Designing a Chart of Accounts for
a Global Company going to Oracle
E-Business Suite Release 12
Helene Abrams
CEO
eprentise
habrams@eprentise.com
Session 8309
Agenda
 Introduction
 Chart of accounts (COA) basics
 Designing a good COA
 5 fundamental criteria for a good COA design
 Accommodating future growth
 Reduced costs, streamlined reporting, and global visibility
 Leveraging Release 12 features
 Global visibility, local compliance
2
Copyright © 2011 eprentise. All rights reserved.
Introduction
 eprentise
 Established in 2006
 Transformation software for E-Business Suite
 Helene Abrams, CEO
 Who we serve
 Large and middle-market US-based and international customers from
both private and public sectors
 What we do
 Provide software that assists companies looking to upgrade to R12,
particularly companies that need to re-structure their business to
change configurations, consolidate instances, separate data, or
address other significant organizational changes they have
experienced since originally implementing EBS.
3
Copyright © 2011 eprentise. All rights reserved.
Chart of Accounts Basics: The Flexfield
Example Structure
Segments, Values, Code Combinations
Company
Business
Unit
Cost
Center
Region
Account
01
100
150
East
1111
02
100
210
West
2222
Values
01.100.150.East.1111
Code Combination
4
Copyright © 2011 eprentise. All rights reserved.
Chart of Accounts Basics: Segments
 The EBS accounting flexfield accommodates up to 30
segments for categorizing transactions
 Structurally analogous to columns in a table
 Have defined lengths for the values they contain
 Answering the questions Who, What, Where, Why, and
possibly How helps identify segments that will give your
accounting flexfield the ability to classify each transaction
 Common segment examples: Cost Center, Department, Fund,
Location, Product Line
5
Copyright © 2011 eprentise. All rights reserved.
Flexfields in the Form
Code Combinations
Accounting Key Flexfield
Value Descriptions
6
Copyright © 2011 eprentise. All rights reserved.
Chart of Accounts Basics: Hierarchy
 The accounting flexfield incorporates parent-child
relationships among values
 Roll-up Groups
 A collection of parent values for a given segment
 Used to create summary accounts
 The most detail is at the lowest level
 Summary Accounts
 Hierarchical rollup of children and/or parents
 Faster reporting
 Account balance inquiries
7
Copyright © 2011 eprentise. All rights reserved.
5 Fundamental Criteria for a Good COA
1. There is only one type of information in each segment.
2. Information in the chart of accounts is not repeated
from other modules.
3. There is enough room to expand within each segment.
4. Summary accounts and rollup groups fall naturally
within ranges.
5. You are able to report on critical business components
with standard reports without resorting to
spreadsheets. FSGs and other reports should be easy to
create.
8
Copyright © 2011 eprentise. All rights reserved.
Criteria 1: One Type of Information
 Information should not overlap across segments.
 If each segment contains one (and only one) type of
information, you:
 Reduce the maintenance of keeping information accurate in two
places
 Reduce the possibility of introducing errors into your accounting
 Case: If your cost center has the same type of
information as a business unit segment, there is no need
to implement both.
 Case: You shouldn’t have a Department segment value
such as HR – Sacramento, CA if there is also a Location
segment in the chart.
9
Copyright © 2011 eprentise. All rights reserved.
Criteria 2: Information Not Repeated
 The accounting flexfield should not repeat
information that exists in other modules of EBS.
 Reduced maintenance and errors (similar to Criteria 1)
 Case: If you are implementing Oracle Projects
modules, there is no need to have a project segment
in your accounting flexfield.
 Case: If you are implementing Receivables, then
there is no need for a customer segment.
10
Copyright © 2011 eprentise. All rights reserved.
Criteria 3: Enough Room to Expand

Define your segment lengths to be long enough to accommodate values added in the future.
Note: Although it likely won’t be an issue, the maximum number of characters for a code
combination string is 240, so there are upper limits on how long you can define your
segments.

When designing values be sure to allow enough room for future growth within each rollup
group



Increment by at least 5 within each group
Increment by 10 if the group is likely to be a high growth area.
Example: If you have a location segment, allow enough room to add ten additional values
between each of your lowest levels. Your Location segment hierarchy might look like this:
10000 US
11000 Midwest
11100 Detroit Metropolitan Area
11110 Ann Arbor
11120 Canton
11130 Plymouth
20000 Canada
11
Copyright © 2011 eprentise. All rights reserved.
Criteria 4: Use Logical Ranges
 Ranging your values logically promotes streamlined
reporting, security, and maintenance.
 Include a whole range of values in your rule (cross validation,
security) and FSG report definitions
 Exclude specific values if needed
 Minimize the number of cross validation rules needed (under 50
using logical ranges compared to hundreds or thousands when
not using logical ranges)
 Use numbers only randomly.
 Avoid using intelligent numbers
 For items with embedded intelligent numbers like Products,
introduce non-intelligent numbers as well
12
Copyright © 2011 eprentise. All rights reserved.
Criteria 5: No Reliance on Spreadsheets
 Be able to get the information you need from built-in
EBS reports.
 Real-time value
 No errors introduced by use of spreadsheets
 Streamlined workflow, lower resource requirements, and
reduced maintenance
 No need to integrate with 3rd party reporting applications
 Capitalize on a master row set for FSG reports.
 Allows you to generate different reports without having to
rewrite each report
13
Copyright © 2011 eprentise. All rights reserved.
A Global Chart of Accounts:
Enterprise Visibility with
Subledger Accounting and
Secondary Ledgers
 Primary ledger is single source of truth for all accounting,
reconciliation, and analytical reporting
 Consistency but flexibility to accommodate different
requirements
 External reporting without relying on a separate financial
consolidation system
 Drill down to individual transactions in the subledgers without
translation
 Transparency (3 - 5 years) to meet IFRS standards and
international auditing requirements
 Common metrics and reporting structures with common
interpretation
14
Copyright © 2011 eprentise. All rights reserved.
A Global Chart of Accounts – Reduced Costs
 Reduce complexity of configurations
 Cross validation rules
 Security rules
 Reporting within ranges
 No conversions required for data warehouse queries, drilldown to subledgers, ad-hoc reporting
 Facilitate movement to shared service centers
 Single COA to manage
 Standardized training
 Enterprise governance and control of new combinations
 Reduce redundancies
15
Copyright © 2011 eprentise. All rights reserved.
A Global Chart of
Accounts –
Reduced
Complexity
 Streamline the month- and
year-end closing processes
 No more messy financial
consolidations using
spreadsheets
 R12 eliminates the need for
using and maintaining
multiple charts of accounts
Location
CCY
Location
Op Unit
US
USD
Comerica
NAm USD
USD
Maldives
China
Bk
Seg
BalSeg
GPN Book
BalSeg
Seg
205
205
565
565
NAm CAD
006
025
Sri Lanka
AsiaPac LKR
025
027
027
Sri Lanka
AsiaPac EUR
201
001
001
Sri Lanka
AsiaPac GBP
301
002
005
106
002
005
106
Sri Lanka
AsiaPac AUD
401
105
105
USD
Singapore
AsiaPac SGD
023
107
911
107
911
PHP
Philippines
AsiaPac PHP
027
912
912
913
913
912
SGD
103
USD
USD
CNY
USD
025
001
EUR
GPS US
002
005
105
027
107
Sri Lanka
106
953
031
Maldives
105
103
031
GPS CNY
031
913
107
911
029
GPS INR
029
Philippines
Taiwan
AsiaPac USD
912
953
US SOB
103
Singapore
China
029
911
GPN PHI
570
570
GPN CHN
801
801
GPN IND
802
802
913
030
GPS TWD
030
GPN TWN
803
803
China
AsiaPac CNY
031
022
GPS MOP
022
022
GPN MAC
545
545
USD
India
AsiaPac INR
029
028
GPS MYR
028
028
GPN MLS
804
804
Macau
MOP
Taiwan
AsiaPac TWD
030
024
GPS BND
024
024
GPN BRU
505
505
Hong Kong
HKD
Macau
AsiaPac MOP
022
006
CAN SOB
915
915
Malaysia
MYR
Hong Kong
AsiaPac HKD
021
006
955
GPS CAD
006
955
Brunei
BND
Malaysia
AsiaPac MYR
028
GPN SRL
585
585
Brunei
AsiaPac BND
024
103
023
GPN SNG
575
575
954
021
GPN HK
525
525
021
953
957
955
952
UK SOB
851
851
India
Taiwan
INR
India
USD
TWD
UK
Europe GBP
951
UK
Europe EUR
952
952
301
951
401
GBP
UK
Europe USD
953
UK
Europe SGD
954
UK
Europe CAD
955
UK
Europe AUD
956
UK
Europe HKD
957
UK
Europe CHF
958
EUR
USD
CAD
956
023
954
SGD
021
957
GPS EUR
CHF
DKK
JPY
NOK
UK
Europe DKK
959
UK
Europe JPY
960
UK
Europe NOK
961
NZD
SEK
UK
Europe NZD
962
UK
Europe SEK
963
025
GPS GBP
GPS AUD
GPS SGD
GPS HKD
201
201
952
301
951
301
GPS
US
201
401
301
401
US
SOB
401
956
023
AUD
HKD
030
106
201
UK
Bk
002
AUD
Philippines
GPS LKR
BalSeg
Canada
GBP
Singapore
GPS Book
CAD
LKR
USD
Sri Lanka
BalSeg
005
Canada
Canada
BalSeg
001
US
951
958
GPS CHF
958
959
GPS DKK
959
960
GPS JPY
960
956
954
957
958
959
960
961
GPS NOK
961
962
GPS NZD
962
963
GPS SEK
963
961
962
963
Russia
RUB
GPN RUS
DolEx US
USD
DOLEX US
RUS
DloEx Mexico
MXN
DOLEX MX
DolEx Guatemala
GTQ
DOLEX GT
Eurofil
EUR
GPN EUR
EUR
Muzo
CZK
GPN MZO
MZO
DLX
16
Copyright © 2011 eprentise. All rights reserved.
R12 Features – Ledger Sets
Perform the Following Across Ledgers:






Open/Close periods
Create journals
Allocations across ledgers
Recurring journals for all ledgers
Elimination sets for all ledgers
Translate and revalue balances
 View information without changing
responsibilities
 View journals and account balances
across ledgers
 Submit standard reports
 Create financial statements that
include data for multiple ledgers
17
Copyright © 2011 eprentise. All rights reserved.
Global Visibility – Local Compliance with R12
Subledger Accounting, Accounting Methods Builder Replaces Global Accounting Engine
18
Copyright © 2011 eprentise. All rights reserved.
Global COA Design Recommendations
 Add an intercompany segment – take advantage of AGIS
 Add a segment to accommodate local requirements
 Ranges, rollups defined for each country to use
 Local bank accounts
 Statutory reporting
 Location segment (optional) but helps with security, cross
validation
 Implement other modules for detailed tracking at a local
level (through an OU)
 Project Accounting
 Collections
 Implement Multiple Reporting Currencies, secondary ledgers
to report in different currencies
19
Copyright © 2011 eprentise. All rights reserved.
Conclusions
 Use the transition to R12 to redesign your COA if it is not
optimized or to adopt a single COA if your organization is currently
using multiple charts.
 As you are redesigning your COA, focus on the 5 fundamental
criteria.
 One type of information per segment
 No repeated information from other EBS modules
 Leave room for future expansion and flexibility
 Use logical ranges
 Make sure you can get the reporting you need straight from the flexfield
structure
 Design your chart with Ledger Sets, Secondary Ledgers, and
Subledger Accounting in mind.
20
Copyright © 2011 eprentise. All rights reserved.
QUESTIONS?
21
Copyright © 2011 eprentise. All rights reserved.
Thank You!
Helene Abrams
eprentise
habrams@eprentise.com
- One World, One System, A Single Source of Truth -
22
Copyright © 2011 eprentise. All rights reserved.