This is the third blog post in a series capturing the Q&A from a recent webinar, How Noble Energy Automated Reconciliations with Oracle ARCS. The on-demand recording is available, no forms to fill out! We couldn’t have been more pleased to welcome both Matt Dossett and Joel Ninemire from Noble Energy on the call as well as Tim Gaumont with Oracle. The active Q&A session ran nearly half an hour – a record breaker for the Oracle team at Perficient. In part one of this blog post series, the team covered time to deploy, integrating ARCS with existing cloud or on-premises ERP systems as well as how upgrades and patches are handled. In part 2, our experts tackled reconciliation for intercompany as well as multi currencies. We close out this blog post series with with some great questions from attendees about whether FDMEE is required and how drill back into subledger works.
One of our challenges is bank account reconciliations; specifically generating entries for bank originated transactions and related matching. Cash clearing, journal entries, and truing up FX gain and loss. We have approximately 500 bank accounts.
[Oracle] There’s two ways to look at that. The first thing is, if you’re loading in a typical bank rec, you have a GL source and a bank source. We also offer multiple match processes, or really, unlimited data sources if you have to have certain legs in between. For example, some customers will load GL, match that to a point of sale system, and then the point of sale system will match to the bank. I also have seen GL to accounts receivable, accounts receivable to the bank, and so on through to credit card processors. There’s all the different sources involved on a lot of these different recs.
Depending how many ways your reconciliation needs to be, how many sources you’re going to load, there’s a lot of adjustments that come from that. The first thing that we extract out and make sure we post are the adjustments. Anything we find that is a variance or adjustment needed between those sources, we can post. The other thing that you mentioned is just the source activity itself. We can extract that and post it as well because, and Perficient touched on this earlier, anything that we load in, we can certainly extract back out and post. I hope that answers your question because I think you were touching on all these different sources and different things needed to get updated. That’s typically how customers will handle that.
Can a single reconciliation be configured to contain some balance of multiple chart fields combinations, so that one user can prepare approved multiple combos at once?
[Oracle] Yes, we can combine across chart field combinations and create what we call a group reconciliation. This definitely saves a lot of time because you’re not doing a lot of individual reconciliations. You’re creating a single reconciliation which has multiple balances rolled into it, and you can see that detail. You can always drill through and see what balances make up that rec, but at the end of the day, that single group of balances goes through one workflow. One preparation and one review, or however many reviewers you’d like, and that does save a lot of time at the end of the day, typically from the manual reconciliation.
You had asked about local and a reporting bucket. There are up to three. Typically, they’re configured as entered or transactional currency. That’s the currency that the transaction occurred in. The local currency, or functional currency, as some people call it, is that second bucket. Then, the reporting currency, or global currency is the third. You can bring in what you need there as the Noble team mentioned. They’re bringing in two, as some customers that are U.S.-based entities only will bring in one. It’s really up to you how you configure that. If you do have multiple currencies, I always recommend bringing in the reporting and functional currencies at least, because then you can always track the difference between them and make sure they’re both obviously reconciled.
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[Noble Energy] With the group that has the reconciliations, there’s two different ways that we’ve been grouping the reconciliations. The first way is called data mapping, where basically, we’re rolling the entire balances for selected accounts all into one balance. It treats it as one reconciliation. Then, there’s also a way where we did the summary reconciliations, where they’re not mapped into one balance per se, but you can see each account listed on what’s called a summary profile. You can see each balance and reconcile it that way.
Does Noble use primary and secondary ledgers? If so, how is this incorporated into the ARCS solution?
[Noble Energy] Right now, we’re using that primary ledgers for most of our accounts. We actually consolidate into what’s called a consolidated ledger. We’re pulling balances and transactions from there, but then for the accounts where we are also pulling in foreign currencies, we’re using the secondary ledgers for those balances.
For automated data integration, do you need FDMEE on premises?
[Perficient] No, you do not. For Noble Energy, we were able to use Oracle Data Management. Data Management is the integration tool that comes delivered with ARCS. It is essentially FDMEE in the cloud. Noble Energy was able to generate the files that we need and created a schedule to export those files to a shared location. The EPM Automate Utility picked up those files and piped them through data management and directly into the application. That was a lights-out automation. This also supported drilling-back into the on-premise EBS application.
Does the workflow use enterprise component or something else in ARCS?
[Oracle] I’m not familiar with the term enterprise component, but the workflow that we use is a common workflow tool, our engine that’s in the EPM platform. It is also used for Close Manager and some other places where we need the flexibility of workflow and all the things that go with that. It’s something that’s built directly into our EPM platform.
Do you have templates for each reconciliation type, and can the rules be set up account type?
[Perficient] From a reconciliation perspective, each reconciliation does have an actual template. You start out with what we call a format. ARCS provides pre-delivered formats in the application that are used as a starting point for building out each reconciliation type. Each reconciliations will be assigned to one of these formats. The format essentially lays out the columns of information that you’re going to have in the application and how the actual reconciliation works. You start out with an overarching format. The reconciliation templates are assigned to that format, and they get created on a monthly basis. You do assign time periods, so they would get created based on the time period that you have assigned to each of those formats.
How does the drill back into subledger work?
[Perficient] In Data Management, we created a subledger import process. We essentially had one file for each of the different subledgers (AP, AR, fixed assets and cash). We created a location in Data Management where we pulled the various subledger data in. For each of these locations, we created a drill through URL. As part of that URL, we had to parametrize specific functions on that URL. Things like the CCID, the set of books, the ledger, the function ID were parametized and passed through to identify the unique transaction that we wanted to drill-through on. We worked with Noble Energy to identify what those parameters are, pass that information across in the file, so we can parametrize it and load it through data management. From a reconciliation, you would click on subledger. You’d see a list of all the transactions and then from there, would drill into that actual subledger transaction in EBS.
My company is implementing Oracle AP. We’ve heard that Oracle AP can create amortization schedules for prepaid accounts and record accruals. Do these activities transfer automatically into the ARCS module?
[Oracle] Yes. I don’t know about automatically, but whatever journal entries those recurring vouchers are going to create whenever you pull your GL, those will be included.
With intercompany reconciliations, are you reconciling to a specific chart fields, or between modules such as AR and AP?
[Oracle] We’re reconciling based on relationships. The AR segment from one company to the AP segment of the intercompany segment. It’s per relationship.
