To make effective decisions about your account structure, consider the structure and dimensions of your organization. Remember as you analyze your account needs, there is no limit to the number of levels you can define in your organization. There is also no limit to the number of entries at each level.

To determine the account structure that best suits your organization:

1. Examine your organization structure to identify how you measure performance and profitability.

   You may even want multiple organizational structures to allow views of the organization from multiple perspectives. For example, if you have both regional and country managers, you can set up one segment which is based on "Location". You can use summary accounts to roll up managers from each location to their respective country managers.

2. Visualize each segment of your account as a unit dimension of your business. Combine units that are based on similar dimensions to avoid using multiple segments that measure the same dimension.

3. Identify the functions, products, programs, funding sources, regions, or any other business dimensions you want to track.

4. Determine how you want to model your legal entities. It is highly recommended that you model your legal entities using the balancing segment so that you can take optimal advantage of Oracle's product features related to legal entity accounting. You should assign specific balancing segment values to each legal entity to enable you to easily identify transactions and balances for a specific legal entity. It also allows you to use certain legal entity accounting features, such as Intercompany Accounting.

5. Determine your reporting needs. Consider the following questions as you begin defining your account structure:

   • What information will better help you manage your organization?

   • What different ways can you look at your operations?

   • What kinds of reports do managers ask for? Product or service managers may want to see a gross margin report for each of their products or services. Managers responsible for a particular functional area, such as the Vice President of Research and Development, might want to see an employee expense report for the entire division.

   • What reports are currently difficult to prepare?

   • What reports do you need, that are provided by other financial information systems such as a revenue tracking system?

   • What statistical reporting, such as headcount by division, or unit sales by product, do you want to perform?

   • Do you need to perform project reporting?

   • At what levels of detail do you produce reports?

Other Sources

• Overview of Accounting Setups