Collaborate 14 Paper: Balancing by 2 Segments

It is a very common requirement to automatically balance by two different segments of the chart of accounts, typically the Legal Entity and some sort of Management Entity (department, line of business, cost center, etc).  Fusion financials allows you to balance by up to three segments, which is always a well received feature.  However at Collaborate you can learn how one company built a custom to do this in EBusiness Suite.  I’m honored to have been asked to Co-present with GE on this topic, they have done some really good work here and I’m sure it will be of great interest to others too.  So come along and join us, you’ll get the specifics of what they did, the details are below:

Session ID: 13941
When: 10 Apr 11:00 AM-12:00 PM
Room: Level 1, Marco Polo – 801
Speakers: Sangeeta Sameer, General Electric (GE),  David Haimes, Oracle Corporation
Abstract: This paper describes the Custom solution that General Electric (GE) implemented in collaboration with Oracle to achieve Balancing by 2 segments in Release 12.1.3 of Oracle E-Business Suite (EBS). GE has the business need to Balance by both the Legal Entity (LE) and Management Entity (ME) segments in the Chart of Accounts. While Fusion Applications allow Balancing by 3 segments, Oracle EBS Applications do not have this Functionality. This paper covers the requirements and solution in detail for 2 Segment Balancing.

Oracle Ebusiness Suite Financials Books

I am often asked what book to read to learn Oracle Financials, there is no simple answer here.  If you get the concepts right everything else will drop into place much more easily than getting overwhelmed with specific details of how to configure every single feature click by click or what every single UI does in detail.  I have listed some of the books available below.  I have given some commentary, but I advise going to amazon and checking out the reviews there or looking in the comments of this post where I hope you will all share your thoughts on the ones you have read.

Oracle E-Business Suite Financials Handbook, Third Edition

I have the first edition of this book, it is very readable and goes over the concepts and major features of all the products in financials, a good starting point if you are new to financials.  It discusses how you would run an implementation project and does not concern itself with step by step guidance on how to set up specific features.  It’s a good book and well researched.

I have not read the third edition in detail yet, anyone who has please feel free to post comments on this post.

Oracle E-Business Suite Financials R12: A Functionality Guide

Oracle E-Business Suite Financials R12

Full disclosure on this one.  Firstly I was given this book free by the publishers to review, secondly I know the author Mohan Iyer, who is chair of the OAUG GL Special Interest Group.

This book is not going to make you an expert in Oracle Financials and ready to get started on a major implementation right away, it does not get into the detailed steps of how to configure all the modules and features. It simply introduces the modules in a way that a business user can understand, diving into a little more detail in some places. I think it is intended to be a guide for a business user considering or already starting an implementation, so they can understand some of the options and choices available and I feel it mostly meets that goal well.

The Oracle General Ledger guide

I purchased this book and I’ve read most of it. It seems to be very comprehensive and accurate on the details but is not adding the value I’d hope for over and above the online help or product documentation.  I would have liked it to see some more concise overviews of features and business cases for using certain implementation choices over others.  That said I’m thrilled to a book on GL and am sure many people will find it useful.

Oracle E-Business Suite Development & Extensibility Guide

Not had a chance to read this one, but it contains information that many, many people will care a lot about.  Let me know if you have read it.

Shining a Light on the Release 12 World

The Solution Beacon crew have produced a number of good publications and have a lot of experience, they focus on what is new in R12 and what is in it for you.  It comes with a recommendation from Floyd Teter, who is a respected friend of this blog.  I have not read this one myself.

If you have any of these books, or maybe you are one of the authors of these books please share your thoughts with the community in the comments section.

Changing the Legal Entity to Balancing Segment Assignement

In the R12 Accounting Setup Manager, you can assign Balancing segment values (aka BSV, Company Codes) to Legal Entities, that’s nothing new for me to blog about.  However a few times in the last month or two I have been asked a question along the lines of

“We are doing a re-org or have created a new LE and now we want to reassign an existing BSV to the new LE, how do we do that?”

My reply is

“I don’t think you really want to do that”

The reason why is because moving ownership of assets and liabilities from one Legal Entity to another is an Intercompany Sale, it has to be done correctly and any taxes due etc must be paid.  Also you need to keep all the history of the activity the old legal entity did and report on that and have it available for audit.  Also you probably want to deal with all the open transactions against the old LE in one way and just start recording new transactions against the new LE.  A good option is to create a new balancing segment value and assign that to the new LE.

There is one situation where I am ok with people wanting to change the assignment, that is when it was a mistake during implementation and you have not entered any transactions against it yet.  That is essentially a data fix.

What is Fusion Accounting Hub?

I like the name Fusion Accounting Hub.  I would like it more if it did not cause so much confusion with the E-Business Suite (EBS) Financial Accounting Hub.  So in an effort to clear things up, I’m writing this blog post.

First some history.  When we designed EBS R12 we wanted to have a common accounting engine for all subledgers, so we built Subledger Accounting (SLA).  We also wanted to provide a platform for customers to generate accounting for all their non Oracle Apps transactional systems using a rule based system.  So we created Financial Accounting Hub (FAH) which exposes the SLA rules engine to external systems so you can bring those into EBS and generate the accounting for multiple systems in one place, using standardized, transparent accounting rules.

When we were building Fusion Applications, we wanted to Fuse the market leading Hyperion BI and Financial Reporting features as well as the powerful PeopleSoft Trees* with EBS General Ledger.  We also wanted to provide a way for Peoplesoft, EBS and JDEdwards customers to move to Fusion in an incremental manner, maybe consolidating data from several GL instances into one Fusion system.  The result was Fusion Accounting Hub (FAH).  Oh and we also provided the accounting rules engine for external systems in the Fusion Accounting Hub.

So we ended up with the same ‘Accounting Hub’ name for the Fusion product when it really offers a whole lot more and different options, you can pick and choose what you take advantage of.

So in summary:

  • E-Business Suite Financial Accounting Hub – An accounting integration platform
  • Fusion Accounting Hub – A BI, reporting and consolidation Platform and an Accounting Integration platform

The other great thing about Fusion Accounting Hub is it is a a great way to incrementally move all your financials into Fusion, but that is a topic for another post…

I hope this clarifies, rather than confuses things, but please let me know your questions in the comments section below.

*Actually there are other Peoplesoft features we include, not least of all automatic balancing across multiple chart of account segments.

Intercompany Segments in the Vision Demo

One of the most common questions I get asked is

‘Do we need to define an Intercompany segment in our chart of accounts?’

The answer is:

‘We do not require an Intercompany Segment, but we still recommend defining one’.

Even if you do not have a great deal of intercompany activity at the moment, it is worth having one defined now as it is difficult to add one later.

Another question I have been asked is

‘Can I define the same segment to be my balancing segment (aka Company Code) and my Intercompany segment?’ Continue reading