Understanding Organizations

Why use more than one organization?

An organization is a collection of assets that you define as you prefer. For example, you might want to define an organization for the assets in each department, in each location, or in each fund of your organization. You store organizations in one or more databases.

Even though you can group assets within an organization, there are still many reasons to create separate organizations for different groups of assets. Reasons for organizing your assets into multiple organizations include the following.

Multiple Jurisdictions

You may want to create multiple organizations to track assets if your organization tracks or owns assets in separate jurisdictions. You could create at least one organization for each jurisdiction.

Mergers and Acquisitions

If an organization, such as a hospital, either merges with another organization or acquires one, it might want to maintain the assets in separate organizations within the application.

Different Fiscal Year Ends or Short Years

Fiscal year ends and short years must be the same within a single organization. If this is not true for the different reporting units within your organization, you must create separate organizations for each reporting unit. For example, if your hospital with a December year-end acquired a health care provider with a September year-end, you might want to maintain the assets in two separate organizations.

Decentralized Organizational Structure

If the culture of your organization is decentralized, or if different organizational units maintain autonomous jurisdiction over assets or accounting, or if they track and report to a central authority separately, then you will want to create separate organizations for each of these organizational entities.

Strict Separation of Asset Classifications/Diversified Services

Even if your organization is centralized and accounting is controlled by one umbrella administrative unit, you might want to create separate organizations for your assets if the assets are strictly divided by classification. For instance, one arm of your organization may be devoted to equipment maintenance and another to medical supplies.

When to Keep Assets in One Organization?

Many of the situations outlined above are special situations. If your organization does not fit into any of the above situations, then you probably want to store all your assets in one organization.

Use one organization to store assets in the application, if:

• your organization is located in a single jurisdiction
• your organization has a centralized management and accounting structure
• your organization does not offer diversified services
• all units in your organization have the same fiscal year-end and short years
• your organization has a relatively low number of assets (say less than thirty thousand).