Oracle Financials Functional Basics

This article gives a brief overview of the core Oracle Financial modules and how they interact or exchange information.

The Oracle Financials family of applications is designed to capture the key financial transactions in a business and to generate financial statements and other useful reports from the same. With the addition of Financial Daily Business Intelligence, it also gives the manager revenue and expense information on a daily basis.

The Oracle Financial family includes the following core modules:

•           General ledger

•           Payables

•           Receivables

•           Assets

General Ledger: is the central repository of all financial transactions in your business. It is integrated with other financial application that generates financial data and, it can also be integrated with other application families like Manufacturing, Order Management and Human Resource etc to capture the financial data generated from them. Other applications in Oracle financials that send financial information to the general ledger are usually referred as Sub ledgers (E.g.: Asset, Payables, Receivables etc.). General Ledger generates the key financial reports like financial income statement, balance sheet etc. The key function of this module is to manage Journal entries, Budget Information and account balances.

Payables: is the core module that manages the enterprise spending. The payables module process the supplier invoices, automate the payment of supplier invoice, perform accounting of the invoice and payment information and transfer the accounting information to the general ledger module. It is fully integrated with the general ledger module and also performs the back end processing for Oracles Procure to Pay and Travel and expense management solutions provided by Oracle. This module can also be integrated to the application of other families like Procurement (eg. Purchasing), Human Resource Management for invoice and payment management.

Receivables: helps to manage the customer invoices and do the exact opposite function as that of Payables. It automates the processing of customer invoices and cash receipts. In simple words Payables manages what goes out of your hand (bills/invoices that you need to pay) and Receivables manages what comes in (customer bills/invoices). The key functions of Receivables are processing of customer invoices and cash receipts and sending the accounting information from the same to general ledger.

Assets: as the names implies, manages the assets of your business. It is fully integrated with Payables and General Ledger modules. The key function includes Asset addition, depreciation and transfer of accounting information related to asset management to general ledger module.