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Management (eAM)
Work Order billing
An Oracle White Paper
October 2004
Version 1.0
eAM Work Order Billing
EXECUTIVE SUMMARY.................................................................................................. 1
INTRODUCTION............................................................................................................... 1
CONCEPTS IN EAM BILLING...................................................................................... 2
DESCRIPTION OF THE INITIAL SETUP................................................................. 2
eAM Parameter - Invoice Billable Items Only......................................................... 3
Setting up billable item...................................................................................................... 4
Cost Plus setup for items......................................................................................... 4
Price List setup for items......................................................................................... 5
Setting up billable resource .............................................................................................. 6
Maintenance Bill Of Material (BOM) & Routing........................................................ 8
Setting up billable activity................................................................................................. 9
Setting up customers.......................................................................................................10
Setups in Oracle Receivable...........................................................................................11
WORK ORDER..................................................................................................................13
BILLING...............................................................................................................................15
Bill by requirements.........................................................................................................15
Cost Plus- billing basis ...........................................................................................16
Price List - billing basis ..........................................................................................18
Bill by activity...................................................................................................................19
CREATING AR INVOICE..............................................................................................20
Checking invoice details .................................................................................................20
CONCLUSION...................................................................................................................22
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eAM Work Order Billing
EXECUTIVE SUMMARY
Oracle Enterprise Asset Management (eAM) provides features to create work
orders. For these work orders , it is possible to estimate and track costs involved to
complete the work . In certain scenarios the cost involved in a work order is to be
charged across to a customer . This functionality of charging customers by means
of an invoice is currently available through eAM Work Order Billing.
INTRODUCTION
Certain costs like material, labor and equipment will be involved in completing a
work order. If the maintenance department maintains the enterprise asset then the
costs are generally tracked by the general ledger accounts. But the costs involved
are not always limited to the particular department /organization . In some
scenarios, the costs of a work order need to be charged to a customer, be it Internal
customers (departments within an organization) or external customers. eAM billing
is used for the above mentioned purpose. Work order Billing enables invoice to be
created based on the material or resources used for the work order or based on the
asset activity.
eAM billing provides features to bill both internal and external customers. The
price involved in the work order could be over- ridden by a certain percentage.
The cost for the material, resource or the activity could be defined as a particular
cost or could be picked up from a price list.
This paper covers the basic setup and functionality of eAM Billing.
EAM Billing could be done either based on requirements or based on activity. This
paper covers both the type of billing with an example.
Readers with an understanding of basic concepts of enterprise Asset management
and costing steps would be in a position to appreciate the entire gamut of this
paper.
Note: The paper has been written with Oracle Application Release 11i in mind
(11.5.9 to be specific). The screen shots indicated pertain to the 11i.
There are three major activities that FMU carries out on the Pick Up trucks:
Tire Retreading
Brake maintenance
Engine Overhauling
In this paper, Invoices for the Tire Retreading & Brake maintenance activities
would be billed by Requirement and the invoices for Engine Overhauling
Activity would be based on asset activity cost .
The billing basis for the Tire Retreading activity would be Cost Plus and that
for the brake Maintenance and the Engine Overhauling activities would be
Price List.
Billable items are those that have a populated value within the Billing Type field,
within the Service Tab, of the Master Item window. Billing Type is relevant only if
this check box selected. Also, selecting this check box means that a different item
to be billed can be chosen.
Within the Service tabbed region, within the Master Item window, select
Material as the Billing Type. This is only relevant if you selected the Invoice
Billable Items Only check box, within the Enterprise Asset Management
Parameters window. Do NOT select the Serviceable Product check box.
Setup the item costs in the cost setup window (Navigation: Cost Definition /
Item Costs / Item Costs).
The cost type used here is Maint. Similar setup is done for Black vulcanizing
cement and Maintenance oil. The cost for each item involved in the Tire
Retreading activity is shown below :
Material Cost
Precured Rubber tread $ 2.00
Black Vulcanizing Cement $ 1.00
Maintenance Oil $ 0.50
Within the Service tabbed region, within the Master Item window, select
Material as the billing type. This is only relevant if the Invoice Billable Items
Only check box is selected in the Enterprise Asset Management Parameters
window. The Serviceable Product check box SHOULD NOT be selected.
The cost for each material item involved in the Brake maintenance Activity is
shown below :
Material Cost
Brake Lining $ 4.00
Brake Oil $ 1.00
Maintenance Oil $ 0.75
After setting up the items, receive the material into the organization.
Define a resource within the Resources window. In the Billing block (in the
Resources window), attach the item (resource item defined in the first step).
Rates for the resource defined in the resource window will not be used in billing.
The billing rates defined for the associated item will be used either from the item
cost or from the item price in the price list.
Assign the Resource to the Department.
The Resource details for the Tire Retreading Activity are
Resource Billing Resource Item Department Cost
Basis
TRW Cost plus TRW Resource Haden $ 1.00
item
Helper Cost plus Helper resource Haden $0.75
item
The Resource details for the Brake Maintenance Activity are
The BOM and Routing for the Brake Maintenance activity is defined using the
same steps as mentioned for the Tire Retreading activity.
For convenience, the quantity of the items in the BOM and the usage in the routing
is defined as 1 for both the activities.
The billing basis for this activity is Price List. In order to set up the activity to be
billed based on the price list, the Customer Ordered check box must be selected
within the Order Management tabbed region, in the Master Item window .
Setting up customers
The invoice has to be created against a customer .
The setup of customers could be done under Accounts receivable. Navigate to the
customers definition form (Navigation: Customers / Standard).
In the Addresses tab, click on New/Open button to add/edit an existing
address. In the Customer Addresses form, navigate to the Business Purpose
tab and ensure to add Bill to usage.
Another setup to be verified is whether the flexfield definition for work order
billing is defined. Navigate to the descriptive flexfield definition (Navigation:
Setup / Financials / Flexfield / Descriptive / Segments). Query for Line
Transaction Flexfield in the Title field. Check whether the Work Order
Billing code exists within the Context Field Values region. The Work Order
Billing structure must have the following segments:
The work order, BILL1, created for the PUT001 Tire Retreading is shown
below ( The material and resource requirements are also shown) :
Similarly Work orders BILL2 and BILL3 are created for PUT001 Brake
maintenance and PUT001 Engine Overhaul respectively.
If the Billing is based on requirements, ensure that the material and the
resources are applied to the resources. Only if the material and resource are applied
to the work order they will be seen in the billing.
Issue material to the work order using the WIP component issue (Navigation:
Work Order Transactions / Material Transactions) or via a material issue
verification. The material transaction for the Work order Bill1 is shown below
The material and resource transaction for BILL2 is also done as shown for BILL1
Complete the work order (Navigation: Work Order Completion / Work Order
Completion).
Bill by requirements
In this type of Billing , the bill is created based on the material and resources
involved in the work order. The Bill by requirement is discussed below for the
work orders BILL1 and BILL2.
Steps
The Find Work Orders screen is used to search for work orders for which
billing is to be done.
The work order search could be done based on either one or combination of
some of the following criteria:
- Work Order or Work request number
- Asset Group or Asset number
- Asset Activity
- Work Order status
- Start or completion dates of the work order
- Owning Department
Click on Find button. This would populate the work orders block with all the
work orders which satisfy the condition defined in the first step.
The Billing Basis for the work order could be either Cost Plus or Price List.
All billable items should be costing enabled (In the Costing tabbed region for the
item, Costing Enabled check box must be checked) and the cost must be defined
for the item under the cost type which would be used for the billing purpose.
The work order BILL1 would be billed based upon the costs defined for the items.
In the Find Work Orders window, click on View Past Details to get
information about the invoices created.
The Work Order BILL2 will be billed based on the Corporate price list. The
billing definition is shown below:
Bill by activity
Finding the work order is similar to the steps mentioned under Bill by
Requirements section.
Choose Bill by Activity.
Enter the customer details and the billing basis as mentioned under Bill by
Requirements. Click Calculate Amounts.
Initiate billing.
For BILL3, the billing basis is Price List and the price list is Corporate.
Please note that the item description seen in the imported invoice transaction line is
not the description of the item but displays the work order name and wip_entity_id
(against which the item/activity is billed).
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