The below example explains a few of the important terms and concepts used in the Oracle E-Business Suite.
This would be a good starting point for the beginners to better understand the concepts behind Oracle Applications.
Say SkRao is the owner of a wholesale fruit shop. He buys various fruits like apples, oranges, mangos and grapes etc from farmers directly and sells them to retail shop owners and also to the direct customers.
The farmers are referred to as VENDORS/SUPPLIERS in Oracle Applications. Harry keeps track of all his vendors’ information like addresses, bank account and the amount he owes to them for the fruits that he bought etc, in a book named Oracle PAYABLE.
SkRao gets an order from a retail shop owner of Fruit Mart, for a shipment of 11 bags of apples, 25 bags of oranges and 32 kgs of grapes. In Oracle Apps, bags and kgs are referred to as UOM (unit of measure), Fruit Mart is called CUSTOMER and the order is referred to as SALES ORDER. Harry maintains a book called ORDER MANAGEMENT where he writes down all the details of the SALES ORDERS that he gets from his customers.
Say the fruits have been shipped to the customer Fruit Mart. Harry now sends him the details like cost of each bag/fruit, the total amount that the customer has to pay etc on a piece of paper which is called INVOICE / TRANSACTION.
Once the INVOICE has been sent over, the customer then validates this against the actual quantity of fruits that he received and will process the payments accordingly. The invoice amount could be paid as a single amount or could be paid in installments.
SkRao’s customer, Fruit Mart pays him in installments (partial payments).
So SkRao has to make a note of the details like date received, amount received, amount remaining, amount received for what goods/shipments/invoice etc, when SkRao receives the payments.
This detail is called RECEIPT, which will be compared to the invoice by SkRao to find how much Fruit Mart has paid to him and how much has to be paid yet. This information is maintained in a book named RECEIVABLES to keep track of all the customers, their addresses (to ship the items), what and how much he has shipped to his customers and the amount his customers owe him etc.
SkRao’s fruit business has begun to improve and has attracted more and more customers. As a result, SkRao decided to buy a cold storage unit where he could stock more fruits.
In Apps, this cold storage unit is known as WAREHOUSE and all the fruits are referred to as INVENTORY. Due to increase in customers, SkRao needs to hire more people to help him out in his business without any hiccups.
These workers are called EMPLOYEES. At the end of every month, Harry pays the salary for all his employees through Checks. These checks are nothing but PAYROLL in Apps.
At the end of every month, SkRao prepares a balance sheet in a book called GENERAL LEDGER to determine how much profit/loss he got and keeps track of the money going out and going in.
As the business grows, it becomes impossible to record everything on a paper. To make everybody’s life easier, we have very good tools in the market, which help the business men to keep track of everything.
One such tool is Oracle E-Business Suite.
Oracle Applications is not a single application, but is a collection of integrated applications. Each application
is referred to as a module and has it own functionality trying to serve a business purpose.
Few of the modules are Purchasing, Accounts Payable, Accounts Receivables, Inventory, Order Management, Human Resources, General Ledger, and Fixed Assets etc.
Here is a high level business use of various modules:
· Oracle Purchasing handles all the requisitions and purchase orders to the vendors.
· Oracle Accounts Payable handles all the payments to the vendors.
· Oracle Inventory deals with the items you maintain in stock, warehouse etc.
· Order Management helps you collect all the information that your customers order.
· Oracle Receivables help you collect the money for the orders that are delivered to the customers.
· Oracle Human Resources helps maintain the Employee information, helps run paychecks etc.
· Oracle General Ledger receives information from all the different transaction modules or sub ledgers and summarizes them in order to help you create profit and loss statements, reports for paying Taxes etc.
For
Example:
when you pay your employees that payment is reported back to General Ledgers as cost i.e money going out, when you purchase inventory items and the information is transferred to GL as money going out and so is the case when you pay your vendors. Similarly when you receive items into your inventory, it is transferred to GL as money coming in, when your customer sends payment, it is transferred to GL as money coming in. So all the different transaction modules report to GL (General Ledger) as either “money going in” or “money going out”, the net result will tell you if you are making a profit or loss.
All the equipment, shops, warehouses, computers can be termed as ASSETS and they are managed by Oracle Fixed Assets.
There is a lot more in Oracle applications. This is the very basic explanation just to give an idea of the flow in ERP for the beginners.
1.
. Invoice
At the end of every month, SkRao prepares a balance sheet in a book called GENERAL LEDGER to determine how much profit/loss he got and keeps track of the money going out and going in.
As the business grows, it becomes impossible to record everything on a paper. To make everybody’s life easier, we have very good tools in the market, which help the business men to keep track of everything.
One such tool is Oracle E-Business Suite.
Oracle Applications is not a single application, but is a collection of integrated applications. Each application
is referred to as a module and has it own functionality trying to serve a business purpose.
Few of the modules are Purchasing, Accounts Payable, Accounts Receivables, Inventory, Order Management, Human Resources, General Ledger, and Fixed Assets etc.
Here is a high level business use of various modules:
· Oracle Purchasing handles all the requisitions and purchase orders to the vendors.
· Oracle Accounts Payable handles all the payments to the vendors.
· Oracle Inventory deals with the items you maintain in stock, warehouse etc.
· Order Management helps you collect all the information that your customers order.
· Oracle Receivables help you collect the money for the orders that are delivered to the customers.
· Oracle Human Resources helps maintain the Employee information, helps run paychecks etc.
· Oracle General Ledger receives information from all the different transaction modules or sub ledgers and summarizes them in order to help you create profit and loss statements, reports for paying Taxes etc.
For
Example:
when you pay your employees that payment is reported back to General Ledgers as cost i.e money going out, when you purchase inventory items and the information is transferred to GL as money going out and so is the case when you pay your vendors. Similarly when you receive items into your inventory, it is transferred to GL as money coming in, when your customer sends payment, it is transferred to GL as money coming in. So all the different transaction modules report to GL (General Ledger) as either “money going in” or “money going out”, the net result will tell you if you are making a profit or loss.
All the equipment, shops, warehouses, computers can be termed as ASSETS and they are managed by Oracle Fixed Assets.
There is a lot more in Oracle applications. This is the very basic explanation just to give an idea of the flow in ERP for the beginners.
1.
. Invoice
The contact information of the buyer
The terms of payment (that explain the means of payment, when the sum should be received, the discount details for early payment, late payment fees, etc.)
An account detailing the product/service
The cost per unit of the product (if this applies)
Sales v. purchase invoice
· An invoice shows the payment that a buyer owes to a seller. From a seller’s point of view, an invoice for the sale of goods and/or services is referred to as a sales invoice.
From a buyer’s point of view, an invoice for the cost of goods and/or services rendered is referred to as a purchase invoice.
Invoices in e-conomic
In e-conomic you can design, create, send and book your own invoices from your computer or smart phone. You can even scan invoices (from e.g. your suppliers) and book them in your system directly.
Cash Transactions
Cash transactions are ones that are settled immediately in cash. Cash transactions also include transactions made through cheques. Cash transactions may be classified into cash receipts and cash payments.
Cash Receipts
Cash receipts are accounted for by debiting cash / bank ledg