Oracle Projects

10th October, 2005

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Contents
Overview Of Projects Oracle Project Costing Concepts Oracle Projects Agreement

Oracle Project Funding Concepts

Oracle Project Billing

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Oracle Projects Concepts

A project is a primary unit of work that can be broken down into one or more tasks.

You can use projects to track: Indirect work Product/asset development Services

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Project Classes

You can use three predefined project classes that track the following types of information: Indirect projects: Overhead activities and costs Capital projects: Product/asset development activities and costs, used to capitalize project costs as one or more assets Contract projects: Activities, cost, revenue, and billing for work performed for and reimbursed by a customer
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Oracle Projects Features

Oracle Projects has many features that address common business concerns. Oracle Projects is composed of: Project-tracking tools Cost collection and calculation capabilities Project asset creation Flexible revenue accrual and invoicing functions Online reporting Full Adjustment Capabilities Integration with other Oracle and non-Oracle financial applications
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Over View Of Oracle Projects

Enter Project Approve Enter Budget Approve

Enter Labor,Usage, Misc Costs.

Generate Rev. & Invoice Or Asset

CIP Costs For Capital Projects

Revenue

Invoice

Import

Interface Supplier Costs

FA

GL AR
Project Cost Collection Approve Invoice

Issue Material

Enter Invoice

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Contents
Overview Of Projects Oracle Project Costing Concepts Oracle Projects Agreement

Oracle Project Funding Concepts

Oracle Project Billing

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Types of Costs
You record transactions against a project to record actual work performed or cost incurred. Timecards Expense reports Usage logs Posted supplier invoices (posted to GL) Inventory Work in process Miscellaneous transactions Burden transactions

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Types of Costs

You also record transactions against a project to record committed costs. Requisitions Purchase orders Pending supplier invoices (not posted to GL)

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Methods of Cost Entry

Import the charges using transaction import

(timecards, expense reports, usage logs, inventory, work in process, miscellaneous, and burden transactions)

Record supplier transactions for projects in Oracle Purchasing and Oracle Payables (requisitions, purchase orders, and supplier invoices)

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Distributing Costs

After you distribute costs: Detail and summary cost amounts can be reported by: Project and task Organization or employee Expenditure type Period Resource list Budget Asset lines can be generated for capital projects. Cost distribution lines can be interfaced to GL/AP.
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Expenditure Categories
An expenditure category describes the source of organization's costs. For example, an expenditure category with a name such as Labor refers to the cost of labor. An expenditure category with a name such as Supplier refers to the cost incurred on supplier invoices. Define Expenditure Category:

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Revenue Category
A revenue category describes a source of your organization's revenue. For example, a revenue category with a name such as Labor refers to labor revenue.

Define Revenue Category:

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Unit
A unit of measure records quantities or amounts of an expenditure item Define Unit:

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Expenditure Type
Define Expenditure Types:

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Non-Labor Resource
Define Non-Labor Resource:

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Employee Cost Rate

Entering Employee Cost Rate:

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Project Costing Flow

Comprehensive online inquiry and reporting Collect costs

Enter Rreqs/ POs in PO
External transactions Enter Time and Expenses Enter preapproved expenditures

Define Identify projects business terms and rules Define

assets Enter project Enter budget Baseline budget

Place asset in service

Interface Import to GL Generate asset lines Review and adjust asset lines Interface to Oracle Assets

Enter supplier invoices

Transaction import Upload Interface Distribute costs

Adjustments

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Capital Projects Processing Flow

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Capital Projects Flow

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Contents
Overview Of Projects Oracle Project Costing Concepts Oracle Projects Agreement

Oracle Project Funding Concepts

Oracle Project Billing

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Overview of Agreements

An agreement is an authorization from a customer that serves as a basis for funding and work. Types of agreements include the following: Purchase order Verbal agreement Service agreement Contract

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Contents
Overview Of Projects Oracle Project Costing Concepts Oracle Projects Agreement

Oracle Project Funding Concepts

Oracle Project Billing

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Concepts of Funding Projects

You assign some or all of an agreements funds to one or more contract projects and/or top tasks. Key requirement: For the budget baseline to succeed, funding must equal the revenue budget.
One agreement to one project
One agreement to many projects and/or top tasks Many agreements to one project
Customer A 1,000,000 revenue Customer B 1,000,000 revenue Customer C 150,000 revenue
FUND 1,000,000 Project X1 revenue budget: 1,000,000 Project Y1 Task 1: 50,000 Task 2: 100,000 Project Z1 revenue budget: 200,000

50,000 100,000

100,000

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Project Versus Top Task Funding

Agreements can fund at the project or top task level. You decide whether to use project or top task funding based on the requirements of your project and your company. Use of funding: Denotes how much revenue/billing is assigned to a unit of work (project/top task) for reporting Can control how much a project or top task accrues and bills (if using hard limits)

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Concept of Hard Limit

A hard limit places a firm cap on the revenue and invoice amounts that you can accrue and bill a project or top task. You cannot accrue and bill past the funded amount. If a hard limit is not used, you can accrue and bill revenue and invoice amounts above the funded amount. For each agreement, you specify whether to impose a hard limit. Each project and top task limit is controlled by the agreements that fund it. Hard limits control both revenue accrual and billing.
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Entering Agreements

Comprehensive online inquiry and reporting Identify business terms and rules Define projects
Enter project and tasks

Collect costs

Recognize revenue
Enter revenue events Interface

Generate invoices
Enter invoice events Generate invoices Interface Approve invoice Print customer invoice

Enter agreements

Enter revenue budget Baseline budget

Generate revenue Update project summary

Fund project

Adjustments

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Entering Agreements

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Agreement Summary Amounts

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Entering Funding Lines

Comprehensive online inquiry and reporting Identify business terms and rules Define projects
Enter project and tasks

Collect costs

Recognize revenue
Enter revenue events Interface

Generate invoices
Enter invoice events Generate invoices Interface Approve invoice Print customer invoice

Enter agreements

Enter revenue budget Baseline budget

Generate revenue Update project summary

Fund project

Adjustments

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Funding Projects

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Viewing Funding Summary

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Viewing Project Funding

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Maintaining Agreements and Funding

During the project life cycle, you may need to change the funding amount. Increase funding by creating new funding lines. Fund unallocated agreement funds to projects or tasks. Increase agreement based on additional customer funds. Create a new agreement based on additional customer funds.

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Maintaining Agreements and Funding

Reverse funding by creating negative funding lines. You can reverse funding up to the amount not accrued/invoiced for the project or top task against the agreement The total of all funding lines cannot exceed the total agreement amount.

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Contents
Overview Of Projects Oracle Project Costing Concepts Oracle Projects Agreement

Oracle Project Funding Concepts

Oracle Project Billing

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Overview of Invoices

Comprehensive online inquiry and reporting Identify business terms and rules Define projects
Enter project and tasks

Collect costs

Recognize revenue
Enter revenue events Interface

Generate invoices
Enter invoice events Generate invoices Interface Approve invoice Print customer invoice

Enter agreements

Enter revenue budget Baseline budget

Generate revenue Update project summary

Fund project

Adjustments

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Methods of Invoicing
You specify the invoicing method based on the distribution rule that you select for the contract project.
Supported Distribution Rules
Distribution Rule
Work/Work

Revenue Method
As-Work-Occurs

Invoicing Method
As-Work-Occurs

Work/Event
Cost/Work Cost/Event Cost/Cost Event/Event

As-Work-Occurs
Cost-to-Cost Cost-to-Cost Cost-to-Cost Event/Milestone

Event/Milestone
As-Work-Occurs Event/Milestone Cost-to-Cost Event/Milestone

Event/Work

Event/Milestone

As-Work-Occurs

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Event Billing

With event billing, you invoice projects based on predefined amounts that are not directly related to detail expenditure items. You define the events (also referred to as milestones) to specify: How much to bill When to bill (can specify future dates) An invoice is generated after the scheduled event date.

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Types of Invoicing Events

When you create an event, you assign it to an event type.

You define all event types during implementation; each event type is mapped to an event type classification. Oracle Projects uses these classifications to distinguish between types of events.

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Review of Entering Events

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Bill Rate Schedule

A bill rate schedule maintains the rates and percentage markups over cost that you Charge clients for your labor and non-labor expenditures. You can define bill rate schedules for your entire organization, or define separate bill rate schedules for

individual business units.

We Can Define One Of The Following Schedule Type In Each Bill Rate Schedule:

Employee: We Can Define standard Hourly Bill Rates Or Percentage markups by employee. Job: We Can Define Standard Hourly Bill Rate Against Job. Non-Labor: We Can Define Standard Bill rates or percentage markups by non-labor expenditure type or non-labor resource.

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Functions of Invoice Generation

When you generate an invoice, the Generate Draft Invoice process: Creates an invoice from the eligible expenditure items and events Formats the invoice lines according to the invoice line formats defined during project setup invoices against the available funding based on the hard limit configuration of the agreement that is funding the project/top task . Retains a percentage of the invoice as specified during project setup

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Overview of Invoice Flow

Oracle Projects has these primary functions for invoicing:

Invoice Flow
Approve invoice
Generate draft invoice Review, adjust invoice Approve invoice Release invoice Interface invoice to AR

Print invoice

Send invoice to customer

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Billing Cycles

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PA Period
Project accounting periods track Oracle Projects data on a periodic basis. PA periods may be more frequent than your accounting periods. PA periods can be used for budgeting and for accounting for cost and revenue.

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Reporting Period
Set Reporting Period: Current PA period should be set as Reporting Period to allow Oracle Projects to summarize project amounts and to track project status

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PA Period Open/Closed Status

Status

Meaning

Never Opened :New periods that are in the future, and in which no entry is allowed.

Future

: Future periods in which entries are allowed but interfacing transactions is not allowed. : Current periods.Entry and interfacing transactions both are allowed.

Open

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PA Period Open/Closed Status (Contd.)

Status
Pending Close

Meaning
: In this period status only corrections of unprocessed items are allowed.
: In this status entry and interfacing transactions are not allowed.Also a period cant be You cannot be closed if unprocessed items exist. A closed period can be re-opened at any time.

Closed

Permanently Closed :This status is same as Closed only difference is once a period is permanently closed cant be re-opened.
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Invoice Summary

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Reviewing Invoices

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Processes to Run
Following are few processes which we need to run in Oracle PA: PRC: Distribute Labor Costs PRC: Interface Labor Costs to General Ledger PRC: Distribute Usage and Miscellaneous Costs PRC: Interface Usage and Miscellaneous Costs to General Ledger PRC: Distribute Expense Report Costs PRC: Interface Expense Reports to Payables

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Processes to Run (Contd.)

PRC: Interface Expense Reports from Payables PRC: Interface Supplier Costs PRC: Transaction Import PRC: Generate Draft Revenue for a Single Project PRC: Interface Revenue to General Ledger PRC: Generate Draft Invoices for a Single Project PRC: Interface Invoices to Receivables PRC: Generate Asset Lines for a Single Project PRC: Interface Assets to Oracle Assets Please note that only few important processes are listed and this is not an exhaustive list.
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Accounting Entries for Capital Projects

When CIP cost is booked against Capital Project: Debit : CIP Credit:

Liability

When Asset is created and posted to GL: Debit: Asset Cost Credit:

CIP

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Important Accounting Entries

When Revenue is generated before invoicing: Revenue Generation: Debit : Unbilled Receivables Credit: Invoicing:

Revenue

Debit: Receivables Credit:

Unbilled Receivables

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Important Accounting Entries (Contd.)

When Revenue is generated after invoicing: Invoicing: Debit: Receivables Credit: Revenue Generation: Debit : Unearned Revenue Credit:
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Unearned Revenue

Revenue

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