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Oracle General Ledger & Chart of Accounts. 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. Invoices In.
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Management AccountsWorkshop 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
Invoices In Oracle Sub Ledgers Simplified 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
Invoices In Oracle Sub Ledgers Simplified 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
GENERAL LEDGER • Payroll • Journal Adjustments • FSG Reporting • Open/Close Periods • New Segments (accounts) • Cross Validation • Combinations
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
Chart of Accounts 5 Segments 1. Company- 2.COSTCENTRE- 3.ANALYSIS CODE- 4.ACCOUNT- 5. Spare e.g. 10-11000-AA11000100-11111-100000 CU-MEDIC-GENERAL-PROF_SALARY-SPARE
Combinations Once a combination is used it cannot be deleted; However we can disable it Disabled
Cost Centres 10-11000-AA11000100-11111-100000 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
Analysis Codes 10-11000-AA11001234-11111-100000 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.
Terminology 2 When we say: “A Analysis Codes” we mean anything beginning with A e.g. AA1100000 to AZ9999ZZZZ “ AA Analysis Codes” we mean anything beginning with AA e.g. AA1100000 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”
Analysis Codes 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
Chart of AccountsCombination Rules Income and Expenditure e.g. 11000 - AA11000100 – 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
Analysis CodeTypes 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.
Account Ranges 10-11000-AA11000100-11111-100000
Account Structure 10-11000-AA11000100-11111-100000
Account Structure 10-11000-AA11000100-11111-100000 Staff Non Staff
Terminology When we say: “1 Accounts” we mean anything beginning with 1 e.g. 10000 to 19999. (salaries) “48 Accounts” we mean anything beginning with 48 e.g. 48000 to 48999. (Debit Transfers) “690 Accounts” we mean anything beginning with 690 e.g. 69000 to 69099. (Allocations)
Account StructureDirect Income and Expenditure All external income should be charged to 70000 to 79999 All direct salaries should be charges to 10000 to 19999 All direct expenditure should be charged directly to a 40000 to 47999
Account Structure ExamplesRecharges / Overheads [internal] 48% Accounts must match with 68% Accounts and net off to Nil within a journal transfer and therefore not effecting the Statutory Financial Statements.
Account Structure ExamplesRecharges / Overheads [internal] 2% Accounts (salary recharges) are used alone and net off to nil. 690% Accounts (allocations) are used alone and net of to nil.
Account Structure Examples Internal Trade Internal trade accounts 69100 – 69999 net off with expenditure They are used with 40000 - 47999 Expenses And are charged to expenditure In the Financial Statements to net off Estates have their own internal trade accounts e.g. 69550 – 69559 CSERV also have their own internal trade accounts in the 6952% range.
Account Structure Currently 03300 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 03400. It is important that schools ensure that 03400 transfers net off to NIL. Other wise there TPA reports will be misrepresented.
Account Structure Schools and Directorates should not post to these accounts
Account Structure - Salaries There is an underlying structure to Salary Accounts that facilitates the complex reporting required for external and internal purposes. Accounts have 5 characters Character 1 Character 2 Character 3 Character 4 Character 5
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.
