General Ledger Implementation Considerations - Sets of Books (Ledger for 12i) and Chart of Accounts

Set of Books (Ledger for 12i):
Set of books determines the functional Currency, Chart of account structure, and accounting Calendar for each company or group of companies, which are known as the 3 C's.

You need to create and set up one or more sets of books. The number of books you set up depend on various factors, such as:
Ø Whether you have multiple subsidiaries using different calendars, charts of accounts, and currencies requiring multiple sets of books
Ø Whether you have multiple subsidiaries that share the same calendar, chart of accounts, and currencies that allow them to share the same set of books
Ø Your organizational requirements or government reporting requirements.

General Ledger provides you with the flexibility to manage your financial information within any company structure. One can maintain multiple companies with similar or different accounting structures, and consolidate their results for meaningful financial reporting.

Chart of Accounts:
Chart of accounts uses Key Flexfield (Accounting Flexfield) that, comprises of Segments, Value sets, Values and Code Combination ID.

Defining the Chart of accounts:
Planning the Chart of accounts structure is the most important activity involving the structure, segments, segment validation and additional features. Analyze the organizational structure and the dimensions of the business before designing the Chart of accounts. By carefully evaluating the business needs, design the chart of accounts to take advantage of General Ledger’s flexible tools for recording and reporting the accounting information.

The account structure can comprise 30 segments with a maximum character length of 275 for the entire String. Each string of multiple-segments is called a code combination and stores a code combination ID based on which balances are maintained in GL. An accounting chart normally consists of Company code, Line of Business, Cost center, Natural Account, Intercompany and Future.

How to define Key Flexfield Structures like Chart of Accounts:
Ø Define descriptive information and validation information for each segment.
Ø Determine the appearance of your key flexfield window, the number and order of the segments, and the segment descriptions and default values.
Ø Freeze flexfield definition and save the changes once set up or when the structures/segments are modified. On saving, Flexfield compiles automatically to improve on–line performance.
Ø Compile the flexfield every time when the changes are made to this form, including enabling or disabling cross–validation rules and when the changes are made to the shorthand aliases window.
Ø Oracle Applications submits one or two Concurrent requests to generate database views of the flexfield combinations table.
Ø The flexfield changes immediately after freezing and recompiling. However, the changes affect other users only after they change responsibilities or exit the application and sign back on.


Determine the Chart of Accounts Structure That Best Suits Your Organization:
Ø Examine the organization structure to identify how performance and profitability are normally measured
Ø Also multiple organizational structures may be needed to allow views of the organization from multiple perspectives. Summary accounts can be used to roll up details.
Ø Visualize each segment of the account as a unit dimension of the business. Combine units that are based on similar dimensions to avoid using multiple segments that measure the same dimension.
Ø Identify the functions, products, programs, funding sources, regions, or any other business dimensions that are to be tracked
Ø Determine the reporting needs.

Consider the following questions before defining the COA structure:
Ø What information will better help one to manage one’s organization?
Ø What are the different ways in which one can look at one’s operations?
Ø What kinds of reports do managers ask for?
Ø What reports one prepares now with some difficulty?
Ø What reports are provided by other financial information systems?
Ø What statistical reporting does one want to perform?
Ø Is project reporting needed?
Ø At what levels of detail does one produce reports?

To Determine Your COA Segment Needs:
Ø Determine the segment that captures the natural account, such as assets, liabilities, expenses, and so on.
Ø Define a separate Accounting Flexfield segment for each dimension of your organization on which you want to report, such as regions, products, services, programs, and projects.
Ø Group similar business dimensions into one segment. This allows a more simplified and flexible account structure For example, you only need one segment to record and report on both districts and regions. Because regions are simply groups of districts, you can easily create regions within your district segment by defining a parent for each region with the relevant districts as children. Use these parents when defining summary accounts to maintain account balances and reporting hierarchies to perform regional reporting.