White-Paper Company Organization-Setup-In-R12 Standard FINAL 061509

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Organization Setup in R12

an eprentise white paper


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Copyright 2009 eprentise, LLC. All rights reserved. www.eprentise.com | Page 2

2009 eprentise, LLC. All rights reserved.

eprentise is a registered trademark of eprentise, LLC.

FlexField Express and FlexField are registered trademarks of Sage Implementations, LLC.

Oracle, Oracle Applications, and E-Business Suite are registered trademarks of Oracle Corporation.

All other company or product names are used for identification only and may be trademarks of their respective owners.

Author: Helene Abrams

Published: June 15, 2009

www.eprentise.com


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There are many changes in how organization units are defined and used in R12. An Organization can

represent a Ledger, a Business Group, a Legal Entity, an HR Organization, an Operating Unit, and an

Inventory Organization. You may define the relationships among organizations.

A Business Group is the highest level in the organization hierarchy structure, usually representing the

consolidated enterprise, an operating company, or a major division. The business group secures theemployee information in all applications except for HR. For example, when you request a list of employees

for approvals or expense reports, you will see all employees assigned to a business group. This is a little

bit confusing, because within the HR applications, you can assign a security profile at the HR organization

level providing a much more granular view of confidential information such as salaries or social security

numbers.

The concept of a Legal Entity is much more developed in R12 than it was in 11i. A legal entity is the

organization unit level at which you report taxes and maintain the corporate banking relationships. The

LEGAL_ENTITY_ID column is added to the transaction tables in 12, allowing the ability to track transactions

at a Legal Entity level. In R12, you assign a Legal Entity to a Ledger instead of to a Set of Books. It is

recommended that you assign one (or more) balancing segment values in your chart of accounts to a

legal entity.

An HR Organization typically represents the functional management or reporting groups within a business

group. You may also define HR organizations for tax and government reporting or for third-party

payments.

The Operating Unit is tied to a ledger (instead of a Set of Books) and, as it was in R11, continues to

partition transactions. A ledger can have many operating units assigned to it. Responsibilities determine

the security for operating units. A responsibility can access only the transactions for the operating unit(s)

to which it has been assigned. An operating unit also controls access to reports and concurrent requests.

If you set up a profile option MO: Operating Unit, then the responsibility can only access a single

operating unit. If you want a responsibility to access multiple operating units, then you must define a

security profile with multiple operating units assigned and assign it to the MO: Security Profileoption.

The MO: Default Operating Unitoption also allows you to specify the default operating unit for the

transactions entered by that responsibility. Operating units are not directly associated with legal entities,

though they are assigned to a ledger and to a default legal context (Legal Entity). A user can assign any

operating unit to a transaction or copy transactions to a different operating unit if access to the operating

unit is authorized by the security profile for the responsibility.

With the new Multiple Organization Access Control (MOAC) feature in R12, transactions may be posted to

different operating units and legal entities from a single responsibility. In order to do this, you set up a

security control (MO: Security Profile) to assign multiple operating units and legal entities to a single

responsibility. An Inventory Organization is the organization that manufactures or distributes products orfor which you track inventory transactions and balances.

An inventory organization is associated with a parent operating unit, but can serve other operating units

under a different ledger. As such, each inventory organization is attached to a legal entity and a ledger.

You can specify the inventory organizations that are available for each responsibility. You can enter

purchase orders and assign for receipt any inventory organization. Your purchase order operating unit

and receiving inventory organization can be in different ledgers to receive against a purchase order. The


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following applications secure information by inventory organization: Oracle Inventory, Bills of Material,

Engineering, Work in Process, Master Scheduling/MRP, Capacity, and Purchasing receiving functions. To

run any of these applications, you must choose an organization that has been classified as an inventory

organization.

Other organization structures may be set up to reflect hierarchies in different subledgers. For example,you can define organizations for project expenditures to manage project control requirements in Oracle

Projects. Oracle Assets uses asset organizations to perform activities for a specific Oracle Assets corporate

book.

Some information is set up at the organization unit level, while other data is set up once for the entire E-

Business Suite. All flexfield definitions, customer and supplier headers, Oracle Assets, General Ledger,

Oracle Inventory, and Oracle Manufacturing products are set up only once in the instance. Oracle Cash

Management, Accounts Payable, Purchasing, Accounts Receivable, Order Management, Project

Accounting, and Sales & Services are set up at the operating unit level. Site information for suppliers and

customers is also at the operating unit level. The following shows the data that must be set up for each

operating unit:


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Cash Management

Bank accounts

Order Management

System parameters

Hold sources

Transaction types

Payment types

Purchasing

Document approval

controls

Change order

controls

Supplier sites

Financial options

Control rules/groups

Purchasing options

Job/position controls

Freight carriers

Document controls

Sales and Marketing

Territories

Territory types Territory groups

Territory qualifiers

Territory Accesses

Interest category sets

Promotion word

processors

Collateral categories

Payables

Supplier sites

Withholding

tax

certificatesand

exceptions

Distribution

sets

Withholding

tax codes and

groups

Payables

options

Reporting

entities

Financial

options

Expense

report

templates

Signing limits

Procurement

and credit

card

Card

programs

Card profiles

GL account

sets

Projects

Maintain PA

Period Statuses

GL Periods for

Projects Project

Templates

Create Projects

Search Project

Personalize

Region

Create View

Current

Reporting Period

Grants Award

Template, Award

Grants

Implementation

Options

Implementation

options

Bill rate

schedules

Project types

Project Setup and

Implementation

Project templates

AutoAccounting

Receivables

AutoAccounting

Contact phones

Customer

address

Customer

relationships

Customer bank

accounts

Distribution sets

Transaction

sources

Lockbox

definitions

Memo lines

Receipt sources

Receivables

activities

Remit to address

Remittance bank

accounts

Salesperson,

sales territories

assigned to

salespersons

System options

Transaction types

Services

Service

parameters

Access control

templates

Code sets Note:The procurement and credit card setup is a shared setup for both Internet Expenses and Payables. Note:Expenditure types are

not operating unit specific but if the expenditure type requires a cost rate, then the rate is operating unit specific.

Learn more about eprentise Reorganization software atthis link.
http://eprentise.com/software/hd-suite/reorganizationhttp://eprentise.com/software/hd-suite/reorganization


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Curious?

For more information, please call eprentiseat 1.888.943.5363or visit www.eprentise.com.

About eprentise

eprentiseprovides transformation software products that allow growing companies to make their Oracle E-Business

Suite (EBS) systems agile enough to support changing business requirements, avoid a reimplementation and lower the

total cost of ownership of enterprise resource planning (ERP). While enabling real-time access to complete, consistent

and correct data across the enterprise, eprentisesoftware is able to consolidate multiple production instances, change

existing configurations such as charts of accounts and calendars, and merge, split or move sets of books, operating

units, legal entities, business groups and inventory organizations.

White-Paper Company Organization-Setup-In-R12 Standard FINAL 061509

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