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Richard Byrom
Oracle Applications Consultant

SAOUG October 2003

 

] resentation assumptions & objectives

]
hy an effective chart of accounts?
] Some common mistakes
] roposed methodology for effective design
] Additional tips and ideas
] Conclusion
] uestions & Answers





Õou are either: -.

± reparing for a new implementation.
± resently implementing.
± Have already implemented but could benefit from
enhancements and improvements.

Õou have an approved methodology for

implementing your system and each of the steps
mentioned here will fall within the phases being
used in your implementation methodology.



ho emphasise that building an effective chart of

accounts is dependant on using the right ³mix´ of
people, processes and technology.

ho give you the techniques and methodologies

involved in designing a chart of accounts so that you
can maximise your return on investment.
6 
  
 
 
 


] t is the heart of the system into which all modules and
interfaces flow.
] ase of Use.
] lexibility.
] rovides a good foundation for further expansion as well
as appropriate storage of current and historical
information.
] rovides the basis for timeous management reports and
financial statements.
] ho ensure implementation success and continued use of
the system.
þ
  



Knowledge himely |ecisions

|ata 
  
6 
  
   



  



] Gather existing chart of accounts and modify to
incorporate Oracle functionality.
] ONLÕ the inance |epartment designs and understands
the chart of accounts.
] hhe implementation partner is made responsible for
designing the Chart of Accounts.
] No consideration of impact of country, industry and
organisational factors on reporting requirements and
Chart of Accounts Structure.
] ast, present and future .
] nadequate summarisation of data in GL. Replication of
same data between sub ledgers or modules.
h 





] Generic |esign ssues.

] ssues relating to your country, industry and
modular setups.
] hake into account Oracle Specific functionality
that may be useful in the design process.
] Continuous mprovement.
r   |




] Begin with the end in mind.

± ³ho begin with the end in mind means to
start with a clear understanding of your
destination. t means you know where you
are going so that you better understand
where you are now and so that the steps
you take are always in the right direction´ ±
Stephen Covey.
r   |




!
] Gather management reports and financial statements or
design new ones. hhen work backwards to arrive at your
Chart of Accounts Layout.
] Consider organisational growth and diversification plans ±
be proactive, not reactive.
] Start with a basic structure and then enhance. However,
ensure there is a match between level of detail and ability
to maintain this ± KSS.
] nsure that you work well with your implementation
partner.
] Use all the tools Oracle rovides you with to manage the
process ± A|,
orkflow,hutor,Alert.
] |evelop a set of standards and conventions.
r   |




!
] heam work within the organisation ± particularly
important for Multi-site.
] Hold workshops.
± nsure users understand the importance of an
appropriate design infrastructure.
± stablish procedures for maintenance and update -
Centralised or decentralised approach.
± Agree on standards and conventions.
± nsure that the chart of accounts is signed by all the
parties involved ± that¶s one way to ensure peoples
involvement and acceptance.
] hhird party review.

"




  
 


ß. Country.
2. hype of industry.
3. Organisation ± multi-org, number of
sites,information types.
4. Modules implemented.
5. 3rd party nterfaces and systems.


 


] Check whether localisations

and/or statutory accounting
requirements affect your
chart of accounts.



 


] Manufacturing/Services
XX XXX XXXX XXX XXX XXX
Company Cost Centre Account roduct roduct Line Sub Account

] |istribution (News)
XX XXXXXX XX XXX XXXX
|ivision Account Region Story |istribution

] rojects
XXX XXXXX XXX XXXX XX
Company Account |epartment roject roject hype


h
] A single company with all
offices in one country.
] An international company with
offices overseas but a single
reporting structure.
] A multinational company with
subsidiary companies, each
with its own reporting and
management structures. þ #



 
$ 


  
 



]
hich modules are being implemented and how

do they impact the Chart of Accounts.
'þ
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% 

  
  


  
r  &  
h 







] nsure your Chart of Accounts design considers
the impact of third party interfaces and systems.
h 




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r  &  

   



 #  

] Set of Books infrastructure.

] Segments and Value Sets.
] Cross Validation and security rules.
] Aliases.
] Statistical Accounts.

$





Set of Books consists of your Chart of Accounts,

Calendar and unctional Currency.





%

 
 

   



  

 

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http://www.oracle.com/appsnet

Oracle Applications

  
that our
customers convert to Multi-Org as soon as possible.
e
make this recommendation to prepare for improvements
to performance across the -Business Suite as well as to
prepare for supporting Multi-Org Access Control, an
upcoming feature of the -Business Suite. Read the white
paper Release ßßi Use of Multiple Organizations in Oracle
Applications for more information.
  

] |efinition ± an area of analysis within your

business.
] Recommend using 5-7 segments with a spare
segment for future growth.
] |efine each segment name and the order in
which it appears in such a way that data capture
is facilitated.
 


] Length
] Numeric and alphanumeric
] Security
 
 



] Attach a list of valid values to

each segment.
± Child Values identify the
specific components of a
segment.
± arent Values define a
hierarchy or summarisation of
child values.
± nsure each a/c has
appropriate categorisation
Asset accounts, liability $þ   
accounts, revenue, expense, 


owners equity.





] Cross-validation rules let you control the combinations of

accounts entered for particular segments.
] xample ß ± ensuring that for all income statement
accounts a department is specified whilst for balance
sheet no department is specified.
] xample 2 - nsuring that for all revenue accounts a
product is captured.
] hhe advantage is that posting errors can be reduced,
however if they are two restrictive then posting errors will
not be reduced.
 
(

] Allows you to create specific views for certain

people ./hh  

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*+++ h





***+ 

**,+ 



*,++  

( 
*,,+ 
( 

*-*+ 


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  **+*
**00


] Allows you to develop names that are familiar to your organisation





  

] |edicated Statistical Accounts.

] Shared accounts which contain statistical and
monetary information.



(  

³hhere will come a time when believe everything is

finished. hhat will be the beginning.´
Louis L¶amour ± Best selling Author.

] Although certain designs are permanent never be happy

with your chart of accounts. Always look for improvements
but maintain a balance.
] hhis applies particularly to large organisations where
improvements can be made on cross validation, security
rules and aliases.
] Make sure any changes are validated in test and then
copied to production.
 
 

)




  
 
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Low
High

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h

] Spreadsheet template (demo).

] |ata Loader for loading your data into Oracle.
Available at http://www.comstar.co.uk (Also see
presentation).
] Coding tips.
± Ranges and coding.
± Make sure you provide for growth.
± Create meaningful patterns within the coding structure.

h

] Use the Oracle A| Account Hierarchy editor for mass edits and Big
icture View

h

] Alternatively use the Account Hierarchy Manager in -Business Suite
found under GL Super User Responsibility>Setup>Accounts>Manager




] Use auditing tools to establish whether your setup

is correct
± CRM analysis tool (note ß 7000.ß Metalink)
± |emonstration
 


] Oracle -business suite provides a highly

effective mechanism for enabling a powerful chart
of accounts design.
] rocesses outside the system as well as the
people aspects are equally important in ensuring
an appropriate COA infrastructure.
  


Name: Richard Byrom

e-mail: richard@rpcdata.com
richard@richardbyrom.com
Company: R C |ata Ltd

eb Site: http://www.rpcdata.com
http://www.richardbyrom.com
Mobile: +25 -77983245