In this artcle, you will learn why GL Chart of Accounts is so important and is backbone of any organization, and how you can configure the same in Fusion Financials Accounting Hub. In the Oracle EBS article for Key Flexfield, you learnt why a Key Flexfield is required. That article can be read from here. In this article, we will continue with our implementation steps for configuration of Fusion Financial Accounting Hub. In the previous article linked here we created the value sets that will be used by the GL Key Flexfield in Fusion Financials. In this article, we will configure the GL Chart of Accounts itself in Fusion.

Firstly why is GL Chart of Accounts required?

The senior management can know what is strategically happening in the company just by looking at the GL Balances. These GL Balances are tracked against the GL Chart of Account Segments. For example, if you have an account segment in GL and a cost centre. Lets assume following

GL Cost Centre Values Are

C001 - IT Cost Centre

C002 - Human Resource Cost Centre

GL Account Values Are

2323490 - Hardware Expense

2323491 - Software Expense

5412000 - Travel Expense

5453291 - Flight Travel Expense

5453293 - Train Travel Expense

The accounting entries will be transferred into GL from various modules such as Procurement, iExpense, Receivables, Projects, Assets etc.

Now. if a person in Human Resource department travels via flights, their expenses will be booked to  “C001 - IT Cost Centre” & “5453291 - Flight Travel Expense”.

Likewise. if a person in Human Resource department travels via flights, their expenses will be booked to  “C002 - Human Resource Cost Centre” & “5453291 - Flight Travel Expense”.

These accounting entries will be transferred from iExpense to GL. Thus allowing the management to know how much is IT deparment spending on flights every month and how much is HR department.

As evident from above example, you can literally track any strategic activity just from GL. This is why all the modules in Oracle EBS and Fusion post into the general ledger.

The level of activity that you can track from GL Balances depends on the level of values[known as granularity] you put into the values of the GL Accounting Segment Value Sets. Of course the other modules must also create accounting entries at the desired level.

For example, if your client’s iExpense allows creation of accounting entry for “5412000 - Travel Expense” then GL will not be able to tell how much spend was for train and how much for flights. For this reason, we create roll up groups, so that even though accounting transactions are captured at granular level, those can still be reported at the desired levels.  You can go from Train n Flight to Travel, but not the other way around.

If you wish to track balances i.e. expenses, revenue, asset & liabilities for segments that do not exist in GL then you have various other options such as extended charts in FAH, operational dimensions in your warehouse or Essbase cube or any other planning & modelling tool. Contact http://fusionpractices.com for any consulting advise that your organization requires. A typical example would be that a bank will track balances at investments product & activity levels, whereas an insurance company will track balances at insurance policy level.

Anyways, let us see the steps involved in creating a GL Chart of Account Segments in Fusion Financials Accounting Hub. You will notice that we can have upto three segments in Fusion Financials at which the journals can be balanced.

For my example, I will be enforcing that the journals are balanced at Legal Entity, Line Of Business Level & Cost Centre Level. This is not very usual for most organizations, but a very large enterprise that is global across the world with billions in revenue should consider this level of 3 tier balancing. Again, this is a case by case approach, and get in touch with me for scenario discussions.

Are all the steps the same in GL Accounting Flexfield config in Fusion as compared to EBS?

Not really, on the contrary, very different. For example, in Fusion Financials, you have a concept of Key Flexfield Instance. The Key Flexfield definition is just a template, but the instance is a reference or a wrapper around the definition. It is the instance of Key Flexfield that gets used in Fusion Applications. The benefits are that you can make multiple instances of a key flexfield, and make some instances having certain segments displayed & required, as compared to the display of the same segment in another instance of KFF.

Will I be adding an intercompany segment?

Yes, but not in this example. I will be adding the intercompany segment later when I discuss intercompany features of Fusion Financials. There is a unique qualifie/label named Intercompany for such segments. The intercompany features in Fusion Financials are much more advanced than Oracle in EBS.

The steps for implementing GL Chart of Accounts in Fusion Financials are detailed as per below.

First go to Manage Chart of Account Structures Task in Fusion Financials and click on Go to Task.

First let us create an key Accounting Flexfield structure

You will notice that there is a seeded General Ledger Accounting Flexfield in Fusion Financials. Click on it.

Next, click on Manage Structures. Here you can create the segments in Key Flexfields. These are the segments for which balances are tracked. The values in those segments give the granularity to management to track the balances.

We need to create a structure of this kay Flexfield, so that it canbe used for our Fusion GL Chart of Accounts.

Click On Create, because we need to create a new Flexfield Structure

The Delimiter will be .

But you can have whatever delimiter that you wish to have.

Set the delimited to ., which is a norm and then save.

Click on Edit Structure after you have created a Key Flexfield structure.

Now, we create our first segment with it, by clicking Create from drop down menu of Actions.

Create an Entity Segment. The GL Entity segment will be attached to your XXANV_ENTITY value set. Give it a label of Primary Balancing Segment. In the Oracle EBS, R12 & 11i, this was called Flexfield qualifier.

Next, create a segment for Line Of Business. We will attach it a flexfield label of “Second Balancing Segment”.

Next create Cost Centre segment (third Segment)

The label for the cost centre segment should be selected as well. Now create the Cost Centre segment as 3rd balancing segment. This should be done only in a very large enterprise. For 90% of the companies this segment will not be a balancing segment.

The natural account segment should have the label of Natural Account Segment and the appropriate value set.

Now, go to Manage Chart of Accounts Structures, where we can create a new instance of KFF.

click Go to Task.

Now, create a Key flexfield structure instance.

Let us create an instance of the keyFlexfield.

Click on Create to create a new instance for our key Flexfield Structure.

Set the displayed and Required properties of the segments, by editing each segment in the instance.

You need to edit each segment in the key FlexfieldStruture to make the segments requiredin the KFF instance.

Next, go to Manage Chart Of Account Structures again.

Click on Search, to find the config you have done for KFF structure.

Your search results will be displayed.

Click on Actions and Deploye the Flexfield structure.

You will get a message that Key Flexfield has been deployed.

Yout accounting fle field is ready to be used.

Anil Passi

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