General Ledger up and running!

By François Gendron⋅ January 22, 2009 ⋅Print this post⋅Post a comment

With my new 12.0.4 eBusiness Suite environment up and running, it is now time to start configuring some modules. The first one up at bat will be General Ledger.

The following steps will provide for a very rudimentary configuration of Oracle General Ledger. Just enough to be able to enter and post a very simple manual journal entry. More complex configuration options will appear in articles discussing specific functionalities of General Ledger in the future.

Step 1 - Register your applications configuration account

Before we start the configuration of Oracle General Ledger, it is usually appropriate to create one or more applications user accounts for the people who will perform the configuration steps and not use the default SYSADMIN account. This will ensure that you have an accurate audit trail in the record history indicating who performed the various configuration steps.

System Administrator -> Navigator -> Security -> User -> Define

Step 2 - Define the value sets for the accounting flexfield segment values

The accounting flexfield structure is a multi-segmented key used to identify periodic financial result balances according to the business dimensions managed by the group of organizations in a financial ledger.

Each segment of the key represents one of these business dimensions, and the value sets we will now configure are used to hold the list of possible attribute values for each segment.

Please note that for simplicity, I have defined each of the value sets below as Independant value sets. If you plan on using your chart of accounts in a multilingual environment, it would probably be better to use the Translation Independant value set type, as this will allow you to translate both the value codes and descriptions for languages other than the base language.

System Administrator -> Navigator -> Application -> Validation -> Set

Step 3 - Define the accounting flexfield structure

Defining the accounting flexfield structure is what allows us to assemble the segments, representing the business dimensions, and the value sets, which hold the dimension attributes, into a key of concatenated values. Each unique key within the structure, also called an accounting flexfield code combination, will hold its own set of periodic financial result balances.

System Administrator -> Navigator -> Application -> Flexfield -> Key -> Segments

Once all the individual segments have been defined, you may review the summary segment listing

Then, you must define the flexfield qualifiers that are required for some of the segments. Flexfield qualifiers are used to tell your software when one of your business dimensions represents a dimension which has special functionality in the suite of module.

To define the qualifiers for a given segment, place your cursor on the row for the segment in the summary listing and press the ‘Flexfield Qualifiers’ button. The following snapshots show the qualifiers I have opted to use for each segment of the structure (the segment is shown at the top).

Then, you must freeze and compile the structure.

When you freeze and compile the flexfield structure, the ‘Program - Generate Ledger Flexfield’, ‘Flexfield View Generator’ and ‘Compile Key Flexfields’ concurent programs will be executed. Please make sure to wait and confirm that these programs have completed successfully.

Step 4 - Define segment values

Once your accounting flexfield structure has been defined, frozen and compiled, we can now add some values to each segment. The values defined in the following snapshots constitute the bare minimal set of values that are required to be able to define the initial Ledger in the system.

System Administrator -> Navigator -> Application -> Flexfield -> Key -> Values

When you have completed adding values to the segments, the ‘Compile value set hierarchies’ and ‘General Ledger Accounting Setup Program’ concurent programs will be executed. Please make sure to wait and confirm that these programs have completed successfully.

Step 5 - Enable Currencies

If you are implementing for any organization which uses currencies other than the U.S. Dollar, then you must enable the currencies that you plan to use.

General Ledger Super User -> Navigator -> Setup -> Currencies -> Define

Step 6 - Define Accounting Calendar

The accounting calendar you define here allows you to slice the fiscal year into the financial periods that you desire for internal or statutory reporting requirements. Financial result balances will be kept for each period and for each distinct accounting flexfield combination you create.

Note: All periods of a budget year must be defined, or it will not be possible to open periods for entering a budget.

General Ledger Super User -> Navigator -> Setup -> Financials -> Calendars -> Accounting

Make sure to validate the calendar and ensure that the concurrent request ‘Other - Calendar Validation Report’ completes successfully.

Review the validation report to ensure that no exceptions have been found.

Step 7 - Define prerequisites for Accounting Setup

The following definitions are prerequisites regarding the automatic numbering of Legal entities and parties in the Trading Community Architecture. I use automatic numbering in the demonstration environment to facilitate initial setup.

System Administrator -> Navigator -> Profile -> System

Step 8 - Create Accounting Setup

The ‘Accounting Setup’ is a new functionality in Release 12 allowing the creation of Ledgers (which replaces the 11i Sets of Books) along with some organizational structures such as Legal Entities and Operating Units that are required to create a ledger.

Part 1 - Create the accounting setup

An accounting setup defines the configuration parameters of a primary ledger and identifies the legal entities, operating units and secondary reporting currency ledgers it contains, along with the configuration of sub-ledger accounting methods and other setup information.

General Ledger Super User -> Navigator -> Setup -> Financials -> Accounting Setup Manager -> Accounting Setups

Press the [Create Accounting Setup] button

Part 2 - Create the legal entity

The accounting setup of each primary ledger must identify at least one legal entity managed within the ledger. This will also create a default establishment for the legal entity, which is an organizational structure involved in the determination of taxes.

Press the [Create Legal Entity] button

Note: Later on, during the configuration of taxes (the subject of a later article), I noticed that the Tax Manager responsability, under the ‘Home’ menu item, had another point of access to define Legal Entities and Establishments. I believe this could be a better way to define these organizational structures than through the General Ledger responsibility.

Part 3 - Define the new legal entity

Here you provide the legal entity with a name and an address, along with other setup information. Please note that the ‘Organization Name’ field refers to an organization unit of type ‘Establishment’ which is also created automatically at the same time as the legal entity.

Press the [Apply] button

Part 4 - Assign the legal entity to the ledger

Make sure your new legal entity is shown in the list of entities associated with the accounting setup.

Press the [Next] button

Part 5 - Define the primary ledger

Enter a name for this primary ledger and then choose a chart of accounts (accounting flexfield structure), the accounting calendar, the functional currency and the sub-ledger accounting method.

Press the [Next] button

Part 6 - Save the accounting setup

Review your preliminary configuration before saving it.

Press the [Finish] button

You will then be prompted with the following window. Press the [Define Accounting Options] button and then proceed to the next step.

Step 9 - Complete the accounting setup

At this point, we must configure each section of the accounting setup. The following sections can be configured:

 Ledger Definition

 Reporting Currencies

 Balancing Segment Value Assignments

 Subledger Accounting Options

 Operating Units

 Intercompany Accounts

 Intercompany Balancing Rules

 Sequencing

I will not configure the following sections, as I am not ready to use the associated functionality:

 Reporting Currencies

 Intercompany Accounts

 Intercompany Balancing Rules

Defaults will be used for the following:

 Subledger Accounting Options

Part 1 - Ledger Definition

This section allows you to define the primary ledger associated with this accounting setup. A primary ledger is an accounting structure which holds all the functional currency financial results for a group of accounting entities, which themselves can be grouped into one or more legal entities. To be grouped together in the same ledger, legal entities must share a certain number of ledger configuration caracteristics.

Part 2 - Reporting Currencies

To be honest, my memory fails me as I am not clear as to what I did for this section (I am writing this many months after having actually performed the configuration). I believe I simply entered the page and then pressed the [Complete] button. I know I did not intend to configure it, and this is reflected by the fact that the section does not have a checkmark in the accounting setup summary page.

Part 3 - Balancing Segment Value Assignments

Assign the default accounting entity value you created in step 4 (Define segment values) to your new legal entity.

Part 4 - Operating Units

This step will create a new operating unit for your legal entity.

Part 5 - Document Sequencing

in R12, document sequencing is now a mandatory part of the ledger configuration. This section shows how to do a minimal configuration of document sequencing for GL journals.

Step 10 - Define Ledger Responsibilities

In order to transact into your new ledger, you must use a responsibility that has been linked to it. This step shows how you may copy one of the seeded responsibilities and then link it to your new ledger, in the following steps.

Note: One you have created your new responsibilities, and linked them to your ledger, I would strongly suggest taking the time to inactivate the existing seeded ones provided by Oracle, as they are not linked to any ledger and should not be used. It is not recommended to use the seeded responsibilities or make any updates to them, as this may complicate upgrades to future releases.

System Administrator -> Navigator -> Security -> Responsibility -> Define

Step 11 - Define Profile Options

Setting these profile options will link your new responsilities to your new ledger.

System Administrator -> Profile -> System

Step 12 - Disable Dynamic Flexfield Insertion

General Ledger Super User -> Navigator -> Setup -> Financials -> Flexfields -> Key -> Segments

Dynamic Flexfield Insertion allow users of the system to automatically create new accounting flexfield combinations. At this point, since I have not created any cross-validation rules to constrain the creation of new combinations, I am disabling this functionality.

Step 13 - Open General Ledger Period

Before you can enter or post any new journals in your new ledger, you must at least open one period. Make sure that the period you open is the earliest period in which you could possibly think of creating journals.

General Ledger Super User -> Navigator -> Setup -> Open/Close

Step 14 - Handle Budgetary Control

Finally, at this point, your ledger has a base configuration, and if I had not chosen to use the encumbrance accounting functionality, it would now be operational and you could go ahead and create new journals and post them.

With encumbrace accounting turned on, with this minimal configuration, you will still be able to create journals, but they will fail with an ‘Insufficient Funds’ error when you try to post them.

To allow the posting of journals without any funds checking, you will have to perform the following minimal budgetary control configuration.

Part 1 - Define the Budgetary Control Group

This will define the budgetary control rule to apply to journals from all sources and categories

General Ledger Super User -> Navigator -> Budgets -> Define -> Controls

Part 2 - Set the Budgetary Control Group

This will set the budgetary control group for the entire site

System Administrator -> Navigator -> Profile -> System

Tags: General Ledger, R12, Setup