Back Ground

Some organizations have fairly complex share holding structure. A holding company could have a few subsidiaries that owns each other in various percentage of equity. A group, refers to consolidated entity of multiple companies that are defined as "Business Entity".

     Even though in most cases, each "Business Entity" only has one balance sheet, but there are some large organization that would like to have a balance sheet for each Profit and Cost Center for management purposes. Based on the hierarchy of how Wavelet define the organization structure, Group is at the highest level, and Business Entity is the legal entity of the business being registered, while business unit is like the functions within this Business Entity, and each of the business unit may have multiple Profit and Cost Centers (PC Center).

     Having said that, for Small and Medium Businesses, most of the time, there's only one business entity with only one business unit and only one PC Center. This is because the company does not need more than one balance sheet. Having more than one balance sheet may create problems when transactions cross between one PC Center to the other, because strictly speaking, if each PC Center has a balance sheet, cross PC Center transactions could only be carry out like a supplier and a customer.

     To date, Wavelet does not have the features and functions to automatically cross out internal company transactions within a group to generate a consolidated account for the group or business entity yet. But with the sound structure in place, we do not rule out the possibilities of having this feature in the not too far future.

To define Business Entity, Business Unit and PC Center, go to DEVELOPER module.

Step by step

The first step in setting up the EMP would be to define the organizational structure of the EMP. As each organization is inherently different, this portion only serves as a guide to the different section; you should know the organizational structure of your own organization.

A majority of EMP system configuration is done in the Developer section, selected from the top of the page. From there, you will be able to see the options available to the left side of the page.

Define Business Group

Go to DEVELOPER tab → (Organization Structure) Define Business Group

After completing that, select Define Business Entity. The term ’Business Entity’ in the EMP is used typically in reference of the legal entity of each subsidiary in the business group defined in the preceding section (if applicable & end ash; if not, the business entity should be the same as the business group). This sub-module will prompt you to fill up the following fields: -

Define Business Entity

Go to DEVELOPER tab → (Organization Structure) Define Business Entity

Next, you will have to click on Define Business Unit / Department. This section allows you to set the details of the different departments (if applicable) within the business entity by specifying the following: -

Define Business Unit/ Department

Go to DEVELOPER tab → (Organization Structure) Define Business Unit / Department

Lastly, you will have to go to Define Profit and Cost Centre to input the following fields: -

Define Profit and Cost Center

Go to DEVELOPER tab → (Organization Structure) Define Profit and Cost Center

As each PC Centre has its own set of accounts, balance sheet and Profit or Loss Statement, the accounts belonging to one PC Centre cannot be mixed with those of another PC Centre, even though they are in the same business unit.