OracleGeneral Ledger

&Chart of Accounts

SM~111030

Management AccountsWorkshop Objectives

• To Understand the relationship between General Ledger and Subledgers

• To Understand the Chart of Accounts • Recognise good practice• Recognise bad combinations• Understand Cross Validation rules

Oracle Sub Ledgers Simplified

PURCHASING

RECEIVABLES

PAYABLES

CASH MANAGEMENT POST

POST

POST

POST PROJECTS

This is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger

Payments Out

Receipts In

Invoices In

Invoices Out

Invoices Out

Invoices InOrders Out

Orders In

GENERAL LEDGER

Oracle Sub Ledgers Simplified

PURCHASING

RECEIVABLES

PAYABLES

CASH MANAGEMENT POSTPOST PROJECTS

This is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger

Payments Out

Receipts In

Invoices In

Invoices Out

Invoices Out

Invoices InOrders Out

Orders In

GENERAL LEDGER

GENERAL LEDGER

• Payroll• Journal Adjustments

• FSG Reporting• Open/Close Periods

• New Segments (accounts)• Cross Validation• Combinations

Reliable Information for External Reporting

• Management Accounts• Statutory Accounts• Finance Group• University Board• HESA returns• Transparency Review• Freedom Of Information Act• VAT• Corporation Tax

These reporting requirement require a robust underlying Chart of Accounts and strict rules to ensure the reliability of information to avoid penalties

Chart of Accounts

5 Segments

1. Company-

2. COST CENTRE-

3. ANALYSIS CODE-

4. ACCOUNT-5. Spare

e.g. 10-11000-AA11000100-11111-100000CU-MEDIC-GENERAL-PROF_SALARY-SPARE

Combinations

Disabled

Once a combination is

used it cannot be

deleted;

However we can

disable it

Cost Centres10-11000-AA11000100-11111-100000

Schools / Dir Cost Centre = Department

11 MEDIC 11000 MEDIC Central

Group1111%

11100 MEDIC Haematology

11110 MEDIC Pathology

11120 MEDIC Medical Genetics

11130 MEDIC EMU Unit

Group2112%

11200

11210

15 SONMS 15100 SONMS

631 FINCE 63100 Finance

63150 Purchasing

Each school is allocated a number 11 to 39. All cost centres are modelled on this number. Some schools have many departments e.g. 111%, 112% and 113% in MEDIC.

Cost centres are used for security / approval routes. Ensuring that each school can only access its own Analysis Codes

Analysis Codes

Each activity type has been allocated a two letter prefix.

All analysis codes for a given activity type begin with this letter to facilitate year end and management reports.

Sometimes the 7th and/or 8th characters also have meanings e.g. the “T” in KC1100T001 Indicates that the activity could be taxable.

This is why Management Accounts and Corporate Financial Services set up the analysis codes.

10-11000-AA11001234-11111-100000Analysis Codes (Activities) have 10 characters and several components.

AA explains the activity type e.g Academic General.

1100 tells us that the Analysis code belongs to Medic Central.

1234 is the activity number.

Terminology 2

When we say:

“A Analysis Codes” we mean anything beginning with A e.g. AA1100000 to AZ9999ZZZZ

“ AA Analysis Codes” we mean anything beginning with AA e.g. AA1100000 to AA9999ZZZZ General School Codes.

It is often better to communicate an analysis code by splitting it up into its components e.g. “AA_1100_1001”

Analysis CodesTo separate activities and keep the income and all related expenditure together in one place for reporting.This is important for VAT and Corporation Tax and also for Management Reporting

BA1234T001 £70350 Course Fees (17,000)40115 Consumables 3,000 48175 Overheads 4,250

Taxable Surplus (9,750)

Chart of AccountsCombination Rules

Income and Expenditure

e.g. 11000 - AA11000100 – 11111The first 4 characters of the Cost Centre is repeated within

the Analysis CodeThese Cost Centre – Analysis Code (A% to S%) combinations must conform to strict rules to ensure security between schools

Balance Sheet 10000 – YABC123456

Balance Sheet Analysis Codes have more flexibility but will rarely be used by schools or directorates

Analysis CodeTypes

AA-AJ Academic departments TPA (AC)

AK-AZ Academic departments Other

BA_BF Academic and Administrative Courses (S)

BQ Education Contracts TPA

BV_BZ Academic Studentships

C Academic Services

D Staff & Student Facilities

E Admin (AD)

F Premises (PR)

G CSERV

I Income CENTRAL

K Academic Conferences (KC)

L Services Rendered/Consultancy PROJECTS

M Services Rendered/Consultancy

N Salary-based recharges

R Research Grants & Contracts PROJECTS

S European Structural Funds PROJECTS

Y Balance sheet

Each Activity has been allocated a letter.

All analysis codes for a given activity type begin with this letter to facilitate year end and management reports.

Account Ranges

1% 10000 19999 Salaries

40000 47999 Direct expenditure

7% 70000 79999 External income

10-11000-AA11000100-11111-100000

Account Structure

1% 10000 19999 Salaries

2% 20000 29999 Salary recharges

40000 47999 Direct expenditure

48000 49999 Recharges / Overheads [internal]

68000 68999 Recharges / Overheads [internal]

69000 69099 Allocations

69100 69999 Internal Trade

7% 70000 79999 External income

10-11000-AA11000100-11111-100000

Account Structure

0% 00000 09999 Brought Forward Balances

1% 10000 19999 Salaries

2% 20000 29999 Salary recharges

3% 30000 39999 Spare

40000 47999 Direct expenditure

48000 49999 Recharges / Overheads [internal]

5% 50000 59999 Spare

60000 67999 Spare

68000 68999 Recharges / Overheads [internal]

69000 69099 Allocations

69100 69999 Internal Trade

7% 70000 79999 External income

80000 99999 Balance sheet

10-11000-AA11000100-11111-100000

Staff

Non Staff

Terminology

When we say:“1 Accounts” we mean anything beginning with 1

e.g. 10000 to 19999. (salaries)“48 Accounts” we mean anything beginning with

48 e.g. 48000 to 48999. (Debit Transfers)“690 Accounts” we mean anything beginning with

690 e.g. 69000 to 69099. (Allocations)

Account StructureDirect Income and Expenditure

Income

70000 79999 External Income

Expenditure

10000 19999 Salaries

40000 47999 External (Direct) Expenditure

All external income should be charged to 70000 to 79999

All direct salaries should be charges to 10000 to 19999

All direct expenditure should be charged directly to a 40000 to 47999

Account Structure Examples Recharges / Overheads [internal]

Dr Cr

48150 FEC:ESTATES COSTS 6815048160 FEC:INDIRECT COST 68160

48175 OVERHEADS 68175

48200 BALANCE TRANSFERS TO CLOSE 68200

48500 TRANSFERS OF FUNDS 68500

48% Accounts must match with 68% Accounts and net off to Nil within a journal transfer and therefore not effecting the Statutory Financial Statements.

Account Structure Examples Recharges / Overheads [internal]

Dr Cr

21111 RCHG PROFESSOR FT PERM 21111

69010 ALLOCATIONS 69010

2% Accounts (salary recharges) are used alone and net off to nil.

690% Accounts (allocations) are used alone and net of to nil.

Account Structure Examples Internal Trade

Dr Cr

40115 CONSUMABLES 69100

40130 GASES (LABORATORY) 69100

43520 LABOUR RECHARGES (Estates) 69550

Estates have their own internal trade accounts e.g. 69550 – 69559

CSERV also have their own internal trade accounts in the 6952% range.

Internal trade accounts 69100 – 69999 net off with expenditure

They are used with 40000 - 47999 Expenses

And are charged to expenditure In the Financial Statements to net off

Account StructureRe-instate balances

00000 09999 Finance Accounts

Currently 03300 accounts are for Finance to Re-instate Balances

We try to keep this account disabled whenever possible.

Schools can transfer opening balances to development accounts (personal pots) by using 03400.

It is important that schools ensure that 03400 transfers net off to NIL. Other wise there TPA reports will be misrepresented.

Balance sheet

80000 80999 Fixed asset

82000 82999 Current assets

85000 85999 Liabilities

90000 99999 Capital & reserves

Schools and Directorates should not post to these accounts

Account Structure

Account Structure – ReCap

0% 00000 09999 Brought Forward Balances (Jo & Steve + Schools)

DR & CR on 0%

1% 10000 19999 Salaries (Rhian) Direct (Cyborg)

2% 20000 29999 Salary recharges (Schools) DR & CR on 2%

40000 47999 Direct expenditure Direct

69100 69999 Internal Trade Recharged (net off)

48% 48000 48999 Recharges / Overheads [internal] Use 68% and 48%

together68% 68000 68999 Recharges / Overheads [internal]

69000 69099 Allocations (Jo) DR & CR on 690%

7% 70000 79999 External income Direct

80000 99999 Balance sheet

Account Structure - SalariesThere is an underlying structure to Salary Accounts that facilitates the complex reporting required for external and internal purposes.

Accounts have 5

charactersCharacter

1Character

2Character

3Character

4Character

5

Summary

• Accurate and reliable accounts are required.

• COA Segments are structured and can be complex.

• Certain combinations are not allowed.• Rules can be put in place to prevent some

bad combinations being created.• Analysis codes can be structured into

Parents and Grandparents for reporting.