EDU31E5Y - Project Billing Overview

Oracle Project Billing Overview
Financial Applications Overview
Copyright 2006, Oracle. All rights reserved.
Objectives
After completing this module, you should be able to do the
following:
Describe the overall Project Billing Process
Describe all the information required for contract
project definition
Define an agreement and fund a project
Explain fundamental revenue concepts and describe the
revenue flow
Explain fundamental invoice concepts and describe the
invoice flow
Briefly provide an overview of interproject billing
Describe the integration with Oracle Project Contracts
Agenda

Defining contract projects
Agreements and Funding
Revenue Concepts and Flow
Invoice Concepts and Flow
Revenue and Invoice Accounting
Interproject Billing
Integration with Oracle Project Contracts
Oracle Project Billing
Billing Methods
Accrue Revenue
Time & Materials
Automatic Generation
Fixed Price
Funding Limit Mgmt.
% Spent
Manage Backlog
& Margin
Track Project
Billings
% Complete
Milestone
Cost
Reimbursable
Generate Invoices
Online Review & Approval
Drilldown to Detail
Collect
Receivables in
Oracle
Receivables
Agenda

Contract Projects
Revenue
Track
Contract
Projects
Cost
Billing
Overview of Projects and Tasks
Project
Task 1
Task 1.1
Task 1.1.1
Task 2
Task 1.2
Task 2.1
Task 2.2.1
Task 2.2
Task 2.2.2
A project is a primary unit of work that can be

broken down into one or more tasks.
Overview of Project Templates

Project Templates
Projects
T,Bid and
Proposal
T,Cell Tower
Construction
T,Radio Tower
Construction
You use project templates to create new projects. All projects

ultimately originate from a template.
Project Classes and Project Templates
Project Class: Contract

Project Type
Project Template
Cost Plus
T, Cost Plus
Projects
You must create at least one project template for every project
class that your company uses.
Defining Project Templates
There are two methods for creating

project templates:
Define a New project
template
Project Template
Copy an existing
project or project
template
Project Template
Defining Projects
Copy
Copy a project template or an existing

project to create a new project.
Project Classes and Project Types
Project Classes
Project Types
Bid and Proposal
Indirect
Overhead
Construction
Capital
Cost Plus
Contract
Fixed Price
Billing Information Tab

Billing Information
Funding Level
Billing Job Group
Bill Rate Schedules - Labor
Bill Rate Schedules - Non-Labor
Invoice Formats
Billing Cycle
First Bill Offset Days
Baseline Funding without Budget
Revaluate Funding
Funding Revaluation Includes Gains and

Losses
Realized Gains and Losses Event Types
Billing Assignments Tab
Project Type
Assign billing extensions to
the project type
Contract Projects
The extensions will apply to all projects
associated with the project type
Distribution Rules Tab

Distribution
Rule
Definition
Cost/Cost
Accrue revenue and bill using the ratio of actual cost

to budgeted cost (percent spent)
Cost/Event
Accrue revenue using the ratio of actual cost to

budgeted cost (percent spent), bill based on events
Cost/Work
Accrue revenue using the ratio of actual cost to

budgeted cost (percent spent), bill as work occurs
Event/Event
Accrue revenue and bill based on events
Event/Work
Accrue revenue based on events, bill as work occurs
Work/Event
Accrue revenue as work occurs, bill based on events
Work/Work
Accrue revenue and bill as work occurs
Distribution rules
Customers
Oracle Receivables
Customer
Oracle Project Billing
You use customers defined in Oracle Receivables for contract projects .
Default Top Task Customer
Default Top Task

Customer Enabled
The customer that you select as the

Default Top Task Customer is the default
customer for the top tasks on the project.
Project
Task 1
Task 2
Project Contact Information
Customer Name: Port of Oakland

Contact Last Name: Lasky
Contact First Name: John
Title: Mr.
Job Title: AP Supervisor
Bill: Yes
Ship: Yes
Example: Project Contact Information on a contract project.
Currency Options
In the Billing tab of the Currency window, you can:

Enable multi-currency functionality
Select the currency type(s) to use for the revenue
transaction currency
Select the currency type(s) to use for the invoice
processing currency
Define currency conversion attributes
Revenue in Foreign Currency
Project
Project Functional
Invoice Transaction
Project Funding
Revenue Currencies
Invoice Currency
Oracle Project Billing generates revenue in project, project functional and

project funding currencies while generating invoices in invoice
transaction currency.
Bill Rates
A bill rate is an amount or percentage that is applied to a unit (of time

and materials) to calculate revenue and invoicing.
You can specify the following bill rates in Oracle Projects:
Employee Bill Rates

Job Bill Rates
Non-Labor Bill Rates
Customer Billing Retention
Invoiced Amount = $ 550

Retention Amount = $100
Retention is a provision in a contract to hold back a portion of invoiced

amounts until an agreed upon condition is met.
Defining the Retention Level and Terms
Retention at
top-task level
Retention at
project-level
For each project customer, you can define retention terms at either the
project level or the top task level.
Billable Status Control
You can control which transactions charged to the

project are billable and which are nonbillable.
Billable items can accrue revenue, can be invoiced and
can be reimbursed by the client.
Non-billable items do not accrue revenue, cannot be
invoiced 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 resource.
Billable Transaction Control
Limit To: Enabled (Inclusive Control)

Expenditure
Expenditure
Employee
Chargeable Billable
Category
Type
Labor
Non-clerical
Marlin, Amy
Yes
Task Level
Labor
Clerical
Marlin, Amy
Yes
No
In this example, Amy Marlin can charge labor. Clerical labor is not
billable. Billability for her other labor charges is determined from the
task billable status. Nothing else is chargeable (inclusive control).
Agenda

Overview of Agreements
Customer
Agreement
Hard or Soft Limit

for Revenue
Hard or Soft Limit
for Invoice
Currency
Organization
Criteria for Agreement Definition.
An agreement provides the funding for projects and tasks.

Overview of Project Funding
Agreement
Project
Create
Budget
Accrue
Revenue
Generate
Invoice
You must fund a project before the project can accrue revenue and be
billed.
Example: Agreements and Funding

Agreement
Total = $ 500K
Funded = $ 300K
Project A
Bid & Proposal
$50K Task 1
Task 1.1
$150K
$50K
Project B
Time & Material
Project C
Fixed Price
Task 2 $30K
Task 1.2
Project D
Cost Plus
Task 3 $70K
Task 3.1
Task 3.1.1
$100K
Task 3.2
Task 3.1.2
Example of an agreement that funds three projects. In Project B, the top

tasks are also individually funded.
Agreements and Funding Process Flow

Create
Agreement
Create
Project
Funded
Contract
Project
Enter Approved
Revenue Budget
Create
Funding
Baseline
Generate
Revenue
Generate
Invoices
Generating Invoices and Revenue Accrual
Accrue Revenue
Enter Agreement
and Fund Project
Generate Invoices
Agenda

Project Revenue Overview
Contract project revenue is the amount recognized as

income to be received for work performed on a project.
Revenue received
Work performed
on a project
Methods of Revenue Accrual
Oracle Project Billing supports three basic methods of

revenue accrual.
As-work-occurs
Cost-to-cost
Event-based
Hard Limit Processing Overview
You specify a hard limit for an agreement to limit revenue

accrual and billing of a project funded by that agreement to
the amount funded.
Hard limits can be set for both revenue and invoice or for
either revenue or invoice. You specify whether to use hard
limits for an agreement in the Agreements form. Funding
cannot be reduced below the accrued revenue if hard limit
for revenue exists.
Revenue Process Flow to GL

Costdistributed
expenditure
items
Events
Adjustments
Revenuegenerated
expenditure
items
Generate
draft revenue
Generate revenue
accounting event
Create accounting
in Oracle Subledger
Accounting
Revenuegenerated
events
Oracle
General Ledger
Transfer to
GL
GL journal
import
GL journal
entries
Revenue Flow
PRC: Generate Draft Revenue for a Single Project
or
PRC: Generate Draft Revenue for a Range of Projects
PRC: Generate Revenue Accounting Events
PRC: Create Accounting
PRC: Transfer Journal Entries to GL
(optional)
Journal Import
(Oracle General Ledger)
Subledger accounting processing flow for revenue
Generate Draft Revenue
PRC: Generate Draft

Revenue for a Range of
Projects
Submit processes to
generate draft revenue
PRC: Generate Draft

Revenue for a Single
Project
Creating Revenue Distribution Lines
The Generate Draft Revenue concurrent program creates revenue

distribution lines for each eligible expenditure item and revenue event.
Revenue distribution line

Cost distribution line
Revenue distribution line
Expenditure item
Revenue event
Expenditure
Generate Revenue Accounting Events
PRC: Generate Revenue

Accounting Events
Submit concurent
program to generate
revenue accounting
events
Create Accounting
PRC: Create Accounting
Submit concurrent
program to create
accounting for revenue
lines
Accounting entries in
Oracle Subledger Accounting
PRC: Transfer Journal

Entries to GL
Review Project Revenue

Some of the details you can review in the Revenue Review window are:
Project functional and

revenue transaction
currency
Date the revenue

accounting event was
generated
Revenue generation
warnings
Detailed Accounting Transactions

You can review detailed accounting transactions for revenue items in
the following windows:
Revenue Lines
Revenue Line
Details
View Accounting Lines
Line Type
Account
Labor Revenue
01-420-4130-0000
Unbilled
Receivables
01-000-1232-0000
Unearned
Revenue
01-000-2550-000
Total
Debit
Credit
1,664.11
1,664.11
0.00
1,664.11
1,664.11
An example of the accounting details you can review from the View
Revenue Accounting window.
Accrue-Through Date
Accrue-through
date
The accrue-through date controls which billable expenditure items and

revenue events are processed.
Releasing Revenue
You can release revenue in the Revenue Review window or when you
release a project invoice.
Revenue Review
Window
Invoice Summary
Window
Agenda

Invoice Concepts
Hard limit processing

Accounting dates
Billing amounts
Methods of invoicing
Percent complete
Events
Hard Limit Processing for Invoices

Example of Invoice Hard Limit
Task 3.0 revenue budget = $1,000
Funded by an agreement with hard limit = Yes
This table presents the Billed Expenditure Items:
Task
Employee
Exp Type
Qty
Units
Bill
Amount
3.1
Marlin
Professional
Hrs
380
3.2
Gray
Field Equip
Days
60
3.3
Marlin
Professional
Hours
560
TOTAL
Invoice Warning: Invoice has reached the hard limit.

1000
Overview of Accounting Dates
All invoices are accounted for using these dates :

PA date: Date accounted for based on PA periods
GL date: Date accounted for based on GL periods
Review of Billing Amounts
Each transaction has two billing amounts when processed:

Revenue amount
Invoice amount
Both these amounts are calculated as follows:
Rate based = Quantity Bill Rate
Cost markup = Raw Cost (1 + Markup)
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
Revenue Method
Invoicing Method
Work/Work
As-Work-Occurs
As-Work-Occurs
Work/Event
As-Work-Occurs
Event/Milestone
Cost/Work
Cost-to-Cost
As-Work-Occurs
Cost/Event
Cost-to-Cost
Event/Milestone
Cost/Cost
Cost-to-Cost
Cost-to-Cost
Event/Event
Event/Milestone
Event/Milestone
Event/Work
Event/Milestone
As-Work-Occurs
Overview of Invoice Flow

Generate Draft Invoice
Review and Adjust Invoice
Approve Invoice
Release Invoice
Interface Invoice
Print Invoice
Generating Invoices
PRC: Generate Draft
Invoices for a Single
Project
Submit program to
generate invoice for a
single project.
PRC: Generate Draft

Invoices for a Range
of Projects
Submit program to run
multiple invoice
generation processes
Invoice-Related Setup Steps
Steps related to Invoices

Define Invoice Formats
Define Invoice Print Method
Defining Invoice Formats
An invoice format determines how Oracle Project Billing creates an

invoice line.
Customer Invoice Format

Intercompany Invoice Format
Types of Invoice Formats
Defining Invoice Print Method

Oracle
Receivables
Oracle
Projects
Interface
Create custom
invoice
printing program
Invoice printing
program
Invoice
You can print invoices either from Oracle Projects or from Oracle
Receivables. Oracle Projects interfaces invoices to Oracle Receivables for
printing. To print from Oracle Projects, you must write a custom program.
Interfacing Invoices to Oracle Receivables
Oracle Project Billing interfaces invoices to Oracle

Receivables.
You can use an Interface Streamline option to interface
invoices to Oracle Receivables.
In turn, Oracle Receivables creates accounting in Oracle
Subledger Accounting.
Journal
entries
Released
invoices
Invoices
Oracle
Projects
Oracle
Receivables
Oracle
Subledger
Accounting
Oracle
General
Ledger
Invoice Flow to Oracle Receivables

Revenue
distributed
costs
Generate
draft invoice
Approve/release
invoice
Oracle
Receivables
Events
Interface to
Receivables
Receivables
interface
Receivables
AutoInvoice
Adjustments
Tieback invoices
Receivables
invoices
Viewing Invoices in Oracle Receivables
Project Number
Draft Invoice Number
Agreement Number
Project Organization
Project Manager
In addition to information such as the Invoice Number, Invoice Date and

Total Invoice Amount, you can query on the above information in Oracle
Receivables.
Accounting Transactions
Invoices
Invoices
Oracle
Projects
Customers
Oracle
Receivables
Receipts
Invoice and
Receipt
Accounting
Revenue
Accounting
Oracle
Subledger
Accounting
Transfer to GL
Agenda

Receiver
Project
Costs
Payables
invoice
Interproject
Invoices
Receivables
Invoice
Collect
Costs
Provider
Project
Agenda

Completed
Deliverable
Generate Delivery-based
billing event
Deliverable Tracking
System
Bill it
Oracle Project Contracts
Oracle Projects
When a deliverable is completed in Oracle Project Contracts, it

automatically creates a billing event in Oracle Projects.
Summary
In this module, you should have learned how to:

Describe the overall Project Billing Process
Describe all the information required for contract
project definition
Define an agreement and fund a project
Explain fundamental revenue concepts and describe the
revenue flow
Explain fundamental invoice concepts and describe the
invoice flow
Briefly provide an overview of interproject billing
Describe the integration with Oracle Project Contracts

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Oracle Project Billing Overview

Financial Applications Overview

Copyright 2006, Oracle. All rights reserved.

Copyright 2006, Oracle. All rights reserved.

Oracle Project Billing Overview

Copyright 2006, Oracle. All rights reserved.

Oracle Project Billing

Time & Materials

Funding Limit Mgmt.

Copyright 2006, Oracle. All rights reserved.

Oracle Project Billing Overview

Copyright 2006, Oracle. All rights reserved.

Copyright 2006, Oracle. All rights reserved.

Overview of Projects and Tasks

A project is a primary unit of work that can be

Copyright 2006, Oracle. All rights reserved.

Overview of Project Templates

You use project templates to create new projects. All projects

Project Classes and Project Templates

Project Class: Contract

Copyright 2006, Oracle. All rights reserved.

Defining Project Templates

There are two methods for creating

Copyright 2006, Oracle. All rights reserved.

Copy a project template or an existing

Copyright 2006, Oracle. All rights reserved.

Project Classes and Project Types

Copyright 2006, Oracle. All rights reserved.

Billing Information Tab

Funding Revaluation Includes Gains and

Realized Gains and Losses Event Types

Copyright 2006, Oracle. All rights reserved.

Billing Assignments Tab

Copyright 2006, Oracle. All rights reserved.

Distribution Rules Tab

Accrue revenue and bill using the ratio of actual cost

Accrue revenue using the ratio of actual cost to

Accrue revenue using the ratio of actual cost to

Accrue revenue and bill based on events

Accrue revenue based on events, bill as work occurs

Accrue revenue as work occurs, bill based on events

Accrue revenue and bill as work occurs

You use customers defined in Oracle Receivables for contract projects .

Copyright 2006, Oracle. All rights reserved.

Default Top Task Customer

Default Top Task

The customer that you select as the

Copyright 2006, Oracle. All rights reserved.

Project Contact Information

Customer Name: Port of Oakland

Example: Project Contact Information on a contract project.

Copyright 2006, Oracle. All rights reserved.

In the Billing tab of the Currency window, you can:

Copyright 2006, Oracle. All rights reserved.

Revenue in Foreign Currency

Oracle Project Billing generates revenue in project, project functional and

A bill rate is an amount or percentage that is applied to a unit (of time

Employee Bill Rates

Copyright 2006, Oracle. All rights reserved.

Customer Billing Retention

Invoiced Amount = $ 550

Retention is a provision in a contract to hold back a portion of invoiced

Copyright 2006, Oracle. All rights reserved.

Defining the Retention Level and Terms