How Charts of Accounts, Ledgers, Legal Entities, and Business Units Are Created Using Spreadsheets

The rapid implementation process for setting up an enterprise structure includes several steps.

1. Downloading the Rapid Implementation for General Ledger workbook.

2. Entering data into the sheets.

3. Verifying the entered data and resolving any errors.

4. Uploading the chart of accounts file.

5. After successful upload of the chart of accounts file, uploading the general ledger, legal entity, and business unit file with the rest of the configuration.

The rapid implementation enterprise structure configuration is meant to be used as a one-time initialization. To the extent that you want to make certain allowed modifications to the configuration, you generally have to make those changes directly in the applications. After initial upload of the ledger, legal entity, and business unit file, the fundamental accounting configuration framework is only created once and is permanently set. This framework includes the ledger and its assigned chart of accounts, calendar and currency assignment, and the associated definitions of those components.

Workbook Overview

You can download the workbook in one of two ways:

1. In the Setup and Maintenance work area, go to the Manage Chart of Accounts Configurations task in the Financial Reporting Structures functional area and click the Download Setup Template button.

2. In the Setup and Maintenance work area, create an implementation project that includes the Define Financials Configuration for Rapid Implementation task list. Download the workbook using the Create Chart of Accounts, Ledger, Legal Entities, and Business Units in Spreadsheet task.

The workbook includes the following sheets:

• Instructions

• Chart of Accounts, Calendar, and Ledger

• Business Units

• Companies and Legal Entities

• Natural Accounts

• Financial Sequences

New sheets for entering segment values and hierarchies for additional segments of your chart of accounts can be created automatically. After you enter the segments on the Chart of Accounts, Calendar, and Ledger sheet, click Add Segment Sheets or Generate Additional Hierarchy.

Note: The rapid implementation process creates a standard ledger. You can convert a standard ledger to an average daily balance ledger before the first period is opened by selecting the Enable average balances check box on the Specify Ledger Options page.

Instructions

Review the Instructions sheet for important information about how to use the workbook and submit the accounting configuration. The sheet includes:

• Data preparation requirements

• Setup object concepts

• Best practices and recommendations

• Instructions on how to create additional hierarchies or hierarchy versions

• A completed workbook with sample data, which you can use to familiarize yourself with how to enter data, preview the sample report, and generate required upload files

Chart of Accounts, Calendar, and Ledger

Enter the data to create your chart of accounts, calendar, and ledger.

Caution: Once you begin using your chart of accounts, calendar, and ledger, making changes to their fundamental attributes is neither recommended nor supported. This includes your chart of account segments, including the segment labels as well as other characteristics of those segments, and your calendar structure or pattern.

The following figure shows an example of the Chart of Accounts, Calendar and Ledger sheet with sample values.

An explanation of each field on the sheet follows.

• Name: Enter the name of your primary ledger.

  A primary ledger is created for each unique country that's entered in the Companies and Legal Entities sheet. A country code is appended to the name that you specify. For example, one legal entity is based in the United States and another in Canada. If you enter the ledger name of InFusion Ledger, two primary ledgers are automatically created, InFusion Ledger US and InFusion Ledger CA.

  All of the primary ledgers that are created use the same chart of accounts, account hierarchies, and accounting calendar. Legal entities and their primary balancing segment values are assigned to the primary ledger of their respective countries. If the addresses provided for the legal entities on the Companies and Legal Entities sheet are all in the same country, then only one primary ledger is created.

• Currency: If you're not entering legal entities and only a single ledger should be created by the rapid implementation configuration, enter the ledger currency in which you want to maintain accounting for in that ledger. If you're entering legal entities, leave this field blank. The currency is automatically supplied based on the country.

• Period Frequency: Select from among the list of available frequencies for the ledger calendar.

  Caution: For the accounting calendar created using the Rapid Implementation Enterprise Structure solution, the choices of patterns are limited to the period frequency and adjusting period options that are available for selection in the spreadsheet. It isn't possible to make alterations to the pattern or specified fiscal year start date once the calendar has already been created.The accounting periods of the calendar are automatically named using a preset format. If you want to change these period names, you have a limited window of time to make those changes. Use the Manage Accounting Calendars page in the application to make the changes before the accounting calendar is being used actively, such as when one of its accounting periods has been set to a status of Open.

• Adjusting Periods: Select the number of periods used to segregate closing, auditing, or other adjustments in General Ledger. The entries are tracked in the adjusting period and not in your monthly activity.

• Fiscal Year Start Date: Enter the start date of the accounting calendar. The date can't be changed after the submission of the configuration.

  Caution: If you plan to run translations, enter a fiscal year start date for the entire accounting year that's before the first period for which you intend to run translations. You can't run translation in the first defined period of an accounting calendar. For example, if your fiscal year starts on January 1, and you want to start translations for the period of Mar-17, then you should select a fiscal year start date of January 1, 2016.Also when determining the fiscal year start date, you might want to consider whether you plan to load history.

• Segment: Enter the names for your segments. The value sets are created from the segments.

• Segment Label: Select segment labels to assign special functionality to segments.

  Segment labels specifying the segment's purpose, such as balancing, cost center and natural account, can only be assigned once to a chart of accounts segment. The Primary Balancing Segment and Natural Account Segment labels must be assigned, while the other segment labels are optional. Segments that are assigned these two particular labels cannot be assigned any other label. However, segments that are assigned the other remaining labels can also be assigned additional labels, provided they're not Primary Balancing Segment or Natural Account Segment.

  The Intercompany Segment label assignment is optional. If assigned, an Intercompany sheet is automatically added to the workbook when you select the Add Segment Sheets button. Use the sheet to enter your intercompany values and hierarchies. When you upload the chart of accounts file, the application creates a new value set for the Intercompany segment with the values that you entered. If you want to assign the Intercompany segment the same values as the Primary Balancing segment, copy all the parent and child values from the Companies and Legal Entities sheet to the Intercompany sheet.

  If you enable segment value security on the primary balancing value set, the security enforcement won't conflict with the Intercompany segment because the value sets for the two segments will be different. The same holds true if you enable segment value security on the intercompany value set. Security enforcement won't conflict with the Primary Balancing segment.

  If you plan to use related value sets and create a relationship between the segments that involves your primary balancing segment or intercompany segments, there won't be a conflict of values because the value sets are different.

  Note: If you want to assign the Intercompany segment the same value set as the Primary Balancing segment, you can change the value set assignment from the Manage Chart of Accounts Configurations page after you upload the chart of accounts configuration and before you upload the financial structures for the chart of accounts. If you decide to go with the same value set for both segments, you won't be able to change the value set association later on, once the ledger is assigned to the chart of accounts.
  Note: For the posting process to apply intercompany balancing, you must select the Enable intercompany accounting option on the Specify Ledger Options page.

• Short Prompt: Enter a short name for the segment, which is used on applications pages.

• Display Width: Enter the segment size. Select the size carefully and leave room for growth. For example, if you have 89 cost centers, enter 3 for the display length to allow for more than 100 cost centers in the future.

• Add Segment Sheets: Select this button to create sheets for additional segments. Sheets are provided only for the Company and Natural Accounts segments.

  From the new segment sheet, you can click the Generate Additional Hierarchy button to create more than one hierarchy for any chart of account segment. A worksheet is then automatically created and populated with the data already entered for that segment. Change this data as required for the new hierarchy. You can create additional hierarchies during initial setup, or after the initial setup is done.

Caution: You can't change the chart of accounts, accounting calendar, or currency for your ledgers after the setup is created.

Business Units

Enter the name of your business units and related default legal entities.

The following figure shows an example of the Business Units sheet with sample values for the Name and Default Legal Entity Name fields.

Business units are created with the names that you enter. You can enter more than one business unit per ledger. Based on the default legal entity specified for the business unit in the Business Units sheet, the business unit is assigned the primary ledger to which its default legal entity is assigned.

Companies and Legal Entities

Enter parent and child values for your Company segment, which is the segment that's assigned the Primary Balancing Segment label on the Chart of Accounts, Calendar, and Ledger sheet. You can create up to nine levels of parent values to roll up your companies to meet corporate and local reporting requirements.

Enter your legal entities for the child values with the address, registration number, and reporting unit registration number. The registration number identifies legal entities registered for your company and recognized by law for which you want to record and perform transactions. The reporting unit registration number identifies the lowest level component of a legal structure that requires registrations.

The following figure shows part of the Companies and Legal Entities sheet with sample values. The sheet includes columns for different levels of parent values, the child value, and company description. The Legal Entity columns include name, identifier, country, address information, and registration numbers.

To create additional hierarchies for the company segment for reporting or other purposes, click the Generate Additional Hierarchy button. A worksheet is automatically created and populated with the data already entered for that segment. Change this data as required for the new hierarchy. You can create additional hierarchies during initial setup, or after the initial setup is done.

When a new hierarchy sheet is created, the name for that sheet is derived by adding a counter to the sheet name. For example, when you click Generate Additional Hierarchy on the Companies and Legal Entities sheet, the new sheet is named Companies and Legal Entities 1. When you click Generate Additional Hierarchy again, another sheet is generated with the name Companies and Legal Entities 2.

Note: Adding legal entity information isn't supported on a new hierarchy sheet for the Company segment.

Natural Accounts

Enter account hierarchies, account values, and specify account types.

The following figure shows part of the Natural Accounts sheet with sample parent and child values, descriptions, and account type.

• Parent: Enter parent account values to define hierarchies. Hierarchies are used for chart of accounts mappings, revaluations, data access sets, cross-validation rules, and segment value security rules. The balances cube and account hierarchies are also used for financial reporting, Smart View queries, and allocations.

• Child: Enter child account values to define the postable accounts.

• Description: Enter descriptions for the segment values.

• Account Type: You must assign an account type to each account value. Account types are used in year-end close processes and to correctly categorize account balances for reporting. Select from among general account types and expanded account types. The general account types are: Asset, Liability, Owner's Equity, Revenue, Expense. Expanded account types provide specialized functionality and are used to:

  • Identify the intended usage of your natural account values to facilitate automation and enable completion of other required setup objects. For example, assign the Asset - Intercompany Receivable and Liability - Intercompany Payable expanded account types. The Rapid Implementation process then automatically creates a chart of accounts level intercompany balancing rule, which is a required setup for the application to perform intercompany balancing.

  • Automatically generate fully defined initial Financial Reporting reports and Account Groups based on your enterprise structure.

  Examples of expanded account types include:

  • Asset - Accounts Receivable: For Receivables receipt methods

  • Liability - Accounts Payable: For Payables common options

  • Owner's Equity - Retained Earnings: For General Ledger ledger options

  • Revenue - Top Revenues Parent Account: For sample reports and account groups

  • Expense - Top Operating Expenses Parent Account: For sample reports and account groups

  You must assign the Revenue - Top Revenues Parent Account and Expense - Top Operating Expenses Account account types to the parent accounts that are your highest level and comprehensive revenue and operating expenses accounts. You can optionally assign the account type of Expense - Top Cost of Sales Parent Account, if it's applicable for your scenario.

  The Generate Financial Reports and Account Groups process, which is automatically submitted when the accounting configuration is created in the application, generates a set of Financial Reporting reports and account groups according to the accounting configuration defined in the workbook. The top parent accounts are used as the basis for deriving the accounts referenced in the reports and in the Account Groups.

  The immediate descendants of the top parent accounts are used to define the rows on the reports. Depending on whether both the top operating expense and top cost of sales accounts are tagged, different variations of the income statements are generated. If the optional top cost of sales account is provided, the Financial Reporting reports that are income statements also include a gross margin section.

  Caution: Assign account types carefully. If you assign an incorrect account type to a natural account segment value, accounting entries are recorded incorrectly and financial statements are inaccurate. Misclassified accounts are also potentially handled incorrectly at year end, with actual balances either getting zeroed out to retained earnings, or accumulating into the next year.

• Financial Category: Select a value to identify groups of accounts for reporting with Oracle Transactional Business Intelligence. You can add financial categories to parent values. Accounts that are tagged with expanded account types are automatically assigned a financial category. You can override the default category or leave it out.

  Note: The list of accepted values is defined in the FINANCIAL_CATEGORY lookup_type.

• Generate Additional Hierarchy: To create additional hierarchies for the natural account segment for reporting or for other purposes, click the Generate Additional Hierarchy button. A worksheet is automatically created and populated with the data already entered for that segment. Change this data as required for the new hierarchy. You can create additional hierarchies during initial setup or after the initial setup is done.

Financial Sequences

Enable document or journal sequences to assign unique numbers to transactions to meet legal requirements.

The following figure shows the Financial Sequences sheet with sample values for the Restart and Initial Value columns.

Document sequences are created for these transactions: Payables invoices, Payments, Receivables invoices, Receivables credit memos, Receivables adjustment activities. Reporting and accounting journal sequences are created for Subledger journals and General Ledger journals.

For each transaction, you can provide values for the following fields:

• Restart: Set when to restart the numbering: Annually, Monthly, Never.

• Initial Value: Specify the beginning number in the sequence.

How Worksheets Are Processed

After you complete the worksheets, proceed with validation, sample report preview, and file upload.

1. On the Chart of Accounts, Calendar, and Ledger sheet, click the Step 1: Validate button.

   The validation checks the worksheets for missing or inappropriate setups. Errors are marked as actionable items in a validation report sheet that's dynamically generated. You can review the anomalies and make the corrections as indicated. The Field column on the validation report notes the issue. Click the text link to navigate to the appropriate field in the sheet that must be updated. When the validation is successful, a message appears with the option of previewing a sample of the reports that are automatically generated as part of the enterprise configuration.

   The following figure shows the message that appears after a successful validation.

   

   If you select to preview the sample report, a new sheet is automatically created called Preview Report. The preview incorporates elements of the setup that you provided. The rows on the report are derived based on the top parent revenue and expense account values that you tagged on the Natural Accounts sheet. The preview also reflects the reporting hierarchy for your natural accounts.

   The following figure shows an example of the sample Financial Reporting report.

   

   You can use the preview to validate whether the hierarchy setup aligns to your reporting needs. If the natural account hierarchy requires adjustments, this is your chance to make those corrections before actually creating the account hierarchies in the application. You can modify your enterprise structure setup, validate the spreadsheet, and preview the revised sample reports for as many times as you need. The account hierarchies are created when you finally submit the accounting configuration in the rapid implementation spreadsheet.

2. Click Step 2: Generate Chart of Accounts File. The process generates a data file called ChartOfAccounts.xml with the entered chart of accounts and hierarchies setup data. Save the file to a network or local drive.

3. Click Step 3: Generate Ledger, LE, and BU File. The process generates a data file called FinancialsCommonEntities.xml with the entered ledger, legal entities, and business unit setup data. Save the file to a network or local drive.

4. From your implementation project, go to the Upload Chart of Accounts task. The Upload Enterprise Structures and Hierarchies process is launched.

5. Accept the default selection of the Upload Enterprise Structure option.

6. Click Browse and select the first file that you saved called ChartOfAccounts.xml.

7. Click Submit.

8. Verify that the process completed without errors or warnings.

9. From your implementation project, go to the Upload Ledger, Legal Entities, and Business Units task. The Upload Enterprise Structures and Hierarchies process is launched.

10. Accept the default selection of the Upload Enterprise Structure option.

11. Click Browse and select the second file that you saved called FinancialsCommonEntities.xml.

12. Click Submit.

13. Verify that the process completed without errors or warnings.

An individual set of the following Financial Reporting reports is generated for each ledger that's defined within the rapid implementation accounting configuration. If multiple primary ledgers are created as part of your configuration, a set of Financial Reporting reports is generated for each ledger.

• Income Statement

• Consolidated Income Statement

• Rolling Quarterly Income Statement

• Rolling Monthly Income Statement

• Trial Balances by Ledger Currency

• Trial Balances by Entered Currency

The process also generates three account groups. These include two for the infolets, Revenues and Expenses, and one for the Close Monitor called Close Monitor Summary Income Statement. A set of these three account groups is generated for the balances cube, to be shared among all the ledgers that are part of that balances cube.

Additional Hierarchies After Initial Setup

To create additional hierarchies and hierarchy versions, or to update existing hierarchy versions after the initial setup:

1. Click the Generate Additional Hierarchy button on the applicable segment sheet. A new worksheet is automatically created and populated with the data already entered for that segment. Change the data as required.

2. Click the Generate File for This Hierarchy Only button. This generates a .zip file for the particular hierarchy.

3. From your implementation project, go to the Upload Chart of Accounts task. The Upload Enterprise Structures and Hierarchies process is launched.

4. Select the Upload Hierarchy option.

5. Select from among the following options and provide values for the required parameters:

   1. Create hierarchy: Select to create another account hierarchy. Specify the value set, tree code, and start date.

   2. Create version: Select to render a new version of an existing account hierarchy. Specify a value set, tree code, tree version, and start date.

   3. Update existing version: Select to edit an existing version of an account hierarchy. Specify a value set, tree code, and tree version.

6. Click Choose File and select the .zip file that you saved earlier.

7. Click Submit.