How to Add a New Operating Unit to Existing Configurations

September 5, 2007 on 1:06 pm | by Marian Crkon | In How To Guides | 20 Comments | Print Print | Email Email

The following steps are required to add new operating units to your existing organizational structure:

1. Revise the Organization Structure.

2. Define Sets of Books (optional).

3. Define Locations.

4. Define Organizations.

5. Define Relationships.

6. Define Responsibilities.

7. Set Profile Options for Each Responsibility linked to the new Operating Unit.

8. Run the Replicate Seed Data concurrent program.

9. Set profile options specific to operating units.

10. Define Inventory Organization Security (optional).

11. Implement the Application Products.

12. Secure Balancing Segment Values (optional).

13. Run the Setup Validation Report (recommended).

14. Implement Document Sequencing (optional).

15. Define Intercompany Relations (optional).

16. Set the top reporting level (optional).

17. Set up conflict domains (optional).

The trick with adding a new operating unit to the existing configurations was to figure out which configurations were operating unit specific. The attached three documents capture those steps for a typical installation of Oracle Projects and Financials.

Another dilema we had was how many operating units to define in the same set of books. We started with the “best practice” approach to have one set of books for all operating units with the same 3 Cs (Chart of Accounts, Calendar and Currency). The challenge with this approach was how to manage some financial operations, including closing the periods, securing journals by operating unit, or defining default accounting rules. And because we needed to completely separate three legal entities, we ended up with multiple sets of books – one for operating unit. There are several improvements to the multi-organization structures in the release 12 but I will right about those after I can “put my hands on them”.

20 Comments »

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  1. Nice summary, was thinking yesterday about looking for this info!
    Gareth

    Comment by Gareth Roberts — September 5, 2007 #

  2. Hi Marian
    Your blog rocks !!!! I have been reading your blog for the last 2 months and have benefited alot in my understanding of iExpenses and Projects modules.

    The articles in your blog are very informative to say the least. You are helping others in the journey across the learning curve in Oracle 11i.

    Need an info on iExpenses, Can we support the following scenario in Web Based Expense Reports.

    SOB Currency : USD
    Reimbursement in EUR
    Expense lines in EUR
    AP Invoice Line : USD – Functional using Corporate Rate.

    Exchange Rate : GL Daily Rates – Corporate Rate

    We would like to submit an expense report online with foreign currency expense lines. While entering the expenses report, user shouldnt key in the rates.
    Then while importing the Expense Report in Payables, the foreign currency expense lines are converted to functional currency using GL Daily Rates – Corporate Rate.

    Is there a setup for the Exchange Rate to use during Import ?

    Comment by Ananda Gupta — September 11, 2007 #

  3. Yes, iExpenses supports foreign currency expense reports and keeps track of different foreign and functional currencies. Thank you for your kind comments.

    Comment by Marian — September 11, 2007 #

  4. Thanks Marian for the info.

    Is there a setup in Payables/iExpenses so that we can use GL Daily Rates for conversion of Expense lines to the Set-of-Books Functional Currency during import to AP ?
    Requirement is to use GL Daily Rates ( Corporate Rate Type) for conversion. User will not be entering the conversion rates in their Expense Reports.
    -Ananda

    Comment by Ananda Gupta — September 11, 2007 #

  5. Remember expense reports are, essentially, a self-service extension of Payables. In order to enable multiple currency invoices, you first need to enable multiple currencies in AP. As Payables Manager, navigate to Options > Payables > Currency.

    Then, in order to control how exchange rates are entered during the expense report entry, define your exchange rate policy in Internet Expenses Setup and Administration > Policy > Exchange Rates.

    Comment by Marian — September 11, 2007 #

  6. HI Marian
    Thanks a ton for your help. I got your point regarding multi-currency support. Taking your cues, went through the steps in Payables and Setup Admin and was able to test the feature in OIE.

    Approval Routing query:
    Another point I was thinking of yesterday is the issue of Executive Approval of Expense Reports. Employees with designations such as VP, CEO , CFO and others would like an auto-approve route for their expenses reports. iExpenses always routes expense reports to supervisors, so a dummy employee with a high signing limit can act as Approver.Seems like a crude way of doing things, is there a better option with AME to auto-approve without an approver routing. Next option is customizing Expense WF as a last resort.
    Have you faced a similar issue or can suggest a workaround.

    -Regards,
    Ananda

    Comment by Ananda Gupta — September 12, 2007 #

  7. HI Marian

    Could you please suggest how to add new subsidiary or Legal Entity to existing configuration in Oracle Apps Release-12

    Regards
    Raj

    Comment by Raj — October 18, 2007 #

  8. I am not very familiar with R12 yet but I can imagine it is very similar to R11 when it comes to defining multi-org structures. Refer to Metalink and Oracle Documentation (links are on the sidebar); there are several excellent user guides and white paper that cover this topic.

    Comment by Marian — October 18, 2007 #

  9. It is not essential to have 1 sob per Legal Entity, outside of the US that is best practice but for the US you should put many LE in one sob and use the balancing segmetn to represnt the LE.

    CHeck my blog post for more details on defining Legal Entity with details of R12 also

    Comment by David Haimes — December 24, 2007 #

  10. I’m a regular visitor to your blog and i really like the way you present your topic.

    I have a quation. Currently we have oracle applications 11i (11.5.10.2) financials and projects. Currently,In US we have one set of books with multiple operating units.Out of which we want to split one existing ou into multiple OUs for better analysis and reporting. Currently we have 2 major line of business that we operate. We have this line of business also part of our chart of accounts. I need to know the best practices/advantages/disadvantes/limitatons of having different OUs for each line of business compared with running reports fron single OU by line of business segment from the COA.

    Thanks for your help,
    shree.

    Comment by shree — April 10, 2009 #

  11. Hi Shree,

    If improved reporting for a given business unit is your only goal, then having a separate GL segment/value should be sufficient. You typically implement a separate Operating Unit when sub-ledger transactions (AP invoices, AR invoices, POs, project expenditures and revenues, etc.) need to be separated form the other operating units. In practice, you do this when separate operating units have their own Finance departments…

    Marian

    Comment by Marian — April 14, 2009 #

  12. Hi Marian,
    We are currently using 11.5.10.2 Financials with AP and Cash Management. We have multiple operating units using one set of books. We have determined that we need to move one of the bank accounts out of one operating unit into a new operating unit to prevent that particular bank account from being used by the AP payment responsibility for the original operating unit. Is there a way to accomplish this and if so what are the steps and how do we handle the outstanding checks for cash management?

    Bob

    Comment by Bob — May 8, 2009 #

  13. Bob,
    I believe the bank setup is global and the bank account setup is OU-specific. So in order to “transfer” your bank account from one OU to another, you would need to disable it in the original OU and define in the new one.
    Marian

    Comment by Marian — May 14, 2009 #

  14. Hi Marion,

    quick question. I hope…

    I’m trying to set up a new organization “PPD Group”, i added the busines_unit, GRE/Legal Entity and HR Organization classfications. However when i add the Opertaing Unit, and it brings up the Additional Operating Unit Window i can only select the Legal Entity “PPD Group”, when i click on the Oerating Unit LOV nothing appears.

    Have i missed something out.

    Any help would be great.

    Thanks in advance.

    Regards

    Ross

    Comment by Ross — May 18, 2009 #

  15. Sorry meant the Set of Books LOV.

    Ross

    Comment by Ross — May 18, 2009 #

  16. Ross,

    You have to classify the organization as legal entity first (GRE / Legal Entity) classification. That’s where you specify the Set of Books.
    Marian

    Comment by Marian — May 18, 2009 #

  17. do you have any documentation AR in franch language

    Comment by Merzak — August 3, 2009 #

  18. Hi marian,
    your blog really rocks!!!

    3 BR100 links provided here is very good. can you provide me the links for BR100s for other modules.

    mohammedahmed1966 AT yaahho.com

    Comment by ahmed — February 17, 2010 #

  19. If we have two Operating Units under same LE, can we open and close periods separately for different OUs.If yes, please let me know how?

    Comment by Manish — February 13, 2011 #

  20. Most countries in Europe have mandatory sequencing requirements (more from a VAT perspective than a Statutory Reporting perspective). How can we setup separate sequencing for Purchase and Sales invoices for multiple legal entities within one SOB. In Release 11 it is very inconvenient to have multiple SOB’s for each LE. Does R12 provide any enhancements from a Sequencing perspective.. such that it can be defined at a Balancing Segment level or an OU level.

    Comment by Raj Ramachandran — February 21, 2011 #

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