What is a Business Unit?

Aytan Vahidova
2 min readFeb 8, 2022

Learn the definition of Business Unit in Oracle Applications

Hello, everybody:)Welcome to the 2nd day of my #30daychallenge!

Let me explain to you shortly the term which you come across very often if you work closely with Oracle Applications.

What is a Business Unit (BU)?

A business unit is a unit of an enterprise that performs one or many business functions that can be rolled up in a management hierarchy. A business unit can process transactions on behalf of many legal entities.
Normally, it will have a manager, strategic objectives, a level of autonomy, and responsibility for its profit and loss. Roll business units up into divisions if you structure your chart of accounts with this type of hierarchy.

In Oracle Fusion Applications, you assign your business units to one primary ledger. For example, if a business unit is processing payables invoices they will need to post to a particular ledger. This assignment is mandatory for your business units with business functions that produce financial transactions.

Can a BU Process Transactions for Multiple Legal Entities (LE)?

Yes, If you want multiple LEs using the same BUs then all LEs must be assigned to the same ledger and the BU needs to have the same ledger assigned as its primary ledger.

The second article has come to an end:) ❤️ Hope to see you tomorrow on the third day of my #30daychallenge.

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I am an Oracle Functional Specialist with more than 6 years of experience. I help clients to understand software capabilities and to analyze business needs. My main goal is to recommend solutions and ultimately guide through all phases of Oracle Cloud Applications. I am also inspired to write about life, improvement, and personal growth.