Enterprise Asset

Management (eAM)
Work Order billing
An Oracle White Paper
October 2004
Version 1.0

eAM Work Order Billing

EXECUTIVE SUMMARY.................................................................................................. 1
INTRODUCTION............................................................................................................... 1
CONCEPTS IN EAM BILLING...................................................................................... 2
DESCRIPTION OF THE INITIAL SETUP................................................................. 2
eAM Parameter - Invoice Billable Items Only......................................................... 3
Setting up billable item...................................................................................................... 4
Cost Plus setup for items......................................................................................... 4
Price List setup for items......................................................................................... 5
Setting up billable resource .............................................................................................. 6
Maintenance Bill Of Material (BOM) & Routing........................................................ 8
Setting up billable activity................................................................................................. 9
Setting up customers.......................................................................................................10
Setups in Oracle Receivable...........................................................................................11
WORK ORDER..................................................................................................................13
BILLING...............................................................................................................................15
Bill by requirements.........................................................................................................15
Cost Plus- billing basis ...........................................................................................16
Price List - billing basis ..........................................................................................18
Bill by activity...................................................................................................................19
CREATING AR INVOICE..............................................................................................20
Checking invoice details .................................................................................................20
CONCLUSION...................................................................................................................22

ii

eAM Work Order Billing

EXECUTIVE SUMMARY

Oracle Enterprise Asset Management (eAM) provides features to create work

orders. For these work orders , it is possible to estimate and track costs involved to
complete the work . In certain scenarios the cost involved in a work order is to be
charged across to a customer . This functionality of charging customers by means
of an invoice is currently available through eAM Work Order Billing.
INTRODUCTION

Certain costs like material, labor and equipment will be involved in completing a
work order. If the maintenance department maintains the enterprise asset then the
costs are generally tracked by the general ledger accounts. But the costs involved
are not always limited to the particular department /organization . In some
scenarios, the costs of a work order need to be charged to a customer, be it Internal
customers (departments within an organization) or external customers. eAM billing
is used for the above mentioned purpose. Work order Billing enables invoice to be
created based on the material or resources used for the work order or based on the
asset activity.
eAM billing provides features to bill both internal and external customers. The
price involved in the work order could be over- ridden by a certain percentage.
The cost for the material, resource or the activity could be defined as a particular
cost or could be picked up from a price list.
This paper covers the basic setup and functionality of eAM Billing.
EAM Billing could be done either based on requirements or based on activity. This
paper covers both the type of billing with an example.
Readers with an understanding of basic concepts of enterprise Asset management
and costing steps would be in a position to appreciate the entire gamut of this
paper.
Note: The paper has been written with Oracle Application Release 11i in mind
(11.5.9 to be specific). The screen shots indicated pertain to the 11i.

1 eAM Work Order Billing

CONCEPTS IN EAM BILLING

EAM Billing could be done either

based on the material and resources involved in the work order. This is known
as Bill By Requirements
or based on Asset activity costs associated with the work order. This type of
billing is known as Bill By Activity
In EAM Billing, an item represents an activity, material, or a resource, which is
charged to the customer. The billing basis for the item could be either Cost Plus or
Price List.
Cost Plus - The cost plus method uses the costs associated with the item.
Therefore, the item should have a cost defined for it. Ensure that within the
costing tabbed region for the item, the following two check boxes are selected:
Costing Enabled and Inventory Asset Value.
Price List - The price list method uses a specified price ilst. Therefore, the
specified item should have an entry in the price list.
The billing basis affects the item setup. If you want the ability to use both types of
billing basis for the item, you need to follow both setups. It is possible to have the
flexibility of using both billing basis types for an item and to gain that flexibility, it
would be necessary to set up both costs and prices for that item.
DESCRIPTION OF THE INITIAL SETUP

Two organizations are used in this paper. The manufacturing organization is

FORD MANUFACTURING UNIT, FM. The eAM organization attached to FM
is FORD MAINTENANCE UNIT, FMU. FMU treats FM as an external
organization. The definition for the FM organization is shown below :

2 eAM Work Order Billing

The FMU organization takes up the maintenance of Pickup trucks that are used in
the Ford Manufacturing unit (FM). The Asset Group defined for the pickup trucks
in FMU is Pick Up Trucks. The Asset numbers under this Asset Group are
PUT001, PUT002 and PUT003.
There are three major activities that FMU carries out on the Pick Up trucks:
Tire Retreading
Brake maintenance
Engine Overhauling
In this paper, Invoices for the Tire Retreading & Brake maintenance activities
would be billed by Requirement and the invoices for Engine Overhauling
Activity would be based on asset activity cost .
The billing basis for the Tire Retreading activity would be Cost Plus and that
for the brake Maintenance and the Engine Overhauling activities would be
Price List.
eAM Parameter - Invoice Billable Items Only

In the Enterprise Asset Management responsibility, access the eAM Parameters

window to decide whether Invoice could be raised only for items/ activities that are
billable. This is decided by the Invoice billable Items Only parameter.
Billable items are those that have a populated value within the Billing Type field,
within the Service Tab, of the Master Item window. Billing Type is relevant only if
this check box selected. Also, selecting this check box means that a different item
to be billed can be chosen.

3 eAM Work Order Billing

Setting up billable item

Cost Plus setup for items

The Work orders for the Tire Retreading activity are based on requirements and
the billing basis is Cost plus. To have the items billed based on Cost plus,
Ensure that within the costing tabbed region for the item, the following two
check boxes are selected: Costing Enabled and Inventory Asset Value.

Within the Service tabbed region, within the Master Item window, select
Material as the Billing Type. This is only relevant if you selected the Invoice
Billable Items Only check box, within the Enterprise Asset Management
Parameters window. Do NOT select the Serviceable Product check box.

Setup the item costs in the cost setup window (Navigation: Cost Definition /
Item Costs / Item Costs).

4 eAM Work Order Billing

The cost setup for the material Precured Rubber Thread is shown below:

The cost type used here is Maint. Similar setup is done for Black vulcanizing
cement and Maintenance oil. The cost for each item involved in the Tire
Retreading activity is shown below :
Material
Precured Rubber tread
Black Vulcanizing Cement
Maintenance Oil

Cost
$ 2.00
$ 1.00
$ 0.50

Price List setup for items

The Billing for the Brake maintenance Activity is done based on requirements
and the billing basis is Price List. To have the items billed based on the Price list
The item should have the Customer Ordered check box selected within the
Order Management tabbed region, within the Master Item window.

Within the Service tabbed region, within the Master Item window, select
Material as the billing type. This is only relevant if the Invoice Billable Items
Only check box is selected in the Enterprise Asset Management Parameters
window. The Serviceable Product check box SHOULD NOT be selected.

5 eAM Work Order Billing

The list Price for the material required for the Brake Maintenance activity is
added to the Corporate Price List as shown below (Navigation: Pricing /
Price Lists / Price List Setup) :

The cost for each material item involved in the Brake maintenance Activity is
shown below :
Material

Cost
$ 4.00
$ 1.00
$ 0.75

Brake Lining
Brake Oil
Maintenance Oil

After setting up the items, receive the material into the organization.
Setting up billable resource

Define an item that represents a resource. Enable the Costing Enabled and
Inventory Asset Value in the Costing tabbed region (OR) the Customer
Ordered check box in the Order Management tabbed region depending on
whether the costing basis is Cost Plus (OR) Price list.
Within the Service tabbed region, within the Master Item window, select
Labor as the billing type. . The Serviceable Product check box SHOULD

6 eAM Work Order Billing

NOT be selected.

Define a resource within the Resources window. In the Billing block (in the
Resources window), attach the item (resource item defined in the first step).

Rates for the resource defined in the resource window will not be used in billing.
The billing rates defined for the associated item will be used either from the item
cost or from the item price in the price list.
Assign the Resource to the Department.
The Resource details for the Tire Retreading Activity are
Resource

Billing
Basis

Resource Item

Department

Cost

TRW

Cost plus

TRW Resource
item

Haden

$ 1.00

Helper

Cost plus

Helper resource
item

Haden

$0.75

The Resource details for the Brake Maintenance Activity are

Resource

Billing
Basis

Resource Item

Department

Cost

BMW

Price List

BMW Resource
item

Haden

$ 1.00

Helper

Price List

Helper resource
item

Haden

$0.75

7 eAM Work Order Billing

Maintenance Bill Of Material (BOM) & Routing

The Tire Retreading and the Brake Maintenance activ ities are set up using the
Activities window.
The maintenance BOM for Tire Retreading activity is shown below :

Maintenance Routing for the Tire Retreading activity is shown below :

The BOM and Routing for the Brake Maintenance activity is defined using the
same steps as mentioned for the Tire Retreading activity.
For convenience, the quantity of the items in the BOM and the usage in the routing
is defined as 1 for both the activities.

8 eAM Work Order Billing

Setting up billable activity

Invoices raised for the Engine Overhauling activity will be billed based on
activity costs. To set up a billing activity, follow the steps mentioned below.
Within the Invoicing tabbed region, within the Master Item window, select
the Invoiceable Item and Invoice Enabled check boxes.

The billing basis for this activity is Price List. In order to set up the activity to be
billed based on the price list, the Customer Ordered check box must be selected
within the Order Management tabbed region, in the Master Item window .

9 eAM Work Order Billing

The unit price for the activity is set up in the Corporate Price List (Navigation:
Pricing / Price Lists / Price List Setup). The unit price for the Engine Overhaul
activity is $10.

Setting up customers

The invoice has to be created against a customer .

The setup of customers could be done under Accounts receivable. Navigate to the
customers definition form (Navigation: Customers / Standard).
In the Addresses tab, click on New/Open button to add/edit an existing
address. In the Customer Addresses form, navigate to the Business Purpose
tab and ensure to add Bill to usage.

10 eAM Work Order Billing

In the Customer- Standard form, navigate to the Classification tab. Choose the
Customer Type. The options available here are External and Internal. Ford
Manufacturing Unit is treated as an external organization to FMU.

Setups in Oracle Receivable

Check whether Work Order Billing is set up as a source for transactions.

Navigate to the Transaction sources window (Navigation: Accounts Receivable:
Setup / Transactions / Sources) .

Another setup to be verified is whether the flexfield definition for work order
billing is defined. Navigate to the descriptive flexfield definition (Navigation:
Setup / Financials / Flexfield / Descriptive / Segments). Query for Line
Transaction Flexfield in the Title field. Check whether the Work Order
Billing code exists within the Context Field Values region. The Work Order
Billing structure must have the following segments:

11 eAM Work Order Billing

Work order

Work Order Id

Invoice Number

Line Number.

The definition of the flexfield is shown below:

12 eAM Work Order Billing

WORK ORDER

Create a work order for the asset number activity combination.

The work order, BILL1, created for the PUT001 Tire Retreading is shown
below ( The material and resource requirements are also shown) :

Similarly Work orders BILL2 and BILL3 are created for PUT001 Brake
maintenance and PUT001 Engine Overhaul respectively.
If the Billing is based on requirements, ensure that the material and the
resources are applied to the resources. Only if the material and resource are applied
to the work order they will be seen in the billing.
Issue material to the work order using the WIP component issue (Navigation:
Work Order Transactions / Material Transactions) or via a material issue
verification. The material transaction for the Work order Bill1 is shown below

13 eAM Work Order Billing

Charge resources to the work order using the resource transaction screen
(Navigation: Work Order Transactions / Resource Transactions).

The material and resource transaction for BILL2 is also done as shown for BILL1
Complete the work order (Navigation: Work Order Completion / Work Order
Completion).
Change the status of the work order to COMPLETE NO CHARGES.

14 eAM Work Order Billing

BILLING

Work orders created for the asset number activity combination can be billed. An
important point to be noted here is that only work orders with status as either
CLOSED or COMPLETE NO CHARGES are eligible for Billing.
Bill by requirements

In this type of Billing , the bill is created based on the material and resources
involved in the work order. The Bill by requirement is discussed below for the
work orders BILL1 and BILL2.
Steps
The Find Work Orders screen is used to search for work orders for which
billing is to be done.
The work order search could be done based on either one or combination of
some of the following criteria:

Work Order or Work request number

Asset Group or Asset number

Asset Activity

Work Order status

Start or completion dates of the work order

Owning Department

Click on Find button. This would populate the work orders block with all the
work orders which satisfy the condition defined in the first step.

15 eAM Work Order Billing

Choose the Bill By Requirements button.

If the bill is to be raised for an internal customer, then mark the Internal
Customer check box. If this is marked then the list of values for the
Customer field is limited to internal customers alone. If the profile is left
unchecked, then the customers LOV would display both the internal & external
customers.
Choose the customer from the list of values provided. The work order BILL1 is
to be billed to the FU organization . The customer details entered for the billing
is shown below :

The Billing Basis for the work order could be either Cost Plus or Price List.
Cost Plus- billing basis

All billable items should be costing enabled (In the Costing tabbed region for the
item, Costing Enabled check box must be checked) and the cost must be defined
for the item under the cost type which would be used for the billing purpose.
The work order BILL1 would be billed based upon the costs defined for the items.
Enter the cost type to be used for the billing purpose.
Enter the markup percentage. The markup percentage would increase the
defined item cost by the percentage mentioned.. In this example, for BILL1, the
markup % is 20%.
Enter the billing currency. There are times when the billing currency would be
different from the organization currency. In such scenarios, the currency
conversion block must be populated with the appropriate values. For BILL1, the
organization currency and the billing currency are the same (USD).

16 eAM Work Order Billing

Click on Calculate Amounts button. This calculates the unit rates to be used
for each billable item and not the total amount.

In the Billing by Requirements block, it is possible to change the quantity for

the items. This quantity to be billed should not be greater than the difference
between the applied quantity and the previously billed quantity. The applied
quantity is what has been applied/used by the work order. For material, it
implies the material issued to the work order. For resources, it implies the
resources charged to the work order.
Choose the items to be billed. For BILL1, the maintenance oil used would not
be billed to the customer. All the other items are to be billed. The two screen
shots provided below show the billing details :

17 eAM Work Order Billing

The calculated/ billed amount for the work order BILL1 is $5.70
Click the Initiate Billing button. This would populate the
RA_INTERFACE_LINES_ALL interface table. A success message will be
displayed as shown below:

In the Find Work Orders window, click on View Past Details to get
information about the invoices created.

Price List - billing basis

All the steps mentioned above for the work order BILL1 hold good for the Price
List method. The only exception to the steps mentioned above would be choosing
of the billing basis. In the Work Order Billing form, choose the Billing Basis
as Price List and choose the price list. All billable items should be present on the
price list selected.
It is not possible to mark up the price in this case.
The Work Order BILL2 will be billed based on the Corporate price list. The
billing definition is shown below:

18 eAM Work Order Billing

The Billing amount for BILL2 is $7.50

Bill by activity

Finding the work order is similar to the steps mentioned under Bill by
Requirements section.
Choose Bill by Activity.
Enter the customer details and the billing basis as mentioned under Bill by
Requirements. Click Calculate Amounts.
Initiate billing.
For BILL3, the billing basis is Price List and the price list is Corporate.

19 eAM Work Order Billing

CREATING AR INVOICE

The next step in billing process is to create the invoices for the work orders that
were billed.
The AutoInvoice Master Program is run to create invoices from the lines that
were populated in the RA_INTERFACE_LINES_ALL table. (Navigation :
Accounts receivable : Interfaces / Auto invoice).

Choose a suitable value for Number of Instances parameter. An instance

refers to how AutoInvoice groups and processes transactions. Submitting a
greater number of instances enables import of transactions into Receivables
faster.
For the transaction source, choose Work Order Billing as the value.
Enter a value for the parameter Default Date The date entered must be in an
open/future period.
Submit the request.
Checking invoice details

To view the details of the invoice created, navigate to the Transactions form
(Navigation : Accounts Receivable : Transactions / Transactions).
Query based on the Transaction number and the source (Work Order Billing). The
invoice created for the work orders BILL1, BILL2 & BILL3 is shown below :

20 eAM Work Order Billing

In the Transactions form, click on Line Items to view the invoice lines. In the
following invoice, lines 1 4 are the details imported for BILL1, lines 5-9 are for
BILL2 and line 10 is for BILL3. The billed amounts are as follows:
$5.70 for BILL1
$7.50 for BILL2
$10.00 for BILL3.
The invoice total amounts to $23.20.

Please note that the item description seen in the imported invoice transaction line is
not the description of the item but displays the work order name and wip_entity_id
(against which the item/activity is billed).

21 eAM Work Order Billing

CONCLUSION

eAM Billing functionality was introduced in EAM.I. This paper aimed at covering
the basic setups and the process of eAM Billing taking a hypothetical business
scenario and test data. The paper covers the complete cycle starting from setups in
eAM & Receivables to creation of invoices.

22 eAM Work Order Billing

Enterprise Asset Management (eAM) Work Order billing

October 2004
Author: Karthikeyan Balasubramaniam, Vikrant Vartak
Contributing Authors: N/A
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