Chart of Account samples?

This forum is to discuss different features/issues of Oracle Financials modules ( GL - General Ledger, AP - Accounts Payable, AR - Accounts Receivable, FA - Fixed Assets & CM - Cash Management ).
admin
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Chart of Account samples?

Post by admin »

Hi,
Chart of Account is finalization is a milestone in any implementation and I think every organization is reinventing the wheel in designing COA. As many gurus are working in different type of organizations so it is suggested to share their recommendations of COA segments. Expecting cooperation from all of the members.

I am sure soon we will be able to finalize standard COA as per different industry requirements.

Those who are not interested to share here can email as well.

Thanks

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[img]/forums/images/icon_zip.gif[/img] <b>Attachment:</b> Oracle Applications R12, 11i - Chart of Accounts - v1.0 <i>(22,736 bytes )</i>
Helene Abrams
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Post by Helene Abrams »

Designing an accounting flexfield is one of the most difficult processes in an Oracle implementation. A ?good? chart of accounts has the following criteria:

1. The segments support important aspects of the business.
2. You are able to report on critical business components with standard reports without resorting to spreadsheets.
3. There is enough room to expand within each segment.
4. FSGs and other reports are easy to create.
5. Summary accounts and rollup groups fall naturally within ranges.
6. Information in the chart of accounts is not repeated from other modules.
7. There is only one type of information in each segment.

Answering the 4 questions ?Who?? ?What?? ?Where? ?Why? and possibly ?How? helps identify segments that will give your accounting flexfield the ability to classify each transaction. When transactions are classified, then it is easy to report on the relevant aspects of that transaction, to group that transaction with other similar types of transactions, and to differentiate the parameters of the transaction. ?Who? can be represented by a legal entity and intercompany segments and a cost center, a department or business unit segment. An Activity segment can answer the ?What? question. ?Where? is represented by a Location or Region segment. ?Why? is answered by the natural account segment (e.g. a lease expense, revenue from sales). ?How? is often used in government or fund accounting to identify the fund from which the money is coming.

If your segments are designed to answer the who, what, where, why, and how questions, and within each segment you have designed different levels of roll-up groups, then you will easily be able to analyze the transactions in different ways and in as much detail as you want without using spreadsheets. The most detail is in the lowest level of rollup groups. If you want to analyze the big picture, report on the parent values. When designing the values be sure to allow enough room to grow within each rollup group. I usually suggest incrementing by at least 5 within each group, and by 10 if the group is likely to be a high growth area. For example, if you have a location segment, allow enough room to add ten additional values between each of your lowest levels. Your location hierarchy might look like this:

10000 US
11000 Midwest
11100 Detroit Metropolitan Area
11110 Ann Arbor
11120 Canton
11130 Plymouth
20000 Canada

When you are creating reports, you can report on the parent values (Detroit Metropolitan Area, Midwest, or the entire US) to track the right information for your analytical needs. When creating rules cross validation and security rules and FSG reports, you can include a whole range of values in your rule or create a master report for the entire range and then exclude specific values if needed. Many of our customers have reduced thousands of cross-validation rules to under 50 rules by re-ranging their values.


When designing your segments, you should have information in one place. If you are implementing Oracle Projects modules, there is no need to have a project segment in your accounting flexfield. You will get all the information that you need from reports in the Projects modules. If you are implementing Receivables, then there is no need for a customer segment. If your cost center has the same type of information as a business unit segment, there is no need to implement both. Thinking about the category of information and putting only one type of information in one place reduces the maintenance of keeping information accurate in two places, and it reduces the possibility of introducing errors into your accounting. Introducing a ?Future? or ?TBD? segment increases the probability that multiple types of information will be held in a single segment. For some, the future segment might mean a sub-account or local account, while for others, that same future segment might represent a particular tax code.
khanaslam
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Post by khanaslam »

I appreciate admin for this important topic, but I suggest discussing best practices and COA structure development guidelines instead of standard COA for particular industry. COA may not be standardized for any Industry because it can be changed with different need / desire of management, but it should be standardize to some extend like

Manufacturing/Services
Company - Cost Centre - Product Line - Account - Sub Account

Distribution
Division - Region - Distribution - Account

Projects
Company - Department - Account - Project Type - Project


I want to add few noise words, because I am still learner, but I know the companies are enjoying benefit of chart of account which is defined as Helene recommended. They are able to get 100s of standard reports, instant information because of rollup groups and summary accounts. I know some implementation which was done 3-4 years ago, has dependent segments and still working on customize reports. But with independent segment security rules, cross validation rules needs to be defined otherwise user can enter garbage instead of controlled data.

I suggest to discuss Best Practices for designing Chart of Accounts, Industry Standards and experts should share problem and benefits their designed COA, so we can reach to a best solution / conclusion.
Willynelly1
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Location: Kuwait

Post by Willynelly1 »

Hi Gurus,

We are using 7 segments,(Retail business, Trading Co.) following are the details;

Segment 1 = Company
Segment 2 = Profit Center
Segment 3 = Location
Segment 4 = Account
Segment 5 = Employee
Segment 6 = Buffer1
Segment 7 = Buffer2

Segment4= Account

10000-19999 = Assets
20000-29999 = Liabilities
30000-39999 = Owners Equity
40000-49999 = Revenue(Sale, income etc..)
50000-59999 = Expenses (Cogs)
60000-89999 = Expenses
90000-99999 = Control Accounts (Assets/Liabilities)

Segment5=Employee.

This segment useful for capturing Employee information (We are not using HR module)

Employee no. like 1000 to 9999

So the code combination will be = 11.101.101.16403.9555.0000.00000
Co.Pc.loc.Employee Advance.Employeeno.buffer1.buffer2

If you need more information pls reply.

Regards,


William.
jasmine.hue
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Location: Malaysia

Post by jasmine.hue »

Hi Gurus,

My company also using 7 segments.

Segment 1 = Company
Segment 2 = Division
Segment 3 = Business Unit/Department
Segment 4 = Account
Segment 5 = Intercompany
Segment 6 = Buffer1
Segment 7 = Buffer2

Segment 1: 2 numbers
Segment 2: 2 numbers
Segment 3: 7 numbers
Segment 4: 6 numbers
Segment 5: 2 numbers
Segment 6: 2 numbers
Segment 7: 2 numbers

Sample of the COA: (21.02.0540000.300111.00.00.00)

[8)]
Jasmine
sudhir
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Location: Oman

Post by sudhir »

This is an excellent venture. Contributions to this post can reduce the time for COA design.

may i suggest that the administrator create a spreadsheet (editable by members) with tabs for each industry (the industry will give us insight into the coding logic)
The posting must have details such as number of segments, segment size, coding logic etc.

Regards,
Sudhir
amit.moon
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Location: India

Post by amit.moon »

Hi gurus ,
Im working as a consultat in one of the top telecom company we using
nine segments.
1=operating unit
2=business unit
3=account
4=cost center
5=buffer
6=future use
7=future use
aanand_iiitn
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Location: India

Post by aanand_iiitn »

Hi Gurus,

It is request to all members who all replying ( Please mention country and industry group.
sajjadahmadcma
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Location: Pakistan

Post by sajjadahmadcma »

Dear Admin

I am working as consultant for implementaion oracle apps in telecommunication industry. I have recently prepare COA, segment of GL and COA are as follows:

1- Company
2- Region
3- office
4- Cost Centre
5- Future-01
6- Natural Account
7- Business Unit
8- Product
9- Future-02

Segment of COA

There is 04 Levels of chart of account:
1- Share capital and Reserves 100000000
2- Liabilities 200000000
3- Assets 300000000
4- Revenue 400000000
5- Expenses 500000000


Regards,
Sajjad Ahmed
ERP Consultant
admin
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Post by admin »

Shared by one member.

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rajeshwar_123
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Location: India

Post by rajeshwar_123 »

Hi Guru,

We are using the following COA for one of the Manufacturing Company as the reporting style is both IFRS and IAS.

Primary Ledger
Segment Details Length
Segment 1 - Company 2
Segment 2 - Operating unit 2
Segment 3 - Cost Center 4
Segment 4 - Accounts 5
Segment 5 - Intercompany 2
Segment 6 - Products 2
Segment 7 - Sub - Products 2
Segment 8 - Projects 4
Segment 9 - Industry Segment 2
Segment 10 - Future 1 2
Segment 11 - Future 2 2

Secondary Ledger

Segment 1 - Company 2
Segment 2 - Entity 2
Segment 3 - Industry Market 6
Segment 4 - Accounts 5
Segment 5 - Products 4
Segment 6 - Future 1 4

Hope this will help you.

Thanks
San
admin
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Post by admin »

Shared by one member of Manufacturing company in Pakistan.

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mukarram.mehmood
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Location: Pakistan

Post by mukarram.mehmood »

as the chart of account is the mile stone the main concern is the
segments representation which should focus the main business component
kesani14
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Joined: Mon Jul 23, 2007 5:49 am
Location: India

Post by kesani14 »

Hi,

We are using 5 segment stracture for NGO implementation.

1.company 4
2.Fund 5
3.Stratagy 5
4.Budget Center 4
5.Nactural Account 6
6.Spare 4

Regards,
KLK.
hiszaki
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Joined: Thu May 10, 2007 9:03 am
Location: Egypt

Post by hiszaki »

Hi All,

We are using the following COA for one of the Manufacturing Company:

Segment 1 - Company 2
Segment 2 - Region 3
Segment 3 - Cost Cnter 7
Segment 4 - Main Account 6
Segment 5 - Sub account 3
Segment 6 - Product code 5

I think like khanaslam say that the best practices and COA structure development guidelines instead of standard COA for particular industry because the same Manufacture has different COA in the same industry.

Thanks
Hisham
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