Oracle Finacial||online training|| Oracial Financial Introduction part - 3 by SaiRam

Overview of Oracle Applications ERP

Introduction to Oracle Applications

• The previous class discussed the various modules within the Oracle application ERP.

• The instructor prompts students to recall what they learned about Oracle applications.

• Emphasizes the importance of remembering these modules for future discussions.

Key Modules in Oracle Applications

• There are six main branches or divisions in Oracle applications:

• Financials

• Manufacturing

• Distributions

• HRMS Payroll

• Project Accounting

• CRM

• Clarifies that "Oracle financials" is a subset of "Oracle applications."

Understanding Specializations and Course Relevance

• Students should distinguish between "Oracle applications" and "Oracle financials."

• Depending on academic background, students may choose specific specializations like HR or finance.

• Suggestion for those specializing in human resources to pursue Oracle Human Resources.

Why Choose ERP Over Traditional Accounting Packages?

Comparison with Accounting Packages

• Questions why companies should opt for ERP systems when accounting packages exist.

• Lists popular accounting software used in India (Tally, Focus, Wings).

• Mentions QuickBooks as a common choice in the USA and Dekizzi used in some countries.

Advantages of ERP Systems

• Discusses the need for understanding why businesses prefer ERPs over basic accounting software.

• Highlights that while Tally is cheaper (around $150), larger companies prefer comprehensive solutions like SAP or Oracle due to their scale and complexity.

Functionality of ERP Systems

Overview of General Ledger (GL)

• Introduces the concept of General Ledger (GL), which serves as a main module within an ERP system.

• Explains that surrounding modules are referred to as sub-modules, such as purchasing, payables, HR, etc.

Module Activities Explained Through Analogy

• Uses food analogies (burger vs. pizza) to explain that each module has distinct functions:

• Purchasing module handles material procurement.

• Payable module manages payments.

• Order management facilitates sales activities.

Target Audience for ERP Solutions

Identifying Suitable Companies for ERP Implementation

• Discusses who should consider implementing an ERP system based on company turnover:

• Small businesses with lower turnovers may not require complex ERPs; simpler software suffices.

• Large corporations with turnovers in billions or trillions benefit from robust systems like Oracle applications.

Goods Receipt and Inventory Management

Understanding Goods Receipt

• Goods receipt is an acknowledgment provided to the vendor, confirming the receipt of items supplied.

• After receiving goods, they are stored in inventory, which acts as a warehouse for these items.

Customer Interaction and Purchase Orders

• Customers typically request items through formal channels rather than casual communication methods like WhatsApp or email.

• When customers want items, they issue a purchase order similar to how the business issues its own purchase orders when needing stock.

Sales Order Preparation

• Upon receiving a customer’s purchase order, it is converted into a sales order for processing.

• A customer's purchase order may include multiple items; in this case: computer, television, table, chair, and AC.

Handling Stock Availability

• If certain items (like chairs) are out of stock or discontinued, they will not be included in the sales order.

• The sales order reflects only available stock; thus only four items were processed due to the absence of chairs.

Returns and Customer Relations

• If a customer returns an item (e.g., a table), it indicates dissatisfaction with quality.

• Such returns are categorized differently from sales; from the customer's perspective it's termed as "purchase return," while for the seller it's known as "sales return."

Order Management Cycle

Document Creation in Receivables

• In receivables management, two main documents are created: invoices sent to customers and cash receipts upon payment.

Purchase-to-Pay (P2P) Cycle

• The P2P cycle encompasses purchasing goods from vendors and making payments. This process is crucial for maintaining supplier relationships.

Inventory and Human Resources Management

Inventory Management Functions

• Inventory management involves maintaining stock levels effectively to meet customer demands without overstocking.

Human Resources Responsibilities

• HR activities include managing employee applications, payroll generation, medical benefits provision, retirement plans, and other employee welfare programs.

Data Transfer in Financial Management

Understanding Data Flow from Sub-Ledgers to Main Ledger

• The process of data transfer involves moving recorded information from sub-ledgers to the main ledger, which is crucial for financial reporting.

• In the main ledger, various financial statements are generated, including profit and loss accounts and balance sheets, to assess company performance.

Assessing Company Status Through Financial Statements

• Financial statements help determine the company's status regarding profits or losses, providing insights into income generation.

Simplified Example of Profit Calculation

• A simple example is presented to illustrate key concepts without overwhelming complexity; the aim is to ensure understanding.

• An Apple iPhone was purchased for $600 directly from the manufacturer as a basis for this example.

Breakdown of Costs and Profits

• The iPhone was sold for $650 after incurring storage costs of $5 and employee-related expenses of $10.

• After accounting for these expenses, the actual profit realized from selling the phone amounts to $35 instead of an initial calculation of $50.

Role of ERP in Business Operations

• The Enterprise Resource Planning (ERP) system facilitates various business activities such as purchasing, selling, storing inventory, and managing employee tasks.