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Oracle EBS Module Overview: AP, AR, GL

Grasp the core financial modules and how they interrelate within EBS Financials

Three modules form EBS Financials, and the relationship between them is the thing to understand.

AP and AR are like individual department ledgers in a household (grocery bills, salary deposits), while GL is the family's master budget spreadsheet that summarizes everything into one coherent financial picture.

Key Concepts

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    AP   money out -- supplier invoices and payments
    AR   money in  -- customer invoices and receipts
    GL   the ledger everything lands in
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AP and AR are subledgers. GL is the ledger. A transaction happens in a subledger, is accounted, and is then transferred to GL as journal entries.
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    invoice entered in AP
        |  validated
        |  accounted by Subledger Accounting (SLA)
        v
    journal entries transferred to GL
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So GL holds a summarised, auditable record of what the subledgers did. It is not where transactions are entered.
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Subledger Accounting is where the rules live. SLA decides which accounts a transaction hits, based on configurable rules rather than hard-coded logic.
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That is the answer to "why did this invoice post to that account": look at the SLA setup, not the invoice.
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The three Cs define a ledger, and this is asked directly:
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    Chart of Accounts   the account structure
    Calendar            the accounting periods
    Currency            the functional currency
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Change any one of those and it is a different ledger. Two operating units sharing all three can share a ledger; differing in any one cannot.
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Each module has its own setup hierarchy.
    AP   payment terms, suppliers, distribution sets
    AR   customers, transaction types, AutoInvoice rules
    GL   chart of accounts, calendars, ledgers
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Period close is where the relationship becomes concrete. A period closes in the subledgers first, then in GL:
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    1. close AP -- no more invoices in that period
    2. close AR
    3. transfer everything to GL
    4. close GL
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Closing GL with untransferred subledger transactions leaves entries that belong to a closed period, which is the classic month-end problem. The sequence exists to prevent it.
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The troubleshooting question. "The invoice is in AP and not in GL." The chain has four links — created, validated, accounted, transferred — and the answer is always which of those has not happened. Knowing the chain is what lets you check them in order.
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What the interviewer is probing.1. "How do AP and AR relate to GL?" Probing: the integration. Stalls: "They are separate." Moves up: they are subledgers — transactions post there and transfer to GL in summary or detail, so GL balances must reconcile back to them.
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2. "What is the three-way match in AP?" Probing: the control. Stalls: "Checking." *Moves up:* purchase order, receipt and invoice must agree within tolerance before payment, which is the core spend control.
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3. "What does AutoAccounting do in AR?" Probing: the mechanism. Stalls: "Posts entries." Moves up: derives the accounting flexfield segments from transaction attributes, so account coding is configuration rather than data entry.
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4. "What is a common period-close problem?" Probing: experience. Stalls: "Nothing." *Moves up:* unposted subledger transactions or an unaccounted batch blocking the close — which is why the exception reports are run before closing.
Use cases:financialsaparglsubledger