What are business units?

In SunSystems, a business unit represents an operating entity. You may need just one business unit if you are accounting for a single operating company. Alternatively, in a multi-national organization, you may need several business units, one for each separate legal company or operating unit. One or more business units can be maintained within a single physical database.

If, for example, you have four branch offices in different locations, it can be difficult to decide whether each office should operate separately in different business units. You should consider the following, which may help you decide:

  • do they file separate statutory accounts?
  • does each maintain its own debtors/receivables and creditors/payables accounts?
  • do they require the same base currency and second base or reporting currency (if required)?
  • do they require the same fourth currency?

A number of major processing choices are set for a business unit. These may also help you to decide whether an operating entity requires a separate business unit.

The most important business unit operational choices determine how the multi-currency facilities are to be used, if at all. Four different values can be entered on transactions and maintained for each account. The rules that govern the use of these values are defined for a business unit. These rules include:

  • identifying the base currency and setting the input and balancing rules for this currency.
  • identifying the pivot currency which determines how currency rates are defined and how currency conversions are performed.
  • determining the input and balancing rules for the transaction currency values.
  • determining the use of the third currency value available (it can be either a second base or reporting currency) and the input and balancing rules for this.
  • determining the input and balancing rules for the fourth currency values (it can be either fixed and used as an additional reporting currency, or implemented as a variable currency, for example banking currency).
  • setting the input rules for the fourth, memorandum, value available on transactions.

Other operational choices include:

  • defining the date input format.
  • setting the maximum number of accounting periods.
  • identifying the number format, for example the decimal separator.