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    Tausif Mulla
    Ledger design decision help required
    Topic posted January 18, 2019 by Tausif MullaBronze Medal: 1,250+ Points, last edited February 6, 2019, tagged Accounting Hub Cloud Service, Allocations, Assets, Budgetary control, Cash Management, Collections, Compliance, Configuration, Core HR, Discussion Forums, Expenses, Financials, Fusion, General Ledger, Help Center, Intercompany, Invoice Imaging, OTBI, Payables, Period Close / Reconciliation, Receivables, Reports, Search, Security, Setup, Setup / Administration, Subledger Accounting 
    168 Views, 8 Comments
    Title:
    Ledger design decision help required
    Summary:
    Ledger design decision help required
    Content:

    Hi,

    We need help in understanding the repercussion of having the below scenarios to help us design the ledger for our client:

    • Single primary ledger across the globe (As all 4c's i.e. calendar, COA, convention and currency). What are the merits and demerits of having single Primary ledger globally and leveraging secondary ledger and reporting currency for same single ledger.
    • Having multiple primary ledgers based on each country specific.

    This will help us take design decision and hence critical to understand the implication for each scenario.

    Your inputs will be highly appreciated.

    Regards

    Tausif Mulla

    Comment

     

    • Felix Beaudoin

      Also interested in knowing more about the impacts of the two points above. I would think it makes more sense to have a Primary Ledger for an organization with Secondary Ledgers for each country that consolidate into the Primary.
      Let's see what other gurus think!

    • Ba Kwon

      Best practice is to define one primary ledger per country. There are other considerations besides the 4 C's, such as country specific requirements supported by localizations, legal and sales tax reporting by country, subledger accounting by ledger, flexibility in securing access by ledger (e.g. journals), etc. You should be using secondary ledgers and reporting currency ledgers where appropriate.

      Please read white paper on Enterprise Structures:

      https://support.oracle.com/epmos/faces/DocumentDisplay?id=2415848.1

       

      • Tausif Mulla

        Thank you Ba Kwon for your valuable inputs !

        The attachment shared is helpful !

        However will like to know any business use cases for merits and demerits on two scenarios.

        Regards

        Tausif Mulla

    • Ba Kwon

      I don't see this as a "pros and cons" discussion for one primary ledger for all countries versus one primary ledger for each country.

      If you operate in 50 countries and have one primary ledger for all, you will have issues with country specific localizations driven by the primary ledger for some countries. If you plan to use secondary ledgers for each of the country, the entire primary ledger will be replicated in each of the 50 secondary ledgers, since you cannot filter replication by primary balancing segment value (BSV). Typically for period close, it's the end of the business day in the time zone of the country, not the time zone of HQ wherever it resides. If you need to define SLA rules for a specific country, it will be very cumbersome since you can only associate one SLA method to a ledger. Your primary ledger is the main record keeping ledger where each transaction is initially recorded. The primary ledger is where sales tax is calculated and reported, and also where document sequences are driven (though could be mitigated by separating sequence by legal entity). You can't separate journal entries in primary ledger for each country. Presumably, you will also need to define Data Access Set by BSV for each country. The list goes on.

      There are compelling reasons why you should not use one primary ledger for multiple countries. That's why we have secondary ledgers and report currency ledgers in addition to primary ledgers to support a global implementation. The exception would be rare. For e.g. let's say you have a small sales office in the Bahamas with one agent and all expenses are in USD. Let's say there is no local reporting requirement other than a corporate tax return. HQ reimburses the agent for all expenses in USD. In this scenario, it may be acceptable to include the Bahamas operation in the US ledger with a BSV to represent the business operation.

      My recommendation is to have one primary ledger per country.

      • Felix Beaudoin

        Wow Ba! This is very interesting information and makes total sense. Really appreciate your input on this and I will definitely keep this in mind for future implementations. I really hope this will help Tausif make some great design decisions on their end.

        • Tausif Mulla

          Yes Felix it is a great information and makes sense. Thanks for your help as well on our concerns.

          Regards

           

      • Tausif Mulla

        Thanks Ba Kwon for your detailed inputs !

        We will definitely include your point of view while deciding on the ledger design decision.

        Thanks !