Training

Projects
Oracle Applications 11.5.10
 Agenda

1. Overview of Project Costing

2. Project Interface
3. Purpose Of Oracle projects
4. Oracle Projects Feature
5. How to use Oracle projects
6. Terminologies Used
7. Process Flow
8. What is a Project / Task
9. Work Breakdown Structure (WBS)
 Agenda

10. Project Classes and Types

11. Set Ups
12. Project Template
13. Set Up Quick Entry
14. Project Creation
15. Budgets
16. Expenditure
17. Allocation
18. Capital Project (Asset Capitalization)
19. Integration With External System
20. Project Connect
21. Other Features
 Agenda
22. Overview of Projects Billing
23. Contract Projects
24. Billing Terms
25. Billing Cycle
26. Billing Distribution and Retention
27. Distribution Rules
28. Invoice Format
29. Job group and job Mapping
30. Bill Rates
31. Bill Rate Overrides
32. Labor Multiplier
33. Billing Schedule
34. Billing Assignment
35. Billable Status Control
36. Event type and Agreement Type
37. Credit Receivers
 Agenda
38. Data Elements and Options for Contract Project
39. Burden Schedule for Revenue and Invoicing
40. Changes Allowed
41. Setups Required
42. Billing Flow
43. Agreement
44. Revenue Flow
45. Steps before Generating Revenue
46. Pre-requisites for Revenue Generation
47. Generate Revenue
48. Interface Revenue to General Ledger
49. Revenue Review.
50. Invoice Flow
51. Generating Invoice
52. Interface Invoice to AR
53. Billing Transaction Adjustment
 Project Costing

Overview of Oracle Project

Oracle Projects is a central part of the complete software solution for project–oriented
companies, providing you with a flexible approach to defining and structuring projects,
tasks, and budgets by which to monitor project status.

Oracle Project Costing provides you with the ability to define Projects, Work breakdown
structure, budgets, record and report Cost against projects

Oracle Project Billing provides you with the ability to define revenue and invoice rules,
generate revenue and create invoices
Project Costing
Overview of Oracle Project
One Time

Perform server Implement Oracle Projects

and client side
Set up project types, expense types, project
installation
PA periods, AutoAccounting rules, and so on.

Many Times

Create
Use Project project
• Record actual against project Maintain
• Release and approve transactions project
• Cost transactions (that is, determine
dollar amount and proper account)
• Summarize Revise
• Identify and review variances project
• Process revenue/invoice transactions
• Perform analysis/reporting
Close
project
Project Costing
Oracle Projects Interfaces

Oracle
Payroll External Project
Human Fixed Assets
Service Transaction Management
Resources
Timecards
Actuals Assets
Work
Reference Oracle
In Import Plan
Employees and Inventory
Process Organizations
Timecards Usages

MFG Resource
Oracle Projects
Issues and Receipts
Costs Supplier Invoices,
Reference Report Committed Costs
Customers Invoice Adjustments

Invoices Adjustments Expense Reports

Oracle Data
Accounts Accounts
WorkFlow Post Cash Warehouse
Receivable Purchasing Payable
Post Actual Expense
Post Revenue
Post Labor Distribution General Ledger Post Usage Distribution
 Project Costing
Purpose of Oracle Projects

The purpose of Oracle Projects is to track and control work (or activity) on a
project.

• You track activity on a project by comparing actual activity with expected

activity.

• Record actual activity as actual (transactions).

• Record expected activity in a budget.

 Project Costing
Oracle Projects Features

Oracle Projects has many features that address common Business needs:

Project-tracking tools

• Cost collection and calculation capabilities

• Allocations and allocation sets features
• Project asset creation functions
• Flexible revenue accrual and invoicing functions
• Online reporting and hard-copy reporting
• Full adjustment capabilities
• Oracle Projects supports attachments
• Oracle and non-Oracle applications integration
 Project Costing

How to Use Oracle Projects

The following is a typical process flow using Oracle projects:

• Create a project
• Enter a budget
• Collect Actual (transactions)
• Process cost, revenue, and invoice transactions
• Capitalize asset costs
• Perform analysis/reporting
Project Costing
Self Service
Time and
Oracle Projects Expense
Projects Inventory

Project External
Management Budgets Expenditures
WIP
Oracle Oracle
Costing
Human Payables
Resources
Employees
Revenue Accrual Capitalization
and
Organizations
Oracle
Summarization Invoicing Purchasing

Data Project Oracle Oracle

Warehouse Status Receivables Assets
Inquiry

BIS Oracle General Ledger

 Project Costing
Terminologies Used

Project/Task owning Organization - Organization that can own and

Manage projects and task.

PA Period- Project Accounting period (PA Period) track Oracle Projects data
on a periodic basis. PA periods can be used for budgeting and for accounting
for cost and revenue. PA Period can be different from GL period

Raw Cost- Costs that are directly attributable to work performed (also
Referred to as direct costs). For example, Hours × Hourly Cost Rate.

Burden Costs -Costs of running the business that support the raw costs (also
referred to as indirect costs). For example, fringe benefits, office
space, general and administrative (G&A).
 Project Costing

Terminologies Used…

Burdened Cost = Raw Cost + Burden Cost

Project Currency – The currency in which project amounts are summarized

for Project summary reporting.

Project Functional Currency – The functional currency of the Set of Books

(SOB) associated with a transaction for accounting purposes. For costing, the
expenditure functional currency is derived from the SOB associated with the
expenditure Operating Unit (OU).

Invoice Currency – The currency in which invoice is raised.

 Project Costing
Terminologies Used…
You can define the following types of organization in the organization hierarchy
for different uses:

• Project/task owning organization : These organizations “own” the project or

task.

• Expenditure/event organization : It is the organization providing the

resource to the project. To act as an expenditure organization, an
organization must have this classification and be an element of the
“Expenditure/Event Organization” hierarchy

• Project Invoice Collection Organization : Organizations with this classification

are used for decentralized invoicing.
 Project Costing
Process Flow
• Create project types

• Create a project template and a Project

• Creating Budgets

• Incurring Actual Expenditures

• Revenue Generation (in case of contract Project)

• Invoice Generation (in case of Contarct Project)

• Reporting and Inquiry

 Project Costing

What is a Project / Task

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

• A Task is smaller unit of project easily manageable. Tasks are the various activities
that will be performed on a Project.

Every transaction entered into Oracle Projects is charged to a Project / Task. When we
set up a Project, we must set up Work Breakdown Structure (WBS), and enter project
and task information.
 Project Costing
Work Breakdown Structure (WBS)…

• Organize project work into smaller, more easily manageable units called tasks.
• Every project has one task by default.
• Hierarchy of tasks is called a work breakdown structure (WBS).

Oracle Projects Processes tasks based on their position in WBS. The three distinct
positions are:
 Top Task – A task whose parent is the Project.
 Mid Task – A task that is not a top task or lowest task.
 Lowest Task – Bottom most task, without any child task.
 Project Costing

Work Breakdown Structure (WBS)…

In the WBS, a task can be:

Top Task or Middle Task or a Lowest Task.

• Top task is one which does not have any Parent Task.

• Middle Task is one which has a Parent Task and also have one or more Child Tasks also
known as the Lowest Tasks.

• Lowest task is the last node in a project tree and will not have any further child tasks.
 Project Costing
Work Breakdown Structure:

Your project, which consists of one or more tasks, can be as simple or detailed
as you want it to be.
You can define an unlimited hierarchy of tasks, called a work breakdown
structure (WBS), to organize and monitor project activities.

Project

Task 1 Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

 Project Costing
Work Breakdown Structure:

Task Numbering and Naming

Tasks are indented to indicate their location in theWBS. When planning your
WBS numbering method, choose your task numbers carefully.
The Task Number field is used as a sort key within a task level for reporting
purposes. Since it is alphanumeric, numbers precede letters.
Project Project

01 02 11 1 11 2

1.1 2.1 2.2 1.1 2.1 2.2

1.1.1 2.2.1 1.1.1 2.2.1
 Project Costing
Project Classes and Project Type
You can use three predefined Project Classes to track the following types of
information:

Capital projects:
Indirect Project :
Track product/asset
To track Overhead development activities
Activities and costs.
Asset Development
Research and Activity
Development
Contract projects:
Track activities, cost,
revenue, and billing
for work performed
for and reimbursed by
an internal or external
customer.

Each project is assigned a project type. Project types are user defined and are used to:
Control processing, Control project defaults and Generate reports
 Project Costing
Project Classes and Project Types…

Project classes are predefined, but project types are implementation-defined.

Project Classes Project Types

Bid and Proposal
Indirect
Overhead

Capital Product Development

Time and Materials

Contract
(Project Billing Only)
Cost Plus
 Project Costing
Setups Required
• Set the profile option PA: Licensed to Use Project
• PA: Licensed to Use Project Billing Required
• Define your set of books. Required
• Enable currencies that you plan to use. Optional
• Human Resources Required
• Define organizations. Required
• Define organization hierarchies Required
• Specify a project burdening hierarchy for each BG Required
• Define jobs Required
• Define employees Required
• Define customers Required
• Set up output tax codes for customer invoices Optional
• Set up output tax exemptions for customer invoices. Optional
 Project Costing
Setups Required…
• Define implementation options.
Required
• Define PA periods. Required
• Define expenditure categories. Required
• Define revenue categories. Required
• Define units. Required
• Define expenditure types. Required
• Define non–labor resources. Required
• Define transaction sources. Optional
• Implement transaction control extension Optional
• Define cost rates for expenditure types. Required
• Define usage cost rate overrides. Optional
• Define compensation Required
• Define employee cost rates. Required
 Project Costing
Setups Required…

• Define labor cost multipliers. Optional

• Implement labor costing extension Optional
• Implement labor transaction extension Optional
• Implement overtime processing Optional
• Define cost bases and cost base types. Optional
• Define burden cost codes. Optional
• Define burden structures Optional
• Define burden schedules. Optional
• Define billing cycles. Required
• Implement billing cycle extension Optional
• Define payment terms. Optional
 Project Costing
Setups Required…
• Define agreement types. Required
• Define bill rate schedules. Required
• Define invoice formats. Required
• Define credit types. Required
• Define event types. Optional
• Assign event types for cost–to–cost revenue Optional
• Implement Percent Complete Revenue Accrual and Invoicing Optional
• Implement labor billing extension Optional
• Implement billing extensions Optional
• Implement automatic invoice approve/release extension Optional
• Implement AR transaction type extension Optional
• Implement cost accrual
Optional
 Project Costing
Setups Required…
• Define budget types Optional
• Define budget entry methods Required
• Define budget change reasons Optional
• Define resource Required
• Implement budget calculation extension Optional
• Implement budget verification extension
Optional
• Implement budget workflow extension. Optional
• .Define project statuses. Optional
• Define class categories and class codes Optional
• Define service types Required
• Define project role types. Optional
• Define project customer relationships. Required
• Define contact types. Optional
 Project Costing
Setups Required…
• Define project types Required
• Define project templates. Required
• Implement project verification extension
Optional
• Implement project workflow extension. Optional
• Implement verify organization change extension. Optional
• Define displayed columns and derived columns Optional
• Define descriptive flexfields. Optional
• Define request groups for report and process security. Optional
• Define responsibilities for different functional users.
• Set up accounting for labor revenue. Required
• Set up accounting for labor costs Required
• Set up accounting for expense report costs Required
• Set up accounting for usage costs Required
 Project Costing
Setups Required…

• Set up accounting for miscellaneous costs Required

• Set up accounting for burden transactions. Required
• Set up accounting for WIP and Inventory costs
(if you are using these expenditure type classes for costs
other than those originating in Oracle Manufacturing and
Oracle Inventory) Required
• Set up accounting for supplier invoice adjustment costs. Required
• Set up accounting for total burdened costs. Optional
• Set up accounting for expense report revenue. Required
• Set up accounting for usage revenue. Required
• Set up accounting for miscellaneous revenue Required
• Set up accounting for burden transactions revenue
Required
 Project Costing
Setups Required…

• Set up accounting for inventory revenue Required

• Set up accounting for work in process revenue Required
• Set up accounting for supplier invoice revenue Required
• Set up accounting for event revenue Required
• Set up accounting for unbilled receivables, unearned
revenue, and receivables Required
• Define Invoice Rounding account Required
• Set up accounting for invoice write–offs. Required
 Project Costing
Project Templates
All projects defined in Oracle Projects must originate from a template or an
existing project. You must define atleast one project template for every project
type class. You cannot change the project type class when you copy a project
from the template.

Templates are used to:

• Simplify the project setup process
• Copy projects and WBS
• Copy commonly used project and task options.

Quick Entry provides:

• A way to enter variable project information that may change between projects
• A way to override certain values defined for the project template.
 Project Costing
Project Templates…

Find the
Template
Project Costing
 Project Costing
Set up of Quick Entry

Quick Entry
from a
template
 Project Costing
Set up of Quick Entry
 Project Costing
Project Creation using Quick Entry

Use this to
create a new
Project
 Project Costing
Project Creation using Quick Entry
 Project Costing
Project Creation
 Project Costing
Project Creation

Required Project Data are

You can define a project with just the basic project information:
• Number
– Unique identifier
Name: Unique description of the project
• Type
– What type of project?
– What type of work?
• Organization: The organization responsible for the project
• Key members : Employee name and number
Project Costing
Project Creation…
Key Members

Key members are employees who can:

• Enter and maintain project data
• View labor cost details charged to the
project (based on project role type
definition)

Key member information includes:

• Employee name and number
• Project role type (defined during implementation)

Each project can have only one project manager at a time.

 Project Costing
Key Members Creation During Project Creation
 Project Costing
Project Creation…

Optional Project Data

The following information is defaulted and can be changed:

• Duration: When does the project start and end?

• Status: Is the project active (chargeable) or closed (non-chargeable)?

• Public Sector: Is the client public or private? Selecting the Public Sector box
affects project reporting and AutoAccounting.
 Project Costing
Project Creation…

Additional Project Data

You can define additional information based on the requirements of your
project
or company. Options may include:
• Tasks
• Burden Multipliers
• Classifications
• Multinational
• Key Members
• Billing Information
• Resource List Assignment
• Bill Rates and Overrides
• Customers and Contacts
• Organization Overrides
• Asset Information
• Transaction Controls
 Project Costing
Project Creation…

Transaction Controls

In the Transaction Controls window, you list controls based on the Limit to
Transaction Controls check box:

• Checked = Inclusive limit to transaction controls

Allows only charges that are included on the list. Anything not listed is not
chargeable.

• Unchecked = Exclusive limit to transaction controls

Specifies charges that are not allowed. Anything not listed is chargeable.

You can control exceptions to any rule using the Chargeable check box.
 Project Costing
Task Creation during Project Creation

Every Project will have one task by default .

 Project Costing
Task Creation during Project Creation

To create a
task at the
same level
 Project Costing
Task Creation during Project Creation

To Create a
sub-task for a
Task
 Project Costing
Project Creation…
Task Options
 Project Costing
Task Details window during Project Creation
 Project Costing
Transaction entry at following levels
 Project Costing
Project Creation…

Project Status Controls :

You can use project status to control what processing is allowed at the various
stages of a project. Oracle predefines the following statuses:

• Active
• Unapproved
• Submitted
• Approved
• Rejected
• Pending close
• Closed
 Project Costing
Project Creation…

Changing the Project Organization

Along with organization hierarchies, you can use organization classifications to
specify which organizations are allowed to:
• Manage projects and tasks (project organization hierarchy)
• Incur expenditures (expenditure organization hierarchy)

The following are business benefits of organization hierarchies:

• Accommodate company reorganizations for a single or for multiple projects.
• Determine which organizations can own projects or incur costs through
organization classifications.
• Indicate which organizations are valid project-owning organizations or
expenditure organizations for an operating unit through organization
hierarchy assignment.
 Project Costing
Budgets
A Budget is an estimated cost or revenue for a project or task. Each budget can have
detailed or summary Information in the following areas, as appropriate for each
project.
You track project status and performance by comparing budgeted amounts to
actuals
using reports and Project Status Inquiry.
We can set up budget for data entry at the following levels of your WBS.
• Project
• Top Task
• Lowest Task
• Top Task and Lowest Task
We can enter budget for duration of the project or Task or we can enter time phased
budgets which contain budget amount by time period.
• PA Period – Oracle Projects period
• GL Period – Oracle General Ledger period
• Date Range – User defined dates
 Project Costing
Budgets…

WBS level at which you enter the budget

• Whether the Budget will be for the duration of the project or tasks, or time–
phased by date range, GL period, PA Period

• Whether you enter summary budget lines or budget lines

categorized by resources

• which budget amounts you will enter for the budget. (For Cost Budgets, you
can enter Quantity, Raw Cost, and Burdened Cost. For Revenue Budgets, you
can enter Quantity and Revenue.
 Project Costing

Budgets…

Oracle Projects provides you with many budgeting features. You can:

• Define multiple cost and revenue budgets for your project

• Copy budget versions to simplify the budget setup process

• Copy actual

• Define time-phased budgeting

 Project Costing
Budgets…

Processing by Task Levels

Tasks can be used and processed based on their location in the WBS.
• Top tasks
– Budgeting
– Rollup Reporting
• Middle tasks
– Rollup Reporting
• Lowest tasks
– Budgeting
– Transaction Entry
– Override Entry
Project Costing
Budgets…

You can budget You can never

PROJECT budget at this
here
level

Top Task You can Top Task

budget here

Lowest Lowest Lowest

Mid task
Task Task Task

Lowest
Task
You can budget
here
Project Costing
Budget Processing Flow

Create projects

Copy Enter/revise draft Rework

budget submitted
budget
Submit draft

Baseline draft

Baselined budget
Track budget vs. actuals versions
Project Costing
Budget Types and Versions
Budget
Budget Versions
Types User-Defined
budget
Forecast Cost
budget
Approved Cost
DRAFT
budget
DRAFT
DRAFT

Original
1st
Submit and Revised original
baseline 2nd
Historical
3rd
Revised original
4th
Current
5th version
 Project Costing
Budgets…

Budget versions are grouped as follows:

• Original: First baselined budget

• Current: Most recently baselined budget

• Revised original: Current and historical revisions of the original budget

• Historical: Historical copies of previously baselined budgets that are not

original or current
 Project Costing

Budgeting Features

• Enter budget amounts directly.

• Define standardized budget entry methods to enforce consistency of

budgeting at specific levels within the WBS

• Define budget calculations (using client extension)

Example: You can enter a quantity of hours that is used to calculate your
budgeted raw and burdened cost amounts, based on your rates and business
rules.

• Upload budget numbers from external sources

 Project Costing
Budgets…

Following are the setups for budget definition:

– Budget Type

– Budget Entry Method

– Budget Change Reason

– Resource List
 Project Costing
Budgets…
Budget types identify the different kind of budgets that are entered for the
projects. Every project entered is classified by a budget type.

Budget type is defined as either as a cost budget type or a revenue budget type.

For budget using cost budget type we can enter:

• Quantities
• Raw cost
• Burdened cost

For budgets using revenue budget type we can enter:

• Quantity
• Revenue amount
Project Costing
Budgets…

Oracle Projects predefine 4 budget types:

• Approved Cost Budget

• Approved Revenue Budget

• Forecast Cost Budget

• Forecast Revenue Budget

User can define additional budget types.

 Project Costing
Budgets…

Defining Budget Types:

1. Setup -> Budgets -> Budget Types

2. Enter a unique name and description for the budget type and whether the budget
is cost or revenue budget type. This effects what amounts you can enter for the
budget.

3. Enter effective dates for the budget type.

4. Select cost budget or revenue budget as amount type.

5. Save your work.

 Project Costing
Budgets…

User-
defined
 Project Costing
Budgets…
Budget Entry Method specify and control how you can enter a budget.

Oracle Projects predefine 3 budget entry methods:

• By lowest task and Date range

• By lowest task and GL period
• By lowest task and PA period

User can define additional budget entry methods.

Navigate to the Budget Entry Method Window.

Setup -> Budgets -> Entry Methods

 Project Costing
Budgets…
 Project Costing
Budgets…

Resources are amounts needed to track, complete, and account for

project work.
For example --- Labor, Material, Equipment

You use Resource Lists as groupings by which you want to budget and
summarize actual For Eg: Expenditure Category and Expenditure Type.

You can define a simple list of resources or a two level hierarchy of resource
groups and resources. You can group resources by:
• Organization
• Revenue category
• Expenditure category
• No category
Project Costing
Budgets…

Resources can be tracked by

A labor resource group

and individual employees

An expenses resource group

and airfare, auto, hotel and
A material meals expenditure types
resource group
 Project Costing
Budgets
Resource list
 Project Costing
Budgets…
 Project Costing
Budgets…

You may want to modify the Original Budget to correct data entry errors
or scope changes which you want to include in the original budget
amounts.
 Project Costing
Budgets…

There are different methods for revising draft budgets in the Budgets window:

• Changing amounts
– Navigate to the budget line and easily change any
field value, delete the budget item if needed, and
add a new line.
– Copy previous budgets or actuals into a draft.

• Changing BEM
– Navigate to the Entry Method field.
– Select a different method. All budget lines are
 Project Costing
Expenditures
Costing is the processing of expenditures to calculate their cost to each project
and determine the GL accounts to which the costs will be posted.

You record the following transactions against a project to record actual work
performed or cost incurred:

• Timecards
• Expense reports
• Asset utilization usage logs
• Supplier invoices
• Miscellaneous
• Burden
• Work in process
• Inventory
 Project Costing
Expenditures…
Methods of Transaction Entry
You record transactions using these methods

• Preapproved batches

• Project allocations

• Transaction import

• Oracle Self-Service Time and Expenses

• Other Oracle applications

 Project Costing
Expenditures…
Entering Project Expenditures

Purchase Supplier
orders invoices
Project
Labor, expense, and cost
usages expenditures

Transaction import from other

Self Service time and
applications
expense
Project Costing
Expenditures...
Comprehensive online inquiry and reporting

Identify Define projects Collect costs

business
terms and Enter
rules Reqs/ Interface
POs in Enter
PO supplier Import to
invoices G/L
External Transaction
Enter transactions
project import
Enter Time
& Expenses Upload
Enter
Enter Baseline
preapproved
budget budget
expenditures

Adjustments
Project Costing
Expenditures…

Pre-approved Expenditure Batch Entry

Define projects Collect Cost

Enter
project
Enter
preapproved
Online Enquiry
Enter Baseline expenditures and Reporting
budget budget
 Project Costing
Expenditures Set Ups…

Expenditure Category

An Expenditure Category describes the source of your organizations cost.

Expenditure category are used for grouping expenditure types of costing.

Defining Expenditure Category:

1. Setup -> Expenditures -> Expenditure Categories

2. Enter unique name for the expenditure category.

3. Enter description for the category.

4. Save your work.

 Project Costing
Expenditure Category
 Project Costing

Expenditure Set Ups…

A Revenue Category describes the source of your organizations revenue.

Defining Revenue Category:

1. Setup -> Expenditures -> Revenue Categories

2. Enter the following information.

• Code
• Meaning
• Description
• Tag Value (Optional)
• Effective Date

3. Save your work

 Project Costing
A Revenue Category
 Project Costing

Expenditure Set Ups…

Defining an Expenditure Type:

1. Setup -> Expenditures -> Expenditure Type

2. Enter unique for expenditure type.

3. Enter the expenditure category and revenue category you want to associate
with the expenditure type.

4. Enter unit of measure. For expenditure type enter hours as UOM.

5. Save your work

 Project Costing
Expenditures Set Ups…
A unit of measure records quantities or amounts of an expenditure item. WE
assign a unit for each expenditure type.
Defining Unit of Measure:

1. Navigate to the Units Lookup Window.

Setup -> Expenditures -> Units

2. Enter the following information.

• Code
• Meaning
• Description

3. Save your work

 Project Costing
Unit of measure
 Project Costing

Expenditure Set ups…

Expenditure type cost rate is a currency amount that Oracle Projects multiplies
by
the expenditure type unit to calculate cost. Cost rates for expenditure items are
specific to each operating unit.

Defining Expenditure Type Cost Rate:

1. Navigate to the Cost Rate Window.

Setup -> Expenditures -> Expenditure Type -> Cost Rate(B)

 Project Costing
Expenditures…

• Defining Non-Labor Resources:

• Navigate to Usage Cost Rate window.

Setup – Expenditures -> Non-Labor Resources -> Cost Rate(B)

 Project Costing
Expenditures….

Oracle Projects uses these terms for transactions:

• Expenditure item: The smallest unit of expenditure charged to a

project and task.

• Expenditure: A group of expenditure items incurred by an employee

or organization for an expenditure period.

• Expenditure batch: A user-defined name used to track a batch of

preapproved expenditures, such as timecards and expense reports.
 Project Costing
Expenditures..

Each transaction must be charged to a project’s lowest-level task.

Each detailed transaction is recorded with these attributes:

• Employee/supplier/organization that incurred transaction
• Expenditure item date = when work was performed or cost was incurred
• Project number
• Task number = lowest-level task
• Expenditure type = type of transaction
• Units of measure (UOM) = units defined by expenditure type
• Quantity = the quantity of units incurred
• Non-labor resource = asset utilized (for usage logs only)
• Non-labor organization = organization that owns the non-labor asset (for
usage logs only)
Project Costing
Expenditure Expenditure Expenditure Nonlabor Nonlabor
Type Class Category Type Resource Organization
Straight Labor Administrative
Time Professional

Travel Airfare
Expense Meals
Report
Other Expenses Entertainment
Other Expenses
Outside Construction
Supplier Services Consulting
Invoices Equipment
Other Expenses
Rental
Supplies
Data Systems
Computer PC
Usages In-House Finance
Services
Recoverables Sparc IS
Truck Midwest
Vehicles
Van East
Project Costing

Expenditure Expenditure Expenditure Non-labor Non-labor

Type Class Category Type Resource Organization
Miscellaneous Fixed Assets Computer Srvcs
Depreciation Vehicles
Burden Overhead Labor Overhead
Transaction

Work Materials Building Materials

In
Process

Inventory Materials Building Materials

 Project Costing
Expenditures…

• Time Cards: This Expenditure type Class is used to capture the cost of labour.

• Expense Reports : Tracks the cost incurred by employees to be reimbursed by

the company.

• Miscellaneous transaction
Tracks miscellaneous project costs. Similar to the usages expenditure type
class. Does not require a non-labor resource or organization

• Burden transaction
Tracks burden costs that are calculated in an external system or generated
within the projects setup is created as separate expenditure item that has
burdened cost amounts, but has not quantities and no raw costs. Can be
interface to Oracle General Ledger
 Project Costing
Expenditures…

• Work In Process transaction

Tracks manufacturing resource costs that are interfaced from Oracle
Manufacturing for project manufacturing integration. Can be used when
you import other manufacturing costs using transaction import.

• Inventory
Tracks manufacturing materials costs that are interfaced from Oracle
Manufacturing and inventory issues and receipts from Oracle Inventory.
Can be used when you import other manufacturing costs using transaction
import.
 Project Costing
Expenditures…

Employee Cost Rate

Employee cost rate is the hourly rate you pay an employee. Employee must
have
a cost rate and a compensation rule.

Defining Employee Cost Rates:

1. Navigate to the Employee cost rates Window.

Setup -> Costing -> Labour -> Employee Cost Rates

2. Enter employee name or number.

3. Enter compensation rule and hourly rate for employee.

 Project Costing
Expenditures..

Oracle Projects uses the following expenditure type Classes to process

Non - labor costs.

• Usages – Asset usage costs are interfaced to Oracle General Ledger. For
every item classified as Usage, we need to define a non-labor resource and
organization that own the resource.

• Miscellaneous Transaction – used to track miscellaneous project costs. The

expenditure type class is similar to usages only that here we don’t define a
non-Labor resource or non-labor resource organization. This type class used
for following costs.
- Fixed assets depreciation, Allocations, Interest
charges
 Project Costing
Expenditures…

• Burdened Transaction – BT tracks burden cost calculated outside the

system. Burden cost quantity and raw cost value is zero. BT costs are
interfaced to General Ledger.

• Work-in-progress – This expenditure type class is used by project

manufacturing WIP transaction interfaced from manufacturing to Projects.

• Inventory – This type class is used for the following:

- Project Manufacturing transactions that are

interfaced from Manufacturing or Inventory to
Oracle Projects.

- Interfaced from Oracle Inventory to Projects in

 Project Costing
Expenditure entry
 Project Costing
Expenditure…
Preapproved Batches
You can perform some of these typical pre-entry activities:

• Standardize the batch-naming process.

• Organize batches of input documents.

• Batch by item similarity within batch, which makes copying easier and
simplifies repetitive data entry.

• Count the number of input documents in the batch, which reduces

potential error.

• Calculate the sum of all the transaction amounts (quantities).

 Project Costing
Use Pre-approved batch to make transaction entry
Project Costing
 Project Costing
Expenditures…

• You submit the preapproved batch when you have finished entry.

• The batch running totals must equal the control totals (if using control totals)
before you can submit the batch. Releasing a batch is a second level of
review after entry. This is usually done by someone other than the entry
person, typically the entry person’s supervisor. You can use function security
to remove the release capability from the entry person’s responsibilities.

– Use the Preapproved Expenditure Entry Audit

Report to review batch input before release.
– Expenditure batches can be edited before release;
the status must be ‘Working’ to make corrections.
 Project Costing
Expenditures…

• You can review and verify data entry of preapproved batches using the
Preapproved Expenditure Entry Audit Report.

• This report displays the details of preapproved expenditure batches,

including expenditures and expenditure items.
 Project Costing
Expenditures…

• After submitting a batch, you can make corrections such as adding,

deleting, and revising expenditures and expenditure items that were
incorrectly reported or entered.

• If the status of the batch is submitted, you must return it to working, and
then make the corrections at the expenditure/expenditure item level
before resubmitting the batch.

• If the status of batch is released, you must reverse the full amount of the
original item before entering the correct information.
Project Costing
Expenditures…

Expenditure Batch Status and the Approval Process

Working Submitted

Yes
Reversed

Needs
Adjustments? Released

No
Approved
 Project Costing
Expenditures…

Entering Preapproved Usages

Similar to preapproved timecards, with a few differences:

Expenditure Batches window
Class = usages

Expenditures window
• In the Expenditures region, enter employee or organization.
• In the Expenditures Items region, select the usage expenditure type, such
as vehicle, field equipment, computer services.
• Nonlabor Resource and Organization: These fields are required for
nonlabor usage entry.
 Project Costing
Expenditures…

Entering Pre-approved Usages

• Resource: Enter the resource utilized. The list is limited to those defined
for the type and the organization.

• Organization: Enter the organization that owns the asset utilized.

• Quantity: Enter the number of units.

• Units vary by type, for example:

– Vehicles —> days
– Field equipment —> hours
– Computer service —> hours
 Project Costing

Expenditures…

You can copy preapproved transactions to speed entry.

• You can copy from one batch to another.

• The date ending for the target batch defaults on all line items.

• You can copy with or without expenditure detail.

• You can reverse an expenditure batch if the current batch is released and the
transaction source of the batch allows adjustments.
 Project Costing
Expenditures…

• You can reverse an expenditure batch if the current batch is released and the
transaction source of the batch allows adjustments.

• When you reverse an expenditure batch, all expenditure items are reversed
except:

– Related items

– Expenditure items that have been already reversed

– Reversing items (net zero adjusted items)

 Project Costing
Expenditures…
• You submit the preapproved batch when you have finished entry.
• The batch running totals must equal the control totals (if using control totals)
before you can submit the batch.
• Releasing a batch is a second level of review after entry. This is usually done
by someone other than the entry person, typically the entry person’s
supervisor. You can use function security to remove the release capability
from the entry person’s responsibilities.
– Use the Pre-approved Expenditure Entry Audit
Report to review batch input before release.
– Expenditure batches can be edited before release;
the status must be ‘Working’ to make corrections.
• Release makes expenditures ready for cost distribution; only approved
expenditures can be cost distributed.
• Release is synonymous with ‘Approval.’
 Project Costing
Expenditure Inquiry
 Project Costing
Expenditure Inquiry

Find the
expenditure
entered
 Project Costing
Expenditures…

• After submitting a batch, you can make corrections such as adding, deleting,
and revising expenditures and expenditure items that were incorrectly
reported or entered.

• If the status of the batch is submitted, you must return it to working, and
then make the corrections at the expenditure/expenditure item level before
resubmitting the batch.

• If the status of batch is released, you must reverse the full amount of the
original item before entering the correct information.
 Project Costing
Expenditures…
Burden Multipliers

• A burden multiplier applies to a raw cost amount to reflect the actual cost of
doing business. These extra costs include employee benefits, office space,
and so on.

• A cost burden schedule is an implementation-defined set of burden

multipliers used for costing to derive total cost amounts. You can apply
costing burden schedules across projects.

• Burden schedule overrides are revisions to the burden schedule attached to

the project. When you define project types at implementation, you decide
whether overrides will be allowed for each project type.
 Project Costing
Expenditure…
You can transfer a transaction from one project or task to another and maintain
full tracing abilities.

When the transaction is posted, the following occurs:

• A reversing item is created for the old project.

• A new item is created for the new project.

• The new “transferred” transaction is posted to the current open period.

• The new transaction is recosted with the new burdened amount for the
destination project or task.
 Project Costing

Project Allocation

What are Allocations?

Allocations are amounts from one or more source projects/tasks, GL accounts,

And /or fixed amounts distributed (or allocated) to one or more target projects
and/or tasks.

Business Need :

Project managers often need to allocate certain costs from one project to
another.
The allocations feature in Oracle Projects can distribute amounts
• Between projects and tasks
• Within projects and tasks
• To projects in other organizational units
Project Costing
Project Allocation…
Source:
The costs comprising the pool amount you want to
allocate. These costs can be comprised of
summarized projects costs, posted GL balances or
fixed amounts (or a combination of all three sources).
Target:
The projects and/or tasks receiving a percentage of
the source pool amount.
Basis:
The percentage of the source pool amount received
by each chargeable task.
Offset:
 Project Costing
Project Allocation Example:
Source Project collects costs and allocates amounts(determined by the
basis) to Targets A, B, and C and creates negative transactions to an
Offset Project.

Source
Target A

Basis

Target B

Target C
Offset
 Project Costing
Project Allocation…
The basis method defines how and in what proportion the amounts in the
source
pool are to be divided among the target projects. Each basis method has its
own characteristics.

You can choose from the following four basis methods:

• Spread Evenly

• Target % - Spread Evenly

• Prorate

• Target % - Prorate
 Project Costing
Project Allocation…

Basis Method - Spread Evenly

This method is the most simple and direct. The rule divides the source pool
amount equally among all the chargeable target tasks specified in the rule.

P1 - $25
Source Amount
P2 - $25
$100

P3 - $25

P4 - $25
 Project Costing

Project Allocation…

Target % and Spread Evenly

This is another simple method. You specify the percentage of the source pool
that you want to allocate to each target line. The rule calculates the amount to
allocate to the line, and then spreads the results evenly among the tasks.

Target % T1 - $5
Source Amount
P1 - 10%
T2 - $5
$100
P2 - 90% T1 - $45

T2 - $45
 Project Costing
Project Allocation…

Prorate Method
This basis method uses the basis attributes to apportion the source amount
among
all the tasks defined by the rule. Basis = raw cost
T1(Cost = $40)
Allocation = $20
Source Amount
P1
T2(Cost = $60)
$100 Allocation = $30
P2
T1(Cost = $70)
Allocation =$35
T2(Cost = $30)
Allocation =$15
 Project Costing

Project Allocation…

Target % and Prorate

This method uses the attributes set in the Basis window to derive the rate at
which
the source pool amount is apportioned among the target projects and tasks. The
rule first uses the target percentage to calculate the amount to allocate to the
line,
Basis = raw costs
and then goes on to apportion the results among all theT1tasks.
(Cost = $40)
Target % Allocation = $8
P1 - 20%
Source Amount T2 (Cost = $60)
Allocation = $12
$100 T1(Cost = $40)
T1 Allocation = $32
P2 - 80%
T2(Cost = $60)
T2 Allocation = $48
 Project Costing
Project Allocation…
 Project Costing
Project Allocation…
 Project Costing
Project Allocation…

Targets
 Project Costing
Project Allocation…
 Project Costing
Project Allocation…
 Project Costing
Project Allocation…

To Copy the
existing
allocation rule
 Project Costing
Project Allocation…

Enquire by task
status
 Project Costing
Project Status Inquiry
Use this screen to inquire the status of Expenditures and Budgets
 Project Costing
Capital Projects

Purpose of Capital Project:

Use capital projects to collect construction in process (CIP) and expensed costs
for assets you are creating using internal resources.
These internal resources can include:
– Labor
– Equipment
– Inventory
– Outside services
– Internal service-center recharges
 Project Costing
Capital Projects…

General accounting rules require that CIP costs should not be expensed to the
income statement until the asset is placed into service. Then the asset cost is
incrementally depreciated over the life of the asset.

Therefore, CIP costs are:

• Treated as an asset on the balance sheet and not recorded directly as an
expense on an income statement.
• Reclassified as fixed assets when the asset is completed and placed in service.
 Project Costing
Capital Projects… Accounting Flow:

General Ledger
Accounts Projects
Subledger Balance Sheet
 Assets
• Billed A/R X
• Unbilled A/R X
Balance • Fixed assets X Fixed Assets
Sheet CIP • CIP X Subledger
(Eligible Total Assets XX
for Liabilities X Capitalized
capitalization) Equity X asset
Total L&E XX amount

Expenses Income Statement

Depreciation
Income (Not eligible Revenue XX
amount
for Expenses
State- • Contract costs X
capitalization)
ment • Overhead X Legend
• G&A X Periodic
Total Expenses XX
Net Profit/Loss XX Event driven
 Project Costing
Capitalizing Project Costs

Send purchasing details Send non-CIP assets

Oracle Oracle Assets

Oracle Payables
Purchasing Send project Post asset
costs costs and
Send CIP asset clear CIP
costs accounts

Send expense Post invoice CIP

report costs and expensed
Oracle Projects costs

Post non-invoice CIP and Oracle

expensed costs
General Ledger
 Project Costing
Capital Project…

You can use Oracle Projects to collect all costs associated with a capital project.

The following are characteristics of CIP costs:

• CIP costs are eligible for capitalization within a given capital project.

• CIP costs are associated with the assets the project is building.

• When the assets are ready to be placed in service, the CIP costs are
• summarized and interfaced into Oracle Assets, becoming depreciable fixed
assets.

• CIP costs can be adjusted within Oracle Projects before and after asset costs
are interfaced to Oracle Assets.
 Project Costing
Creating a Capital Project:

Create a capital project for each asset or group of assets that needs to be
constructed.

Project setup defines:

• Which costs are capitalized

• How costs are summarized for import to Oracle Assets by expenditure

• groupings and WBS groupings

• Which costs are assigned to which assets

 Project Costing
Capital Project…

Capital Project Types :

The capital project type is used to define the following attributes for capital
projects:

• CIP Cost Type

• Require Complete Asset Definition

• Override Asset Assignment

• CIP Grouping Method

• Group Supplier Invoices

 Project Costing

Capital Project…

CIP Cost Summarization:

CIP costs are summarized into one or more assets before being sent to Oracle
Assets. Summarization is based on the following project setup details:

• Capital project type - Grouping Method

• Assignment of assets to the WBS level(s):

– Can be done any time during or after initial project
setup
– Must be completed before placing the asset in
service
 Project Costing

Capital Project…

CIP Grouping Methods

Capital project types can use only one CIP grouping method per project type.
The CIP (expenditure) grouping methods are:
• All expenditures or uncategorized (highest level of summarization)
• Expenditure category
• Expenditure category, nonlabor resource
• Expenditure type
• Expenditure type, nonlabor resource
 Project Costing
Capital Project…
CIP Grouping Methods

In addition to CIP expenditure grouping methods, capital projects use

grouping levels to summarize asset costs.

The available grouping levels are:

Project level

Top task level

Lowest task level

Mixed task level

 Project Costing
Capital Project…
Grouping at Project Level

Project

Top Task 1 Top Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

Task 2.1.1 Task 2.1.2

 Project Costing
Capital Project…
Grouping at Top Task Level

Project

Top Task 1 Top Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

Task 2.1.1 Task 2.1.2

 Project Costing
Capital Project…

Grouping at Lowest Task Level

Project

Top Task 1 Top Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

Task 2.1.1 Task 2.1.2

 Project Costing
Capital Project…

Grouping at Mixed Task Level

Project

Top Task 1 Top Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

Task 2.1.1 Task 2.1.2

 Project Costing
Capital Project…
Grouping Level Types

When assigning assets to projects or tasks you must choose one of

the following grouping level types:

• Specific Assets: Select this option to associate assets with the project or
task.

• Common Costs: Select this option to group projects or tasks that capture
costs you want to allocate to multiple assets.
Project Costing
Grouping Level Types
 Project Costing
Capital Project…

Defining Assets

CIP assets must be predefined within Oracle Projects before they are
interfaced to Oracle Assets. You can define assets:

• During project setup

• After the project starts (perhaps when the building process begins)

• Using the Projects window

• Using the Capital Projects window

 Project Costing
Asset Definition in Capital Projects
 Project Costing
Capital Project…

Placing a CIP Asset in Service :

Placing a CIP asset in service involves the following steps:

• Finish building the project asset.

• Record the actual placed-in-service date.

• Complete the asset definition (if required).

• Generate asset lines.

• Interface assets to Oracle Assets.

 Project Costing
Capital Project…

Matching Strategy for Asset Lines

The following logic is used to determine how asset lines are matched to CIP
assets:

• If only one asset is on a given grouping level, all asset lines created are
automatically assigned to that asset.

• If multiple assets are assigned to a grouping level, all asset lines are created as
unassigned.

• If the grouping level type is Common Costs, all asset lines are created as
unassigned.
 Project Costing
Capital Project…

Running the Interface Assets Process :

To send asset lines to Oracle Assets to become fixed assets:

• For either a single project or a range of projects, select the PRC: Interface
Assets process in the Submit Requests window.

• Review the mass addition lines in the Oracle Assets Prepare Mass
Additions window.
Project Costing
Asset Definition And View in Capital Project
 Project Costing
Capital Project…
Abandoning a CIP Asset
Capital projects can be abandoned at any time.

• Before capitalization:
– Change all project expenditures from capitalizable
to noncapitalizable in the Expenditure Items
window.
– Deselect the Capitalizable check box at the task
level in the Task Details window to prevent the
creation of new CIP expenditures.

• After capitalization:
 Project Costing
Capital Project…

Accounting for CIP Costs

For capital projects, you must define AutoAccounting to account for CIP and
expense costs.

When CIP costs are tracked in Oracle Projects:

• Oracle Projects is the subsidiary ledger for CIP assets.
• Oracle Assets is the subsidiary ledger for capitalized (depreciable) assets
only.
Project Costing
Accounting Example for capital Project:

Project X is set up to collect costs to build a new clean room.

The following costs are recorded.

Description Amounts
Supplier invoice for architectural drawings 2000

Supplier invoice for building contractor 5500

Supplier invoice for building permit penalty 200 $7700

Employee labor for project management $1400

Employee expense report for miscellaneous costs $ 250

Use of company car $ 55

Total Cost $9405

 Project Costing
Accounting Example for Capital Project

After reviewing the costs, you determine that you

cannot capitalize
the building permit penalty. You change the
transaction from
capitalizable to non-capitalizable and interface the
adjustment to
Oracle Payables.

Oracle Payables posts the reversing entry to

General Ledger.
 Project Costing
Capital Project…

Assume the clean room is complete and ready to

be placed in
service. You capitalize and send the CIP costs for
Project X to
Oracle Assets.

Oracle Assets creates the following journal entry

after
you post the asset.
 Project Costing
Changing Project Organization

Flexible Organization Change Methods:

Oracle Projects provides flexible change methods to meet your business needs:

• Change single project/task organization using the Project form

• Change multiple project/task organizations using the Mass Update Batch

form

• Use function security, Projects: Org Update: Update Override Standard

Checks, or implement the Verify Organization Change client extension to
enforce organization change rules
 Project Costing
Mass Update for change of organization
 Project Costing
Mass Update for change of organization
 Project Costing
Online Inquiry and Reporting

To ensure project control and profitability, you need immediate information for
informed decision making.

You can analyze project data at any point and make adjustments easily, while
maintaining a full audit trail.

Oracle Projects provides several reporting and analysis tools including:

• Project Status Inquiry (PSI)

• Standard reports
• Database views for custom reports
• Business Intelligence System (BIS) integration
• Oracle Cash Management System integration
 Project Costing
Inquiry and Reporting…
Full Adjustment Capabilities
Oracle Projects records an audit trail of all adjustments.

Who What When

Project Costing
Oracle Projects Interfaces…

Project Oracle Projects

Management
Projects
Cost
Budgets Expenditures Collection
Systems

Human Oracle Projects Engine

Resources

Status Customer Accounting

Reporting Invoice Transactions
 Project Costing
Integration with External Systems

Activity Management Gateway

Activity Management Gateway (AMG) enables external applications to interface

with Oracle Projects to perform the following functions:

• Create and maintain projects and budgets

• Analyze commitments, actual costs and revenue

• Manage progress (percent complete and earned value)

Integration with External Systems
 Project Costing

Integration with External Systems…

Using the AMG APIs you can:

• Define projects in your project management system and then import the
project structure and budgets into Oracle Projects.

• Export summarized project transactions from Oracle Projects to your

project management system.
 Project Costing
Integration With External System :

You can use the AMG APIs to integrate Oracle Applications with a wide
variety of external systems, including the following:

• Project management systems

• Sales management systems
• Work management systems
• Customer asset management and plant maintenance systems
• Project manufacturing systems
• Legacy systems
 Project Costing
Overview of Oracle Project Connect (Integration with External system)
Microsoft Project Oracle Projects
Project/Task Data Define
Define
project/tasks project/tasks
Resource Lists
Define
Assign Budget (Baseline/Cost) Resources
Resources Forecast Plan
Collect
Transactions
Schedule
Project
Actual Costs/Rev.
Distribute and
summarize
Costs/Rev.
% Complete
Status Progress Capitalize Costs
Generate Rev.
 Project Costing
Other Features

Attachments:
You can attach word processing documents, spreadsheets, or images to certain
windows. Oracle Projects supports attachments for the following entities:
• Projects: Attach project scope/definition document
• Tasks: Attach task scope/definition document
• Budget versions: Attach preparation document
• Expenditures: Attach timecards/expense reports
• Project assets: Attach description of the asset
• Agreements: Attach image of customer agreement
• Project funding: Attach approval document
• Draft invoice: Attach actual customer invoice
 Project Costing
Other Features

Sub Ledger Accounting

Oracle Projects provides the ability to view

accounting lines for transactions interfaced to GL.

You can:
• Drill up from Oracle Projects to view accounting details in GL.
• Drill down from GL to the transactions interfaced from Oracle Projects
 Project Billing
Overview of Project Billing

Oracle Project Billing enables you to perform the following functions:

• 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.
BILLING
 Project Billing
Overview of Project Billing

• 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
 Project Billing
Overview of Project Billing
Oracle Project Billing functionality provides the flexibility to keep up with your
changing business needs. You automatically accrue revenue according to your
company policies.

For example:
• Time and material bill rates
• Cost plus buildup
• Percent spent ratio
• Or any algorithm you define

You can accrue revenue differently based on the type of project. You can also bill
each project differently, even if the same client has multiple projects. You can
easily manage cash collection in Oracle Receivables.
 Project Billing
Contract Projects

Billing can be done only for a contract Project.

A contract project is used to track activities, cost, revenue, and billing for services
performed for and reimbursed by a customer.

• Types of contract projects include:

– Time and Materials
– Fixed Price
– Cost Plus
– Intercompany
 Project Billing
Contract Project
 Project Billing
Contract Project…

Each project is classified by project type.

The project type controls processing and defaults for a project.

Defaults
Processing
• Service type
• Whether to burden costs
• Intercompany billing type
• Whether to use billing
• Revenue accrual and
extensions
billing methods
• Whether to control
• Bill rate schedules
budgeting options
• Burden rate schedule
• Indirect, capital, or contract
• Resource lists
classification
• Distribution rule
 Project Billing
Contract Project Type
 Project Billing

Billing Terms

You negotiate the billing terms of the contract with the project customers.
Billing terms for a contract project
• How should the project be billed?
Billing method: Milestone, Time and Materials,
Cost Plus
• How often should the project be billed?
Billing cycle
 Project Billing

Billing Terms…

• How should the information be displayed on the invoice?

What is the desired invoice currency?
• Does an amount have to be retained for the project invoices?
Retention percentage
• What rates should be used?
Standard rate schedule, negotiated rates
• What type of work can be billed? Cannot be billed?
 Project Billing
Billing Cycle

You enter billing-cycle information to control how often you create and send
invoices to your project customers.
• First bill offset
– Number of days following the project start date
before first invoice cycles off
– Defaults from implementation options
• Bill cycle days
– Frequency of billing following previous billing
– Defaults from implementation options
– Can create specific project invoices at any time
 Project Billing
Billing Distribution and Retention
A distribution rule specifies the revenue accrual method and the billing method.
• Notation: <Revenue Accrual Method>/<Invoicing Method>
• Supported revenue accrual and invoicing methods
– Work: Based on detailed transactions using bill
rates, burden rates, and markups
– Event: Milestone billing
– Cost: Based on percent spent calculation
Retention
• You use invoice retention to reduce a project invoice by a percentage
amount that you specify for a particular project.
• Retention invoice format defines what to display in the retention invoice line
description.
• Retention % defines the percentage to withhold from each invoice. This
percentage is applied to the total invoice amount.
 Project Billing
Distribution Rules
Invoice Formats Concepts
Formats control
Creation of invoice lines when
• Formats for generating an as-work-occurs
• Labor invoice. This includes:
• Nonlabor • How to summarize expenditure
• Retention items into an invoice line
• Which fields to display on the
• Invoice formats invoice line
defined during • Order in which to display the
implementation fields on the invoice line

Can create formats to

• Summarize at project or task level
• Summarize labor by category, job,
employee, or site
• Summarize non-labor by category,
type, resource, or site
• Include text in invoice line
• Include bill rates, amounts, units
 Project Billing
Job Groups

Job groups enable you to group like jobs for specific purposes. Use the Job groups
window in HRMS to define job groups for project purposes. Jobs assigned to these
job groups are called Project Jobs.

Project jobs are used for:

• Bill Rates (for Revenue, Invoicing, and Transfer Pricing amounts)

• Project Invoice Line definitions
• Resource List definition for Budgets
• Resource summarization in PSI (Project Status Inquiry)
 Project Billing
Master Job Groups

A master job group is used as an intermediate mapping group between other job
groups.

• In Single Business Group Access mode, you can have one master job group for
each business group. You can map jobs only within the same business group.

• In Cross Business Group Access mode, there is only one master job group, and
you can map jobs across business groups.
 Project Billing
Job Mapping Usage

The Job Mapping feature allows a resource’s HR job assignment to automatically

be translated to a different job title for use in Projects via a Master Job Group.

HR Job Master Job PA Job

Group Group Group
Job 1 Master
Job 1 Job 1
Job 2
Master
Job 3
Job 2 Job 2
Job 4
Master
Job 5 Job 3
 Project Billing
Bill Rates

You can use the following types of rates for as-work-occurs revenue accrual and/or
invoicing:
• Standard bill rates
• Negotiated bill rates

Standard Bill Rate Schedule

A standard bill rate schedule is a set of standard bill rates or markups that can be
assigned to a project as a group.
• Labor - By employee (bill rate or markup over cost) or job (bill rate)
• Non-labor - By expenditure type or non-labor resource (rate or markup over
cost)
 Project Billing
Bill Rates Overrides
Negotiated Bill Rates

You can define the following negotiated bill rates or markups for a project or
lowest-level task:
• Job bill rate override: Bill rate for a job
• Employee bill rate overrides: Bill rate for an employee or Labor Multipliers
• Nonlabor bill rate overrides: Bill rate for a nonlabor expenditure type or
non-labor resource

Billing Title and Job Assignment Override

You can define negotiated billing titles and job assignments for a project or
lowest-level task.
• Job billing title overrides
• Job assignment overrides
 Project Billing
Bill Rates Overrides…

From Project,
Templates Employee Bill Rate Override
Rate Start End
window Name Number Amt. Per Unit Date Date
or Task
Jones, B 01234 100 Hour 01-Dec-1996
window

Job Bill Rate Override

Rate Start End
Job Amt. Per Unit Date Date
Principal engineer 200 Hour 01-Dec-1996

Nonlabor Bill Rate Overrides

Exp. Rate Per Markup Start End
Type Resource Amt. Unit Percent Date Date
Vehicle 100 Days 01-Jan-1996
Vehicle Pickup 125 Days 01-Jan-1996
Consulting 100% 01-Feb-1996
 Project Billing
Bill Rates Overrides…
Employee Bill Rate Overrides
• You can override an employee’s standard bill rate for a project or task. When
you override an employee’s standard bill rate, the new bill rate becomes the
bill rate for the employee’s billing.

• When you override an employee’s bill rate, the new employee bill rate takes
precedence over the following override you can define at the project level ---
Job bill rate override

• In addition, the new employee bill rate takes precedence over the following
information you can define at the task level:

 Job bill rate override

 Standard bill rate schedule
 Labor multiplier
 Project Billing
Bill Rate Overrides…
 Project Billing
Bill Rates Override… From Project,
Templates window or
Task window

Job Billing Title

Job Billing Title Start End

Principal clerk Administrative assistant 01-Dec-1996

Job Assignment Override

Employee Employee Job Billing Title Start End
Name Number Override Override* Date Date
Jones, B 01234 Sr. eng. Chief Hydrologist 01-Dec-1996
Gray, D 02795 Project manager 01-Dec-1996

*Overrides employee billing title

 Project Billing
Bill Rates Override…

• Job Bill rate Overrides

When you override a job’s bill rate, the new job bill rate takes precedence over
standard bill rates and labor multipliers you assign to this task. In addition the
override takes precedence over any project job bill rate override.

• Job Assignment Overrides

You can override both an employee’s job assignment and an employee’s
billing title for this project or lowest level task. When you override an
employee’s job assignment, the new job assignment determines bill rates for
the employee’s billing on this project or lowest task (if this task uses job bill
rates).
 Project Billing
Bill rate Override…
 Project Billing
Bill rate Override…
 Project Billing
Labor Multipliers

• You can use labor multipliers when you want to apply only one multiplier to
raw labor cost for billing purposes.
• If you need to apply many multipliers to raw cost for billing, use burden
schedules or burden schedule overrides.
• Labor multipliers are available at the project level and the lowest task level.

Labor Multiplier
Project level or
lowest task level Multiplier Start Date End Date
1.5 06-APR-1996
 Project Billing
Billing Schedules

• You specify the default type of schedule to use for labor and for non-labor.
– Bill rate schedule
– Burden schedule. You can use a burden schedule for
labor and a standard bill rate schedule for non-labor
or vice versa.

• You specify the default schedules based on the type of schedule.

– You can specify different burden schedules for
revenue and invoicing.
– If both labor and non-labor use a burden schedule,
 Project Billing
Billing Schedule…
 Project Billing
Burden Schedules for Revenue and Invoicing

• You must use the as-work-occurs revenue accrual and/or invoicing method to
apply burden schedules to a project. This is the same method used for bill rate
schedules.

In the Billing Schedules window, select Burden Schedule instead of Bill Rate
Schedule.

• You define burden schedules of organization-based multipliers. These

schedules are groups of standard multipliers, similar to the concept of
standard bill rates schedules.
– Assign to project or task
– Can define multiple standard burden schedules for
revenue accrual and invoicing
 Project Billing
Billing Assignments
In the Billing Assignments window, you can assign a billing extension to your
project or top tasks.
Billing extensions calculate revenue and/or bill amounts for transactions using
unique methods specific to your business.
Billing extensions are implementation defined.

To enter billing assignments, you must select and expand Billing information from
the list of options in the Projects, Templates window.
When you choose this option, you can enter the following information in the
Billing Assignments window:
•Name: Enter the name of the billing extension you want to use.
•Amount: Enter the amount.
•Percent: Enter the percent amount.
•Active: Choose whether to enable this extension
 Project Billing
Billable Status Control

• You can control which transactions charged to the project are billable and
which are nonbillable.
– Billable items can accrue revenue and can be
reimbursed by the client.
– Nonbillable items do not accrue revenue and are
not reimbursed by the client.

• You can control billable items in two ways:

– Identify tasks that are billable or nonbillable.
– Use transaction controls to further control billable
status by person, category, type, and nonlabor
 Project Billing
Billable Status Control…
Control Billing by Top Task
 Project Billing

Event type
An event is an entry assigned to a top task or project that generates revenue
and /or billing activity, but is not directly related to any expenditure items. You
classify events by event type. When you define an event type, you assign it one
of the predefined classifications. When you enter an event, its event type
classification determines how the event affects revenue and billing for a
particular project.

Agreement types
Agreement types categorize the various kinds of agreements you negotiate
with clients. For example, you can define one agreement type for all verbal
agreements and another for all agreements using purchase orders.
 Project Billing
Credit Receivers
• You can assign credit for project revenue to employees using credit receivers.
• Credit receivers can be used for the following:
– Reporting. You can define custom reports to use
with credit receivers.
– Transferring sales credit information to Oracle
Receivables. You can use sales credit information for
sales commission reporting in Oracle Receivables.
• You classify credit receivers with a credit type.
• Examples of credit types:
– Quota (predefined by Oracle Projects)
– Marketing
• Credit types are defined during implementation.
 Project Billing
Data Elements and Options for Contract Projects Definition
Level at which entry is allowed

Top Task Lowest

Project/Task Options Project Mid Task Task

Billing information (contract projects only)

Billing setup
Events
Billing assignments
Credit receivers

Bill rates and overrides (contract projects only)

Standard billing schedules (Default) (Default) (Default) (Default)

Employee bill rate overrides
Job bill rate overrides
Labor multipliers
Job assignment overrides
Job billing title overrides
Nonlabor bill rate overrides
 Project Billing
Changes allowed

Customer field
The customer billing percentage must reflect the billing percentage throughout
the
life of the project. You can change the customer billing percentage only if no
invoice exists.

If invoices do exist, you can:

• Delete unreleased invoices
• Cancel released invoices
• Change customer billing percentages, which automatically sets revenue and
invoices to be recalculated

New invoices will be created using the new percentage the next time the
invoicing
process is run.
 Project Billing
Changes allowed…
• Billable flag
• Standard bill rate schedule and burden schedule information
– Defaults to new tasks; only the lowest task schedule
is used.
– Does not cascade to existing subtasks.
– Does not automatically recalculate revenue and
invoice amounts.
• Billing assignments
• Customer work site
• Chargeable flag: allowed only at lowest-level task
• Task number
– Change is allowed only before charging expenditure
 Project Billing
Setups

The following setups are required for billing

• Billing Cycle
• Agreement Types
• Billing Extension
• Bill Rate Schedules
• Invoice Formats
• Credit Types
• Event Types
 Project Billing
Setups…
Billing Cycle
Determines how often and on what date project is billed.

1. Navigate to Billing Cycles Screen.

Setup -> Systems -> Cycles

2. Enter unique name.

3. Enter type, Value.

4. Enter from date and to date.

5. Save the work.

 Project Billing
Setups…
Agreement Types
Agreement Type categorizes various kinds of agreement types.

1. Setup -> Billing -> Agreement Type

2. Enter name.

3. Enter Description.

4. Enter default payment terms.

5. Enable revenue limit.

6. Save the work.

Project Billing
 Project Billing
Setups…
Billing Extensions enables users to implement company specific billing methods. To use
billing extensions we have to implement billing extensions and assign them to project.

Defining Billing Extensions:

1. Setup -> Billing -> Extensions
2. Enter extension name.
3. Attach PL/SQL procedure.
4. Enter description.
5. Enter Order.
 Project Billing…
Setups…

6. Enter effective dates.

7. Enter default event values.

8. Enter default budget type.

9. Check the options – Calling Process, Required Inputs, Other Parameters

and Calling Place.

10. Save the work.

Project Billing
 Project Billing
Setups…

Bill Rate Schedules

You can define bill rate schedules to maintain the rates and percentage markups
over cost that you charge clients for your labor and non-labor expenditures.

1. Setup -> Billing -> Bill Rate Schedule

2. Enter schedule name and description.
3. Specify the organization tat uses the schedule.
4. Specify the schedule type.
5. Depending on the schedule type – specify the bill rate or markups for
employee, job titles or non-labor expenditure type.
6. Save the work.
Project Billing
 Project Billing
Setups…
Invoice Formats

You create an invoice line using an invoice format. You can define different
formats for labor, non-labor, and retention invoice line items.

1. Setup -> Billing -> Invoice Formats

2. Specify Invoice format name.

3. Specify Invoice format type.

4. Specify use.

5. Specify the grouping option

 Project Billing
Setups…

Invoice Formats

6. Specify the effective dates.

7. Specify the star and end position for each field you want to include in the
invoice line.

8. Specify the text – default.

9. Save the work.

 Project Billing
Setups…
Credit Types
You can award different kinds of revenue credit to your employees, such as sales
credit and market credit. After defining the project, you specify the employees
as
a credit receiver of diversity credit.

1. Setup -> Billing -> Credit Types

Enter the following information:
• Code
• Meaning
• Description
• Tag value (optional)
• Effective dates
3. Check the enabled check box.
4. Save the work.
 Project Billing
Setups…
Event Types

You classify events by event type. When you define an event type, you assign it
one of the predefined classifications.

Oracle Projects provides the following classifications:

• Automatic
• Deferred Revenue
• Invoice Reduction
• Manual
• Scheduled Payment
• Write-Off
• Write-On
 Project Billing
Setups…

Event Types

Defining Event Type:

1. Setup -> billing -> Event Types

2. Specify event type name.

3. Enter description.

4. Specify the revenue category.

 Project Billing
Setups…

Event Types

5. Specify event type classification

6. Enter output tax

7. Enter effective dates.

8. Save your work

Project Billing
 Project Billing
Billing Flow

• Enter an Agreement
• Generating Revenue
• Interfacing to General Ledger
• Generating Invoice
• Interface to Receivables

Interface Interface
Enter an Generating Generating
Revenue to Invoice to
Agreement revenue Invoice
GL AR
Project Billing
 Project Billing

Agreement

Agreement represents any form of contracts, written or verbal, between you

and
one of your customers. We enter an agreement representing a purchase order
or
any funding agreement we make with the customer.

Agreement provides funding for projects and tasks. We can allocate funds from
one agreement to any number of Projects or top-level tasks. All revenue and
invoices in Oracle Projects are recorded against an agreement, and all items that
accrue revenue against an agreement subsequently bill against the same
agreement.
 Project Billing…

•An Agreement is a contract with a customer that serves as a basis for

funding and work authorization.
– Construction Contract, Purchase Order,Verbal Agreement

 One agreement to one project Customer A FUND Project: X1

$1,000,000 $1,000,000 Revenue Budget
Revenue $1,000,000

Customer B $50,000
 One agreement to many projects Project: Y1
$1,000,000 $100,000 Task 1 $ 50,000
and/or top tasks Revenue Task 2 $100,000

 Many agreements to one project Customer C Project: Z1

$150,000 $100,000 Revenue Budget
Revenue $200,000
 Project Billing
Agreement…
1. Billing -> Agreements

2. Enter the customer who is providing the agreemtn funding.

3. Enter the number to identify this agreement, such as customer’s purchase

order number. Agreement number should be unique for the customer and
agreement type.

4. Enter an agreement type.

5. Enter amount of this agreement

6. Enter the accounts receivable term.

7. Chose hard limit, if for revenue accrued and invoice generated

 Project Billing

Agreement…

8. Enter date this agreement expires.

9. Enter description for the agreement.

10. Enter the administrator for the agreement.

11. Enter creation date.

12. Save the work.

Project Billing
Project Billing

Oracle Projects revenue flow follows the following steps.

 Project Billing
Steps before Generating Revenue

• Enter and fund the agreement.

• If you want to generate revenue or invoices for the project based on

percent complete, enter percent complete information either at the
project or the funding level.

• If you want the project customer to be billed in a currency other than the
project currency, enter currency attributes for the project customer.

• Enter budgets and Baseline the project budget.

• Projects using event billing enter billing events using the Event option in
the Project or Task window
 Project Billing
Pre-Requisites for Revenue Generation

• Must have a status – Revenue Generation

• Must be a contract project
• Must have a baseline revenue budget
• Must have an expenditure item or an event that are eligible for revenue
accrual.
• If project uses cost-to-cost revenue accrual, item must have project or task
cost budget that include burdened cost and revenue budgets that include
revenue amounts.
• Cost distribution line that has PA period that ends on or before accrued
through date.
• Billing extensions is checked if revenue accrual is based on billing extensions.
 Project Billing
Pre-Requisites for Revenue Generation
If distribution rule is cost-to-cost, assign default event type to predefined billing
extension of cost-to-cost revenue and cost-to-cost invoice. Projects automatically
call and execute billing extensions for revenue accrual and invoice amounts.
 Project Billing
Pre-Requisites for Revenue Generation
To generate revenue or invoices using percent complete.

1. Create two event types with type class automatic – one for revenue and one
for invoice and associate each with one of the billing extensions depending on
revenue or invoice.

2. Revenue distribution for project must be one of the following:

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

3. Enter % complete at the funding level.

4. Assign billing extension to the project.
 Project Billing
Pre-Requisites for Revenue Generation

Cost Accrual

Cost accrual is required for such companies where revenue is recognized in

future period after cost is accrued.

With cost accruals, you initially account for the costs incurred as an asset in
a
Cost work in process (WIP) account. When you accrue revenue, the costs are
recognized as expense by using cost accruals.
 Project Billing
Interface Revenue to General Ledger
The information you can view in these windows includes:
• Amount
• Revenue category
• Event description
• Information about a revenue item’s distribution lines
• Agreement providing the revenue funding
• Date the revenue was interfaced to Oracle General
Ledger
• Distribution warnings encountered while generating
draft revenue
 Project Billing
Billing Controls
You can control which transactions are billable for projects and tasks. Billable means that
you can accrue revenue and bill your customers. Non billable means that you cannot
accrue revenue or bill your customers

Project ABC
• Labor is billable.
• All expenses except entertainment expenses are billable.
• Supplier invoices dated before 01-SEP-1999 are billable.

Billable Billable
Nonbillable
Nonbillable
Labor Construction Work
Billable
28-AUG-1999
Entertainment Construction Work
Meals
Expense 05-SEP-1999
 Project Billing
Generating Revenue

Revenue can be generated for single project or for range of projects using:

Others -> Request -> run

PRC: Generate Draft Revenue Process

For single project:

Generate Draft Revenue for Single Process

For range of projects:

Generate Draft Revenue for a range of project
 Project Billing

Generating Revenue

Process:

• Oracle Projects selects projects, tasks and their associated events and
expenditure items that are eligible for revenue generation.
• Projects create the potential revenue and create - revenue events and
expenditure items.
• Projects also calculate the bill amount for each expenditure item, based on
revenue distribution rules associated.
 Project Billing

Interface Revenue to General Ledger

1. Projects releases revenue to interface to Oracle General Ledger. Released

revenue cannot be deleted or updated.

2. Oracle projects automatically releases revenue when interfaced to Oracle

General Ledger via submit request window.

3. Request: PRC: Interface Revenue to General Ledger

 Project Billing
Revenue Review
 Project Billing

• Invoice Flow

Generate Review Interface

and Adjust Approve Release
Draft Invoice
Invoice Invoice Invoice
Invoice To AR

Print and
Send Invoice
To Customer
 Project Billing
Generate Draft Invoice

To generate invoices across a range of projects:

PRC: Generate Draft Invoices for a Range of Projects

To generate invoices for a single project:

PRC: Generate Draft Invoices for a Single Project

You can use the Invoice Review report to review the draft invoices of a project
before approving and releasing them for interface to Oracle Receivables.
 Project Billing
Generate Draft Invoice
Reviewing Invoice:

You should review each invoice before you approve and release it for billing. Use the
Invoice Summary window or the Invoice Review report to review invoices. You can
review invoice information such as:

Invoice amount
Invoice lines
Currency attributes
Expenditure items that back up invoice items
Invoice customer
 Project Billing
Approving Invoice:
After you review invoices and make any necessary adjustments, you need to
approve them before you can release them for interfacing to Oracle Receivables.

There are two ways to approve invoices:

Manual invoice approval.
Usually project administrator or project manager approves invoices. Oracle
Projects records the invoice approval information of the person who approved
the invoice and the date it was approved.

Automatic invoice approval.

The Automatic Invoice Approve/Release Extension allows you to approve
invoices automatically as part of the Generate Draft Invoice process
 Project Billing
Interface Invoice to Accounts Receivables
Oracle Projects fully integrates with Oracle Receivables to process your invoices
and track customer payments. Oracle Projects generates draft invoices and uses
Oracle Receivables to collect payments for the project invoices and transfer the
accounting transactions to Oracle General Ledger.

Manual Invoice Release.

Usually project administrator or project manager releases invoices. Oracle
Projects records the invoice released information of the person who releases the
invoice and the date it was released.

Automatic Invoice Release.

The Automatic Invoice Approve/Release Extension allows you to release
invoices automatically as part of the Generate Draft Invoice Process.
 Project Billing
Use this window to review Invoices Generated and interfaced to receivables
 Project Billing
Billing Transaction Adjustments

You can make billing adjustments against transactions. For example:

• Billable or non-billable reclassifications

• Billing holds
• Billing releases
• Recalculated cost, revenue, bill amounts (resulting from a change in cost
rate, bill rate, or estimated completion time)

You can manage revenue and invoice write-off in Oracle Projects. Once
adjustments are complete, regenerate the revenue and/or invoice.