Business Units

A business unit is a unit of an enterprise that performs one or many business functions that can be rolled up in a management hierarchy. A business unit can process transactions on behalf of many legal entities.

Normally, it has a manager, strategic objectives, a level of autonomy, and responsibility for its profit and loss. Roll business units up into divisions if you structure your chart of accounts with this type of hierarchy.

Though there’s no direct relationship between business units and legal employers, it’s recommended that you either maintain a 1:1 relationship between the two or have many business units within a legal employer. Typically, a business unit is used to roll up financial transactions within a legal entity. So, if you set up business units at a higher level than legal entities, your financial transactions may fail.

In Oracle Fusion Cloud Applications you do the following:

• Assign your business units to one primary ledger. For example, if a business unit is processing payables invoices, then it must post to a particular ledger. This assignment is required for your business units with business functions that produce financial transactions.

• Use a business unit as a securing mechanism for transactions. For example, if you run your export business separately from your domestic sales business, then secure the export business data to prevent access by the domestic sales employees. To accomplish this security, set up the export business and domestic sales business as two separate business units.

The Oracle Fusion Applications business unit model provides the following advantages:

• Enables flexible implementation

• Provides consistent entity that controls and reports on transactions

• Shares sets of reference data across applications

Business units process transactions using reference data sets that reflect your business rules and policies and can differ from country to country. With Oracle Fusion Application functionality, you can share reference data, such as payment terms and transaction types, across business units, or you can have each business unit manage its own set depending on the level at which you want to enforce common policies.

In summary, use business units for:

• Management reporting

• Transaction processing

• Transactional data security

• Reference data sharing and definition

Brief Overview of Business Unit Security

A number of Oracle Fusion Applications use business units to implement data security. You assign roles like Accounts Payable Manager to users to permit them to perform specific functions, and you assign business units for each role to users to give them access to data in those business units. For example, users who have been assigned a Payables role for a particular business unit, can perform the function of payables invoicing on the data in that business unit. Roles can be assigned to users manually using the Security Console, or automatically using provisioning rules. Business Units can be assigned to users using the Manage Data Access for Users task found in Setup and Maintenance.