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Oracle General Ledger & Chart of Accounts

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Presentation on theme: "Oracle General Ledger & Chart of Accounts"— Presentation transcript:

1 Oracle General Ledger & Chart of Accounts

2 Management Accounts Workshop Objectives
To Understand the relationship between General Ledger and Subledgers To Understand the Chart of Accounts Recognise good practice Recognise bad combinations Understand Cross Validation rules SM~111030

3 Oracle Sub Ledgers Simplified
Invoices In Payments Out Orders Out PURCHASING PAYABLES Invoices In POST CASH MANAGEMENT GENERAL LEDGER POST POST PROJECTS POST RECEIVABLES Invoices Out Orders In Receipts In Invoices Out This is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger

4 Oracle Sub Ledgers Simplified
Invoices In Payments Out Orders Out PURCHASING PAYABLES Invoices In CASH MANAGEMENT GENERAL LEDGER POST POST PROJECTS RECEIVABLES Invoices Out Orders In Receipts In Invoices Out This is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger

5 New Segments (accounts)
GENERAL LEDGER Payroll Journal Adjustments FSG Reporting Open/Close Periods New Segments (accounts) Cross Validation Combinations

6 Reliable Information for External Reporting
Management Accounts Statutory Accounts Finance Group University Board HESA returns Transparency Review Freedom Of Information Act VAT Corporation Tax These reporting requirement require a robust underlying Chart of Accounts and strict rules to ensure the reliability of information to avoid penalties

7 CU-MEDIC-GENERAL-PROF_SALARY-SPARE
Chart of Accounts 5 Segments 1. Company- 2. COST CENTRE- 3. ANALYSIS CODE- 4. ACCOUNT- 5. Spare e.g AA CU-MEDIC-GENERAL-PROF_SALARY-SPARE There are 5 segments to the CU Chart Of Accounts (COA) Each has a different function: 1. Company- In case we have subsidiaries added to the system 2. COST CENTRE- Reflects the management structure and provides the basis for security and approval routes 3. ANALYSIS- This is for the “Activity” equivalent to the old NOMINAL code. e.g. a course, conference or development account 4. ACCOUNT- Equivalent to the old SUBACCOUNT e.g MPSS FULL-TIME REGULAR (TECH), CONFERENCE EXPS UK 5. Spare To be used for expansion if an unexpected accounting event occurs.

8 Combinations Once a combination is used it cannot be deleted;
However we can disable it Disabled

9 Cost Centres 10-11000-AA11000100-11111-100000 Schools / Dir
Cost Centre = Department 11 MEDIC 11000 MEDIC Central Group1 111% 11100 MEDIC Haematology 11110 MEDIC Pathology 11120 MEDIC Medical Genetics 11130 MEDIC EMU Unit Group2 112% 11200 11210 15 SONMS 15100 631 FINCE 63100 Finance 63150 Purchasing Each school is allocated a number 11 to 39. All cost centres are modelled on this number. Some schools have many departments e.g. 111%, 112% and 113% in MEDIC. Cost centres are used for security / approval routes. Ensuring that each school can only access its own Analysis Codes

10 Analysis Codes AA Analysis Codes (Activities) have 10 characters and several components. AA explains the activity type e.g Academic General. 1100 tells us that the Analysis code belongs to Medic Central. 1234 is the activity number. Each activity type has been allocated a two letter prefix. All analysis codes for a given activity type begin with this letter to facilitate year end and management reports. Sometimes the 7th and/or 8th characters also have meanings e.g. the “T” in KC1100T001 Indicates that the activity could be taxable. This is why Management Accounts and Corporate Financial Services set up the analysis codes.

11 Terminology 2 When we say:
“A Analysis Codes” we mean anything beginning with A e.g. AA to AZ9999ZZZZ “ AA Analysis Codes” we mean anything beginning with AA e.g. AA to AA9999ZZZZ General School Codes. It is often better to communicate an analysis code by splitting it up into its components e.g. “AA_1100_1001”

12 Analysis Codes BA1234T001 £ 70350 Course Fees (17,000)
To separate activities and keep the income and all related expenditure together in one place for reporting. This is important for VAT and Corporation Tax and also for Management Reporting BA1234T001 70350 Course Fees (17,000) 40115 Consumables 3,000 48175 Overheads 4,250 Taxable Surplus (9,750)

13 Chart of Accounts Combination Rules
Income and Expenditure e.g AA – 11111 The first 4 characters of the Cost Centre is repeated within the Analysis Code These Cost Centre – Analysis Code (A% to S%) combinations must conform to strict rules to ensure security between schools Balance Sheet 10000 – YABC123456 Balance Sheet Analysis Codes have more flexibility but will rarely be used by schools or directorates

14 Analysis Code Types Each Activity has been allocated a letter.
AA-AJ Academic departments TPA (AC) AK-AZ Academic departments Other BA_BF Academic and Administrative Courses (S) BQ Education Contracts TPA BV_BZ Academic Studentships C Academic Services D Staff & Student Facilities E Admin (AD) F Premises (PR) G CSERV I Income CENTRAL K Academic Conferences (KC) L Services Rendered/Consultancy PROJECTS M Services Rendered/Consultancy N Salary-based recharges R Research Grants & Contracts PROJECTS S European Structural Funds PROJECTS Y Balance sheet Each Activity has been allocated a letter. All analysis codes for a given activity type begin with this letter to facilitate year end and management reports.

15 Account Ranges 1% 10000 19999 Salaries 40000 47999 Direct expenditure
AA 1% 10000 19999 Salaries 40000 47999 Direct expenditure 7% 70000 79999 External income Each expenditure or income type has a given range. Blue = Direct expenditure / income Green = Recharges (Cross charges), Transfers or internal trade Grey = Spare ranges for future amendments if required

16 Account Structure 1% 10000 19999 Salaries 2% 20000 29999
AA 1% 10000 19999 Salaries 2% 20000 29999 Salary recharges 40000 47999 Direct expenditure 48000 49999 Recharges / Overheads [internal] 68000 68999 69000 69099 Allocations 69100 69999 Internal Trade 7% 70000 79999 External income Each expenditure or income type has a given range. Blue = Direct expenditure / income Green = Recharges (Cross charges), Transfers or internal trade Grey = Spare ranges for future amendments if required

17 Account Structure 0% 00000 09999 Brought Forward Balances 1% 10000
AA 0% 00000 09999 Brought Forward Balances 1% 10000 19999 Salaries 2% 20000 29999 Salary recharges 3% 30000 39999 Spare 40000 47999 Direct expenditure 48000 49999 Recharges / Overheads [internal] 5% 50000 59999 60000 67999 68000 68999 69000 69099 Allocations 69100 69999 Internal Trade 7% 70000 79999 External income 80000 99999 Balance sheet Staff Non Staff Each expenditure or income type has a given range. Blue = Direct expenditure / income Green = Recharges (Cross charges), Transfers or internal trade Grey = Spare ranges for future amendments if required

18 Terminology When we say:
“1 Accounts” we mean anything beginning with 1 e.g to (salaries) “48 Accounts” we mean anything beginning with 48 e.g to (Debit Transfers) “690 Accounts” we mean anything beginning with 690 e.g to (Allocations)

19 Account Structure Direct Income and Expenditure
70000 79999 External Income Expenditure 10000 19999 Salaries 40000 47999 External (Direct) Expenditure All external income should be charged to to 79999 All direct salaries should be charges to to 19999 All direct expenditure should be charged directly to a to 47999 Direct Expenditure means that an external document has been received e.g an expense invoice has been received or personal expenses form (being outside expenditure being reclaimed) (money going out) Salaries is an external payment to staff (money going out) External Income is money received from any third party (including recurrent grants, donations and contributions)

20 Account Structure Examples Recharges / Overheads [internal]
Dr Cr 48150 FEC:ESTATES COSTS 68150 48160 FEC:INDIRECT COST 68160 48175 OVERHEADS 68175 48200 BALANCE TRANSFERS TO CLOSE 68200 48500 TRANSFERS OF FUNDS 68500 If these accounts are used with 4% (40000 to 47999) or 7% accounts the financial statements will overstate / understate income or expenditure. 48% Accounts must match with 68% Accounts and net off to Nil within a journal transfer and therefore not effecting the Statutory Financial Statements.

21 Account Structure Examples Recharges / Overheads [internal]
Dr Cr 21111 RCHG PROFESSOR FT PERM 69010 ALLOCATIONS 2% Accounts (salary recharges) are used alone and net off to nil. If these accounts are used with 4% (40000 to 47999) or 7% accounts the financial statements will overstate / understate income or expenditure. 690% Accounts (allocations) are used alone and net of to nil.

22 Account Structure Examples Internal Trade
Dr Cr 40115 CONSUMABLES 69100 40130 GASES (LABORATORY) 43520 LABOUR RECHARGES (Estates) 69550 Internal trade accounts – net off with expenditure They are used with Expenses And are charged to expenditure In the Financial Statements to net off Estates have their own internal trade accounts e.g – 69559 CSERV also have their own internal trade accounts in the 6952% range.

23 Account Structure Re-instate balances 00000 09999 Finance Accounts
Currently accounts are for Finance to Re-instate Balances We try to keep this account disabled whenever possible. Schools can transfer opening balances to development accounts (personal pots) by using It is important that schools ensure that transfers net off to NIL. Other wise there TPA reports will be misrepresented.

24 Account Structure Balance sheet 80000 80999 Fixed asset 82000 82999
Current assets 85000 85999 Liabilities 90000 99999 Capital & reserves Schools and Directorates should not post to these accounts

25 Account Structure – ReCap
7% 70000 79999 External income Direct 40000 47999 Direct expenditure Direct 69100 69999 Internal Trade Recharged (net off) 1% 10000 19999 Salaries (Rhian) Direct (Cyborg) 2% 20000 29999 Salary recharges (Schools) DR & CR on 2% 48% 48000 48999 Recharges / Overheads [internal] Use 68% and 48% together 68% 68000 68999 Each expenditure or income type has a given range. Blue = Direct expenditure / income Green = Recharges (Cross charges), Transfers or internal trade Grey = Spare ranges for future amendments if required 69000 69099 Allocations (Jo) DR & CR on 690% 0% 00000 09999 Brought Forward Balances (Jo & Steve + Schools) DR & CR on 0% 80000 99999 Balance sheet

26 Account Structure - Salaries
There is an underlying structure to Salary Accounts that facilitates the complex reporting required for external and internal purposes. Character 4 Character 5 Character 3 Character 1 Accounts have 5 characters Character 2

27 Summary Accurate and reliable accounts are required.
COA Segments are structured and can be complex. Certain combinations are not allowed. Rules can be put in place to prevent some bad combinations being created. Analysis codes can be structured into Parents and Grandparents for reporting.


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