures.

Oracle is offering out of the box, pre-built connector and seeded accounting rules to integrate with the Oracle E-Business Suite and PeopleSoft Applications.

One of the significant benefits of SLA was the ability to generate multiple accounting representations (IFRS, local GAAP etc) for a single sub-ledger transaction event. Oracle has retained this functionality with Oracle Fusion Accounting Hub and has also retained and extended the functionality of Primary, Secondary and Reporting Currency ledgers that were introduced with Oracle E-Business Suite Release 12.

With Oracle Fusion Accounting Hub the biggest value add is that you need not define and maintain any accounting rules or accounting transaction generating capability in your legacy applications such as a non-Oracle order processing or inventory management system. Users can define the accounting rules based on the transaction events that are flowing in from these applications into Oracle Fusion Accounting Hub and feed in only the raw transactions from the source system into Oracle Fusion Accounting Hub. The SLA engine in Oracle Fusion Accounting Hub is capable of deriving the accounting transactions (journal entries) based on the raw data feed.

SLA also offers the ability to define date effective accounting rules and users have the ability to maintain rules in advance to cater to any changes in accounting treatment. Date effective accounting rules enabled accounting for a transaction based on the appropriate treatment of the period in which it originated.

Sub-Ledger Accounting Repository:

The SLA layer also maintains balances and the granular transaction level details of the accounting event that originated in the sub-ledger Oracle Fusion Accounting Hub, retaining the ability that was introduced in Oracle E-Business Suite Release 12 to maintain sub-ledger accounting transactions and journal entries in the SLA layer along with sub-ledger non accounting transaction details such as supplier, customer and asset number.

The SLA layer provides the ability to maintain supporting references which are basically user configurable transaction attributes that provide additional information that are relevant to the financial transaction. Supporting references can also be better understood as extensible accounting segment values that are relevant only to transactions that originate from certain sub-ledgers.

The biggest benefit with supporting references is the ability to track balances on these supporting references as with any of the other dimensions or segments of the COA. The only point to note is that these supporting references and the balances on them are stored only within SLA.

Financial Allocation Solution:

Oracle Fusion Accounting Hub has incorporated another feature that was lacking in earlier releases of the product, namely a more robust allocation engine. Oracle Fusion Accounting Hub includes a new functionality called Allocation Manager.The allocation manager works on the multi dimensions cubes where the allocation calculation engine is more robust. The engine also has the ability to write back allocation journal entries to the General Ledger.

Hyperion Data Relationship Management:

With Hyperion Data relationship management (DRM) Oracle has created a simple tool with which to keep all Charts of accounts and hierarchies in sync. The DRM can integrate with both Oracle E-Business Suite and PeopleSoft applications as well as non-Oracle COA’s and the Oracle Fusion Accounting Hub. DRM ensures that any updates to values and hierarchies are seamlessly integrated between these various COA repositories.

Vibrant Financial and Analytic Reporting Applications:

With Oracle Fusion Accounting Hub and the movement of GL balances to multi dimension cubes, Oracle has introduced an array of reporting toolsets for users to choose from depending on their business needs.

The needs of financial users range from being able to view summarized financial data at the level of hierarchical parents down to being able to drill down to the source transactions that was the origin of the balance. By incorporating the reporting toolset on a pre-aggregated multi-dimensional database, Oracle has made reporting fast, easy and accurate. Users have the ability to slice and dice on data across dimensions and drill up, down and sideways on any parents. The various tools available are Account Manager, Account Inspector, Smart View, OTBI, etc which has already been discussed in length in my previous articles.

Anjan Mukerji

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