Designing a Chart of Accounts for

a Global Company going to Oracle

E-Business Suite Release 12

Helene Abrams
CEO
eprentise
habrams@eprentise.com
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Learning Objectives
After completion of this program you will be able to:
Objective 1: List the five fundamental design criteria for creating a
forward-thinking chart of accounts.

Objective 2: Explain how to design a chart of accounts to

accommodate future growth.

Objective 3: Describe how a good design enables you to reduce

costs, streamline reporting, and provide global visibility.
Objective 4: Identify how to leverage Release 12 features like
subledger accounting and ledger sets.

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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

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 : Transformation Software for E-Business Suite
Company Overview: Established 2006 l Helene Abrams, CEO

eprentise Can So Our Customers Can:

Consolidate Multiple EBS Instances Reduce Operating Costs and Increase
Change Underlying Structures and Efficiencies
Configurations Shared Services
Chart of Accounts, Other Flexfields Data Centers
Inventory Organizations Adapt to Change
Operating Groups, Legal Entities, Align with New Business Initiatives
Ledgers Mergers, Acquisitions, Divestitures
Calendars Pattern-Based Strategies
Costing Methods Make ERP an Adaptive
Resolve Duplicates, Change Sequences, Technology
IDs Avoid a Reimplementation
Separate Data Reduce Complexity and Control Risk
Improve Business Continuity, Service
Quality and Compliance
Establish Data Quality Standards and a
Single Source of Truth

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Chart of Accounts Basics: The Flexfield
Example Structure
Segments, Values, Code Combinations

Company Business Cost Region Account

Unit Center
01 100 150 East 1111
02 100 210 West 2222

Values

01.100.150.East.1111 Code Combination

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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

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Flexfields in the Form

Code Combinations

Accounting Key Flexfield

Value Descriptions

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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

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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.

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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 shouldnt have a Department segment value such as HR
Sacramento, CA if there is also a Location segment in the chart.

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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.

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Criteria 3: Enough Room to Expand
Define your segment lengths to be long enough to accommodate future values added.
Note: Although it likely wont 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

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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

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CVR Implications on COA Design
Out of Range Cross-validation rules can get messy if your chart of
accounts values are not organized in logical ranges.
Rule elements are much more complex due to the inability to rely on
value ranges for exclusion
Example Goal: Prevent revenue account values between 30000 and
40000 from being used with any department values other than the
following 5 values (well begin with the familiar global Include element):
3001
5057
6124
8537
9905

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CVR Implications on COA Design
Example Goal: Prevent revenue account values between 30000 and
40000 from being used with any department values other than the
following 5 values (well begin with the familiar global Include element):

3001 5057 6124 8537 9905

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CVR Implications on COA Design Cont.
Example Goal: Prevent revenue account values between 30000 and
40000 from being used with any department values other than the
following 5 values (well begin with the familiar global Include element):

3001 5057 6124 8537 9905

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CVR Implications on COA Design
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

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A Global Chart of Accounts
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
Enterprise Visibility with Subledger Accounting and
Secondary Ledgers

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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, drill-down 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

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A Global Chart Location CCY Location Op Unit BalSeg BalSeg GPS Book BalSeg Bk Seg BalSeg GPN Book BalSeg Seg Bk

of Accounts
US 001
US USD Comerica NAm USD 002
Canada 005
CAD
Canada
USD Canada NAm CAD 006 025 GPS LKR 025

Sri Lanka AsiaPac LKR 025 027 027

LKR 001
USD Sri Lanka AsiaPac EUR 201 001 001 002 205 205
US SOB

Reduced
Sri Lanka EUR 002 002 005
GBP Sri Lanka AsiaPac GBP 301 005 005 105 565 565
AUD 106 106
Sri Lanka AsiaPac AUD 401 105 105
SGD 103 GPS US 103
Singapore
USD Singapore AsiaPac SGD 023 107 107 027
GPN PHI 570 570
911 911 107
PHP Philippines AsiaPac PHP 027 912 912
Philippines
USD 913 913 912
GPN CHN 801 801
Sri Lanka 106 953 953 031

Complexity
Maldives USD Maldives 105
Singapore 103 031 GPS CNY 031 913
GPN IND 802 802
CNY Philippines AsiaPac USD 107 029
China 029 GPS INR 029
USD Taiwan 911
China 912 911
030 GPS TWD 030 GPN TWN 803 803
INR India 913 030
India
USD
China AsiaPac CNY 031 022 GPS MOP 022 022 GPN MAC 545 545
TWD
Taiwan 028 GPS MYR 028
USD India AsiaPac INR 029 028 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

Streamline the month- and

Malaysia MYR Hong Kong AsiaPac HKD 021 006 006
GPS CAD
955 955 025
Brunei BND Malaysia AsiaPac MYR 028 106
201 201 201 GPN SRL 585 585
GPS EUR
Brunei AsiaPac BND 024 952 952 301

year-end closing processes

201 401
GPS
UK Europe GBP 951 301 301 301
GPS GBP US
951 951 401
UK Europe EUR 952 US
401 401 SOB
GPS AUD
UK Europe USD 953 956 956 103

No more messy financial

GPN SNG 575 575

023
GBP UK Europe SGD 954 023 023
GPS SGD
EUR 954 954 021 GPN HK 525 525
USD UK Europe CAD 955

consolidations using
SGD 021 021 953
GPS HKD
CAD UK Europe AUD 956 957 957 955
AUD 952
UK HKD UK Europe HKD 957 951
CHF 958 GPS CHF 958 956

spreadsheets
DKK UK Europe CHF 958 954
JPY 959 GPS DKK 959 957 UK SOB 851 851
NOK UK Europe DKK 959 958
NZD 960 GPS JPY 960 959
SEK UK Europe JPY 960 960
961 GPS NOK 961 961

R12 eliminates the need for

UK Europe NOK 961 962

962 GPS NZD 962 963

UK Europe NZD 962
963 GPS SEK 963
UK Europe SEK 963

using and maintaining Russia

DolEx US
RUB

USD
GPN RUS

DOLEX US
RUS

multiple charts of accounts DloEx Mexico

DolEx Guatemala
MXN

GTQ
DOLEX MX

DOLEX GT
DLX

Eurofil EUR GPN EUR EUR

Muzo CZK GPN MZO MZO

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R12 Features Ledger Sets
Open/Close periods
Create journals
Allocations across ledgers
Recurring journals for all ledgers
Elimination sets for all ledgers
Translate and revalue balances
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View information without changing
responsibilities
View journals and account balances across
ledgers
Submit standard reports
Create financial statements that include
data for multiple ledgers
Global Visibility Local Compliance with R12
Subledger Accounting, Accounting Methods Builder Replaces Global Accounting Engine

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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

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How Do You Leverage AGIS?
Advanced Global Intercompany System
Intercompany Balancing
Intercompany Invoicing
Intercompany Reconciliation/Eliminations
Manual Intercompany Transactions
Netting Process
Common Chart of Accounts
Intercompany Segment

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Leveraging the Chart of Accounts for
Global Operations
Two ways to handle local/regulatory requirements
Separate Segment
Each country can use a range of values for their statutory requirements
Analysis Segment Ranges Values Descriptions
000000-001000 France 000321 Crdit Agricole Bank Account
000544 Droits D'enregistrement Tax
001001-002000 Italy 001321 Intesa Sanpaolo Bank Account
002001-003000 UK 002321 Barclays Bank Account
002584 VAT Tax

Secondary Ledger

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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, Subledger
Accounting, AGIS in mind.

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Transformation Software Solutions
Two Product Lines
FlexField
Change chart of accounts in EBS
Built-in Rules
Changes data in all subledgers
Retain all historical transactions
Quick, easy project, low price point
eprentise
Software that remodels any setup data
Reorganizes configuration, master, and transaction data
Maintains all history resulting in a single source of truth
Based on a source that is transformed into a target
Enterprise-level scope project
Metadata Analysis and intelligent knowledge repository

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FlexField Software Process Flow
Create new COA in E-Business Suite (Structure, Qualifiers)
Install FlexField software (client/server)
Run current baseline report set
Pair accounting flexfields
Map either segments and values or code combinations
Create mapping file from software
Add new values, combinations in Excel
Load csv file into FlexField Software
Resolve Exceptions
Execute Changes
Transform CCIDs
Apply changes to history, subledgers
Align balances
Print audit report
Run report set to reconcile

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Mapping the Accounting Flexfield
Either Segments and Values or Code Combinations
New Mapping Must be Derived from Old Segment Values
Segments
1:1
Current New
Segment
Company Company Segment

1:M*
Current New
Segment
Cost Center Cost Center + Location Segments

M:1
Current New
Segments
Product Line + Cost Center Line of Business Segment

Values or Code Combinations *Segment Level Only

Current
Value
Company
01
Company
100
New
Value 1:1
Cost Centers
Current 01 Activity New
Values 02 101 Value
03
CO-CC-ACT
M:1
Current
CO-CC-ACCT-LOC New
Value 01-10-1000
100-300-16000-200 Value
01-20-1500

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Select the Source and Target Flexfield

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FlexField Software to Change your EBS Chart of
Accounts
Map Segments and Values
or Code Combinations
Segment Mapping

1 1 Mapping

M 1 Mapping

1 M Mapping

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FlexField Software to Change your EBS Chart of
Accounts
Changes CCID everywhere
All setups
All subledgers
All history
Looks as though the
new chart of accounts
was part of the original
implementation
Full audit trail, drill
down, roll up
Built in exception
reporting

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 Create Mapping Files
1:M Mapping of Company to (Company and Business Unit)
A B C D E F
New
Current CO
CO Description CO New CO Description
New BU
New BU Description New
Value Value
Company Value Company and
Segment 1 01 North America Company 01 New Company 101 New Business Unit
Business Unit
2 02 Overseas Distribution 02 New Distribution Company 102 Overseas Operations BU
Values and Segment
3 03 French Company 03 French Manufacturing Company 103 Project Mfg BU
Descriptions 4 27 Consulting Services Company 04 New Vision Consulting Ltd 104 Vision Consulting BU Values and
5 95 Operation Elimination 05 Intercompany 195 Operations Elimination BU Descriptions
6 99 Corporation (Vision Consolidation) 99 New Vision Consolidation 199 Vision Consolidation BU

M:1 Mapping of (Region, Account, Product) to Account

A B C D E F G H
New
Reg Reg Account Product Product New Account
Account Description Account
Value Description Value Value Description Description
Current Value
New
Region, 1 01 Southwest 1400 SALES COMMISSIONS 001 computer 140000
SALES COMMISSIONS
GENERAL Account
Account,
2 01 Southwest 1405 SALES COMMISSIONS - OTHER 002 hard drive 140500
SALES COMMISSIONS Segment
and Product HARD DRIVE
Values and
Segment 3 02 Northeast 1410 SALES COMMISSIONS - RESERVE 001 computer 140000
SALES COMMISSION
GENERAL Descriptions
Values and SALES COMMISSIONS SERVICES - SALES COMMISSION -
Descriptions 4 02 Northeast 1415
SUPPORT
003 Services 146000
SERVICES
SALES COMMISSIONS SERVICES - SALES COMMISSION -
5 02 Northeast 1415
WARRANTY
003 Services 146000
SERVICES
SALES COMMISSIONS
6 03 Southeast 1410 SALES COMMISSIONS - RESERVE 002 hard drive 141000
- RESERVE
Exceptions:
Account Type Mismatch Splitting Balancing Segment
Multiple Descriptions Length of Value

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Create Mapping File from FlexField

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Load Mapping Files into FlexField
Overwrites existing segment value mappings
Repeat Loading until you are satisfied with mappings and have no exceptions

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Apply Changes to Database

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Align Accounts

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Merging Balances
Balance Tables (GL, AX, XLA etc.)
Unique constraint on code combination ID
Forces one balance per code combination
No other tables are affected
Many old CCIDs mapped to the same new code combination

Old Entity Cost Account Interco Future Balance

CCID Center Use
7754 02001 00965 150170 0000 0 $100,000.59
7766 02001 00965 150170 0000 0 $10,250.33
7783 02001 00965 150170 0000 0 ($7,432.84)
02001 00965 150170 0000 0 $102,818.08

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Export Current and New Code Combinations

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Post-Change Steps (Not covered by Software)
Hard-Coded (RICE Activities) Definition of Target
Interfaces to third-party systems
Data Warehouse Testing and Cutover Strategy &
Reports
Execution
Workflows
Rules (Use Business Logic)
OFA Oracle Financial Analyzer
Cross Validation
Uses Ranges Consolidation
Approval Assignments Account Derivation Rules
Budget Assignments Accounting Generator
Roll-up Groups
New EBS Features Security Rules
New Modules/Functionality Summary Templates
Some Configuration New CoA, Ledgers Mass Allocations
Upgrade to R12 Costing and Revenue Recognition
Rules

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Questions?

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 Thank You!
Helene Abrams
CEO
www.eprentise.com
habrams@eprentise.com

- One World, One System, A Single Source of Truth -

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