Need to setup 3 Legal Entities in R12?

[mah.rukh]

Hi Gurus,
I want to setup modules Financials (all 5 modules), HRMS & Payroll, Inventory & Purchasing for 3 Legal Entities in 3 different countries USA, India & China. I have few confusions in my mind which you may guide me in R12 setup. I will have 4 SOB's 1 for each LE and 1 for consolidation. So my setup will be,

1 BG
3 LE's & 3 SOB's (3 currencies)
3 OU's
3 IO's


1- How many business groups I should keep one or 4?
2- What are the issues in creating 1 or creating 4 BG's?
3- Is my above proposed setup is ok?

Anyother guidance will also be appreciated.


Waiting for responses.

[cnubandi]

Hi,

Your praposed setups is correct.
No need to go for 4 BG's.
One is enough.


Thanks,
Cnubandi

[mah.rukh]

Thanks for the input. Please let me know that if I will keep single BG then what about the currency and legislation I should select on BG. THANKS

[AmanKhan]

HI Mah Rukh,

AT BG level you can choose currency or legislation of the country where your HQ of the Organization is situated... i.e USA.

Their will be one LE and at least one OU against each Primary ledger.

Rgds,

Aman

[admin]

Subject: Implication Of changing 'Payroll Legislation Code' And 'Currency' Provided While Creating a Business Group on HRMS and Payroll
Doc ID: Note:564547.1 Type: HOWTO
Last Revision Date: 13-MAY-2008 Status: MODERATED

This document is being delivered to you via Oracle Support's Rapid Visibility (RaV) Rapid Visibility (RaV) process, and therefore has not been subject to an independent technical review.

Applies to:
Oracle Human Resources - Version: 11.5.2 to 12.1
Information in this document applies to any platform.
Goal
1) What is the Implication of Legislation Code and Currency in a Business Group definition?

2) Is it compulsory to change legislation code and Currency according to a Base Country's requirement , even if no Localization of Payroll available for that Country?


Solution

1) The Legislation Code and Currency Columns ensure the Proper functioning of HRMS Module and Payroll Processing according to the Local Legislation Requirements.

If they have been set incorrectly, then it is NOT possible to change the values, once the Business Group definition is saved.

2) Yes. It is required to change the Legislation Code and Base currency according to Base country's Requirement, though no Localization is available for the Base Country , for example,

Pakistan , in your case.

The 'Default Currency' becomes the default output currency for all Earnings and Deductions in Payroll. If Payroll is used with PKR as the output currency, and USD as currency in Business Group definition, then there will be issues in producing a Statement of Earnings.

Earnings and Deductions must have the same output currency as the balances they feed.
Likewise, the output currency for Elements determines the currency code fed to General Ledger in the Transfer to GL process.

The Element Classifications for all Earnings and Deductions Elements are tied to the Legislation, as are the balances for that Legislation. The expectation is that when the user selects the Legislation and the Base Currency for the Business Group, these items will synchronize with the

Business Rules for the Elements and Balances provided for each local payroll.

The above points hold good only when Local Legislation Exists. For Pakistan, no local legislation exists for Payroll. Hence Oracle Payroll, HRMS can be used with the existing setup.

But it would be better to create a New Business Group with Proper Legislation Code and Currency , and attach the Existing Employees to the New Business Group (after removing from existing Business Group) . Since some of the seeded reports / forms might refer to the Legislation Code, Currency specified in the Business Group definition this step is advisable rather than continuing with incorrect definition.

The following steps can be used as workaround for this requirement:

1) Create a NEW Business Group.

2) Give the classification as Business Group, HR Organization to the New Business Group.

3) Ensure that you provide the Legislation Code, Currency pertaining to Pakistan for the

New Business Group.

4) Set the Profile for HRMS Responsibility at the Responsibility level :
HR: Business Group
HR: Security Profile
as pointing to the New Business Group.

5) Set the Profile:
HR: Cross Business Group
to "Yes" and ensure that the Employees from the Existing Business Group could be accessed through the New Business Group.

6) Only point you need to take care of is, if you are going to have Integration with General Ledger from Oracle payroll, then you need to take care of Consolidation between two Business Groups.

[mah.rukh]

Now I would request to comment on the BU setup after reading this note. bye