Building the Inventory Organization Structure: Office Smart Solutions begins work with R12


Constructing the Inventory organization Structure is a challenge every organization deals with as the implementation begins.

Office Smart Solutions (OSS) is a US based supplier of office products, furniture, stationery, and electronic products. OSS is implementing Oracle Applications Release 12.

OSS wants to start building its organization structure. They have a Legal Entity, a Set of Books, and an operating unit to begin with.


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Of Legal Entities in R12

OSS uses the following steps to create the Legal Entity named Office Smart Solutions.

Responsibility: General Ledger Super UserNavigation: Setup > Financials > Accounting Setup Manager

OSS defines the Legal Entity as shown below. 

A Legal Entity has to be associated with a Legal Address.

In 11i, the Legal Address could be defined as a Location in Inventory > Setup> Organizations > LocationsIt could then be assigned to a Legal Entity defined in Inventory > Setup > Organizations

In R12, the address to be associated to the Legal Entity has to be defined in the Accounting Setup Manager page. It would then appear in Inventory > Setup> Organizations > Locations with the Legal Address checkbox, checked.You also have the option of selecting an existing Legal Address.

Office Smart Corporate is the Corporate Headquarters of OSS and is located in the Chicago suburb of Naperville. OSS will have to define this address using the Create New Address feature, as shown above.

OSS may optionally add the Inception Date, to complete the creation of its Legal Entity.

A Simple Search by name would now display the Legal Entity information, as shown below. 





FREE DEMO: Defining a Legal Entity in R12

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In this Demo, we define a Legal Entity using the Accounting Setup Manager.

Now, the Set of Books...renamed the Primary Ledger in R12

Having defined the Legal Entity, Office Smart Solutions will trudge along the new path of accounting setups by moving towards the next milestone in setting up the inventory organization structure…creating the Primary Ledger.

In the Account Setup Manager, OSS consultants choose Create Accounting Setup. For the Legal Entity they just defined, OSS will create a Primary Ledger. This is the new avatar of what we knew as the Set of Books in Release 11i and before.

For a clearer view of the screens, please run the demo on the next page. 

As the screenshot above shows, the entries required to create the Primary Ledger include

  • Name - OSS have selected the name as Office Smart (USA).
  • Chart of Accounts – Operations Accounting Flex for OSS.
  • Accounting Calendar – Accounting for OSS.
  • Currency – USD for OSS.
  • Subledger Accounting Method – Standard Accrual Method for OSS.


Upon creation of the Primary Ledger, you will be greeted with the confirmation message as shown in the screen below. 

For a clearer view of the screens, please run the demo on the next page. 

Cheers! We are getting there, a step at a time...building the inventory organization structure for Office Smart Solutions!

Defining Accounting Options

As the message in the screen above confirms, the consultants at OSS need to define the Accounting Options before they can consider the first phase of their Inventory Organization Structure to be complete. This means, they need to define the Ledger Options and the Reporting Currencies (mandatory), as shown below. 

For a clearer view of the screens, please run the demo on the next page. 


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A Comprehensive Guide to Implementing Internal Requisitions, and Internal Sales Order Cycle in R12


Next: Creating the Operating Unit 

Return to Oracle Inventory from Inventory Organization Structure Setup 


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