Overview

A Key component of Oracle Fusion ERP, Oracle Purchasing Cloud enables you to streamline and automate the procure-to-pay process while enforcing negotiated pricing and terms and ensuring policy compliance.

The charge account in your PO distributions will be used as the Debit account during your PO Delivery process. For example, if you are receiving and delivering an Inventory Item the charge account would typically default from Sub-inventory or organization material account.

If you are dealing with an expense item, the charge account could default from your sub-inventory or organization or item expense account If the destination type is expense, you can specify this account (provided it is not project related) and override any defaults. This account will be either an asset clearing account that will be included on the balance sheet or an expense account that will be included on the income statement. This account is either created or specified when you create a purchase order.

In many a case, a business might be associated with more than one Legal Entity. Such scenarios require attributes to be changed/defaulted based on the legal entity to which the transaction pertains to. One of the attributes is the charge account on the Purchase Order distributions. We have helped a number of our customers during our Oracle ERP Cloud implementations deal with this scenario.

Configuration Steps within Oracle ERP Cloud (Purchasing Cloud)

  1. Perform all the Procurement Setups (Not shown in this post)
  2. For accommodating the requirement of defaulting the correct legal entity on the PO, we would have to create dummy(virtual) inventory origination. Each organization will be associated to a distinct legal entity.

We would have to create as many virtual inventory organizations same as the number of legal entities.

Probably name the inventory orgs same as the legal entity name for easier identification.

Create Inventory Organization- Tangenz Corporation

Create Inventory Organization- Tangenz Corporation

  1. Identify all the locations which are used as deliver-to location within the business unit.
  2. Segregate the locations based on the legal entity. While defining the locations, populate the corresponding inventory organization on the location setup.

Create Location- Tangenz Corporation

Create Location- Tangenz Corporation

  1. In case there are locations which are common between the legal entities, then define them as duplicates by naming the locations appropriately for easy identification and populate the respective inventory organization on each location setup.
  2. Navigate to the “Manage Mapping Sets” in Setup and Maintenance.

Manage Mapping Set- Tangenz Corporation

Create a Mapping Set for mapping the deliver to locations to the correct legal entity and map the locations to the          corresponding BSV

Create Mapping Set- Tangenz Corporation

  1. Navigate to the Manage Account Rule task

Manage Account Rule - Tangenz Corporation

Create an Account Rule and associate the mapping set as the source

Create Account Rule - Tangenz Corporation

  1. Navigate to the Manage Transaction Account Definitions task

Manage TAD - Tangenz Corporation

Associate the Account rule to the segment rules section

Activate TAD - Tangenz Corporation

And activate the Transaction Account Definitions.

  1. As the configurations are complete now, requester would need to login into the Purchase requisition work area and select the correct location in the requisition preferences. User should make sure to select the correct location pertaining to the legal entity in which the purchase order needs to be raised.

Requisition Preference - Tangenz Corporation

10. User can proceed with creating the requisition and the corresponding purchase order will have the correct BSV       values on the charge account by the system.

11. User would need to update the requisition preference and select location2 for creating purchase requisition pertaining to LE2.

If you haven’t already used it, I hope you try this approach. Please share any additional thoughts in the comments below