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Home » Oracle apps Basics » Oracle APPS :Basic terminology
Oracle apps Basics

Oracle APPS :Basic terminology

6/16/2017 08:09:00 PM
Sekhar Byna Oracle Applications : Basic terminology:

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.

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.

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.

One such tool is Oracle E-Business Suite.

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.

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 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.

2. Receipt 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 ledger to recognize the increase in the asset.
Following are common types of cash receipt transactions along with relevant accounting entries: 3. Customer:But an ERP like oracle does not have any relationship with a person unless he buys something from the company. A customer is someone who has a buying relationship with the company.
then only PARTY will become "Customer"

4. Vendor/Supplier:

The terms vendor and supplier are commonly encountered in businesses that procure goods and services from outside.
• Both vendors and suppliers can provide goods and services to a company
• A vendor is more close to the end consumer than a supplier who appears to be earlier in the supply chain
• Vendor is a more generic term and applies to anybody supplying goods and services
• A vendor is rarely a manufacturer and gets products on consignment basis from the manufacturers. He can return unsold items and get his commission
• A supplier is many a times manufacturer also.


A vendor basically means a person who supplies items to customers while a supplier is the one who makes the goods available. The supplier acts as the middleman between the retailer and the manufacturer. A supplier is also a distributor who makes the goods available to vendors. The two terms are not equivalent but are related in the fact that they are both used in the supply chain.

Supplier - Supplier are those which provide some material to the company but they have not any contract to the company
Vendor - They also provide the material to the company but they have contract to the company

5 Buyer
Party which acquires, agrees to acquire, ownership (in case of goods), benefit or usage (in case of services), in exchange for money or other consideration under a contract of sale.

*Buyer:* Who is able to buy the goods in the organization, buyer should be an employee before to buy goods

6. Supplier/Vendor:See point 4

7. Requisition:

·         Purchase Requisition is a formal request intended to procure/buy something that is needed by the organization. It is created and approved by the department requiring the goods and services.
·         A purchase requisition typically contains the description and quantity of the goods or services to be purchased, a required delivery date, account number and the amount of money that the purchasing department is authorized to spend for the goods or services. Often, the names of suggested supply sources are also included.
·         Basically, requisitions are of two types:
·         Internal requisition and Purchase requisition
·         Internal Requisitions are created if the Items are to be obtained from one Inventory location to another location within the same organization. Here the source of the requisition would be INVENTORY. There is no approval process for internal requisition.
·         Purchase Requisitions are created if the goods are obtained from external suppliers. Here the source of the requisition would be SUPPLIERS. The purchase requisitions are sent for approvals

8. Purchase Order:

A buyer-generated document that authorizes a purchase transaction. When accepted by the seller, it becomes a contract binding on both parties.

A purchase order sets forth the descriptions, quantities, prices, discounts, payment terms, date of performance or shipment, other associated terms and conditions, and identifies a specific seller. Also called order.

Oracle purchasing is a comprehensive procurement solution designed to:
·          Help purchasing professionals reduce administration costs.
·          Process requisitions, purchase orders, requests for quotation, and receipts quickly and efficiently.

Enable you to focus on:

·         Value Analysis
·         Development of strategic supplier relationships
·         Management of the procurement process
Oracle Purchasing satisfies the following business needs:
·          Replaces paper processing with online requisition generation, purchase-order creation  and document approval.
·          Regulates document access, controls modification activity and approval, and is based on organizational signature and security policies.
·          Minimizes data entry time with item-saving templates.
·          Controls purchasing activity and enables accurate, automatic pricing using approved suppliers and supplier lists.
·          Consolidates purchase requirements from multiple warehouses, plants or locations.
·          Enables negotiations from a position of strength based on easy access to purchase volume statistics and supplier performance reports.
·          Facilitates communication between requester, buyers, receiving staff, and accounts payable staff using online inquiries, attachments and notes.
·          Provides related functions, such as marketing, finance, master scheduling, inventory management, production, cost accounting, and customer order entry with access to purchasing information.
·          Manages historical purchasing data.
·         Automate the Entire Procure-to-Pay Cycle: Define suppliers and agreements; then automate your entire purchasing cycle from purchase order to settlement.
·         Improve Supply Base Management: Take central control of all supplier and item master information with an application that tightly integrate suppliers into your organization by leveraging advanced supply management capabilities.

·         Adapt to Any Purchasing Practice: Adapt the application to your organization’s purchasing practices with uniquely configurable policies and an open architecture that integrates legacy and supplier systems.

9. Sales Order:

Sales orders represent our mutually binding contract to provide the enumerated products and services you have ordered for the dollar amount specified therein. Generation of a sales order will automatically prompt our fulfillment department to ship your order or activate your digital testing account and produce an invoice.  A sales order requires documentation.  Examples include an email or fax in which you place the order, or a government contract, or a signed price quote, or organizational purchase order.  Conditions of sale are included on sales orders.

10. Pack Slip
11. Pick Slip:

A pack slip denotes what should be "packed" for a delivery. It may consolidate several orders to a route, truck or customer. However, in some businesses the pack slip or packing slip shows what has been “picked" for delivery or shipment a pick sheet denotes what items to pull from inventory. it too may be derived from consolidated orders. for example: Customers A, B and C all have orders shipping today.
Each customer is within 10 min of each other and all will be delivered from the same truck/route.
A single pack slip is generated, detailing the 3 customer’s orders (qty and items) for the truck.
Depending on the type of picking utilized, one or several pick sheets may be generated. in this case, we'll say there are three "picking zones" in the warehouse. so three pick slips are generated, one for each zone. the pick slip tells each zone picker what items to pick.

The three zones then deliver their picked items to a staging zone where the items are sorted into 3 boxes, one for each customer.

These boxes get loaded onto the truck and each one is checked against the pack slip to ensure that each customer is receiving their order accurately. in short: a pick slip facilitates the method/order/consolidation of picking items from inventory. a pack slip facilitates the method in which orders are consolidated/organized and shipped to a customer. "pick" - pick it from inventory "pack" - pack up the truck

12. Drop Ship:

One example of drop ship is a manufacturer shipping goods directly to one of its customers' customer (instead of delivering the goods to the customer that placed the order with the manufacturer). The following illustrates the concept of drop ship, drop shipping or a drop shipment. Assume that XYZ Distributors Inc (XYZ) sells only the Premier brand of water heaters. XYZ receives an order for 40 of the water heaters from a condominium developer located 30 miles away. XYZ then places an order for 40 water heaters from Premier Manufacturing Corp. However, XYZ instructs Premier to deliver them directly to the condo project. So instead of delivering them to XYZ's warehouse, Premier is asked to drop ship them to the condo project. The drop ship means that XYZ will not have to receive the water heaters, unload them, reload them onto its trucks and then deliver them to the condo project. Hence the drop ship allows XYZ to avoid some expensive non-value-added activities. When Premier ships the water heaters, it will bill XYZ and will send the invoice to XYZ. As a result XYZ will have a purchase and an account payable for the amount charged by Premier. XYZ will prepare its own sales invoice to bill the condo developer.

13. Back Order:

A customer order that has not been fulfilled. A back order generally indicates that customer demand for a product or service exceeds a company's capacity to supply it. Total back orders, also known as backlog, may be expressed in terms of units or dollar amount.

14. ATP: Available to Promise:

is a business function that provides a response to customer order enquiries, based on resource availability.It generates available quantities of the requested product, and delivery due dates. Therefore, ATP supports order promising and fulfillment, aiming to manage demand and match it to production plans.

Available-to-promise functions are IT-enabled and usually integrated in enterprise management software packages. However, ATP execution may need to be adjusted for the way a certain company operates.
15. Lot/Serial Number

Lot tracking system records information regarding a batch of product. Lot tracking allows to track several units of a stock item using the same lot or batch number. User can determine what can be purchased or sold by Lot status.

Expiry dates and user defined statuses allow you to further control the stock item. You cannot sell stock items that have reached or passed their expiry date.. You can track items by lot number and serial number - Lot tracked items are where the tracking (Lot) number refers to a specified quantity of the items, serial numbers are applied to individual items.

Lot Control and serialization options are defined at the system level and when one of these options is activated individual items are defined to be controlled by either lot number or serial number or by item number (not lot or serial tracked) on the part master file.
When a part is defined as being tracked by lot number or serial number, that tracking is enforced throughout all material transactions for that item and upward through its parent items.

For purchased items lot or serial numbers are required for the full quantity of receipt, and are entered as part of the receiving transaction. For receipts with many serial number tracked items, ranges of numbers may be entered.

A running total of items accounted for with lot or serial number assignments are displayed, thereby ensuring that the entire received quantity is properly identified prior to completion of the transaction.

Furthermore, the system checks current inventory to ensure that duplicate numbers are not assigned. On subsequent inventory transactions, lot and serial traceability is enforced upward through the item's bill of material structure. The lot or serial number and quantity are required on all material issues.

17. Organization:

Generic Definition :

Content Courtesy: Resected  Content owners
Organization id EBS:
What is an Organization? In EBS it is a generic term, infact, varied term. In Oracle EBS an organization can be a Legal Entity, or an Inventory, or a department. Anything can be treated as organization in Oracle. In our daily routine if we say the word “organization”, we will certainly be referring to some company, for example, Inbox Business Technologies, IBM, Acer, HP, these are the example of organization selling hardware. But in Oracle Multi Org structure they are referred to as Legal Entities.

The Multi Org structure in Oracle consists of following organizations

18. Business Unit:


A business group is the top level in multi org structure. Oracle view human resource as the basis for the business. A human resource is selling the products that organization is manufacturing, a human resource is purchasing raw materials required to make a product, a human resource is making accounting and financials statement. In short a legal entity transacts because of Human Resources.
19. Multi Org
20. DFF: Descriptive Flex Fields
21. KFF: Key Flex Fields
22. Value Sets
23. Folders
24. WHO Columns
25. Oracle Reports
26. Oracle Form
27. Workflow Builder
28. Toad
29. SQL Developer
30. SQL Navigator
31. Discoverer Reports
32. XML/BI Publisher
33. ADI: Application Desktop Integrator
34. Winscp
35. Putty
Posted by Sekhar Byna at 6/16/2017 08:09:00 PM
Labels: Oracle apps Basics


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