Terminology in (Oracle) Fusion
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Terminology in ERP (Oracle) Fusion
Enterprise:
It is top level of the organization and it represent Headquarter /
Corporate Office of the organization. An enterprise consists of legal entities
under common control and management.
Enterprise represent the Corporate office and all other organizations
that define belongs to it.
Jurisdictions:
Jurisdiction is a physical territory such as a group of countries,
country, state, county, or parish where a particular piece of legislation
applies.
Examples of Jurisdictions are French Labor Law, Singapore Transactions
Tax Law, and US Income Tax Laws
Legal
Entities:
Legal Entity (Organization) is registered with legal authorities and
required by law. It is created for legal/ Tax reporting purposes.
Define a legal entity for each registered company or other entity
recognized in law for which you want to record assets, liabilities, and income,
pay transaction taxes, or perform intercompany trading.
Divisions:
A division organizes itself differently to deliver products and
services or address different markets.
By definition a division can be represented in the chart of accounts.
Companies may choose to represent product lines, brands, or geographies as
their divisions. their choice represents the primary organizing principle of
the enterprise. This may coincide with the management segment used in segment
reporting.
Business
Units:
A business unit is a unit of an enterprise that performs one or many
business functions that can be rolled up in a management hierarchy.
Business units can be roll up into Divisions.
In Oracle, Business units is to be assigned to a primary ledger. For
example, if a business unit is processing payables invoices they will need to
post to a particular ledger. This assignment is mandatory for your business
units with business functions that produce financial transactions.
Business
Functions:
A business unit can perform many business functions in Oracle Fusion
Applications. Prior to Oracle Fusion Applications, operating units in Oracle
EBusiness Suite were assumed to perform all business functions, while in Oracle
PeopleSoft , each business unit had one specific business function. Oracle
Fusion Applications blends these two models and allows defining business units
with one or many business functions.
A business function represents a business process, or an activity that
can be performed by people working within a business unit and describes how a
business unit is used. The following business functions exist in Oracle Fusion
applications:
Billing and revenue management
Collections management
Customer contract management
Customer payments
Expense management
Incentive compensation
Marketing
Materials management
Inventory management
Payables invoicing & Payments
Procurement & Procurement contract management
Receiving
Requisitioning
Sales
Item
Master Organization:
An item master organization lists and describes items that are shared
across several inventory organizations or item organization.
This is logical organization to maintain the list of all the items.
Inventory
Organization:
In Oracle storage facilities, warehouses, and distribution centers are
implemented as inventory organizations.
Shared
Service Centers:
Oracle Fusion Applications allows defining relationships between
business units to outline which business unit provides services to the other
business units.
This functionality is used to frame service level agreements and drive
security. The definition of service provider relationships provides you with a
clear record of how the operations of your business are centralized.
Chart
of Accounts:
The chart of accounts is the underlying structure for organizing
financial information and reporting.
The chart of accounts defines the number and attributes of various
segments, including the order of segments, the width of segments, prompts, and
segment labels, such as balancing, natural account, and cost center.
Thick
Versus Thin General Ledger:
With a thin general ledger, you use the general ledger for internal
control, statutory reporting, and tracking of asset ownership. You minimize the
data stored in your general ledger. A thin general ledger has many of the
following characteristics:
• Minimal chart of accounts
• Short list of cost centers
• Short list of natural accounts
• Short list of cost accounts
• Summary level asset and liability accounts
• Low number of optional segments
• Infrequent posting schedule
With a thick general ledger, you use the general ledger as a detailed,
analytic tool, performing analytic functions directly in the general ledger.
Data is broken down by many reporting labels, and populated frequently from the
subledgers.
You maximize the data stored in the general ledger. A thick general
ledger has many of the following characteristics:
• Maximum use of the chart of accounts
• Long list of natural accounts
• Long list of cost centers
• Long list of costing accounts
• Detailed asset and liability accounts
• Frequent posting schedule
Cost
Centers:
A cost center represents the smallest segment of an organization for
which costs are collected and reported. A cost center also represents the
destination or function of an expense as opposed to the nature of the expense
which is represented by the natural account. For example, a sales cost center
indicates that the expense goes to the sales department.
Departments:
A department is an organization with one or more operational objectives
or responsibilities that exist independently of its manager. For example,
although the manager may change, the objectives do not change. Departments have
one or more workers assigned to them.
