Chart of account redesign

[atabti]

Dear All,

We are planning a redesign of our chart of account, has anyone of you encounter such an activity ?, and if this is the case, could you eventually tell me about your experiences regarding the planning, the time scale, issues etc... .

Best Regards

Akli

[email protected]

 

[rtuohy]

Akli, I did this about five years ago. The chart of accounts we had which
was based on a US publishing CoA was a nightmare in Europe where a product
belonging to the US Company with domestic currency in Dollars was sold from
a UK warehouse to Belgium via the French warehouse. JDE threw up its hands
in horror and bombed left, right and centre as it didn't know which currency
was which, and created journals which just would not post. As we were multi
currency it required considerably complex algorithms to take, in some
instances, existing AA ledger amounts and make them CA amounts whilst
regenerating the new AA amount. It was also complicated by the use of the GL
to provide sales reporting mainly through the use of the subsidiary and
subledger to indicate sold from and sold to countries. Having said all that,
the work was carried out in about a month with myself programming and a
couple of accountants, to ensure the go live of a distribution project, and
once we got our heads round it, was actually not difficult.

Email me off list with some details and I will be happy to give you some
ideas and maybe point you in the right direction.

Regards
Ron Tuohy
RJT Information Systems Ltd

 

[Colin_Hugill]

Akli,

Yes I have been involved in three (3) projects involving redesign and
conversion of charts of accounts. Your question is a very big ask, probably
too big to be addressed via this list however I have put forward some
comments below.

Timeframe is totally dependant on the degree of change, the size of the
chart (ie the number of unique obj.sub combinations not the number of
records in F0901), and the number of JDE systems in use. I would guess that
about three months should be enough but then six months might be more
realistic if you are a heavy user of many JDE systems and have a large
chart. If the degree of change is minor and you are using only JDE
financials then you may well be able to use standard JDE functions. However
I have found it best to use a "cross reference" table mapping the "old"
obj.sub combinations to "new" obj.sub and develop fairly straight forward
RPG programs to update all affected files - one program per file.

Be aware that object and subsidiary fields are not the only fields affected,
there is also the ANI field which occurs in quite a few files. Also
remember that AAI's also need to be changed but given their criticality to
the system these should be changed and checked manually. Be careful also
about merging many accounts into one (account id will need to be very
carefully addressed in the design of the conversion programs) or attempting
to split one account into many. The latter concept should be avoided at all
costs. If one to many is needed then it should be done via manual journals
(or allocation or FASTR journals).

If you need further information then let me know - probably best if you
email me direct (ie off list)

Regards...... Colin HUGILL




Colin Hugill
Consultant

 

[GMunchel]

We redesigned the Chart of Accounts when we implemented JDE 3 years ago. We
had an outside consultant lead this effort. It was money very well spent
since none of us here were expert on Chart of Accounts design. It took
about a month to do it, because the consultants were not here full-time and
we needed to check things with different groups in our company plus
coordinate with outside reporting needs to make sure the Chart met as many
needs as possible. Generally the consultants (one lead & one gopher) came
in for 2-3 days, left, we digested their work, they came back, tweaked their
old work some and then went on.

Basically the approach was to visually design the business units and object
accounts (using Org Plus) by creating LARGE org charts showing the
heirarchical breakdown of:

1. Business unit structure for each Company (we have 5 companies so we have
5 org charts). This included:
a. Having a single balance sheet business unit for each company.
b. Identifying a product line breakdown to determine the Gross Profit
business units.
c. Building a heirarchy of production business units for each company
(split into Production & Overhead business units).
d. Building a heirarchy of selling, administrative and operations
business units for each company.
e. Identifying special business units for holding non-operating expenses
& taxes.
2. Asset object accounts (1000s) (applied to B/S business units only).
3. Liabilities/equity object accounts (2000s) (applied to B/S business
units only).
4. Sales, cost of sales, direct charges & variances (3000s) (applied to
Gross Profit business units only).
5. Operating expense object accounts (4000s, 5000s & 6000s) (applied to all
expense business units--Production/Selling/Admin/Operations although not all
accounts were set up in all business units) divided into:
a. Variable expenses (4000s) (Production business units)
b. Non-variable expenses (5000s & 6000s)
(Production/Selling/Admin/Operations business units)
c. Note that an alternative approach is to identify variable &
non-variable business units (I would have preferred this and it was
recommended by our consultants but was vetoed by others in the company).
6. Non-operating object accounts (7000s) (applied to Non-Operating & Taxes
business units only).
7. After all boxes were in place then came up with a numbering scheme for
business units that were consistent within ranges across companies; the
number scheme for object accounts was absolutely consistent across
companies.
8. Designed allocations from production business units back to gross profit
business units in order to compute variances by product line and as a result
show a somewhat meaningful Product Line statement.

Creating the Chart visually using Org Plus was brilliant. We plastered
these large charts (printed them out on a HP plotter/printer that
engineering had) all over a training room and had people come in and walk up
to them, point at business units or accounts, discuss a problem or an
omission and be able to "see" the design. It was very effective, but a lot
of work.

The consultants we used, GL Associates, had a Chart of Accounts design
methodology that worked very well for us (plus the lead consultant took us
out to really good restaurants....something very important when picking
consultants). If interested in learning more about GL Associates contact
Bill Glasofer, [email protected]. I think they have a web site too but
I've never looked at it so I don't know how informative it might be.

....Gerry Munchel
7.3, Cum 10

 

[GMunchel]

We redesigned the Chart of Accounts when we implemented JDE 3 years ago. We
had an outside consultant lead this effort. It was money very well spent
since none of us here were expert on Chart of Accounts design. It took
about a month to do it, because the consultants were not here full-time and
we needed to check things with different groups in our company plus
coordinate with outside reporting needs to make sure the Chart met as many
needs as possible. Generally the consultants (one lead & one gopher) came
in for 2-3 days, left, we digested their work, they came back, tweaked their
old work some and then went on.

Basically the approach was to visually design the business units and object
accounts (using Org Plus) by creating LARGE org charts showing the
heirarchical breakdown of:

1. Business unit structure for each Company (we have 5 companies so we have
5 org charts). This included:
a. Having a single balance sheet business unit for each company.
b. Identifying a product line breakdown to determine the Gross Profit
business units.
c. Building a heirarchy of production business units for each company
(split into Production & Overhead business units).
d. Building a heirarchy of selling, administrative and operations
business units for each company.
e. Identifying special business units for holding non-operating expenses
& taxes.
2. Asset object accounts (1000s) (applied to B/S business units only).
3. Liabilities/equity object accounts (2000s) (applied to B/S business
units only).
4. Sales, cost of sales, direct charges & variances (3000s) (applied to
Gross Profit business units only).
5. Operating expense object accounts (4000s, 5000s & 6000s) (applied to all
expense business units--Production/Selling/Admin/Operations although not all
accounts were set up in all business units) divided into:
a. Variable expenses (4000s) (Production business units)
b. Non-variable expenses (5000s & 6000s)
(Production/Selling/Admin/Operations business units)
c. Note that an alternative approach is to identify variable &
non-variable business units (I would have preferred this and it was
recommended by our consultants but was vetoed by others in the company).
6. Non-operating object accounts (7000s) (applied to Non-Operating & Taxes
business units only).
7. After all boxes were in place then came up with a numbering scheme for
business units that were consistent within ranges across companies; the
number scheme for object accounts was absolutely consistent across
companies.
8. Designed allocations from production business units back to gross profit
business units in order to compute variances by product line and as a result
show a somewhat meaningful Product Line statement.

Creating the Chart visually using Org Plus was brilliant. We plastered
these large charts (printed them out on a HP plotter/printer that
engineering had) all over a training room and had people come in and walk up
to them, point at business units or accounts, discuss a problem or an
omission and be able to "see" the design. It was very effective, but a lot
of work.

The consultants we used, GL Associates, had a Chart of Accounts design
methodology that worked very well for us (plus the lead consultant took us
out to really good restaurants....something very important when picking
consultants). If interested in learning more about GL Associates contact
Bill Glasofer, [email protected]. I think they have a web site too but
I've never looked at it so I don't know how informative it might be.

....Gerry Munchel
7.3, Cum 10

 

[GMunchel]

We redesigned the Chart of Accounts when we implemented JDE 3 years ago. We
had an outside consultant lead this effort. It was money very well spent
since none of us here were expert on Chart of Accounts design. It took
about a month to do it, because the consultants were not here full-time and
we needed to check things with different groups in our company plus
coordinate with outside reporting needs to make sure the Chart met as many
needs as possible. Generally the consultants (one lead & one gopher) came
in for 2-3 days, left, we digested their work, they came back, tweaked their
old work some and then went on.

Basically the approach was to visually design the business units and object
accounts (using Org Plus) by creating LARGE org charts showing the
heirarchical breakdown of:

1. Business unit structure for each Company (we have 5 companies so we have
5 org charts). This included:
a. Having a single balance sheet business unit for each company.
b. Identifying a product line breakdown to determine the Gross Profit
business units.
c. Building a heirarchy of production business units for each company
(split into Production & Overhead business units).
d. Building a heirarchy of selling, administrative and operations
business units for each company.
e. Identifying special business units for holding non-operating expenses
& taxes.
2. Asset object accounts (1000s) (applied to B/S business units only).
3. Liabilities/equity object accounts (2000s) (applied to B/S business
units only).
4. Sales, cost of sales, direct charges & variances (3000s) (applied to
Gross Profit business units only).
5. Operating expense object accounts (4000s, 5000s & 6000s) (applied to all
expense business units--Production/Selling/Admin/Operations although not all
accounts were set up in all business units) divided into:
a. Variable expenses (4000s) (Production business units)
b. Non-variable expenses (5000s & 6000s)
(Production/Selling/Admin/Operations business units)
c. Note that an alternative approach is to identify variable &
non-variable business units (I would have preferred this and it was
recommended by our consultants but was vetoed by others in the company).
6. Non-operating object accounts (7000s) (applied to Non-Operating & Taxes
business units only).
7. After all boxes were in place then came up with a numbering scheme for
business units that were consistent within ranges across companies; the
number scheme for object accounts was absolutely consistent across
companies.
8. Designed allocations from production business units back to gross profit
business units in order to compute variances by product line and as a result
show a somewhat meaningful Product Line statement.

Creating the Chart visually using Org Plus was brilliant. We plastered
these large charts (printed them out on a HP plotter/printer that
engineering had) all over a training room and had people come in and walk up
to them, point at business units or accounts, discuss a problem or an
omission and be able to "see" the design. It was very effective, but a lot
of work.

The consultants we used, GL Associates, had a Chart of Accounts design
methodology that worked very well for us (plus the lead consultant took us
out to really good restaurants....something very important when picking
consultants). If interested in learning more about GL Associates contact
Bill Glasofer, [email protected]. I think they have a web site too but
I've never looked at it so I don't know how informative it might be.

....Gerry Munchel
7.3, Cum 10