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Multi Org Structure in Oracle Apps

Discussion in 'General' started by Kirti, Aug 26, 2010.

  1. Kirti

    Kirti Forum Advisor

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    Oracle APPS Multi-Org Structure

    We all hear a lot about the multi-org structure of oracle apps and there is a lot of jargon thrown around like OU and IO and legal entity etc etc. It can get pretty confusing as a beginner. Ok so here is an article that tries to explain the multi-org structure in Oracle Apps. Basically the different entities in multi-org are:

    • Business Group (BG)
    • Sets of Books (SOB)
    • Legal entities (LE)
    • Operating units (OU)
    • Inventory organizations (IO)


    Business Group

    The Business Group is an Organization that represents the consolidated enterprise, a major division, or an operation company and has no accounting impact. The Business Group partitions Human Resources information and the Purchasing Approval Hierarchy. At least one Business Group would be required per country that an enterprise operates in since HRMS data would have different legislation in different countries.

    If you request a list of employees (in any module) you will see only those employees in the Business Group of which your Operating Unit is a part. Multiple Legal Entities can relate to a single Business Group. You must have at least one Business Group. For a new installation, Oracle Applications provides a default business group, Setup Business Group. You can define additional business groups as required for your enterprise.

    Sets of Books

    A set of books (SOB) is a financial reporting entity that shares the three Cs: a particular chart of accounts (accounting flexfield structure), functional currency, and financial accounting calendar. The SOB concept is similar in a Multi-Org environment. Basically the Set of Books separate the accountings for a legal Entity. A company which operates in separate cities or separate line of businesses may separate their accounting transactions across units through separate Set of Books. General Ledger module secures transaction information (journal entries, balances) by set of books. When you use General Ledger, you choose a responsibility that specifies a set of books. You then see information only for that set of books. Besides GL, Fixed Assets (FA) is also at the SOB level.

    You create sets of books using the Set of Books window in General Ledger. You define all other types of organizations using the Organizations window.

    As evident from the diagram above, a Business Group can have one or more set of Books.

    Legal entities

    A legal entity represents a legal company for which you prepare fiscal or tax reports. You assign tax identifiers and other legal entity information to these types of organizations. Separate Legal Entities may share same set of Books.

    Operating units

    An operating unit represents an organization that uses any Oracle subledger application, for example, Order Management, Payables. It may be a sales office, a division, or a department. An operating unit is associated with a legal entity. Information is secured by operating unit for these applications. Each user sees information only for their operating unit. Responsibilities are linked to a specific operating unit by the MO: Operating Unit profile option.

    Inventory organizations

    An inventory organization represents an organization for which you track inventory transactions and balances, and manufactures or distributes products. Examples include manufacturing plants, warehouses, distribution centers, and sales offices. The following products and functions secure information by inventory organization: Inventory, Bills of Material, Engineering, Work in Process, Master Scheduling/MRP, Capacity, and purchasing receiving functions. To run any of these products or functions, you must choose an organization that is classified as an inventory organization.

    With the Multi-Org, multiple sets of books can use the same “global” item master organization, since the item master organization is used for item definition and not item accounting information. All accounting related attributes in the Item Master are controlled at the item or organization level.

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  2. chintamahesh

    chintamahesh Guest

    Thanks u sir,very valuable information for me