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Copyright © 2015, Oracle and/or its affiliates. All rights reserved. Copyright © 2015, Oracle and/or its affiliates. All rights reserved.
JD Edwards Summit
JD Edwards Chart of Accounts Design and Leading Practices
James Hill Principal Sales Consultant National JD Edwards Sales Consulting February 5th, 2015
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open Discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 2
6
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 3
6
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Jim Hill, Principal Sales Consultant
4
Finance Roles:
Financial Consolidations and Reporting Manager
Controller
Sr. Financial Analyst
Consulting:
18 years experience in JD Edwards:
Finance Consulting (7 years)
Solutions / Pre-Sales (8 years)
Program/Project Management (5 years)
Practice Director (3 years)
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Bill
ings
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All roads lead to General Ledger!
5
Purchases,
Sub-contracts
Service Request
Service Billings
Fixed Assets
Vouchered
Expenses,
T&E
Credit Card
Charges
Invoices &
Payments Basis for
Billings Employees &
Skills
Depreciation
Expense
Suppliers Customers
Time Entry
HR AP Expense
Management AR Contracts
Purchasing Production Equipment Inventory Service
Sales
Billings,
Maintenance
Receiving
General
Ledger
Pricing
Invoices
Maintenance
Repairs
His
tory
Transactions,
Demand Product Data
Mfg Execution
Budgets,
Commitments
Labor
Cost
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 6
6
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US Operations Companies: • Fiscal Date Pattern
• Base Currency
• Balancing Entity
Accounts: • Belong to Business Unit
• 43+ Category Codes or
Dimensions
Business Unit Company
Business Unit #100 Company 1 Business Unit #200 Company 2 Business Unit #300 Company 3 Business Unit #400 Company 4 Business Unit #500 Company 5 Business Unit #600 Company 6
Business Units: • Belong to a Company
• Own the Chart of Accts
• 50+ Category Codes or
Dimensions
Company 1 Company 6 Company 2 Company 5
Chart of Accounts
1010 Capital One (STS AR) 1110 Allowance for Doubtful Account 1680 Construction in Progress 2000 Accounts Payable 2600 Long Term Debt - Revolver 4000 Rental Sales/Revenue
Account Category Codes
Business Unit Category Codes Business Units
Accounts
Subledger / Adv.
Accounting • Transactional based
Dimensions
Company 4 Company 3
7
European Operations
Consolidation
Region Geography Type
User Defined Up To 50 Cat
Codes
US Operations Central Mfg European Operations France Dist Center US Operations West Admin US Operations North East Dist Center US Operations Mountain Dist Center Europe US 0perations United Kingdom Dist Center
Cash Flow Report Acct
User Defined Up to 43 Cat
Codes
Cash Current Assets Current Liability Current Assets Investment LT Assets Operations Current Liability Operations LT Liability Operations Revenue
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
US Operations Companies: • Fiscal Date Pattern
• Base Currency
• Balancing Entity
Accounts: • Belong to Business Unit
• 43+ Category Codes or
Dimensions
Company 1 Company 6 Company 2 Company 5
Chart of Accounts
1010 Capital One (STS AR) 1110 Allowance for Doubtful Account 1680 Construction in Progress 2000 Accounts Payable 2600 Long Term Debt - Revolver 4000 Rental Sales/Revenue
Account Category Codes Accounts
Subledger / Adv.
Accounting • Transactional based
Dimensions
Company 4 Company 3
8
European Operations
Consolidation
Cash Flow Report Acct
User Defined Up to 43 Cat
Codes
Cash Current Assets Current Liability Current Assets Investment LT Assets Operations Current Liability Operations LT Liability Operations Revenue
Business Units: • Belong to a Company
• Own the Chart of Accts
• 50+ Category Codes or
Dimensions
Business Unit Category Codes Business Units
Region Geography Type
User Defined Up To 50 Cat
Codes
US Operations Central Mfg European Operations France Dist Center US Operations West Admin US Operations North East Dist Center US Operations Mountain Dist Center Europe US 0perations United Kingdom Dist Center
Business Unit Company
Business Unit #100 Company 1 Business Unit #200 Company 2 Business Unit #300 Company 3 Business Unit #400 Company 4 Business Unit #500 Company 5 Business Unit #600 Company 6
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Business Unit Category Codes (Mgmt Reporting)
Business Unit Effective
Date Region Area Div . . . Cat 50
10
12/31/1013
US Central Retail ?
20 US Central Wholesale ?
30 US Central E-Commerce ?
40 US East Retail ?
50 US East Retail ?
60 US West Wholesale ?
70 US West Wholesale ?
80 US South Retail ?
Category Codes
9
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Business Unit Category Codes (Financial Reporting)
Business Unit Effective
Date Consolidation
Level 1 Consolidation
Level 2 Consolidation
Level 3
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12/31/2013
USD North America USA
20 USD North America USA
30 USD North America Canada
40 USD Asia China
50 USD Asia China
60 USD Asia Taiwan
70 USD Asia Hong Kong
80 USD Euro UK
90 USD Euro UK
100 USD Euro UK
110 USD Euro Germany
120 USD Euro Germany
…
Category Codes
10
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Sample Ledger Types
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AA BA B2 B3 B4 D1 D2 PA
Actual Budget 2nd Qtr
Reforecast 3rd Qtr
Reforecast 4th Qtr
Reforecast Federal Tax State Tax Commitments
Operational Ledger Types
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Financial Reporting Ledger Types
AA CA XA GP * Rate AC
Local Currency Local GAAP
Foreign Amt of
Transaction
Original USD Value of
Transaction
Adjustment between US
GAAP and IFRS Consolidated USD
12
Currency and Consolidation
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Sub-Ledgers
Business Unit
Object Subsidiary Description Amount Sub-Ledger
Type* Number Description
100 8200 1000 Travel - Airfare
$100 A 2000 James Hill
$200 A 2100 Bob Jones
$150 A 2300 Sally Johnson
100 7000 2000 Repairs and Maintenance
$500 W 1500 Work Order #1500
•A = Address Book, W = Work Order Others include Business Unit, Equipment Number, Call Number, Service Contract Number, Item Number, Lease Number, Mfg Work Order, Purchase Order Number.
Example Sub-ledger
13
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 15
6
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Your JD Edwards Organizational Structure can adapt to your changing business!!
Changing Organizational Structures
16
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 17
6
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
US Operations Companies: • Fiscal Date Pattern
• Base Currency
• Balancing Entity
Accounts: • Belong to Business Unit
• 43+ Category Codes or
Dimensions
Business Unit Company
Business Unit #100 Company 1 Business Unit #200 Company 2 Business Unit #300 Company 3 Business Unit #400 Company 4 Business Unit #500 Company 5 Business Unit #600 Company 6
Business Units: • Belong to a Company
• Own the Chart of Accts
• 50+ Category Codes or
Dimensions
Company 1 Company 6 Company 2 Company 5
Account Category Codes
Business Unit Category Codes Business Units
Subledger / Adv.
Accounting • Transactional based
Dimensions
Company 4 Company 3
18
European Operations
Consolidation
Region Geography Type
User Defined Up To 50 Cat
Codes
US Operations Central Mfg European Operations France Dist Center US Operations West Admin US Operations North East Dist Center US Operations Mountain Dist Center Europe US 0perations United Kingdom Dist Center
Cash Flow Report Acct
User Defined Up to 43 Cat
Codes
Cash Current Assets Current Liability Current Assets Investment LT Assets Operations Current Liability Operations LT Liability Operations Revenue
Chart of Accounts
1010 Capital One (STS AR)
1110 Allowance for Doubtful Account
1680 Construction in Progress
2000 Accounts Payable
2600 Long Term Debt - Revolver
4000 Rental Sales/Revenue
Accounts
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
JDE Sample Account Structure
Typical Object
Account Range* Type
1000-1999 Assets
2000-2999 Liability
3000-3999 Equity
4000-4999 Revenue
5000-5999 Direct Expenses
6000-6999 Indirect Expenses
7000-7999 Sales & Marketing
8000-8999 SG&A
9000-9999 Units or Statistics
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*Account ranges are suggestions only.
19
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JDE Account Structure
• Account Masters
• Copy Accounts from Existing BU
• Inherit Company and Business Unit Attributes
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Business Unit
. Object . Subsidiary LOD Post Description
100 . 8000 . 6 N Salaries and Wages
100 . 8000 . 1000 7 Regular Time
100 . 8000 . 2000 7 Overtime
100 . 8000 . 3000 7 Vacation and Holiday Pay
Where What
20
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Statutory Reporting
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JDE Account Description Alternative Account
1.1110.100 Cash Chicago Acct Current Assets
1.1110.200 Cash Detroit Acct Current Assets
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Chart of Account System Considerations
• Object Account order must be Assets, Liabilities, Equity, and then Revenue and Expenses
• It is HIGHLY recommended that Object Accounts be standardized across all Companies!
• Do not skip Levels of Detail
• Do not change an account with history to a non-posting account
Oracle Confidential – Internal/Restricted/Highly Restricted 22
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Chart of Accounts Design Approach
• Define reporting requirements
• Analyze existing reports
• Develop list of Object and Subsidiary Accounts in sequential order based on requirements and existing reports
• Determine system required Object Account ranges (i.e. AAI’s)
• Define KPIs and Metrics that may impact COA.
Oracle Confidential – Internal/Restricted/Highly Restricted 23
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Program Agenda
Introductions
Organizational Structure Review (COA Context)
Messaging
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 24
6
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Chart of Account Leading Practices
• Minimize Levels of Detail
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Minimize Level of Detail
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Account Description PEC LOD
8000 Sales and Marketing Expenses N 3
8050 Sales Expenses N 4
8100 Sales Promotional Expenses N 5
8200 Sales Promotional Advertising N 6
8250 Sales Promotional Advertising Catalogs N 7
8300 Sales Promotional Advertising Print Catalogs N 8
8400 Sales Promotional Advertising Print Winter Catalog 9
8500 Marketing Expenses N 4
8550 Marketing Promotional Expenses N 5
8600 Marketing Promotional Advertising N 6
8650 Marketing Promotional Advertising Catalogs N 7
8700 Marketing Promotional Advertising Print Catalogs N 8
8800 Marketing Promotional Advertising Print Winter Catalog 9
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Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
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Taking Advantage of Level of Detail
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Object LOD Description
1000 3 Total Assets
1100 4 Current Assets
1700 4 Long-Term Assets
1900 4 Intangible Assets
2000 3 Total Liabilities
2100 4 Current Liabilities
2700 4 Long-Term Liabilities
2900 4 Notes Payable
3000 3 Equity
3100 4 Retained Earnings
Object LOD Description
4000 4 Revenue
4100 5 Retail Revenue
4200 5 Wholesale Revenue
5000 4 Direct Expenses
5100 5 Direct Labor
6000 4 Administrative Expenses
6100 5 Salaries
7000 4 Other Expenses
7100 5 Facilities
7200 5
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Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
• Leave enough space in between Object and Subsidiary Account Numbers for future growth
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Not Recommended
30
Account Description
8000 Sales and Marketing Expenses
8001 Sales Expenses
8002 Sales Promotional Expenses
8003 Sales Promotional Advertising
8004 Sales Promotional Advertising Catalogs
8005 Sales Promotional Advertising Print Catalogs
8006 Sales Promotional Advertising Print Winter Catalog
8007 Marketing Expenses
8008 Marketing Promotional Expenses
8009 Marketing Promotional Advertising
8010 Marketing Promotional Advertising Catalogs
8011 Marketing Promotional Advertising Print Catalogs
8012 Marketing Promotional Advertising Print Winter Catalog
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Better
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Account Description
8000 Sales and Marketing Expenses
8005 Sales Expenses
8010 Sales Promotional Expenses
8015 Sales Promotional Advertising
8020 Sales Promotional Advertising Catalogs
8025 Sales Promotional Advertising Print Catalogs
8030 Sales Promotional Advertising Print Winter Catalog
8035 Marketing Expenses
8040 Marketing Promotional Expenses
8045 Marketing Promotional Advertising
8050 Marketing Promotional Advertising Catalogs
8055 Marketing Promotional Advertising Print Catalogs
8060 Marketing Promotional Advertising Print Winter Catalog
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Best
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Account Description
8000 Sales and Marketing Expenses
8100 Sales Expenses
8150 Sales Promotional Expenses
8200 Sales Promotional Advertising
8250 Sales Promotional Advertising Catalogs
8300 Sales Promotional Advertising Print Catalogs
8350 Sales Promotional Advertising Print Winter Catalog
8400 Marketing Expenses
8450 Marketing Promotional Expenses
8500 Marketing Promotional Advertising
8550 Marketing Promotional Advertising Catalogs
8600 Marketing Promotional Advertising Print Catalogs
8650 Marketing Promotional Advertising Print Winter Catalog
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Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
• Leave enough space in between Object and Subsidiary Account Numbers for future growth
• Minimize “smart numbering” of account numbers
Oracle Confidential – Internal/Restricted/Highly Restricted 33
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
• Leave enough space in between Object and Subsidiary Account Numbers for future growth
• Minimize “smart numbering” of account numbers
• COA should be only as “thick” as necessary (use transaction details for very detailed reporting)
Oracle Confidential – Internal/Restricted/Highly Restricted 34
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
• Leave enough space in between Object and Subsidiary Account Numbers for future growth
• Minimize “smart numbering” of account numbers
• COA should be only as “thick” as necessary (use transaction details for very detailed reporting)
• Proper governance over COA changes
Oracle Confidential – Internal/Restricted/Highly Restricted 35
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Chart of Account Leading Practices
• Minimize Levels of Detail
• Take advantage of LOD functionality
• Leave enough space in between Object and Subsidiary Account Numbers for future growth
• Minimize “smart numbering” of account numbers
• COA should be only as “thick” as necessary (use transaction details for very detailed reporting)
• Proper governance over COA changes
• Security over who has access to make COA changes
Oracle Confidential – Internal/Restricted/Highly Restricted 36
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Chart of Account Leading Practices
• Keep account descriptions generic to account for potential acquisitions in other industries
Oracle Confidential – Internal/Restricted/Highly Restricted 37
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Not Recommended
38
Account Account Description LOD
8000 Cost of Sales 4
8100 Material - Recombinant Proteins 5
8150 Material - Proteome Profiler Antibody Arrays 5
8200 Material - Activity Assays & Reagents 5
8250 Material - Stem Cell & Cell Culture Products 5
8300 Material - Flow Cytometry & Cell Selection/Detection 5
8350 Material - General Laboratory Reagents 5
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Recommended
39
Account Account Description LOD Cost Object
8000 Cost of Sales 4
8100 Material 5
Recombinant Proteins
Proteome Profiler Antibody Arrays
Activity Assays & Reagents
Stem Cell & Cell Culture Products
Flow Cytometry & Cell Selection/Detection
General Laboratory Reagents
Copyright © 2014, Oracle and/or its affiliates. All rights reserved.
Chart of Account Leading Practices
• Keep account descriptions generic to account for potential acquisitions in other industries
• Corporate versus local control over additions / changes i.e. Object versus Subsidiary account
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Local Versus Corporate Governance
41
Object Subsidiary Description LOD PEC
8000 Cost of Sales 5 N
8100 Cost of Sales - Material 6 N
8100 1100 Cost of Sales - Material (Location Specific) 7
8100 1200 Cost of Sales - Material (Location Specific) 7
Governance and maintenance at Corporate level
Governance and maintenance at Local level if conditions met
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Why Chart of Account Matters
42
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Generates Purpose
Funds to Invest
Nature of Business
Investment decisions are
based on financial results
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Investors (SEC)
Nature of Business
Government Agencies
Finance Community
Governed by GAAP / IFRS, government
regulations, and industry
associations
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Program Agenda
Introductions
Organizational Structure Review (COA Context)
The Chart of Accounts
Chart of Accounts Leading Practices
Open discussion
1
2
3
4
5
Oracle Confidential – Internal/Restricted/Highly Restricted 45
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A Q &
46
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Oracle Confidential – Internal/Restricted/Highly Restricted
Copyright © 2015, Oracle and/or its affiliates. All rights reserved.
JD Edwards Chart of Accounts Design and Leading Practices
James Hill Principal Sales Consultant National JD Edwards Sales Consulting February 5th, 2015