Decide whether to model internal organizations as legal entities or operating units - Training

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• Consolidation is not required, because data is already shared among operating units.

• Decide whether to model internal organizations as legal entities or operating units

• You must have at least one legal entity to represent your business in finance and operations apps.

• Legal entities can be used for transactional business or for consolidation.

• For example, a company that participates in transactions can own subsidiary legal entities. In this example, a legal entity is required for transactions, and a virtual legal entity is required to consolidate the results and balances of the subsidiary legal entities.

• Internal organizations in your business, such as regional offices, can be represented as additional legal entities, or as operating units of the main legal entity.

• operating unit is not required to be a legally defined organization

• used to control economic resources and operational processes in the business.

• An operating unit is an organization that is used to divide the control of economic resources and operational processes in a business.

• operating unit have a duty to maximize the use of scarce resources, improve processes, and account for their performance.

• Cost center

• Business unit

• Value stream

• Department

• Retail channel

• Branch

• Rental Location

• Region

• Teams

• operating unit in which managers are accountable for budgeted and actual expenditures. It is used for the management and operational control of business processes that span legal entities