Business Process terminologies explained with a real life example

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 Rahul is the owner of a wholesale fruit shop. He buys various fruits like apples, oranges, mangos 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.

Rahul 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.

Rahul 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.

Rahul 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. Rahul 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.

Rahul’s customer, Fruit Mart pays him in installments (partial payments). So Rahul has to make a note of the details like date received, amount received, amount remaining, amount received for what goods/shipments/invoice etc, when Rahul receives the payments. This detail is called RECEIPT, which will be compared to the invoice by Rahul 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.

Rahul’s fruit business has begun to improve and has attracted more and more customers. As a result, Rahul 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, Rahul 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, Rahul pays the salary for all his employees through Checks. These checks are nothing but PAYROLL in Apps.

At the end of every month, Rahul 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.

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