Tuesday Nov 19, 2013

Tips and Usage of Group Account Number Configuration

Author: Sridhar Kasam

Introduction

The general concept discussed in this blog applies to all OBIA releases. The specific screenshots on Configuration Manager is only available starting 11.1.1.7.0.

When you implement Financial Analytics, one of the most important steps is to set up Group Account Numbers. Many issues are reported due to incorrect setup of Group Account Numbers.

- What is Group Account Number?

o Group Account Number logically groups GL natural accounts into reportable group(s), so users can view financial reports at a higher level than that of a GL natural account.


Example: Assign natural account range 1210 – 1240 to Group Account Number “AR” (Accounts Receivable).

CHART OF ACCOUNTS ID

FROM ACCT

TO ACCT

GROUP_ACCT_NUM

101

1110

1110

CASH

101

1210

1240

AR

101

1280

1280

OTHER CA

101

1340

1340

PPAID EXP

o Group Account Number is used to establish relationship between GL natural accounts and Financial Statement Item Code. Financial Statement Item Code is mapped to base fact tables for GL reconciliation process.

Example: Group Account Number, Financial Statement Item Code & Base Fact Table

GROUP_ACCT_NUM

FIN_STMT_ITEM_CODE

BASE FACT TABLE

ACC DEPCN

OTHERS

W_GL_OTHER_F

ACC LIAB

OTHERS

W_GL_OTHER_F

AP

AP

W_AP_XACT_F

AR

AR

W_AR_XACT_F

CASH

OTHERS

W_GL_OTHER_F 

CMMN STOCK

OTHERS

W_GL_OTHER_F 

COGS

COGS

W_GL_COGS_F

REVENUE

REVENUE

W_GL_REVN_F

- How to configure Group Account Number(s) and Financial Statement Item Code(s)?

o Group Account Numbers are defined / configured through a configurable csv file. In case of Oracle the file name is file_group_acct_codes_ora.csv. For PeopleSoft, it is file_group_acct_codes_psft.csv, and for JDE, it is file_group_acct_codes_jde.csv. Users are allowed to specify which GL natural accounts are assigned to a particular group account within chart of accounts, GL Business Units and company for Oracle, PeopleSoft and JDE sources respectively. Please ensure that the account ranges are continuous without any overlaps. If necessary you can have multiple ranges and/or accounts assigned to the same group account. Additionally, please ensure that the accounts being provided are all leaf accounts / ranges and not parent nodes/ranges.

o By mapping GL accounts to group account numbers and then associating group accounts to a financial statement Item code, an indirect association is built between GL accounts and financial statement Item codes as well. In case of BI APPS 11.1.1.7.1 or later, association of group account numbers to financial statement item code is performed in Oracle BI Applications Configuration Manager. But, in earlier releases like 7.9.6.3 this configuration was also done using a configurable file file_grpact_fstmt.csv.

Note: Customers should not modify the mapping relationship between Group Account Number and Financial Statement Item Code for Group Account Numbers AP, AR, COGS and REVENUE.

o It is not always necessary to assign all out of box group account numbers to certain account ranges. In cases where customers are not planning to use the logical metrics under GL which uses Group Account Number as part of their metric definitions, users do not need to configure majority of the Group Account Numbers. However, if users are still planning to implement Payables, Receivables, Revenue, or COGS facts, they still need to configure Group Account Numbers AP, AR, REVENUE, or COGS because these Group Account numbers are also used for the GL reconciliation process against these facts.

o If for some reason, out of the box group account numbers are not sufficient, then the high level steps to add additional group accounts are (11g):

§ Define new Group Account Numbers in Configuration Manager

§ Assign the newly created Group Account Number to a financial statement code (e.g. AP, AR, REVENUE, COGS, OTHERS).

§ Assign GL account to Group Accounts in source specific csv file.

§ Model the RPD to include a new group account measure and expose in presentation layer.

- Why is it important?

Group Account Number configuration is important as it determines that the right GL Accounts are assigned to the group account number(s). In other words, it determines the accuracy of most of the reports that are reported from Financial Analytics where Group Account Number is part of the report. Group Account Numbers in combination with Financial Statement Item Codes are also leveraged in GL reconciliation process to ensure that sub ledger data reconciles with GL Journal entries.

Group Account Number Usage in Financial Analytics

- GL reports

For “Account Receivable” in balance sheet reports, we calculate the total amount for GL natural accounts from 1210 to 1240 for ledgers with chart of account id 101.

o Because of this association and subsequent configuration to expose the group account number metric in RPD, users can now report on Group Account Number metric. For example in a Balance Sheet Report, users can now report on “AR Amount” from “Fact – Fins – GL Balance” (Logical Fact) corresponding to “AR” group account.

- Reconciliation

o Because of the indirect relationship that is built between GL Accounts and Financial statement Item codes, it is now possible to do GL reconciliation to ensure that the sub ledger data reconciles with GL Journal entries. For example, it is possible that after an invoice has been transferred to GL, the user might decide to adjust the invoice in GL. In which case, it is important that the adjustment amount is trickled down to the sub ledger base fact along with the balance fact. So, to determine such sub ledger transactions in GL, the reconciliation process uses Financial Statement item codes.


Common Issues due to Incorrect Group Account Number Setup

1. 1. Sub ledger transactions are not posted.

Group account numbers are associated with financial statement item codes. The GL reconciliation process uses the financial item codes to identify sub ledger fact tables to be reconciled with GL journals. If the group account number assignment to GL account is incorrect, sub ledger facts remain “unposted”.

As Sub ledger balance facts are based on posted transactions, for example, AP balances or AR balances reports may return incorrect results.

For Example: GL account “1210” is supposed to be associated to “AR” (Accounts Receivables) group account but was mistakenly associated to “AP” (Accounts Payables). In which case, as part of ETL Process all the GJ Journal lines for account 1210 are attempted to be reconciled against sub ledger accounting records in AP fact. But, in reality these GL journal lines came from AR and not AP. So, because it couldn’t find the corresponding entries in “AP” they will remain ��unposted”.

2. 2. Unnecessary Manual Records are created in Sub ledger facts.

When a group account number is incorrectly assigned to an account, unnecessary records with transaction type “Manual” are created in sub ledger facts (e.g. W_AP_XACT_F, W_GL_REVN_F etc). Those records do not have sub ledger transaction details (e.g. supplier, customer, transaction number, and so on).

Following the same example above, because it couldn’t find the corresponding entries in “AP”, the ETL process will insert “Manual” records into the AP fact because it thinks that these entries are “Manual” Journal entries created directly in the GL system.

3. 3. GL reports return incorrect results.

When group account number assignments are not correct, GL metrics such as “AP”, “AR” from the above example will have incorrect amount. Therefore, whenever, you see GL metrics showing incorrect amount, the first thing you should check is if the group account num used by that metric has correct GL account ranges assigned to it.

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