The below example explains
a few of the important terms and concepts used in the Oracle E-Business Suite.
This would be a good starting point for the beginners to better understand the
concepts behind Oracle Applications.
Say Peter is the owner of a
wholesale fruit shop. He buys various fruits like apples, oranges, mangoes and
grapes etc from farmers directly and sells them to retail shop owners and also
to the direct customers. The farmers are referred to as VENDORS / SUPPLIERS in Oracle Applications.
Peter keeps track of all his vendors’
information like addresses, bank account and the amount he owes to them for the
fruits that he bought etc, in a book named PAYABLES.
Peter gets an order from a retail shop owner of Fruit Mart, for a shipment of 11 bags of apples, 25 bags of oranges and 32 KGS of grapes. In Oracle Apps, bags and KGS are referred to as UOM (Unit Of Measure), Fruit Mart is called CUSTOMER and the order is referred to as SALES ORDER.
Peter maintains a book called ORDER MANAGEMENT where he writes down all the
details of the SALES ORDERS that he gets
from his customers.
Say the fruits have been shipped to the
customer Fruit Mart. Peter now sends him the details like cost of each
bag/fruit, the total amount that the customer has to pay etc on a piece of
paper which is called INVOICE / TRANSACTION. Once
the INVOICE has been sent over, the customer then validates this against the
actual quantity of fruits that he received and will process the payments
accordingly. The invoice amount could be paid as a single amount or could be
paid in installments.
Peter’s customer, Fruit Mart pays him
in installments (partial payments). So Peter has to make a note of the details
like date received, amount received, amount remaining, amount received for what
goods/shipments/invoice etc, when Peter receives the payments. This detail is
called RECEIPT, which will be compared to
the invoice by Peter to find how much Fruit Mart has paid to him and how much
has to be paid yet. This information is maintained in a book named RECEIVABLES to keep track of all the customers,
their addresses (to ship the items), what and how much he has shipped to his
customers and the amount his customers owe him etc.
Peter’s fruit business has begun
to improve and has attracted more and more customers. As a result, Peter
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, Peter
needs to hire more people to help him out in his business without any hiccups.
These workers are called EMPLOYEES. At
the end of every month, Peter pays the salary for all his employees through
Checks. These checks are nothing but PAYROLL
in Apps.
At the end of every month, Peter
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.
As the business grows, it becomes impossible
to record everything on a paper. To make everybody’s life easier, Oracle has
very good tools in the market, which help the business men to keep track of
everything. One such tool is Oracle E-Business Suite.
Oracle Applications is not a single
application, but is a collection of integrated applications. Each application
is referred to as a module and has its own functionality trying to serve a
business purpose. Few of the modules are Purchasing, Accounts Payables,
Accounts Receivables, Inventory, Order Management, Human Resources, General
Ledger, and Fixed Assets etc.