overcoming uncertainty in common r12 setups: coa, ledger, legal entity, operating unit options,...

Overcoming Uncertainty in Overcoming Uncertainty in Common R12 Setups: COA, Common R12 Setups: COA,

Ledger, Legal Entity, Operating Ledger, Legal Entity, Operating UnitUnit

Options, Considerations and Lessons LearnedOptions, Considerations and Lessons Learned

Hans Kolbe, Celantra Systems Inc.

Stafford Warren, Consultant NorCal GEO Training Day January 2011 - Copyright Celantra Systems

Celantra Systems: Celantra Systems: Celantra Systems provides international program management services with a strong focus on multi-org, inter-

company, global compliance and implementation issues. The key element in our approach is the alignment of

operational efficiency, legal/tax compliance and management reporting. Our goals are: - Single global structure across country, currency, language, accounting and tax regime

- Variations are transparent to operator and business user community

- Flexibility for business growth, acquisitions, or other changes in business or legal model

- Ease of support and upgrade

Former and current clients include Trident Microsystems, Terex, UPS, Xerox, Tektronix, British Telecom, Assa

Abloy, Yahoo, Texas Instruments, PPG, State Street Bank, Xilinx, Dionex and others.

Hans Kolbe has managed and advised software implementation projects for over 15, global projects for over 12

years. His extensive knowledge on Oracle applications is combined with a formal background as a German attorney,

trained in international and comparative law.

E-mail: [email protected] Ph: + 1 (415) 730 - 1131

NorCal GEO Training Day January 2011 - Copyright Celantra Systems

Stafford Warren: Stafford Warren: Oracle Financials Consultant/Project Manager

EXPERIENCE 15+ years Analyzing and Implementing Information Technology Solutions, in High-Tech Industries, through roles as Lead Business Analyst, Software Implementation Consultant and Project Manager

We partner with Silicon Valley High-Tech Companies: Visa Cisco Franklin Templeton

Yahoo! Agilent Oracle Consulting

Verisign Electronic Arts Symantec

BMC Software Calpine Intuit

Information Management Group

[email protected]

408-568-3182

1. R12 Multi-Org Structure, high-level setup steps and 1. R12 Multi-Org Structure, high-level setup steps and

configuration optionsconfiguration options

2. Setup Steps2. Setup Steps

a) Business Group and Legal Entity a) Business Group and Legal Entity

b) Ledger b) Ledger

c) Op Units and Balancing segments c) Op Units and Balancing segments

3. R12 Gotcha: Addresses, Locations, Organizations3. R12 Gotcha: Addresses, Locations, Organizations

4. R12 Flexibility and Restrictions: Multiple values balancing 4. R12 Flexibility and Restrictions: Multiple values balancing

segments, Legal Entity, Op Unitssegments, Legal Entity, Op Units

Agenda


Starting Point, Process and AssumptionsStarting Point, Process and Assumptions- We are presenting results from a R12 ‘Greenfield” implementation, Application Version 12.1.3

-This is not an upgrade

- We are comparing multi-org setups between R12 and 11I and are sharing our learning, pointing out remaining questions, surprises etc.

-Version 12.1.3 has some significant differences to earlier R12 versions impacting the behavior of the HR Locations records (which are important for the multi-org setup)

-We have not completed this specific implementation cycle. However, CRP testing has successfully been done confirming that our multi-org structure supports correct sub-ledger transactions, intercompany scenarios and tax application. We know this setup works.


Section 1Section 1Multi-Org DecisionsMulti-Org Decisions


R12 Multi-Org Structure and DecisionsR12 Multi-Org Structure and Decisions

Business Group (used for employees and HR functions, no difference to 11I Chart of Accounts – basis for all other operational and financial setups) – no

difference in setup and structure Legal Entity – New Legal Entity Configurator Responsibility in Web-Form) -

– Lots of different setup and decisions to be made (very different from 11I) Create Ledger - New Accounting Setup Manager Responsibility in Web-Form

– Lots of different setup and decisions to be made (very different from 11I). Formerly GL Set of Books.

Create Operating Unit and assign to Ledger New Accounting Setup Manager Responsibility in Web-Form

– Additional restrictions and impacts, differences between R12 and 11I. – Upgrade and conversion limitations

– NEEDS another slide with options and business impact


Multi-Org – LE Configuration Options – View AMulti-Org – LE Configuration Options – View A– Multi-Org Comparing Implementation Guide 12.1: Comparing 11I to R12: Options look

very similar, only terminology has changed: Set of Books Ledger



Multi-Org – LE Configuration Options – View BMulti-Org – LE Configuration Options – View B

Financial Implementation Guide 12.1: Variety of Options and Configurations is discussed in detail, 2-13 (worthwhile reading!)

Accounting Setups with One Legal Entity Accounting Setups with Multiple Legal Entities Accounting Setups with No Legal Entities

Using Accounting Setups with No Legal Entities for Management Purposes

Using Accounting Setups with No Legal Entities for Consolidation Purposes

Note: There is no general Oracle standard solution to accommodate a requirement single Operating Unit operating in two Legal Entities in R12. Options to resolve these challenges are being discussed within the Multi-National and other SIG Groups.


Multi-Org – LE Configuration Options – View BMulti-Org – LE Configuration Options – View B


Section 2Section 2Setup StepsSetup Steps


Steps and RelationshipsSteps and Relationships

• Business Group • Legal Entity • Ledger (needs chart of accounts)

• Associate Balancing Segment • Associate Operating Unit


R12: Business Group, Legal Entity and Ledger are R12: Business Group, Legal Entity and Ledger are independent entitiesindependent entities


Is there a business function in using one without the other? Is there a business function in using one without the other?

Step 1: R12 COA SetupStep 1: R12 COA Setup

Chart of Accounts to be created (not covered in this presentation)

Fundamentally the same as in R11.5.10 and previous versions (additional functions on sub-ledger control accounts see later slides)

All in Java Forms


Step 2: Create Business Group (Global) Step 2: Create Business Group (Global) - same setup as R11I- same setup as R11I

We create a single global business group. We prefer this because otherwise you create additional complexity for approval hierarchies. Each approval hierarchy is limited to 1 business group. For international companies approvals of expenses, assets purchases, etc. often are routed from subsidiaries to headquarters for larger amounts. This would force duplication of employees.

Multiple Business Group are used only for payroll localizations (localizations are assigned by business group).


Screen Shot – (in Java Form)Screen Shot – (in Java Form)


Step 3: Legal Entity Step 3: Legal Entity SetupSetup

Use Legal Entity Configurator Responsibility (Web-Form) to define: Use Legal Entity Configurator Responsibility (Web-Form) to define:

- - Location /Address (Web-Form)Location /Address (Web-Form)

- Tax Profile (not required at LE level) - Tax Profile (not required at LE level)

- Registration - Registration

- Create Jurisdiction (skip if existing)- Create Jurisdiction (skip if existing)

- Territory (skip if existing) – potential Gotcha- Territory (skip if existing) – potential Gotcha

- Create Location with Address (required) – see later slides for Gotchas- Create Location with Address (required) – see later slides for Gotchas

- Create Organization (Java – Form)- Create Organization (Java – Form)

- Establishments (usable for tax): Legal Entity setup automatically creates one - Establishments (usable for tax): Legal Entity setup automatically creates one

establishment at legal entity level. establishment at legal entity level.

- Contact Information (not required at LE level) - Contact Information (not required at LE level)

- Intercompany Exceptions (not required at LE level) - Intercompany Exceptions (not required at LE level)

- History (not required at LE level)- History (not required at LE level)


Step 4: Assign Balancing Segment to Legal Entity or Ledger Step 4: Assign Balancing Segment to Legal Entity or Ledger

Use Web-Form: GL Responsibility Use Web-Form: GL Responsibility

A balancing segment can be associated either to the Legal Entity or to the A balancing segment can be associated either to the Legal Entity or to the

Ledger. However, you any balancing segment value tied to Ledger cannot be Ledger. However, you any balancing segment value tied to Ledger cannot be

used in OU dependant transaction (AR, AP, etc.) –used in OU dependant transaction (AR, AP, etc.) –

DON’T Assign the company value to the Ledger if you want to use it for the OU DON’T Assign the company value to the Ledger if you want to use it for the OU

transactions. See next screen. transactions. See next screen.

- You can assign multiple Balancing Segment values per legal entity. Then - You can assign multiple Balancing Segment values per legal entity. Then

security rules are needed to restrict access (if required). security rules are needed to restrict access (if required).

- You cannot associate the balancing segment value to the LE and then again to - You cannot associate the balancing segment value to the LE and then again to

any ledger. This is assignment is done automatically through the LE. any ledger. This is assignment is done automatically through the LE.



Step 4: continued Step 4: continued

Assign Multiple Legal Entities to single LedgerAssign Multiple Legal Entities to single Ledger, ,

The operating unit option is “hidden” in the ledger setup menu. The operating unit option is “hidden” in the ledger setup menu.




Create and Assign Operating Units assigned to a Legal EntityCreate and Assign Operating Units assigned to a Legal EntityClick “Add Operating Unit” on the previous screen. Here you add the OU and assign it to a Click “Add Operating Unit” on the previous screen. Here you add the OU and assign it to a

business group. This the first time that Business Group is connected to Ledger and Legal business group. This the first time that Business Group is connected to Ledger and Legal

Entity. In 11I Business Group is assigned at the Legal Entity level. Entity. In 11I Business Group is assigned at the Legal Entity level.

You choose the Legal Entity by choosing the “Legal Context” field. You choose the Legal Entity by choosing the “Legal Context” field.




Assign Operating Units assigned to a Legal EntityAssign Operating Units assigned to a Legal EntityYou choose the Legal Entity by choosing the “Legal Context” field. You can see the legal You choose the Legal Entity by choosing the “Legal Context” field. You can see the legal

entity name when searching “by”. entity name when searching “by”.




View the result – Operating Unit and Legal Entity are associatedView the result – Operating Unit and Legal Entity are associated




Multiple Balancing Segment values at Ledger Level Multiple Balancing Segment values at Ledger Level



Section 3Section 3GotchasGotchas


Gotcha 1: Location Addresses” or “Locations” – Terminology Gotcha 1: Location Addresses” or “Locations” – Terminology

and challenges in visibility of data from both angles Java and and challenges in visibility of data from both angles Java and Web-FormWeb-Form

“Addresses” or “Locations” – Terminology

Visibility of data from both angles Java and Web-Form



R12 Gotcha Locations – AddressesR12 Gotcha Locations – AddressesTopic 1 – visibility from both angles Java and Web-FormTopic 1 – visibility from both angles Java and Web-Form

We entered 12 locations into R12; From the Java form we can see all 12, from Web-Form we can see We entered 12 locations into R12; From the Java form we can see all 12, from Web-Form we can see only 4 only 4

Big problem and confusionBig problem and confusion

Java Form = 12 LocationsJava Form = 12 Locations


Web Form = 4 LocationsWeb Form = 4 Locations


Other Observations on Locations and AddressesOther Observations on Locations and Addresses

No easy way to see table used in Web-FormNo easy way to see table used in Web-Form

- No easy way to see total number of records in Web-Form - No easy way to see total number of records in Web-Form

- Locations are not consistently visible across Java and Web Forms. We - Locations are not consistently visible across Java and Web Forms. We

are not sure what it depends on. Possibly I can see in Web form only are not sure what it depends on. Possibly I can see in Web form only

those that have been entered in Web-Form. In Java I can see all. those that have been entered in Web-Form. In Java I can see all.

Possible strategy is to enter what you can in Web-Form, especially Possible strategy is to enter what you can in Web-Form, especially

locations, organizations. locations, organizations.

- Locations in Java and 11I are called Addresses in Web-Form of 12 - Locations in Java and 11I are called Addresses in Web-Form of 12


Gotcha 2: Location with Address Validation Gotcha 2: Location with Address Validation

Business Group Needs Location (HR_Location): Address Validation Data entry through Java form or Web-form? Address default United States – will cause

validation (if site profile option is set for HR purpose)


Address ValidationAddress Validationdefault Address format default Address format


Select different Address formats Select different Address formats


Change address style to United States International – then there is no validation. For each address you Change address style to United States International – then there is no validation. For each address you select the address style separately. For locations that are used for tax calculation we may need to change select the address style separately. For locations that are used for tax calculation we may need to change the address style to the address style to United StatesUnited States. This makes City, County, State mandatory and validates City, County, . This makes City, County, State mandatory and validates City, County, State relationship with Zip Code. (not sure if it goes not address level). Need to load patch with address State relationship with Zip Code. (not sure if it goes not address level). Need to load patch with address validations (maybe we should find the patch no.).validations (maybe we should find the patch no.).

US Validated Format or International Format: yes/no?US Validated Format or International Format: yes/no?

International Format International Format

No validationNo validation


Thank you ! Thank you !

Hans Kolbe, Celantra Systems [email protected]

+ 1 (415) 730 – 1131

Stafford Warren [email protected]

(408) 568-3182


mailto:[email protected]

overcoming uncertainty in common r12 setups: coa, ledger, legal entity, operating unit options,...

Documents

copyright celantra systems

r12 multiorg structure

multiorg setups

r12 flexibility

r12 greenfield implementation

r12 gotcha

multiorg decisions norcal

business group