Friday, 26 May 2017

Multi Organization in Oracle Apps R12

As salamo alaikum wa rahmatullah

What is Multi-Org?
It’s a feature used to store the data of multiple organization in a single instance by partitioning the data of human resource, financials, sales, purchases, assets and materials
Examples of Multi Org are Tata Group, Reliance Group, Mahindra Group etc.
Let us consider Tata Group to illustrate more on Multi Org
In the above illustration Tata Finance, TCS, Tata Motors are individual organizations.
NOTE: The complete organization data are maintained at one place.
Financial statements are to be created for individual organization separately this is achieved using E BUZ Suite.
Multi-Org has been categorized into:
1.     Business Group
2.     Ledger
3.     Legal Entities
4.     Operating Unit
5.     Inventory Org
 1.       Business Group:
Business Group is a top level in the org structure. At this level we secure work structures (Job Structure, Position structure, Grades structure) and remuneration policy (Pay roll Policy).
Structure for Jobs, Position, Grades may differ from organization to organization, say position structure in a organization may have clerk, senior clerk, manager, senior manager. Where as in another organization it may only have clerks and managers.
Based on the Work Structure and remuneration the business group are created. If all the 3 organization (Tata Finance, TCS, and Tata Motors) have different Work Structure and remuneration then we need to define 3 business groups else if they have the same Work Structure and remuneration then only one business group is defined.
Module involved is HR
 2.       Ledgers:
Ledgers are used to secure journals and ledger balances of the company. A ledger is a collection of currency, calendar, chart of accounts and sub ledger accounting (SLA) methods.
Currency, here we setup the local currency for the organization where its business is defined say INR (INDIAN Rupee) this is used only to report the balances but the transaction can be done in other foreign currency also including INR.
 Calendar, the financial year is been defined to control the transactions and secure them. We divide the financial year into PERIODS, periods may be defined daily, Monthly, Quarterly this is only to restrict the transaction as transaction can happen only for the period that’s open, say in July we can have transactions for the month of July and August as its open but we can restrict for September by keeping it closed.
 Chart of Accounts, here we define the accounts setup for an organization. For better understanding let us take an example where in we need to create an account when a rent has been paid. The account entry would be
 Rent A/c
To Cash
 Now to differentiate this based on the organization say if the rent is for Tata Finance or TCS or Tata Motors. The entries can be
So for this when the transaction is recorded the entry in the system would be 01.1001
If there are any further division (category) then a new segment is created but if an organization is not having any division then a default segment is also defined.
Now the account for tata motors having division for cars in a particular location say hyd and for payables as an account would be 01.001.0001.1002, if tata finance has no division and location but with rent account then the entry would be 02.000.0000.1001
Note: An account that is defined for an organization is a combination of Company code and Account code, that are defined if there are no segments (Division, Location etc) been defined. We should have minimum two segments and a maximum of 30 segments when defining an account.
Sub Ledger Accounting: (SLA), how to maintain the account is been defined in SLA, the accounts may be accrual based or cash based.
Module involved is GL
3.       Legal Entities:
This is a legal business or a registered firm; at this level we prepare income tax reports.
In our example we would be having 3 legal entities (Tata Motors, TCS, and Tata Finance)
Legal Entries are used to report the Tax Reporting
4.    Operating Unit: (OU)
 An operating unit is division of legal entity, at this level we secure the sales and purchase transactions.
Now we also need to keep in mind that an OU can be set at the division level or location level or branches based on the sectors.
Here in the above illustration Cars and Trucks are division, Hyd, Pune and Bangalore are location.  OU can be set at Division level or Location level or Branch Level.
If the OU is set at branch 1 then branch 2 cannot see the details (Sales and purchases) of branch 1 and vice versa as they are secured. Similarly if set at the location then it is secured with that location and restricted from other locations.
Module involved is AR, AP, PO, OM, CM etc
5.       Inventory Org:
This is used to secure the materials of an organization.
Note: Legal Entity can also be an Operating Unit as there are no further division in a organization.

Ma Asalaam
Passion 4 Oracle

Wednesday, 24 May 2017

R12 - Explanation about the Segment Value

As salamo alaikum wa rahmatullah

For All segment - Allow Budgeting and Allow Posting will default to NO for parent accounts, or YES for posting accounts.
These can be changed to meet your company's needs with one Emitted restriction:Parent accounts should never ALLOW POSTING.
For the Natural Account, ACCOUNT TYPE is available and has two main purpose: to classify accounts as Assets, Liabilities, Owner Equity, Revenue, or Expense (Budgetary CR and DR are available for encumbrances), as well as to determine which accounts will roll into prior year Retained Earnings at the end of Fiscal Year.
Third Party Control Account will need to be CUSTOMER, SUPPLIER, or YES to use the Third Party Balance feature.
This feature will prevent manual transactions from being allowed to use this segment, and any combinations created with it, only allowing journal entries created in the sub ledgers. This will prevent manual miss-postings to the account and make reconciliations easier between the sub ledger and the General Ledger.
Selecting CUSTOMER restricts journal to sub ledgers where the applications is identified as CUSTOMER, and the same goes for SUPPLIERS.
Selecting either CUSTOMER or SUPPLIER will restrict posting to these accounts and prevent miss-posting. For example, a common posting error is to create a manual journal entry to the payable liability account int the general ledger,which throws this account out of balance with the sub ledger.
Setting up the payable liability account to Suppliers will restrict entries to the account to only entries from Payable.

RECONCILE needs to be set to YES to use the feature of Reconciling Accounts, usually for VAT transaction or clearing accounts.

Ma Asalaam
Passion 4 Oracle

R12 Accounting Flex Field

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Segment Label: Identifies certain segments in your chart of accounts and assigns special functionality to those segments. The required segment labels are:
Balancing Segment: Ensures that all journals balance for each balancing segment value or combination of multiple balancing segment values to use in financial processes and reporting. The three balancing segment labels are: Primary balancing segment, Second balancing segment, and Third balancing segment. The Primary balancing segment label is required and must be the first segment in the Rapid Implementation spreadsheet.
Natural Account: Facilitates processes in the General Ledger application, such as retained earnings posting. For each child value, you must assign an Account Type. You can select from one of the general choices to mark the account value as an Asset, Liability, Owner's Equity, Revenue, or Expense account.
If the account is used by the rapid implementation solution to provide accounts for setup objects, select the appropriate Expanded Account Type value for the child account. Examples of expanded account types required for setup objects are:
Owner's Equity - Retained Earnings: To set up General Ledger ledgers.
Liability - Accounts Payable: To set up Payables common options.
Asset - Accounts Receivable: To set up Receivables receipt methods.
Accounts tagged with expanded account types are automatically assigned a financial category. You can override the default category in the Financial Category field, or leave it out.

Cost Center: Facilitates grouping of natural accounts by functional cost types, accommodating tracking of specific business expenses across natural accounts.

Ma ASalaam
Passion 4 Oracle

Tuesday, 9 May 2017

Primary Ledger Vs Secondary Ledger Vs Reporting Currency

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Primary Ledger Vs Secondary Ledger
Use secondary ledgers for supplementary purposes, such as consolidation, statutory reporting, or adjustments for one or more legal entities within the same accounting setup. For example, use a primary ledger for corporate accounting purposes that use the corporate chart of accounts and subledger accounting method, and use a secondary ledger for statutory reporting purposes that use the statutory chart of accounts and subledger accounting method. This allows you to maintain both a corporate and statutory representation of the same legal entity's transactions in parallel. 

Reporting Currency Vs Secondary Ledger
Reporting Currencies are not the same as secondary ledgers. Looking at the 4 C's that define a ledger, we have a chart of accounts, calendar, accounting method, and currency. If you only need multiple currencies to support your reporting requirements, use reporting currencies. If you need to account for your data using different calendars, charts of accounts, accounting methods in addition to currency, use a secondary ledger.

Ma Asalaam
Passion 4 Oracle