Organizational Hierarchy

Hi Guys,

Can someone answer my question here.


Client has multiple companies each having its own financial reporting structure. Each of these companies operate in multiple countries. Within each country, it has offices at multiple location. The client wants financial reporting for each of the companies as well as a consolidated reporting structure. My question here is how do I structure the Organizational Hierarchy? Should I create One Legal Entity and then each companies as Business unit and each country as cost center and then location as team? OR Should I create each company as separate legal entity and Countries as Cost centers?

Also, can I use financial dimension to achieve the above objective. If yes, then how.

Please elaborate your answer.

Thanks a lot


You need to consider the localization issues, and then the decision on instances for the geographical differences. I would suggest that the legal reporting requirements of each company will drive elements and the structure, but you can also create consolidated companies and then report on those for consolidation using MR. I would not create one legal entity because of the issues of legal reporting. The creation and use of financial dimensions will depend upon the reporting requirements of each legal entity but of course you want some consistency.