So, what do we do with the Chart that we have? Throw it out and start over? That is a massive project!
Particularly in a system like JDE that is interconnected to many different sub-ledgers that, like it or not, contain information that ties all transactions that impact the bottom line back to the General Ledger whose backbone is, of course, the Chart of Accounts.
Designing Your New Chart of Accounts
The best way to arrive at your destination with the least amount of trauma, is to have a clear vision of your target. To design your chart of accounts follow these steps:
- To use JDE most effectively, follow the COA Design Requirements (see resources below.)
- Begin your initial design with the major headings of your transactions
- Then add your detailed transaction descriptions
Standard JDE Functionality Assumptions
A Chart of Accounts is generally divided into major groups of accounts. The grossest grouping are the Balance Sheet and the Income Statement or Profit and Loss Statement. The Balance Sheet always precedes the Income Statement especially in JDE. The most common structure of a Chart of Accounts follows these major groups:
The Balance Sheet contains the information that is both of a more long-term nature and presents a picture of the Company’s worth. Groups or sections of the Balance Sheet:
The Income Statement contains the more detailed information to support the breakdown of the Balance Sheet. This has only two major groups:
This is where the daily transactions of running the Company are recorded – Sales of goods or services and the cost, Expenses, incurred to make those goods or provide the services. These are broken down even more to be able to track the income and/or expenses for a particular product or service. Usually also related to a specific Department or Warehouse or Job. Obviously, the difference between Revenue and Expenses equals Profit.
Balance Sheet must be first.
Last Balance Sheet account must be Net Income with a Posting Edit Code of ‘N’, Non-posting. The system calculates Net Income on the Balance Sheet.
Next to last Balance Sheet account needs to be Retained Earnings. This must have a Posting Edit Code of ‘M’, Machine Generated.
Account Numbers are sequential – Balance Sheet from 1000 – 4999, Income Statement from 5000 on up, for example.
- Set up both a Model Company and a Model Business Unit
- Set up the Model Chart of Accounts within that Model Company and Business Unit
- Models can be specific to a particular type of business (Water, Energy, Construction)
- This will insure consistency across all Business Units of the same type
- Keep the Model current to business needs
Set up PEC’s to be consistent across all companies
Use Category codes (Segments of the business: Geo, Water resources, Mineral services, Energy services, Heavy Civil, etc.) for different reporting needs
- Provides reporting flexibility without changing the Chart of Accounts
- Record Category Code usage in the Model and in documentation available to personnel that will be responsible for maintenance of the COA
- Balance Sheet
- Income Statement
- Trial Balance
- Company Consolidations (if applicable)
Beginning the Change to Chart of Accounts
The Model COA has been designed and tested and it’s living up to the expectations that you have for the way that a Chart should perform. You’ve gotten the Category Codes set up to do Alternate Reporting, should you need to. You’ve copied the Production environment to a test environment. Now we’re ready to begin the process of changing old Accounts to new Account Numbers in the test environment first.
The Short Account ID in the Master Chart table, F0901, is now instrumental. In the sub-ledgers where the General Ledger Accounts has been stored, it is stored as the Short Account ID (AID, or in some tables as GLBA). Therefore, if the Short Account ID remains intact in the record in the COA Master as the Business Unit, Object and Subsidiary Accounts are changed, the historical information will remain accurate and Integrity Reports will remain constant.
Changing the Business Unit
If the changes you want to make include adding new Business Units, these Business Units must exist in the Business Unit Master before you can change/add Accounts to them. You can change the Business Unit portion of the account number on many accounts at once by globally changing the Business Units. For example, you can change Business Unit 3 to Business Unit 4 for all object and Object.Subsidiary accounts.
To change the Business Unit on multiple accounts, the current Business Unit and the future Business Unit must exist in the F0006 table and must belong to the same company. If they do not, the system displays the company for the old Business Unit and for the new one, but it does not update them.
Accounts that already exist in the new Business Unit are not updated with the new Business Unit number because this action would cause duplicate accounts. For example, if you are renumbering Business Unit 1 to Business Unit 10, and account 10.1110.BEAR already exists in the F0901 table, the system does not update account 1.1110.BEAR to Business Unit 10.
Old Business Unit/New Business Unit
Enter the number of the old Business Unit to change and the number of the new Business Unit. The new Business Unit must already exist in the Business Unit Master.
The Change Business Units program (P09812) updates the F0901 table with each account. After this is completed, you must run the other steps defined below to change the General Ledger Detail (F0911) and the General Ledger Balances (F0902) to align with the new Business Unit changes defined in the Chart of Accounts Master, F0901.
Important: Do not delete the old Business Unit from the F0006 table before you run the Update Business Unit.Object.Subsidiary to Journal Entry program (R09806). If the old Business Unit does not exist in the F0006 table, the system cannot update records that have the old Business Unit number. This is the only one of the processes defined here that requires the Account segment be setup prior to its use. Object Account and Subsidiary cannot exist prior to running their processes.
Changing the Object Account
You can globally change Object Account numbers. For example, you can change Object Account 1131 to 1132 for all Business Units in company 1. When you globally change Object Account numbers, the old Object Account must already exist, and the new Object Account cannot exist in the system.
Run the Change Object Account program (P09803) to change Object Accounts for one Company or for all Companies. If you need to change the Object Account for more than one Company (but not all Companies), you must run the Change Object Account program for each Company. Enter the number of the old Object Account to change and the number of the new Object Account. The new Object Account cannot already exist in the F0901 table. If it does exist, no error message will be sent and no change will happen.
The Change Object Account program updates the F0901 table. This program does not produce a report. After this is completed, you must run the other steps defined below to change the General Ledger Detail (F0911) and the General Ledger Balances (F0902) to align with the new Object Account changes defined in the Chart of Accounts Master, F0901.
Company and Subsidiary
To update all Companies and Subsidiaries, in Account Numbers containing the Object Account being changed, leave these two fields blank. If you do not specify a Company or a Subsidiary in these fields, the program changes all instances of the old Object Account in your Chart of Accounts to the new Object Account.
If you specify a Company or Subsidiary or both, the program changes only the Object Accounts for either the Company or Subsidiary or both the Company and Subsidiary.
Old Object/New Object
Enter the number of the old Object to change and the number of the new Object Account. The new Object Account cannot already exist in the Chart of Accounts Master.
Changing the Subsidiary Account
You can globally change a Subsidiary. For example, you might change the Subsidiary portion of account 1.1110.BEAR to BW01 when you changed banks to Bank of the West. This global change affects all of the Companies for Object Account 1110 only.
When you restructure your accounts, you can change Subsidiaries within a Company, within an Object range, or both. If you need to do this restructuring for selected Companies or Object Account ranges, you must change the Subsidiary for each Company or Object Account range.
If you globally change a Subsidiary, the old Subsidiary must already exist and the new Subsidiary cannot exist in the system.
Company, Object From, and Object Thru
To update all Companies and Object Accounts, leave these fields blank.
To change the Subsidiary on a range of accounts, enter Object Account numbers for the beginning and the ending of the Account range. The Change Subsidiaries program (P09805) updates the F0901 table. If you do not specify a Company or an Object Account range in these fields, the program changes all instances of the old Subsidiary in your chart of accounts to the new Subsidiary. If you specify a Company, range of Object Accounts, or both, the program changes only the Subsidiary with that Company, Object Account range, or both.
Enter the number of the old Subsidiary to change and the number of the new Subsidiary. The new Subsidiary cannot already exist in the Chart of Accounts master.
The Change Subsidiary program updates the F0901 table. This program does not produce a report. After this is completed, you must run the other steps defined below to change the General Ledger Detail (F0911) and the General Ledger Balances (F0902) to align with the new Subsidiary changes defined in the Chart of Accounts Master, F0901.
Updating the Detail and Balance Tables
Regardless of which segment of the General Ledger Account number you have changed, Business Unit, Object Account, or Subsidiary, the final steps that need to be taken are to update the General Ledger Balance table, F0902, and the General Ledger Detail table, F0911.
To do this, you run the Update Business Unit.Object.Subsidiary to Journal Entry program (R09806). This program compares the Business Unit, Object, and Subsidiary for each Short Account ID in the F0911 and F0902 tables to the Account Master records in the F0901 table and updates the F0911 and F0902 tables, based on the F0901 table.
R09806 Processing Options