What Is Multi organization Architecture:
Multi Organization is a feature of oracle applications which Provides Implementation, Maintenance and operations of Multiple Business Units in an Enterprise within a single installation of Oracle Applications, taking Appropriate care of Data security and data separation. Below mentioned are certain salient features of Multi Organization functionality.
- Any number of Business Units in an Enterprise can be supported within a single installation of Oracle Application even if they have different Ledger, Legal Entity, HR data.
- User can access the data corresponding to and limited to the operating unit of the user.
- Transactions like Procurement, Receiving, Selling, Shipping Etc. with the same Party Can be Performed through Different Organization and can be managed internally through intercompany postings.
- Reporting can be managed at different organization levels like, Business Group, Ledger, Operating unit etc.
The Multi Organization structure should not only be compliant from legal perspective but should also be effective from operational management and accounting perspective. Multi organization Architecture provides support for multiple organizations in a single Installation of Oracle E-Business Suite on the basis of the relationships defined between multiple organizations entities in an Enterprise. It provides a hierarchy that specifies how different organization entities interact, and how transactions flow between them. Various types of organizations supported in the Multi organization Architecture are mentioned below.
Business Group:
Business group is the highest level in the Organization Structure and is used for managing human resource information. It can be setup to represent a consolidated Enterprise, A major Division or an Operating Company. There is no impact of Business group on Accounting. It is required to have At least one business group defined for an oracle applications Installation. Multiple Legal Entities, Ledger, operating Units Can relate to a Single Business group.
Ledger:
Ledger is a financial reporting entity, which represents an accounting representation for an organization that is accountable in a self contained way. Ledger is the highest level which impacts accounting. Ledger uses below mentioned components to secure and Manage the transaction information such as Journal entries and Balances) by ledger
- Chart of accounts
- Functional currency
- Accounting calendar
- Subledger accounting method.
Ledger represents the core of a Company’s financial records where every transaction flows through. It provides balanced ledger accounting for the accounting entity and serves as a repository of financial information. Multiple Legal entities can be assigned to a Ledger. A Ledger can be associated with multiple Legal Entities and operating Units.
Legal Entity:
Legal Entity represents a legal company for which Fiscal and Tax reports are prepared. A Legal Entity can Model to an Enterprise, a Designated Legal unit which is recognized by legal authorities in a country. Legal entity is a business entity that is known to exist to the outside world. Internal organizations or divisions are not legal entities themselves, but are just part of it. In the Multi Organization structure various legal entities could share the same ledger. Both legal entities and operating units are associated with the ledger and the relationship between the legal entity and operating unit is derived based on the ledger.
Operating Unit:
An operating Unit represents a business unit in an Enterprise which has a business need to secure transaction data, Setups and Seed data. It can be a major division, sales office, a department, or a separate company within an enterprise. Since the transaction Information is secured at operating unit level for the various modules within Oracle applications, A single application responsibility can access, process, and report on data for one or more operating units that is assigned to its Security profile. An Operating unit can be associated to a Single Legal Entity and Ledger. But multiple operating units can be Associated to a Single Legal entity and Ledger.
Balancing Entity:
Balancing Entity is a business entity in a operating unit for which the Balance sheets are prepared. There can be Multiple Balancing entities within an Operating unit and each of them must balance within themselves. It could be a company or a division in an Enterprise. A Balancing entity is represented by Balancing Segment value in the Accounting Flexfield Structure (Chart of Accounts Structure). If there is intercompany transaction within an operating unit, appropriate intercompany entries will be automatically created in the Ledger so that the balancing Entities are in Balance.
Inventory Organization:
An Inventory organization represents a business entity of an enterprise for which the inventory transactions and inventory balances are tracked. It could be modeled to a Manufacturing plant, warehouse, Distribution center, Sales Office Etc. All the Oracle Application Products which include inventory transactions and inventory balances secure information at Inventory Organization Level. An inventory Organization points to only one Operating Unit but can be referenced by any Operating unit within the same Ledger.
