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© 2006.Deloitte Consulting India Private Limited. All rights reserved.
Oracle Projects – An Overview
Day 2
© 2006.Deloitte Consulting India Private Limited. All rights reserved.
Agenda
Overview
Basic Concepts
Process Flow
Project Template and Project
Budgets
Agreement and Funding
Cost Collection
Capitalization
Projects Billing
Invoicing and Revenue Process Flow
Billing and Revenue Generation Method
Billing Terminologies and Functionalities
Accounting
Reporting
Copyright © 2006 Deloitte Development LLC. All rights reserved.3
Cost Collection
Copyright © 2006 Deloitte Development LLC. All rights reserved.4
Expenditure Type Class• An Expenditure Type Class determines how an expenditure item will be processed by Oracle.
• These are pre-defined by Oracle and cannot be added by the user:
– Straight Time
– Overtime
– Expense Reports
– Usages
– Supplier Invoice
– Misc Transactions
– Burden Transaction
– Work In Process
– Inventory
Copyright © 2006 Deloitte Development LLC. All rights reserved.5
Expenditure Type• Expenditure Type is an extension of Expenditure Type Class and is user defined.
• Expenditure Type is used for reporting and accounting purposes.
• Expenditure Type needs to be linked to one or more Exp Type Classes.
Straight Time
Supplier Invoice
Regular Pay
Bonus
Furniture & Fixtures
Exp Type Class Exp Type
Leasehold Improv.
Copyright © 2006 Deloitte Development LLC. All rights reserved.6
Expenditure Type Setup
Copyright © 2006 Deloitte Development LLC. All rights reserved.7
P O E T • POET refers to:
– Project Number
– Organization (Expenditure)
– Expenditure Type
– Task Number
– Date (Expenditure)
• All project cost needs to have POET information.
• This may be entered manually by user (in Payables, Purchasing, Projects) or may be derived automatically by Oracle (in Inventory, WIP).
Copyright © 2006 Deloitte Development LLC. All rights reserved.8
POET – AP Invoice Distribution
Copyright © 2006 Deloitte Development LLC. All rights reserved.9
Accounted vs. Unaccounted Cost • In Projects context, Accounted costs means costs for which accounting entry is already recorded in General Ledger (GL). Therefore, accounting will not be generated in Projects module.
• Accounting Entry will be generated in Projects for Unaccounted transactions and transferred to GL. This will be done using SubLedger Accounting in 12i.
Copyright © 2006 Deloitte Development LLC. All rights reserved.10
Sources of Project Cost• Following are the main sources of project cost collection:
– Payables: Accounted supplier invoices with POET information will be interfaced to Projects.
– Purchasing: POs and Requisitions will be interfaced as Commitments to Projects. When AP invoice is interfaced, requisition will be removed.
– Expense Reports: iExpense allows entry of Project related expense reports. Once reports are imported as invoice, these can be interfaced to Projects.
– Inventory and WIP: Accounted manufacturing cost will be interfaced if Project Manufacturing is used.
– WebADI: Accounted or Unaccounted costs can be uploaded directly into Projects using WebADI.
– Manual Exp Batch: Unaccounted pre-approved manual expenditure batches can be entered in Projects.
– Burden Cost: Cost collected as above can further be loaded with markup in Projects. This will create accounting for additional markup cost.
Copyright © 2006 Deloitte Development LLC. All rights reserved.11
Supplier Invoice Cost Collection• Once a Supplier invoice is accounted in Payables, it can be collected immediately in Projects.
• Program “PRC: Interface Supplier Costs” needs to be run to collect costs from Payables.
Copyright © 2006 Deloitte Development LLC. All rights reserved.12
Cost Upload using WebADI• Oracle provides 4 different WebADI to upload unaccounted as well as accounted costs into Projects.
Copyright © 2006 Deloitte Development LLC. All rights reserved.13
Manual Exp Batch• Manual Expenditure Batch can be entered for Timecards, Usage, Misc Transaction, etc.
• After expenditure batch entry, following program needs to be run for generating cost and accounting:
– PRC: Distribute Usage and Misc Costs (This will change depending on Exp Type Class entered)
– PRC: Generate Cost Accounting Events
– PRC: Create Accounting
Copyright © 2006 Deloitte Development LLC. All rights reserved.14
Manual Exp Batch - Header
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Manual Exp Batch - Lines
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Knowledge Check
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Question 1Q. What does POET stands for?
-----------------
Copyright © 2006 Deloitte Development LLC. All rights reserved.18
Question 1Q. What does POET stands for?
-----------------
Answer – Project Number
Organization (Expenditure)
Expenditure Type
Task Number
Date
Copyright © 2006 Deloitte Development LLC. All rights reserved.19
Question 2Q. Projects does not uses SubLedger Accounting (SLA) for creating accounting entry?
o True
o False
Copyright © 2006 Deloitte Development LLC. All rights reserved.20
Question 2Q. Projects does not uses SubLedger Accounting (SLA) for creating accounting entry?
o True
o False
Answer – False, Projects uses SLA for creating accounting entry for unaccounted costs.
Copyright © 2006 Deloitte Development LLC. All rights reserved.21
Cost Collection - Exercise• Upload a cost line using WebADI
Copyright © 2006 Deloitte Development LLC. All rights reserved.22
Capitalization
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Capitalization• Capitalization process can be done only for Capital projects.
• Capitalization process is very simple and completely integrated with Assets module.
• Put the Date Placed in Service and run following programs:
– PRC: Generate Asset Lines
– PRC: Interface Assets to Oracle Assets
• Above process will interface the data to Fixed Assets Interface, from where it can capitalized.
• No Accounting is generated in Project module for capitalization process. Accounting will be generated in Assets module.
Copyright © 2006 Deloitte Development LLC. All rights reserved.24
Capitalization
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Projects Billing
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• Allows you to define revenue and invoicing rules for your projects, generate revenue, create invoices, and integrate with other Oracle Applications to process revenue and invoices.
• Enter project customers and contacts with whom you have negotiated and contracted project work
• Enter agreements (contracts) from your customers and fund projects with those agreements
• Generate revenue using various methods including time and materials, percent complete, and cost plus
• Create draft invoices from detail transactions and milestones for online approval by your project or accounting managers
• Interface revenue to Oracle General Ledger and invoices to Oracle Receivables while maintaining a detail audit trail
• Report project revenue, invoice, and receivables status online and in reports
Projects Billing
Copyright © 2006 Deloitte Development LLC. All rights reserved.27
Business Process
Create Project
Define Tasks, project and Task options,
revenue and invoicing rules
Project Manager
Enter Project Customer
ProjectResources
Awards Contract
Customer
Project Costs
Create Agreement
Contract/Account Manager
Fund Projects
Enter Timecards, Expense Reports
Project Accountant
Enter Usage and Miscellaneous
expenses, import inventory and manufacturing
costs
Enter Cost and Revenue
Budgets
Project Budgets
Project Accountant
Accrue Revenue
Interface Revenue to
General Ledger
Generate Invoices
Interface to Accounts
Receivables
Print Invoices
Copyright © 2006 Deloitte Development LLC. All rights reserved.28
Invoicing and Revenue Process Flow
© 2006.Deloitte Consulting India Private Limited. All rights reserved.29
StartIdentify
Milestone
GenerateEvents onmilestone
GenerateDraft Invoice
ReviewDraft Invoice
ApproveInvoice
NO
YES
Run CancelDraft Invoice
Approve& Release Invoice
Run InterfaceInvoice to
Receivables
RunAuto Invoice
RunTie Back
End
Project Invoicing Flow
© 2006.Deloitte Consulting India Private Limited. All rights reserved.30
Revenue Generation Flow
StartIdentify
Milestone
GenerateEvents onmilestone
GenerateDraft
Revenue
Review theRevenue
Generated
Release theRevenue
NO
YES
Run CancelDraft
Revenue
InterfaceRevenue to
GLEnd
© 2006.Deloitte Consulting India Private Limited. All rights reserved.31
Billing and Revenue Generation Methods
Copyright © 2006 Deloitte Development LLC. All rights reserved.32
Billing and Revenue Generation Method
• Oracle Provides the following combination for Billing and Revenue Generation
Billing Method Description
Cost/Cost Accrues revenue and bills using the ratio of actual cost to budgeted cost (percent complete)
Cost/Event Accrues revenue using the ratio of actual cost to budgeted cost (percent complete) and bills based on events
Cost/Work Accrues revenue using the ratio of actual cost to budgeted cost (percent complete) and bills as work occurs
Event/Event Accrues revenue and bills based on events
Event/Work Accrues revenue based on events and bills as work occurs
Work/Event Accrues revenue as work occurs and bills based on events
Work/Work Accrues revenue and bills as work occurs
Copyright © 2006 Deloitte Development LLC. All rights reserved.33
Distribution Rule in Project Template
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Distribution Rules – Cost/Cost
• Accrue on % Complete and Bill on % complete
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000
Revenue = (50,000/80,000)*120,000 = $ 75,000
Billing = (50,000/80,000)*120,000 = $ 75,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.35
Distribution Rules – Cost/Event
• Accrue on % complete and Bill on events
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000Event created for $ 80,000 when actual cost reaches $ 50,000
Revenue = (50,000/80,000)*120,000 = $ 75,000
Billing = $ 80,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.36
Distribution Rules – Cost/Work
• Accrue on % complete and Bill as work occurs
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000Employee on a project ‘A’ has worked for 100 hours.Billing rate for this employee is 650
Revenue = (50,000/80,000)*120,000 = $ 75,000
Billing = 650*100 = $ 65,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.37
Distribution Rules – Event/Event
• Accrue on events and bill on events
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000Event created for $ 80,000 when actual cost reaches $ 50,000
Revenue = $ 80,000
Billing = $ 80,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.38
Distribution Rules – Event/Work
• Accrue on events and bill as work occurs
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000
Event created for $ 80,000 when actual cost reaches $ 50,000Employee on a project ‘A’ has worked for 100 hours.Billing rate for this employee is $ 650 per hour
Revenue = $ 80,000
Billing = $ 650 * 100 = $ 65,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.39
Distribution Rules – Work/Event
• Accrue as the work occurs and bill on events
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000
Event created for $ 80,000 when actual cost reaches $ 50,000Employee on a project ‘A’ has worked for 100 hours.Cost rate for this employee is $ 450 per hour
Revenue = $ 450 * 100 = $ 45,000
Billing = $ 80,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.40
Distribution Rules – Work/Work
• Accrue as work occurs and bill on work occurs
Actual Cost on a Project = $ 50,000Budgeted Cost on a Project = $ 80,000Budgeted Revenue on a Project = $ 120,000
Employee on a project ‘A’ has worked for 100 hours.Cost rate for this employee is $ 450 per hourBilling rate for this employee is $ 650 per hour
Revenue = $ 450 * 100 = $ 45,000
Billing = $ 650 * 100 = $ 65,000
Copyright © 2006 Deloitte Development LLC. All rights reserved.41
Knowledge Check
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Question Q. Which distribution rule combinations Oracle provides for Revenue and Invoice generation?
-----------------
Copyright © 2006 Deloitte Development LLC. All rights reserved.43
Question Q. Which distribution rule combinations Oracle provides for Revenue and Invoice generation?
-----------------
Answer – Cost/ Cost
Cost/ Event
Cost/ Work
Event/ Event
Event/ Work
Work/ Work
Work/ Event
Copyright © 2006 Deloitte Development LLC. All rights reserved.44
Billing Terminologies and Functionalities
© 2006.Deloitte Consulting India Private Limited. All rights reserved.45
• Bill rate is an amount or percentage that is applied to a unit (of time and materials) to calculate revenue and invoicing. Bill rates are used for time and materials projects. You can specify the following bill rates in Oracle Projects:
– Employee Bill Rates: Standard hourly bill rates or percentage markups assigned to employees. You can assign a different bill rate to each employee for customer invoicing.
– Job Bill Rates: Standard hourly bill rates assigned by job title. For example, all System Administrators can have one bill rate, while all Consultants can have a different bill rate.
– Non–Labor Bill Rates: Standard bill rates or standard markups assigned to non–labor expenditure type or non–labor resources.
Bill Rate
© 2006.Deloitte Consulting India Private Limited. All rights reserved.46
• Signifies the occurrence of an event in the course of the project having
a revenue and/or invoice impact. Eg: A milestone, invoice reduction– Automatic– Manual
Event
© 2006.Deloitte Consulting India Private Limited. All rights reserved.47
Invoicing Terms• Bill Through Date: The date through which Oracle Projects picks up eventsand expenditure items to be billed on an invoice.
• Invoice Date: The date that is printed on the invoice and the date on which an invoice receivables aging begins. You specify the invoice date when you generate the invoice.
• Billing Cycle Code: The code that indicates when to generate invoices automatically a project; determined from the project. The bill cycle code is used only during mass invoice generation.
• First Bill Offset Days: The number of days that elapse between the project start date and the date of the project’s first invoice; determined from the project. Bill offset days are used only during mass invoice generation.
• Invoice Currency: The invoice currency selected for the project customer.
• Invoice Transaction Type: If you choose decentralized invoice processing during implementation, this is the name of the organization that is the invoice processing organization for the project owning organization. Otherwise, this is the default transaction type of Projects Invoice or Projects Credit Memo based on the PROJECTS INVOICES batch source.
© 2006.Deloitte Consulting India Private Limited. All rights reserved.48
Invoice Generation• You can generate an invoice for a single project, or for all projects having potential invoices
– For a single project, run PRC: Generate Draft Invoice process
– Submit the PRC: Generate Draft Invoices for a Range of Projects in the Submit Request window to run multiple invoice generation processes in parallel.
• When you generate an invoice, Oracle Projects first select projects, tasks, and their associated events and expenditure items that are eligible for billing
• Oracle Projects next creates invoice items for billing events, revenue events, and for expenditure items based on invoice formats defined for labor and non–labor items. When Oracle Projects creates invoice items, it also searches for available funding for each invoice item.
© 2006.Deloitte Consulting India Private Limited. All rights reserved.49
Revenue & Invoice Accounting
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Revenue and Invoice Accounting• Revenue and Invoice Accounts Function: When you run the PRC:
Interface Revenue to General Ledger process and then the PRC: Interface Invoices to Receivables process, Oracle Projects uses the Revenue and Invoice Accounts function to determine which accounts to use when it interfaces draft revenue and draft invoices.
• The Revenue and Invoice Accounts function consists of the following transactions:
– Unbilled Receivable Account– Accounts Receivable– Invoice Rounding Account– Unearned Revenue Account– Invoice Write–Off Account
© 2006.Deloitte Consulting India Private Limited. All rights reserved.51
Revenue and Invoice Accounting
• Revenue Accrual prior to billing
Account Debit Credit
Unbilled Receivables 200
Revenue 200
• Invoicing prior to Revenue Accrual
Account Debit Credit
Receivables 200
Unearned Revenue 200
© 2006.Deloitte Consulting India Private Limited. All rights reserved.52
Revenue and Invoice Accounting• Revenue Accrual prior to invoicing and invoice partial amount of work
Account Debit Credit
Unbilled Receivables 200
Revenue 200
Account Debit Credit
Receivables 100
Unbilled Receivables 100
© 2006.Deloitte Consulting India Private Limited. All rights reserved.53
Revenue and Invoice Accounting• Invoicing prior to Revenue Accrual and later Accrue more than Invoice
Account Debit Credit
Receivables 200
Unearned Revenue 200
Account Debit Credit
Unearned Revenue 200
Unbilled Receivables 100
Revenue 300
© 2006.Deloitte Consulting India Private Limited. All rights reserved.54
Auto Accounting Rules
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Auto Accounting Rules
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Reporting
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Project Status Inquiry• Oracle has provided many seeded reports and online forms for reporting purposes.
• Project Status Inquiry screen is an online dashboard, which provides real time information on the cost, commitments, revenue, billing and budgets for one or multiple projects.
• This form can be configured to meet complex requirement for online reporting. Custom SQLs can be written to derive any data.
• This form is refreshed each time “PRC: Update Project Summary Amounts” program is run.
© 2006.Deloitte Consulting India Private Limited. All rights reserved.58
Project Status Inquiry
© 2006.Deloitte Consulting India Private Limited. All rights reserved.59
End of Day 2