COA change

What is the Chart of Accounts?

The Chart of Accounts is the set of codes used to classify and record financial transactions in meaningful ways. Chart of accounts represents the accounting structure of the organization. This also

• facilitates financial reporting;
• provides a framework for understanding the financial results
• controls how financial transactions and balances are collected and stored in the Oracle system

While structuring COA so many factors are to be considered to design healthy accounting, which includes client business, operational model, future business needs, reports structure, number of modules being implemented and to be implemented in near future, and provision for future needs etc.

Why the need arise to change the chart of accounts?

Client may need to change the COA for the following reasons:

v Existing COA not addressing the client requirements ( I have seen this at some places – this may due to implementation partner would like to increase effort by way of custom reports / lack of knowledge of consultants or clients / requirement not gathered properly)

v Unexpected changes in the business model

v Amalgamation, absorption and reconstruction - Taken over has taken place and new parent company is insisting for changing

v Change in the reporting requirement to capture new information or delete the unnecessary information.

v Merger - Two companies merged into single company and new company formed wants to have new COA reflecting the reporting requirements of both companies.

v Any other reason as client thinks appropriate.

Ways of  changing COA:

1. Add new segments as needed

When we need to add new segments, perform the COA changes after the year end close. CCID will work according to COA id.

1. Disable the segments as required

1. Change the segment name as desired

1. Create a new set of books with new chart of accounts (adding the new segments and/or delete the segments) and run the consolidation.

However, it is advisable to follow the number 4 solution. In this case we may have to reinstall Subledger.