Download NorCal GEO 2011 - Celantra Systems

Overcoming Uncertainty in
Common R12 Setups: COA,
Ledger, Legal Entity, Operating
Unit
Options, 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 provides international program management services with a strong focus on multi-org, intercompany, 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:
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
Yahoo!
Verisign
BMC Software
Information Management Group
[email protected]
408-568-3182
Cisco
Agilent
Electronic Arts
Calpine
Franklin Templeton
Oracle Consulting
Symantec
Intuit
Agenda
1. R12 Multi-Org Structure, high-level setup steps and
configuration options
2. Setup Steps
a) Business Group and Legal Entity
b) Ledger
c) Op Units and Balancing segments
3. R12 Gotcha: Addresses, Locations, Organizations
4. R12 Flexibility and Restrictions: Multiple values balancing
segments, Legal Entity, Op Units
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Starting 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.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Section 1
Multi-Org Decisions
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
R12 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
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Multi-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
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Multi-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.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Multi-Org – LE Configuration Options – View B
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Section 2
Setup Steps
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Steps and Relationships
•
•
•
•
•
Business Group
Legal Entity
Ledger (needs chart of accounts)
Associate Balancing Segment
Associate Operating Unit
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
R12: Business Group, Legal Entity and Ledger are
independent entities
Is there a business function in using one without the other?
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 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
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 2: Create Business Group (Global)
- 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).
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Screen Shot – (in Java Form)
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 3: Legal Entity Setup
Use Legal Entity Configurator Responsibility (Web-Form) to define:
- Location /Address (Web-Form)
- Tax Profile (not required at LE level)
- Registration
- Create Jurisdiction (skip if existing)
- Territory (skip if existing) – potential Gotcha
- Create Location with Address (required) – see later slides for Gotchas
- Create Organization (Java – Form)
- Establishments (usable for tax): Legal Entity setup automatically creates one
establishment at legal entity level.
- Contact Information (not required at LE level)
- Intercompany Exceptions (not required at LE level)
- History (not required at LE level)
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: Assign Balancing Segment to Legal Entity or Ledger
Use Web-Form: GL Responsibility
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
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
transactions. See next screen.
- You can assign multiple Balancing Segment values per legal entity. Then
security rules are needed to restrict access (if required).
- 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.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: continued
Assign Multiple Legal Entities to single Ledger,
The operating unit option is “hidden” in the ledger setup menu.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: continued
Create and Assign Operating Units assigned to a Legal Entity
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
Entity. In 11I Business Group is assigned at the Legal Entity level.
You choose the Legal Entity by choosing the “Legal Context” field.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: continued
Assign Operating Units assigned to a Legal Entity
You choose the Legal Entity by choosing the “Legal Context” field. You can see the legal
entity name when searching “by”.
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: continued
View the result – Operating Unit and Legal Entity are associated
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Step 4: continued
Multiple Balancing Segment values at Ledger Level
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Section 3
Gotchas
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Gotcha 1: Location Addresses” or “Locations” – Terminology
and challenges in visibility of data from both angles Java
and Web-Form
 “Addresses”
or “Locations” –
Terminology
 Visibility of data from both angles
Java and Web-Form
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
R12 Gotcha Locations – Addresses
Topic 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
only 4
Big problem and confusion
Java Form = 12 Locations
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Web Form = 4 Locations
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Other Observations on Locations and Addresses
No easy way to see table used 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
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.
Possible strategy is to enter what you can in Web-Form, especially
locations, organizations.
- Locations in Java and 11I are called Addresses in Web-Form of 12
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
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)
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Address Validation
default Address format
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Select different Address formats
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
US Validated Format or International Format: yes/no?
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
the address style to United States. 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
validations (maybe we should find the patch no.).
International Format
No validation
NorCal GEO Training Day January 2011 - Copyright Celantra Systems
Thank you !
Hans Kolbe, Celantra Systems
[email protected]
+ 1 (415) 730 – 1131
Stafford Warren
[email protected]
(408) 568-3182
NorCal GEO Training Day January 2011 - Copyright Celantra Systems