Designing a Global Chart of Accounts and Taking Advantage of Oracle Cloud Application (Fusion) & Oracle E-Business Suite Release 12


A chart of accounts is a list of accounts used by a business to classify financial transactions. In Oracle E-Business Suite (EBS) & Oracle Cloud Application (Fusion), the chart of accounts is called the accounting flexfield and is one example of a number of key flexfields in EBS that store values in a table structure for integration with other parts of the enterprise resource planning system. A good chart of accounts provides flexibility for recording and reporting accounting information, provides structure for managing business uniformly, and enhances communication across all parts of the business. A great chart of accounts takes care and consideration in the design phase, with particular focus on five key criteria considerations that will maximize the life of the accounting flexfield. Companies that do not consider their long-term growth and change will eventually find that their chart of accounts is no longer suitable for tracking financial transactions according to the current state of the business.

Fundamental criteria for a Global Chart of Accounts Design

Best Practices:

A best practices COA should use standard accounting principles and incorporate items specific to your business.

The order of your accounts should align with your financial statements.  It should order by account type and then liquidity.  Although the COAs will differ between businesses, the basic setup should be the same.  The common order is as follows:

  • Assets
  • Liabilities
  • Equity
  • Revenue
  • Cost of Goods Sold
  • Operating Expenses
  • Other Income and Expenses


Standardized account numbering logic and account description is essential to keep your COA clean and consistent.  Avoid using vague account description.  Most importantly, each GL account should be defined in order to help the accounting team code the transactions correctly and consistently.  This is especially important if you have multiple sites.  Assign a COA owner to keep the chart up to date with changes in business model and regulatory requirements.

One type of information:

The first of these considerations is a crucial aspect of designing a long-lived chart of accounts: You should have one (and only one) type of information in each segment. If the type of information in a segment is not unique, the chart suffers from a vulnerable overlapping of information across segments, creating potential inaccuracies during reporting.

Information not repeated:

For reasons similar to those discussed above, your accounting flexfield should not repeat information that exists in other modules of EBS. If you are implementing Receivables, then there is no reason to have a Customer segment in your chart of accounts. The goal is still to keep types of information in discrete buckets, only here the buckets include all of the other applications in your EBS environment.

Scalability and Flexibility – Enough room to expand:

A common downfall of chart of accounts design is to tailor the design to your current business without considering the future growth and change that are inevitable outcomes of a successful company. In the design phase, make sure to define your segment lengths to be long enough to accommodate values that will be added in the future.

Logical Numbering.

Using numerical value instead of alpha-numeric for your COA is the best choice. Doing so allows your GL accounts to sort better and will make data entry easier and quicker. Try to avoid using leading zero (‘00050’) as it could be problematic when exporting your COA to Excel (‘50’).

Use logical ranges

Build in some logic in your numbering scheme but keep it simple. For example, asset accounts start with 1, liabilities accounts start with 2, equity accounts start with 3… etc.  Put your sub-groups and sub-accounts in logical ranges as well

Expanding on what was just discussed about segment lengths, you should take care to put values for each segment into logical ranges. A Project segment set up in an accounting flexfield might have a range of values such as 55000 – 55999 that represents a specific type of project. There is room in this structure for at least 999 different projects of that same type, and you can tell just by looking at the number what type of project it is. If the range were 550000 – 559999, there would be room for 9,999 projects. If you know the trends in your business, you can define an appropriate number of characters for both a segment and the ranges it contains. Don’t hesitate to increase the length of a segment to accommodate a larger range. Increasing segment length to accommodate growth lets you build flexibility into the COA structure.

Ranging your values logically promotes streamlined reporting, security and maintenance. It enables you to minimize the number of cross-validation rules, security rules, and Financial Statement Generator (FSG) report definitions that are necessary to support operations by giving you the ability to define your rules and reports by ranges as opposed to individual values. Similarly, avoid using intelligent numbers in your accounting flexfield.

You will get faster reports if you focus on the built-in reporting features of EBS. FSGs can be kept to a minimum if you take the time to design a robust master row set, allowing you to generate different reports without requiring that you rewrite each report. The time required to obtain a custom report can be reduced from days to under an hour.

Get the Most Out of Your Accounting System:

It is crucial to start a new accounting system implementation with a well thought-out COA.  Although it does take time and effort to produce, the end result is more accurate and timely financial reporting.  A well-designed COA will provide business stakeholders actionable information in a timely manner to make important business decisions.  The more time you spend in designing the COA, the more efficient you will be in the long run.

Taking advantage of Oracle Application with a global chart of accounts

New accounting features introduced in Oracle Cloud Application & Oracle EBS R12, promote the adoption of a single chart of accounts across the organization. Companies are given the opportunity to consolidate multiple accounting flexfields into a single flexfield or to restructure their existing flexfield to take advantage of R12 features that automatically take care of functionality that required their current charts to become overgrown and convoluted.

In R12, Oracle also introduces a single accounting engine to manage all posting activities into the general ledger. With a single global chart of accounts and SLA, accounting policies are standardized across the entire enterprise and everyone adheres to the same set of rules and definitions. The data remains consistent, has full drill-down and roll-up capability, auditability, and visibility into all of the activity for the entire ledger set.


Use the transition to Oracle Cloud Application & EBS R12 to redesign your chart of accounts if it is not optimized or to adopt a single chart of accounts if your organization is currently using multiple accounts. If your company is a large, global organization, there are a few additional considerations and recommendations. Add an intercompany segment to you chart to take advantage of Advanced Global Intercompany (AGIS). Add a segment to accommodate local requirements such as local account, local bank accounts and statutory reporting. A Location segment is optional, but it helps with security and cross-validation rules