Chart of Accounts

Chart of Accounts

An account in any organization is a combination of many fields like Company, Division, Location, Account, etc. these fields are known as flexfields. It is of 2 types

1.)    Key Flexfield

2.)    Descriptive Flexfield

KFF is used to capture key or mandatory information of the organization. It is a subfield in the main field.

DFF is used to capture additional (or extra) business information of the organization. It is additional columns in the same form

The application provides almost 41 KFF with the package. Accounting KFF is just 1 of those. It is used to capture accounting business information.

A KFF is a collection of structures, A Structure is a collection of segments, each segment is associated with a value set & a value set is a collection of values.

The structure created using accounting flex fields are called a chart of accounts

Cross-Validation Rules

Qualifiers: These are the properties which are used to determine the behavior of segments & there values. It is of 2 types- Flexfield qualifiers & segment qualifiers.

Flexfield qualifiers are used to determine the behavior of the segment columns whereas segment qualifiers are used to determine the behavior of the values of the segments. It is dependent on flexfield qualifiers

Balancing Segments: It is one of the flexfield qualifier It is unique & mandatory. To whichever segment we enable this qualifier, the application will always balance the journals on that segment. It is also used to account for retained earnings, unrealized gains, and losses & cumulative translation adjustment accounts. 

Natural account segment: It is another flexfield qualifier. It is unique & mandatory. To which segment we enable this property, it enables a segment qualifier as the account type. Account type is of following types

1.)    Asset Account

2.)    Liability Account

3.)    Expense account

4.)    Revenue Account

5.)    Ownership/Retained earning Accounts

Other flexfield qualifiers are

1.)    Balancing Segments

2.)    Natural account segments

3.)    Intercompany

4.)    Cost center

5.)    Secondary tracking

6.)    Management

Apart from the above-mentioned flexfield qualifiers, we have a hidden qualifier. It is a GL Global. It is attached to all the segments. Segments qualifiers associated with GL Global are

1.)    Allow Budgeting: It is used to determine if the budgets can be controlled at a particular segment value or not.

2.)    Allow Posting: It is used to determine if the posting is allowed on a particular segment value or not. It is set to no whenever a segment (say location) is temporarily not functional etc.

The structure of our Chart of Accounts will be like the one shown below

In the below-mentioned way, we create a chart of accounts.

Navigate to General Ledger, Vision Operations (USA) Responsibility > Setup > Financials > Flexfields > Key > Segments à Query for Flexfield Title ‘Accounting Flexfield’ & add another row

Click on Segments

Next is to attach value sets to all these segments. Click on first, record & click on Value Set & give details as shown below

When we say format as Char, then numbers along with characters will be allowed. In order to restrict it to only numbers check the checkbox ‘Numbers Only’

If we check the Right-justify checkbox then numbers will be generated in the format of ‘XX’ otherwise, it will be an only single-digit format

Save the record & similarly create other value sets as shown below

Now assign these value sets to the corresponding segments as shown below

Operations Account is the system provided value set

Save the record

In case if an organization is not using the department segment (or we do not want users to enter any value in this segment) but still as it is one of the segments, so some value has to be assigned to it so click on Department Segment & click on open.

In here, we can make the segment as Hidden & also give some default values as shown below

Close this form & click on Company Segment & click on the flexfield qualifiers & enable it as Balancing Segment

Similarly for Accounts, enable Natural Account Segment

Close the form & freeze the flexfield definition & (temporarily) enable allow dynamic inserts

Click on Compile. It will submit 2 concurrent programs

1.)    Flexfield View Generator

2.)    Compile Key Flexfields

Once completed, you’ll get a message saying

Next is to add values to the value sets. Navigate to Setup > Financials > Flexfields > Validation > Values à Search for the ‘PD Company’ value set & click on Find & give details as shown below

Whenever we save the record, the system will submit a concurrent program ‘Compile value set hierarchies’. This program, in turn, another request.  As we are working on accounting Flexfields, the system will submit a concurrent program ‘General Ledger Accounting Setup Program’

Now for each company, we’ll define other segments (like division, location, etc.) in a similar manner as shown below

With this, we are done with the Chart of Accounts Setups