Following IT Convergence’s recent webcast on “Implementing Oracle R12 in China,” listeners were prompted to clear the air of any doubts they may have had about Oracle in China.
We are happy to provide the Q&A transcript.
1.) Hazel mentioned that some companies need to defer revenue recognition until shipment arrives and customer acknowledges receipt. Can you tell me if this functionality is built into standard Oracle 12.1.3, or if it’s part of a localization package?
“Defer revenue recognition until shipment arrives” is a new standard R12 feature – the deferred COGS and deferred Revenue are introduced, and Oracle forces the revenue and cost to be matched.
“Defer revenue recognition until customer acknowledges receipt” is a new standard R12 feature. The user can manually record the ‘Customer Acceptance'(by customers via self-service or internal CSR) and it can be done in ‘ Pre-billing’ or ‘Post-billing.
Oracle also provides the new revenue managers responsibility to manage more detailed Revenue contigencies and revenue policy tasks.
You will need to setup the following site level profile options:
1. Enable Time zone Conversions: Updated ‘Yes’
2. Server Time zone: set the server time zone; I suggest checking with the DBA regarding the DB time zone setup
3. Client Time zone: Optionally set this at site level (equal to server time zone, so that the US users will not be affected). Australia users will need to set the client time zone by setting up correct user preference or user level profile option.
We suggest running thorough testing for the system standard reports, report/concurrent program scheduling, form date display checking, etc and particularly for the custom reports when the time zone conversion is enabled.”
2.) If we’re operating in China, can we have simply use the global COA without having to set up the second ledger?
“We would suggest you setup 2 ledgers for your China subsidiary, one that confirms to US GAAP and another that conforms to China GAAP, however, we also have other solutions that don’t require to setup a secondary ledger.”
3.) How do you get around the server time being in the US as it relates to reports in a foreign currency? We have a subsidiary in Australia where we measure how they did compared to making a shipment by the scheduled ship date. They are currently 15 hours ahead of us and when we run the reports they carry the server time which is in Minneapolis and distorts the measurements.
“Assigning the ledger structure for a China subsidiary should be simple, you first need to see whether the existing COA can cover the detailed accounts required in China, and whether the GAAP differences can be accounted in one ledger. If the answer to those two questions is yes, then the global COA and the primary ledger should be sufficient. You may need to add detailed accounts for China in global COA, in this case, you need to check existing FSG reports to ensure that the account reporting will not be impacted. In addition to the situation above, you also need to consider how to handle any GAAP adjustments that are required when you design the solution.”
4.) Do we need to implement MLS for China?
“NO, it’s not. UTF8, or Unicode Transformation Format is required. However, from our experience, we’ve found the vast majority do chose to go with MLS. Rather than using MLS, you can meet the minimum legal requirements by using standard and alternate fields, mixing characters or flexfields and setting up the statutory Ledger within the General Ledger with the government issued Chart of Accounts and Chinese account caption. ITC provides both non-MLS as well as MLS solutions.”
5.) Please provide an estimate for an R12 implementation project duration assuming vanilla implementation.
The duration for implementation of R12 in China depends on how many modules, the complexity of the business processes, the scope of the data conversion etc. From my past experience, it normally takes around 4-6 months to implement in China including full statutory and localization compliance.
6.) I have heard that the E-business Tax module is difficult to implement. Can you comment on the challenges of this module?
Based on my experience, the difficulty of E-biz Tax largely comes from the complicated architecture on the tax configuration. It takes many steps to define the elements such as tax regime, tax jurisdiction, tax status, tax rate and very flexible tax rules. It is not easy to understand all of the logic behind this module unless you have spent a lot of time working on it. In addition, there are some system bugs that exist in the integration between E-biz Tax and some other modules, such as Accounts Payables but most of them have been resolve in the latest R12 version.