Hierarchy Management Overview

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Hierarchy Management is the central location for creating and editing various types of hierarchies within your system. Hierarchies are needed for reporting purposes and to organize dimension members. Dimensions define your chart of accounts (COA) structure against which the Planful application stores the monthly summary financial account balances for an organization. You can access the Hierarchy Management page by navigating to Maintenance > Hierarchy Management.

Understanding Financial Dimensions

Dimensions form the framework around how data is stored, and reports are built. The dimensions typically align with the organization's general ledger or ERP structure. A maximum of eight user-defined dimensions are allowed and out of these two are required dimensions: Account and Legal Entity.

The Legal entity dimension, which is sometimes referred to as the Company dimension, is where the currencies are assigned.
The Account dimension aligns with the accounts from the general ledger and associated properties based on the account type.

The rest of the six user-defined dimensions are up to the organization to decide based on their requirements and perspectives. If performing consolidations, an intercompany segment may be required.

Note:

Hierarchies support up to 8 levels. If you go beyond 8 levels, you might experience performance issues.

A solid foundation of user-defined dimensions drives the consistency of reported information across the business units. It allows features to be shared across all business entities such as Planning, Consolidations, and Reports. In addition to the user-defined dimensions mentioned above, there are system-defined dimensions, such as reporting, scenario, time, and measure. These system-defined dimensions work in conjunction with the user-defined dimensions to support planning, data loading, security, and reporting activities.

The dimensions are defined on the Define Financial Budget Entity page (accessed by navigating to Maintenance > Admin > Configuration Tasks). Each dimension is represented as the main level of a hierarchy as shown below.

Hierarchy Management is where all creation and editing of hierarchies will occur, including not only financial hierarchies, but also entity, alternate, attribute, and dated hierarchies.

You can set up many types of hierarchies, but at the very least you will need to set up your Financial hierarchy and a Budget Entity hierarchy (for the Planning application). Budget Entity hierarchies allow budget users to work with their parts of the overall Budget, Plan, or Forecast scenario. Budget hierarchy data is derived from the mapped segments set up using the configuration task page. Budget entities are made up of the combined segment members based on the segments selected during the Define Financial Budget Entity configuration task. Hierarchies are created for reporting and provide you with a way to summarize members. Generally, each hierarchy has a name, parents, and children. Hierarchies are created for segments you have defined.

Understanding Finance Hierarchy

While the dimensions form the foundation of the application, within each dimension, there is a hierarchy of members. Each dimension will have a hierarchy that will include a combination of both leaf-level members, where data will be posted, as well as roll-up members, which are used to organize the hierarchy for reporting purposes. The relationship between the leaf level and roll-up members which allows data to be summarized is referred to as a parent-child relationship.

So, Dimensions provides the infrastructure for the Planful application. Data entered in the application will reside within these dimensions which is why creating the appropriate dimensionality is so important to the creation of the application. To store data in the application and be able to report on it accordingly, dimensions and their associated hierarchies must first be built out within the Planful application.

While you can set up multiple types of hierarchies, there are two essential ones you must establish for the Planning application:

Financial Hierarchy: This hierarchy is crucial for organizing financial data.
Budget Entity Hierarchy: This hierarchy allows budget users to manage and work with their specific portions of the overall Budget, Plan, or Forecast scenario.

Understanding Hierarchy Management Interface

Hierarchy Management is where all creation and editing of hierarchies will occur.

Within the interface, there are 3 panes:

Left Pane: Select the hierarchy to work with which is then displayed in the bottom half of the left pane
Center Pane: Displays the contents of the roll-up member on the left pane
Right Pane: Displays properties of the member and where properties are defined and/or edited

By navigating through these panes and utilizing the options along the toolbar, changes to members and their associated properties can be adjusted as needed. Click here to learn more about the Hierarchy Management interface.

Managing Main and Optional Hierarchies in the Hierarchy Management Interface

In the Hierarchy Management interface, the main finance hierarchies for each dimension are primarily managed and edited by clicking on the Edit Hierarchy option. This main hierarchy defines the core structure of dimension members, such as accounts or legal entities, which are essential for organizing and reporting financial data.

Additionally, alternate hierarchies, attribute hierarchies, and other types of hierarchies can be created as needed. These optional hierarchies offer flexibility for specific reporting or organizational needs, but they are not required for the basic functionality of the financial hierarchy. Refer to the section below to understand the required and optional hierarchies.

Exploring Hierarchy Types

Several hierarchies can be set up within an application. The chart below gives a brief description of each type of hierarchy when to create that hierarchy type, and if it is a system-required hierarchy.

Hierarchy Type	When to Create this type of Hierarchy	Required/Not Required
Finance	This is the foundation hierarchy which represents your chart of accounts. A Finance hierarchy is created for each financial segment you define on the Define Financial Segments page.	Required
Budget Entity	The budget entities of the organization are organized here and used to manage budget workflows and responsibilities.	Required for the Planning Application
Attribute	Attribute hierarchies are created for reporting purposes and provide a way to summarize members. Attribute hierarchy is an additional hierarchy that can be created and is usually built for a specific reporting or planning purpose.	Not Required
Alternate	Provide information on a segment of the hierarchy and in some cases only certain members of that segment (depending on how the hierarchy was originally set up) Alternate hierarchies use the same set of books as the main Finance hierarchy.	Not Required
Multiple Set of Books (MSOB)	For MSOB, you will create a sibling hierarchy (to the main hierarchy versus a segment only). You might use MSOB when you need to provide financial statements for GAAP as well as IFRS.	Not Required
Dated	With Dated Hierarchies, you can manage a hierarchy based on periods. This allows you to create a new version of a hierarchy and take a snapshot of the existing version. Dated Hierarchies are useful when you need to manage multiple versions of hierarchies that exist during different periods. They enable you to generate reports using different versions of organizational hierarchies. This reflects the varying reporting positions of individual entities across different times.	Not Required

Hierarchy Management References

Once you create hierarchies, refer to

User Access to Hierarchies article to learn how you can provide user access to the hierarchies and dimensions.
Hierarchy Management for Dynamic Planning article to learn how hierarchy management is being used for Dynamic Planning.
FAQs for the Alternate and Dated Hierarchies

How Tos

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Hierarchy Management Interface Overview

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