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Multi-Org Model
The multi-org model provides a hierarchy that dictates how transactions flow through different business units and how those business units interact. You define the organizations and the relationships between them.
Business Group
This is an Organization that represents the consolidated enterprise, a major division, or an operation company and has no accounting impact. The Business Group partitions Human Resources information and the Purchasing Approval Hierarchy. If you request a list of employees (in any module) you will see only those employees in the Business Group of which your Operating Unit is a part. Multiple Legal Entities can relate to a single Business Group.
You must have at least one Business Group. For a new installation, Oracle Applications provides a default business group called Setup Business Group. You can define additional business groups as required for your enterprise.
Ledger
A Ledger is a financial reporting entity that shares the three Cs: a particular chart of accounts (accounting flexfield structure), functional currency, and financial accounting calendar.
Legal Entity
A legal entity represents a legal company for which you prepare fiscal or tax reports. You assign tax identifiers and other legal entity information to these types of organizations.
Operating Unit
An operating unit represents an organization that uses any Oracle subledger application, for example, Order Management, Payables. It may be a sales office, a division, or a department.
An operating unit is associated with a legal entity. Information is secured by operating unit for these applications. Each user sees information only for their operating unit. Responsibilities are linked to a specific operating unit by the MO: Operating Unit profile option.
Inventory Organization
An inventory organization is an inventory location, which can have its own Ledger, costing method, workday calendar, and list of items.
Relationship between Entities
Using Oracle Applications accounting, distribution, and materials management functions, you define the relationships between inventory organizations, operating units, legal entities, and ledger to create a multilevel company structure. Oracle Applications enables you to set up a simple to complex organization structure. Analyze your current and future business requirements when making this decision. The following points describe how the multi-org model relates organizations:
Defining New Organization
Multi-Org Model
The multi-org model provides a hierarchy that dictates how transactions flow through different business units and how those business units interact. You define the organizations and the relationships between them.
Business Group
This is an Organization that represents the consolidated enterprise, a major division, or an operation company and has no accounting impact. The Business Group partitions Human Resources information and the Purchasing Approval Hierarchy. If you request a list of employees (in any module) you will see only those employees in the Business Group of which your Operating Unit is a part. Multiple Legal Entities can relate to a single Business Group.
You must have at least one Business Group. For a new installation, Oracle Applications provides a default business group called Setup Business Group. You can define additional business groups as required for your enterprise.
Ledger
A Ledger is a financial reporting entity that shares the three Cs: a particular chart of accounts (accounting flexfield structure), functional currency, and financial accounting calendar.
Legal Entity
A legal entity represents a legal company for which you prepare fiscal or tax reports. You assign tax identifiers and other legal entity information to these types of organizations.
Operating Unit
An operating unit represents an organization that uses any Oracle subledger application, for example, Order Management, Payables. It may be a sales office, a division, or a department.
An operating unit is associated with a legal entity. Information is secured by operating unit for these applications. Each user sees information only for their operating unit. Responsibilities are linked to a specific operating unit by the MO: Operating Unit profile option.
Inventory Organization
An inventory organization is an inventory location, which can have its own Ledger, costing method, workday calendar, and list of items.
Relationship between Entities
Using Oracle Applications accounting, distribution, and materials management functions, you define the relationships between inventory organizations, operating units, legal entities, and ledger to create a multilevel company structure. Oracle Applications enables you to set up a simple to complex organization structure. Analyze your current and future business requirements when making this decision. The following points describe how the multi-org model relates organizations:
- Ledger is associated with a single Business Group; multiple Ledgers may be associated with a single Business Group.
- Each Ledger may have a different chart of accounts structure, calendar, or functional currency.
- Each Legal Entity is associated with a single Ledger; multiple Legal Entities may be associated with a single Ledger.
- Each Operating Unit is associated with a single Legal Entity, multiple Operating Units maybe associated with a single Legal Entity.
- An Inventory Organization may be associated with any Operating Unit within the same Ledger.
- Choose an organization classification to describe the general purpose of your organization. Examples of organization classifications are inventory organization, legal company, and HR organization.
- Choose inventory organization as your organization classification to use your organization for inventory management.
- Tie each inventory organization to an operating unit. Each operating unit is associated to a legal entity and a general ledger Ledger.
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