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R12 Project Costing

Fundamentals
Student Guide

D47868GC10
Edition 1.0
February 2007
D49395
Copyright © 2007, Oracle. All rights reserved.

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be trademarks of their respective owners.

Author

Jeffrey Colvard, Ph.D.

Technical Contributors and Reviewers

Ed Artiga, Prithi Bandla, Janet Buchbinder, Jean-Francois Chalmers, Sarita Chebbi, Ivy Farren,
Barbara Fox, Steven A. Gordon, Debbie Hendrix, Biju Kattuparambil, Ruth Kukla, Martha
McKillip, Thierry Javelle, David Millin, Tanya Poindexter, Suet Ching Siew, Lata Sundar, Juli
Anne Tolley, Gajjala Prashanti

This book was published using: oracletutor


Table of Contents

Overview of Oracle Project Costing...............................................................................................................1-1


Overview of Oracle Project Costing..............................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Agenda...........................................................................................................................................................1-5
Oracle Enterprise Project Management Solution...........................................................................................1-6
Oracle Project Costing and Integration..........................................................................................................1-7
Agenda...........................................................................................................................................................1-11
Oracle Project Costing and Project Classes ...................................................................................................1-12
Overview of Resources In Oracle Projects ....................................................................................................1-13
Costing Flow .................................................................................................................................................1-15
Collect and Manage All Costs .......................................................................................................................1-17
Manage Costs ................................................................................................................................................1-18
View Accounting: Transaction Details..........................................................................................................1-20
View Accounting: Final Subledger Accounting Entries................................................................................1-21
View Expenditure Item Details .....................................................................................................................1-22
Summary........................................................................................................................................................1-23
Defining Projects for Costing .........................................................................................................................2-1
Defining Projects for Costing ........................................................................................................................2-3
Objectives ......................................................................................................................................................2-4
Agenda...........................................................................................................................................................2-5
Overview of Projects and Tasks ....................................................................................................................2-6
Project Classes and Project Types .................................................................................................................2-7
Overview of Project Templates .....................................................................................................................2-8
Organizing a Project Structure.......................................................................................................................2-9
Basic Project Information ..............................................................................................................................2-10
Agenda...........................................................................................................................................................2-12
Burden Schedules for Costing .......................................................................................................................2-13
Organization Overrides..................................................................................................................................2-14
Project Currency ............................................................................................................................................2-15
Currencies and Expenditures .........................................................................................................................2-16
Costing Currency Options .............................................................................................................................2-17
Practice - Create a Project..........................................................................................................................2-18
Solution - Create a Project.........................................................................................................................2-19
Agenda...........................................................................................................................................................2-23
Controlling Expenditures Overview ..............................................................................................................2-24
Project Statuses..............................................................................................................................................2-25
Task Chargeable Status .................................................................................................................................2-26
Transaction Dates ..........................................................................................................................................2-27
Transaction Controls......................................................................................................................................2-28
Exclusive and Inclusive Transaction Controls...............................................................................................2-30
Allowable Charges for Each Transaction Control .........................................................................................2-31
Determining if an Item is Chargeable............................................................................................................2-32
Practice - Define Transaction Controls......................................................................................................2-33
Solution - Define Transaction Controls .....................................................................................................2-34
Summary........................................................................................................................................................2-36
Entering Expenditures ....................................................................................................................................3-1
Entering Expenditures ...................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Agenda...........................................................................................................................................................3-5
Costing Flow: Enter Expenditures.................................................................................................................3-6
Expenditures Overview .................................................................................................................................3-7

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Multiple Organization Access Control (MOAC)...........................................................................................3-8
Expenditures Overview .................................................................................................................................3-9
Currency Fields for Expenditures ..................................................................................................................3-11
Pre-Approved Batch Expenditure Entry Flow Overview ..............................................................................3-12
Statuses for Pre-Approved Expenditure Batches...........................................................................................3-13
Enter Pre-Approved Batches .........................................................................................................................3-14
Submitting an Expenditure Batch ..................................................................................................................3-16
Practice - Enter an Expenditure Batch .......................................................................................................3-17
Solution - Enter an Expenditure Batch ......................................................................................................3-19
Reversing an Expenditure Batch ...................................................................................................................3-24
Correcting Expenditure Batches ....................................................................................................................3-25
Copying an Expenditure Batch......................................................................................................................3-27
Reviewing Project Expenditures....................................................................................................................3-28
Viewing Accounting Lines ............................................................................................................................3-31
Practice - Use Expenditure Inquiry............................................................................................................3-32
Solution - Use Expenditure Inquiry ...........................................................................................................3-33
Agenda...........................................................................................................................................................3-40
Automatically Reversing Expenditure Batches .............................................................................................3-41
Releasing the Batch .......................................................................................................................................3-42
GL Periods for the Expenditure Items ...........................................................................................................3-43
Guided Demonstration - Enter an Automatically Reversing Batch ...........................................................3-44
Agenda...........................................................................................................................................................3-46
Upload Expenditure Batches from Microsoft Excel......................................................................................3-47
Upload Contingent Worker Timecards..........................................................................................................3-49
Agenda...........................................................................................................................................................3-51
Expenditure Batch Reports ............................................................................................................................3-52
Agenda...........................................................................................................................................................3-53
Costing Flow: Import Transactions ...............................................................................................................3-54
Overview of Transaction Sources..................................................................................................................3-55
Overview of Transaction Import ...................................................................................................................3-56
Resolving Import Exceptions ........................................................................................................................3-57
Correcting Rejected Transactions within Oracle Project Costing..................................................................3-58
Summary........................................................................................................................................................3-60
Implementing Expenditures ...........................................................................................................................4-1
Implementing Expenditures...........................................................................................................................4-3
Objectives ......................................................................................................................................................4-4
Expenditures Implementation Steps ..............................................................................................................4-5
Agenda...........................................................................................................................................................4-6
Expenditure Categories..................................................................................................................................4-7
Define Revenue Categories ...........................................................................................................................4-8
Define Units...................................................................................................................................................4-9
Expenditure Type Classes..............................................................................................................................4-10
Define Expenditure Types .............................................................................................................................4-12
Multiple Expenditure Type Classes Per Expenditure Type ...........................................................................4-14
Practice - Define an Expenditure Type......................................................................................................4-15
Solution - Define an Expenditure Type .....................................................................................................4-16
Agenda...........................................................................................................................................................4-19
Transaction Control Extension ......................................................................................................................4-20
AutoApproval Extension ...............................................................................................................................4-21
Agenda...........................................................................................................................................................4-22
Define Transaction Sources...........................................................................................................................4-23
Example Predefined Transaction Sources .....................................................................................................4-24
Example Predefined Transaction Sources: Manufacturing and Inventory.....................................................4-25
Agenda...........................................................................................................................................................4-27
Listings ..........................................................................................................................................................4-28
Summary........................................................................................................................................................4-29

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Performing Cost Processing............................................................................................................................5-1
Performing Cost Processing ..........................................................................................................................5-3
Objectives ......................................................................................................................................................5-4
Agenda...........................................................................................................................................................5-5
Overview of Costing......................................................................................................................................5-6
Costing Concepts...........................................................................................................................................5-9
Overview of Encumbrance Accounting.........................................................................................................5-10
Agenda...........................................................................................................................................................5-12
Costing Flow: Distribute Costs......................................................................................................................5-13
Cost Distribution Processing Flow ................................................................................................................5-14
Determining Costs .........................................................................................................................................5-15
Burden Cost Calculations ..............................................................................................................................5-17
AutoAccounting: Distribution Programs .......................................................................................................5-18
Cost Distribution Concurrent Programs ........................................................................................................5-19
Agenda...........................................................................................................................................................5-21
Costing Flow: Create Accounting .................................................................................................................5-22
Integration with Oracle Subledger Accounting .............................................................................................5-23
Generating Cost Accounting Events..............................................................................................................5-24
AutoAccounting: Generate Accounting Events.............................................................................................5-25
Creating and Transferring Accounting ..........................................................................................................5-26
Oracle General Ledger Journal Import ..........................................................................................................5-27
Agenda...........................................................................................................................................................5-28
Streamline Processes .....................................................................................................................................5-29
Submitting Streamline Processes...................................................................................................................5-31
Practice - Distribute Costs .........................................................................................................................5-32
Solution - Distribute Costs.........................................................................................................................5-33
Guided Demonstration - Create Accounting for Costs ..............................................................................5-37
Agenda...........................................................................................................................................................5-40
Overview of Period Processing .....................................................................................................................5-41
Control of GL Period Statuses for Project Transactions................................................................................5-42
Transaction Accounting Methods..................................................................................................................5-43
Period End Date Accounting .........................................................................................................................5-44
Expenditure Item Date Accounting ...............................................................................................................5-46
Expenditure Item Date Accounting with Common Accounting Periods .......................................................5-48
Sweeping Transaction Accounting Events ....................................................................................................5-50
Summary........................................................................................................................................................5-52
Accounting for Costs .......................................................................................................................................6-1
Accounting for Costs .....................................................................................................................................6-3
Objectives ......................................................................................................................................................6-4
Agenda...........................................................................................................................................................6-5
Overview of Accounting for Costs ................................................................................................................6-6
AutoAccounting ............................................................................................................................................6-7
AutoAccounting Rules ..................................................................................................................................6-8
AutoAccounting Rule Mapping.....................................................................................................................6-9
Constant Value ..............................................................................................................................................6-10
Parameter Value ............................................................................................................................................6-11
SQL Select Statement Value .........................................................................................................................6-12
Lookup Sets ...................................................................................................................................................6-13
Selecting a Segment Value Source ................................................................................................................6-15
Assign Rules..................................................................................................................................................6-16
Guided Demonstration - Define a Lookup Set...........................................................................................6-18
Guided Demonstration - Define an AutoAccounting Rule ........................................................................6-19
Practice - Define an AutoAccounting Rule ...............................................................................................6-20
Solution - Define an AutoAccounting Rule...............................................................................................6-21
Guided Demonstration - Assign AutoAccounting Rules ...........................................................................6-23
Agenda...........................................................................................................................................................6-24

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AutoAccounting for Costs Implementation Steps .........................................................................................6-25
Accounting for Labor Costs...........................................................................................................................6-26
Accounting for Expense Report Costs...........................................................................................................6-27
Accounting for Usage Costs ..........................................................................................................................6-28
Accounting for Miscellaneous Costs .............................................................................................................6-29
Accounting for Burden Transactions.............................................................................................................6-30
Accounting for Total Burdened Cost.............................................................................................................6-31
Accounting for WIP and Inventory Costs......................................................................................................6-32
Accounting for Supplier Cost Adjustments ...................................................................................................6-34
Listings ..........................................................................................................................................................6-36
Agenda...........................................................................................................................................................6-37
Account Generator.........................................................................................................................................6-38
Account Generator Terminology ...................................................................................................................6-40
Implementing Accounting for Project-Related Supplier Costs and Expense Reports ...................................6-41
Agenda...........................................................................................................................................................6-43
Encumbrance Accounting and Project Budgets.............................................................................................6-44
Project Budget Account Generation Workflow.............................................................................................6-45
Agenda...........................................................................................................................................................6-46
Overview of Oracle Subledger Accounting...................................................................................................6-47
Integration with Oracle Subledger Accounting .............................................................................................6-48
Accounting Event Model Overview ..............................................................................................................6-49
Agenda...........................................................................................................................................................6-51
Oracle Subledger Accounting for Costs Implementation Steps.....................................................................6-52
Oracle Subledger Accounting for Costs Implementation Steps (continued) .................................................6-53
Sources and Custom Sources.........................................................................................................................6-54
Journal Entry Methods and Definitions .........................................................................................................6-55
Associating Subledger Accounting Methods and Ledgers ............................................................................6-57
Post-Accounting Programs ............................................................................................................................6-58
Cross-Entity Balancing Rules........................................................................................................................6-60
Oracle Subledger Accounting Inquiries.........................................................................................................6-61
Audit Reports.................................................................................................................................................6-62
Summary........................................................................................................................................................6-63
Implementing Non-Labor Costing .................................................................................................................7-1
Implementing Non-Labor Costing.................................................................................................................7-3
Objectives ......................................................................................................................................................7-4
Agenda...........................................................................................................................................................7-5
Implementing Non-Labor Costing.................................................................................................................7-6
Non-Labor Costing Implementation Steps ....................................................................................................7-7
Defining Non-Labor Resources.....................................................................................................................7-8
Non-Labor Cost Rates ...................................................................................................................................7-9
Non-Labor Cost Rate Overrides ....................................................................................................................7-10
Practice - Define Non-Labor Resources ....................................................................................................7-11
Solution - Define Non-Labor Resources....................................................................................................7-12
Practice - Test Your Non-Labor Resources ...............................................................................................7-16
Solution - Test Your Non-Labor Resources ..............................................................................................7-18
Agenda...........................................................................................................................................................7-24
Listings ..........................................................................................................................................................7-25
Summary........................................................................................................................................................7-26
Implementing Labor Costing..........................................................................................................................8-1
Implementing Labor Costing.........................................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Agenda...........................................................................................................................................................8-5
Labor Costing Implementation Steps ............................................................................................................8-6
Define Labor Costing Multipliers..................................................................................................................8-7
Labor Costing Rules ......................................................................................................................................8-8
Rate Schedules...............................................................................................................................................8-10

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Practice - Define a Rate Schedule..............................................................................................................8-12
Solution - Define a Rate Schedule.............................................................................................................8-13
Assign Costing Rules and Rate Schedules ....................................................................................................8-15
Guided Demonstration - Define an Organization Labor Costing Rule......................................................8-17
Labor Costing Overrides ...............................................................................................................................8-18
Guided Demonstration - Define a Labor Costing Override .......................................................................8-19
Labor Costing Extension ...............................................................................................................................8-20
Labor Transaction Extension.........................................................................................................................8-21
Implement Overtime Processing....................................................................................................................8-23
Overtime Calculation Extension....................................................................................................................8-25
Agenda...........................................................................................................................................................8-26
Listings ..........................................................................................................................................................8-27
Summary........................................................................................................................................................8-28
Implementing Burden Costing .......................................................................................................................9-1
Implementing Burden Costing.......................................................................................................................9-3
Objectives ......................................................................................................................................................9-4
Agenda...........................................................................................................................................................9-5
Overview of Burdening .................................................................................................................................9-6
Burden Costing Terminology ........................................................................................................................9-7
Storing Burden Cost Calculations .................................................................................................................9-8
Accounting for Burden Costs ........................................................................................................................9-9
Project Types and Burdening.........................................................................................................................9-11
Agenda...........................................................................................................................................................9-13
Burden Costing Implementation Steps ..........................................................................................................9-14
Cost Bases and Cost Base Types ...................................................................................................................9-15
Burden Cost Codes ........................................................................................................................................9-16
Burden Structures ..........................................................................................................................................9-17
Practice - Define a Burden Structure .........................................................................................................9-21
Solution - Define a Burden Structure ........................................................................................................9-22
Burden Schedule Types and Burden Schedules.............................................................................................9-25
Assigning Burden Multipliers........................................................................................................................9-26
Defining Burden Schedules ...........................................................................................................................9-28
Practice - Define a Burden Schedule .........................................................................................................9-30
Solution - Define a Burden Schedule ........................................................................................................9-32
Assigning Burden Schedules .........................................................................................................................9-36
Burden Costing Extension .............................................................................................................................9-37
Reporting Separate Burden Transactions with Source Resources .................................................................9-38
Accounting for Cost Adjustments Resulting from Burden Schedule Revisions............................................9-40
Accounting for Cost Adjustments Example 1: Total Burdened Costs without Incremental Transactions ....9-41
Accounting for Cost Adjustments Example 2: Total Burdened Costs with Incremental Transactions .........9-43
Accounting for Cost Adjustments Example 3: Summarized Burden Cost Components without Incremental
Transactions...................................................................................................................................................9-45
Accounting for Cost Adjustments Example 4: Summarized Burden Cost Components with Incremental
Transactions...................................................................................................................................................9-47
Agenda...........................................................................................................................................................9-49
Burden Calculation in Costing Programs ......................................................................................................9-50
Concurrent Programs: Total Burdened Cost Accounting ..............................................................................9-53
Practice - Distribute Total Burdened Costs ...............................................................................................9-54
Solution - Distribute Total Burdened Costs...............................................................................................9-56
Concurrent Programs: Account for Summarized Burden Cost Components.................................................9-60
Maintenance Concurrent Programs ...............................................................................................................9-61
Summary........................................................................................................................................................9-62
Performing Cost Adjustments ........................................................................................................................10-1
Performing Cost Adjustments........................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Agenda...........................................................................................................................................................10-5

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Adjusting Expenditure Items .........................................................................................................................10-6
Adjustments to Imported Transactions ..........................................................................................................10-7
Project Status and Adjustments .....................................................................................................................10-9
Recalculate Burden Cost................................................................................................................................10-10
Recalculate Raw Cost....................................................................................................................................10-11
Change Work Type........................................................................................................................................10-12
Change Comment ..........................................................................................................................................10-13
Split Item .......................................................................................................................................................10-14
Transfer Item .................................................................................................................................................10-15
Practice - Perform a Split and a Transfer...................................................................................................10-16
Solution - Perform a Split and a Transfer ..................................................................................................10-17
Change Currency Attributes ..........................................................................................................................10-24
Adjustments to Multi-Currency Transactions................................................................................................10-25
Adjustments to Supplier Costs.......................................................................................................................10-26
Mass Adjustments..........................................................................................................................................10-28
Correct Approved Expenditure Items ............................................................................................................10-30
Practice - Correct an Approved Expenditure Item.....................................................................................10-32
Solution - Correct an Approved Expenditure Item ....................................................................................10-33
Processing Adjustments.................................................................................................................................10-38
Results of Adjustment Processing .................................................................................................................10-40
Agenda...........................................................................................................................................................10-42
Audit Reporting for Expenditure Adjustments ..............................................................................................10-43
Summary........................................................................................................................................................10-45
Integration with Oracle Purchasing and Oracle Payables...........................................................................11-1
Integration with Oracle Purchasing and Oracle Payables..............................................................................11-3
Objectives ......................................................................................................................................................11-4
Agenda...........................................................................................................................................................11-5
Overview of Supplier Costs...........................................................................................................................11-6
Oracle Purchasing and Oracle Payables (Accrual) ........................................................................................11-7
Oracle Purchasing and Oracle Payables (Cash).............................................................................................11-9
Agenda...........................................................................................................................................................11-11
Entering Project-Related Information............................................................................................................11-12
Validating Project Information ......................................................................................................................11-14
Budgetary Control Activation........................................................................................................................11-15
Commitment Reporting .................................................................................................................................11-16
Guided Demonstration - Review Committed Costs...................................................................................11-18
Accounting Transactions ...............................................................................................................................11-19
Agenda...........................................................................................................................................................11-21
Integration with Oracle Purchasing ...............................................................................................................11-22
Documents in Oracle Purchasing...................................................................................................................11-24
Practice - Enter a Project-Related Requisition...........................................................................................11-25
Solution - Enter a Project-Related Requisition ..........................................................................................11-27
Practice - AutoCreate a Project-Related Purchase Order...........................................................................11-32
Solution - AutoCreate a Project-Related Purchase Order ..........................................................................11-34
Agenda...........................................................................................................................................................11-42
Supplier Costs and Accounting Methods.......................................................................................................11-43
Integration with Oracle Payables (Accrual)...................................................................................................11-44
Integration with Oracle Payables (Cash) .......................................................................................................11-46
Invoices in Oracle Payables...........................................................................................................................11-47
Practice - Create a Project-Related Supplier Invoice.................................................................................11-48
Solution - Create a Project-Related Supplier Invoice ................................................................................11-50
Agenda...........................................................................................................................................................11-55
Interfacing Supplier Costs .............................................................................................................................11-56
Predefined Transaction Sources ....................................................................................................................11-58
Predefined Transaction Sources (continued) .................................................................................................11-59
Practice - Interface Supplier Costs.............................................................................................................11-60

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Solution - Interface Supplier Costs............................................................................................................11-61
Supplier Cost Audit Report ...........................................................................................................................11-65
Expenditure Inquiry.......................................................................................................................................11-66
Viewing Project Adjustments from the Invoice Workbench .........................................................................11-67
Agenda...........................................................................................................................................................11-68
Managing Subcontractor Payments ...............................................................................................................11-69
Managing Financing and Advances...............................................................................................................11-71
Managing Retainage ......................................................................................................................................11-72
Agenda...........................................................................................................................................................11-74
Supplier Cost Adjustments Overview............................................................................................................11-75
Restrictions to Supplier Cost Adjustments in Oracle Project Costing ...........................................................11-77
Guided Demonstration - Allow Adjustments for a Supplier Cost Transaction Source..............................11-79
Adjusting Project-Related Documents in Oracle Purchasing ........................................................................11-80
Writing Off Receipt Accruals in Oracle Purchasing......................................................................................11-82
Adjusting Project-Related Documents in Oracle Payables............................................................................11-83
Adjusting Supplier Costs for Non-Capital Assets .........................................................................................11-85
Manually Adjusting Unmatched Reversing Expenditure Items.....................................................................11-86
Processing Adjustments.................................................................................................................................11-87
Prioritizing Supplier Costs Adjustments........................................................................................................11-89
Accounting for Supplier Cost Adjustments ...................................................................................................11-94
Practice - Adjust Supplier Costs ................................................................................................................11-99
Solution - Adjust Supplier Costs ...............................................................................................................11-101
Agenda...........................................................................................................................................................11-112
Oracle Purchasing and Oracle Payables Integration Implementation Steps ..................................................11-113
Implementing Oracle Purchasing and Oracle Payables Integration...............................................................11-115
Set Profile Options for Project-Related Documents ......................................................................................11-116
Define the Supplier Invoice Account Generator............................................................................................11-118
Defining a Project-Related Purchasing Transactions Account Generator .....................................................11-119
Specify a Default Supplier Cost Credit Account ...........................................................................................11-120
Guided Demonstration - Specify a Default Supplier Cost Credit Account................................................11-121
Define Project-Related Distribution Sets.......................................................................................................11-122
Define Oracle Payables Descriptive Flexfields and Related Profiles ............................................................11-123
Summary........................................................................................................................................................11-124
Integration with Oracle Internet Expenses ...................................................................................................12-1
Integration with Oracle Internet Expenses.....................................................................................................12-3
Objectives ......................................................................................................................................................12-4
Agenda...........................................................................................................................................................12-5
Oracle Internet Expenses ...............................................................................................................................12-6
Expense Report Flow.....................................................................................................................................12-7
Deriving Project Data from Expense Reports................................................................................................12-9
Disconnected Expense Reporting Process.....................................................................................................12-10
Adjusting Expense Reports............................................................................................................................12-11
Practice - Enter and Approve an Expense Report......................................................................................12-12
Solution - Enter and Approve an Expense Report .....................................................................................12-14
Guided Demonstration - Run Expense Report Export...............................................................................12-19
Practice - Interface Expense Report Costs.................................................................................................12-20
Solution - Interface Expense Report Costs ................................................................................................12-21
Agenda...........................................................................................................................................................12-27
Integration with Oracle Internet Expenses Implementation Steps.................................................................12-28
Install and Implement Oracle Internet Expenses ...........................................................................................12-29
Set Profile Options for Project-Related Expense Report Entry .....................................................................12-30
Set Profile Options for Project-Related Expense Report Approval ...............................................................12-31
Define the Project Expense Report Account Generator.................................................................................12-33
Define a Project-Related Expense Report Template .....................................................................................12-34
Summary........................................................................................................................................................12-35
Integration with Oracle Time and Labor ......................................................................................................13-1

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Integration with Oracle Time and Labor .......................................................................................................13-3
Objectives ......................................................................................................................................................13-4
Agenda...........................................................................................................................................................13-5
Oracle Time & Labor Overview....................................................................................................................13-6
Disconnected Time Entry ..............................................................................................................................13-7
Collecting and Processing Project-Related Timecards ..................................................................................13-8
Guided Demonstration - Set Timecard Approval Style .............................................................................13-10
Practice - Enter and Approve a Timecard..................................................................................................13-12
Solution - Enter and Approve a Timecard .................................................................................................13-14
Guided Demonstration - Import Timecard Costs.......................................................................................13-19
Editing Timecards in Oracle Time & Labor ..................................................................................................13-21
Contingent Worker Timecards with PO Integration ......................................................................................13-22
Agenda...........................................................................................................................................................13-24
Integration with Oracle Time & Labor Implementation Steps ......................................................................13-25
Install and Implement Oracle Time & Labor.................................................................................................13-26
Set Profile Options for Project-Related Timecards .......................................................................................13-27
Implement Client Extensions to Route and Approve Timecards...................................................................13-28
Summary........................................................................................................................................................13-29
Allocations and AutoAllocations ....................................................................................................................14-1
Allocations and AutoAllocations...................................................................................................................14-3
Objectives ......................................................................................................................................................14-4
Agenda...........................................................................................................................................................14-5
Overview of Allocations................................................................................................................................14-6
Allocation Terminology ................................................................................................................................14-7
Difference between Allocation and Burdening..............................................................................................14-9
Allocation Rules Implementation Steps ........................................................................................................14-10
Allocation Rules ............................................................................................................................................14-11
Basis Method .................................................................................................................................................14-12
Basis Method - Spread Evenly ......................................................................................................................14-13
Basis Method - Target Percent and Spread Evenly .......................................................................................14-14
Basis Method - Prorate ..................................................................................................................................14-15
Basis Method - Target Percentage and Prorate..............................................................................................14-16
Allocation Rule Definition ............................................................................................................................14-17
Source Definition...........................................................................................................................................14-19
Target Definition ...........................................................................................................................................14-21
Offset Definition............................................................................................................................................14-23
Prorated Basis Method Definition .................................................................................................................14-25
Copy Allocation Rules...................................................................................................................................14-26
Deleting or Modifying Allocation Rules .......................................................................................................14-27
Practice - Define an Allocation Rule .........................................................................................................14-28
Solution - Define an Allocation Rule ........................................................................................................14-30
Client Extensions for Allocations..................................................................................................................14-36
Agenda...........................................................................................................................................................14-38
Allocating Costs ............................................................................................................................................14-39
Creating Allocation Runs ..............................................................................................................................14-40
Allocation Run Statuses.................................................................................................................................14-41
Deleting Allocation Runs ..............................................................................................................................14-42
Releasing Allocation Runs ............................................................................................................................14-43
Reversing Allocation Runs ............................................................................................................................14-44
Practice - Process an Allocation Rule........................................................................................................14-45
Solution - Process an Allocation Rule .......................................................................................................14-47
Agenda...........................................................................................................................................................14-57
Overview of AutoAllocations........................................................................................................................14-58
AutoAllocation Rules Implementation Steps.................................................................................................14-61
AutoAllocation Set Definition.......................................................................................................................14-62
Implementing Workflow and Client Extensions for AutoAllocations...........................................................14-64

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Guided Demonstration - Review an AutoAllocation Set...........................................................................14-65
Agenda...........................................................................................................................................................14-67
Submitting an AutoAllocation Set.................................................................................................................14-68
Viewing the Status of AutoAllocation Sets ...................................................................................................14-69
Summary........................................................................................................................................................14-70
Asset Capitalization.........................................................................................................................................15-1
Asset Capitalization.......................................................................................................................................15-3
Objectives ......................................................................................................................................................15-4
Agenda...........................................................................................................................................................15-5
Overview of Asset Capitalization..................................................................................................................15-6
Project-Related Asset Processing Flow .........................................................................................................15-9
Accounting Example .....................................................................................................................................15-10
Agenda...........................................................................................................................................................15-16
Project Types for Asset Capitalization ..........................................................................................................15-17
Agenda...........................................................................................................................................................15-19
Asset Processing Flow...................................................................................................................................15-20
Specifying Costs ............................................................................................................................................15-22
Defining Assets for Capital Projects..............................................................................................................15-24
Streamlining Asset Creation ..........................................................................................................................15-26
Asset Grouping Levels ..................................................................................................................................15-27
Asset Cost Allocation Methods .....................................................................................................................15-28
Practice - Define and Assign Assets ..........................................................................................................15-29
Solution - Define and Assign Assets .........................................................................................................15-32
Specifying an Actual Date in Service or a Retirement Date..........................................................................15-45
Capital Events................................................................................................................................................15-46
Generating Summary Asset Lines .................................................................................................................15-48
Assigning Asset Lines ...................................................................................................................................15-50
Sending Asset Lines to Oracle Assets ...........................................................................................................15-51
Guided Demonstration - Create Final Subledger Accounting for Costs....................................................15-53
Practice - Capitalize Assets .......................................................................................................................15-56
Solution - Capitalize Assets.......................................................................................................................15-58
Agenda...........................................................................................................................................................15-70
Adjusting Capital Project Costs.....................................................................................................................15-71
Reversing Capitalization of Assets in Oracle Project Costing.......................................................................15-72
Abandoning a Capital Asset in Oracle Project Costing .................................................................................15-74
Agenda...........................................................................................................................................................15-75
Asset Capitalization Implementation Steps ...................................................................................................15-76
Implement Asset Extensions..........................................................................................................................15-77
Define Standard Unit Costs for Asset Cost Allocations ................................................................................15-79
Guided Demonstration - Define Standard Unit Costs for Asset Cost Allocations.....................................15-80
Enable Retirement Cost Processing...............................................................................................................15-81
Define Proceeds of Sale Expenditure Types..................................................................................................15-82
Practice - Define a Proceeds of Sale Expenditure Type ............................................................................15-83
Solution - Define a Proceeds of Sale Expenditure Type............................................................................15-84
Summary........................................................................................................................................................15-85
Asset Capitalization: Capitalizing Interest....................................................................................................16-1
Asset Capitalization: Capitalizing Interest ....................................................................................................16-3
Objectives ......................................................................................................................................................16-4
Agenda...........................................................................................................................................................16-5
Overview of Capitalized Interest ...................................................................................................................16-6
Setting Up Capital Projects for Capitalized Interest ......................................................................................16-8
Generating Capitalized Interest Expenditure Batches ...................................................................................16-9
Reviewing Capitalized Interest Expenditure Batches....................................................................................16-10
Inactive Capital Projects Report ....................................................................................................................16-11
Agenda...........................................................................................................................................................16-12
Capitalized Interest Implementation Steps ....................................................................................................16-13

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Defining Capitalized Interest Rate Names.....................................................................................................16-14
Practice - Define a Capitalized Interest Rate Name...................................................................................16-17
Solution - Define a Capitalized Interest Rate Name ..................................................................................16-18
Defining Capitalized Interest Rate Schedules................................................................................................16-21
Practice - Define a Capitalized Interest Rate Schedule..............................................................................16-23
Solution - Define a Capitalized Interest Rate Schedule .............................................................................16-24
Specifying Capitalized Interest Rate Schedules for Project Types................................................................16-27
Guided Demonstration - Specify a Capitalized Interest Rate Schedule for a Capital Project Type...........16-28
Practice - Assign a Capitalized Rate Schedule to a Project .......................................................................16-29
Solution - Assign a Capitalized Rate Schedule to a Project.......................................................................16-30
Setting Project Status Controls for Capitalized Interest.................................................................................16-33
Guided Demonstration - Set the Project Status Control for Capitalized Interest.......................................16-34
Implementing the Capitalized Interest Extension ..........................................................................................16-35
Summary........................................................................................................................................................16-36
Cross Charge....................................................................................................................................................17-1
Cross Charge .................................................................................................................................................17-3
Objectives ......................................................................................................................................................17-4
Agenda...........................................................................................................................................................17-5
Overview of Cross Charge.............................................................................................................................17-6
Cross Charge Terminology............................................................................................................................17-7
Cross Charge Types Example........................................................................................................................17-9
Processing Methods.......................................................................................................................................17-10
Agenda...........................................................................................................................................................17-11
Borrowed and Lent Processing......................................................................................................................17-12
Project and Task Setup ..................................................................................................................................17-13
Subledger Accounting Process Flow: Cross Charge .....................................................................................17-15
Borrowed and Lent Accounting.....................................................................................................................17-17
Cross Charge Adjustments ............................................................................................................................17-18
Processing Cross Charge Adjustments ..........................................................................................................17-20
Practice - Set Cross Charge Attributes for a Project..................................................................................17-22
Solution - Set Cross Charge Attributes for a Project .................................................................................17-23
Practice - Create and Process Cross Charges.............................................................................................17-27
Solution - Create and Process Cross Charges ............................................................................................17-29
Guided Demonstration - Complete Cross Charge Processing ...................................................................17-37
Practice - Review Cross Charges...............................................................................................................17-40
Solution - Review Cross Charges ..............................................................................................................17-41
Agenda...........................................................................................................................................................17-44
Borrowed and Lent Cross Charge Processing Implementation Steps............................................................17-45
Transfer Price Rules ......................................................................................................................................17-46
Practice - Define Transfer Price Rules.......................................................................................................17-48
Solution - Define Transfer Price Rules......................................................................................................17-49
Transfer Price Schedule.................................................................................................................................17-52
Practice - Define a Transfer Price Schedule ..............................................................................................17-54
Solution - Define a Transfer Price Schedule..............................................................................................17-55
Cross Charge Implementation Options..........................................................................................................17-57
Provider and Receiver Controls for Borrowed and Lent Accounting............................................................17-58
AutoAccounting Rules for Borrowed and Lent Transactions........................................................................17-59
Implement Cross Charge Extensions.............................................................................................................17-60
Summary........................................................................................................................................................17-61
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking ..............18-1
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking .....................18-3
Objectives ......................................................................................................................................................18-4
Agenda...........................................................................................................................................................18-5
Integration with Oracle Inventory..................................................................................................................18-6
Integration with Oracle Inventory Flow ........................................................................................................18-7
Miscellaneous Transactions...........................................................................................................................18-8

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Practice - Enter a Miscellaneous Transaction ............................................................................................18-9
Solution - Enter a Miscellaneous Transaction ...........................................................................................18-10
Launching Transaction Managers..................................................................................................................18-13
Transfer and Import .......................................................................................................................................18-14
Guided Demonstration - Process Miscellaneous Transactions ..................................................................18-15
Practice - View Inventory Expenditure Items............................................................................................18-18
Solution - View Inventory Expenditure Items ...........................................................................................18-19
Agenda...........................................................................................................................................................18-21
Oracle Inventory Integration Implementation Steps......................................................................................18-22
Install and Implement Oracle Inventory ........................................................................................................18-23
Enable Project Cost Collection......................................................................................................................18-24
Create a Project-Enabled Transaction Type ..................................................................................................18-25
Guided Demonstration - Create a Project-Enabled Transaction Type.......................................................18-27
Create an Inventory Expenditure Type..........................................................................................................18-28
Set Expenditure Type Profile Option.............................................................................................................18-29
Agenda...........................................................................................................................................................18-31
Integration with Oracle Project Manufacturing .............................................................................................18-32
Importing Project Manufacturing Costs ........................................................................................................18-33
Transaction Sources.......................................................................................................................................18-34
Transaction Sources (continued) ...................................................................................................................18-35
Agenda...........................................................................................................................................................18-36
Integration with Oracle Asset Tracking.........................................................................................................18-37
How Purchase Order Receipts Flow into Project-Related Transactions........................................................18-39
Importing Oracle Asset Tracking Cost ..........................................................................................................18-41
Summary........................................................................................................................................................18-42
Appendix B: Budgetary Controls and Budget Integration ..........................................................................19-1
Appendix B: Budgetary Controls and Budget Integration.............................................................................19-3
Objectives ......................................................................................................................................................19-4
Agenda...........................................................................................................................................................19-5
Overview of Budgetary Controls...................................................................................................................19-6
Budgetary Control Settings: Time Intervals ..................................................................................................19-7
Budgetary Control Settings: Control Levels..................................................................................................19-9
Example: Budgetary Control Rollup .............................................................................................................19-10
Entering Budget Amounts for Controlled Budgets........................................................................................19-11
Budget Definition Strategies..........................................................................................................................19-13
Transaction Processing with Controlled Budgets ..........................................................................................19-14
Overview of the Budgetary Control Process Flow ........................................................................................19-16
Viewing Budgetary Control Results ..............................................................................................................19-18
Maintaining Budgetary Control Balances......................................................................................................19-19
Budgetary Controls Cross Charge Restriction...............................................................................................19-20
Agenda...........................................................................................................................................................19-21
Overview of Budget Integration ....................................................................................................................19-22
Generating Accounting for Integrated Budgets .............................................................................................19-23
Accounting Event Model Overview ..............................................................................................................19-25
Budget Check Funds Processing Overview...................................................................................................19-28
Creating a Baseline for an Integrated Budget ................................................................................................19-30
Budget Integration Workflow........................................................................................................................19-32
Reviewing and Overriding Budget Account Details......................................................................................19-33
Viewing Encumbrance and Budget Subledger Accounting...........................................................................19-34
Agenda...........................................................................................................................................................19-35
Top-Down Budget Integration.......................................................................................................................19-36
Top-Down Budget Integration Procedures ....................................................................................................19-37
Encumbrance Accounting Example...............................................................................................................19-39
Creating Project Budgets for Top-Down Budget Integration ........................................................................19-42
Maintaining the Project Budget .....................................................................................................................19-43
Year-End Processing .....................................................................................................................................19-45

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Agenda...........................................................................................................................................................19-46
Bottom-Up Budget Integration ......................................................................................................................19-47
Bottom-Up Budget Integration Procedures ...................................................................................................19-48
Agenda...........................................................................................................................................................19-50
Non-Integrated Budgets with Budgetary Controls Procedures......................................................................19-51
Agenda...........................................................................................................................................................19-52
Budgeting Implementation Steps...................................................................................................................19-53
Define Additional Core Budgeting Setup......................................................................................................19-54
Implementing Budgetary Controls ................................................................................................................19-55
Budgetary Controls: Enable Budgetary Controls and Encumbrance Accounting .........................................19-56
Budgetary Controls: Define Profile Options..................................................................................................19-57
Budgetary Controls: Define Control Levels and the Time Interval...............................................................19-58
Budgetary Controls: Create an Initial Budget................................................................................................19-60
Budgetary Controls: Adjust Default Control Levels .....................................................................................19-61
Implementing Budget Integration..................................................................................................................19-63
Budget Integration: Define the Project Budget Account Generation Workflow ...........................................19-64
Budget Integration: Define Profile Options...................................................................................................19-66
Budget Integration: Implement Top-Down Integration .................................................................................19-67
Budget Integration: Implement Bottom-Up Integration ................................................................................19-69
Practice - Create a Bottom-Up Integrated Budget .....................................................................................19-70
Solution - Create a Bottom-Up Integrated Budget.....................................................................................19-72
Guided Demonstration - Transfer Budget Journal Entries to GL ..............................................................19-81
Summary........................................................................................................................................................19-83
Summary of R12 Project Costing Fundamentals .........................................................................................20-1
Summary of R12 Project Costing Fundamentals...........................................................................................20-3
Objectives ......................................................................................................................................................20-4
Agenda...........................................................................................................................................................20-5
Defining Projects for Costing ........................................................................................................................20-6
Expenditures ..................................................................................................................................................20-7
Performing Cost Processing ..........................................................................................................................20-8
Accounting for Costs .....................................................................................................................................20-11
Burden Costing..............................................................................................................................................20-12
Integration with Oracle Purchasing and Oracle Payables..............................................................................20-13
Integration with Oracle Internet Expenses.....................................................................................................20-14
Integration with Oracle Time & Labor ..........................................................................................................20-15
Integration with Other Applications ..............................................................................................................20-16
Allocations and AutoAllocations...................................................................................................................20-17
Asset Capitalization.......................................................................................................................................20-18
Asset Capitalization: Capitalized Interest......................................................................................................20-19
Cross Charge .................................................................................................................................................20-20
Budgetary Controls and Budget Integration ..................................................................................................20-21
Agenda...........................................................................................................................................................20-22
Oracle Projects Fundamentals Learning Path ................................................................................................20-23
Summary........................................................................................................................................................20-24

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Preface
Profile
Before You Begin This Course

• Working experience with project management and project accounting

Prerequisites

• R12 eBusiness Essentials for Implementers

• R12 Project Foundation Fundamentals

How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.

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Related Publications
Oracle Publications
Title Part Number
Oracle Project Costing User Guide B25618-02
Oracle Projects Implementation Guide B25623-02
Oracle Projects Fundamentals B25617-02
Oracle Projects APIs, Client Extensions, and Open Interfaces B25624-02
Reference

Additional Publications

• System release bulletins

• Installation and user’s guides

• Read-me files

• International Oracle User’s Group (IOUG) articles

• Oracle Magazine

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xiv
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, “Working with
initial caps; Objects.”
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
Arrow Menu paths Select File > Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

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Typographic Conventions in Code
Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;

Passwords DROP USER scott


IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (‘prod_pie_layer’))

Lowercase Syntax variables CREATE ROLE role


italic
Uppercase SQL commands and SELECT userid
functions FROM emp;

Typographic Conventions in Oracle Application Navigation Paths


This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.

(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve

This simplified path translates to the following:

1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

Notations:

(N) = Navigator

(M) = Menu

(T) = Tab

(B) = Button

(I) = Icon

(H) = Hyperlink

(ST) = Sub Tab

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Typographical Conventions in Oracle Application Help System Paths
This course uses a “navigation path” convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

1. In the navigation frame of the help system window, expand the General Ledger entry.

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

4. Review the Enter Journals topic that appears in the document frame of the help system
window.

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xviii
Overview of Oracle Project
Costing
Chapter 1

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Overview of Oracle Project Costing


Chapter 1 - Page 1
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Overview of Oracle Project Costing


Chapter 1 - Page 2
Overview of Oracle Project Costing

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Overview of Oracle Project Costing


Chapter 1 - Page 3
Objectives

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Overview of Oracle Project Costing


Chapter 1 - Page 4
Agenda

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Overview of Oracle Project Costing


Chapter 1 - Page 5
Oracle Enterprise Project Management Solution

Oracle Enterprise Project Management Solution


You can use Oracle Project Costing to collect, process, and track costs against projects and
tasks. You can enact cost controls and report on costs for all project activities. Oracle Project
Costing is part of the Oracle Enterprise Project Management solution. Oracle Enterprise
Project Management provides a set of applications that help companies deliver global projects
by integrating and managing project information. It enables all persons at all levels of the
enterprise to participate in and collaborate on the projects at appropriate levels in a centralized
environment. Information is available to the project team through personalized and secure role-
based views.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 6
Oracle Project Costing and Integration

Oracle Project Costing and Integration


Oracle Project Costing imports data from these applications:
• Oracle Asset Tracking - Oracle Asset Tracking enables you to provide users with access
to tracking information, without allowing them access to sensitive processes related to
assets and purchasing. You can also track inventory items after you have installed them
and link financial transactions to the physical movement of equipment. Oracle Asset
Tracking enables you to create assets upon receipt in Oracle Purchasing. After you create
the asset, Oracle Asset Tracking performs the changes in the background for any further
physical movement. For example, if you move the asset from one location to the other,
then Oracle Asset Tracking performs the asset cost, distribution, and unit changes without
manual intervention. Oracle Asset Tracking integrates with Oracle Inventory, Oracle
Purchasing, Oracle Project Costing, Oracle Assets, and Oracle Payables, and stores
information collected from them.
• Oracle Internet Expenses - Oracle Internet Expenses enables you to enter project-
related expense reports. Once approved, the expense reports are imported into Oracle
Payables. Oracle Payables creates invoices from the expense reports, maintains
payments, and creates subledger accounting entries. In Oracle Project Costing, expense
reports are interfaced as actual costs from Oracle Payables.
Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 7
• Oracle Inventory - You can implement Oracle Inventory to Oracle Project Costing
integration, enabling you to interface costs from Oracle Inventory to Oracle Project
Costing, without installing Oracle Project Manufacturing. When you enter project–related
transactions in Oracle Inventory, you enter the project information on the source
transaction. Oracle Inventory and Oracle Project Costing carry the project information
through from the Issue To or Receipt From transaction in Oracle Inventory to the project
expenditure in Oracle Project Costing.
• Oracle iProcurement - You can enter project-related purchase requisitions using Oracle
iProcurement. After requisition approval, you can AutoCreate a purchase order in Oracle
Purchasing. Oracle Purchasing copies the project information to the purchase order.
• Oracle Payables - In Oracle Payables, you can match a supplier invoice to an existing
purchase order or receiving transaction. Oracle Payables automatically copies the project
information from the purchase order distribution lines when you perform the match. You
can also create non-matched supplier invoices in Oracle Payables and enter invoice
distributions to charge invoice costs to projects. You can use both Oracle Purchasing and
Oracle Payables, or just Oracle Payables. You can set up Oracle Payables to apply
discounts to payments. After you enter a payment with discounts, you interface the
discounts to Oracle Project Costing. Oracle Payables creates subledger accounting entries
for project-related supplier costs.
• Oracle Purchasing - When you enter project-related transactions in Oracle Purchasing,
you only need to enter project information on the source document; either the requisition
or the purchase order. The Account Generator automatically creates the account
information, based on the project-related information you enter. You can also use the
Buyer WorkCenter in Oracle Purchasing to enter project-related purchase orders. When a
purchase order shipment is flagged to accrue at receipt and the purchased goods are
delivered to an expense destination, you enter a receiving transaction for the purchase
order in Oracle Purchasing and create subledger accounting for the receiving transaction
in final mode. Next, you interface receipt accruals to Oracle Project Costing.
• Oracle Project Manufacturing - Oracle Project Costing acts as a cost repository for
manufacturing-related activities from other products in the Oracle Project Manufacturing
suite. Oracle Project Manufacturing is a type of manufacturing environment where large
projects drive production requirements. You define the Work Breakdown Structure for a
manufacturing project in Oracle Project Costing. You track manufacturing costs by
project and task and use Transaction Import to import them into Oracle Project Costing.
• Oracle Time & Labor - Oracle Time & Labor integrates with Oracle Project Costing to
enable employees and contingent workers to enter and submit project-related timecards.
Employees and contingent workers enter their own time, which you can subject to an
approval process according to your business rules. You can transfer approved timecards
to Oracle Project Costing, Oracle Payroll, and Oracle Human Resources. After you
import the timecards into Oracle Project Costing, you cost the timecards and derive the
default accounting using AutoAccounting. During cost processing, the raw cost and any
additional burden cost is calculated. Finally, you generate cost accounting events and
create accounting for the timecards in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 8
Oracle Project Costing and Integration

Oracle Project Costing and Integration


Oracle Project Costing sends data to these applications:
– Oracle Assets - Using asset capitalization functionality, you can define capital assets and
capture construction–in–process (CIP) and expense costs for assets you are creating.
When you are ready to place assets in service, you can generate asset lines from the CIP
costs and send the lines to Oracle Assets for posting as fixed assets. You can also define
retirement adjustment assets and capture cost of removal and proceeds of sale amounts
(collectively referred to as retirement costs, retirement work–in–process, or RWIP) for
assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and
send the lines to Oracle Assets for posting as adjustments to the accumulated depreciation
accounts for the group asset that corresponds to each asset.
– Oracle General Ledger - Oracle Project Costing integrates with Oracle General Ledger
via Oracle Subledger Accounting so that you can update your general ledger with Oracle
Project Costing activity. You use Oracle Project Costing to collect project cost detail
transactions, and then to generate accounting events that Oracle Subledger Accounting
uses to create the accounting. Oracle Subledger Accounting transfers the final accounting
entries to Oracle General Ledger.
Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 9
– Oracle Subledger Accounting - Oracle Subledger Accounting is an intermediate step
between each of the subledger applications and Oracle General Ledger. Oracle Subledger
Accounting stores a complete and balanced subledger journal entry in a common data
model. Oracle Project Costing uses AutoAccounting, or the Project Budget Account
Generation workflow for integrated budgets, to derive default accounts for transactions.
You submit concurrent programs in Oracle Project Costing to generate accounting events
and create accounting entries in Oracle Subledger Accounting. Oracle Project Costing
predefines setup in Oracle Subledger Accounting so that it accepts the default accounts
that Oracle Project Costing derives without change. Oracle Subledger Accounting
transfers the final accounting to Oracle General Ledger. If you define your own detailed
accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
overwrites default accounts, or individual segments of accounts, that Oracle Project
Costing derives using AutoAccounting.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 10
Agenda

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Overview of Oracle Project Costing


Chapter 1 - Page 11
Oracle Project Costing and Project Classes

Oracle Project Costing and Project Classes


You can use Oracle Project Costing to collect costs associated with all of your project
activities.
For example, you can use indirect projects to track costs associated with research and
development, non-billable sales proposal activities, or general overhead operational costs for
departments such as purchasing or human resources. Capital projects enable you to capture
construction-in-process (CIP) costs for assets you are creating. You can also use capital
projects to capture the cost of removal and proceeds of sale amounts (RWIP) for assets you are
retiring. You also can track costs associated with contract projects. In conjunction with Oracle
Project Billing, you can generate revenue and customer invoices for contract projects. This
enables you to report on both project costs and revenue.
For additional discussion regarding contract projects, see the course titled “R12 Project Billing
Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 12
Overview of Resources In Oracle Projects

Overview of Resources in Oracle Projects


Oracle Projects provides a centralized resource pool as part of the core foundation in which
employees and contingent workers are identified as resources. Each of the applications in the
Oracle Projects suite utilizes this resource pool differently:
• Oracle Project Costing: Collects project-related timecard and expense report costs for
resources. Provides resource cost controls and cross-charging for shared resources.
• Oracle Project Billing: Generates revenue and invoices by billing labor hours on a
project.
• Oracle Project Management: Creates a budget for labor costs to plan and manage the
financial performance of projects throughout the project lifecycle.
• Oracle Project Collaboration: Allows resources to participate as team members for
communicating progress against assigned tasks by directly accessing the published
workplan, and assigns actions to fellow team members so that the ownership and steps to
resolution are communicated clearly and consistently.
• Oracle Project Resource Management: Locates the appropriate resources to staff project
requirements based on competencies and availability. As a resource, you can also search
for requirements that match your particular skills.

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Overview of Oracle Project Costing


Chapter 1 - Page 13
Collecting Resource Costs
Resources can charge time to projects. For labor costs, you can:
• Associate each labor expenditure item with a scheduled work assignment and a work type.
• Maintain labor cost rate schedules by employee or by job.
• Calculate costs based on labor.
• Override labor cost rates for individuals.
• Define a method for calculating overtime cost.
• Maintain burden schedules to calculate additional costs of doing business that support the
raw costs.
• Report on actual resource utilization based on actual hours from timecards.
• Query expenditure items for specific resources.
Oracle Project Costing integrates with Oracle Time & Labor to capture project-related
timecards for resources.
Resources can also charge expenses to projects. Oracle Project Costing integrates with Oracle
Internet Expenses and Oracle Payables to capture project-related expense reports.
Note: Employees and contingent workers do not have to be scheduleable project resources to
charge time and expenses to projects. Optionally, you can use transaction controls to control
charges to tasks based on the resources assigned to the workplan tasks.
Cross Charge
When projects share resources within an enterprise, it is common to see those resources shared
across organization and country boundaries. Further, project managers can also divide the work
into multiple projects for easier execution and management. Oracle Project Costing provides
cross charge features to enable project managers to view the current total costs of the project,
regardless of who performs the work or where it is performed.
Project Allocations
You can use the allocations feature to distribute cost amounts between and within projects and
tasks, or to projects in other organizational units. You can select resources groups and
resources when you define allocation sources and proration basis methods.

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Overview of Oracle Project Costing


Chapter 1 - Page 14
Costing Flow

Costing Flow
Oracle Project Costing enables you to track and account for all project costs. You can enter
transactions directly into Oracle Project Costing using expenditure batches, import transactions
from other Oracle Applications, such as Oracle Time & Labor, or import transactions from
external systems.
Costing Flow Example (Labor Cost)
1. Enter or import expenditures - You can enter pre-approved expenditure batches or
import transactions from other Oracle applications or external applications.
2. PRC: Distribute Labor Costs - Calculates the raw and burden cost amounts for labor cost
expenditure items and uses AutoAccounting to determine the default debit account for
each expenditure item.
3. PRC: Generate Cost Accounting Events - Uses AutoAccounting to determine the
default credit account for expenditure items and generates accounting events for
distributed transactions.
4. PRC: Create Accounting - Creates subledger journal entries for eligible accounting
events. You can run the program in either draft or final mode. Optionally, the program
can post journal entries in Oracle General Ledger.

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Overview of Oracle Project Costing


Chapter 1 - Page 15
5. PRC: Transfer Journal Entries to GL - When you run the program PRC: Create
Accounting, if you select No for the parameter Transfer to GL, then you run must the
program PRC: Transfer Journal Entries to GL to send journal entries to Oracle General
Ledger.
6. Journal Import (in Oracle General Ledger - Imports the final accounting entries from
Oracle Subledger Accounting into Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 16
Collect and Manage All Costs

Collect and Manage All Costs


Oracle Project Costing is an integrated cost management solution for all projects and activities
within an enterprise. With Oracle Project Costing you can manage costs across currency and
organizational boundaries. Oracle Project Costing also acts as a central repository of project
transactions, processes project costs, and creates corresponding accounting.
Methods of Entering Expenditures
You can use pre-approved batches to enter expenditures directly into Oracle Project Costing
and Transaction Import to import expenditures into Oracle Project Costing from external
sources. In addition, you can use Microsoft Excel Integration to enter expenditures and then
import the expenditures into Oracle Project Costing. Oracle Project Costing also integrates
with other Oracle applications. You can collect project-related costs in applications such as
Oracle Time & Labor, Oracle Purchasing, Oracle Payables, Oracle iProcurement, Oracle
Inventory, Oracle Project Manufacturing, Oracle Asset Tracking, and Oracle Internet
Expenses.

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Overview of Oracle Project Costing


Chapter 1 - Page 17
Manage Costs

Manage Costs
After you collect costs, you can perform adjustments as needed. You can also use features such
as cross charge, burdening, project allocations, and asset capitalization to further process the
costs. The adjustment functionality in Oracle Project Costing gives you control over your
project costs. You can adjust your project costs online, create accounting for the adjustments,
and provide a historical audit trail of all activities. You can perform a wide variety of
adjustments - including correcting approved expenditures, changing the capitalizable or
billable status of expenditure items, recalculating raw or burdened costs, splitting expenditure
items, and transferring expenditures to another project.
Cross Charge
A cross charge takes place when the expenditure organization of an expenditure item is
different from task owning organization of the task being charged. These organizations are
called the provider and receiver organizations. The organizations can be within the same
operating unit or belong to different operating units. You may perform additional cross charge
processing to pass costs or share revenues between the provider and receiver organizations.
This processing includes creating borrowed and lent accounting entries or generating
intercompany invoices.

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Overview of Oracle Project Costing


Chapter 1 - Page 18
Burdening
Burden costs are costs of doing business that support raw costs. For example, you can define a
burden cost code of G&A to burden specific raw costs with general and administrative
overhead costs. You can create subledger accounting for burden cost and post the accounting to
Oracle General Ledger.
Project Allocations
The allocations feature in Oracle Project Costing can distribute amounts between and within
projects and tasks, or to projects in other organizational units. For example, you can allocate
amounts such as salaries or administrative overhead across several projects and tasks.
Your allocations can be as simple or elaborate as you like. You identify the amounts you want
to allocate (source) and then define the targets, the projects and tasks to which you want to
allocate the source amounts. Optionally, you can offset the allocations with reversing
transactions. The system gathers source amounts into a source pool, and then allocates to the
targets using the basis method that you specify in the allocation rule. You can use a basis
method of Spread Evenly to divide the source pool amount equally among all the chargeable
target tasks included in the rule. Alternatively, you could select Prorate as the basis method to
use the attributes set in the Basis window.
When you allocate amounts, you create expenditure items whose amounts are derived from one
or more of the following sources:
• Existing summarized expenditure items in Oracle Project Costing
• A fixed amount
• Amounts in an Oracle General Ledger account balance
Asset Capitalization
Using asset capitalization functionality, you can define capital assets and capture construction–
in–process (CIP) and expense costs for assets you are creating. When you are ready to place
assets in service, you can generate asset lines from the CIP costs and send the lines to Oracle
Assets for posting as fixed assets. You use capital projects to capture the costs of capital assets
you are building, installing, or acquiring.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work–in–process, or
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
for the group asset that corresponds to each asset.
You can also calculate and record capitalized interest for capital projects. Capitalized interest
(also referred to as Allowance for Funds Used During Construction) is an estimate of the
interest cost that enterprises incur when they invest in long–term capital projects. Subject to
accounting rules and regulatory guidelines, enterprises can capitalize interest as part of the total
cost of acquiring and constructing assets that require an extended amount of time to prepare for
their intended use.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 19
View Accounting: Transaction Details

View Accounting: Transaction Details


From Oracle General Ledger, you can drill down to subledger details from the Account
Inquiry, Enter Journals, or View Journals windows for journals that have specific journal
sources assigned to them. For example, you can select a labor cost journal entry line with the
source Projects and select the Line Drilldown button to view the details in Oracle Subledger
Accounting. Next you can choose to either view the subledger journal entry or to view the
transaction. When you choose to view the transaction, the system drills down to Oracle Project
Costing and queries the individual expenditure items that make up the subledger journal entry
in expenditure inquiry.
You can also perform inquiries directly in Oracle Subledger Accounting to view transaction
details for accounting events. When you view a transaction for a cost accounting event, Oracle
Subledger Accounting drills down to Oracle Project Costing and automatically opens and
queries information in expenditure inquiry. Similarly, you can drill down to other subledger
applications to view transaction information for the accounting events that originated in those
applications. In Oracle Subledger Accounting, you can query accounting events, journal
entries, and journal entry lines based on multiple selection criteria.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 20
View Accounting: Final Subledger Accounting Entries

View Accounting: Final Subledger Accounting Entries


You can use expenditure inquiry in Oracle Project Costing to view final subledger accounting
entries for expenditure items. Use the View Accounting option from the Tools menu to review
accounting entries. You must create accounting in final mode for the accounting events
associated with the expenditure item to view accounting entries.
Note: For both historical (prior to Release 12) expenditure items not migrated to Oracle
Subledger Accounting, and transactions accounted in an external system and interfaced into
Oracle Project Costing, the View Accounting option displays accounts from the cost
distributions table in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 21
View Expenditure Item Details

View Expenditure Item Details


You can also use expenditure inquiry to view detailed information for each expenditure item.
Depending on the expenditure item, you can:
• View cost distribution line information for each expenditure item, including the default
accounting entries that Oracle Project Costing derived using AutoAccounting, the PA
and GL period, and the accounting event generation status.
• View the revenue distribution lines for billable expenditure items (contract projects).
• Drill down to Oracle Payables if the supplier cost expenditure item was interfaced to
Oracle Project Costing from Oracle Payables.
• Drill down to the Receipt Transaction Summary window in Oracle Purchasing for
receipt accrual expenditure items.
• Drill down to view purchase order details in Oracle Purchasing for contingent worker
labor cost expenditure items that are associated with a purchase order.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing


Chapter 1 - Page 22
Summary

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Overview of Oracle Project Costing


Chapter 1 - Page 23
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Overview of Oracle Project Costing


Chapter 1 - Page 24
Defining Projects for Costing
Chapter 2

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Defining Projects for Costing


Chapter 2 - Page 1
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Defining Projects for Costing


Chapter 2 - Page 2
Defining Projects for Costing

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Defining Projects for Costing


Chapter 2 - Page 3
Objectives

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Defining Projects for Costing


Chapter 2 - Page 4
Agenda

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Defining Projects for Costing


Chapter 2 - Page 5
Overview of Projects and Tasks

Overview of Projects and Tasks


You can create a project with one structure defined for workplan management purposes and
another defined for financial management purposes, or you can use one structure for both
purposes:
• Workplan Management
- The workplan management functionality helps project managers and team members
deliver projects on time.
• Financial Management
- Financial management functionality helps project and financial administrators and
managers track billing, costs, budgets, and other financial information for projects.
You can use three predefined project classes that track the following types of information:
• Indirect projects - Track overhead activities and costs.
• Capital projects - Track asset development activities and costs, and costs are capitalized
as one or more assets.
• Contract projects - Contract projects track cost, revenue, and billing.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 6
Project Classes and Project Types

Project Classes and Project Types


Oracle Project Foundation predefines project classes, but you define project types as part of
your implementation. The project type controls how Oracle Project Foundation creates and
processes projects, and is a primary classification for the projects your business manages. You
must set up at least one project type to create projects. You must set up project types for each
operating unit.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 7
Overview of Project Templates

Overview of Project Templates


You use project templates to create new projects. When you create a project from a project
template or an existing project, Oracle Project Foundation copies the financial structure from
the source project or template. Project templates belong to only one operating unit. You can
maintain and copy project templates within an operating unit. However, project template
numbers are unique across operating units. A project template number cannot duplicate any
project or project template number within the installation. For additional information, see the
course titled "R12 Project Foundation Fundamentals."

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 8
Organizing a Project Structure

Organizing a Project Structure


A project financial structure is a task tree showing the organization of project work. It can be
as simple or detailed as you want it to be. There are no limits in width or levels. The position of
the task in the hierarchy determines what you can do with it:
• Top Task
- A task whose parent is the project.
- For example, use top tasks for budgeting and rollup reporting.
• Middle Task
- A task that is not a top task or a lowest task.
- For example, use middle tasks for rollup reporting.
• Lowest Task
- A task that is at the bottom of the structure, without any child tasks. A top task can
also be considered a lowest task, if the task does not have any child tasks.
- For example, use lowest tasks for transaction entry, budgeting, and override entry.
Expenditures are always charged to a lowest task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 9
Basic Project Information

Basic Project Information


• Project Name - A short and descriptive name of a project. Use this name to find and
identify a project.
• Long Name - A longer, unique descriptive name for the project. It can be up to 240
characters long. The default value is the short name (Name).
• Project Number- A unique identification number of a project. You use this number to
find and identify the project. You can manually enter a project number, or let the system
automatically generate one for you. For audit trail purposes, you cannot modify a project
number after you charge expenditure items, requisitions, purchase orders, or supplier
invoices to the project. If project numbering is automatic, then you cannot modify the
number at any point.
• Project Organization - The managing or owning organization of a project. Use the
organization for reporting and AutoAccounting purposes.
• Project Type - The project type determines how Oracle Project Costing processes costs
(expenditure items) for a project and provides defaults and controls for project entry and
processing. For audit trail purposes, you cannot change a project type after you charge
expenditure items, requisitions, purchase orders, or supplier invoices to the project.

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Defining Projects for Costing


Chapter 2 - Page 10
• Project Status - Indicates the current status of a project.
• Description - A description of the project.
• Public Sector - Use the Public Sector check box to indicate whether a project is a private
or public sector project. Use this for reporting and AutoAccounting purposes.
• Access Level - Access levels control who can search for and view a project. You can
specify one of the following access level values for a project:
- Secured
- Enterprise
• Location - Use project location information to match resource location to work site
location (the location of the project). Location includes three attributes:
- City
- Region
- Country

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Defining Projects for Costing


Chapter 2 - Page 11
Agenda

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Defining Projects for Costing


Chapter 2 - Page 12
Burden Schedules for Costing

Burden Schedules for Costing


Costing Burden Schedules
The default costing burden schedule for a project comes from its project type. You can enter
the following information in the Costing Burden Schedules window:
• Burden Schedule
- Enter the burden schedule you want to use for this project or task.
• Burden Hierarchy
- Enter the burden hierarchy you want to default to each burden schedule version.
• Fixed Date
- Enter a fixed date for the burden schedule if you want all expenditure items to be
burdened with the multipliers in effect as of that date.
For additional discussion regarding burden schedules, see the lesson titled “Implementing
Burden Costing.”

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 13
Organization Overrides

Organization Overrides
You can reassign an employee’s or an entire organization’s costs and revenue to a different
organization for a particular project. When you enter an organization distribution override, the
new organization you enter overrides the expenditure organization Oracle Project Costing uses
in AutoAccounting and in burdening. For AutoAccounting processing, if an organization
distribution override exists, the destination organization of the override is substituted for the
actual expenditure organization. You can enter the following information in the Organization
Overrides window:
• Source Organization - Enter the source organization whose costs and revenue you want
to assign to a different organization.
• Employee Name/Number - Enter the name and number of the employee for this project
whose costs and revenue you want to assign to a different organization.
• Expenditure Category - The expenditure category for the costs you want to assign to a
different organization.
• Destination Organization - The new organization to which you want to reassign costs
and revenue.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 14
Project Currency

Project Currency
You define a project currency for each project. This currency can differ from the functional
currency of the operating unit that owns the project. You can select any active currency defined
in Oracle General Ledger.
In a multinational business environment, employees from locations across the world can report
to one operating unit. Therefore, an operating unit can own projects being managed and
implemented from various remote sites. The project managers of these projects need the ability
to report project costs and revenues in the local currencies of the countries where the work is
being performed. To accomplish this, you have the ability to define a project currency that
differs from the functional currency of the operating unit owning the project.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 15
Currencies and Expenditures

Currencies and Expenditures


Transaction amounts are stored in the following currencies:
• Transaction Currency
- The currency in which a project transaction occurs.
• Expenditure Functional Currency
- The functional currency of the expenditure operating unit.
• Project Functional Currency
- The functional currency of the operating unit that owns the project.
• Project Currency
- The user–defined project currency.
When you enter transactions in a currency that is different from functional currency or project
currency, Oracle Project Costing must convert the transaction amount to the functional and
project currencies. To convert transaction currencies, Oracle Project Costing must first
determine the exchange rate type and exchange rate date.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 16
Costing Currency Options

Costing Currency Options


When you create a new project, the system copies the default value for the project currency
code from the functional currency defined in the Implementation Options for the project-
owning operating unit. You can override the default currency code and enter default
conversion attributes for the project in the Costing tab of the Currency window. Oracle Project
Costing displays the attributes you select as the default values during expenditure entry, and
also uses the values for imported transactions.
Project Currency Attribute Hierarchy
To convert transaction currencies to functional and project currencies, Oracle Project Costing
must first determine the exchange rate type and exchange rate date. Each attribute is
determined separately. If Oracle Project Costing finds a rate type in step one, but no rate date is
present at that level, then it uses the rate type and then follows the logic to the next level to
determine the rate date. During project and task setup, Oracle Project Costing copies the values
you enter to all the underlying tasks in the financial structure.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 17
Practice - Create a Project
Overview
In this practice, you will create a new project from an existing template and change the project
currency to EUR.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Create a Project

Copy the Capital Services Template to create a new project with the values as specified in the
following table:

Field Value
Project Number XXCS
Project Name XX Capital Services
Project Manager Gray, Mr. Donald R.
Organization Services-East
Project Start Date Today's Date
Project Finish Date Two Years from Today

Change the Project Currency

Your project is based in Paris. Change the project currency to EUR and select Corporate as the
rate type to convert to project functional currency and to project currency.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 18
Solution - Create a Project
Create a Project

1. Login to Oracle Applications:


− Username = SERVICES
− Password = WELCOME

2. Responsibility = Projects, Vision Services (USA)

3. Navigate to the Find Projects window.

• (N) Projects

4. Find the Capital Services Template.

• Enter the find criteria:


− Name = Capital Services Template

• (B) Find

5. Select the Capital Services Template on the Projects, Templates Summary window.

6. (B) Copy To...

7. Complete the fields on the Project Quick Entry window as specified in the following table:

Field Value
Project Number XXCS
Project Name XX Capital Services
Project Manager Gray, Mr. Donald R.
Organization Services-East
Project Start Date Today's Date
Project Finish Date Two Years from Today

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Defining Projects for Costing


Chapter 2 - Page 19
8. (B) OK

9. Revise the project description.

Change the Project Currency

10. Select your new XXCS project.

11. (B) Open

12. Select the Currency option.

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Defining Projects for Costing


Chapter 2 - Page 20
13. (B) Detail

14. Complete the fields on the Currency window as specified in the following table:

Field Value
Project Currency EUR
Conversion Attributes to Project Corporate
Functional Currency - Rate Type
Conversion Attributes to Project Corporate
Currency - Rate Type

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Defining Projects for Costing


Chapter 2 - Page 21
15. (I) Save

16. Close the open windows and return to the Navigator.

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Defining Projects for Costing


Chapter 2 - Page 22
Agenda

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Defining Projects for Costing


Chapter 2 - Page 23
Controlling Expenditures Overview

Controlling Expenditures Overview


Oracle Project Costing provides you with many levels of charge controls:
• Project Status - You can use the project status to control whether any charges are allowed
for the project.
• Task Chargeable Status - You can specify a lowest task as chargeable or non–chargeable
to control whether any charges are allowed for the task.
• Transaction Dates -You can specify the transaction dates of a lowest task to record the
date range for which charges are allowed for the task. You can also specify transaction
dates at the project-level.
• Transaction Controls - You can define transaction controls to specify the types of
transactions that are chargeable or non–chargeable for the project and tasks.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 24
Project Statuses

Project Statuses
When you define a status, the Status Controls region contains a list of actions that are allowed
or restricted for each status. To allow charges on a project, you must assign the project a status
with the status control Create New Transactions enabled. To allow users to adjust transaction
on a project, you must assign the project a status with the status control Adjust Transactions
enabled. For additional discussion regarding defining project statuses, see the course titled
“R12 Project Foundation Fundamentals.”
Note: The Create New Transactions status control only affects new transactions. It does not
prevent reversals that Oracle Project Costing creates when you adjust transactions. In addition,
it does not prevent you from splitting transactions. For example, if you change the project
status to a status that does not allow new transactions and transfer an existing expenditure item
to another project, then Oracle Project Costing still creates the reversing expenditure item on
the original project and task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 25
Task Chargeable Status

Task Chargeable Status


The Allow Charges check box controls whether or not you can charge new expenditure items
to a task. The default setting is to allow charges for all new tasks. Disable the Allow Charges
check box if you want to prevent new charges to a task.
Note: This task-level control only affects new transactions. It does not prevent reversals. For
example, if you disable the option for a task and transfer an existing expenditure item from that
task to a new task, then Oracle Project Costing still creates the reversing expenditure item on
the original task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 26
Transaction Dates

Transaction Dates
Project Transaction Dates
The transaction start date and finish date control which transactions you can charge to the
project. You cannot charge an expenditure item to a project if the expenditure item date falls
outside the project-level transaction dates. You must enter a start date to enter a finish date.
Task Transaction Dates
Task transaction dates must be within the corresponding project dates and within the dates of
the parent task. The transaction start and finish dates control the transactions that can be
charged to the task. You cannot charge an expenditure item to a task if the expenditure item
date falls outside the task dates. Default values for task transaction dates are the project
transaction dates (for top tasks) or the parent task’s transaction dates (for subtasks).

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 27
Transaction Controls

Transaction Controls
Use transaction controls to configure your projects and tasks to allow only charges that you
expect or plan. You can also define which items are billable and non-billable on your contract
projects. For capital projects, you can define which items are capitalizable and non-
capitalizable. This proactive means to control charges to projects enables you to better manage
your projects. You enter transaction controls in the Project Options and Task Options windows.
You must specify either an employee or an expenditure category for each record. You can
specify a non-labor resource for usage expenditure types.
Employee Transaction Controls
Transaction controls that you define for people (employees and contingent workers) do not
apply to transactions that are not associated with people. This includes supplier cost
transactions entered for a supplier not associated with a person, and usage items incurred by an
organization and not a person. If you define transaction controls to list people who can charge
to your project, then Oracle Project Costing allows transactions incurred by those people. It
also allows any supplier cost transactions and usage items incurred by an organization, and any
other transactions that do not require an employee number.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 28
When you enter expense reports in Oracle Payables using suppliers associated with employees,
Oracle Project Costing validates the transaction using the person associated with the supplier.
For example, if you specify that Donald Gray cannot charge to the project, and you enter an
expense report item for the supplier GRAY, DONALD who is associated with the person
Donald Gray, Oracle Project Costing does not allow you to charge the item to the project,
because it validates the transaction controls that you have defined.
Scheduled Expenditures Only Controls
When Oracle Project Resource Management is installed, you can specify that only employees
with scheduled work assignments are allowed to charge labor and expense report transactions.
Specifying Billable and Capitalizable Transactions
You can control what transactions for contract projects are non-billable and what transactions
for capital projects are non-capitalizable when you set the Billable/Capitalizable field. You can
choose between the options of No or Task Level. Select No if you want the charges to be non-
billable or non-capitalizable. Select Task Level if you want the billable or capitalizable status to
default from the task to which the item is charged.
Workplan Resources Only Controls
You can control charges to tasks based on the people assigned to the workplan tasks. For
information about the validation rules for timecards and expense reports when the Workplan
Resources Only control is set with the other transaction control attributes, see the Oracle
Project Costing User Guide.
Person Type Control
You can select no value, Employee Only, or Contractor Only from the list in the Person Type
field. You can use this control to specify whether transactions incurred by only employees,
only contractors (contingent workers), or both are chargeable. For additional information, see
the Oracle Project Costing User Guide.
Specifying Effective Dates for Transaction Controls
You can enter an Effective From and Effective To date for each transaction control record to
define transactions as chargeable for a given date range. You must specify an Effective From
date. The default Effective From date is the start date of the project or task. The Effective To
date is optional.
Validating Expenditures Against Transaction Controls
Oracle Project Costing checks all levels of transaction controls when you try to charge a
transaction to a project. Oracle Project Costing checks the control when you:
• Enter an online or pre-approved expenditure item
• Copy a pre-approved timecard item
• Transfer an expenditure item to a new project or task
• Enter a project-related requisition or purchase order distribution in Oracle Purchasing
• Enter a project-related requisition distribution in Oracle iProcurement
• Enter a project-related invoice distribution in Oracle Payables
• Enter a project-related expense report in Oracle Internet Expenses
• Run the concurrent program PRC: Transaction Import to import expenditures

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Defining Projects for Costing


Chapter 2 - Page 29
Exclusive and Inclusive Transaction Controls

Exclusive and Inclusive Transaction Controls


Exclusive Transaction Controls
Exclusive transaction controls allow all expenditures except those that are specified as non–
chargeable in the transaction controls. Exclusive transaction controls is the default setting.
When you use exclusive transaction controls, you specify the non-chargeable criteria. Disable
the Limit to check box on the Transaction Controls window to make your transaction controls
exclusive.
Inclusive Transaction Controls
Inclusive transaction controls limit charges to only those expenditures that meet the specified
transaction control criteria. Oracle Project Costing rejects any expenditure that are not listed as
chargeable in the transaction controls. When you use inclusive transaction controls, by default,
nothing is chargeable. You must specify the chargeable criteria. Enable the Limit to check box
on the Transaction Controls window to make your transaction controls inclusive.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 30
Allowable Charges for Each Transaction Control

Allowable Charges for Each Transaction Control


You can use transaction controls to specify whether to allow charges, further controlling the
allowable charges. You usually select Chargeable when you use inclusive transaction controls.
Transaction Control Extension
To define more complex rules for implementing company-specific expenditure entry policies,
you can use the transaction control extension. Some examples of rules that you may define are:
• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
• All entertainment expenses are non-billable.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 31
Determining if an Item is Chargeable

Determining if an Item is Chargeable


Oracle Project Costing checks all levels of chargeability control when you try to charge a
transaction to a project. If the expenditure item passes the first three chargeability controls,
then Oracle Project Costing checks the transaction controls.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 32
Practice - Define Transaction Controls
Overview
In this practice, you will define exclusive transaction controls at the project level for the project
you created in a previous practice.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define Exclusive Transaction Controls at the Project Level

Define exclusive transaction controls for you XX Capital Services project to prohibit people
from charging meals and telephone expenses to your project. As an exception, permit Emily
Heather to charge telephone expenses. Let the task details determine whether her telephone
expenses are capitalizable or not. When you are done, approve the project.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 33
Solution - Define Transaction Controls
Define Exclusive Transaction Controls at the Project Level

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find your new capital services project.

• Enter the find criteria:


− Number = XXCS
− Name = XX Capital Services

• (B) Find

4. Select the XX Capital Services project on the Projects, Templates Summary window.

5. (B) Open

6. In the Options region, select Transaction Controls.

7. (B) Detail

8. Do not enable the Limit To Transaction Controls check box.

This approach creates exclusive transaction controls. By default, everything is chargeable.

9. Enter the transaction control lines as specified in the following table:

Expenditure Expenditure Employee Chargeable Capitalizable


Category Type
Expenses Meals No No
Expense Telephone No No
Expenses Telephone Heather, Yes (enable) Task Level
Ms. Emily

Everything is chargeable, except for meals and telephone expenses. The exception is that Emily
Heather can charge her telephone expenses.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 34
10. (I) Save

11. Close the Transaction Controls window.

12. Approve the project.

• (B) Change Status

• Select Approved.

• (B) OK

• (I) Save

13. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing


Chapter 2 - Page 35
Summary

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Defining Projects for Costing


Chapter 2 - Page 36
Entering Expenditures
Chapter 3

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Entering Expenditures
Chapter 3 - Page 1
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Entering Expenditures
Chapter 3 - Page 2
Entering Expenditures

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Entering Expenditures
Chapter 3 - Page 3
Objectives

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Entering Expenditures
Chapter 3 - Page 4
Agenda

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Entering Expenditures
Chapter 3 - Page 5
Costing Flow: Enter Expenditures

Costing Flow: Enter Expenditures


You can use pre-approved batches to enter project-related expenditures directly into Oracle
Project Costing.

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Entering Expenditures
Chapter 3 - Page 6
Expenditures Overview

Expenditures Overview
An expenditure is a group of expenditure items, or transactions, that an employee or an
organization incurs for an expenditure period. You charge expenditures to a project to record
actual work performed or cost incurred. Oracle Project Costing uses these terms for
expenditures:
• Expenditure batch
- A user-defined name used to track a batch of pre-approved expenditures, such as
timecards and expense reports.
- You can enter the following classes of pre-approved expenditure batches in Oracle
Project Costing: Timecards, Usages, Miscellaneous Transaction, Inventory, Work in
Process, and Burden Transaction.
• Expenditure
- A group of expenditure items incurred by an employee or organization for an
expenditure period.
• Expenditure item
- The individual transactions charged to a specific project and task combination.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 7
Multiple Organization Access Control (MOAC)

Multiple Organization Access Control


The multiple organization access control (MOAC) feature allows you to enter and process pre-
approved batches in two or more operating units without switching responsibilities.

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Entering Expenditures
Chapter 3 - Page 8
Expenditures Overview

Expenditures Overview
You enter:
• Expenditure Item Date - The date on which work is performed or a cost is incurred and
is charged to a project and task.
• Project Number - A unit of work that requires resources to produce measurable results. A
project can be broken down into one or more tasks. You can charge costs to a project.
• Task Number - A subdivision of project work. You can charge costs to lowest-level
tasks.
• Assignment Name - When Oracle Project Resource Management is installed, you can
associate labor and expense report expenditures to scheduled work assignments.
• Work Type - A classification of work. You use work types to classify both actual and
scheduled work. You can also use work types to classify work to determine the billability
of expenditure items, classify cross charge amounts into cost, and revenue for cross-
charged work, and assign attributes for utilization reporting. Work types roll up to
resource and organization utilization categories. This field is required when the PA:
Require Work Type Entry for Expenditures profile option has a value of Yes.

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Entering Expenditures
Chapter 3 - Page 9
• Expenditure Type - A classification of cost that you assign to each expenditure item. You
can choose any expenditure type within the expenditure type class that you select for the
expenditure batch.
• Non-Labor Resource and Non-Labor Organization - If the expenditure type class for
the batch is Usages, enter the non-labor resource and its owning organization. This enables
you to track use of company-owned assets.
• Currency Fields - You can optionally display and enter the currency fields. You can use
folder tools to display to display currency fields. When your cursor is positioned in the
Expenditure Items regions of the Expenditures window, select Show Field from the Folder
menu and then select the field that you want to display.
• Quantity - The quantity of units. The expenditure type determines the unit of measure.
For example, on a timecard, you enter the quantity for professional labor in hours.
• Comment - Optionally, enter a free text Comment.

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Entering Expenditures
Chapter 3 - Page 10
Currency Fields for Expenditures

Currency Fields for Expenditures


The currency fields include:
• Functional Currency - The functional currency of the expenditure operating unit.
• Project Currency - The common currency into which all transactions for a particular
project are converted.
• Transaction Currency - The currency in which a cost transaction is incurred.
Note: You must use folder tools to display additional currency fields.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 11
Pre-Approved Batch Expenditure Entry Flow Overview

Pre-Approved Batch Expenditure Entry Flow Overview


To enter a pre-approved expenditure batch:
1. Enter batch-level information.
2. Enter an expenditure.
3. Enter expenditure items.
4. Enter additional expenditures and expenditure items as needed.
5. Submit the batch for review.
6. As needed, rework the batch.
7. Release the batch for processing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 12
Statuses for Pre-Approved Expenditure Batches

Statuses for Pre-Approved Expenditure Batches


Pre-approved expenditure batches can have one of three statuses:
• Working - The expenditure batch is not ready for review. You can enter transactions and
modify their expenditures and expenditure items.
• Submitted - The batch is awaiting review. You can return the batch to Working status
(rework) to make corrections.
• Released - The expenditure batch is released for cost distribution. You can reverse
incorrectly entered expenditure items within the batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 13
Enter Pre-Approved Batches

Enter Pre-Approved Batches


1. Navigate to the Expenditure Batches window.
2. Select the operating unit the operating unit that incurred the cost.
3. Enter a unique batch name to identify this set of expenditures.
4. Enter the expenditure ending date for the batch. If you enter a date that is not the last day
of an expenditure week, the system automatically updates the date to the next valid week
ending date.
5. Choose the expenditure type class for this batch.
6. Optionally, enter a description.
7. Optionally, enable the Reverse Expenditures in a Future Period check box to
automatically reverse the batch. The expenditure type class must be Miscellaneous
Transaction to create an automatically reversing expenditure batch. For more information
regarding this feature, see the section in this lesson titled “Automatically Reversing
Expenditure Batches.”

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Entering Expenditures
Chapter 3 - Page 14
8. Optionally, enter a control total and control count in the Amounts region. Use the
Running Totals and Counts and the Difference columns to verify actual versus entered
totals.
9. Select the Expenditures button to enter the batch. The status of a new batch is always
Working.
10. In the Expenditures window, enter the employee or organization that incurred the cost.
11. Optionally enter the total units of measure in the Control Total field. When you have
entered all the expenditure items, you can compare the Control Total with the Running
Total, to verify your entries.
12. Enter the expenditure items in the Expenditure Items region.
13. When you have completed the expenditure batch, submit the batch for review.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 15
Submitting an Expenditure Batch

Submitting an Expenditure Batch


Verifying Control Totals and Control Counts
Oracle Project Costing verifies control totals and control counts when you submit a batch. If
the running total or running count does not equal your control totals, then you cannot submit
the expenditure batch until your totals match. If you do not enter control totals, then Oracle
Project Costing does not validate control totals.
Reviewing and Releasing Expenditure Batches
Releasing a batch is a second level of review after entry. You can use function security to
remove the release capability from the entry person’s Oracle Project Costing responsibility.
You can edit expenditure batches before release. The status must be Working to make changes.
Release makes expenditures ready for cost distribution. Release is synonymous with Approval.
Releasing a batch automatically releases all the expenditures and expenditure items in the
batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 16
Practice - Enter an Expenditure Batch
Overview
In this practice, you will enter, submit, and release a timecard expenditure batch.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter the Batch Information

Enter a timecard expenditure batch for the current week. Enter the header information as
specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH
Ending Date This Sunday's Date
Class Timecards
Description Timecards
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals 40
Control Count 2

Note: For all expenditure items in this batch, use Unscheduled as the Assignment Name and
Internal - capital as the Work Type.

Enter the First Expenditure

Enter expenditure items for Amy Marlin as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment


Date Number
Today's Date XXCS 1.1 Clerical 10 Review
Tomorrow's Date XXCS 1.2 Design 10 Documentation

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Entering Expenditures
Chapter 3 - Page 17
Enter the Second Expenditure

Enter expenditure items for Ann Hamilton as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment


Date Number
Today's Date XXCS 3.0 Supervision 10 Project
management
Tomorrow's Date XXCS 3.0 Supervision 10 Project
management

Submit and Release the Batch

After you verify your control totals, submit and release the batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 18
Solution - Enter an Expenditure Batch
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH
Ending Date This Sunday's Date
Class Timecards
Description Timecards
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals 40
Control Count 2

4. (I) Save

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Entering Expenditures
Chapter 3 - Page 19
5. (B) Expenditures

Enter the First Expenditure

6. Enter the first expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending


Number Date
Marlin, Ms. Amy 34 Services-East This Sunday's Date

7. Enter the expenditure items for Amy Marlin as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment


Date Number
Today's Date XXCS 1.1 Clerical 10 Review
Tomorrow's Date XXCS 1.2 Design 10 Documentation

For all expenditure items:


− Assignment Name = Unscheduled
− Work Type = Internal - capital
− UOM = Hours

8. (I) Save

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Entering Expenditures
Chapter 3 - Page 20
Enter the Second Expenditure

9. Position your cursor in the row under where you entered Amy Marlin's name.

10. Enter the second expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending Control Total


Number Date
Hamilton, Ms. Anne 37 Services-East This Sunday's Date 20

11. (I) Save

12. Enter the expenditure items for Anne Hamilton as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment


Date Number
Today's Date XXCS 3.0 Supervision 10 Project
management
Tomorrow's Date XXCS 3.0 Supervision 10 Project
management

For all expenditure items:


− Assignment Name = Unscheduled
− Work Type = Internal-Overhead
− UOM = Hours

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Entering Expenditures
Chapter 3 - Page 21
13. (I) Save

Submit and Release the Batch

14. Close the Expenditures window and return to the Expenditure Batches window.

15. Verify that the control totals match the running totals. If the totals do not match, then return
to the Expenditures window and revise the expenditure items as needed.

16. (B) Submit

17. (B) Release

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Entering Expenditures
Chapter 3 - Page 22
18. Close the Expenditure Batches window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 23
Reversing an Expenditure Batch

Reversing an Expenditure Batch


The Reverse button is enabled only if the current batch is released. You can reverse imported
expenditure batches only if the transaction source of the batch allows reversals. When you
reverse an expenditure batch, Oracle Project Costing reverses all the expenditure items except
for:
• Related items
• Expenditure items that are already reversed
• Reversing items (net zero adjusted items)
• Expenditure items created as a result of a transfer adjustment

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 24
Correcting Expenditure Batches

Correcting Expenditure Batches


After you submit a batch, you can rework the batch to add, delete, and revise expenditures and
expenditure items. You also must correct a batch if your supervisor rejects and returns a
submitted batch to you. If the batch has a status of Submitted, locate the batch, click the
Rework button to return its status to Working, and change the expenditure or expenditure item
before resubmitting the batch.
If the batch has a status of Released, you can correct individual expenditure items by reversing
the full amount of the original item and then entering the correct information. For example, if
you entered six hours on a timecard expenditure item when the correct number of hours is four,
then you can create a reversing item equal to a negative six hours and add a new expenditure
item of four hours.
To correct a released expenditure item:
1. Create a new batch for the correction items.
- The Expenditure Ending date must match the week that includes the expenditure item
you are reversing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 25
- Optionally check the All Negative Transactions Entered As Unmatched check box if
you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus (–) sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
4. Select the Reversal button.
- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
5. Finish entering the batch and submit the batch as usual.
- Expenditure batches can contain both positive and negative expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 26
Copying an Expenditure Batch

Copying an Expenditure Batch


If you frequently enter similar groups of expenditures, you can copy data from one week to the
next. The Copy function copies all expenditures and, optionally, all expenditure items from a
specified source batch. You need to revise only the items that are different in the new batch.
Copying your expenditure batches can reduce your manual data entry requirements when you
enter similar groups of expenditures.
Note: You cannot copy expenditure items from a reversed expenditure batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 27
Reviewing Project Expenditures

Reviewing Project Expenditures


Two expenditure inquiry modes are available in Oracle Project Costing:
• Project - You can view expenditure items for a single project across operating units. If
your system uses project security, then you can select only projects that you are allowed to
see. The expenditure items that you view can cross operating units, but you must have
security access to an operating unit to view those expenditure items. For example, a
project has expenditure items associated with operating units A, B, C, and D. If your
responsibility only gives you access to operating units B and C, then you can view and
adjust only the expenditure items from operating units B and C.
• All - You can view expenditure items across projects and structure your query to retrieve
information across projects within a single operating unit. If you have access to more than
one operating unit, then you must select the operating unit that you want to query. If you
have access to only one operating unit, then that operating is the default value. No project
security is enforced. Oracle Project Costing shows only the expenditure items that
correspond to the current operating unit. If a project has expenditure items that are
charged across operating units, then you cannot view these expenditure items. In this case,
use the Find Project Expenditure Items window to query these expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 28
Reviewing Project Expenditures

Reviewing Project Expenditures


To view expenditure items (perform an expenditure inquiry):
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.
2. Enter your search criteria. You can enter search criteria for a large number of attributes
and on multiple tabs at the same time to limit the results of the query.
• Note: For a detailed discussion of the available search criteria, see the Oracle
Project Costing User Guide.
3. Choose Find to execute the search, or choose Mass Adjust to process mass adjustment of
expenditures. For information about mass adjustments, see the lesson titled "Performing
Cost Adjustments."
4. From the Expenditure Items window, you can:
• Select the Run Request button and then select which set of predefined programs to
run.
• Select the Totals button to view the totals for the expenditure items returned based
on your search criteria.

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Entering Expenditures
Chapter 3 - Page 29
• Note: This window does not display events. If your project uses event-based or cost-
to-cost revenue accrual or invoice generation, use the Events window to view the
total project revenue and bill amounts.
• Select the Item Details button to review the details of this expenditure item. You can
then choose one of the following options:
- Cost Distribution Lines - View individual transactions and the default debit and
credit GL accounts for each expenditure item that Oracle Project Costing derived
using AutoAccounting. You can also view other information about the cost
distribution lines, such as PA and GL period, accounting event generation status,
and the rejection reason if the generation of the accounting event was not
successful. The Cost Distribution Lines window does not display the credit
account for supplier invoice expenditure items interfaced from Oracle Payables.
- Revenue Distribution Lines - View the revenue transactions generated for a
specific expenditure item. The window displays the default revenue account that
Oracle Project Billing derived using AutoAccounting. You can also see the GL
and PA posting period for the revenue, accounting event generation status, and
the rejection reason if the generation of the accounting event was not successful.
- AP Invoice - Drill down to the Invoice Overview window in Oracle Payables. If
the invoice is matched to a purchase order, then you can drill down to the
purchase order from the Invoice Workbench. This option is enabled for
expenditure items whose expenditure type class is either Supplier Invoices or
Expense Reports.
- PO Receipt -- Drill down to the Receipt Transaction Summary window in
Oracle Purchasing. You can also drill down to the related purchase order from
the Receipt Transaction Summary window. This option is enabled for
expenditure items for receipt accrual transactions in Oracle Purchasing.
- Purchase Order Details - Drill down to the purchase order details for
contingent worker labor costs. This option is enabled for expenditure items for
contingent worker labor costs that are associated with a purchase order.
• Important: If you define your own detailed accounting rules in Oracle Subledger
Accounting, then Oracle Subledger Accounting overwrites default accounts, or
individual segments of accounts, that Oracle Project Costing derives using
AutoAccounting. In this case, the default accounts displayed on the Cost
Distribution Lines and Revenue Distribution Lines windows may not be the same as
final accounts that Oracle Subledger Accounting transfers to Oracle General Ledger.
To view the final subledger accounting, use the View Accounting option from the
Tools menu.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 30
Viewing Accounting Lines

Viewing Accounting Lines


You can use the View Accounting option from the Tools menu to review accounting entries for
expenditure items. You must create accounting in final mode for the accounting events
associated with the expenditure item to view accounting entries. If an expenditure item has
multiple cost distribution lines, then you can view accounting for each cost distribution line
that is accounted in Oracle Subledger Accounting. Similarly, if you adjust an expenditure item
and do not create accounting for the adjustments in Oracle Subledger Accounting, then the
View Accounting window only shows the accounted cost distribution lines. If you create
accounting in draft mode, then you can either review the output from the create accounting
program or use Subledger Accounting Inquiry to view the draft accounting.
Note: The View Expenditure Accounting window displays final accounting entries from
Oracle Subledger Accounting. It does not display default accounts that Oracle Project Costing
derives using AutoAccounting.
Note: For both historical (prior to Release 12) expenditure items not migrated to Oracle
Subledger Accounting, and transactions accounted in an external system and interfaced into
Oracle Project Costing, the View Accounting option displays accounts from the cost
distributions table in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 31
Practice - Use Expenditure Inquiry
Overview
In this practice, you will use expenditure inquiry to view the cost distribution lines and
accounting information for expenditure items.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Review Expenditure Items for Your Project

Use Expenditure Inquiry (Project) to review the expenditure items that you charged to your XX
Capital Services project. Note that the expenditure items have no cost because you have not run
costing programs for your project.

Review Straight Time Costs for Amy Marlin

Use Expenditure Inquiry (All) to perform a second query to review all straight time that Amy
Marlin has charged since the beginning of January of 2006. Perform the query for the Vision
Services operating unit. Determine the total burdened cost for Amy's time over this period of
time.

Note the total project functional burdened cost in the total field at the bottom of the window:
_______________

View Accounting for an Expenditure item

View the cost distribution lines, accounting, and T-accounts for one of the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 32
Solution - Use Expenditure Inquiry
Review Expenditure Items for Your Project

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

3. Query all expenditure items for your XX Capital Services Project

• Enter the find criteria:


− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

4. Review the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 33
Note that the expenditure items have no cost because you have not run costing programs for
your project.

5. Close the open windows and return to the navigator.

Review Straight Time Costs for Amy Marlin

6. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

7. For the Vision Services operating unit, query all straight time labor that Amy Marlin
charged since January 2006.

• Enter the header find criteria:


− Operating Unit = Vision Services
− Expend Typ Class = Straight Time
− Item Dates (from) = 01-JAN-2006

• (T) Resource

• Enter resource find criteria:


− Employee Number = 34
− Employee Name = Marlin, Ms. Amy

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 34
• (B) Find

8. Review the total labor cost.

• (B) Totals

• Scroll to find the column named Proj Func Burdened Cost.

• Note the total project functional burdened cost in the total field at the bottom of the
window: _______________

Note: Your total may differ from the amount in the screen capture.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 35
View Accounting for an Expenditure item

9. Position your cursor on one of the queried items with an amount in the Project Func
Burdened Cost field.

10. (B) Item Details

11. Select Cost Distribution Lines.

12. (B) OK

This selection opens the Cost Distribution Lines window.

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Entering Expenditures
Chapter 3 - Page 36
13. Review the information.

14. Close the Cost Distribution Lines window and return to the Expenditure Items window.

15. View subledger accounting information for the same expenditure item.

• Position your cursor on the same expenditure item.

• (M) Tools > View Accounting

• Review the accounting information on the View Expenditure Accounting window.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 37
16. Review the T-Accounts.

• (B) T Accounts

This button opens the Options window. You can set your T-Accounts options here.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 38
• (B) T Accounts

• Review the T-Accounts for the expenditure item.

17. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 39
Agenda

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Entering Expenditures
Chapter 3 - Page 40
Automatically Reversing Expenditure Batches

Automatically Reversing Expenditure Batches


You can create automatically reversing expenditure batches to record cost accruals in Oracle
Project Costing. Frequently, you receive items and services in one accounting period, which
are then invoiced in another period. You can use automatically reversing expenditure batches
to accrue cost in the period in which it is incurred.
To enter an automatically reversing batch, you must use the Miscellaneous Transactions
expenditure type class. When you release the batch, Oracle Project Costing creates reversing
entries that are accounted in the next General Ledger period.
As you add expenditure items and save the batch, Oracle Project Costing determines the GL
date for each transaction and stores it as an expenditure item attribute called Accrual Date.
Oracle Project Costing determines the accrual date as follows:
• If Expenditure Item Date Accounting is used, then the accrual date is the expenditure item
date.
• If Period-End Date Accounting is used, then the accrual date is the period ending date of
the General Ledger period that includes the expenditure item date.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 41
Releasing the Batch

Releasing the Batch


When you release an expenditure batch with the Reverse Expenditures In a Future Period
checkbox enabled, Oracle Project Costing automatically reverses each expenditure item
included in the batch. Oracle Project Costing determines the GL date for the reversing
expenditure items when it creates the reversing entries and it stores the date in the Accrual
Date attribute.
Oracle Project Costing determines the GL date as follows:
• If Expenditure Item Date Accounting is used, then the accrual date of the reversing item is
the first day of the GL period that follows the GL period that includes the accrual date of
the original expenditure item.
• If Period-End Date Accounting is used, then the accrual date of the reversing item is the
last day of the GL period that follows the GL period that includes the accrual date of the
original expenditure item.
• If the accrual dates for the reversing items fall in a period with a closed status in Oracle
General Ledger, then the release process fails and an error message appears.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 42
GL Periods for the Expenditure Items

GL Periods for the Expenditure Items


Oracle Project Costing assigns the original expenditure items to the current GL period and the
reversing expenditure items to the next GL period.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 43
Guided Demonstration - Enter an Automatically Reversing Batch
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH2
Ending Date This Sunday's Date
Class Miscellaneous Transaction
Description Accruals
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Select
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

5. (B) Expenditures

Enter the Expenditure

6. Enter the expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending


Number Date
Leave Blank Leave Blank Services-East This Sunday's Date

7. Enter the expenditure items for Services-East as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment


Date Number
Today's Date Cost Reimbursable 1.1.1 Consulting 1000 Accrual
Tomorrow's Date Cost Reimbursable 2.0 Consulting 1500 Accrual

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Entering Expenditures
Chapter 3 - Page 44
For all expenditure items:
− Work Type = Commercial Customer-billable
− UOM = Currency

8. (I) Save

Submit and Release the Batch

9. Close the Expenditures window and return to the Expenditure Batches window.

10. (B) Submit

11. (B) Release

Oracle Project Costing creates the reversing expenditure items when you release the batch.

Review the Reversing Expenditure Items

12. (B) Expenditures

You see two new reversing expenditure items, one for each expenditure item that you
entered.

13. Review the accrual date.

• Position your cursor on the first expenditure item.

• (M) Folder > Show Field

• Select Provider Accrual Date.

• (B) OK

• Compare the accrual dates for the original and the reversing expenditure items.

14. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 45
Agenda

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Entering Expenditures
Chapter 3 - Page 46
Upload Expenditure Batches from Microsoft Excel

Upload Expenditure Batches from Microsoft Excel


You can enter and upload pre-approved expenditure batches using Microsoft Excel
spreadsheets. You can connect to the database to validate records during entry, or you can
create the spreadsheet offline and allow validation to occur during the transaction upload.
Note: If you choose to create the spreadsheet offline, then only mandatory fields associated
with a list of values are validated during transaction upload. The transaction upload calls the
Transaction Import program, where additional transaction validations take place.
Download an Entry Template
You must first download an entry template from Oracle Project Costing. All fields marked with
an asterisk are mandatory. If List-Text appears under the column name, then a list of values is
available. To access the list of values, double-click in the column or select List of Values from
the Oracle menu located at the top of the spreadsheet template.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 47
Upload Expenditure Batches from Microsoft Excel

Upload Expenditure Batches from Microsoft Excel


Once the batch is ready, you can upload the data to the Oracle Project Costing transaction
import interface table. From here, the concurrent program PRC: Transaction Import brings the
expenditure batch into Oracle Project Costing.
Upload Batch
Select Upload from the Oracle menu located at the top of the spreadsheet template. Optionally,
select the Parameters button to select upload options. After viewing the Parameters window,
you must select Close or Proceed to Upload to return to the Upload window. Select Upload to
launch the upload process. The upload process updates the message column for each record in
the spreadsheet to indicate whether the upload was successful.
Transaction Import
The upload process populates the transaction import table. Run the PRC: Transaction Import
program to import the transactions into the Expenditure Items table. You can optionally use the
upload parameter to run the transaction import program automatically.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 48
Upload Contingent Worker Timecards

Upload Contingent Worker Timecards


You can enter contingent worker timecard batches in Microsoft Excel and upload the to Oracle
Project Costing:
• Each timecard line is related to a project and purchase order line.
• A amount check is performed against the purchase order during transaction import.
• Oracle Project Costing uses the cost rates stored on the purchase order to calculate
contingent worker labor costs.
• The supplier must submit an invoice. You match the invoice to the purchase order to
reduce outstanding balances.
• You interface additional cost, such as nonrecoverable tax or invoice price variances, to
Oracle Project Costing from the supplier invoice in Oracle Payables.
• You can bill contingent worker costs as labor.
To use this integration, you must enable the Import Contingent Worker Timecards with
Purchase Order Integration implementation option. You can optionally set up AutoAccounting
function transactions to determine default credit and debit accounts for contingent worker labor
costs that are different from the default accounts for employee labor costs.

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Entering Expenditures
Chapter 3 - Page 49
Note: When contingent workers are allowed to enter timecards that are not related to a
purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
assignment in Oracle HRMS.
2. Consolidate contingent worker project-related timecards and enter a timecard batch in
Microsoft Excel. Assign a purchase order and purchase order line to each timecard line.
3. Upload the timecards and run the program PRC: Transaction Import to import the
timecards into Oracle Project Costing. An amount check takes place against the purchase
order during import.
4. Process contingent worker timecards in Oracle Project Costing:
a. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
b. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
c. Run PRC: Create Accounting (for the process category Labor Cost).
5. Process in Oracle Payables:
a. Supplier submits an invoice.
b. Match supplier invoice to the purchase order to reduce outstanding balances.
c. Process and pay supplier invoice in Oracle Payables.
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
additional costs, such as nonrecoverable tax or invoice price variances.
For information about entering contingent worker in Oracle Time & Labor, see the lesson titled
"Integration with Oracle Time & Labor."

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Entering Expenditures
Chapter 3 - Page 50
Agenda

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Entering Expenditures
Chapter 3 - Page 51
Expenditure Batch Reports

Expenditure Batch Reports


• AUD: Expenditure Batch Status - With this report you can identify expenditure batches
that are ready for release. Use this report to ensure that none of your expenditure batches
go unprocessed.
• AUD: Pre-Approved Expenditures Entry Audit - Use the AUD: Pre-Approved
Expenditures Entry Audit report to review pre-approved expenditures. After you enter all
expenditures for an expenditure batch, submit this report and use it to verify that the
entered data is correct before you submit your expenditure batch. This report provides a
summary for each expenditure batch that displays the total amounts for each expenditure
type in the expenditure batch.

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Entering Expenditures
Chapter 3 - Page 52
Agenda

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Entering Expenditures
Chapter 3 - Page 53
Costing Flow: Import Transactions

Costing Flow: Import Transactions


Oracle Project Costing provides a single open interface, called Transaction Import, to enable
you to load transactions from external cost collection systems into Oracle Project Costing.
Transaction Import creates pre-approved expenditure items from transaction data entered in
external cost collection systems. Examples of external cost collection systems are:
• Timecard entry systems
• Supplier invoice entry systems
• Electronic data collection systems for asset usage (computer, printer, phone, etc.)
• Payroll systems
You can use the Review Transactions window to view and correct transactions that were
rejected during import.
Note: You can use Transaction Import to import project-related expense reports into Oracle
Project Costing from third-party systems. Expense reports that you import into Oracle Project
Costing must be fully accounted. Oracle Project Costing does not generate accounting events
to create accounting in Oracle Subledger Accounting for these imported costs.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 54
Overview of Transaction Sources

Overview of Transaction Sources


When you submit Transaction Import, you must identify the source of the transactions that you
want to import.
To import 3rd party transactions, use your import utility to enter this transaction source in the
TRANSACTION_SOURCE column of the PA_TRANSACTION_ INTERFACE_ALL table.
You then select the transaction source name in the Submit Request window when you want to
import transactions from this source.
For additional information about transaction sources, see the lesson titled "Implementing
Expenditures."

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 55
Overview of Transaction Import

Overview of Transaction Import


When you import transaction information from external cost collection systems, Oracle Project
Costing records the transaction details and the source of the imported transactions during
transaction import. The PRC: Transaction Import program (also referred to as Transaction
Import) validates the transaction information, reports any exceptions, and creates transactions
for all of the valid transactions.
To import transactions, you first must load transactions for external systems into the PA
Transaction Interface Table. Your implementation team must determine the method for
populating the table.
After you populate the interface table, you use the Submit Request window to run PRC:
Transaction Import to import transactions into Oracle Project Costing. The program selects all
pending transactions that satisfy the selection criteria of the request and validates each
transaction. If a transaction is valid, the program creates expenditure records in Oracle Project
Costing.
For additional information, see the online course titled "R12 Oracle Projects Advanced -
Transaction Import."

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 56
Resolving Import Exceptions

Resolving Import Exceptions


If any one expenditure item in an expenditure fails validation, then Oracle Project Costing
rejects the entire expenditure and updates each expenditure item in the expenditure with a
status of R (Rejected). However, only the expenditure item that was rejected appears on the
exception report. Other expenditure items attached to the rejected expenditure do not appear on
the report. The remainder of the expenditures in the batch interface to Oracle Project Costing.
Note: The transaction import validation logic is different when you run the program PRC:
Interface Supplier Costs to import transactions from Oracle Purchasing and Oracle Payables.
The program uses predefined supplier cost transaction sources to import expenditure items and
it rejects only the expenditure items that fail validation. The program imports the valid
expenditure items in the expenditure.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 57
Correcting Rejected Transactions within Oracle Project Costing

Correcting Rejected Transactions within Oracle Project Costing


To make changes to the source information because of invalid data, you can delete the rejected
rows from the interface table, correct the rejected transactions in the feeder system, and reload
them from the feeder system. You can also correct the transaction in the interface table using
the Review Transactions window. Oracle Project Costing automatically updates the status of
corrected items and all other transactions in the same expenditure to P (Pending). The original
and updated values for corrected transactions are stored in the audit table.
You can also use the Review Transactions window to create one or more new transactions
without loading them from the feeder system. This window was designed to expedite minor
additions to expenditure batches.
Review Transactions Window: Currency-Related Fields
The Review Transactions window is a folder-type window. Many of the currency fields are not
displayed in the default folder. You can create folders that display these fields.
Review Transactions Window: Expenditure Item Dates for Supplier Costs
The program PRC: Interface Supplier Costs validates expenditure item dates for supplier costs
that you interface from Oracle Purchasing and Oracle Payables. If the expenditure item date for
an expenditure item fails validation, then the program rejects the transaction and leaves it in the

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Entering Expenditures
Chapter 3 - Page 58
interface table. You must either change the date setup in Oracle Project Costing or change the
date for the expenditure item. You can use the Review Transactions window to change the date
for a rejected expenditure item. Oracle Project Costing picks up the revised date for the
rejected transaction the next time that you run the program PRC: Interface Supplier Costs. To
update the expenditure item date in the Review Transactions window, the Allow Interface
Modifications option must be enabled for the transaction source.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 59
Summary

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Entering Expenditures
Chapter 3 - Page 60
Implementing Expenditures
Chapter 4

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Implementing Expenditures
Chapter 4 - Page 1
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Implementing Expenditures
Chapter 4 - Page 2
Implementing Expenditures

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Implementing Expenditures
Chapter 4 - Page 3
Objectives

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Implementing Expenditures
Chapter 4 - Page 4
Expenditures Implementation Steps

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Implementing Expenditures
Chapter 4 - Page 5
Agenda

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Implementing Expenditures
Chapter 4 - Page 6
Expenditure Categories

Expenditure Categories
Oracle Project Costing uses expenditure categories to group expenditure types for costing. An
expenditure category describes the source of your organization’s costs. For example, an
expenditure category with a name such as Labor refers to the cost of labor. You use
expenditure categories when you define organization overrides, for budgeting, and for
transaction controls. In addition, you can use expenditure categories in your AutoAccounting
rules and for reporting.
Use the Expenditure Categories window to define an expenditure category. For each
expenditure category, enter a unique name for the expenditure category and a description.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 7
Define Revenue Categories

Define Revenue Categories


A revenue category describes a source of your organization’s revenue. For example, a revenue
category with a name such as Labor refers to labor revenue.
Use the Revenue Category Lookups window to define new revenue categories. Revenue
categories are used for grouping expenditure types and event types for revenue and billing.
You can use revenue categories for budgeting, for reporting purposes, and in your
AutoAccounting rules.
For additional discussion regarding event types, see the course “R12 Project Billing
Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 8
Define Units

Define Units
A unit of measure records quantities or amounts of an expenditure item. You assign a unit to
each expenditure type. For example, to calculate the cost of computer services using the
amount of time a user uses a computer, you can define an expenditure type for computer
services and assign it the unit Hours.
Use the Unit Lookups window to define units.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 9
Expenditure Type Classes

Expenditure Type Classes


An expenditure type class tells Oracle Project Costing how to process an expenditure item.
Oracle Project Costing predefines all expenditure type classes.
Oracle Project Costing uses the following expenditure type classes to process labor costs:
• Straight Time - Labor cost calculated using a base cost rate multiplied by hours
• Overtime - Labor cost calculated using a premium cost rate multiplied by hours.
Oracle Project Costing uses the following expenditure type classes to process non-labor project
costs:
• Expense Reports – Expense reports from Oracle Payables or Oracle Internet Expenses.
You cannot enter expense reports directly into Oracle Project Costing. Expense reports
that you import into Oracle Project Costing must be fully accounted prior to import.
• Usages - You must specify the non-labor resource for every usage item you charge to a
project. For each expenditure type classified by a Usage expenditure type class, you also
define non-labor resources and organizations that own each non-labor resource.
• Supplier Invoices - Supplier invoices, discounts, and payments from Oracle Payables or
an external system, and receipt accruals from Oracle Purchasing.

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Implementing Expenditures
Chapter 4 - Page 10
• Miscellaneous Transaction - Miscellaneous Transactions are used to track miscellaneous
project costs. Examples of uses for miscellaneous transactions are:
- Fixed assets depreciation
- Allocations
- Interest charges
• Burden Transaction - Burden transactions track burden costs that are calculated in an
external system or calculated by Oracle Project Costing as separate, summarized
transactions. These costs are created as a separate expenditure item that has a burdened
cost amount, but has a quantity and raw cost value of zero. You can adjust burden
transactions that are not system-generated.
• Work In Process – You use this expenditure type class for Oracle Project Manufacturing
WIP transactions that you interface from Manufacturing to Oracle Project Costing. You
can also use this expenditure type class when you import other manufacturing costs via
Transaction Import or when you enter transactions via pre-approved batch entry.
• Inventory - This expenditure type class is used for the following transactions:
- Oracle Project Manufacturing transactions that you import from Manufacturing or
Oracle Inventory.
- Oracle Inventory Issues and Receipts that you import from Oracle Inventory in a
manufacturing or non-manufacturing installation.
- You can also use this expenditure type class when you import other manufacturing
costs via Transaction Import or when you enter transactions via pre-approved batch
entry.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 11
Define Expenditure Types

Define Expenditure Types


An expenditure type is a classification of cost that you assign to each expenditure item you
enter in Oracle Project Costing. Defining expenditure types is a key aspect of your
implementation of Oracle Project Costing. Enter the following information to define an
expenditure type:
• Name - A unique name for the expenditure type.
• Expenditure Category - The expenditure category you want to associate with this
expenditure type.
• Revenue Category - The revenue category you want to associate with this expenditure
type.
• Unit of Measure (UOM) - The unit of measure to use when Oracle Project Costing
calculates the cost for this expenditure type. You must enter Hours for labor expenditure
types.
• Tax Classification Code - Optionally, click Tax Classification Code and select the tax
classification code for customer invoice lines for this expenditure type and operating unit.
Oracle Project Costing uses this code as the default tax classification code based on the
Application Tax Options hierarchy that you define in Oracle E-Business Tax for the

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Implementing Expenditures
Chapter 4 - Page 12
combination of Oracle Project Costing and the specified operating unit. For more
information on setting up taxes and the hierarchy of tax options for an application and
operating unit, see the Oracle E-Business Tax User Guide.
• Rate Required - If this expenditure type requires a cost rate, then enable the Rate
Required check box. Select the Cost Rate button to navigate to the Expenditure Cost Rates
window, select an operating unit, and then enter a cost rate and its effective dates. If this
expenditure type does not require a cost rate, then do not enable the Rate Required check
box. If you create a non-labor expenditure type without checking the Rate Required check
box, you cannot subsequently require and enter a cost rate for that expenditure type.
Instead, you must disable the expenditure type and create a new one that requires a cost
rate and has a unique name. If you enable the Rate Required check box when you create a
non-labor expenditure type, then you can change the cost rate at any time.
For supplier invoice expenditure types, if you specify that a rate is required, Oracle Project
Costing requires you to enter a quantity in Oracle Payables for invoice distributions using
that expenditure type. When you interface the invoice distribution to Oracle Project
Costing, Oracle Project Costing copies the quantity and amount to the expenditure item
and calculates the rate. If you define a supplier invoice expenditure type with the Rate
Required option disabled, then the quantity of the expenditure item is set to the amount
you enter in Oracle Payables.
• Description and Dates - On the Description, Dates tab, enter a description and an
effective from date for the expenditure type. You can optionally enter an effective to date
for the expenditure type.
• Expenditure Type Classes - In the Expenditure Type Class region, select the expenditure
type class or classes for this expenditure type.
Attention: After you create and save an expenditure type, you cannot subsequently update the
following attributes for the expenditure type:
• Name
• Expenditure Category
• Revenue Category
• Unit of Measure
• Rate Required check box
Instead, you must enter an end date for the expenditure type and create a new one that has a
unique name. When you enter an end date for an expenditure type, the end date has no affect
on existing transactions. Oracle Project Costing uses the old expenditure type to report on and
process existing transactions. You cannot use the old expenditure type for new transactions that
have an expenditure item date after the end date.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 13
Multiple Expenditure Type Classes Per Expenditure Type

Multiple Expenditure Type Classes Per Expenditure Type


You can assign multiple expenditure type classes to an expenditure type. This feature allows
you to use a single expenditure type to classify as many different costs as you require. You can
use the same expenditure type for expenditures that have different origins (and therefore
different accounting), but which should otherwise be grouped together for costing, budgeting,
or summarization purposes.
For example, an expenditure item with the expenditure type Materials can have the
expenditure type class Supplier Invoice if it originated in Oracle Payables, and the expenditure
type class Inventory if it originated in Oracle Inventory. This ability enables you to easily
group these costs together for reporting and budgeting purposes, because the cost rolls up into
the same expenditure type, regardless of the source of the individual transaction.

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Implementing Expenditures
Chapter 4 - Page 14
Practice - Define an Expenditure Type
Overview
In this practice, you will define a new expenditure type. Your company maintains a motor pool
consisting of trucks that departments can use for deliveries. The motor pool charges other
organizations for use of the trucks. This type of cost is a Usage in Oracle Project Costing.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define an Expenditure Type

Define an expenditure type to record motor pool truck usage charges. Use the information as
specified in the following table:

Name Expenditure Revenue UOM Rate


Category Category Required
XXMotor Pool Trucks Chargebacks Other Day Yes

Enter a description and assign the expenditure type an expenditure type class of Usages.

Assign a Tax Classification Code for Billing Purposes

These internal charges are eligible for billing on some time and materials projects in Oracle
Project Billing. Assign a tax classification code of Location for the Vision Services operating
unit.

Assign a Cost Rate

Assign a cost rate of $250 USD a day for the Vision Services operating unit.

Note: In a future practice, you will create non-labor resources for this expenditure type and
assign rate overrides.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 15
Solution - Define an Expenditure Type
Define an Expenditure Type

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Types window.

• (N) Setup > Expenditures > Expenditure Types

3. Define the expenditure type.

• (T) Classifications

• Enter the basic expenditure type information as specified in the following table:

Name Expenditure Revenue UOM Rate


Category Category Required
XXMotor Pool Trucks Chargebacks Other Day Yes

• (T) Description, Dates

• Enter the description and date information as specified in the following table:

Description Effective Date From Effective Date To


<Enter a brief description> Today's Date Leave Blank

• Assign an expenditure type class to the new expenditure type as specified in the
following table:

Expenditure Type Class Effective Date From Effective Date To


Usages Today's Date Leave Blank

4. (I) Save

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Implementing Expenditures
Chapter 4 - Page 16
Assign a Tax Classification Code for Billing Purposes

5. Assign a tax classification code to your expenditure type.

• (B) Tax Classification Code

• Enter the tax classification code information as specified in the following table:

Operating Unit Tax Classification Code


Vision Services Location

• (I) Save

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Implementing Expenditures
Chapter 4 - Page 17
• Close the Tax Classification Code window and return to the Expenditure Types window.

Assign a Cost Rate

6. Assign a cost rate to your expenditure type.

• (B) Cost Rates

• Enter the cost rate information as specified in the following table:

Operating Unit Currency Rate Effective Effective


Date From Date To
Vision Services USD 250 Today's Date Leave Blank

• (I) Save

7. Close the open windows and return to the Navigator.

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Implementing Expenditures
Chapter 4 - Page 18
Agenda

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Implementing Expenditures
Chapter 4 - Page 19
Transaction Control Extension

Transaction Control Extension


The transaction control extension enables you to define your own rules to implement company-
specific expenditure entry policies. You can validate any transaction entered into Oracle
Project Costing, including transactions from other Oracle Applications and from external
systems. The transaction control extension is called during expenditure entry. In addition, the
program PRC: Transaction Import calls the transaction control extension to validate
transactions before they are loaded into Oracle Project Costing.
Some examples of rules that you may define are:
• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
• You can charge labor hours for a future date.
The transaction control extension validates expenditure items one at a time. All validation is
done for each expenditure item. Oracle Project Costing checks each expenditure item during
data entry and the transaction is validated before it commits the transaction to the database.
Oracle Project Costing processes the transaction control extension after the standard validation
performed for expenditure entry, and after validating any transaction controls entered at the
project or task level.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 20
AutoApproval Extension

AutoApproval Extension
Use the AutoApproval Extension to define conditions under which expense reports in Oracle
Internet Expenses or timecards in Oracle Time & Labor are approved automatically. You can
configure this extension to meet your needs. For additional information, see the Oracle
Projects API's, Client Extensions, and Open Interfaces Reference.

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Implementing Expenditures
Chapter 4 - Page 21
Agenda

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Implementing Expenditures
Chapter 4 - Page 22
Define Transaction Sources

Define Transaction Sources


Transaction sources identify the source of transactions imported into Oracle Project Costing
using Transaction Import. The transaction source determines how Transaction Import
processes transactions. The transaction source is used to identify transactions in the
PA_TRANSACTION_INTERFACE_ALL table. When you run the concurrent program PRC:
Transaction Import, you must enter the transaction source for the transactions that you want to
import into Oracle Project Costing. The Transaction Import program selects all eligible
pending transactions in the PA_TRANSACTION_INTERFACE_ALL table that satisfy the
selection criteria of the program request and determines the validity of each transaction.
Oracle Project Costing predefines some transaction sources, and you can create others to fit
your business needs. When you create a transaction source, you select the transaction source
options to control the Transaction Import processing. For details about each of the transaction
source options, see the Oracle Projects Implementation Guide and the online course titled
"R12 Oracle Projects Advanced - Transaction Import."

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 23
Example Predefined Transaction Sources

Example Predefined Transaction Sources


Oracle Projects predefines a set of transaction sources to import cost from Oracle sources. Do
not use these transaction sources to import transactions from non-Oracle sources. For a
complete list of predefined transaction sources, see the Oracle Projects implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 24
Example Predefined Transaction Sources: Manufacturing and
Inventory

Example Predefined Transaction Sources: Manufacturing and Inventory


Oracle Project Costing predefines transaction sources to import transactions from Oracle
Project Manufacturing and Oracle Inventory. Do not use these transaction sources to import
transactions from non-Oracle sources. For a complete list of predefined transaction sources, see
the Oracle Projects implementation Guide.
For the transaction sources for Inventory, WIP, and WIP Straight Time transactions, the GL
Posting Option in the Project Manufacturing Parameters window determines whether Oracle
Project Manufacturing or Oracle Project Costing generates accounting events and creates
accounting for the transactions in Oracle Subledger Accounting as follows:
• If the posting option is Manufacturing, then Oracle Project Manufacturing creates
accounting for the transactions in Oracle Subledger Accounting.
• If the posting option is Projects, then Oracle Project Costing creates accounting for the
transactions in Oracle Subledger Accounting. The value that you select for the Account
Option determines the source of the default accounting as follows:

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Implementing Expenditures
Chapter 4 - Page 25
- If the option is set to Use AutoAccounting, then Oracle Project Costing uses the
transaction sources with No Accounts to import the transactions with no accounts.
Oracle Project Costing then uses AutoAccounting to derive the default accounts.
- If the option is set to Send Accounts to PA, then Oracle Project Costing uses the
transaction sources with Accounts to import the transactions and the default
accounting from Oracle Project Manufacturing.

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Implementing Expenditures
Chapter 4 - Page 26
Agenda

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Implementing Expenditures
Chapter 4 - Page 27
Listings

Listings
Use the following concurrent programs to document expenditure setup information:
• IMP: Expenditure Types Definition - Use IMP: Expenditure Types Definition Listing to
review expenditure types. You can print a listing for one or all expenditure categories and
for a specified effective date. If an effective date is specified for the report, then the report
lists only expenditure types that are active as of the date you enter.
• IMP: Revenue Categories - Use the IMP: Revenue Categories Listing to review revenue
categories. For each revenue category listed, this report prints all the associated
expenditure types and their corresponding expenditure categories. To limit the report to
only one revenue category, enter the revenue category. Otherwise, leave this field blank.
• IMP: Units Definition - Use the IMP: Units Definition Listing to review all units of
measure.

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Implementing Expenditures
Chapter 4 - Page 28
Summary

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Implementing Expenditures
Chapter 4 - Page 29
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Implementing Expenditures
Chapter 4 - Page 30
Performing Cost Processing
Chapter 5

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Performing Cost Processing


Chapter 5 - Page 1
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Performing Cost Processing


Chapter 5 - Page 2
Performing Cost Processing

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Performing Cost Processing


Chapter 5 - Page 3
Objectives

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Performing Cost Processing


Chapter 5 - Page 4
Agenda

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Performing Cost Processing


Chapter 5 - Page 5
Overview of Costing

Overview of Costing
Costing includes the following major steps:
1. Enter and approve expenditures through the Oracle Project Costing user interface, or
import transactions. You can use Transaction Import to import unaccounted and
accounted transactions. If you import unaccounted transaction, then you must run the
costing programs for the transactions. If you import accounted transactions, then no
additional processing is needed.
2. Distribute costs and derive default accounting. Cost distribution is the act of calculating
the cost and determining the cost accounting for an expenditure item. Oracle Project
Costing has a set of cost distribution programs that you run, depending upon the type of
expenditure. Some imported expenditures are already cost distributed when you import
them and do not require further cost distribution processing.
3. Generate cost accounting events. The program PRC: Generate Cost Accounting Events
collects cost distribution lines in Oracle Project Costing and uses AutoAccounting to
determine the default liability accounts for raw and burden costs. It also generates cost
accounting events for Oracle Subledger Accounting.

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Chapter 5 - Page 6
Overview of Costing

Overview of Costing
4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries to
Oracle General Ledger. You run the concurrent program PRC: Create Accounting in
Oracle Project Costing to create accounting entries for accounting events. Depending on
the parameter values you select, the program performs the following tasks:
- Creates subledger accounting entries for unprocessed accounting events. If you define
your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of
accounts, that Oracle Project Costing derives using AutoAccounting.
- Transfers accounting entries to the Oracle General Ledger interface tables. In Oracle
Project Costing, you can optionally run a separate program named PRC: Transfer
Journal Entries to GL to transfer accounting entries to Oracle General Ledger.
- Initiates the journal import program in Oracle General Ledger.
- Initiates posting of journal entries in Oracle General Ledger.

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Chapter 5 - Page 7
Overview of Costing

Overview of Costing
In Oracle General Ledger, the Journal Import program takes the summary interface
information stored in the Oracle General Ledger interface tables and automatically creates
journal entries for posting in Oracle General Ledger. Journal Import creates a journal entry
batch for your journal entry records in your ledger and accounting period. For each journal
entry category in a batch, Journal Import creates a journal entry header. For each header in a
journal entry batch, Journal Import creates one or more journal entry lines that correspond to
the journal entry records you transfer from Oracle Subledger Accounting to Oracle General
Ledger.
When you run the program PRC: Create Accounting and you select Yes for the parameter
Transfer to General Ledger, the create accounting program transfers the final accounting from
Oracle Subledger Accounting to Oracle General Ledger and runs the Journal Import program.
When you submit the program PRC: Create Accounting, and you choose to transfer to Oracle
General Ledger, or alternatively when you submit the program PRC: Transfer Journal Entries
to GL, you can optionally set the parameter Post in General Ledger to Yes to enable the
program to automatically post successfully imported journal entries in Oracle General Ledger.

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Chapter 5 - Page 8
Costing Concepts

Costing Concepts
• Raw Cost - Cost directly attributable to work performed. Examples of raw cost are
salaries and travel expenses.
• Burden Cost - Cost of doing business that supports raw cost and cannot be directly
attributed to work performed. Examples of burden cost are fringe benefits, office space,
and general and administrative costs.
• Total Burdened Cost - The total cost. It consists of raw cost plus any burden cost.

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Chapter 5 - Page 9
Overview of Encumbrance Accounting

Overview of Encumbrance Accounting


Budgetary controls are set to enforce limits, and encumbrance accounting creates reservations
for planned expenditures. The reservations ensure that funds will be available when project
costs are incurred, and provide a complete picture of funds available for future use. Oracle
Project Costing creates project encumbrance entries when you enable top-down budget
integration for a project.
Budgetary Controls
Budgetary controls enable you to monitor and control expense commitment transactions
entered for a project based on a project cost budget. Expense commitment transactions are
transactions for non-inventory items. Oracle Project Costing enforces budgetary controls for:
• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing
• Contingent worker purchase orders entered in Oracle Purchasing
• Supplier invoices entered in Oracle Payables
• Project-related prepayments not matched to a purchase order and the application of
unmatched prepayments to supplier invoices

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Chapter 5 - Page 10
Note: Budgetary controls are not enforced for project-related expense reports entered in Oracle
Payables because you generally enter expense reports after costs are already incurred.
Therefore, you should ensure that your procedures for approving expense report expenditures
include verification of available funds according to your business requirements.
Budget Integration
Oracle Project Costing budget integration features enable you to integrate project budgets with
non-project budgets in Oracle General Ledger. Integration is defined in order to perform
bottom-up or top-down budgeting.

For additional information, see the lesson titled "Appendix B: Budgetary Controls And Budget
Integration."

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Chapter 5 - Page 11
Agenda

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Chapter 5 - Page 12
Costing Flow: Distribute Costs

Costing Flow: Distribute Costs


After you enter or import expenditures, the next step is to distribute the costs.

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Chapter 5 - Page 13
Cost Distribution Processing Flow

Cost Distribution Processing Flow


Distribution programs perform the following tasks:
• Calculate raw cost (quantity x rate) in transaction currency
• Calculate burden and burdened cost
• Create and distribute raw cost distribution lines
• Convert all transaction currency amounts to functional currency and project cost currency
amounts
• Create and distribute burden and burdened cost distribution lines
• Determine default accounting using AutoAccounting (debit account for raw cost and
burden cost, debit and credit accounts for total burdened cost)
Note: If you are not performing burdening, then you can skip the programs that create and
distribute burden and burdened cost. See the lesson titled "Implementing Burden Costing."

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Chapter 5 - Page 14
Determining Costs

Determining Costs
Calculating labor cost:
• Raw cost is the result of multiplying hours by a rate.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• For employees and contingent workers, you can maintain labor cost rate schedules by
employee (includes contingent workers) or by job. You also have the option of overriding
labor cost rates for individual employees and contingent workers. In addition, you can
define a unique labor costing algorithm using the Labor Costing Extension.
• For contingent worker timecards with Oracle Purchasing integration, when you run the
program PRC: Distribute Labor Costs, Oracle Project Costing uses rates from the related
purchase order to calculate the costs.
• Oracle Project Costing determines costs for labor transactions with the following
programs:
- PRC: Distribute Labor Costs
- PRC: Distribute Labor Costs for a Range of Projects

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Chapter 5 - Page 15
Calculating cost for usages and miscellaneous transactions:
• Raw cost is equal to quantity (if quantity is in currency, for example, a currency amount),
or alternatively, raw cost is the result of multiplying quantity by a rate (if quantity is not in
currency). You can define cost rates for usage and miscellaneous costs as follows:
- Cost rates by expenditure type
- Cost rates by non-labor resource and owning organization for usages to override the
expenditure type cost rate
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Oracle Project Costing determines costs for usage and miscellaneous costs with the
following program:
- PRC: Distribute Usage and Miscellaneous Costs
Determining supplier cost:
• For supplier cost interfaced from Oracle Payables, raw cost for each expenditure item is
equal to the supplier invoice distribution line amount (accrual basis accounting) or the
payment distribution amount (cash basis accounting) in Oracle Payables.
• For receipt accrual cost interfaced from Oracle Purchasing, raw cost is equal to the receipt
transaction amount in Oracle Purchasing.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Oracle Project Costing determines costs for supplier invoice transactions with the
following programs:
- PRC: Interface Supplier Costs
- PRC: Distribute Supplier Cost Adjustments
- PRC: Distribute Supplier Costs Adjustments for a Range of Projects
Determining expense report cost:
• Raw cost for each expenditure item is equal to the expense report invoice distribution line
amount (accrual basis accounting) or the payment distribution amount (cash basis
accounting) in Oracle Payables.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Receipt amount is the expenditure amount in the receipt currency.
• Note: When you split a receipt in Oracle Payables across multiple expenditure items,
Oracle Project Costing does not divide the receipt amount among the expenditure items.
As a result, each expenditure item is associated with the full receipt amount.
• Oracle Project Costing determines costs for expense reports with the following programs:
- PRC: Interface Expense Reports from Payables
- PRC: Distribute Expense Report Adjustments

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Chapter 5 - Page 16
Burden Cost Calculations

Burden Cost Calculations


Oracle Project Costing calculates burden cost by multiplying raw cost by a burden multiplier.
This calculation is represented in the following formula:
• Burden Cost = Raw Cost x Burden Multiplier
Oracle Project Costing calculates total burdened cost by adding burden cost to the raw cost
amount. This calculation is represented in the following formula:
• Total Burdened Cost = Raw Cost + Burden Cost
You use the burden multiplier to derive the total amount of the burden cost. For additional
discussion regarding burdening, see the lesson titled “Implementing Burden Costing.”

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Chapter 5 - Page 17
AutoAccounting: Distribution Programs

AutoAccounting: Distribution Programs


You create rules in AutoAccounting to specify the default accounts that the distribution
programs generate. Oracle Project Costing creates many different accounting transactions
throughout its business cycle. You use AutoAccounting to specify how to determine the correct
account for each cost distribution line. See the lesson titled “Accounting for Costs.”

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Chapter 5 - Page 18
Cost Distribution Concurrent Programs

Cost Distribution Concurrent Programs


Oracle Project Costing provides the following cost distribution concurrent programs
• PRC: Create and Distribute Burden Transactions - Summarizes burden cost and
creates expenditure items for burden transactions. The program creates burden
transactions for projects, depending on the method you use to store burden costs. See the
lesson titled “Implementing Burden Costing.”
• PRC: Distribute Borrowed and Lent Amounts - Distributes all transactions identified
for Borrowed and Lent accounting. The program determines the transfer price amount for
each transaction and generates the default borrowed and lent accounting entries. You run
this program in the provider operating unit. See the lesson titled "Cross Charge."
• PRC: Distribute Expense Report Adjustments - Computes the burden costs associated
with adjusted expense report expenditure items and determines the account to which to
post the raw costs. The program also identifies if a transaction is cross-charged and, if so,
determines the processing it requires.
• PRC: Distribute Labor Costs for a Range of Projects & PRC: Distribute Labor Costs
- Computes the labor costs for timecard hours and determines the default GL account to

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Chapter 5 - Page 19
which to post the cost. The program also identifies if a transaction is cross-charged and
determines the processing it requires.
• PRC: Distribute Supplier Cost Adjustments & PRC: Distribute Supplier Cost
Adjustments for a Range of Projects - Processes adjustments made in Oracle Project
Costing to supplier costs, such as supplier invoices, receipt accruals, supplier payments,
and discounts. This program determines the default GL account for supplier cost
adjustments.
• PRC: Distribute Total Burdened Costs - Creates total burdened cost distribution lines
for all transactions on a burdened project. The program also identifies and processes any
cross-charged transactions. The program creates default accounts for credit and debit
distribution lines for burdened cost. See the lesson titled see the lesson titled
“Implementing Burden Costing.”
• PRC: Distribute Usage and Miscellaneous Costs - Computes the costs and determines
the default GL account to which to post cost for expenditure items with the following
expenditure type classes: Usages, Burden Transactions, Miscellaneous Transactions, and
Inventory and WIP transactions not already costed or accounted. The program also
identifies if a transaction is cross-charged and, if so, determines the processing it requires.

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Chapter 5 - Page 20
Agenda

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Chapter 5 - Page 21
Costing Flow: Create Accounting

Costing Flow: Create Accounting


After you distribute costs, the next step is to create the accounting for the costs. Creating
accounting consists of four main steps:
1. Generating cost accounting events.
2. Creating accounting for accounting events in Oracle Subledger Accounting.
3. Transferring final subledger accounting to Oracle General Ledger.
4. Importing and posting the journal entries in Oracle General Ledger.

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Chapter 5 - Page 22
Integration with Oracle Subledger Accounting

Integration with Oracle Subledger Accounting


Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
Oracle Project Costing generates accounting events and creates the subledger accounting
entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
Oracle Project Costing without change. Next, Oracle Subledger Accounting transfers the final
accounting to Oracle General Ledger. If you define your own detailed accounting rules in
Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.

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Chapter 5 - Page 23
Generating Cost Accounting Events

Generating Cost Accounting Events


The program PRC: Generate Cost Accounting Events collects cost distribution lines in Oracle
Project Costing and uses AutoAccounting to determine the default liability account. The value
you select for the parameter Process Category determines the type of costs that the program
processes. The program also creates accounting events for the costs in Oracle Subledger
Accounting. If the program is able to successfully generate an accounting event, then it updates
the status of the cost distribution line to Accepted. If the program cannot successfully
determine a liability account or is unable to generate an accounting event, then it updates the
status of the cost distribution line to Rejected.

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Chapter 5 - Page 24
AutoAccounting: Generate Accounting Events

AutoAccounting: Generate Accounting Events


When you run program PRC: Generate Cost Accounting Events, Oracle Project Costing uses
AutoAccounting to determine the credit side of the accounting for each cost distribution line.
See the lesson titled “Accounting for Costs.”

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Chapter 5 - Page 25
Creating and Transferring Accounting

Creating and Transferring Accounting


The program PRC: Create Accounting creates draft or final accounting entries in Oracle
Subledger Accounting for unprocessed accounting events. If you define your own detailed
accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
overwrites default accounts, or individual segments of accounts, that Oracle Project Costing
derives using AutoAccounting. You can run this program in either draft mode, if you want to
review the results before you create the final accounting, or final mode. You can optionally
choose to transfer final journal entries to Oracle General Ledger, initiate the Journal Import
program, and post the journal entries in Oracle General Ledger.
If you do not choose to have the program transfer final journal entries to Oracle General
Ledger, then you can run the program PRC: Transfer Journal Entries to GL to transfer final
journal entries from Oracle Subledger Accounting to Oracle General Ledger. This program
transfers final subledger accounting journal entries from Oracle Subledger Accounting to
Oracle General Ledger and initiates the program Journal Import in Oracle General Ledger.
Optionally, you can choose to have the program post journal entries in Oracle General Ledger.

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Chapter 5 - Page 26
Oracle General Ledger Journal Import

Oracle General Ledger Journal Import


Use Journal Import to import accounting entries into Oracle General Ledger. Journal Import is
an Oracle General Ledger program that creates journal entries from transaction data stored in
the Oracle General Ledger GL_INTERFACE table. The program creates and stores journal
entries in the following tables: GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES.
You post these journal entries in Oracle General Ledger to update your account balances.

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Chapter 5 - Page 27
Agenda

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Chapter 5 - Page 28
Streamline Processes

Streamline Processes
Streamline processes submit and monitor a series of concurrent programs that must be run
sequentially to complete a function. For example, distributing labor costs, generating cost
accounting events, creating accounting in Oracle Subledger Accounting, and transferring the
costs to Oracle General Ledger requires that you submit several programs. Instead of running
the individual programs one at a time, you can choose to submit the program PRC: Submit
Interface Streamline Processes and select the streamline option DXL: Distribute and Interface
Labor Costs to GL. The streamline process then submits and monitors the progress of each
separate program in sequence until all programs complete. Oracle Project Costing provides
three streamline processes:
• PRC: Submit Interface Streamline Processes - Combines programs that send
information from Oracle Project Costing to other Oracle applications.
• PRC: Submit Project Streamline Processes - Combines programs that distribute costs,
interface supplier costs, generate revenue, and generate invoices for a single project.
Generally, you submit a project streamline request after you make expenditure or invoice
adjustments.

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Chapter 5 - Page 29
• PRC: One-Step Interface Streamline Processes to GL - Generates accounting events
for transactions, creates accounting in Oracle Subledger Accounting, transfers subledger
journal entries to Oracle General Ledger, runs the program Journal Import, and posts the
journal entries in Oracle General Ledger. The streamline options for the program PRC:
One-Step Interface Streamline Processes to GL are similar to the streamline options for
the program PRC: Interface Streamline Processes. In addition, you can choose the
streamline option All Streamline Processes to GL to process all distributed cost
transactions and released revenue transactions.
Note: For the program PRC: Create Accounting, the interface streamline processes
automatically set the Mode parameter to Final, the Transfer to General Ledger parameter to
Yes, and the Post in General Ledger parameter to Yes.

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Chapter 5 - Page 30
Submitting Streamline Processes

Submitting Streamline Processes


To submit a streamline process:
1. Navigate to the Submit Request window.
2. For Name, choose one of the three streamline processes. For details about each of the
streamline options and the programs that each option initiates, see Oracle Projects
Fundamentals.
3. Choose the Streamline Option you want to submit.
4. (Optional) Enter the Reschedule Interval, Reschedule Time of Day, and Stop
Rescheduling Date.
5. Choose the Submit button. Oracle Project Costing submits your streamline request. The
Streamline Processing Report lists the name, the concurrent request ID, and the
completion status of each child programs monitored by the streamline process.

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Chapter 5 - Page 31
Practice - Distribute Costs
Overview
In this practice, you will run the cost distribution program for the XXBATCH expenditure batch
that you entered in the practice titled "Enter an Expenditure Batch."

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Distribute Labor Costs

Submit the concurrent program PRC: Distribute Labor Costs for your XXBATCH expenditure
batch. Ensure that you select your expenditure batch and project as program parameters. Review
the output report.

Note your Request ID __________________________

Review the Results in Expenditure Inquiry

After the program is complete, query the expenditure items for your project in Expenditure
Inquiry and review the cost distribution line information for one of the expenditure items. The
distribution program calculates the raw and burdened cost for the four expenditure items.

The status of the cost distribution line is Pending. When the instructor runs the program PRC:
Generate Cost Accounting Events, the program will derive the default credit account for the cost
distribution line.

Note: The instructor will run the programs PRC: Generate Cost Accounting Events and PRC:
Create Accounting for the entire class in the next guided demonstration.

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Chapter 5 - Page 32
Solution - Distribute Costs
Distribute Labor Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Distribute Labor Costs from the list of values in the Name field
and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Batch XXBATCH
Project Number XXCS

7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

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Chapter 5 - Page 33
9. (B) No in the Decision dialog box

10. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

13. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query all expenditure items for your XX Capital Services Project.

• Enter the find criteria:


− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

16. Review the expenditure items.

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Chapter 5 - Page 34
The distribution program calculates the raw and burdened cost for the four expenditure
items.

17. Review cost distribution line information.

• Position your cursor on one of the queried items with an amount in the Project Func
Burdened Cost field.

• (B) Item Details

• Select Cost Distribution Lines.

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Chapter 5 - Page 35
• (B) OK

• Review the cost distribution line information.

The status of the cost distribution line is Pending. When the instructor runs the program
PRC: Generate Cost Accounting Events, the program will derive the default credit account
for the cost distribution line.

18. Close the open windows and return to the Navigator.

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Chapter 5 - Page 36
Guided Demonstration - Create Accounting for Costs
Run Programs to Create Accounting for Labor Costs

The instructor will submit a streamline program to create accounting for the entire class.

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Submit Interface Streamline Processes from the list of values in
the Name field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Streamline Option XL: Interface Labor Costs To GL

7. (B) OK

8. (B) Submit

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

The following programs run during streamline processing:


− PRC: Submit Interface Streamline Processes
− PRC: Generate Cost Accounting Events
− Process Category= Labor Costs

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Chapter 5 - Page 37
− PRC: Create Accounting
− Process Category= Labor Costs
− Accounting Program
− Journal Import
− Posting: Single Ledger
− Subledger Accounting Balances Update

12. When the streamline program is complete, close the Requests window and return to the
Navigator.

Review the Results in Expenditure Inquiry

13. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

14. Query all expenditure items for the class.

• Enter the find criteria:


− Operating Unit = Vision Services
− Expenditure Type Class = Straight Time
− Item Dates (from) = Date for the first day of this class

• (B) Find

• (B) Yes for the Decision message

15. Review cost distribution line information.

• Position your cursor on one of the queried items.

• (B) Item Details

• Select Cost Distribution Lines.

• (B) OK

• Review the cost distribution line information.

The status of the cost distribution line is Accepted -- Final Accounted in Oracle Subledger
Accounting.

16. Close the Cost Distribution Lines window

17. Review the final subledger accounts.

• Position your cursor on the same expenditure item.

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Chapter 5 - Page 38
• (M) Tools > View Accounting

• Review the accounting information on the View Expenditure Accounting window.

18. Close the open windows and return to the Navigator.

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Chapter 5 - Page 39
Agenda

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Chapter 5 - Page 40
Overview of Period Processing

Overview of Period Processing


Project Accounting Periods
A project accounting period is an implementation-defined period against which you can
measure project performance. Project accounting periods are also referred to as PA periods.
PA Periods and GL Periods
To report project information more frequently than your Oracle General Ledger accounting
periods (GL periods) allow, you can define PA periods that are shorter than your GL periods.
For example, you can define weekly PA periods and monthly GL periods. You can also create
PA periods that match existing GL periods. However, defining PA periods that overlap your
GL periods can create the need for numerous adjustments and journal entries if you wish to
reconcile Oracle Project Costing with Oracle General Ledger. For additional information, see
the course titled "R12 Project Foundation Fundamentals."

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Chapter 5 - Page 41
Control of GL Period Statuses for Project Transactions

Control of GL Period Statuses for Project Transactions


You can control the status of GL periods for transaction processing in Oracle Project Costing,
without closing the period in Oracle General Ledger. This feature enables you to open and
close GL periods for project transactions independent of the closing processes for the other
subledgers. The status of a GL period for project transactions in Oracle Project Costing can
differ from the same GL period’s status in Oracle General Ledger.
Enabling the Maintain Common PA and GL Periods Implementation Option
If your PA periods and GL periods are identical, you can enable the Maintain Common PA and
GL Periods implementation option. When this option is enabled, the system automatically
maintains PA period statuses as you maintain the GL period statuses. To use this method, you
must define identical PA periods and GL periods.

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Chapter 5 - Page 42
Transaction Accounting Methods

Transaction Accounting Methods


To give you greater control over when your transactions are accounted, you can enable the
profile option PA: Enable Enhanced Period Processing to use expenditure item date
accounting.

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Chapter 5 - Page 43
Period End Date Accounting

Period End Date Accounting


With period end date accounting, you maintain PA periods in Oracle Project Costing and GL
periods in Oracle General Ledger. Oracle Project Costing derives the PA date for a transaction
from the expenditure item date and sets the PA date to the PA period ending date. The period
must be in either Open or Future status. Next, Oracle Project Costing derives GL dates from
PA dates and sets the accounting date to the end date of the corresponding GL accounting
period.
Period End Date Accounting Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. This expenditure item date falls within the SEP-07 PA period and because the SEP-07
PA period is open, Oracle Project Costing sets the PA date to 30-SEP-07, the last day of the
period.
Next, Oracle Project Costing uses the PA date (30-SEP-07) to derive the GL date. The PA date
falls into the open SEP-07 GL period. The derived GL date is 30-SEP-2007, the end date of the
SEP-07 GL period.
Date Derivation
Project Accounting Date (PA Date)

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Chapter 5 - Page 44
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The PA date is set to the end date of the earliest PA period that includes or follows
the transaction expenditure item date and has a status of Open or Future.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is determined based on the relationship of the transaction expenditure
item date to the GL date entered in Oracle Purchasing or Oracle Payables.
- If the expenditure item date is less than or equal to the GL date, then the PA date
is set to the end date of the earliest PA period that includes or follows the GL
date and has a status of Open or Future.
- If the expenditure item date is greater than the GL date, then the PA date is set to
the end date of the earliest PA period that includes or follows the expenditure
item date and has a status of Open or Future.
Oracle General Ledger Accounting Date (GL Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The GL date is set to the end date of the earliest GL period that includes or follows
the PA date of the cost distribution line and has a status of Open or Future according
to the period status in Oracle General Ledger.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
each distribution line from the GL date entered for the distribution in Oracle
Purchasing or Oracle Payables.

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Chapter 5 - Page 45
Expenditure Item Date Accounting

Expenditure Item Date Accounting


With expenditure item date accounting, you maintain both PA periods and GL period statuses
for project transactions in Oracle Project Costing. Oracle Project Costing derives PA dates and
GL dates independently, and does not set the accounting dates to the end date of the
corresponding accounting period.
Expenditure Item Date Accounting Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. The expenditure item date falls into the open SEP-07 PA period. The PA date is set to
the expenditure item date of 08-SEP-2007.
The GL period SEP-07 is also open for Oracle Project Costing. Oracle Project Costing sets the
GL date to expenditure item date of 08-SEP-2007.
Date Derivation
Project Accounting Date (PA Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments

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Performing Cost Processing


Chapter 5 - Page 46
- The PA date is set to the transaction expenditure item date if that date falls in a PA
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
enterable PA period that follows the expenditure item date.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is set to the transaction expenditure item date if that date falls in a PA
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
enterable PA period that follows the expenditure item date.
Oracle General Ledger Accounting Date (GL Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The GL date is set to the transaction expenditure item date if that date falls in a GL
period with a status of Open or Future according to the period status in Oracle Project
Costing. If the expenditure item date falls in a closed GL period, then the GL date is
set to the start date of the earliest open or future enterable GL period that follows the
expenditure item date.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
each cost distribution line from the GL date entered for the distribution line in Oracle
Purchasing or Oracle Payables.

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Performing Cost Processing


Chapter 5 - Page 47
Expenditure Item Date Accounting with Common Accounting
Periods

Expenditure Item Date Accounting with Common Accounting Periods


This method uses expenditure item date accounting and date derivation features with the
Maintain Common PA and GL Periods implementation option. You maintain GL period
statuses for project transactions in Oracle Project Costing and the system automatically
maintains PA Periods. To use this method, you must define identical PA periods and GL
periods. Oracle Project Costing derives a GL date for each transaction and copies the value to
the PA date.
Expenditure Item Date Accounting with Common Accounting Periods Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. The expenditure item date falls into the SEP-07 GL period. While SEP-07 is still open in
Oracle General Ledger, the GL period for project transactions status is Closed in Oracle Project
Costing. Because this GL period is closed for project transactions, Oracle Project Costing sets
the GL date to 01-OCT-2007, the start date of the OCT-07 GL period. OCT-07 is the earliest
open or future enterable GL period for project transactions that follows the expenditure item
date. It then copies the PA date from the GL date.

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Performing Cost Processing


Chapter 5 - Page 48
Date Derivation
Project Accounting Date (PA Date)
• Oracle Project Costing copies the PA date from the GL date.
Oracle General Ledger Accounting Date (GL Date)
• Oracle Project Costing uses the Expenditure Item Date Accounting logic.

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Performing Cost Processing


Chapter 5 - Page 49
Sweeping Transaction Accounting Events

Sweeping Transaction Accounting Events


During the period-end closing cycle, you can choose to close the period without accounting for
all accounting events. The program PRC: Sweep Transaction Accounting Events enables you to
move accounting events that are in a closed GL period, and have errors or are not fully
accounted, to the next open GL period so that you can complete closing without accounting for
these transactions. This program changes the date on unaccounted transaction accounting
events to the first day of the next open GL period without accounting for them.
After the program sweeps the transaction accounting events, it also changes the GL date on the
cost and revenue distribution lines associated with the accounting events to the first day of the
next open GL period.
When budgetary control is enabled for a project, this program also updates unaccounted
project-related commitment transaction accounting events for project-related documents in
Oracle Purchasing and Oracle Payables. The program updates the GL date that the system uses
when it creates the reversing encumbrance accounting entries.
The following conditions can cause a transaction to become eligible for sweeping:
• The transaction has accounting events with errors.

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Chapter 5 - Page 50
• The transaction has been accounted in draft mode but not in final mode in Oracle
Subledger Accounting.
• The transaction has unprocessed accounting events.
When you submit the program, you can choose to run it in either review mode or update mode.
Use review mode to view all transactions with exceptions and the reasons for the exceptions.
At this point, you can address the exceptions and run the program PRC: Create Accounting in
final mode to complete the accounting for the transaction. Alternatively, if you do not want to
correct the exceptions at this time, run the sweep transaction accounting events program in
update mode to change the dates on the unaccounted accounting events to the first day of the
next open GL period.
Upon completion, the sweep transaction accounting events program generates an output report
that shows the results of the program.
Note: If you sweep revenue transactions, and you use Project Status Inquiry, Project
Performance Reporting, or Oracle Daily Business Intelligence for Projects, then you must run
the appropriate refresh or update programs so that reporting tool accurately reports the GL
period. For additional information, see Oracle Projects Fundamentals.
Note: Before you sweep transaction accounting events, consider the impact on other related
processing such as burden cost accounting, asset capitalization, allocations, and non-CIP
assets. For example, if the raw cost for a transaction is successfully accounted and the
transaction accounting event for the burden cost is in error, then when you sweep transaction
accounting events to the next period, you can end up with the raw cost posted to one period and
burden cost posted to the following period.

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Chapter 5 - Page 51
Summary

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Chapter 5 - Page 52
Accounting for Costs
Chapter 6

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Accounting for Costs


Chapter 6 - Page 1
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Chapter 6 - Page 2
Accounting for Costs

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Accounting for Costs


Chapter 6 - Page 3
Objectives

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Accounting for Costs


Chapter 6 - Page 4
Agenda

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Accounting for Costs


Chapter 6 - Page 5
Overview of Accounting for Costs

Overview of Accounting for Costs


Oracle Project Costing creates accounting transactions throughout its business cycle. You can
use AutoAccounting to specify how to determine the correct account for each transaction.
Oracle Project Costing generates accounting events and creates accounting for the accounting
events in Oracle Subledger Accounting. Oracle Project Costing predefines setup in Oracle
Subledger Accounting so that the create accounting program accepts default accounts from
AutoAccounting without change. If you define your own detailed accounting rules in Oracle
Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts, or
individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. AutoAccounting, the Account
Generator, and Oracle Subledger Accounting each provide functionality to create accounting
for project-related supplier costs and expense reports. When you implement Oracle Purchasing
and Oracle Payables integration with Oracle Project Costing, carefully consider how to set up
the account derivation logic in each location.

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Accounting for Costs


Chapter 6 - Page 6
AutoAccounting

AutoAccounting
When you implement AutoAccounting, you define the rules governing which general ledger
accounts Oracle Project Costing uses under which circumstances. Oracle Project Costing uses
the rules you define whenever it performs an accounting transaction.
The AutoAccounting feature requires that you allow dynamic insertion of new account
combinations. You must define your Accounting Flexfield structure with the Allow Dynamic
Inserts options enabled.
Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.

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Accounting for Costs


Chapter 6 - Page 7
AutoAccounting Rules

AutoAccounting Rules
AutoAccounting rules are formulas (or methods) that you use to derive each segment within
your account structure based on the type of transaction. Each rule can use one of three
intermediate value sources to derive the account segment:
• Constant value
- Supply a single valid segment value.
• Parameter
- Context-sensitive intermediate value that requires a lookup set.
• SQL select statement
- Execute an SQL select statement to retrieve a value; make the rule dependent on
multiple values and conditional statements.
To implement AutoAccounting, you define AutoAccounting rules to generate account
combinations. You then assign a set of rules to each AutoAccounting transaction you want to
use for your company.

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Accounting for Costs


Chapter 6 - Page 8
AutoAccounting Rule Mapping

AutoAccounting Rule Mapping


Each AutoAccounting rule you define supplies one Accounting Flexfield segment value at a
time. Thus, you need to specify one AutoAccounting rule for each segment in your Accounting
Flexfield, for each AutoAccounting transaction you want to use. Some of the AutoAccounting
rules you define can be quite simple, such as always supplying a constant company code or
natural account. Others can draw upon context information (parameters), such as the
expenditure type of an expenditure item or the organization that owns a particular non-labor
resource. You can use multiple parameters to provide a segment value. You can reuse the same
AutoAccounting rules for many different functions and their transactions.
For each rule that you define, only one segment value within the entire account structure is
supplied at a time. Thus, you specify one AutoAccounting rule for each segment in your
account structure for each AutoAccounting transaction.

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Chapter 6 - Page 9
Constant Value

Constant Value
Use a constant value when you always supply a particular intermediate value (usually an
Accounting Flexfield segment code). If you specify Constant as the rule intermediate value
source, then enter the value that you want Oracle Project Costing to supply as the intermediate
value.

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Accounting for Costs


Chapter 6 - Page 10
Parameter Value

Parameter Value
When you define an AutoAccounting rule, you can use a predefined parameter as an input
value. Examples of parameters that you can use as context information include the project-
owning organization or the expenditure type of an expenditure item. Oracle Project Costing
predefines the available parameters.
AutoAccounting enables you to use the AutoAccounting parameters as inputs for your
AutoAccounting rules. Not all of the parameters are available for all functions. The Customer
ID and the Customer Name parameters are available for cross charge functions only.
Submit the AutoAccounting Functions Listing for a complete listing of all of the parameters
available for each function.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 11
SQL Select Statement Value

SQL Select Statement Value


A SQL select statement value enables you to execute a SQL select statement to retrieve an
intermediate value. You can make the rule dependent on multiple values and conditional
statements. SQL statements are intended to process rules that depend on more than one
parameter. You can define rules to read any value by using a SQL select statement. You should
consider the performance implications of using SQL statements. For example:
IF the project type is overhead,
THEN use the expenditure organization parameter.
ELSE use the project organization parameter.
Although many companies have implemented AutoAccounting SQL statement rules in a
production environment, you should tune your SQL statement and test the AutoAccounting
setup against volume data to check their performance quality before implementation.
AutoAccounting rules with SQL statements are intended to process rules that are dependent on
more than one parameter. They are not intended to derive additional parameters using SQL that
accesses application tables. This type of use can affect processing performance and may not be
supported based on the AutoAccounting function.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 12
Lookup Sets

Lookup Sets
A lookup set is an implementation-defined list that corresponds to the account segments. To
define a lookup set, you specify pairs of values. For each intermediate value, you specify a
corresponding account segment value. One or more related pairs of intermediate values and
segment values form a lookup set. When you define lookup sets, lists of values are not
available.
You need to define a lookup set before you can use it in a rule. However, if you prefer to
define your rules before completing your lookup sets, you can define each lookup set’s name
and description and then define the intermediate values and segment values later.
If AutoAccounting does not find a matching intermediate value in the lookup set, then it
provides an error message (Incomplete AutoAccounting Rules) to notify you that it could not
build an Accounting Flexfield combination. You must correct your AutoAccounting setup and
resubmit the program that triggered the AutoAccounting error. If AutoAccounting does not
find a matching segment value in the lookup set, then it provides an error message (Invalid
Accounting Flexfield) to notify you that it could not build a valid Accounting Flexfield
combination. You must correct your AutoAccounting setup and resubmit the program that
triggered the AutoAccounting error.

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Accounting for Costs


Chapter 6 - Page 13
Descriptive Flexfields on Setup Entities
You can use the descriptive flexfield attributes to store values used in AutoAccounting instead
of maintaining lookup sets for entities. These entities include:
• Agreement types
• Budget entry methods and budget types
• Class categories and class codes
• Compensation rule sets
• Event types
• Expenditure categories and expenditure types
• Burden cost codes
• Lookup sets
• Non-labor resources and non-labor resource organizations sources
• Project role types
• Transaction sources

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 14
Selecting a Segment Value Source

Selecting a Segment Value Source


After you specify an intermediate value, you specify one of the following segment value
sources to indicate whether the intermediate value is already a valid segment value or whether
AutoAccounting needs to translate it into a segment value using a lookup set:
• Intermediate Value
- Supply the intermediate value as a segment value; do not use a lookup set.
• Segment Value Lookup Set
- Look up the intermediate value in a lookup set; translate the intermediate value into
the corresponding segment value.
You do not always need to use a lookup set when you write an AutoAccounting rule. If you
define a simple constant rule, then you do not need to use a lookup set to supply a segment
value because you generally supply a valid segment value as the constant.

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Chapter 6 - Page 15
Assign Rules

Assign Rules
Function
For each accounting transaction, you define rules to determine the appropriate account to
charge. Each accounting transaction is identified by an AutoAccounting function.
AutoAccounting functions are components of programs that you submit to generate accounting
entries.
Function Transactions
When you are assigning rules to an AutoAccounting function, you can assign different rules to
different conditions. For example, you can account for indirect projects using one set of rules,
and use two different sets of rules for billable items and non-billable items on contract projects.
Oracle Project Costing provides function transactions for each function which identify
commonly used conditions. You can assign rules to function transactions for each
AutoAccounting function. Complete the following steps to assign AutoAccounting rules to
AutoAccounting functions and function transactions:
• Enable each function transaction you want to use.
• For each function transaction you enable, specify an AutoAccounting rule for each
segment of your Accounting Flexfield.

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Chapter 6 - Page 16
Assign rules to function transactions to tell Oracle Project Costing which AutoAccounting
rules to use under which circumstances. In cases where an AutoAccounting function consists
of several distinct function transactions, you assign rules to each function transaction that you
want to use. These rule assignments determine which account AutoAccounting uses to process
that function transaction. Oracle Project Costing attempts to use the most appropriate function
transaction. If you have not enabled that function transaction, then it tries to use the next most
appropriate transaction. Oracle Project Costing continues this process until it finds an enabled
function transaction.
Segment Rule Pairings
After you enable a function transaction, you match each segment in your Accounting Flexfield
with the appropriate AutoAccounting rule. For example, if you have a two-segment
Accounting Flexfield containing a Company segment and an Account segment, you assign one
rule to the Company segment and one rule to the Account segment. You use the Assign
AutoAccounting Rules window to enable AutoAccounting function transactions and assign
rules to them.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 17
Guided Demonstration - Define a Lookup Set
Define a Lookup Set

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Lookup Sets window.

• (N) Setup > AutoAccounting > Lookup Sets

3. Enter lookup set header information as specified in the following table:

Field Value
Name XXExpCat/Indirect Cost Account
Description Uses expenditure category to look up indirect cost account values.

4. Enter Segment Value Lookups as specified in the following table:

Intermediate Value Segment Value


Chargebacks 7750
Expenses 7699
Labor 7580
Other Expenses 7740
Overhead 7740
Travel 7699

Note: Lists of values are not available when you define lookup sets.

You can map multiple intermediate values to the same segment value. This option enables
you to capture more detail in Oracle Project Costing than you need in Oracle Subledger
Accounting or Oracle General Ledger.

5. (I) Save

6. Close the AutoAccounting Lookup Sets window.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 18
Guided Demonstration - Define an AutoAccounting Rule
Define an AutoAccounting Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Rule window.

• (N) Setup > AutoAccounting > Rules

3. Define a rule using the lookup set you created in the previous demonstration.

• Enter the values as specified in the following table:

Field Value
Rule Name XX Indirect Cost Account Rule
Description Derives the default debit account for the indirect cost
account based on expenditure category.
Intermediate Value: Source Parameter
Intermediate Value: Value Expenditure Category
Segment Value: Source Lookup Set
Segment Value: Lookup Set XXExpCat/Indirect Cost Account

• Optionally, use the Lookup Set button to review the lookup set values.

4. (I) Save

5. Close the AutoAccounting Rule window.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 19
Practice - Define an AutoAccounting Rule
Overview
In this practice, you will define a rule for use in AutoAccounting. Your company uses the
expenditure organization associated with an expenditure item to determine what department to
charge. You will define an AutoAccounting rule for this business scenario.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define an AutoAccounting Rule

Define a rule for AutoAccounting that uses the expenditure organization to determine the
account value. Name your rule XX Exp Org to Department Rule.

Your implementation team previously defined a lookup set that maps organizations to accounts.
Use the lookup set Organization to Department Value in your rule. Review the lookup set as you
define the rule.

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Accounting for Costs


Chapter 6 - Page 20
Solution - Define an AutoAccounting Rule
Define an AutoAccounting Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Rule window.

• (N) Setup > AutoAccounting > Rules

3. Enter the values as specified in the following table:

Field Value
Name XX Exp Org to Department Rule
Description Enter a brief description
Intermediate Value: Source Parameter
Intermediate Value: Value Expenditure Organization
Segment Value: Source Lookup Set
Segment Value: Lookup Set Organization to Department Value

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Accounting for Costs


Chapter 6 - Page 21
4. (I) Save

5. Review the lookup set.

• (B) Lookup Set

• Review the lookup set values.

6. Close the open windows and return to the Navigator.

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Accounting for Costs


Chapter 6 - Page 22
Guided Demonstration - Assign AutoAccounting Rules
Assign AutoAccounting Rules

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Assign AutoAccounting Rules window.

• (N) Setup > AutoAccounting > Assign Rules

3. Find the AutoAccounting function.

• Select Labor Cost Account in the Name field.

• (B) Find

4. In the Function Transactions region, scroll down and select the function transaction Indirect,
All.

IMPORTANT: For this demonstration, do not enable the function transaction. Oracle
Project Costing does not use disabled function transactions during processing. Caution
students not to modify AutoAccounting rule assignments during class. Modifying
AutoAccounting can affect the processing of future demonstrations and practices.

5. With Indirect, All selected, enter the Segment Rule Pairings as specified in the following
table:

Number Segment Name Rule Name


0 Services Company Company Default Rule
1 Services Department Exp Org to Dept Rule
2 Services Account XX Indirect Cost Account Rule
3 Services Product Product Default Rule

• Optionally, select the Rule button to review each rule.

6. (I) Save

7. Close the Assign AutoAccounting Rules window and return to the Navigator.

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Accounting for Costs


Chapter 6 - Page 23
Agenda

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Accounting for Costs


Chapter 6 - Page 24
AutoAccounting for Costs Implementation Steps

AutoAccounting for Costs Implementation Steps


Oracle Project Costing uses AutoAccounting to generate default accounting for cost
transactions. When you implement AutoAccounting, you define rules that determine accounts
that Oracle Project Costing assigns to transactions to meet your business requirements. You
can optionally define your detailed accounting rules in Oracle Subledger Accounting. If you
define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Project Costing derives using AutoAccounting.
Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 25
Accounting for Labor Costs

Accounting for Labor Costs


Oracle Project Costing uses the Labor Cost Account and the Labor Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Straight
Time and Overtime expenditure type classes.
Labor Cost Account Function
When you run PRC: Distribute Labor Costs or PRC: Distribute Labor Costs for a Range of
Projects, Oracle Project Costing calculates labor cost amounts based upon employee labor cost
overrides and labor costing rules. After calculating labor costs, Oracle Project Costing uses the
Labor Cost Account transactions to debit a default expense account for raw labor costs.
Labor Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Labor Cost process category,
the program credits a default payroll clearing liability account to balance the labor expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.
You can assign different sets of rules to and enable the Contingent Worker Labor and
Employee Labor function transactions to generate a different default clearing account based on
the person type. Alternatively, you can assign rules to and enable only the All Labor function
transaction to use the same rules for employees and contingent workers.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 26
Accounting for Expense Report Costs

Accounting for Expense Report Costs


Oracle Project Costing uses the Expense Report Cost Account function to determine the
expense default debit account for transactions associated with the Expense Reports expenditure
type class.
Expense Report Cost Account Function
When you run PRC: Distribute Expense Report Adjustments, Oracle Project Costing calculates
and distributes costs originating from expense report adjustments, and uses the Expense Report
Cost Account function transactions to determine which default expense account to debit for
expense report costs.
Expense Report Adjustment Liability Account
When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,
the program credits a default supplier cost liability account to balance the supplier cost expense
account. If you specify a default account in Oracle Project Costing implementation options,
then the program uses the Default Supplier Cost Credit Account. Otherwise, you must set up
Oracle Subledger Accounting to derive the account. The program also generates cost
accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 27
Accounting for Usage Costs

Accounting for Usage Costs


Oracle Project Costing uses the Usage Cost Account and the Usage Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Usages
expenditure type class.
Usage Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Usage Cost Account transactions to debit a default expense account for raw usages costs.
Usage Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Usage Cost process category,
the program credits a default asset usages liability account to balance the usages expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 28
Accounting for Miscellaneous Costs

Accounting for Miscellaneous Costs


Oracle Project Costing uses the Misc Trans Cost Account and the Misc Trans Cost Clearing
Account functions to determine the default cost accounting for transactions associated with the
Miscellaneous Transaction expenditure type class.
Miscellaneous Transaction Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Misc Trans Cost Account transactions to debit a default expense account for raw
miscellaneous costs.
Miscellaneous Transaction Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Miscellaneous Cost process
category, the program credits a default miscellaneous cost liability account to balance the
miscellaneous cost expense account. The program also generates cost accounting events in
Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 29
Accounting for Burden Transactions

Accounting for Burden Transactions


Oracle Project Costing uses the Burden Cost Account and the Burden Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Burden
Transaction expenditure type class.
Burden Cost Account Function
When you run PRC: Create and Distribute Burden Transactions, Oracle Project Costing uses
the Burden Cost Account transactions to debit a default expense account for the burden costs.
Burden Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Burden Cost process category,
the program credits a default burden cost liability account to balance the burden cost expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 30
Accounting for Total Burdened Cost

Accounting for Total Burdened Cost


Oracle Project Costing uses the Total Burdened Cost Debit and the Total Burdened Cost Credit
functions to determine the default cost accounting for total burdened costs.
Total Burdened Cost Debit/Credit
When you run PRC: Distribute Total Burdened Cost, Oracle Project Costing creates two
burdened cost distribution lines for the total burdened cost. One distribution line holds the
default account for the burdened cost debit and the other distribution line holds the default
account for the burdened cost credit. Oracle Project Costing creates these two distributions for
all expenditure items charged to projects which are defined to burden costs.
The Total Burden Costs Debit/Credit function consists of the following functions:
• Total Burdened Cost Debit
• Total Burdened Cost Credit

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 31
Accounting for WIP and Inventory Costs

Accounting for WIP and Inventory Costs


Oracle Project Costing uses the WIP Cost Account and the WIP Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Work in
Process (WIP) expenditure type class. In addition, Oracle Project Costing uses the Inventory
Cost Account and the Invent. Cost Clearing Account functions to determine the default cost
accounting for transactions associated with the Inventory expenditure type class.
WIP Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the WIP Cost Account transactions to debit a default expense account for raw work in process
costs.
WIP Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Work in Process Cost process
category, the program credits a default work in process cost liability account to balance the
work in process expense account. The program also generates cost accounting events in Oracle
Subledger Accounting.

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Chapter 6 - Page 32
Inventory Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Inventory Cost Account transactions to debit a default expense account for raw inventory
costs.
Invent. Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Inventory Cost process category,
the program credits a default inventory cost liability account to balance the inventory expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 33
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


When you enter project-related supplier invoices in Oracle Payables or receipt accruals in
Oracle Purchasing, Oracle Payables or Oracle Purchasing invokes the Account Generator in
real time. The Account Generator derives the Accounting Flexfield values based on project
information in much the same way that AutoAccounting works in Oracle Project Costing
programs. After you interface supplier costs to Oracle Project Costing, you can adjust the
supplier cost expenditure items in Oracle Project Costing. Oracle Project Costing processes
these supplier invoice adjustments using the Supplier Invoice Cost Account AutoAccounting
function.
Supplier Invoice Cost Account Function
Oracle Project Costing uses the Supplier Invoice Cost Account function to debit the
appropriate default expense account for supplier cost adjustments (includes adjustments to
expenditure items from invoices, receipts, and payments).
When you run PRC: Distribute Supplier Cost Adjustments or PRC: Distribute Supplier Cost
Adjustments for a Range of Projects, Oracle Project Costing uses the Supplier Invoice Cost
Account function to debit a default expense account for raw supplier costs.

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Chapter 6 - Page 34
Supplier Cost Adjustment Credit Account
When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,
the program credits a default supplier cost liability account to balance the supplier cost expense
account. If you specify a default account in Oracle Project Costing implementation options,
then the program uses the Default Supplier Cost Credit Account. Otherwise, you must set up
Oracle Subledger Accounting to derive the account. The program also generates cost
accounting events in Oracle Subledger Accounting.

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Accounting for Costs


Chapter 6 - Page 35
Listings

Listings
• IMP: AutoAccounting Functions - For each function, this report displays all of the
possible parameters that AutoAccounting rules use to derive key flexfield segment values.
The report also shows you all of the transactions related to the AutoAccounting function
and whether each transaction is enabled or disabled.
• IMP: AutoAccounting Lookup Sets - For each AutoAccounting lookup, this report
prints each possible intermediate value and its corresponding segment value.
• IMP: AutoAccounting Rule Definitions - For each AutoAccounting rule, this report
displays the type of its intermediate source and the corresponding value for that source. If
the intermediate value source is a SQL statement, this report displays the text of that
statement. This listing also includes the segment value source that maps an intermediate
value to the final segment value. If the segment value source is a lookup set, then this
report displays the name of that lookup set.
• IMP: AutoAccounting Segment Rule Pairings - For each function, this report displays
each of the function’s transactions. It also lists the AutoAccounting rule and key flexfield
segment pairings for each transaction. This report also displays the function’s transactions
without paired segments and rules.

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Chapter 6 - Page 36
Agenda

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Chapter 6 - Page 37
Account Generator

Account Generator
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. You define functions and processes
to derive the Accounting Flexfield combinations. You can optionally customize the Account
Generator for each set of defined ledgers.
Oracle Purchasing
Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
default account generator processes for the accounts it needs to build. Oracle Purchasing
provides default account generator processes. To derive the accounts based on project
information, you must change the default processes so that they use the project information.
For more information, see the “Oracle Purchasing User’s Guide.”

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Accounting for Costs


Chapter 6 - Page 38
Oracle Payables
How the Account Generator generates default charge accounts for invoices and expense reports
depends on whether you are entering an invoice or expense report that contains project and task
information:
• Supplier invoices
- Oracle Payables (Invoices window) calls the Project Supplier Invoice Account
Generator.
• Oracle Internet Expenses and Oracle Payables expense reports
- Oracle Internet Expenses or Oracle Payables calls the Project Expense Report
Account Generator.
PA: Allow Override of PA Distributions in AP/PO
You use the profile option PA: Allow Override of PA Distributions in AP/PO to control
whether users can override the account number that the Account Generator derives for project-
related distributions. Settings for this profile options are:
• Yes - User is allowed to update and override the generated Account.
• No - User is not allowed to update and override the generated Account.
• (No Value) - Equivalent to Yes.
For more information regarding the Account Generator and Oracle Project Costing, see the
Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 39
Account Generator Terminology

Account Generator Terminology


The Account Generator uses Oracle Workflow to derive default account code combinations.
AutoAccounting determines default account combinations for all other project-related
transactions.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 40
Implementing Accounting for Project-Related Supplier Costs and
Expense Reports

Implementing Accounting for Project-Related Supplier Costs and Expense


Reports
AutoAccounting, the Account Generator, and Oracle Subledger Accounting each provide
functionality to create accounting for project-related supplier costs and expense reports. When
you implement Oracle Purchasing and Oracle Payables integration with Oracle Project
Costing, you must carefully consider how to set up the account derivation logic in each
location.
• Oracle Purchasing Account Generator (required) - Oracle Purchasing uses the
Account Generator to derive default debit accounts for project-related purchasing
documents.
• Project Supplier Invoice Account Generator (required) - Oracle Payables uses the
Account Generator to derive default debit accounts for project-related supplier invoices
that are not matched to a purchase order.
- Oracle Payables always uses the Account Generator for project-related invoices. You
must set up the Account Generator to generate a default account, even if the profile
option PA: Allow Override of PA Distributions in AP/PO. option is set to Yes.

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Chapter 6 - Page 41
- In addition, Oracle Project Costing uses the Account Generator to derive a default
debit account for supplier cost and expense report adjustments that you perform in
Oracle Project Costing. Oracle Project Costing uses this information to determine
whether to allow the adjustment when you enable Automatic Offsets in Oracle
Payables. Oracle Project Costing also uses this information to determine whether an
adjustment can potentially affect tax recoverability.
• Project Expense Report Account Generator (required) - Oracle Internet Expenses and
Oracle Payables (Invoices window) use the Account Generator to derive default debit
accounts for project-related expense reports. You set up the Account Generator when you
implement Oracle Payables.
• Supplier Invoice Cost Account AutoAccounting Function (required) - Oracle Project
Costing uses this AutoAccounting function to derive default debit accounts for supplier
cost adjustments that you perform in Oracle Project Costing.
• Expense Report Cost AutoAccounting Function (required) - Oracle Project Costing
uses this AutoAccounting function to derive default debit accounts for expense report
adjustments that you perform in Oracle Project Costing.
• Default Supplier Cost Credit Account Implementation Option (optional) - The
program PRC: Generate Cost Accounting Events uses the specified account as the default
credit account for supplier cost and expense report adjustments that you perform in Oracle
Project Costing.
• User-defined Setup in Oracle Subledger Accounting for Supplier Cost Adjustments
(optional) - Oracle Project Costing predefines setup in Oracle Subledger Accounting so
that the create accounting program accepts the accounting for supplier cost and expense
report adjustments from Oracle Project Costing without change. You can optionally define
your own detailed accounting rules in Oracle Subledger Accounting.
- If you allow adjustments to supplier costs in Oracle Project Costing and you do not
define a default supplier cost credit account in Oracle Project Costing implementation
options, then you must set up Oracle Subledger Accounting to derive the credit
account for supplier cost adjustments.

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Chapter 6 - Page 42
Agenda

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Chapter 6 - Page 43
Encumbrance Accounting and Project Budgets

Encumbrance Accounting and Project Budgets


Oracle Projects creates project encumbrance entries when you enable top-down budget
integration for a project. Oracle Purchasing and Oracle Payables create encumbrance entries to
relieve the existing encumbrances and to create new encumbrance accounting entries. Oracle
Projects provides this setup in Oracle Purchasing and Oracle Payables so that these
applications can create encumbrance for burden costs.
Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds
related action is performed for a document. For example, when you perform a Check Funds
action for document, the encumbrance accounting events are processed to create the
encumbrance journals in draft mode. When you perform a Reserve Funds action for a
document, the encumbrance accounting events are processed to create the encumbrance
journals in final mode and the funds balances are updated. After processing is complete, you
can review the updated funds balances.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Purchasing or Oracle Payables derives using the Account Generator.

Copyright © 2007, Oracle. All rights reserved.

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Chapter 6 - Page 44
Project Budget Account Generation Workflow

Project Budget Account Generation Workflow


Oracle Project Costing uses the Project Budget Account Generation workflow process to
generate default accounts when a project budget is integrated with a non-project budget. You
must customize the Project Budget Account Generation workflow process to generate accounts
according to your business needs.
For additional information, see the lesson titled "Appendix B: Budgetary Controls and Budget
Integration."

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 45
Agenda

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Accounting for Costs


Chapter 6 - Page 46
Overview of Oracle Subledger Accounting

Overview of Oracle Subledger Accounting


Oracle Subledger Accounting is an intermediate step between each of the subledger
applications and Oracle General Ledger. Oracle Subledger Accounting creates the final
accounting for subledger journal entries and transfers the accounting to Oracle General Ledger.
It stores a complete and balanced subledger journal entry in a common data model for each
business event that requires accounting.
Oracle Subledger Accounting provides a uniform approach to accounting and a common set of
tools that enable you to configure accounting rules for applications that require accounting. It
includes a common user interface and a set of programs that can generate accounting for
Oracle and non-Oracle applications.
When you set up rules in Oracle Subledger Accounting, you can define the types of lines,
descriptions, and accounts to store on journal entries. Oracle Subledger Accounting partitions
data by subledger application, while storing the information in a common model.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 47
Integration with Oracle Subledger Accounting

Integration with Oracle Subledger Accounting


Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
Oracle Project Costing generates accounting events and creates the subledger accounting
entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
Oracle Project Costing without change. Oracle Subledger Accounting transfers the final
accounting to Oracle General Ledger. If you define your own detailed accounting rules in
Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting,
or the Project Budget Account Generation workflow for integrated budgets.

Copyright © 2007, Oracle. All rights reserved.

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Chapter 6 - Page 48
Accounting Event Model Overview

Accounting Event Model Overview


Oracle Project Costing generates accounting events for the business events that it processes and
then creates subledger accounting entries for the accounting events.
For example, a business event takes place when an employee charges time to a project. After
you distribute costs for the labor expenditure items, you run PRC: Generate Cost Accounting
Events to generate accounting events. Next, you run PRC: Create Accounting to create
accounting entries for the accounting events in Oracle Subledger Accounting.

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Chapter 6 - Page 49
Accounting Event Model Overview

Accounting Event Model Overview


As the foundation of the event model, Oracle Project Costing predefines event entities. An
event entity enables Oracle Subledger Accounting to handle the accounting for similar business
events in a consistent manner. The three event entities are Expenditures, Budgets, and Revenue
(Oracle Project Billing).
Each event entity is associated with one or more event classes. An event class represents a
category of business events for a particular transaction type or document. Event classes group
similar event types and enable the sharing of accounting definitions.
An event type represents a business operation that you can perform for an event class. An
accounting event has both an event class and an event type that affect the subledger accounting
entries. Event types provide the lowest level of detail for storing accounting definitions.
Oracle Project Costing provides a predefined set of event classes and event types for each
accounting event entity. Oracle Project Costing also predefines accounting event class options
for each event class to specify the detailed information about the event class. For example, the
accounting event class options specify the general ledger journal category and the balance type
(actual, encumbrance, or budget) for each event class.

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Chapter 6 - Page 50
Agenda

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Chapter 6 - Page 51
Oracle Subledger Accounting for Costs Implementation Steps

Oracle Subledger Accounting for Costs Implementation Steps


You can optionally set up your own accounting rules in Oracle Subledger accounting. For
additional information, see the Oracle Subledger Accounting Implementation Guide.

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Chapter 6 - Page 52
Oracle Subledger Accounting for Costs Implementation Steps
(continued)

Oracle Subledger Accounting for Costs Implementation Steps (continued)


You can optionally set up your own accounting rules in Oracle Subledger accounting. For
additional information, see the Oracle Subledger Accounting Implementation Guide.

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Chapter 6 - Page 53
Sources and Custom Sources

Sources and Custom Sources


Oracle Project Costing predefines a set of sources. Sources are pieces of information that
Oracle Subledger Accounting uses to determine how to create accounting for an accounting
event. Oracle Project Costing assigns the predefined sources to accounting attributes.
Accounting attributes are values that Oracle Subledger Accounting needs to successfully create
subledger journal entries. For example, for the event class Labor Cost, Oracle Project Costing
assigns the source Raw Cost to the accounting attribute Entered Amount. The program PRC:
Create Accounting uses the raw cost value from the labor cost distribution line to determine the
entered amount for the subledger accounting journal entry.
You can optionally define custom sources to extend the list of sources available to application
accounting definitions. To create custom sources, you write PL/SQL functions that use the
predefined sources and constant values as parameters. For example, if you capture the
geographic region to which each organization belongs in a descriptive flexfield segment, then
you can create a custom source to use the information in your application accounting
definitions. You use the expenditure organization (a predefined source) as a parameter in the
definition of the custom source. For information about how to define custom sources, see the
Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 54
Journal Entry Methods and Definitions

Journal Entry Methods and Definitions


Oracle Project Costing provides predefined accounting setup for Oracle Subledger Accounting.
If you use the predefined setup, then Oracle Subledger Accounting accepts the default accounts
from Oracle Project Costing without change. You can optionally define your own detailed
subledger accounting rules. Many different components come together to form the subledger
accounting setup:
• Subledger Accounting Method: A group of common application accounting definitions
that determines how Oracle Subledger Accounting processes accounting events. The
subledger accounting method groups application accounting definitions from subledger
applications such as Oracle Project Costing, Oracle Payables, Oracle Purchasing, and
Oracle Receivables. This grouping capability enables you to assign a set of application
accounting definitions collectively to a ledger.
• Application Accounting Definitions: Application accounting definitions are collections
of setup components for a subledger application that determine how Oracle Subledger
Accounting processes accounting events to create subledger and general ledger journal
entries. Application accounting definitions assign journal lines definitions to event class
and event type combinations.

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Chapter 6 - Page 55
• Journal Lines Definitions: Journal lines definitions group journal line types, account
derivation rules, and journal entry descriptions into a complete set of journal line types
within an event class or event type.
• Journal Line Types: Journal line types determine the characteristics of subledger journal
entry lines for an event class. These characteristics determine whether the line is used to
create actual, budget, or encumbrance entries, whether the line is a debit or a credit,
whether matching lines are merged, and whether data is transferred to the general ledger in
summary or detail form.
• Account Derivation Rules: Account derivation rules determine the Accounting Flexfield
values for subledger journal entries. You can define account derivation rules in Oracle
Subledger Accounting that generate either a value for a single Accounting Flexfield
segment or a complete Accounting Flexfield account code combination.
• Mapping Sets: Mapping sets enable you to assign a specific output value to an
Accounting Flexfield or Accounting Flexfield segment. You use mapping sets when you
set up account derivation rules. Account derivation rules determine the Accounting
Flexfield values for subledger journal entries.
• Journal Entry Description: The journal entry description determines both the content
and sequence in which the elements of the description appear. You assign journal entry
descriptions to headers and lines in the application accounting definition. Oracle
Subledger Accounting assigns the descriptions to the journal header and lines when it
creates the draft or final accounting.
For additional information, see the Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 56
Associating Subledger Accounting Methods and Ledgers

Associating Subledger Accounting Methods and Ledgers


You must assign a subledger accounting method to a ledger. Assigning different subledger
accounting methods to different ledgers enables you to create multiple accounting
representations of transactions.

Copyright © 2007, Oracle. All rights reserved.

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Chapter 6 - Page 57
Post-Accounting Programs

Post-Accounting Programs
Subledger applications use post-accounting programs to transfer transaction data between
subledgers based on the accounting generated from the transaction data. Oracle Subledger
Accounting uses accounting classes to classify journal entry lines. The post-accounting
programs distinguish journal lines for processing based on the accounting class assigned to
each journal entry line.
Oracle Project Costing provides two post-accounting programs, one for debits and one for
credits, to obtain final accounting information from Oracle Subledger Accounting because the
accounting that Oracle Project Costing creates using AutoAccounting may not be the same as
the final accounting that Oracle Subledger Accounting transfers to Oracle General Ledger.
Oracle Project Costing uses post-accounting programs to determine which journal entry lines
to retrieve from Oracle Subledger Accounting when Oracle Project Costing performs the
following activities:
• Groups asset lines on capital projects
• Generates audit reports

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Chapter 6 - Page 58
• Creates a reversing entry for expenditure items that you imported into Oracle Project
Costing from other applications, such as Oracle Purchasing, Oracle Payables, or Oracle
Inventory
• Creates a reversing entry for expenditure items when you split an expenditure item,
transfer an expenditure item, or change transaction attributes for an expenditure item (for
example, change whether the expenditure item is billable or capitalizable)
The predefined setup for the post-accounting programs consists of the program code and a list
of the accounting classes assigned to each respective program. If you modify the accounting
class for a journal line type, or add a new accounting class and journal line type pair, then you
must also update the accounting classes assigned to each of the predefined post-accounting
programs. This update ensures that the asset generation program, audit reports, and expenditure
item splits and transfers in Oracle Project Costing continue to work accurately.
Important: Do not add the same accounting class to both the debit and the credit journal line
types.
Important: Oracle Project Costing predefines post-accounting program assignments for the
PA Postaccounting Debit program and the PA Postaccounting Credit program. Do not remove
the predefined accounting classes even if you define your own journal lines definitions and add
accounting class assignments to the programs. In this case, Oracle Project Costing uses the
predefined accounting classes to process and report on existing historical journals and new
user-defined accounting classes that you add to process and report on new journals.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs


Chapter 6 - Page 59
Cross-Entity Balancing Rules

Cross-Entity Balancing Rules


Oracle Subledger Accounting uses intracompany balancing rules to create balancing lines on
journal entries between balancing segment values. You set up this functionality in the
Accounting Setup Manager in Oracle General Ledger. The Accounting Setup Manager
centralizes the common setup steps for the Oracle financial applications.
For example, if you define accounting rules for project costs that use the operating unit to
derive the account for your balancing segment, then transactions can have unbalanced entries
when you create transactions between two different operating units. To address this situation,
Oracle Project Costing sends the unbalanced entries to Oracle Subledger Accounting and
Oracle Subledger Accounting automatically creates debit and credit accounting lines to balance
the subledger journal entries by balancing segment. Oracle Subledger Accounting uses the
balancing accounts that you define for the ledger in the Accounting Setup Manager.
You must select the Enable Intracompany Balancing option in the ledger definition to enable
the application of the balancing rules. You also must set up the accounts to ensure that Oracle
Subledger Accounting generates the balancing journal entries. For information about cross-
entity balancing rules, including examples, see the Oracle Financials Implementation Guide.

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Accounting for Costs


Chapter 6 - Page 60
Oracle Subledger Accounting Inquiries

Oracle Subledger Accounting Inquiries


You can query accounting events, journal entries, and journal entry lines based on multiple
selection criteria. You can use subledger accounting inquiries to:
• View information about an accounting event or journal entry error.
• View detailed information about the subledger journal entry headers for an accounting
event.
• Compare subledger journal entry information for any two journal entries.
• View subledger journal entry lines for multiple documents or transactions.
• View subledger journal entry in a t-account format.
• View transactions for an accounting event or journal entry.
When you view a transaction for a cost accounting event, Oracle Subledger Accounting drills
down to Oracle Project Costing and automatically opens and queries information in
expenditure inquiry. Similarly, you can drill down to other subledger applications to view
transaction information for the accounting events that originated in those applications.

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Chapter 6 - Page 61
Audit Reports

Audit Reports
The Project Subledger Audit Reports print cost distribution lines related to projects. The
reports enable you to drill down from a GL account balance in the trial balance to the
individual project-related transactions.
• AUD: Project Subledger Summary - This report prints a summary of cost distribution
lines by project. The report includes subtotals for GL Account, Project Number,
Manufacturing-Related, and Expenditure Type Class.
• AUD: Project Subledger Detail by Project - This report shows cost distribution lines for
a single project by task.
• AUD: Project Subledger Detail by Expenditure Type - This report shows project
subledger detail across projects for one expenditure type.

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Accounting for Costs


Chapter 6 - Page 62
Summary

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Chapter 6 - Page 63
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Accounting for Costs


Chapter 6 - Page 64
Implementing Non-Labor
Costing
Chapter 7

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Implementing Non-Labor Costing


Chapter 7 - Page 1
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Implementing Non-Labor Costing


Chapter 7 - Page 2
Implementing Non-Labor Costing

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Implementing Non-Labor Costing


Chapter 7 - Page 3
Objectives

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Implementing Non-Labor Costing


Chapter 7 - Page 4
Agenda

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Implementing Non-Labor Costing


Chapter 7 - Page 5
Implementing Non-Labor Costing

Implementing Non-Labor Costing


When you charge a usage expenditure item to a project, your must specify the non-labor
resource utilized and the non-labor resource organization that owns the resource. When you
define non-labor resources, you can choose only expenditure types with the Usages
expenditure type class.

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Implementing Non-Labor Costing


Chapter 7 - Page 6
Non-Labor Costing Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing


Chapter 7 - Page 7
Defining Non-Labor Resources

Defining Non-Labor Resources


1. In the Non-Labor Resources window, enter the name, description, effective dates. Select
an expenditure type for each non-labor resource entered.
2. In the Organizations region, select the organizations to which the resource is assigned and
enter the effective dates. The organizations include any organization from your
organization hierarchy, regardless of whether the organization has the Project
Expenditure/Event Organization classification enabled and regardless of the effective
dates for the organization.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing


Chapter 7 - Page 8
Non-Labor Cost Rates

Non-Labor Cost Rates


An expenditure type cost rate is a currency amount that Oracle Project Costing multiplies by
the expenditure type unit to calculate cost. In the Expenditure Types window, select an
expenditure type and choose the Cost Rates button to enter a cost rate for it.
When you define an expenditure type, you specify whether cost rates are required. You can
only select the Cost Rates button for the expenditure type if you enable the Rate Required
option. You cannot change this setting after you save the expenditure type. Instead, you must
create a new expenditure type with a unique name and set the Rate Required option for it.
In a multi-organization environment, you set up expenditure types once and they are shared
across all operating units. However, the cost rates for expenditure types are specific to each
operating unit. You must define cost rates for each operating unit.
For additional discussion regarding defining expenditure types, see the lesson titled
“Implementing Expenditures.”

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing


Chapter 7 - Page 9
Non-Labor Cost Rate Overrides

Non-Labor Cost Rate Overrides


You define cost rate overrides in the Non-Labor Resources window. When you define non-
labor resources, you assign each non-labor resource an expenditure type. The cost rates you
define for an operating unit for the expenditure type apply to all non-labor resources with that
expenditure type.
You can optionally define non-labor cost rate overrides for non-labor resources. You define
each cost rate override by operating unit for a specific non-labor resource and organization
combination.
In a multi-organization environment, you set up non-labor resources once and share them
across all operating units, while you define cost rate overrides by operating unit.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing


Chapter 7 - Page 10
Practice - Define Non-Labor Resources
Overview
In this practice, you will define a non-labor resource. In a previous practice titled "Define an
Expenditure Type," you defined an expenditure type named XXMotor Pool Trucks. You must
now define non-labor resources that represent the two types of delivery trucks that the motor
pool maintains for other departments to use. For each non-labor resource, you will specify the
owning organization. You will enter a cost rate override for one of the non-labor resources.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter a Non-Labor Resource for Small Trucks

Define a non-labor resource named XXSmall Truck to select when a department is charged for
use of a small truck from the motor pool. Associate it with the XXMotor Pool Trucks expenditure
type that you defined in a previous practice. Assign the non-labor resource to the Shared Services
organization (motor pool is part of this organization).

Small trucks cost less to operate and maintain, so the motor pool does not charge other
organizations as much to use them. For the organization Vision Services, enter a cost rate
override of $100 USD a day for the remainder of this year and $125 USD a day for next year.

Enter a Non-Labor Resource for Large Trucks

Define a non-labor resource named XXLarge Truck to select e when a department is charged for
use of a large truck from the motor pool. Associate it with the XXMotor Pool Trucks expenditure
type that you defined in a previous practice. Assign the non-labor resource to the Shared
Services organization (motor pool is part of this organization).

Do not enter a cost rate override. Instead, Oracle Project Costing uses the cost rate of $250 USD
a day that you defined for the expenditure type.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing


Chapter 7 - Page 11
Solution - Define Non-Labor Resources
Enter a Non-Labor Resource for Small Trucks

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Non-Labor Resources window.

• (N) Setup > Expenditures > Non-Labor Resources

3. Enter Non-Labor Resource information as specified in the following table:

Field Value
Name XXSmall Truck
Description Enter a brief description
Expenditure Type XXMotor Pool Trucks
Equipment Resource Class Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

4. With your new non-labor resource selected, enter an owning organization as specified in the
following table:

Name Effective Date From Effective Date To


Shared Services Today's Date Leave Blank

5. (I) Save

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Chapter 7 - Page 12
6. Enter cost rate override for Shared Services.

• Select Shared Services.

• (B) Cost Rates

• Enter cost rate override information for the remainder of this year as specified in the
following table:

Field Value
Operating Unit Vision Services
Currency USD (View Only)
Rate 100
UOM Day (View Only)
Effective Date From Today's Date
Effective Date To 31-DEC of the current year

• (I) Save

• (I) New

• Enter cost rate override information for next year as specified in the following table:

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Chapter 7 - Page 13
Field Value
Operating Unit Vision Services
Currency USD (View Only)
Rate 125
UOM Day (View Only)
Effective Date From 01-JAN of next year
Effective Date To 31-DEC of next year

• (I) Save

7. Close the Cost Rate Overrides window and return to the Non-Labor Resources window.

Enter a Non-Labor Resource for Large Trucks

8. Place your cursor in the empty row below where you defined the XXSmall Truck non-labor
resource.

9. Enter Non-Labor Resource information as specified in the following table:

Field Value
Name XXLarge Truck
Description Enter a brief description
Expenditure Type XXMotor Pool Trucks
Equipment Resource Class Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

10. With your new non-labor resource selected, enter an owning organization as specified in the
following table:

Name Effective Date From Effective Date To

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Chapter 7 - Page 14
Shared Services Today's Date Leave Blank

11. (I) Save

Note: Do not enter a cost rate override. Instead, Oracle Project Costing uses the cost rate of
$250 USD a day that you defined for the expenditure type.

12. Close the Non-Labor Resources window and return to the Navigator.

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Chapter 7 - Page 15
Practice - Test Your Non-Labor Resources
Overview
In this practice, you will test the non-labor resources that you defined in a previous practice. You
will:

• Enter, submit, and release a usage expenditure batch.

• Run the cost distribution program for the batch.

• Verify the results in Expenditure Inquiry.

Your instructor can help you troubleshoot any issues that you encounter so that you can update
your setup and retest.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter and Process a Test Expenditure Batch

To validate that your setup is correct, you need to test the non-labor resources that you created in
the previous practice. First, enter an expenditure batch for the current week and name it XXTEST.
Select the Usages class.

Enter two expenditures for Amy Marlin as specified in the following tables:

Expnd Item Project Task Expnd Type Non-Labor Non-Labor


Date Number Number Resource Org
Today's Date XXCS 3.0 XXMotor Pool XXLarge Shared
Truck Services
Today's Date XXCS 3.0 XXMotor Pool XXSmall Shared
Truck Services

Work Type UOM Quantity Comment


Internal - capital Day 5 Enter a brief
comment
Internal - capital Day 10 Enter a brief
comment

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Chapter 7 - Page 16
Next, submit and release the batch. Run the program PRC: Distribute Usage and Miscellaneous
Costs to distribute the expenditure items. Ensure that you specify your expenditure batch and
project in the program parameters. Review the output report. If the report contains exceptions,
then research the issues, fix them, and rerun the distribution process to test the fix. If you
encounter missing cost rates exception, then verify that the cost rate is set up properly on the
XXMotor Pool expenditure type.

Review the Results

Query the expenditure items in Expenditure Inquiry and verify that they are cost distributed. Use
folder tools to display the fields that show the raw cost rate and project functional raw costs to
validate the cost rates for the small and large trucks non-labor resources.

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Chapter 7 - Page 17
Solution - Test Your Non-Labor Resources
Enter and Process a Test Expenditure Batch

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXTEST
Ending Date This Sunday's Date
Class Usages
Description Usages
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

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Chapter 7 - Page 18
5. (B) Expenditures

6. Enter the expenditure information as specified in the following table:

Employee Name Employee Organization Expnd Ending


Number Date
Marlin, Ms. Amy 34 Services-East This Sunday's Date

7. Enter the expenditure items for Amy Marlin as specified in the following tables:

Expnd Item Project Task Expnd Type Non-Labor Non-Labor


Date Number Number Resource Org
Today's Date XXCS 3.0 XXMotor Pool XXLarge Shared
Truck Services
Today's Date XXCS 3.0 XXMotor Pool XXSmall Shared
Truck Services

Work Type UOM Quantity Comment


Internal - capital Day 5 Enter a brief
comment
Internal - capital Day 10 Enter a brief
comment

8. (I) Save

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Chapter 7 - Page 19
9. Close the Expenditures window and return to the Expenditure Batches window.

10. (B) Submit

11. (B) Release

12. Close the Expenditure Batches window and return to the Navigator.

13. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

14. Select to run a Single Request.

15. (B) OK

16. Select the program PRC: Distribute Usage and Miscellaneous Costs from the list of values
in the Name field and Vision Services for the operating unit.

17. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Batch XXTEST
Project Number XXCS

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Chapter 7 - Page 20
18. (B) OK

19. (B) Submit

• Note your Request ID __________________________

20. (B) No in the Decision dialog box

21. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

22. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

23. Review the output report.

• (B) View Output

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Chapter 7 - Page 21
If the report contains exceptions, then research the issues, fix them, and rerun the
distribution process to test the fix. If you encounter missing cost rates exception, then verify
that the cost rate is set up properly on the XXMotor Pool expenditure type.

24. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

25. Responsibility = Projects, Vision Services (USA)

26. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

27. Query the expenditure items from the XXTEST expenditure batch for task 3.0 on your
project.

• Enter the header find criteria::


− Project Number = XXCS
− Project Name = XX Capital Services
− Task Number = 3.0
− Task Name = Project Management

• (T) Expenditure

• Enter expenditure find criteria:


− Expenditure Batch = XXTEST

• (B) Find

28. Show the raw cost rate field.

• Place your cursor in the Quantity column.

• (M) Folder > Show Field

• Select Raw Cost Rate.

• (B) OK

29. Show the project functional raw cost field.

• Place your cursor in the Raw Cost Rate column.

• (M) Folder > Show Field

• Select Project Functional Raw Cost.

• (B) OK

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Chapter 7 - Page 22
30. Drag the Non-Labor Resource column to the position next to the Project Functional Raw
Cost column.

31. Review the raw cost rates.

32. Close the open windows and return to the Navigator.

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Chapter 7 - Page 23
Agenda

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Chapter 7 - Page 24
Listings

Listings
Use the following concurrent programs to document non-labor resource setup information:
• IMP: Expenditure Cost Rates - Use the IMP: Expenditure Cost Rates listing to review
the non-labor expenditure cost rates. You can print a listing for one or all expenditure
categories, one or all expenditure types, or for a specified effective date. If an effective
date is specified for the report, then the report lists only expenditure cost rates that are
active as of the date you enter.
• IMP: Non-Labor Resources by Organization - Use the IMP: Non-Labor Resources by
Organization listing to review all non-labor resources associated with a particular
organization, expenditure category, or expenditure type. For each organization listed, this
report displays the organization’s non-labor resources and the corresponding expenditure
types and expenditure categories.

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Chapter 7 - Page 25
Summary

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Chapter 7 - Page 26
Implementing Labor Costing
Chapter 8

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Chapter 8 - Page 1
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Chapter 8 - Page 2
Implementing Labor Costing

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Chapter 8 - Page 3
Objectives

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Chapter 8 - Page 4
Agenda

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Chapter 8 - Page 5
Labor Costing Implementation Steps

Labor Costing Implementation Steps


When you import or enter labor costs into Oracle Project Costing as a quantity of hours, the
cost distribution program determines how to calculate the raw cost of the labor. To accomplish
this, within Oracle Project Costing you can maintain labor cost rate schedules by employee or
by job or use a labor costing extension to calculate the cost. You also have the option of
overriding labor cost rates for individual employees. When you run the program PRC:
Distribute Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects,
the program uses the cost rates to determine the raw cost for each uncosted labor expenditure
item. You can also define a method for calculating overtime cost.

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Chapter 8 - Page 6
Define Labor Costing Multipliers

Define Labor Costing Multipliers


A labor costing multiplier is a value by which Oracle Project Costing multiplies an employee’s
labor cost rate to calculate the employee’s overtime premium cost rate:
• Labor Cost Rate * Labor Cost Multiplier = Overtime Premium Labor Cost Rate
Oracle Project Costing then multiplies this overtime premium labor cost rate by the number of
overtime hours an employee works to calculate the overtime premium for that employee:
• Overtime Premium Labor Cost Rate * OT Hours = Overtime Premium
You define a labor cost multiplier for each kind of overtime your business uses, such as double
time, or time and a half. For example, if you pay an employee double time for all overtime
hours, then define a labor cost multiplier of 1.0. You multiply the employee’s labor cost rate by
1.0 to calculate the employee’s overtime premium labor cost rate. If you pay an employee time
and a half for all overtime hours, then define a labor cost multiplier of 0.5 to calculate the
employee’s overtime premium labor cost rate. An employee’s total labor cost is the overtime
premium plus the total number of hours that employee worked multiplied by the employee’s
labor cost rate:
• Overtime Premium + (Total Hours x Labor Cost Rate) = Total Labor Cost

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Chapter 8 - Page 7
Labor Costing Rules

Labor Costing Rules


You define a labor costing rule for each pay type your business uses. For example, you can
define a labor costing rule for pay types such as exempt, non-exempt, uncompensated,
compensated, or hourly. When an employee charges time to a project, Oracle Project Costing
processes the labor hours according to the employee’s labor costing rule.
To define a labor costing rule:
1. Enter a unique rule name and select a costing method.
- Costing methods determine how Oracle Project Costing calculates labor costs:
- Rates: When you select Rates, Oracle Project Costing calculates the labor costs
for entered hours using hourly cost rates.
- Extension: When you select Extension, labor costs are calculated by the labor
costing extension. When you use this option, you are not required to maintain
hourly cost rates in Oracle Project Costing.
2. If the overtime calculation extension creates overtime hours, then you can select the
Overtime Trans Defaults button and specify a default project and task by operating unit
for system-generated expenditure items.

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Chapter 8 - Page 8
3. Enter the Effective Dates during which the labor costing rule is valid.
4. Assign cost multipliers to overtime expenditure types.
- Enter this information if your employees enter overtime hours manually. When you
select a costing method of Rates and a transaction is charged to an expenditure type
that has an assigned multiplier, then the distribution program applies the multiplier as
it calculates labor costs.

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Chapter 8 - Page 9
Rate Schedules

Rate Schedules
You can define rate schedules for both billing and costing. A cost rate schedule maintains
hourly cost rates for employees or jobs. No system attribute exists to distinguish between a bill
rate schedule and a cost rate schedule.
For labor cost rate schedules, specify one of the following schedule types for each rate
schedule you define:
• Employee
- Use this type of rate schedule to define standard hourly rates or percentage markups
for billing by employee.
• Job
- Use this type of rate schedule to define standard hourly rates by job title. When you
enter a job-based rate schedule, you enter a job group to indicate which jobs are used
to determine rates. When a project uses a job-based bill rate schedule, the job group
on the schedule must match the project’s billing job group.
In a multi-organization environment, you can share rate schedules across different operating
units, or have different rates for the same resource in different operating units.

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Chapter 8 - Page 10
To define a rate schedule:
1. Specify the operating unit to which your organization and rate schedule belongs. When
you have access to only one operating unit, that operating unit appears as a default value
in this field.
2. Specify the organization that maintains the schedule.
- The organization you enter can be any organization from your organization hierarchy,
regardless of whether the organization has the Expenditure Organization
classification, and regardless of the start and end dates for the organization.
3. In the Rate Schedules window, enter a schedule name and a description of the schedule.
4. Specify a currency for the schedule.
5. Optionally, enable the Share Across Operating Units check box.
- This optional enables other operating units to use this schedule.
6. Select a schedule type.
7. Specify rates or markups for employees or for job titles.

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Chapter 8 - Page 11
Practice - Define a Rate Schedule
Overview
In this practice, you will define a job cost rate schedule for Vision Services. Your company uses
job-based cost rates to calculate the cost of straight time labor charged to projects. You maintain
a job-based cost rate schedule in Oracle Project Costing to use in your company's organization
labor costing rules.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define a Cost Rate Schedule by Job

Define a job-based cost rate schedule. Enter the header information as specified in the following
table:

Field Value
Operating Unit Vision Services
Organization Services-East
Schedule XXCost Rate by Job
Description Enter a brief description
Currency USD
Share Across Operating Units Leave check box disabled

After you define the header information, select the Job tab and enter the job cost rate
information. Select the Vision Corporation job group and then enter jobs and rates as specified in
the following table:

Job UOM Rate Effective Date Effective Date


From To
CON600.Consultant Hours 95 Today's Date Leave Blank
SMR400.SENIOR MANAGER Hours 105 Today's Date Leave Blank
STA700.Staff Administrator Hours 88.5 Today's Date Leave Blank
TRN500.Trainer Hours 97.75 Today's Date Leave Blank

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Chapter 8 - Page 12
Solution - Define a Rate Schedule
Define a Cost Rate Schedule by Job

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Rate Schedules window.

• (N) Setup > Expenditures > Rate Schedules

3. Enter the rate schedule header information as specified in the following table:

Field Value
Operating Unit Vision Services
Organization Services-East
Schedule XXCost Rate by Job
Description Enter a brief description
Currency USD
Share Across Operating Units Leave check box disabled

4. (T) Job

5. Enter the job rate information.

• Select Vision Corporation as the Job Group.

• Enter the jobs and rates as specified in the following table:

Job UOM Rate Effective Date Effective Date


From To
CON600.Consultant Hours 95 Today's Date Leave Blank
SMR400.SENIOR MANAGER Hours 105 Today's Date Leave Blank
STA700.Staff Administrator Hours 88.5 Today's Date Leave Blank
TRN500.Trainer Hours 97.75 Today's Date Leave Blank

• (I) Save

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Chapter 8 - Page 13
6. Close the Rate Schedules window and return to the Navigator.

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Chapter 8 - Page 14
Assign Costing Rules and Rate Schedules

Assign Costing Rules and Rate Schedules


Use the Organization Labor Costing Rules window to:
• Assign costing rules and rate schedules to operating units, parent organizations, and
specific expenditure organizations. The costing rule and rate schedules assigned to an
organization apply to all employees in the organization.
• Specify currency rate attributes to calculate labor costs if the currency of the cost rate
schedule is different from the currency of the operating unit in which the timecard is
entered.
• Define default overtime projects and tasks for organizations using the overtime calculation
extension to generate overtime transactions.
When you assign a costing rule and a rate schedule to an organization, Oracle Project Costing
applies the following rules in the order presented to determine the costing rule for each
transaction:
• If an assignment exists for the transaction expenditure organization, then the
corresponding costing rule and rate schedule are used to calculate labor costs.
• If an assignment does not exist for the expenditure organization, Oracle Project Costing
uses the Expenditure Organization Hierarchy and searches for an assignment for the parent

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Implementing Labor Costing


Chapter 8 - Page 15
organization that owns the expenditure organization. If an organization has multiple
parents and a rule is assigned to each, then the rule assigned to the lowest level parent
organization is applied.
• If an assignment does not exist for a parent organization, then Oracle Project Costing
searches for an assignment for the expenditure-operating unit.
To assign costing rules and rate schedules:
1. Select an Operating Unit, Organization or both.
- If you do not select an operating unit, then Oracle Project Costing displays all
organizations that are part of any Expenditure/Event Organization Hierarchy.
- If you select an operating unit, then Oracle Project Costing displays only those
organizations that are in the Expenditure/Event Organization Hierarchy for the
selected operating unit. An organization does not have to be classified as Project
Expenditure/ Event Organization to appear on the list.
2. Select a labor costing rule.
- If the labor costing rule has a costing method of Rates, then select the cost rate
schedule that defines the hourly cost rates for employees in the selected organization.
- If you assign an organization labor costing rule to an organization that is not
classified as a Project Expenditure/Event Organization, then the rule applies to
organizations that are below it in the hierarchy, unless you assign a rule to an
organization at a lower level in the hierarchy. For example, a hierarchy has three
organizations: Organization 1, Organization 11, and Organization 111. Organization 1
is the parent of Organization 11. Organization 11 is the parent of Organization 111.
Organization 111 is the only Project Expenditure/Event Organization. If you assign
organization labor costing rules only to Organization 1 and Organization 11, then the
rule that you assign to Organization 11 takes precedence for Organization 111.
3. Enter a default job rate schedule.
- This schedule is used to forecast costs for unstaffed positions.
4. Enter the effective dates.
5. Optionally, enter a default project and task for system-generated transactions.
- Enter this information if you use the overtime calculation extension,
6. Enter the currency conversion attributes in the Currency Conversion Attributes region.
- Enter this information if your cost rate schedule currency is different from your
operating unit currency.
- If you do not specify currency attributes, then Oracle Project Costing applies the rate
attributes defined in the Implementation Options window.

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Chapter 8 - Page 16
Guided Demonstration - Define an Organization Labor Costing
Rule
Define an Organization Labor Costing Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Organization Labor Costing Rules window.

• (N) Setup > Costing > Labor > Organization Labor Costing Rules

3. Enter the organization labor costing rules for Services-East as specified in the following
table:

Field Value
Operating Unit Vision Services
Organization Services-East
Labor Costing Rule Compensation
Cost Rate Schedule XXCost Rate by Job (select one of
the student's schedules from a
previous practice)
Default Job Schedule Bill Rate by Job
Effective Date From One year from today
Effective Date To Leave Blank

Note: Enter an effective start date of one year from today. This organization labor costing
rule is for demonstrations purposes only.

4. (I) Save

5. Close the Organization Labor Costing Rules window and return to the navigator.

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Chapter 8 - Page 17
Labor Costing Overrides

Labor Costing Overrides


For individual employees, you can enter labor costing overrides. You can override the assigned
costing rule, override the assigned cost rate schedule, or enter an overriding cost rate.
To override labor costing:
1. In the Labor Costing Overrides window, find any existing labor costing overrides.
- Select either the Employee Name or Employee Number from the list of values.
- Select the operating unit from the list of values.
- Select the Find button.
2. Optionally, select a labor costing rule.
3. Choose an override type to specify whether to override the assigned rate schedule or enter
an overriding cost rate:
- Schedule - Enter the overriding rate schedule in the Cost Rate Schedule field.
- Rate - Enter an overriding rate. Optionally, select a new currency code and define
currency conversion attributes.
4. Enter effective dates.

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Chapter 8 - Page 18
Guided Demonstration - Define a Labor Costing Override
Define a Labor Costing Override

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Labor Costing Overrides window.

• (N) Setup > Costing > Labor > Labor Costing Overrides

3. Find the employee.

• Enter the find criteria:


− Employee Name = Cagliastro, Ms. Joanne Lisa (Jo)
− Employee Number = 10
− Overrides for Operating Unit = Vision Services

• (B) Find

4. Enter the labor cost override.

• Use the values as specified in the following table:

Field Value
Costing Rule Exempt
Override Type Rate
Costing Schedule Leave Blank
Rate 122.45
Currency CAD
Rate Type Corporate
Rate Date Expenditure Item Date
Exchange Rate Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

• (I) Save

5. Close the Labor Costing Overrides window and return to the Navigator.

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Chapter 8 - Page 19
Labor Costing Extension

Labor Costing Extension


Use the labor costing extension to implement a unique costing method for labor transactions.
The standard method calculates raw cost using the number of hours multiplied by the
employee’s hourly cost rate. The labor costing extension enables you to derive raw cost
amounts for individual labor transactions. Examples uses of the extension include:
• Standard cost rate by job
• Capped labor cost rates
• Multiple cost rates per employee
You can use the labor costing extension to implement unique costing methods other than the
standard method, which calculates raw cost using the number of hours multiplied by the
employee’s hourly cost rate.
Processing
Oracle Project Costing processes the labor costing extension during labor cost distribution
before calculating standard raw cost amounts. If Oracle Project Costing encounters a labor
costing extension that derives the raw cost amount of a labor transaction, then it skips the
standard raw cost calculation section for that transaction.

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Chapter 8 - Page 20
Labor Transaction Extension

Labor Transaction Extension


The labor transaction extension enables you to create additional transactions for individual
labor items charged to projects:
• Create overtime premium transactions for overtime hours based on company overtime
policies.
• Create fringe benefit transactions that are charged to the same project as the source labor.
• Create additional transactions for hazardous work performed for every labor transaction
charged to certain projects.
You can create additional transactions for straight time labor transactions and overtime labor
transactions. You create additional labor transactions based on the source labor transactions
that you enter on timecards.
Related Transactions
Additional transactions created for labor transactions are referred to as related transactions. All
related transactions are associated with a source transaction and are attached to the expenditure
item ID of the source transaction. You can identify and process the related transactions by
referring to the expenditure item ID of the source transaction.

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Chapter 8 - Page 21
You create related transactions to process a raw cost amount separately than the source
transaction raw cost amount. Related transactions can be burdened, billed, and accounted for
independently of the source transaction.
Processing
Oracle Project Costing processes the labor transaction extension during labor cost distribution.
When you distribute labor costs, the program processes the labor transaction extension after it
calculates the raw cost of the source transactions. This sequence enables you to derive the cost
of the related transaction from the cost of the source transaction. You also use the labor
transaction extension to calculate new cost amounts for related transactions if the source
transaction is recosted.

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Chapter 8 - Page 22
Implement Overtime Processing

Implement Overtime Processing


Complete the following steps to implement an indirect project to collect overtime premium
costs:
• Implement the Oracle Project Costing Overtime Calculation extension.
• Define overtime expenditure types.
• Define labor cost multipliers.
- For each type of overtime your business uses, define a corresponding labor cost
multiplier. You assign the appropriate labor cost multiplier to each overtime task.
• Enter an overtime project.
- You can define one indirect project to hold all of your company’s overtime costs, or
you can define many indirect projects to make it easier to enter and report overtime
by group or office.
- If you decide to use more than one indirect project to hold your company’s overtime
costs and you are using automatic overtime calculation, then you must include logic
in your Overtime Calculation extension to charge the overtime hours to the
appropriate overtime project.

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Implementing Labor Costing


Chapter 8 - Page 23
• Define overtime tasks.
- For each overtime project, you must define a task for each type of overtime your
business uses. Different types of overtime use different labor cost multipliers to
calculate overtime costs.
- If you are using automatic overtime calculation, then you must include the logic in
your Overtime Calculation extension to charge overtime hours to the appropriate
overtime task.
• Define labor costing rules.
- If you charge overtime costs to an indirect project, then you can use Oracle Project
Costing to record the premium your business pays employees for overtime hours they
work.
• Assign a labor cost multiplier for each overtime task.
• Implement AutoAccounting.
For additional discussion regarding how to implement overtime calculations, see the Oracle
Projects Implementation Guide.

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Chapter 8 - Page 24
Overtime Calculation Extension

Overtime Calculation Extension


You can specify how to use the Overtime Calculation extension in the Implementation Options
window.
The overtime calculation extension enables you to define your own rules to implement
company-specific overtime calculation policies. The extension calculates overtime costs and
charges them to an indirect project other than the project where the labor was charged.
To charge overtime to the project where the labor was charged, consider creating items via the
labor transaction extension.
Oracle Project Costing provides a template Overtime Calculation extension. You can use the
template to understand the extension, and then make appropriate changes to meet your business
needs.
If you use both the Labor Transaction Extension and the Overtime Calculation program, then
you must define conditions so that only one of these options processes each transaction.

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Chapter 8 - Page 25
Agenda

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Chapter 8 - Page 26
Listings

Listings
• IMP: Labor Cost Multipliers - Report to review all labor cost multipliers.
• IMP: Labor Cost Rates Listing - Report to review all employees and their cost rates, job
level, job discipline, or labor costing rule. For each employee listed, this report displays
the employee’s active organization and job assignments, the assigned labor costing rule,
and the hourly cost rate.
• IMP: Labor Cost Rates Listing by Organization - Report to review all employees and
their cost rates, job level, job discipline, or labor costing rule. This report starts at a
specified organization and reports down the organization hierarchy listing employees and
their labor cost rates. You cannot print a listing for a single organization using this report
unless the organization is at the lowest level of the hierarchy.
• IMP: Labor Costing Rules Listing - Report to review labor costing rules.

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Chapter 8 - Page 27
Summary

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Implementing Labor Costing


Chapter 8 - Page 28
Implementing Burden
Costing
Chapter 9

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Chapter 9 - Page 1
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Implementing Burden Costing


Chapter 9 - Page 2
Implementing Burden Costing

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Implementing Burden Costing


Chapter 9 - Page 3
Objectives

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Chapter 9 - Page 4
Agenda

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Chapter 9 - Page 5
Overview of Burdening

Overview of Burdening
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
costs. You can choose to account for the individual burden cost components to either track the
overhead absorption or to account for the total burdened costs. You can write custom reports
using standard views to report all burden cost components for each detail transaction.
The objective of burdening is to provide you with a buildup of raw and burden costs, so you
can accurately represent the total cost of doing business. You can choose to calculate total
burdened costs as a buildup of costs using a precedence of multipliers. Taking the raw cost,
Oracle Project Costing performs a buildup of burden costs on top of raw costs to provide you
with a true representation of costs. You provide the multiplier that Oracle Project Costing uses
to calculate the cost. Oracle Project Costing performs the buildup for each detailed transaction.

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Chapter 9 - Page 6
Burden Costing Terminology

Burden Costing Terminology


• Burden Cost Code - An implementation-defined classification of overhead costs that
represents the type of burden cost to apply to raw cost.
• Burden Costs - Legitimate costs of doing business that support raw costs and cannot be
directly attributed to work performed.
• Burden Multiplier - A numeric multiplier associated with an organization for burden
schedule revisions, or with burden cost codes for projects or tasks.
• Burden Schedule - An implementation-defined set of burden multipliers that you
maintain to use across projects.
• Burden Structure - Determines how cost bases are grouped and what types of burden
costs are applied to the cost bases. A burden structure defines relationships between cost
bases and burden cost codes and between cost bases and expenditure types.
• Burdened Cost - The cost of an expenditure item, including raw cost and burden costs.
• Cost Base - The grouping of raw costs to which burden costs are applied.
• Raw Costs - Costs that are directly attributable to work performed. Examples of raw costs
are salaries and travel expenses.

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Chapter 9 - Page 7
Storing Burden Cost Calculations

Storing Burden Cost Calculations


Storing Burden Cost on the Same Expenditure Item
You can choose to store the total burdened cost as a value along with the raw cost on each
expenditure item. You can view the total burdened cost and the raw cost of each item. Oracle
Project Costing displays the raw and burdened costs on windows and reports.
Storing Burden Costs as a Separate Expenditure Item on the Same Project or on a
Separate Project
You can choose to hold the burden cost components as separate expenditure items on the same
project. Alternatively, you can show burden cost as summarized expenditures on a separate
project that you assign in the Project Types window. The expenditure items storing the burden
cost components have a different expenditure type that is classified by the expenditure type
class Burden Transaction. Oracle Project Costing summarizes the burden cost components to
create the burden transactions. The summarization is by project, lowest task, expenditure
organization, expenditure classification, supplier, PA period, and burden cost code. You can
also use the Burden Resource Extension to specify the attributes that Oracle Project Costing
uses when it groups summary burden transactions. The link to the original expenditure item is
maintained, but is not visible when you look at the summarized expenditures.

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Implementing Burden Costing


Chapter 9 - Page 8
Accounting for Burden Costs

Accounting for Burden Costs


Accounting for Burden Costs by Burden Cost Component
You can account for the individual burden cost components when you want to track the
burdening in Oracle Subledger Accounting and Oracle General Ledger. The program PRC:
Create and Distribute Burden Transactions summarizes the burden costs and creates the
expenditure items for the burden transactions. You can create the burden transactions on the
same project as the raw cost transactions or on a separate project.
Accounting for Total Burdened Cost
You may choose to account for the total burdened cost of the items, without distinguishing the
amounts by burden cost components. You can use this approach to track the total burdened
cost in a cost asset or cost WIP (work in process) account. This method is also sometimes
referred to as project inventory.
Storing Burden Costs with No Accounting Impact
You can choose to calculate the burden costs for project transactions for management reporting
without an accounting impact. If you store burden costs as a value on the expenditure item,
then you have no extra setup to perform and no accounting programs to run on the burden
costs, as long as you do not enable Total Burdened Accounting for any project types.

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Implementing Burden Costing


Chapter 9 - Page 9
If you store burden costs as separate, summarized expenditure items and perform the
accounting in Oracle Project Costing (rather than importing the accounting), then you must set
up AutoAccounting to derive the same default GL account for both the debit and the credit
account. You must generate cost accounting events for the cost distribution lines for these
expenditure items, create the final accounting in Oracle Subledger Accounting, and transfer the
subledger accounting to Oracle General Ledger.

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Implementing Burden Costing


Chapter 9 - Page 10
Project Types and Burdening

Project Types and Burdening


Use the Costing Information tab on the Project Types window to define default settings for
burdening and processing for projects:
• Burdened - Indicates whether to burden raw costs charged to projects using this project
type.
• Schedule - The burden schedule to use as the default cost burden schedule. You enter a
schedule only if the project type is burdened. If the project type is burdened, then this field
is required.
• Allow Schedule Override - Indicates whether you can override the default cost burden
schedule when entering and maintaining projects and tasks. Deselect the check box if you
want to ensure that all projects of a project type use the same schedule. Check the box to
allow updates to the cost burden schedule on the projects and tasks. You can enter this
only if you enabled the Burdened check box.
• Burden Cost on same expenditure item - Select if you want to store the burden amount
in the same expenditure item, and then optionally select a project and task to account for
the expenditure item.

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Chapter 9 - Page 11
• Account for Burden Cost components: Select this option to store the burden amount in
the same expenditure item, and additionally to show the burden cost on separate,
summarized expenditures on a separate project. Select a project and (optional) task that
accounts for the expenditure item.
• Burden Cost as separate expenditure item - Select this option to account for burden
amounts as a separate expenditure item.
• Enable Accounting for Total Burdened Costs - Select this option to generate accounting
for the total burdened cost.
- Note: If you store burden costs as a value on the same expenditure item for reporting
purposes only, and you do not want to generate accounting for total burdened cost,
then do not enable this option.

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Implementing Burden Costing


Chapter 9 - Page 12
Agenda

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Implementing Burden Costing


Chapter 9 - Page 13
Burden Costing Implementation Steps

Burden Costing Implementation Steps


Complete the setup steps listed on the slide to implement burden costing.

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Implementing Burden Costing


Chapter 9 - Page 14
Cost Bases and Cost Base Types

Cost Bases and Cost Base Types


Cost bases refer to groups of raw costs that you use for applying burden costs. You assign cost
bases to burden structures, and then specify the types of raw costs that are included in the cost
base along with the types of burden costs that are applied to the cost base.
Cost base types refer to the use of cost bases. Oracle Project Costing predefines the cost base
types Burden Cost and Other. You use cost bases with the type Burden Cost in burden
calculations. Oracle Project Costing does not include cost bases with a type other than Burden
Cost in burden calculations. You use these cost bases for grouping expenditure types for
different purposes, such as for billing extension calculations.

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Chapter 9 - Page 15
Burden Cost Codes

Burden Cost Codes


Burden cost codes represent the types of costs to allocate to raw costs. You can use burden cost
codes for costing, revenue generation, and billing. You can also use burden cost codes to report
and account for on burden cost recovery components in Oracle Project Costing.
Define an expenditure type for burden cost codes that Oracle Project Costing processes as
separate, summarized burden transactions. You must assign the Burden Transaction
expenditure type class to the expenditure type.

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Chapter 9 - Page 16
Burden Structures

Burden Structures
You define the cost buildup using a burden structure. A burden structure determines how you
group cost bases and establishes the method of applying burden costs to raw costs. Expenditure
types classify raw costs and burden cost codes classify burden costs. The relationship between
expenditure types and burden cost codes within each cost base determines what burden costs
Oracle Project Costing applies to specific raw costs, and the order in which Oracle Project
Costing applies the burden costs.
Each expenditure type can belong to only one cost base having a type of Burden Cost within
each burden structure. This setup ensures that Oracle Project Costing does not burden an
expenditure types more than once.
If you do not assign an expenditure type to a cost base, then Oracle Project Costing does not
burden transactions with that expenditure type. The burdened cost for these transactions equals
the raw cost of the transaction.
Example
The diagram on this page illustrates a burden structure with the following cost bases:
• Labor
- Includes the expenditure types Professional, Clerical, and Sales.

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Chapter 9 - Page 17
- Is assigned the burden cost codes Fringe, Overhead, and General and Administrative
(G&A).
• Material
- Includes the expenditure types Supplies and Construction Materials.
- Is assigned the burden cost codes Handling and General and Administrative (G&A).
• Expense
- Includes the expenditure types Travel, Meals, and Airfare.
- Is assigned the burden cost code General and Administrative (G&A).
Copying Burden Structures
When you copy a burden structure, Oracle Project Costing copies the following assignments
from the existing (From) structure to the new (To) structure:
• Cost base assignments
• Burden cost codes
• Expenditure types
To copy an existing burden structure to a new burden structure, first enter header information
for the new burden structure.

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Implementing Burden Costing


Chapter 9 - Page 18
Burden Structures

Burden Structures
Create an Additive burden structure to apply each burden cost code assigned to a cost base
using the same precedence when calculating burden costs. Additive schedules automatically
provide a default precedence value of 1 to each burden cost code in the structure.

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Chapter 9 - Page 19
Burden Structures

Burden Structures
Create a Precedence burden structure to specify the order in which each burden cost code in a
cost base is applied to raw costs. Enter the precedence in which you want to apply each burden
cost code to raw costs within the cost base.

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Chapter 9 - Page 20
Practice - Define a Burden Structure
Overview
In this practice, you will define an additive burden structure. You will set up the burden structure
to apply different burden costs to labor and to expense report raw costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the Burden Structure Header Information

Your company applies fringe, overhead, and general and administrative burden to various types
of costs. The finance department always uses an additive approach to calculate the burden.
Define the header information for a new additive burden structure and name it XXLabor and
Expenses. Note that your company does not want users to use this structure for overrides.

Enter the Labor Cost Base

The finance department wants to apply fringe to labor costs to account for benefits and overhead
to account for human capital management administrative support. Define a labor cost base that
applies both types of burden costs to the following expenditure types:
− Administrative
− Clerical
− Design
− Professional
− Supervision

Enter the Expenses Cost Base

The finance department also wants to apply general and administrative burden to expense report
costs to account for the cost of using an outside travel agency and overhead to account for
managing the expense reports. Define an expenses cost base that applies both types of burden
costs to the following expenditure types:
− Airfare
− Car Rental
− Hotel
− Meals
− Mileage
− Telephone

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Chapter 9 - Page 21
Solution - Define a Burden Structure
Define the Burden Structure Header Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Labor Costing Overrides window.

• (N) Setup > Costing > Burden > Structures

3. Enter the header information as specified in the following table:

Field Value
Structure XXLabor and Expenses
Effective From Today's Date
Effective To Leave Blank
Description Enter a brief description
Structure Type Additive
Structure Usage in Schedule Overrides - Allowed No
Structure Usage in Schedule Overrides - Default No

4. (I) Save

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Chapter 9 - Page 22
Enter the Labor Cost Base

5. Select Labor from the list of values in the Cost Base field.

6. Enter the cost code for this cost base as specified in the following table:

Burden Cost Code Precedence (View Only)


Fringe 1
Overhead 1

7. Add the following expenditure types to this cost base:


− Administrative
− Clerical
− Design
− Professional
− Supervision

8. (I) Save

Enter the Expenses Cost Base

9. Position your cursor in the empty row below Labor in the Cost Base Assignment region.

10. Select Expenses from the list of values in the Cost Base field.

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Chapter 9 - Page 23
11. Enter the cost codes for this cost base as specified in the following table:

Burden Cost Code Precedence (View Only)


G&A 1
Overhead 1

12. Add the following expenditure types to this cost base:


− Airfare
− Car Rental
− Hotel
− Meals
− Mileage
− Telephone

13. (I) Save

14. Close Burden Structures window and return to the Navigator.

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Implementing Burden Costing


Chapter 9 - Page 24
Burden Schedule Types and Burden Schedules

Burden Schedule Types and Burden Schedules


Two types of burden schedules exist that you can use in Oracle Project Costing:
• Firm - Use firm schedules if you do not expect your multipliers to change. Generally, you
use firm schedules for costing or commercial billing schedules. Firm schedules can have
multiple versions, but never more than one version for an effective date range.
• Provisional - Because you do not always know burden multipliers at the time that you
calculate total burdened costs, you can use provisional multipliers. Provisional multipliers
are generally estimates based on a company’s forecast budget for the year. When you
determine the actual multipliers that apply to costs, then you replace the provisional
multipliers with the actual multipliers. Oracle Project Costing processes the adjustments
from provisional to actual changes for costing, revenue, and billing.
You define schedule versions for a burden schedule to record the date range within which
multipliers are effective. You can have an unlimited number of versions for each burden
schedule, but you can have only one active version at a given point in time.
The profile option PA: Default Burden Schedule Type indicates the default burden schedule
type when entering a standard burden schedule using the Burden Schedules window.

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Chapter 9 - Page 25
Assigning Burden Multipliers

Assigning Burden Multipliers


When you create burden schedules, you assign a multiplier to an organization and burden cost
code. The multiplier specifies the amount by which Oracle Project Costing multiplies the raw
cost to obtain the burden cost amount. When you cost the expenditure items, Oracle Project
Costing looks at the expenditure organization on the expenditure item to determine what
multiplier to use for burden calculation.
Burden Multiplier Hierarchy
Effective multipliers cascade down the Project Burdening Hierarchy, starting with the parent
organization. If Oracle Project Costing finds a level in the hierarchy that does not have a
multiplier defined, then it uses the multipliers entered for the parent organization. Therefore, an
organization multiplier schedule hierarchy is really a hierarchy of exceptions. You define the
multipliers for an organization only to override the multipliers of its parent organization.
Suggestion for Organizations that Have No Burden
You can set up special procedures for organizations that have no burden. For example, your
company can use contractors that do not have a particular type of burden cost (such as fringe)
applied to their raw cost. To implement this scenario, first set up a new expenditure
organization for contractors. Then, assign that organization to the burden schedule and use a

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Implementing Burden Costing


Chapter 9 - Page 26
multiplier of zero for the burden cost of Fringe to create a zero burden cost amount. Each time
that burden cost for Fringe is calculated for the contractor’s organization, Oracle Project
Costing multiplies the contractor’s raw cost multiplier by zero, resulting in a burden cost
amount of zero, which reflects the true representation of the raw cost and burden multipliers.
Adding a New Organization
If you add a new expenditure organization after you have compiled schedule revisions, you
must ensure that the new organization is included in the schedules:
• If the organization has its own multipliers, then add multipliers to appropriate schedule
revisions and recompile.
• If the organization uses parent organization multipliers, then run the concurrent program
PRC: Add New Organization Burden Compiled Multipliers.

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Implementing Burden Costing


Chapter 9 - Page 27
Defining Burden Schedules

Defining Burden Schedules


• In the Burden Schedules window, enter the name and description of the burden schedule
you are defining.
• Enter the default burden structure for this schedule. You can see the structure of a
particular revision when you review revision details. You can change the default structure
of the schedule at any time. Oracle Project Costing uses the new default structure for any
new revisions that you create. You can update the default structure to create revisions that
use a different burden structure for a given burden schedule.
• Choose the burdening hierarchy for this schedule.
- The burden hierarchy you enter for the burden schedule is the default hierarchy for
the latest version. The burden hierarchy information is displayed in the Burden
Schedule Version Details window and can be overridden at this level.
• Choose the Type of schedule, either Firm or Provisional.
Versions
• In the Versions region, define revisions. You can have many different revisions of a
particular schedule. For example, you can have a schedule revision for each quarter in

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Implementing Burden Costing


Chapter 9 - Page 28
your fiscal year. You also create schedule revisions when you want to use a new burden
structure, enter new burden multipliers, or apply actual rates to provisional multipliers.
• The start and end dates for revisions in a provisional schedule must match GL periods. For
firm schedules, Oracle Project Costing provides you with the flexibility to use any date as
the start or end date.
• Whenever you create a new schedule revision, Oracle Project Costing automatically closes
the previous open revision. The end date defaults to the date preceding the start date of the
new revision.
• Enable the Hold check box to hold this schedule revision from compiling.
• Choose the Details button to review the details of a particular revision.
• Choose Actual if you want to apply actual multipliers to provisional revisions.
Multipliers
• In the Multipliers region, enter multipliers for a schedule revision.
• You also use this region to compile burden multipliers.
• Choose the Copy button to copy multipliers from one schedule revision to a new revision.
You must create and save the Copy To revision before you can copy multipliers to the new
revision. If you have a responsibility with the Project Burden Schedule Copy function
assigned to it, then you can copy multipliers across schedules and schedule revisions.
Otherwise, you can only copy multipliers between revisions that use the same burden
structure.
• When you modify the multipliers on a burden schedule and recompile, Oracle Project
Costing identifies the existing expenditure items affected by the changes and marks the
items for retroactive reprocessing. If you want to change the multipliers and only use them
for expenditure items moving forward, then end date the current version of the schedule
and create a new version with the revised multipliers. Oracle Project Costing uses the new
version to calculate burden amounts for expenditure items with expenditure item dates that
fall within the dates for the new burden schedule version.
Compiling
• After you have completed entry of all multipliers and saved your work, choose the
Compile button to compile new multipliers. When you compile a schedule, Oracle Project
Costing automatically submits PRC: Compile All Burden Schedule Revisions.
• You can also run PRC: Compile All Burden Schedule Revisions to compile multiple
schedules at one time.

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Implementing Burden Costing


Chapter 9 - Page 29
Practice - Define a Burden Schedule
Overview
In this practice, you will define a provisional burden schedule and specify multipliers for each
type of burden cost. You will assign the XXLabor and Expenses burden structure that you created
in the previous practice to the schedule.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the Burden Schedule Header Information

You need to define a burden schedule to specify the burden multipliers for the cost codes on your
XXLabor and Expenses burden structure. The finance department does not have the final
multipliers at this time, so you must create a provisional burden schedule that will enable you to
specify the actual multipliers when they are available.

Define the header information for the provisional burden schedule and name it XXInternal
Costing. Use the organization hierarchy information as specified in the following table:

Field Value
Hierarchy Global
Version 1
Start Org Vision Corporation

Enter the Version Information

Create the initial version of the schedule. Name the first version and identify the first day of next
month as the start date. You do not have an end date for this version at this time.

Enter the Multipliers and Compile the Version

Enter the multipliers for each burden cost code. First enter the multipliers for Vision
Corporation, the start organization that you specified for the hierarchy. Costs for operating your
Services-East organization are higher than in other organizations, so the finance department has
provided you with a separate set of provisional multipliers for Services-East. Enter the
multipliers as specified in the following table:

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Chapter 9 - Page 30
Organization Burden Cost Code Multiplier
Vision Corporation Fringe .35
Vision Corporation Overhead .155
Vision Corporation G&A .10
Services-East Fringe .55
Services-East Overhead .16
Services-East G&A .15

When you are finished, save and compile the new burden schedule version.

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Implementing Burden Costing


Chapter 9 - Page 31
Solution - Define a Burden Schedule
Define the Burden Schedule Header Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Burden Schedules window.

• (N) Setup > Costing > Burden > Schedules

3. Enter the header information

Field Value
Name XXInternal Costing
Description Enter a brief description
Structure XXLabor and Expenses
Effective From Today's Date
Effective To Leave Blank
Type Provisional
Hierarchy Global
Version 1
Start Org Vision Corporation

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Implementing Burden Costing


Chapter 9 - Page 32
4. (I) Save

Enter the Version Information

5. Position your cursor in the Name field in the Versions region (above the label Name) and
enter version information as specified in the following table:

Field Value
Name Enter a version name
Start Date First day of next month
End Date Leave Blank
Structure (view only) XXLabor and Expenses

6. (I) Save

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Implementing Burden Costing


Chapter 9 - Page 33
Enter the Multipliers and Compile the Version

7. Enter the multipliers in the Multipliers region as specified in the following table:

Organization Burden Cost Code Multiplier


Vision Corporation Fringe .35
Vision Corporation Overhead .155
Vision Corporation G&A .1
Services-East Fringe .55
Services-East Overhead .16
Services-East G&A .15

8. (I) Save

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Implementing Burden Costing


Chapter 9 - Page 34
9. (B) Compile

When you select the Compile button, Oracle Project Costing submits the concurrent
program Compile Burden Schedule Revision.

10. Close the Burden Schedules window and return to the Navigator.

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Implementing Burden Costing


Chapter 9 - Page 35
Assigning Burden Schedules

Assigning Burden Schedules


You can assign burden schedules to project types, projects, and tasks. When you assign
schedules to a project type, the schedules are the default schedules for projects and tasks that
use the project type. Assigning burden schedules to project types allows you to implement
company policies. For example, you can implement a policy that requires all projects of a
particular project type to maintain the same multipliers for costing purposes. You can change
the default schedule for a project or task. You can use burden schedule overrides to override
default schedules at the project and task levels. Burden schedule overrides generally reflect
multipliers that have been negotiated specifically for a particular project or task.
You can change the default burden schedules for a project or task. If you change the burden
schedule for a lowest level task that has items processed, then Oracle Project Costing does not
automatically mark the items for reprocessing. Only new items that you charge to the task use
the new burden schedule. You can mark the items for recalculation in the Expenditure Inquiry
window. Marking the items causes Oracle Project Costing to use the new burden schedule
assigned to the task to reprocess the items.
Once you assign a burden schedule to a project, you can use the View Burdened Costs window
to test your burden structure and burden schedule implementation.

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Implementing Burden Costing


Chapter 9 - Page 36
Burden Costing Extension

Burden Costing Extension


Use the Burden Costing client extension to override the burden schedule ID and assign a
different burden schedule to an expenditure item. Oracle Project Costing calls the Burden
Costing extension during cost distribution processing. You can modify the extension to satisfy
your business rules for assigning burden schedules. For additional information, see the Oracle
Projects APIs, Client Extensions, and Open Interfaces Reference.

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Chapter 9 - Page 37
Reporting Separate Burden Transactions with Source Resources

Reporting Separate Burden Transactions with Source Resources


You can set the PA: Report Separate Burden Transactions with Source Resources profile
option to have Oracle Project Costing assign summary burden transaction expenditure items to
the same resource class as their source raw cost expenditure items. This option enables you to
assign both burden costs and their source raw costs to the same resource class for reporting
purposes.
For example, for timecards, if you set the profile option to Yes, then Oracle Project Costing
assigns both the labor raw cost expenditure items and the related summarized burden
transaction expenditure items to the People resource class. Alternatively, if you set this profile
option to No, then Oracle Project Costing assigns the raw cost expenditure items to the People
resource class and the related summarized burden transaction expenditure items to the
Financial Elements resource class. These assignments takes place because labor raw cost
expenditure items have an expenditure type class of Straight Time and burden transaction
expenditure items have an expenditure type class of Burden Transaction.
This profile option only affects transactions charged to projects where the Burden Cost as
Separate Expenditure Item option is enabled for the project type.

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Implementing Burden Costing


Chapter 9 - Page 38
Burden Resource Extension
If you set this profile option to Yes, then you must modify the Burden Resource Extension to
specify the attributes that Oracle Project Costing uses when it groups summary burden
transactions. For additional information about this extension, see Burden Resource Extension,
Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.

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Implementing Burden Costing


Chapter 9 - Page 39
Accounting for Cost Adjustments Resulting from Burden Schedule
Revisions

Accounting for Cost Adjustments Resulting from Burden Schedule Revisions


When you modify burden schedules and recompile burden multipliers, Oracle Project Costing
identifies the existing transactions affected by the changes and marks the items for
reprocessing. When accounting for the adjusted cost, you can choose to reverse the original
accounting entries and generate new ones for the adjusted cost, or you can choose to generate
new accounting lines for the difference between the original and new burden cost amounts. To
select the accounting option that best fits your business needs, enable or disable the profile
option PA: Create Incremental Transactions for Cost Adjustments Resulting from a Burden
Schedule Recompilation. See the following pages for examples of how this profile option
affects adjustment accounting.
Adjustments from the Expenditure Inquiry Window
Setting the profile option to Yes does not affect raw and burden cost recalculation adjustments
that you make from the Expenditure Inquiry window. Although burden cost recalculation does
not affect raw cost amounts and accounts, Oracle Project Costing always accounts for burden
cost recalculation adjustments from this window with a full reversing and rebooking
accounting entry that includes both the raw cost and burden cost amounts.

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Implementing Burden Costing


Chapter 9 - Page 40
Accounting for Cost Adjustments Example 1: Total Burdened
Costs without Incremental Transactions

Accounting for Cost Adjustments Example 1: Total Burdened Costs without


Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries and creates new entries for the adjusted cost amounts. Oracle
Project Costing reverses the raw accounting lines and generates new adjusted lines even though
the raw cost amount does not change.
Accounting Example 1 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

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Implementing Burden Costing


Chapter 9 - Page 41
Accounting for Cost Adjustments Example 1: Total Burdened
Costs without Incremental Transactions

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Implementing Burden Costing


Chapter 9 - Page 42
Accounting for Cost Adjustments Example 2: Total Burdened
Costs with Incremental Transactions

Accounting for Cost Adjustments Example 2: Total Burdened Costs with


Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new accounting entries
for the difference between the original and new burden cost amounts.
Accounting Example 2 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

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Implementing Burden Costing


Chapter 9 - Page 43
Accounting for Cost Adjustments Example 2: Total Burdened
Costs with Incremental Transactions

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Implementing Burden Costing


Chapter 9 - Page 44
Accounting for Cost Adjustments Example 3: Summarized Burden
Cost Components without Incremental Transactions

Accounting for Cost Adjustments Example 3: Summarized Burden Cost


Components without Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries for the raw cost. Oracle Project Costing then creates new raw cost
entries and burden entries for the difference between the original and new burden cost
amounts.
Accounting Example 3 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

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Implementing Burden Costing


Chapter 9 - Page 45
Accounting for Cost Adjustments Example 3: Summarized Burden
Cost Components without Incremental Transactions

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Implementing Burden Costing


Chapter 9 - Page 46
Accounting for Cost Adjustments Example 4: Summarized Burden
Cost Components with Incremental Transactions

Accounting for Cost Adjustments Example 4: Summarized Burden Cost


Components with Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new burden entries for
the difference between the original and new burden cost amounts.
Accounting Example 4 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

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Implementing Burden Costing


Chapter 9 - Page 47
Accounting for Cost Adjustments Example 4: Summarized Burden
Cost Components with Incremental Transactions

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Implementing Burden Costing


Chapter 9 - Page 48
Agenda

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Chapter 9 - Page 49
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs


The calculation of burden cost includes the following processing logic and calculations:
1. The program selects expenditure items with a raw cost amount for processing.
2. The program determines whether the related project type of the expenditure item is
defined for burdening.
- If Yes (the project type is defined for burdening), then the program determines which
burden schedule to use.
- If No (the project type is not defined for burdening), then the program does not
burden the item. The program assumes the burden multiplier is zero (burden cost is
zero, thus burdened cost equals raw cost).

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Implementing Burden Costing


Chapter 9 - Page 50
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs


3. To determine which burden multiplier to use, the program determines if there is a burden
schedule override for the expenditure:
- The program uses the task burden schedule override on the associated task, if such an
override exists.
- If no task burden schedule override exists on the associated task, then the program
uses the project burden schedule override on the associated project.
4. If no burden schedule override exists, then the program determines which standard burden
schedule to use for burden cost calculations in the following order:
1. Standard task burden schedule
2. Standard project burden schedule

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Implementing Burden Costing


Chapter 9 - Page 51
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs


5. After the program determines which schedule to use, it verifies whether the expenditure
item’s expenditure type is found in any of the cost bases of the selected burden schedule
revision.
- If an expenditure type is excluded from all cost bases in the burden structure, then the
program does not burden the expenditure items that use that expenditure type (burden
cost equals zero, thus burdened cost equals raw cost).
- Otherwise, the program uses burden multipliers from the appropriate burden schedule
revision. If a schedule ID override exists, then the program uses that revision.
6. The program calculates burden cost and total burdened cost amounts according to the
following calculation formulas:
- Burden cost equals raw cost multiplied by a burden multiplier
- Total burdened cost equals the sum of raw cost and burden cost

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Implementing Burden Costing


Chapter 9 - Page 52
Concurrent Programs: Total Burdened Cost Accounting

Concurrent Programs: Total Burdened Cost Accounting


1. PRC: Distribute Total Burdened Costs - Creates the total burdened cost distribution
lines for all transactions charged to burdened projects, even if the transaction is not
burdened, to account for the total project costs in the cost WIP account.
2. PRC: Generate Cost Accounting Events - Generates accounting events for total
burdened cost distribution lines. If you select Total Burdened Cost for the Process
Category parameter, then the program generates accounting events only for total burdened
costs.
3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
optionally choose to automatically transfer the final accounting to Oracle General Ledger,
initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Total Burdened Cost for the Process Category parameter, then the program
creates accounting only for total burdened cost accounting events.

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Implementing Burden Costing


Chapter 9 - Page 53
Practice - Distribute Total Burdened Costs
Overview
In this practice, you will run the distribution program to distribute total burdened costs for your
XX Capital Services project. After the program completes, you will review the total burdened
accounting and research how Oracle Project Costing calculated the costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Distribute Total Burdened Costs

Submit the concurrent program PRC: Total Burdened Cost for your XX Capital Services project.
Ensure that you select your project as a program parameter. Review the output report.

1. Note your Request ID __________________________

Review the Results in Expenditure Inquiry

After the program is complete, query the expenditure items for your project in Expenditure
Inquiry and review the cost distribution line information for one of the expenditure items. The
distribution program determines the default total burdened cost accounting for the expenditure
items.

Note the following amounts:


− Raw cost amount:
− Burdened cost amount:

Note the following information about the expenditure item:


− Project number:
− Task number:
− Expenditure type:
− Expenditure item date:
− Expenditure organization:

Research How the Total Burdened Amount was Calculated

Select one of the expenditure items on your XX Capital Services and research how Oracle
Project Costing calculated the total burdened costs. Use the View Burdened Costs window to
assist your research. Answer the following questions:

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Implementing Burden Costing


Chapter 9 - Page 54
1) What is the name of the burden schedule that Oracle Project Costing used to
calculate the burden amount?

2) Describe how Oracle Project Costing calculated the total burdened cost for the
expenditure item (cost codes, multipliers, calculations)?

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing


Chapter 9 - Page 55
Solution - Distribute Total Burdened Costs
Distribute Total Burdened Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Distribute Total Burdened Cost from the list of values in the Name
field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

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Implementing Burden Costing


Chapter 9 - Page 56
• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

13. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query all expenditure items for your XX Capital Services Project.

• Enter the find criteria:


− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

16. Review cost distribution line information.

• Position your cursor on one of the queried items.

• (B) Item Details

• Select Cost Distribution Lines.

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Implementing Burden Costing


Chapter 9 - Page 57
• (B) OK

• Review the cost distribution line information for the burdened debit and the burdened
credit.

17. Note the following amounts:


− Raw cost amount:
− Burdened cost amount:

18. Close the Cost Distribution Lines window and return to the Project Expenditure Items
window.

19. Note the following information about the expenditure item:


− Project number:
− Task number:
− Expenditure type:
− Expenditure item date:
− Expenditure organization:

20. Close the open windows and return to the Navigator.

Research How the Total Burdened Amount was Calculated

21. Navigate to the View Burdened Costs window.

• (N) Setup > Costing > Burdened > View

22. View the burdened costs.

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Implementing Burden Costing


Chapter 9 - Page 58
• Enter information for your expenditure item.

• (B) Burden

• Select the Costing option button.

• Answer the following questions:

1) What is the name of the burden schedule that Oracle Project Costing used to
calculate the burden amount?

2) Describe how Oracle Project Costing calculated the total burdened cost for the
expenditure item (cost codes, multipliers, calculations)?

23. Close the View Burdened Costs window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing


Chapter 9 - Page 59
Concurrent Programs: Account for Summarized Burden Cost
Components

Concurrent Programs: Account for Summarized Burden Cost Components


1. PRC: Create and Distribute Burden Transactions - Summarizes the burden costs,
creates the expenditure items for the burden transactions, and runs the distribution
program. The burden transactions are created on different projects depending on the
method you use to store burden costs.
2. PRC: Generate Cost Accounting Events - Generates accounting events for burden
transactions. If you select Burden Cost for the Process Category parameter, then the
program generates accounting events only for burden costs.
3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
optionally choose to automatically transfer the final accounting to Oracle General Ledger,
initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Burden Cost for the Process Category parameter, then the program creates
accounting only for burden cost accounting events.

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Implementing Burden Costing


Chapter 9 - Page 60
Maintenance Concurrent Programs

Maintenance Concurrent Programs


• PRC: Add New Organization Compiled Burden Multipliers - Adds burden multipliers
to burden schedules for an organization when you add a new organization to your
organization hierarchy. If you do not add the organization to a specific schedule revision,
then this program compiles rates for the organization in all burden schedule revisions
using the rates of the parent organization as defined in the organization hierarchy. A
burden schedule revision must already be compiled for this program to add the
organization rate. Run this program after you create the organization and before you
charge transactions using this organization as the expenditure organization.
Note: Run this program for the parent organization before you run it for the child
organization.
• PRC: Compile All Burden Schedule Revisions - Compiles all burden schedule revisions
that are not compiled and are not on hold.

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Implementing Burden Costing


Chapter 9 - Page 61
Summary

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Implementing Burden Costing


Chapter 9 - Page 62
Performing Cost Adjustments
Chapter 10

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Performing Cost Adjustments


Chapter 10 - Page 1
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Performing Cost Adjustments


Chapter 10 - Page 2
Performing Cost Adjustments

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Performing Cost Adjustments


Chapter 10 - Page 3
Objectives

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Performing Cost Adjustments


Chapter 10 - Page 4
Agenda

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Performing Cost Adjustments


Chapter 10 - Page 5
Adjusting Expenditure Items

Adjusting Expenditure Items


Oracle Project Costing provides powerful features that allow you to:
• Adjust expenditure items on your projects
• Report the audit trail of the adjustments
See also:
• For discussion regarding Cross Charge related adjustments, see the lesson titled “Cross
Charge.”
• For discussion regarding adjustments to supplier costs, see the lesson titled "Integration
with Oracle Purchasing and Oracle Payables."
• For discussion regarding Capital Project specific adjustments, see the lesson titled “Asset
Capitalization.”
• For discussion regarding Contract Project specific adjustments, see the course titled “R12
Project Billing Fundamentals.”

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Performing Cost Adjustments


Chapter 10 - Page 6
Adjustments to Imported Transactions

Adjustments to Imported Transactions


The Allow Adjustments option for a transaction source controls what types of adjustments you
can make to expenditure items associated with the transaction source.
Allow Adjustments Option - Enabled
If you enable this option, then you can adjust imported transactions in Oracle Project Costing
after you load them via Transaction Import. Enabling this option enables you to make
adjustments and changes that can result in a new GL account or cost amounts for an item. For
example, you can make the following types of adjustments:
• Transfer an item to another project or task
• Split an item into two or more items
• Recalculate raw and burden costs (Raw cost values for transactions that were already
costed when loaded into Oracle Project Costing are not changed if you mark the item for
cost recalculation.)
• Reclassify an item as billable or nonbillable
• Reclassify an item as capitalizable or noncapitalizable
• Change the work type of an item

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Chapter 10 - Page 7
Note: If you enable this option, Oracle Project Costing allows adjustments even if you disable
the Interface Costs to GL options in the Implementation Options.
Note: If Burden Transaction is the default expenditure type class for a transaction source, then
you cannot enable the Allow Adjustments option for the transaction source.
Important: If you enable the Allow Adjustments option for a predefined transaction source for
supplier costs, you must complete at least one of the following setup steps:
• Specify the default supplier cost credit account for supplier cost adjustments in the
Implementation Options for each operating unit.
• Define a rule in Oracle Subledger Accounting to determine the supplier cost credit
account.
This setup is required for the program PRC: Create Accounting to successfully create
accounting for supplier cost adjustments.
Allow Adjustments Option - Disabled
If the option is disabled, then you can still perform the following adjustments:
• Apply a billing hold
• Apply a one-time billing hold
• Release billing hold
• Recalculate burden cost - You can recalculate burden costs only if the Import Burdened
Amounts transaction source option is not enabled.
• Recalculate revenue
• Change comment
• Reprocess cross charge
• Mark for no cross charge processing
• Change transfer price currency attributes
• Change the work type (only if the change does not affect the billable status or capitalizable
status of the expenditure item)
- Note: The profile option PA: Transaction Billability derived from Work Type controls
whether the work type determines the billable status of an expenditure item.
If you do not allow users to adjust imported transactions in Oracle Project Costing, then you
can adjust the transactions in the originating external system. After you adjust the transactions,
you import adjustments into Oracle Project Costing.

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Performing Cost Adjustments


Chapter 10 - Page 8
Project Status and Adjustments

Project Status and Adjustments


To adjust the expenditure items for a project, the project status must allow adjustments. You
use the Status Controls region of the Statuses window to define actions that are allowed or
restricted for each project status. Enable the Adjust Transactions status control to allow
adjustments for projects with that status.

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Performing Cost Adjustments


Chapter 10 - Page 9
Recalculate Burden Cost

Recalculate Burden Cost


You can recalculate the burden cost of an expenditure item if you find that the burdened cost
amount is incorrect. To produce correct recalculation results, you must correct the source of the
problem before redistributing the items.
• When you select Recalculate Burden Cost for a burden transaction, no recalculation of the
burden amount takes place.
• You can recalculate the burden cost of an invoice line.
To Recalculate Burden Costs:
• Make the appropriate changes by either selecting another burden cost schedule or
changing the AutoAccounting setup.
• Identify and mark appropriate items for burden cost recalculation.
• Oracle Project Costing reprocesses the items the next time that you run the costing
programs.

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Chapter 10 - Page 10
Recalculate Raw Cost

Recalculate Raw Cost


You can recalculate the raw cost of an expenditure item if you find that the raw cost amount is
incorrect. To produce correct recalculation results, you must correct the source of the problem
before redistributing the item. For imported expenditure items, you can recalculate raw cost
only if the Allow Adjustments transaction source option is enabled on the transaction source
that is associated with the expenditure item.
Note: You can recalculate the raw cost of expenditure items imported as costed to generate a
new debit account; however, the cost amount does not change.
To Recalculate Raw Costs:
• Make the appropriate changes to the rates or AutoAccounting.
• Identify and mark appropriate items for raw cost recalculation.
• Oracle Project Costing reprocesses the items with new rates and accounting rules the next
time that you run the costing programs.

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Performing Cost Adjustments


Chapter 10 - Page 11
Change Work Type

Change Work Type


You can change the work type of an item. You can use this adjustment to reclassify an item for
reporting and billing purposes.
Note: To change the work type, you must set the profile option PA: Require Work Type Entry
for Expenditures to Yes.
Note: If you set the profile option PA: Transaction Billability Derived from Work Type to Yes,
then changes to the work type can affect whether a transaction is billable and therefore follow
the same rules as changes to the billable status for an expenditure item.
For imported expenditure items, you can change the work type if the Allow Adjustments
transaction source option is enabled on the transaction source that is associated with the
expenditure item. If the Allow Adjustments transaction source option is not enabled, then you
can change the work type only if the change does not affect the billable status or capitalizable
status of the expenditure item.

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Performing Cost Adjustments


Chapter 10 - Page 12
Change Comment

Change Comment
You can edit the expenditure comment of an item. You can use this adjustment to make the
expenditure comment clearer if you are including the comment on an invoice backup report.

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Performing Cost Adjustments


Chapter 10 - Page 13
Split Item

Split Item
You can split an item into two items so that you can process the two resulting split items
differently. The resulting split items are charged to the same project and task as the original
item. When you split an expenditure item charged to a contract project, you can select whether
each resulting split item is billable. When you split an expenditure item charged to a capital
project, you can select whether each resulting split item is capitalizable.
For imported expenditure items, you can split an item into two items only if the Allow
Adjustments transaction source option is enabled on the transaction source that is associated
with the expenditure item.

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Performing Cost Adjustments


Chapter 10 - Page 14
Transfer Item

Transfer Item
You can transfer an item from one project and task to another project and task.
• Oracle Project Costing provides security as to which employees can transfer items
between projects. Cross-project users can transfer to all projects. Key members can
transfer to projects to which they are assigned. Oracle Project Costing performs a standard
validation on all transferred items.
• Oracle Project Costing also ensures that you only transfer items which pass the charge
controls of the project and task to which you are transferring. If the items you are
transferring do not pass the new project and task's charge controls, then you cannot
transfer the item.
• For imported expenditure items, you can transfer an item only if the Allow Adjustments
transaction source option is enabled on the transaction source that is associated with the
expenditure item.

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Performing Cost Adjustments


Chapter 10 - Page 15
Practice - Perform a Split and a Transfer
Overview
In this practice, you will split an expenditure item on your project into two expenditure items and
transfer one of the new expenditure items to a different task. You will also run the cost
distribution program for your project to distribute the adjustment. Finally, you will run an
adjustment activity report for your project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Perform a Split and a Transfer

Amy Marlin has informed you that she incorrectly charged 10 hours of clerical work for the
week to task 1.1. Amy should have charged 6 hours of the clerical work to task 2.1 and 4 hours
to task 1.1. Adjust the expenditure items on your XX Capital Services project accordingly.

First, change the comment for the expenditure item to indicate that the Amy's supervisor, Donald
Gray, has approved the transfer. Next, split the expenditure item for 10 hours of Amy's clerical
work on task 1.1 into expenditure items of 6 and 4 hours. When you split the expenditure items,
both should remain capitalizable. Finally, transfer 6 hours to task 2.1.

Cost Distribute the Adjusted Expenditure Items

Submit the concurrent program PRC: Distribute Labor Costs for your project to distribute the
adjusted expenditure items. Review the output report.

Note your Request ID __________________________

Run an Adjustment Activity Report

Donald Gray has requested an audit of all adjustment activity on the XX Capital Services project.
Run the AUD: Project Expenditure Adjustment Activity report to review all adjustment activity.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments


Chapter 10 - Page 16
Solution - Perform a Split and a Transfer
Perform a Split and a Transfer

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Expenditure Items window.

• (N) Expenditures > Expenditure Inquiry > Project

3. Query Amy Marlin's task 1.1 expenditure item for your XX Capital Services project.

• Enter the header find criteria::


− Project Number = XXCS
− Project Name = XX Capital Services
− Task Number = 1.1
− Task Name = Design Development

• (T) Resource

• Enter resource find criteria:


− Employee Number = 34
− Employee Name = Marlin, Ms. Amy

• (B) Find

4. Review the results of the query.

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Performing Cost Adjustments


Chapter 10 - Page 17
You see the expenditure item for 10 hours of clerical labor from the batch you entered in a
previous practice.

5. Position your cursor on the expenditure item.

6. Change the comment to note the approval for the adjustment.

• (M) Tools > Change Comment

• After the existing comment, enter a comment such as: Transfer of 6 hours to task 2.1
approved by Donald Gray.

• (B) OK

7. Split the expenditure item.

• (M) Tools > Split

• Enter the split quantities as specified in the following table:

Split Quantity Capitalizable


6 Yes
4 Yes

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Performing Cost Adjustments


Chapter 10 - Page 18
• (B) OK

• (B) Yes in the Decision dialog box

8. Review the results. You will see three new expenditure items:
− A reversing item of -10 hours
− A new item of 6 hours
− A new item of 4 hours

9. Position your cursor on the expenditure item with a quantity of 6 hours.

10. Transfer the expenditure item.

• (M) Tools > Transfer 1

• Enter the transfer information as specified in the following table:

Field Value
Project Number XXCS
Name XX Capital Services
Task Number 2.1
Name Framing

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Performing Cost Adjustments


Chapter 10 - Page 19
• (B) OK

• (B) Yes in the Decision dialog box

• (B) OK in the Note dialog box

• (B) Yes in the Decision dialog box

11. Review the results. You will see one new expenditure item for task 1.1:
− A reversing item of -6 hours for task 1.1

In addition, the transfer created a new item of 6 hours for task 2.1. Because the original
query was for task 1.1, you do not see the new item for task 2.1. Optionally, you can revise
the query criteria to see all expenditure items for your project.

Cost Distribute the Adjusted Expenditure Items

12. Navigate to the Submit a New Request window.

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Performing Cost Adjustments


Chapter 10 - Page 20
• (M) View > Requests

• (B) Submit a New Request

13. Select to run a Single Request.

14. (B) OK

15. Select the program PRC: Distribute Labor Costs from the list of values in the Name field
and Vision Services for the operating unit.

16. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

17. (B) OK

18. (B) Submit

• Note your Request ID __________________________

19. (B) No in the Decision dialog box

20. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

21. Wait for the program to finish. When the program is complete, select the program.

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Performing Cost Adjustments


Chapter 10 - Page 21
• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

22. Review the output report.

• (B) View Output

23. Close the output page.

Run an Adjustment Activity Report

24. (B) Submit a New Request

25. Select to run a Single Request.

26. (B) OK

27. Select the program AUD: Project Expenditure Adjustment Activity from the list of values in
the Name field and Vision Services for the operating unit.

28. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

29. (B) OK

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Performing Cost Adjustments


Chapter 10 - Page 22
30. (B) Submit

• Note your Request ID __________________________

31. (B) No in the Decision dialog box

32. Find your request.

• (B) Find Requests

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

33. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

34. Review the output report.

• (B) View Output

35. Close the output page.

36. Close the open windows and return to the Navigator.

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Performing Cost Adjustments


Chapter 10 - Page 23
Change Currency Attributes

Change Currency Attributes


You can change the functional or project currency attributes of multi-currency transactions.
When you select Change Functional Currency Attributes or Change Project Currency
Attributes from the Reports menu, Oracle Project Costing displays a window where you can
enter changes in the following fields: Rate Type, Rate Date, and Exchange Rate.
• The window displays the project or functional currency, depending on which currency you
have selected, as well as the transaction currency.
• You can also change currency attributes for expenditure items using the Mass
Adjustments feature.
• If the project currency and the functional currency for an expenditure item are the same,
then you can select only the Functional Currency Attributes option. Oracle Project Costing
copies any changes you make to the functional currency attribute to the project currency
attributes.

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Performing Cost Adjustments


Chapter 10 - Page 24
Adjustments to Multi-Currency Transactions

Adjustments to Multi-Currency Transactions


When you adjust multi-currency transactions, Oracle Project Costing must determine currency
attributes for the transactions that result. The following rules apply:
• The original expenditure item is reversed, with all the same amounts and currency
attributes as the original item.
• The new expenditure items are created and treated as new transactions, following the
standard default logic for currency attributes.
• For reversals and splits, the reversing and new items have the same currency attributes as
the original transaction.
• For a transfer, the reversing item has the same currency attributes as the original
transaction. For the new item, the cost distribution program uses the conversion rules for a
new transaction, taking the default currency attributes from the destination project.

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Chapter 10 - Page 25
Adjustments to Supplier Costs

Adjustments to Supplier Costs


You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, and
Oracle Payables.
In Oracle Project Costing, you can make the following adjustments to supplier cost and
expense report cost expenditure items:
• Transfer an expenditure item to another project or task
• Split an expenditure item
• Reclassify the billable or capitalizable status
• Place a billing hold or one-time hold
• Release a billing hold
• Recalculate burden costs
• Recalculate raw costs
- Note: For supplier costs, Oracle Project Costing does not recalculate the cost amount.
It only re-derives the default debit account.
• Recalculate revenue
• Change comment
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Chapter 10 - Page 26
• Change project functional currency attributes
• Reprocess cross charge transactions
• Mark for no cross charge processing
• Change transfer price currency attributes
In Oracle Purchasing and Oracle Payables, you can adjust the project-related information such
as the invoice amount, supplier, project, task, expenditure type, expenditure organization and
expenditure item date.
Restrictions to Supplier Cost Adjustments
Oracle Project Costing restricts the types of adjustments that you can make to supplier cost
expenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfaced
to Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense report
costs interfaced from Oracle Payables. For a discussion of these restrictions, see the lesson
titled “Integration with Oracle Purchasing and Oracle Payables.”

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Chapter 10 - Page 27
Mass Adjustments

Mass Adjustments
Use the Find Expenditure Items window or the Find Project Expenditure Items window to
process a mass adjustment of expenditures. The mass adjustment feature provides faster
performance when you adjust a large number of expenditures.
If you use the Find Project Expenditure Items window, you can mass adjust expenditure items
for a single project across operating units. The expenditure items that you adjust can cross
operating units, but you must have security access to an operating unit to view and adjust those
expenditure items. For example, a project has expenditure items associated with operating units
A, B, C, and D. If your responsibility only gives you access to operating units B and C, then
you can view and adjust only the expenditure items from operating units B and C.
If you use the Find Expenditure Items window, you can mass adjust expenditure items across
projects, within a single operating unit. If you have access to more than one operating unit,
then you must select the operating unit. If you have access to only one operating unit, then that
operating is the default value. Oracle Project Costing adjust only the expenditure items that
correspond to the current operating unit.
To perform mass adjustment of expenditures:
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.

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Chapter 10 - Page 28
2. Enter your search criteria.
3. Choose Mass Adjust.
4. From the Mass Adjust list, select the adjustment to perform on the selected expenditures.
5. Choose the processing method for the adjustments. You can choose to either process
adjustments online or submit a concurrent program to process the adjustments. If you
choose to submit the concurrent program to process the adjustments, then Oracle Project
Costing submits the PRC: Adjust Expenditure Items concurrent program.
6. Review the results. When you process adjustments online, Oracle Project Costing displays
a message when the adjustment program is complete. If you process adjustments using a
concurrent program, you can review the output report when the program is complete.

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Performing Cost Adjustments


Chapter 10 - Page 29
Correct Approved Expenditure Items

Correct Approved Expenditure Items


When correcting approved expenditure items:
• Reverse the original item and then create a new item using the correct information.
• You can also select the Transfer adjustment action to change the project and task
assignment of an expenditure item.
• For supplier cost expenditure items, you cannot correct the amount, expenditure type, or
supplier in Oracle Project Costing. You must correct these attributes in the source
application: Oracle Payables or Oracle Purchasing. You can use the Review Transactions
window to update the expenditure item date in Oracle Project Costing only if the date fails
validation when you run the program PRC: Interface Supplier Costs.
• You must correct expenditure items imported from Oracle Inventory or Oracle
Manufacturing in their respective systems except for the transactions with transaction
source Inventory Misc. You cannot reverse or correct expenditure items from these
applications in Oracle Project Costing.
To correct an approved expenditure item:
1. Create a new batch for the correction items.

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Chapter 10 - Page 30
- The Expenditure Ending date must match the week that includes the expenditure item
you are reversing.
- Optionally check the All Negative Transactions Entered As Unmatched check box if
you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus (–) sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
4. Select the Reversal button.
- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
5. Finish entering the batch and submit the batch as usual.
- Expenditure batches can contain both positive and negative expenditure items.

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Chapter 10 - Page 31
Practice - Correct an Approved Expenditure Item
Overview
In this practice, you will correct an approved expenditure item that Anne Hamilton charged to an
incorrect expenditure type.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
After reviewing her timecards, Anne Hamilton realizes that she incorrectly charged 10 hours of
her time to your XX Capital Services project as Supervision. Anne has asked you to change the
expenditure type for the timecard with the earliest date for the week from Supervision to Sales.

Enter the Batch Information

Enter a timecard batch for the current week so that you can reverse the incorrect expenditure
item and enter a new corrected expenditure item. Name the batch XXCORRECTION.

Find and Reverse an Expenditure Item

Enter an expenditure for Anne Hamilton and then select the Reverse Original... button to find
and reverse the incorrect expenditure item. Reverse the Supervision expenditure item with the
earliest date for the current week that Ann charged to your project.

Enter a Corrected Expenditure Item

Enter a new corrected expenditure item as specified in the following tables:

Expnd Item Project Number Task Expnd Type Assignment Name


Date Number
Same date as the XXCS 3.0 Sales Unscheduled
reversing item

Work Type UOM Quantity Comment


Internal-Overhead Hours 10 Sales meeting

Submit and Release the Batch

Submit and release the batch.

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Chapter 10 - Page 32
Solution - Correct an Approved Expenditure Item
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXCORRECTION
Ending Date This Sunday's Date
Class Timecards
Description Enter a brief description
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

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Chapter 10 - Page 33
5. (B) Expenditures

Find and Reverse an Expenditure Item

6. Enter the expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending Control Total


Number Date
Hamilton, Ms. Anne 37 Services-East This Sunday's Date Leave Blank

7. (I) Save

8. (B) Reverse Original

9. Find and select the expenditure item to reverse:

• Enter the find criteria:


− Employee = Hamilton, Ms. Anne (view only)
− Org = Services-East (view only)
− Project Number = XXCS

• (B) Find

• Select the Supervision expenditure item with the earliest expenditure item date.

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Chapter 10 - Page 34
Note: Hold down the Ctrl key on your keyboard and left-click the expenditure item to select
it.

10. (B) Reverse 1

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Chapter 10 - Page 35
Oracle Project Costing automatically creates the reversing expenditure item.

Enter a Corrected Expenditure Item

11. Place your cursor in the first empty row after the reversing expenditure item.

12. Enter a new corrected expenditure item as specified in the following tables:

Expnd Item Project Number Task Expnd Type Assignment Name


Date Number
Same date as the XXCS 3.0 Sales Unscheduled
reversing item

Work Type UOM Quantity Comment


Internal-Overhead Hours 10 Sales meeting

13. (I) Save

Submit and Release the Batch

14. Close the Expenditures window and return to the Expenditure Batches window.

15. (B) Submit

16. (B) Release

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Chapter 10 - Page 36
17. Close the Expenditure Batches window and return to the Navigator.

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Chapter 10 - Page 37
Processing Adjustments

Processing Adjustments
After you perform adjustment actions, run the appropriate programs to process the adjustments:
1. Distribute Costs - Run the appropriate cost distribution programs to process the
adjustments. For example, if you adjust timecard expenditure items on a project that uses
total burdened accounting, then you run PRC: Distribute Labor Costs and PRC: Distribute
Total Burdened Costs.
2. Generate Accounting Events - Next, run PRC: Generate Cost Accounting Events to
derive the default credit accounts as needed and generate accounting events for the
adjustments in Oracle Subledger Accounting. You can either run the program separately
for each type of cost (select appropriate process category) or once for all unprocessed cost
distribution lines (leave the Process Category parameter blank).
3. Create Accounting - Finally, run PRC: Create Accounting to create subledger accounting
entries in Oracle Subledger Accounting for the accounting events. You can set the
Transfer to General Ledger parameter to Yes to enable the program to automatically
transfer the final accounting to Oracle General Ledger and run the Journal Import
program. If you choose to transfer to Oracle General Ledger, then you can also set the
parameter Post in General Ledger to Yes to enable the program to automatically post

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Chapter 10 - Page 38
successfully imported journal entries in Oracle General Ledger. Otherwise, you can run
PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries from
Oracle Subledger Accounting to Oracle General Ledger. You can either run the programs
separately for each type of cost (select appropriate process category) or once for all
unprocessed cost distribution lines (leave the Process Category parameter blank).
Alternatively, you can also choose the Run Request button on the Expenditure Items window or
Project Expenditure Items window to initiate a streamline process. In addition, you can submit
project and interface streamline processes from the Submit Request window.

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Performing Cost Adjustments


Chapter 10 - Page 39
Results of Adjustment Processing

Results of Adjustment Processing


After you run the appropriate programs to recalculate the adjusted expenditure items, you can
review the results of the adjustments. When you process an adjustment, a cost adjustment
results if one or more of the following attributes is different from the original value:
• Raw cost amount
• Burden cost amount
• Account to which the cost is charged
• Billable/Capitalizable status of the item
Corrections to Pre-Approved Expenditure Items, Transfers, and Splits
When processing a reversing item which resulted from a correction of a pre-approved
expenditure item, a transfer, or a split, the cost distribution programs use the same cost rate as
the original item to ensure that the cost nets to zero for the original and reversing item. The
program charges the reversing item to an account based on the original distribution line. The
program processes the new positive item resulting from a transfer just as a new expenditure
item is processed. To process new items for a split the same way that a new expenditure item is
processed, you must mark the item for recalculation.

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Performing Cost Adjustments


Chapter 10 - Page 40
Accounting for Cost Adjustments
When a cost distribution program encounters an item that requires a cost adjustment, the
program updates the expenditure item with the new raw and burden cost rates and amounts,
and creates new cost distribution lines. The program creates a reversing cost distribution line
and a new cost distribution line. These lines form the audit trail of cost adjustments.
As a result of adjustment processing, the following two different sets of account code
combinations exist:
• The original cost account code combination and original cost clearing account code
combination.
• The adjustment cost account code combination and adjustment cost clearing account code
combination.
Oracle Project Costing copies the account code combination IDs (CCIDs) from the original
transaction to the reversing transaction and assigns the cost adjustment lines to the earliest
open or future GL period. For additional information, see the Oracle Project Costing User
Guide.

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Chapter 10 - Page 41
Agenda

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Chapter 10 - Page 42
Audit Reporting for Expenditure Adjustments

Audit Reporting for Expenditure Adjustments


Oracle Project Costing provides an audit trail of all adjustments performed on an expenditure
item. The audit trail records the following information about the adjustment:
• The name of the user who performed the adjustment.
• The type of adjustment action performed.
• The date and time that the adjustment was performed.
• The window from which the adjustment action was performed.
Run audit report concurrent programs to produce reports for review:
• AUD: Project Expenditure Adjustment Activity - Use this report to review all
adjustments users made to expenditure items of a particular project. Your accounting
department can submit this report regularly to audit the kinds of expenditure adjustments
being made for a project. For example, they can use this report to identify any expenditure
adjustments that are unauthorized or against company policy.
• AUD: Supplier Cost Audit Report - Use this report to audit transactions between Oracle
Project Costing, Oracle Purchasing, Oracle Payables, Oracle Subledger Accounting, and
Oracle General Ledger. This report lists all supplier cost transactions in Oracle Project

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Chapter 10 - Page 43
Costing for a selected operating unit. When you run the report, you can specify an
adjustment type to limit the transactions that you want to include in the report.
• MGT: Transfer Activity - Use this report to review the expenditure item transfers into
and out of a particular project. You can use this report as an audit tool to control project
costs by identifying incorrect or unauthorized transfers for a project. You can also use this
report to verify any expenditure item transfers that you perform. For each specified
project, this report shows you the expenditure items transferring into or out of the project
and the transfer history of each of these expenditure items. For each expenditure item
listed, this report displays the item’s cost amount, its quantity, and either the destination
project and task numbers or the originating project and task numbers, depending on the
expenditure item’s transfer direction.

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Chapter 10 - Page 44
Summary

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Chapter 10 - Page 45
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Chapter 10 - Page 46
Integration with Oracle
Purchasing and Oracle
Payables
Chapter 11

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 1
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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 2
Integration with Oracle Purchasing and Oracle Payables

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 3
Objectives

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 4
Agenda

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 5
Overview of Supplier Costs

Overview of Supplier Costs


Oracle Project Costing fully integrates with Oracle Purchasing and Oracle Payables and
enables you to enter project-related documents using those products. You can use both Oracle
Purchasing and Oracle Payables, or just Oracle Payables. In addition, you can use Oracle
iProcurement to enter project-related requisitions.
When you enter project-related transactions in Oracle Purchasing and Oracle Payables, you
enter project information on your source document. Oracle Purchasing, Oracle Payables, and
Oracle Project Costing carry the project information through the document flow: from the
requisition to the purchase order in Oracle Purchasing, to the supplier invoice in Oracle
Payables, and to the project expenditure in Oracle Project Costing. The accounting method for
your ledger determines when you can interface supplier costs to Oracle Project Costing.
Note: You can use Transaction Import in Oracle Project Costing to import accounted supplier
invoices directly into Oracle Project Costing from 3rd party systems.
Note: For information about project-related contingent worker timecards with purchase order
integration see lessons titled "Entering Expenditures" and "Integration with Oracle Time and
Labor."

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 6
Oracle Purchasing and Oracle Payables (Accrual)

Oracle Purchasing and Oracle Payables (Accrual)


When the primary accounting method is accrual basis accounting, you interface perpetual
receipt accruals, invoice variances, invoice distributions, and payment discounts to Oracle
Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Purchasing
In Oracle Purchasing, you can enter project information for requisition distribution lines to
associate cost commitments with projects. You can also enter project information on
requisitions in Oracle iProcurement.
When you autocreate a purchase order, Oracle Purchasing copies the distribution lines from the
requisition to the purchase order. You can also create a purchase order without first entering a
requisition. In this case, you enter project information for the purchase order distribution lines
to associate cost commitments with projects. For a blanket purchase order, you enter project
information when you create a release.
You can optionally enable the Accrue at Receipt check box when you enter a purchase order
shipment to make it eligible for receipt accrual processing. After you enter a receiving
transaction for an accrue-on-receipt purchase order shipment, you create subledger accounting

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Chapter 11 - Page 7
for the receiving transaction. Next, you interface the costs associated with the receipt to Oracle
Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Payables
In Oracle Payables, you can match a supplier invoice to an existing purchase order or receiving
transaction. Oracle Payables automatically copies the project information from the purchase
order distribution lines when you perform the match. You can also create non-matched supplier
invoices in Oracle Payables and enter invoice distributions to charge invoice costs to projects.
After you validate the invoice and create accounting for it in final mode, you interface project-
related invoice distributions to Oracle Project Costing as actual costs. In addition, this program
sends any supplier invoice cost variances from receipt accruals to Oracle Project Costing.
Project-Related Prepayment Invoices
Oracle Project Costing summarizes prepayment invoices that are not matched to purchase
orders as cost commitments, not as actual costs, and displays the commitments in the Project
Status Inquiry window or the Project Performance page, depending on the summarization
model you use. Oracle Project Costing tracks only prepayment invoices not matched to
purchase orders as commitments because Oracle Project Costing tracks commitments for
prepayment invoices matched to purchase orders as purchase order commitments. The
unmatched prepayment invoice commitment amount is the outstanding unapplied amount of
the prepayment invoice. Oracle Project Costing calculates the amount by subtracting
prepayment application amounts from the prepayment invoice amount.
Project-Related Payment Discounts
You can set up Oracle Payables to apply discounts to payments. After you enter a payment
with discounts, you interface the discounts to Oracle Project Costing to adjust the previously
interfaced supplier costs. When the program PRC: Interface Supplier Costs interfaces discount
amounts to Oracle Project Costing, the interface program creates an expenditure item for each
discount line. If you pay an invoice before you interface the invoice distribution lines to Oracle
Project Costing, and you set the parameters for the program PRC: Interface Supplier Costs to
interface both supplier invoices and discounts, then the interface program creates the invoice
distribution expenditure items and invoice discount expenditure items at the same time.
Interfacing Supplier Costs to Oracle Project Costing
You run the program PRC: Interface Supplier Costs to interface actual costs to Oracle Project
Costing from Oracle Purchasing and Oracle Payables. This program uses Transaction Import to
move the costs into the expenditures table in Oracle Project Costing. Each distribution line
becomes a separate expenditure item in Oracle Project Costing.

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 8
Oracle Purchasing and Oracle Payables (Cash)

Oracle Purchasing and Oracle Payables (Cash)


When the primary accounting method in Oracle Payables is cash basis accounting, you
interface payments to Oracle Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Purchasing
In Oracle Purchasing, you can enter project information for requisition distribution lines to
associate cost commitments with projects. Oracle Project Costing tracks project-related
supplier costs in Oracle Purchasing as commitments. You can also enter project information on
requisitions in Oracle iProcurement.
When you autocreate a purchase order, Oracle Purchasing copies the distribution lines from the
requisition to the purchase order. You can also create a purchase order without first entering a
requisition. In this case, you enter project information on purchase order distribution lines to
associate cost commitments with projects. For a blanket purchase order, you enter project
information when you create a release.
You enter receiving transactions for purchase order lines in Oracle Purchasing. With cash basis
accounting, you do not flag purchase order lines to accrue at receipt and you cannot interface
receipts to Oracle Project Costing as actual costs.

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Chapter 11 - Page 9
Managing Project-Related Supplier Costs in Oracle Payables
In Oracle Payables, you can match a supplier invoice to an existing purchase order or receiving
transaction. Oracle Payables automatically copies the project information from the purchase
order distribution lines when you perform the match. You can also create non-matched supplier
invoices in Oracle Payables and enter invoice distributions to charge invoice costs to projects.
You cannot interface costs from Oracle Payables to Oracle Project Costing as actual costs until
you pay the invoice.
After you enter payments for a supplier invoice, you interface payments to Oracle Project
Costing as actual costs. Oracle Payables allocates payment amounts to invoice distributions.
You can interface partially paid invoices to Oracle Project Costing. If you void a payment in
Oracle Payables, then Oracle Payables automatically reverses the project-related costs when
you interface the reversing items to Oracle Project Costing.
Project-Related Prepayment Invoices
Oracle Projects summarizes prepayment invoices that are not matched to purchase orders as
cost commitments, not as actual costs, and displays the commitments in the Project Status
Inquiry window or the Project Performance page, depending on the summarization model you
use. Oracle Projects tracks only prepayment invoices not matched to purchase orders as
commitments because Oracle Projects tracks commitments for prepayment invoices matched to
purchase orders as purchase order commitments. The unmatched prepayment invoice
commitment amount is the outstanding unapplied amount of the prepayment invoice. Oracle
Projects calculates the amount by subtracting prepayment application amounts from the
prepayment invoice amount. In addition, you cannot interface discounts related to prepayments
to Oracle Projects as actual costs.
Project-Related Payment Discounts
You can set up Oracle Payables to apply discounts to payments. If you set up Oracle Project
Costing to interface discounts, then the interface program creates an expenditure item for the
amount of the payment, minus the discount amount. If you set up Oracle Project Costing so
that the interface program does not interface discounts, then interface program creates the two
expenditure items. One expenditure item is for the payment amount minus the discount, and
the other expenditure item is for the amount of the discount. Together, the two expenditure
items total to the full amount of the cost.
Interfacing Supplier Costs to Oracle Project Costing
You run the program PRC: Interface Supplier Costs to interface supplier costs to Oracle
Project Costing from Oracle Payables as actual costs. This program uses Transaction Import to
move the costs into the expenditures table in Oracle Project Costing. Each distribution line
becomes a separate expenditure item in Oracle Project Costing.
Note: The parameter Interface AP Discounts does not apply to cash basis accounting.

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Chapter 11 - Page 10
Agenda

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 11
Entering Project-Related Information

Entering Project-Related Information


When you enter requisitions, purchase orders, and supplier invoices, you specify the following
project-related information:
• Project number - The project incurring the charge.
• Task Number - The lowest level task incurring the charge
• Expenditure Type - A classification of the cost. The expenditure type must have an
expenditure type class of Supplier Invoices or Expense Reports.
• Expenditure Organization - The organization that is ordering or has ordered the goods or
services, which can be different from the project owning organization. The organization
you specify in the profile option PA: Default Expenditure Organization in AP/PO is the
default value for the expenditure organization.
• Expenditure Item Date - The date that you expect to incur the expense for the goods or
services that you are requesting for a requisition or purchase order, or the date that you
incur the charge for an invoice. This date is used during online validation using project
transaction controls, and becomes the expenditure item date on the expenditure item in
Oracle Project Costing.

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Chapter 11 - Page 12
Oracle Payables uses the profile option PA: Default Expenditure Item Date for Supplier
Cost during the invoice match process to determine the default expenditure item date for
supplier invoice distribution lines. Oracle Payables also uses the profile option to
determine the default expenditure item date when you enter supplier invoice distribution
lines for unmatched invoices. Oracle Project Costing uses this profile option when you run
the program PRC: Interface Supplier Costs to determine the expenditure item date for
Oracle Purchasing receipts, invoice payments, and discounts.
• Project Quantity - The quantity of goods or services for which you are charged. You can
enter data in this field only in Oracle Payables, as this field is applicable for invoice lines
and distributions only.
If the Rate Required option for the selected expenditure type is enabled in Oracle Project
Costing, then you must enter a quantity. When you interface the invoice distribution to
Oracle Project Costing, Oracle Project Costing copies the quantity and amount to the
expenditure item and calculates the rate. If Rate Required option for the selected
expenditure type is disabled, then the quantity of the expenditure item is set to the amount
you enter in Oracle Payables.
You do not enter the Projects Quantity for documents in Oracle Purchasing because you
do not know the quantity for which you will be invoiced. Oracle Payables automatically
sets the Projects Quantity field to the quantity invoiced of the invoice distribution line
when you match an invoice to a purchase order or receipt.

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Chapter 11 - Page 13
Validating Project Information

Validating Project Information


When you enter project information and either save or move to the next distribution line, the
information is validated against the project transaction control information in Oracle Project
Costing. This validation ensures that you can charge the type of expenditure to the project and
task on the expenditure item date that you specified. If the information that you entered does
not pass, then you must enter valid chargeable project information based on the transaction
controls in Oracle Project Costing before you can continue. If you cannot determine valid
project information that is chargeable, you can delete the values and close the window.
When you create a distribution set in Oracle Payables, the project information for a distribution
set line is not validated against the project transaction control information in Oracle Project
Costing, because you do not enter an expenditure item date which is required for transaction
control validation. When you create the distribution set lines, Oracle Payables validates the
project and task number.
When you enable enhanced period processing in Oracle Project Costing, Oracle Payables gives
you a warning message during data entry if a project-related supplier invoice distribution falls
into a GL period with a status other than Open or Future in Oracle Project Costing. Oracle
Payables notifies you if a project-related invoice has a distribution that fails validation.

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 14
Budgetary Control Activation

Budgetary Control Activation


In Oracle Purchasing and Oracle Payables, you can activate budgetary control validation when
you select the Check Funds option for a transaction, and also during the transaction approval
process. You can enforce budgetary controls against a GL budget and a project cost budget.
When you select the Check Funds option, a successful budgetary control result does not update
budgetary control balances. You use the Check Funds option to verify available funds for a
transaction before requesting approval for the transaction. During the transaction approval
processes, a validation of budgetary controls is automatically performed. If the validation is
successful, the transaction is approved and budgetary control balances are updated.
You can enforce budgetary controls against a project budget. Budgetary controls enable you to
monitor and control expense commitment transactions entered for a project, based on a project
cost budget. Expense commitment transactions are transactions for non-inventory items.
For additional information, see the lesson titled "Appendix B: Budgetary Controls and Budget
Integration."

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Integration with Oracle Purchasing and Oracle Payables


Chapter 11 - Page 15
Commitment Reporting

Commitment Reporting
You can report the total cost of a project by reporting the committed cost along with the actual
cost. You can report the flow of committed cost, including associated nonrecoverable tax
amounts, through Oracle Purchasing and Oracle Payables. These committed costs can include:
• Open requisitions (unpurchased requisitions).
• Open purchase orders (uninvoiced and non-delivered).
• Prepayment invoices that are not matched to a purchase order, and not yet applied to a
supplier invoice.
- Note: The unmatched prepayment invoice commitment amount is the outstanding
unapplied amount of the prepayment invoice. Oracle Project Costing calculates the
amount by subtracting prepayment application amounts from the prepayment invoice
amount.
• Unmatched pending invoices (supplier invoices not yet interfaced to Oracle Project
Costing to be included in project costs).
Oracle Project Costing shows prepayment invoices that are not matched to purchase orders as
invoice commitments. The matched prepayment invoice does not appear as a separate
commitment.

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Chapter 11 - Page 16
Both unapproved and approved open requisitions and purchase orders show as commitments
after you run the concurrent program to update project summary amounts. When you drill-
down to view commitment details, if the Approved check box is enabled, then the requisition or
purchase order associated with the commitment has been approved.
You can report summary committed cost amounts for your projects and tasks, and can also
review detail requisitions and purchase orders that backup the summary amounts.
Note to students: You will view committed and actual supplier costs on your project in
upcoming practices.

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Chapter 11 - Page 17
Guided Demonstration - Review Committed Costs
Review Committed Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Status window.

• (N) Project Status Inquiry > Project Status Inquiry

3. Find the Cost Reimbursable project.

• Enter the find criteria:


− Operating Unit = Vision Services
− Number = Cost Reimbursable
− Name = Cost Reimbursable

• (B) Find

4. View the amount in the Commit Amt column.

5. View the details of the commitments

• (B) Commitments

This project has Supplier Invoice, Purchase Orders, and Requisition commitments.

• Review the document number related to each commitment.

• Review whether the each commitment is related to an approved document or not.

6. Close the open windows and return to the Navigator.

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Chapter 11 - Page 18
Accounting Transactions

Accounting Transactions
Oracle Purchasing and Oracle Payables use the Account Generator to determine the default
accounting for each project-related distribution line based on the project information that you
enter.
Oracle Purchasing builds the account number for the charge, accrual, and variance distribution
accounts based on the Account Generator assignments that you define during implementation.
You can define your Account Generator processes so that project-related requisitions and
purchase orders use project-related information in the Account Generator assignments and non-
project-related documents use the Account Generator assignments predefined by Oracle
Purchasing. If you use encumbrance accounting, you can also define assignments for the
budget account based on project information.
In Oracle Payables, the Account Generator builds the default expense account number for
project-related invoices using assignments that you define during implementation. You must
enter the account number for non-project-related invoices. The Account Generator determines
the default liability account for all invoices based on the liability account defaults provided by
Oracle Payables.

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Chapter 11 - Page 19
When you create subledger accounting for the distributions lines, Oracle Subledger Accounting
uses the predefined setup that Oracle Purchasing, Oracle Payables, and Oracle Project Costing
provide so that the create accounting program accepts the default accounts without change. If
you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites the default account.

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Chapter 11 - Page 20
Agenda

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Chapter 11 - Page 21
Integration with Oracle Purchasing

Integration with Oracle Purchasing


When you enter project-related transactions in Oracle Purchasing and Oracle iProcurement,
you only need to enter project information on the source document; either the requisition or the
purchase order.
Entering Requisitions
You enter project-related purchase requisitions using the Requisitions window in Oracle
Purchasing. A requisition can have a combination of project-related and non-project-related
distribution lines. In addition, you can use the Buyer WorkCenter in Oracle Purchasing to
review requisitions. You can also use Oracle iProcurement to enter project-related purchase
requisitions.
Using AutoCreate
When you automatically create purchase orders from project-related requisitions in the
AutoCreate Documents window, Oracle Purchasing copies the project information and the
accounting information from the requisition to the purchase order. You do not need to enter
any additional project-related information on your purchase order when you use this feature.
You can change the project information on the purchase order that was copied from the
requisition, though in this case, the project information on the requisition is not updated.

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Chapter 11 - Page 22
Entering Purchase Orders
If your company does not use online requisitions or the AutoCreate feature, you can enter
project-related information directly on your standard purchase orders. The Account Generator
automatically creates the account information, based on the project-related information you
enter. You can also use the Buyer WorkCenter in Oracle Purchasing to enter project-related
purchase orders.
Entering Releases
You enter project-related releases against blanket purchase agreements and planned purchase
orders. If the release distribution line is project-related, then you can specify project
information.
Recording Receipts and Delivery
When a purchase order shipment is flagged to accrue at receipt and the purchased goods are
delivered to an expense destination, you enter a receiving transaction for the purchase order in
Oracle Purchasing. Next, you interface receipt accruals to Oracle Project Costing as actual
transactions. This feature enables you to recognize the cost to your project in the period in
which it is incurred rather than in the period in which it is invoiced.
Note: You must create subledger accounting for receiving transactions in final mode before
you can:
• View accounting for receipt accrual expenditure items in Oracle Project Costing.
• Create accounting for adjustments made in Oracle Project Costing to receipt accrual
expenditure items.

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Chapter 11 - Page 23
Documents in Oracle Purchasing

Documents in Oracle Purchasing


You enter project information for distribution lines in Oracle Purchasing:
• Requisitions have three levels: the requisition header, requisition lines, and requisition
distributions.
• Releases have three levels: the release header, release lines, and release distributions.
• Purchase orders have four levels: the purchase order header, purchase order lines,
purchase order shipments, and purchase order distributions.
You can create project-oriented folders at the distribution line level to make it easier and faster
to enter project-related information.
For information about entering requisitions, releases, and purchase orders, see the Oracle
Purchasing User's Guide.

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Chapter 11 - Page 24
Practice - Enter a Project-Related Requisition
Overview
In this practice, you will create a project-related requisition in Oracle iProcurement and charge it
to your XX Capital Services project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• If the student is not using the SERVICES User ID, then the instructor must ensure that
each employee associated with a User ID is assigned a position in Oracle HRMS and
that the position has adequate signing authority in Oracle Purchasing.

Tasks
Enter and Submit a Requisition in Oracle iProcurement

Your project manager has asked you to order 10 coffee makers for the project offices. You can
charge the coffee makers to task 1.2 of the XX Capital Services project.

Enter and submit a non-catalog requisition in Oracle iProcurement. Use the responsibility
iProcurement, Vision Services (USA). Enter the request information as specified on the following
table:

Field Value
Item Type Goods billed by quantity
Item Description Coffee makers for project office
Category MISC.MISC
Quantity 10
Unit of Measure Each
Unit Price 35.99
Currency USD
RFQ Required No
Negotiated No
Contract Number Leave Blank
New Supplier No
Supplier Name Consolidated Supplies

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Site HOUSTON
Contact Name Fuller, Ernie
Phone 713 678-4553
Supplier Item Leave Blank

During checkout, charge the project as specified in the following table:

Field Value
Project XXCS
Task 1.2
Expenditure Type Supplies
Expenditure Org Services-East
Expenditure Item Date Today's Date

Be sure to enter a brief justification and a message to the buyer. Your requisition does not require
any approvals. Submit your requisition.

Note your requisition number: ________________________________

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Chapter 11 - Page 26
Solution - Enter a Project-Related Requisition
Enter and Submit a Requisition in Oracle iProcurement

1. Responsibility = iProcurement, Vision Services (USA)

2. Enter a non-catalog request.

• (T) Shop

• (ST) Non-Catalog Request

• Enter the request information as specified on the following table:

Field Value
Item Type Goods billed by quantity
Item Description Coffee makers for project office
Category MISC.MISC
Quantity 10
Unit of Measure Each
Unit Price 35.99
Currency USD
RFQ Required No
Negotiated No
Contract Number Leave Blank
New Supplier No
Supplier Name Consolidated Supplies
Site HOUSTON
Contact Name Fuller, Ernie
Phone 713 678-4553
Supplier Item Leave Blank

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Chapter 11 - Page 27
• (B) Add to Cart

3. (B) View Cart and Checkout

4. (B) Checkout

5. Revise the project information in the Billing region as specified in the following table:

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Chapter 11 - Page 28
Field Value
Project XXCS
Task 1.2
Expenditure Type Supplies
Expenditure Org Services-East
Expenditure Item Date Today's Date

6. (B) Next

7. Enter a justification and a note to the buyer.

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Chapter 11 - Page 29
Note: Your requisition does not require any approvals.

8. (B) Next

9. Review and submit the requisition.

• (H) Show

• Review the information

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Chapter 11 - Page 30
• (B) Submit

• Note your requisition number: ________________________________

10. (H) Close Window

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Chapter 11 - Page 31
Practice - AutoCreate a Project-Related Purchase Order
Overview
In this practice, you will AutoCreate a purchase order in Oracle Purchasing using the requisition
that you submitted in the previous practice. You will also view the purchase order as a
commitment in Project Status Inquiry.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• If the student is not using the SERVICES User ID, then the instructor must ensure that
the employee associated with the student's User IDs is set up as a Buyer in Oracle
Purchasing and that the employee's position has adequate signing authority.

• IMPORTANT: The instructor must set the current reporting period for Vision Services
operating unit to the period for the current week before students update summary
amounts:

• Responsibility = Projects, Vision Services (USA)

• (N) Setup > System > PA Periods

• (B) Set Reporting Period

• Select the period for the current week.

• (B) OK

• (I) Save

Tasks
AutoCreate a Purchase Order

The project manager of the XX Capital Services project has asked you to create a purchase order
for the coffee makers. In Oracle Purchasing, use your requisition from the previous practice to
AutoCreate a new purchase order. Use the responsibility Purchasing, Vision Services (USA).

Record your new document number ______________________

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Chapter 11 - Page 32
Review and Approve the Purchase Order

After you AutoCreate the new purchase order, review the project charging instructions on the
Project tab of the Distributions window (accessed from the Shipments window). You entered
this project information on the requisition and Oracle Purchasing copied it to the purchase order.

When you are ready, approve the purchase order. Verify that the status of the purchase order is
Approved.

View the Commitment in Project Status Inquiry

Switch your responsibility to Projects, Vision Services (USA) to view the commitment against
your project. First run the program PRC: Update Project Summary Amounts for a Single Project
for your XX Capital Services project.

Note your Request ID __________________________

Use Project Status Inquiry to review the commitment details.

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Chapter 11 - Page 33
Solution - AutoCreate a Project-Related Purchase Order
AutoCreate a Purchase Order

1. Responsibility = Purchasing, Vision Services (USA)

2. Navigate to the Find Requisition Lines window.

• (N) AutoCreate

3. Find the line from your requisition.

• (B) Clear

• Enter the following find criteria:


− Operating Unit = Vision Services
− Approved = Yes
− Requisition = Your requisition number from the previous practice

• (B) Find

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Chapter 11 - Page 34
4. Enable the check box next to the line for your requisition.

5. (B) Automatic

6. Review the information on the New Document window. Accept the default values.

7. (B) Create

8. Record your new document number ______________________

Review and Approve the Purchase Order

9. Review the purchase order header information.

10. Review the project-related distribution line.

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Chapter 11 - Page 35
• (B) Shipments

• (B) Distributions

• (T) Project

Note: You entered this project information on the requisition and Oracle Purchasing copied
it to the purchase order.

11. Close the Distributions and the Shipments windows.

12. (B) Approve

13. Enable the Submit for Approval option.

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Chapter 11 - Page 36
14. (B) OK

15. Verify that the status of the purchase order is now Approved.

16. Close the AutoCreate for Purchase Orders window and return to the Navigator.

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Chapter 11 - Page 37
View the Commitment in Project Status Inquiry

17. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA).

• (B) OK

18. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

19. Select to run a Single Request.

20. (B) OK

21. Select the program PRC: Update Project Summary Amounts for a Single Project from the
list of values in the Name field and Vision Services for the operating unit.

22. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Through Date Leave Blank
Summarize Cost Yes
Expenditure Type Class Leave Blank
Summarize Revenue Yes
Summarize Budgets Yes
Budget Type Leave Blank
Summarize Commitments Yes

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23. (B) OK

24. (B) Submit

• Note your Request ID __________________________

25. (B) No in the Decision dialog box

26. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

27. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

28. Review the output report.

• (B) View Output

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Chapter 11 - Page 39
29. Close the output page and the Requests window.

30. Navigate to the Find Project Status window.

• (N) Project Status Inquiry > Project Status Inquiry

31. Find the XX Capital Services project.

• Enter the find criteria:


− Operating Unit = Vision Services
− Number = XXCS
− Name = XX Capital Services

• (B) Find

32. View the amount in the Commit Amt column.

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Chapter 11 - Page 40
33. View the details of the commitments

• (B) Commitments

• (B) Find

34. Close the open windows and return to the Navigator.

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Chapter 11 - Page 41
Agenda

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Chapter 11 - Page 42
Supplier Costs and Accounting Methods

Supplier Costs and Accounting Methods


When you define a ledger, you can enable an option for the ledger to use cash basis
accounting. Otherwise, the ledger uses accrual basis accounting.
• Accrual basis accounting - Oracle Payables creates accounting entries for invoices and
payments. If you use accrual basis accounting, then you can set up Oracle Purchasing to
accrue expense items at receipt.
• Cash basis accounting - Oracle Payables accounts only for payments and does not record
liability information for invoices.
When you define a primary ledger, you can optionally assign one or more secondary ledgers to
it. The primary ledger acts as the main record-keeping ledger. The secondary ledger is an
optional, additional ledger that is associated with the primary ledger. For example, one ledger
can use accrual basis accounting and the other can use cash basis accounting. This approach is
also known as combined basis accounting. Oracle Payables records invoice accounting entries
in both ledgers. The accounting method of the primary ledger, cash basis or accrual basis,
determines the flow of actual costs to Oracle Project Costing. When you make supplier cost
adjustments in Oracle Project Costing, Oracle Project Costing does not create accounting
entries for a secondary ledger if the accounting basis differs from the primary ledger.

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Chapter 11 - Page 43
Integration with Oracle Payables (Accrual)

Integration with Oracle Payables (Accrual)


When the primary accounting method is accrual basis accounting, you interface perpetual
receipt accruals, invoice variances, invoice distributions, and payment discounts to Oracle
Project Costing as actual costs.
Matching Invoices
If you use Oracle Purchasing and have already associated project-related information to a
purchase order, then you can match the invoice to a purchase order or receipt using the
Invoices window. Oracle Payables automatically copies the project information to the invoice.
You cannot change the project information that is copied from the purchase order to the
invoice, with the exception of the expenditure item date. Oracle Payables uses the profile
option PA: Default Expenditure Item Date for Supplier Cost during the invoice match process
to determine the default expenditure item date for supplier invoice distribution lines. You can
override the default expenditure item date for invoice distribution lines on the Invoice
Workbench in Oracle Payables.
Entering Invoices
You can enter project-related invoices directly in Oracle Payables. You can enter project-
related information at the invoice level, which populates the project-related information at the

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Chapter 11 - Page 44
invoice line level. You can override these default values at the invoice line level. The project-
related information that you enter at the invoice line level populates the invoice distributions
for the line. You can override this default information at the invoice distribution line level. An
invoice can have both project-related and non-project-related distributions.
Importing Invoices
You can import projects-related invoices through the Payables Open Interface tables. For
example, you can import expense report invoices from Oracle Internet Expenses.
Tracking Commitments
You can track project-related invoices as commitments in Oracle Project Costing before you
interface them as actual costs.
Posting Invoices
If you use accrual basis accounting, then you must validate the invoice and create subledger
accounting for it in final mode in Oracle Payables before you can interface the invoice to
Oracle Project Costing.

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Chapter 11 - Page 45
Integration with Oracle Payables (Cash)

Integration with Oracle Payables (Cash)


When the primary accounting method in Oracle Payables is cash basis accounting, you
interface payments to Oracle Project Costing as actual costs. You cannot interface costs from
Oracle Payables to Oracle Project Costing as actual costs until you pay the invoice. You can
interface partially paid invoices to Oracle Project Costing.
Entering Invoices
As with accrual basis accounting, you can match invoices to purchasing documents, manually
enter a supplier invoice, and import supplier invoices from an external source.
Tracking Commitments
You can track project-related invoices as commitments in Oracle Project Costing.

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Chapter 11 - Page 46
Invoices in Oracle Payables

Invoices in Oracle Payables


Invoices in Oracle Payables have three levels: the invoice header, invoice lines, and invoice
distributions. You can create project-oriented folders at all three levels to make it easier and
faster to enter project-related information for your invoices.
For information about entering invoices, invoice lines, and invoice distributions, see the Oracle
Payables User's Guide.

Copyright © 2007, Oracle. All rights reserved.

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Chapter 11 - Page 47
Practice - Create a Project-Related Supplier Invoice
Overview
In this practice, you will create an Oracle Payables supplier invoice and match it to the purchase
order that you created in the previous practice. After you review the invoice distributions, you
will validate the invoice and create final subledger accounting for it.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• IMPORTANT: The instructor must verify that the current AP period is open:

• Responsibility = Payables, Vision Services (USA)

• (N) Setup > Calendar > Accounting > Accounting Periods

• If necessary, open the period for the current month.

Match the Supplier Invoice to a Purchase Order

You received the invoice for the coffee makers that you ordered. In Oracle Payables, create an
invoice. Use the responsibility Payables, Vision Services (USA). Enter or verify the invoice
header information as specified in the following table:

Field Value
Operating Unit Vision Services
Type Standard
Trading Partner Consolidated Supplies (view only)
Supplier Num 1014 (view only)
Supplier Site HOUSTON
Invoice Date Today's Date
Invoice Number XX-INV
Invoice Curr USD
Invoice Amount 359.90
Match Action Purchase Order
GL Date Today's Date
Terms 4/10, 3/20, 2/30 Net 60

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Chapter 11 - Page 48
Payment Method Check
Pay Group Standard
Payment Curr USD
Payment Rate Date Today's Date
Terms Date Today's Date
Taxation Country United States

Match the invoice to the purchase order that you created in the previous practice. After you find
your purchase order and complete the match, review the invoice line and the invoice distribution
line.

Validate the Invoice and Create Accounting

You must validate the invoice and create final subledger accounting before you can interface the
supplier costs to Oracle Project Costing as actual costs. First, validate the invoice. After the
invoice is validated, create final subledger accounting for it. Select the Final Post option when
you create accounting. Verify that the invoice status is Validated and that Accounted is Yes.

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Chapter 11 - Page 49
Solution - Create a Project-Related Supplier Invoice
Match the Supplier Invoice to a Purchase Order

1. Responsibility = Payables, Vision Services (USA)

2. Navigate to the Invoices window.

• (N) Invoices > Entry > Invoices

3. Enter or verify the invoice header information as specified on the following table:

Field Value
Operating Unit Vision Services
Type Standard
Trading Partner Consolidated Supplies (view only)
Supplier Num 1014 (view only)
Supplier Site HOUSTON
Invoice Date Today's Date
Invoice Number XX-INV
Invoice Curr USD
Invoice Amount 359.90
Match Action Purchase Order
GL Date Today's Date
Terms 4/10, 3/20, 2/30 Net 60
Payment Method Check
Pay Group Standard
Payment Curr USD
Payment Rate Date Today's Date
Terms Date Today's Date
Taxation Country United States

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Chapter 11 - Page 50
4. (B) Match

5. Find the purchase order to match.

• Enter the find criteria:


− Num = Your purchase order number from the previous practice.

• (B) Find

6. Select the Match check box next to the line for your purchase order.

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Chapter 11 - Page 51
7. (B) Match on the Match to Purchase Orders window.

8. Review the invoice distributions

• (T) Lines

• Select the invoice line.

• (B) Distributions

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• Scroll to the right to view the project information.

• Close the Distributions window.

Validate the Invoice and Create Accounting

9. Validate the invoice.

• (T) General

• (B) Actions... 1

• Enable the Validate option.

• (B) OK

10. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

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Chapter 11 - Page 53
• Select the Final Post option.

• (B) OK

• (B) OK for the note.

11. Verify that the invoice status is Validated and that Accounted is Yes.

12. Close the Invoices window and return to the Navigator.

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Chapter 11 - Page 54
Agenda

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Chapter 11 - Page 55
Interfacing Supplier Costs

Interfacing Supplier Costs


You run the program PRC: Interface Supplier Costs to bring project-related supplier costs into
Oracle Project Costing from Oracle Purchasing and Oracle Payables. The interface process
groups the items into expenditure batches by transaction source.
• For accrual basis accounting, this program interfaces receipt accruals from Oracle
Purchasing and supplier invoice-related costs, receipt accrual price variances, and
discounts from Oracle Payables to Oracle Project Costing as actual costs. You must
validate invoices and create accounting for them before you can interface the costs to
Oracle Project Costing.
• For cash basis accounting, this program interfaces payments and discounts from Oracle
Payables to Oracle Project Costing as actual costs.
If you make adjustments to project-related supplier costs in Oracle Purchasing or Oracle
Payables, then this program interfaces the adjusting distribution lines to Oracle Project
Costing.
The program selects transactions based on the parameter values that you enter. It first retrieves
all eligible accounted, project-related supplier costs. The program then interfaces the amounts

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Chapter 11 - Page 56
to Oracle Project Costing. The program groups the items into expenditure batches by
transaction source.
Each time you run the program PRC: Interface Supplier Costs, Oracle Project Costing
generates reports you can use to track the interfaced costs, as well as those invoice lines and
receipt accruals that the process rejected during interface.
Import and Expenditure Item Dates
For receipt accruals, payments, and discounts, the program uses the profile option PA: Default
Expenditure Item Date for Supplier Cost to determine the expenditure item date. The program
validates expenditure item dates for supplier costs. If the expenditure item date for an
expenditure item fails validation, then the program rejects the transaction and leaves it in the
Oracle Project Costing interface table. You must either change the date setup in Oracle Project
Costing or change the date for the expenditure item. You can use the Review Transactions
window to change the date for a rejected expenditure item and validate the new date. If the new
date passes validation, then Oracle Project Costing marks it as pending so that PRC: Interface
Supplier Costs interfaces the transaction the next time you run the program.
Note: To update the expenditure item date in the Review Transactions window, the Allow
Interface Modifications option must be enabled for the transaction source.

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Chapter 11 - Page 57
Predefined Transaction Sources

Predefined Transaction Sources


Oracle Project Costing predefines transaction sources to import supplier costs from Oracle
Purchasing and Oracle Payables and expense reports from Oracle Payables.
• You can define preprocessing and postprocessing extensions to customize the predefined
supplier cost transaction sources. See: Oracle Projects APIs, Client Extensions, and Open
Interfaces Reference.
• The program PRC: Interface Supplier Costs only rejects the expenditure items that fail
validation. The program interfaces the remaining expenditure items to Oracle Projects.
This functionality only applies to predefined transaction sources for supplier costs.
Important: Do not use these transaction sources to import transactions from non-Oracle
sources. These transaction sources are intended only for use by the Oracle Project Costing
processes that import supplier costs and expense report costs from Oracle Purchasing and
Oracle Payables.
Note: You run the program PRC: Interface Expense Reports from Payables to interface
expense report costs to Oracle Project Costing.

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Chapter 11 - Page 58
Predefined Transaction Sources (continued)

Predefined Transaction Sources (continued)


You must enable the Allow Interface Modifications option for predefined supplier cost
transaction sources to use the Review Transactions window to modify the expenditure item
date for expenditure items that fail date validation during import.
If you enable the Allow Adjustments option for a predefined transaction source for supplier
costs, then you must complete at least one of the following setup steps to create accounting for
supplier cost adjustments:
• Specify the default supplier cost credit account for supplier cost adjustments in Oracle
Projects implementation options for each operating unit.
• Set up Oracle Subledger Accounting to determine the supplier cost credit account.

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Chapter 11 - Page 59
Practice - Interface Supplier Costs
Overview
In this practice, you will interface supplier costs from the supplier invoice that you validated in
the previous practice to Oracle Project Costing. You will also use Expenditure Inquiry to review
the supplier cost expenditure item.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Interface Supplier Costs

In the previous practice, you validated and created final subledger accounting for your supplier
invoice. You can now interface the supplier costs to Oracle Project Costing as actual costs. Use
the responsibility Projects, Vision Services (USA). Run the program PRC: Interface Supplier
Costs. Ensure that you select your project as a program parameter. The program PRC: Interface
Supplier Costs automatically submits the program AUD: Supplier Costs Interface Audit. Review
the output report for AUD: Supplier Costs Interface Audit.

Note your Request ID __________________________

View the Expenditure Item

Use expenditure inquiry to query the expenditure item from the supplier invoice. Drill down to
view the invoice overview information and invoice workbench for the supplier cost expenditure
item.

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Chapter 11 - Page 60
Solution - Interface Supplier Costs
Interface Supplier Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Interface Supplier Costs from the list of values in the Name field
and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
Through GL Date Leave Blank
Through Transaction Date Leave Blank
Interface Supplier Invoices Yes
Interface Receipt Accruals No
Interface AP Discounts No

7. (B) OK

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Chapter 11 - Page 61
8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRC:
Interface Supplier Costs automatically submits the program AUD: Supplier Costs
Interface Audit. Look for the AUD: Supplier Costs Interface Audit program request with
your Request ID in the parameters.

12. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

13. Close the output page and the Requests window.

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Chapter 11 - Page 62
View the Expenditure Item

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria::


− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:


− Invoice Number = XX-INV

• (B) Find

16. Drill down to the invoice item details information.

• (B) Item Details

• Select AP Invoice.

• (B) OK

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Chapter 11 - Page 63
• (B) Invoice Workbench

17. Close the open windows and return to the Navigator.

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Chapter 11 - Page 64
Supplier Cost Audit Report

Supplier Cost Audit Report


Run the program AUD: Supplier Cost Audit in Oracle Project Costing to generate the Supplier
Cost Audit Report. You can use this report to track supplier cost transactions in Oracle Project
Costing. This report lists all supplier cost transactions in Oracle Project Costing for a selected
operating unit.
• For accrual basis accounting, the report includes raw costs associated with unmatched
invoices, PO-matched or receipt-matched invoices, accrued receipts, and payments
associated with discounts.
• For cash basis accounting, the report includes payments and prepayment applications
associated with invoices.
When you submit the report, you can enter values for parameters such as From Project
Number, To Project Number, Supplier, Transaction Type, From GL Period, To GL Period, and
Adjustment Type to restrict the supplier cost transactions that the program includes on the
report. For a complete list of the parameters, see: Supplier Cost Audit Report, Oracle Projects
Fundamentals.

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Chapter 11 - Page 65
Expenditure Inquiry

Expenditure Inquiry
You can use the Find Project Expenditure Items window or the Find Expenditure Items
window in Oracle Project Costing to query supplier cost expenditure items. You can select a
combination of find criteria to limit the search. For example, you can enter find criteria specific
to supplier costs on the Supplier tab to query the expenditure items for a specific supplier
invoice, payment, or receipt. After you query the expenditure items, you use the Expenditure
Items window or Project Expenditure Items window to review them. You can use folder tools
to add additional columns that provide supplier cost-specific information.
You can review the item details for supplier cost expenditure items. For supplier costs from
supplier invoices, you can choose AP Invoice to drill down to the invoice overview in Oracle
Payables. If the invoice is matched to a purchase order, then you can drill down to the purchase
order from the Invoice Workbench. For expenditure items from receipt accrual transactions,
you can choose PO Receipt to drill down to the receipt transaction summary in Oracle
Purchasing. You can also drill down to the related purchase order from the Receipt Transaction
Summary window. For expenditure items from purchase order-related contingent worker labor
costs, you can choose Purchase Order Details to drill down to the purchase order details in
Oracle Purchasing.

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Chapter 11 - Page 66
Viewing Project Adjustments from the Invoice Workbench

Viewing Project Adjustments from the Invoice Workbench


You can access Expenditure Inquiry from the Invoice Workbench in Oracle Payables to view
adjustments to supplier costs in Oracle Project Costing. The adjustments are to supplier costs
that you previously interfaced to Oracle Project Costing and then adjusted in Oracle Project
Costing. You can use this option to help reconcile costs between Oracle Payables and Oracle
Project Costing because you do not interface adjustments that users make in Oracle Project
Costing back to Oracle Payables.
On the Invoice Workbench in Oracle Payables, select the View Project Adjustments option
from the Tools menu to open the Find Expenditure Items window. This option is context-
sensitive; Oracle Payables automatically enters find criteria based on the position of your
cursor. When your cursor is on the invoice header or an invoice line, you can optionally revise
the find criteria before you search for the expenditure items.

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Chapter 11 - Page 67
Agenda

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Chapter 11 - Page 68
Managing Subcontractor Payments

Managing Subcontractor Payments


If Oracle Services Procurement has been licensed and implemented, then you can take
advantage of additional features for procuring complex services. Complex services can include
consulting, advertising, construction, research and development, and professional services, and
they typically require negotiated contracts with complex terms and payment arrangements.
Oracle's Complex Work feature streamlines all aspects of the acquisition process for complex
services including:
• Negotiation of service contracts with emphasis on terms related to contract financing and
progress payment arrangements.
• Tracking of work progress against an agreed schedule in the contract.
• Processing of payment requests.
The role that Oracle Purchasing plays is primarily in the authoring and monitoring portion of
the Complex Work flow. In addition, the purchase order styles that dictate which of the
complex payment attributes are available are created in Oracle Purchasing. Complex payment
attributes include:
• Progress Payments - For partial payments during performance of the contract. For
example, progress payment pay items include:

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Chapter 11 - Page 69
- Milestone - Payments based on progress events.
- Rate - Payment amount is pro-rated based on the percentage of work completed.
- Lump Sum - Payment amount is a fixed amount based on the percentage of work
completed.
• Advances - For advance payments (prepayments).
• Retainage - To withhold a portion of the payment until all work under a contract is
accepted is to be allowed.
Oracle's Complex Work feature provides a streamlined process for contractors to report
progress and request payments using either a Work Confirmation Request or an Invoice, each
of which can then be electronically routed for approval. You can optionally track the progress
of project-related work against project deliverables that you define in Oracle Project
Management.
When the work is complete, multiple methods exist for submitting a Work Confirmation
Request:
• The contractor can create and submit a Work Confirmation Request in Oracle iSupplier
Portal.
• The project manager can create a Work Confirmation request on behalf of the contractor
in iProcurement.
• The buyer can create and submit a Work Confirmation on behalf of the contractor.
The buyer or contract administrator can then confirm the progress.
For additional information about procuring complex services, see the Oracle Purchasing
User's Guide and the course titled "R12 Oracle Purchasing Fundamentals."

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Chapter 11 - Page 70
Managing Financing and Advances

Managing Financing and Advances


You assign financing terms that allow prepayments to a purchase order header in the Buyer
WorkCenter in Oracle Purchasing. Oracle Payables imports prepayment invoices that Oracle
Purchasing generates based on information from the purchase order financing terms. You
cannot interface project-related prepayment invoices to Oracle Project Costing as actual costs.
Prepayment invoices appear as commitments in Oracle Project Costing as follows:
• A project-related prepayment invoice that is not matched to a purchase order appears as
separate commitment. Once you apply the prepayment invoice to a standard invoice,
Oracle Project Costing relieves the cost commitment for the prepayment invoice.
• A project-related prepayment invoice that is matched to a purchase order appears as a
purchase order commitment, not as an invoice commitment.
With accrual basis accounting, you interface the actual cost from the standard invoice, and not
the prepayment, to Oracle Project Costing. With cash basis accounting, after you apply the
prepayment invoice to a standard invoice, you interface the actual cost from the standard
invoice to Oracle Project Costing. The actual cost amount that you interface to Oracle Project
Costing is equal to the amount of the prepayment applied to the standard invoice.

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Chapter 11 - Page 71
Managing Retainage

Managing Retainage
Retainage is an agreed upon amount, typically a percentage, that you withhold from a
subcontractor until the subcontractor makes predetermined progress for a particular scope of
work. Retainage is also known as retention or contractual withholds. With Oracle's Complex
Work feature, contract administrator can negotiate retainage terms with the contractor and
capture these as part of the contract. For example, the contract can specify that you will retain
20 percent from all payments until 25 percent of work is complete. Therefore, whenever the
subcontractor sends you an invoice, you retain 20 percent of each payment until the overall
progress reaches 25 percent.
Oracle Payables automatically calculates the retainage amount for a supplier invoice based on
the retainage rate and maximum retainage amount that you specify on the purchase order
header in the Buyer WorkCenter in Oracle Purchasing. It stores the retainage amount as a
separate distribution line with a distribution line type of Retainage. Oracle Payables has one
retainage account it uses for each operating unit.
Oracle Project Costing does not report on or interface project-related retainage distribution
lines as commitments or actual costs. Instead, Oracle Project Costing captures the full amount
of the expense as a commitment and, when applicable, for budgetary control. Later, the full

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Chapter 11 - Page 72
amount of the expense is interfaced to Oracle Project Costing as an actual cost. Retainage is
related to the payment of the invoice and it ultimately does not impact the overall project cost.
Retainage Release
The contractor can submit a Retainage Release Invoice for release of retainage withheld. If the
contractual clauses or other conditions governing the release of the retainage are met, then the
buyer can release the applicable retainage. For additional information, see the Oracle
Purchasing User's Guide and the Oracle Payables User's Guide.

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Chapter 11 - Page 73
Agenda

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Chapter 11 - Page 74
Supplier Cost Adjustments Overview

Supplier Cost Adjustments Overview


You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, and
Oracle Payables.
In Oracle Project Costing, you can make the following adjustments to supplier cost and
expense report cost expenditure items:
• Transfer an expenditure item to another project or task
• Split an expenditure item
• Reclassify the billable or capitalizable status
• Place a billing hold or one-time hold
• Release a billing hold
• Recalculate burden costs
• Recalculate raw costs
• Recalculate revenue
• Change comment
• Change project functional currency attributes

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Chapter 11 - Page 75
• Reprocess cross charge transactions
• Mark for no cross charge processing
• Change transfer price currency attributes
In Oracle Purchasing and Oracle Payables, you can adjust the project-related information such
as the invoice amount, supplier, project, task, expenditure type, expenditure organization and
expenditure item date.

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Chapter 11 - Page 76
Restrictions to Supplier Cost Adjustments in Oracle Project
Costing

Restrictions to Supplier Cost Adjustments in Oracle Project Costing


Oracle Project Costing restricts the types of adjustments that you can make to supplier cost
expenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfaced
to Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense report
costs interfaced from Oracle Payables.
Allow Adjustments Option for Supplier Cost Transaction Sources
If your implementation team does not enable the Allow Adjustments check box for predefined
supplier cost transaction sources in the Transaction Sources window, then Oracle Project
Costing restricts the types of adjustments that you can perform in Oracle Project Costing. The
default value for this option is No.
Automatic Offsets in Oracle Payables
If you enter invoices in Oracle Payables for more than one balancing segment, then you can
use the Automatic Offsets feature to keep your Oracle Payables transaction accounting entries
balanced. When you use Automatic Offsets, Oracle Payables automatically creates balancing
accounting entries for your transactions. When Automatic Offsets is enabled in Oracle

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Chapter 11 - Page 77
Payables, you can make adjustments to supplier cost expenditure items in Oracle Project
Costing under the following conditions:
• When the Automatic Offset Method is Balancing, you can make an adjustment in Oracle
Project Costing if the adjustment does not cause a change in the balancing segment value.
• When the Automatic Offset Method is Account, you can make an adjustment in Oracle
Project Costing if the adjustment only affects the value of the natural account segment. If
the adjustment affects the value of any other accounting segment, then you cannot make
the adjustment.
Combined Basis Accounting
With combined basis accounting, if you make supplier cost adjustments in Oracle Project
Costing, then Oracle Project Costing does not create accounting entries for a secondary ledger
if the accounting basis differs from the primary ledger. If you enter adjustments in Oracle
Payables, then the adjustment activity updates both the primary ledger and the secondary
ledger. You must make supplier cost adjustments in Oracle Payables if you want all adjustment
activity to update both ledgers. Your implementation team can disable the Allow Adjustments
check box for the predefined supplier cost transaction sources in the Transaction Sources
window in Oracle Project Costing to prevent users from adjusting supplier cost expenditure
items in Oracle Project Costing.
Adjustments that Affect Tax Recoverability
When you attempt to adjust a supplier cost expenditure item in Oracle Project Costing, if the
adjustment has a potential impact on the tax recoverability, then Oracle Project Costing does
not allow the adjustment. This restriction ensures the integrity of tax information stored in
Oracle E-Business Tax. You must make the adjustment in the source application (Oracle
Purchasing or Oracle Payables).
Adjustments to Historical (Prior to Release 12) Prepayment Invoices
You cannot adjust expenditure items for historical (prior to Release 12) prepayment invoices in
Oracle Project Costing. You must make these adjustments in Oracle Payables.
Adjustments to Canceled Supplier Invoices
If you cancel a supplier invoice, then you cannot make further adjustments to expenditure
items associated with the invoice in either Oracle Payables or Oracle Project Costing.
Adjustments to Receipt Accruals and Exchange Rate Variance
If you allow users to make adjustments in Oracle Project Costing to expenditure items that
represent receipts, receipt nonrecoverable tax, or exchange rate variances, then Oracle Project
Costing does not perform accounting for adjustments in the following ledgers:
• Reporting currency ledgers
• Secondary ledgers if the secondary ledger currency differs from the primary ledger
currency
During implementation, you set the profile option PA: Allow Adjustments to Receipt Accruals
and Exchange Rate Variance to specify whether you can adjust receipt, receipt nonrecoverable
tax, and exchange rate variance expenditure items in Oracle Project Costing when exchange
rate variance exists and you convert journals to another currency.

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Chapter 11 - Page 78
Guided Demonstration - Allow Adjustments for a Supplier Cost
Transaction Source
Allow Adjustments for a Supplier Cost Transaction Source

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Transaction Sources window.

• (N) Setup > Expenditures > Transaction Sources

3. Find the Oracle Payables Supplier Invoices transaction source.

4. Enable the Allow Adjustments transaction source option.

5. (B) OK for the Note

6. (I) Save

7. Close the Transaction Sources window and return to the Navigator.

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Chapter 11 - Page 79
Adjusting Project-Related Documents in Oracle Purchasing

Adjusting Project-Related Documents in Oracle Purchasing


Requisition Adjustments
You can update project information on a requisition only if it is not approved and before it is
included on a purchase order. The Account Generator builds a new default account number
value when you change the project information. The new project information is used in
commitment reporting.
If encumbrance accounting is enabled for the project, and the requisition is reserved, then you
cannot change any of the project attributes. If you unreserve the requisition, then Oracle
Purchasing reverses all encumbrance accounting entries and you can modify the project
attributes.
Purchase Order Adjustments
You can update project information on a purchase order, even after it is approved and invoiced.
However, you cannot update project information if there has been any accounting activity on
the purchase order (for example, if it is encumbered, or if it is accrued on receipt and the
distribution has been received or billed). If the purchase order is invoiced before you update
the project information, the invoice is not updated with the new project information. If the

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Chapter 11 - Page 80
purchase order line is invoiced on a new invoice after you change the project information, then
Oracle Payables copies the new project information to the new invoice.
To update the project information on a purchase order, you must first return all goods that you
have received for the purchase order. In addition, if you have previously interfaced receipts and
returns for the purchase order to Oracle Project Costing, then you must interface all receipts
and returns to Oracle Project Costing before you update project information. If you have not
previously interfaced receipts or returns for the purchase order to Oracle Project Costing, then
you do not have to interface receipts and returns before you update project information. The
Account Generator builds a new default account number when you change the project
information. The new project information is used in commitment reporting.
If encumbrance accounting is enabled for the project, and the purchase order is reserved, then
you cannot change any of the project attributes. If you unreserve the purchase order, then
Oracle Purchasing reverses all encumbrance accounting entries and you can modify the project
attributes.

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Chapter 11 - Page 81
Writing Off Receipt Accruals in Oracle Purchasing

Writing Off Receipt Accruals in Oracle Purchasing


After you enter receipt transactions and match and approve your invoices, you can run the AP
and PO Accrual Reconciliation Report in Oracle Purchasing to identify any differences
between your Oracle Purchasing receipts and Oracle Payables invoices. After you identify the
entries you want to write off, you create a manual journal entry to write off the transactions.
When you write off a receipt accrual in Oracle Purchasing, you must manually adjust the cost
in Oracle Project Costing. Because the receipt accrual write-off is recorded as a manual journal
entry, Oracle Purchasing does not interface write-off adjustments to Oracle Project Costing.
For additional information on receipt accruals and receipt accrual write-offs, see the discussion
about receiving in the Oracle Purchasing User's Guide.

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Chapter 11 - Page 82
Adjusting Project-Related Documents in Oracle Payables

Adjusting Project-Related Documents in Oracle Payables


Matched Invoices
If you match an invoice to a purchase order, then you cannot directly change any of the project
information copied from the purchase order, with the exception of the expenditure item date.
Oracle Project Costing uses the profile option PA: Default Expenditure Item Date for Supplier
Cost during the invoice match process in Oracle Payables to determine the default expenditure
item date for supplier invoice distribution lines. You can override the default expenditure item
date for invoices on the Invoice Workbench in Oracle Payables.
If you accidentally matched to the wrong purchase order document (purchase order, shipment,
distribution, or receipt), you can reverse matched distributions and create new distributions by
matching to new purchase order shipments or distributions of the same purchase order or of
another purchase order. If you add or reverse invoice distributions, then you must also change
the scheduled payment amounts to match the new invoice total, or Oracle Payables places
holds on the invoice during validation.
Note: If you use the Retroactive Pricing of Purchase Orders feature in Oracle Purchasing, and
change project information on an invoice, you must update the same project information on
any subsequent purchase order price adjustment or adjustment documents.

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Chapter 11 - Page 83
Manually Entered, Unvalidated Invoices
You can change the project information before an invoice is validated. The Account Generator
derives a new default account number based on the new project information that you enter.
Manually Entered, Validated Invoices
You cannot directly change any project information on a validated invoice. You must reverse
the distribution line and create a new distribution line with the new project information using
the Distributions window in Oracle Payables.

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Chapter 11 - Page 84
Adjusting Supplier Costs for Non-Capital Assets

Adjusting Supplier Costs for Non-Capital Assets


You can enter invoices for asset items in Oracle Payables and run the Mass Additions Create
concurrent program in Oracle Payables to transfer the specified asset item distributions to the
interface table in Oracle Assets. You then create assets from the distributions in Oracle Assets.
If the invoice distributions are associated with a project, then you also interface the invoice
distributions from Oracle Payables to Oracle Project Costing as supplier costs.
When you adjust supplier cost expenditure items in Oracle Project Costing that affect non-
capital assets, Oracle Project Costing provides the adjustment information to the Mass
Additions Create concurrent program in Oracle Payables. This program transfers the
adjustment information to Oracle Assets. Adjustment costs in Oracle Project Costing are
eligible for interface to Oracle Assets when the following conditions are met:
• The final account type in Oracle Subledger Accounting for the charge account for the cost
adjustment is Asset.
• You successfully generate accounting events for the adjustment and create the final
accounting in Oracle Subledger Accounting.
Oracle Project Costing sends adjustments to the Mass Additions Create concurrent program in
transaction, ledger, and reporting currencies.

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Chapter 11 - Page 85
Manually Adjusting Unmatched Reversing Expenditure Items

Manually Adjusting Unmatched Reversing Expenditure Items


Typically, when Oracle Purchasing or Oracle Payables sends a reversing expenditure item to
Oracle Project Costing, Oracle Project Costing accepts the reversal, associates it with the
original expenditure item, and marks both expenditure items so that they are not eligible for
further adjustments in Oracle Project Costing. Two scenarios exist in which Oracle Project
Costing cannot automatically create the appropriate adjustment transactions, when you:
• Cancel a historical (prior to Release 12) supplier invoice.
• Perform a partial return or partial correction of a receipt.
The program PRC: Interface Supplier Costs interfaces the unmatched reversing expenditure
items from Oracle Payables or Oracle Purchasing to Oracle Project Costing. These items do not
contain a reference to other expenditure items. You must manually adjust these unmatched
reversing expenditure items in Oracle Project Costing. You must also separately adjust any
related expenditure items, such as invoice price variance, exchange rate variance, and tax.
You can run the Supplier Cost Audit Report to research the unmatched reversing expenditure
items. You can also enable the Unmatched Reversing Items that Require Adjustment check box
on the Supplier tab of the Find Expenditure Items or Find Project Expenditure Items window to
query unmatched reversing expenditure items.

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Chapter 11 - Page 86
Processing Adjustments

Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Project Costing:
1. Perform the adjustment in Oracle Project Costing.
2. Process the adjustment by running either PRC: Distribute Supplier Cost Adjustments,
PRC: Distribute Supplier Cost Adjustments for a Range of Projects, or PRC: Distribute
Expense Report Adjustments.
3. Run PRC: Generate Cost Accounting Events. Optionally, you can select Supplier Cost for
the Process Category parameter to process only supplier cost and expense report
adjustments.
4. Run PRC: Create Accounting to create the accounting for the accounting events in Oracle
Subledger Accounting. Run the program in final mode to complete the processing.
Optionally, you can select Supplier Cost for the Process Category parameter to process
only supplier cost and expense report adjustments. When you run the program in final
mode, you can also choose to transfer the final subledger accounting to Oracle General
Ledger and to post the journal entries.

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Chapter 11 - Page 87
Processing Adjustments

Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Payables:
1. Perform the adjustment in Oracle Payables.
2. Validate the new invoice distribution lines.
3. Run Create Accounting in Oracle Payables to create the accounting for the invoice in
Oracle Payables. Run the program in final mode to complete the processing. When you
run the program in final mode, you can also choose to transfer the final subledger
accounting to Oracle General Ledger and to post the journal entries.
4. Interface the adjustment to Oracle Project Costing:
- Run PRC: Interface Supplier Costs in Oracle Project Costing to interface the
adjustment to Oracle Project Costing.
- Run PRC: Interface Expense Reports from Payables in Oracle Project Costing to
interface the adjustment to Oracle Project Costing.
For information about other methods you can use to validate supplier invoices and create
accounting in Oracle Payables, see the Oracle Payables User's Guide.

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Chapter 11 - Page 88
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments


You can make adjustments to supplier costs in Oracle Project Costing or in the source system
(Oracle Payables and Oracle Purchasing). Adjustments that you make in the source system take
precedence over adjustments that you make in Oracle Project Costing. The following pages
present an example of the accounting.

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Chapter 11 - Page 89
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments


First, you create a supplier invoice in Oracle Payables. You charge $10 USD to Project A, Task
1. In Oracle Payables, you validate the invoice and the create accounting in final mode in
Oracle Subledger Accounting. In Oracle Project Costing, you run the program PRC: Interface
Supplier Costs to interface the invoice to Oracle Project Costing.

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Chapter 11 - Page 90
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments


You transfer the expenditure item in Oracle Project Costing from Project A, Task 1 to Project
B, Task 1. When you make the adjustment, Oracle Project Costing, creates a reversing
expenditure item for $10 USD for Project A, Task 1 and a new $10 USD expenditure item for
Project B, Task 1. You generate cost accounting events for the transfer and create accounting
in final mode in Oracle Subledger Accounting.

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Chapter 11 - Page 91
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments


Oracle Payables has no knowledge of the adjustments that you made and accounted for in
Oracle Project Costing. Next, you make an adjustment to the original invoice distribution in
Oracle Payables to move the cost to Project C, Task 1. You reverse the original distribution
line for $10 USD for Project A, Task 1 and create a new distribution line for $10 USD for
Project C, Task 1. In Oracle Payables, you revalidate the invoice and the create accounting for
the adjustments in final mode in Oracle Subledger Accounting. The following table shows you
the resulting distribution lines in Oracle Payables.

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Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments


You run the program PRC: Interface Supplier Costs to interface the adjustments to Oracle
Project Costing. The program interfaces the reversing expenditure item for $10 for Project A,
Task 1 and the new expenditure item for $10 USD for Project C, Task 1 to Oracle Project
Costing.
When the interface program receives reversals and adjustments from a source system after you
have made adjustments in Oracle Project Costing, the program automatically reverses both the
last entry recorded in Oracle Project Costing and the reversing entry recorded by the source
system. In this example, the program reverses both the new expenditure item from the
adjustment you made in Oracle Project Costing to transfer $10 USD to Project B, Task 1, and
the expenditure item from reversing invoice distribution in Oracle Payables. This second
reversal is necessary because Oracle Project Costing previously reversed the original
expenditure item for Project A, Task 1 when you performed the transfer in Oracle Project
Costing. You generate cost accounting events for the two reversing expenditure items that the
interface program created and create accounting in final mode in Oracle Subledger Accounting.

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Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


After you adjust supplier cost or expense report cost expenditure items in Oracle Project
Costing, you must process the adjustment to create accounting entries in Oracle Subledger
Accounting. The program PRC: Generate Cost Accounting Events sorts transactions to process
reversals before the new transactions. For additional information about Oracle Subledger
Accounting, see the lesson titled "Accounting for Costs" and the Oracle Subledger Accounting
Implementation Guide.
If multiple adjustments exist for the same transaction within the same processing batch, then
Oracle Project Costing processes them in the order they were made. Oracle Project Costing
generates accounting events for only the most recent adjustment if the GL date is the same for
all adjustments. If the GL date is not the same for all adjustments, then Oracle Project Costing
generates accounting events for all adjustments. If the program rejects one of the adjustments
in the sequence, it also rejects all subsequent adjustments. Once you correct the original failure,
Oracle Project Costing attempts to generate accounting events for the failed adjustment and all
subsequent adjustments.
The following pages present an example of the accounting. For additional information, see the
Oracle Project Costing User Guide.

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Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


First, you create a supplier invoice in Oracle Payables. The Account Generator in Oracle
Payables generates the default accounting for the supplier invoice. The default credit account
comes from the account that is assigned to the invoice supplier site. After you validate the
invoice and the create accounting in final mode, you interface the supplier costs to Oracle
Project Costing. The interface program interfaces the default debit account, but not the default
credit account. The following table shows the default accounting for the transaction.

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Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


In this example, you have set up your own user-defined rules for Oracle Payables in Oracle
Subledger Accounting. As a result, Oracle Subledger Accounting overwrites the default
accounts from Oracle Payables when you create the subledger accounting in final mode.

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Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


You adjust the supplier cost expenditure item in Oracle Project Costing and run the program
PRC: Distribute Supplier Cost Adjustments. This program uses AutoAccounting in Oracle
Project Costing to determine the default expense account for the new expenditure item.
Next, you run the program PRC: Generate Cost Accounting Events to generate accounting
events for the adjustments. This program uses the default supplier cost credit account from
Oracle Projects implementation options for the operating unit to determine the default liability
account for the reversal and the new expenditure item.
Note: If your implementation team does not specify a default supplier cost credit account in
Oracle Projects implementation options, then your implementation team must define a rule in
Oracle Subledger Accounting to determine the account.

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Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments


Next, you run the program PRC: Create Accounting in final mode to create the subledger
accounting for the accounting events. The program copies the expense account for the reversal
from the original accounting entry in Oracle Subledger Accounting. No override is allowed for
this account.
In this example, you have set up your own user-defined rules in Oracle Subledger Accounting.
As a result, Oracle Subledger Accounting overwrites the default accounts from Oracle Project
Costing when it creates the final accounting for the reversal liability account, and the new
transaction expense and liability accounts. For information about setting up rules in Oracle
Subledger Accounting, see the Oracle Subledger Accounting Implementation Guide.

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Practice - Adjust Supplier Costs
Overview
In this practice, you will

• Transfer the supplier cost expenditure item from the previous practice to a different
task.

• Distribute the supplier cost adjustment in Oracle Project Costing.

• Cancel the invoice in Oracle Payables.

• Create final subledger accounting for the cancelled invoice.

• Interface supplier costs from the canceled invoice to Oracle Project Costing.

• Analyze the expenditure items that result from the multiple adjustments.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• The instructor must complete the activities in previous guided demonstration to allow
adjustments for the Oracle Payables Supplier Invoices transaction source.

Tasks
Transfer an Expenditure Item in Oracle Projects

The project manager of the XX Capital Services project notifies you that you need to charge the
coffee makers to task 3.0 and not task 1.2. In Oracle Project Costing, transfer the expenditure
item to task 3.0 and then run the program PRC: Distribute Supplier Cost Adjustments to
distribute the adjustment. Ensure that you select your project as a program parameter. Review the
output report.

Note your Request ID __________________________

Cancel the Invoice in Oracle Payables

You discover that you have not yet received the coffee makers. After contacting the supplier, you
learn that the coffee makers are discontinued and will not be shipped. In Oracle Payables, find
and cancel the unpaid supplier invoice that you previously entered and validated. Use the
responsibility Payables, Vision Services (USA). After you cancel the invoice, create final

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subledger accounting for the invoice. Select the Final Post option when you create accounting.
Verify that the invoice status is Cancelled and that Accounted is Yes.

Interface Supplier Costs

Interface the canceled invoice costs to Oracle Project Costing. Use the responsibility Projects,
Vision Services (USA). Run the program PRC: Interface Supplier Costs. Ensure that you select
your project as a program parameter. Review the output report for the program AUD: Supplier
Costs Interface Audit.

Note your Request ID __________________________

View the Results in Expenditure Inquiry

Query all of the expenditure items from your XX-INV supplier invoice in Expenditure Inquiry.
Limit the find criteria to query only the expenditure items related to your supplier invoice.
Provide a brief analysis of when each expenditure item was created and the purpose of each
expenditure item:

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Solution - Adjust Supplier Costs
Transfer an Expenditure Item in Oracle Projects

1. Navigate to the Find Project Expenditure Items window.

• (N) Expenditures > Expenditure Inquiry > Project

2. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria::


− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:


− Invoice Number = XXINV

• (B) Find

3. Position your cursor on the supplier cost expenditure item.

4. Transfer the expenditure item.

• (M) Tools > Transfer 1

• Enter the transfer information as specified in the following table:

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Field Value
Project Number XXCS
Name XX Capital Services
Task Number 3.0
Name Project Management

• (B) OK

• (B) Yes in the Decision dialog box

• (B) OK in the Note dialog box

• (B) Yes in the Decision dialog box

5. Review the results. You will see two new expenditure items:
− A new expenditure item for task 3.0
− A reversing expenditure item of for task 1.2

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6. Close the open windows and return to the navigator.

7. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

8. Select to run a Single Request.

9. (B) OK

10. Select the program PRC: Distribute Supplier Cost Adjustments from the list of values in the
Name field and Vision Services for the operating unit.

11. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

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12. (B) OK

13. (B) Submit

• Note your Request ID __________________________

14. (B) No in the Decision dialog box

15. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

16. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

17. Review the output report.

• (B) View Output

18. Close the output page and the Requests window.

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Cancel the Invoice in Oracle Payables

19. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Payables, Vision Services (USA)

• (B) OK

20. Navigate to the Find Invoices window.

• (N) Invoices > Entry > Invoices

• (I) Find

21. Find your invoice.

• Enter the header find criteria::


− Invoice Number = XX-INV

• (B) Find

22. Cancel the invoice.

• (B) Actions... 1

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• Enable the Cancel Invoices option.

• (B) OK

• (B) OK for the Caution message.

23. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

• Select the Final Post option.

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• (B) OK

• (B) OK for the message.

24. Verify that the invoice status is Cancelled and that Accounted is Yes.

25. Close the Invoices window and return to the Navigator.

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Interface Supplier Costs

26. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA)

• (B) OK

27. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

28. Select to run a Single Request.

29. (B) OK

30. Select the program PRC: Interface Supplier Costs from the list of values in the Name field
and Vision Services for the operating unit.

31. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
Through GL Date Leave Blank
Through Transaction Date Leave Blank
Interface Supplier Invoices Yes
Interface Receipt Accruals No
Interface AP Discounts No

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32. (B) OK

33. (B) Submit

• Note your Request ID __________________________

34. (B) No in the Decision dialog box

35. Find your request.

• Select the All My Requests option button.

• (B) Find

36. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRC:
Interface Supplier Costs automatically submits the program AUD: Supplier Costs
Interface Audit. Look for the AUD: Supplier Costs Interface Audit program request with
your Request ID in the parameters.

37. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

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38. Close the output page and the Requests window and return to the Navigator.

View the Results in Expenditure Inquiry

39. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

40. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria:


− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:


− Invoice Number = XX-INV

• (B) Find

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Summary of the six expenditure items:

First, you interfaced supplier costs to Oracle Project Costing, which created the new
supplier cost expenditure item for task 1.2.

Second, you transferred the cost to task 3.0. The transfer created a new expenditure item
for task 3.0 and a reversal for the original expenditure item for task 1.2.

Third, you cancelled the invoice in Oracle Payables and interfaced supplier costs to
Oracle Project Costing. The program PRC: Interface Supplier Costs created an
expenditure item to reverse the transferred expenditure item on task 3.0. Oracle
Payables did not know about the adjustment activity in Oracle Project Costing, so the
cancellation created an expenditure item to reverse the original expenditure item for
task 1.2. Because the transfer previously reversed the original expenditure item in
Oracle Project Costing, the interface program created an expenditure item to reverse the
cancellation reversal (appears as a positive expenditure item for task 1.2). The net
outcome is that the total cost is now zero.

41. Close the open windows and return to the Navigator when finished.

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Agenda

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Oracle Purchasing and Oracle Payables Integration
Implementation Steps

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Oracle Purchasing and Oracle Payables Integration
Implementation Steps

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Chapter 11 - Page 114
Implementing Oracle Purchasing and Oracle Payables Integration

Implementing Oracle Purchasing and Oracle Payables Integration


Oracle Purchasing
Install and implement Oracle Purchasing to use Oracle Purchasing to enter project-related
requisitions, releases, and purchase orders, and then report outstanding committed costs of
requisitions and purchase orders on your projects. You can also interface project-related receipt
accruals from Oracle Purchasing to Oracle Project Costing as actual supplier costs.
Oracle Payables
Install and implement Oracle Payables to perform any of the following activities:
• Enter project-related expense reports in Oracle Payables in the Invoice Workbench. To
enter project-related expense reports for an employee in the Invoice Workbench, you must
first associate a supplier with the employee. Note that the entry of contingent worker
expense reports in the Invoice Workbench is not supported.
• Enter project-related expense reports in Oracle Internet Expenses and import them into
Oracle Payables.
• Use supplier and invoice information in Oracle Payables to create expenditure items for
projects in Oracle Project Costing.

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Set Profile Options for Project-Related Documents

Set Profile Options for Project-Related Documents


Set the following profile options for project-related documents:
• PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance - Specify
whether you can adjust receipt, receipt nonrecoverable tax, and exchange rate variance
expenditure items in Oracle Project Costing when exchange rate variance exists and you
convert journals to another currency.
• PA: Allow Override of PA Distributions in AP/PO - Specify whether Oracle
Purchasing and Oracle Payables pass user-entered account segment values to the Account
Generator workflow. To enable users to override generated accounts, you must set this
profile option to Yes and also set the Replace Existing Value attribute in the Account
Generator workflow to False. The default value for the Replace Existing Value is False.
• PA: AP Discounts interface start date (mm/dd/yyyy) - Specify when Oracle Project
Costing retrieves and interfaces payment discounts from Oracle Payables. The system
assigns a default start date of 01/01/2051. You can enter a different date to override the
default system value. Oracle Project Costing allows you to enter either a historical date or
future date. If you enter a historical date, then the system will retroactively retrieve
discount amounts from the specified date forward the next time you run the PRC:

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Interface Supplier Costs grogram. If you specify a future date, the program will begin
interfacing discount amounts as of that date.
• PA: Default Expenditure Item Date for Supplier Cost - Specify the source for the
expenditure item date. Oracle Project Costing uses this profile option when you run the
program PRC: Interface Supplier Costs to determine the expenditure item date for Oracle
Purchasing receipts, invoice payments, and discounts. In addition, Oracle Payables uses
this profile option during the invoice match process, and when you enter unmatched
invoices, to determine the default expenditure item date for supplier invoice distribution
lines.
• PA: Default Expenditure Organization in AP/PO - Specify the default expenditure
organization for project-related information in Oracle Payables and Oracle Purchasing.
• PA: Expense Report Invoices Per Set - Specify the number of expense report invoices
(entered in Oracle Internet Expenses or Oracle Payables) for the program PRC: Interface
Expense Reports from Payables to process in each set.

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Define the Supplier Invoice Account Generator

Define the Supplier Invoice Account Generator


The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables use the Account Generator to determine the default account code
combinations for supplier invoices and expense reports based on the project information
entered. You define functions and processes to derive the Accounting Flexfield combinations.
You can optionally customize the Account Generator for each set of defined ledgers.
For details about each workflow, see the Oracle Projects Implementation Guide.

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Defining a Project-Related Purchasing Transactions Account
Generator

Defining a Project-Related Purchasing Transactions Account Generator


Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
default account generator processes for the accounts it needs to build. To derive the accounts
based on project information, you must modify the default processes to use project
information. The Account Generator workflows in Oracle Purchasing generate the following
accounts:
• Purchase Order Charge Account
• Purchase Order Budget Account
• Purchase Order Variance Account
• Purchase Order Accrual Account
• Requisition Charge Account
• Requisition Budget Account
• Requisition Variance Account
• Requisition Accrual Account

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Specify a Default Supplier Cost Credit Account

Specify a Default Supplier Cost Credit Account


Specify a default supplier cost credit account in Oracle Projects implementation options. The
program PRC: Generate Cost Accounting Events uses the specified account as the default
account for supplier cost adjustments and expense report cost adjustments that you perform in
Oracle Project Costing.
If you allow adjustments to supplier cost expenditure items in Oracle Project Costing, then you
must either specify a default supplier cost credit account in Oracle Project Costing or set up a
rule to derive the account in Oracle Subledger Accounting.

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Guided Demonstration - Specify a Default Supplier Cost Credit
Account
Specify a Supplier Default Cost Credit Account

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Transaction Sources window.

• (N) Setup > System > Implementation Options

3. Select Vision Services in the Operating Unit field.

4. (B) Find

5. (T) Expnd/Costing

6. Enter 01-000-2220-000 as the Default Supplier Cost Credit Account.

7. (I) Save

8. Close the Implementation Options window and return to the Navigator.

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Define Project-Related Distribution Sets

Define Project-Related Distribution Sets


In the Distribution Sets window of Oracle Payables, you can define project-related distribution
sets. When you assign a project-related distribution set to an invoice you are entering, Oracle
Payables automatically creates project-related invoice distributions for the invoice.
For more information, see: Distribution Sets, Oracle Payables Implementation Guide.

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Define Oracle Payables Descriptive Flexfields and Related
Profiles

Define Oracle Payables Descriptive Flexfields and Related Profiles


• PA: Transfer DFF with AP - Specifies whether the program PRC: Interface Supplier
Costs and the program PRC: Interface Expense Reports from Payables interface
descriptive flexfield segments from Oracle Payables to Oracle Project Costing.
• PA: Transfer DFF with PO - Specifies whether the program PRC: Interface Supplier
Costs interfaces descriptive flexfield segments from Oracle Purchasing to Oracle Project
costing. This profile option only applies to receipt accruals.

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Summary

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Integration with Oracle
Internet Expenses
Chapter 12

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Chapter 12 - Page 1
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Chapter 12 - Page 2
Integration with Oracle Internet Expenses

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Chapter 12 - Page 3
Objectives

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Chapter 12 - Page 4
Agenda

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Chapter 12 - Page 5
Oracle Internet Expenses

Oracle Internet Expenses


With Oracle Internet Expenses, employees and contingent workers can enter and submit
expense reports using a standard Web browser or a Web-enabled mobile device. Oracle
Workflow automatically routes expense reports for approval and enforces reimbursement
policies. Oracle Internet Expenses integrates with Oracle Payables to provide quick processing
of expense reports for payment.
You can create project-related expense reports using Oracle Internet Expenses. You send
expense reports entered in Oracle Internet Expenses to Oracle Payables and then to Oracle
Project Costing.
Note: You can enter expense reports containing project and task information in Oracle Internet
Expenses or Oracle Payables. Additionally, you can import fully-accounted project-related
expense reports into Oracle Project Costing from third-party systems using Transaction Import.

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Chapter 12 - Page 6
Expense Report Flow

Expense Report Flow


Enter and Submit Project-Related Expense Reports
You can enter and submit project-related expense reports in Oracle Internet Expenses.
Approve and Audit Expense Reports
You approve and audit expenses report in Oracle Internet Expenses to enforce policies.
Run Expense Report Export
After an expense report is approved and audited in Oracle Internet Expenses, you run the
program Expense Report Export from an expense report audit responsibility to send this
information to the Oracle Payables invoice tables. Oracle Payables identifies invoices created
from Oracle Internet Expenses expense reports with a source of Oracle Internet Expenses.
Validate and Process Invoices
For accrual basis accounting, you must validate the expense report invoice and create
subledger accounting in final mode before you can interface expense reports to Oracle Project
Costing. For cash basis accounting, you must pay the invoice before you can interface expense
reports to Oracle Project Costing. You can interface partially paid expense report invoices.

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Chapter 12 - Page 7
Expense Report Flow

Expense Report Flow


Interface Expense Reports from Oracle Payables
In Oracle Project Costing you run the program PRC: Interface Expense Reports from Payables
to interface project-related expense report costs to Oracle Project Costing. This information
initially goes to the interface tables. The program continues and automatically calls Transaction
Import to import the transactions to the Expenditure Items table with a source of Oracle
Payables Expense Reports. You run this program for expense reports that you create in Oracle
Internet Expenses (and for expense reports that you enter directly into Oracle Payables). The
program generates a report that lists the interfaced and rejected invoice distribution lines, as
well as a summary of the total number and cost of the distribution lines.
You can use either Oracle Project Costing or Oracle Payables to adjust expense reports that
you entered in Oracle Internet Expenses or Oracle Payables. If you make adjustments in Oracle
Project Costing, then you run programs in Oracle Project Costing to distribute the expense
report adjustments, generate cost accounting events, and create accounting for the adjustments
in Oracle Subledger Accounting. If you make adjustments in Oracle Payables, then you
revalidate the invoices and create final subledger accounting in Oracle Payables, and run the
program PRC: Interface Expense Reports from Payables in Oracle Project Costing.

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Chapter 12 - Page 8
Deriving Project Data from Expense Reports

Deriving Project Data from Expense Reports


When you create expense reports in Oracle Internet Expenses, you directly enter some of the
project-related information. This information includes the project and lowest task that is
associated with each receipt line. Oracle Internet Expenses derives other project-related
information from other data associated with the expense report. The derived information
includes the expenditure type, expenditure organization, expenditure item date, and quantity.
Note: The profile option PA: Default Expenditure Item Date for Supplier Cost does not apply
to expense reports.

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Chapter 12 - Page 9
Disconnected Expense Reporting Process

Disconnected Expense Reporting Process


Employees who are traveling or do not have access to the company’s intranet can create
expense reports using the disconnected expense reporting process. The disconnected expense
reporting process involves entering expenses in a Microsoft Excel spreadsheet on a personal
computer or laptop and then importing this spreadsheet into Oracle Internet Expenses. Oracle
Internet Expenses provides a Microsoft Excel expense spreadsheet template to create a
disconnected expense report. You can configure this spreadsheet template to meet the needs of
your enterprise.
For additional information regarding the template, see the Oracle Internet Expenses
Implementation and Administration Guide.

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Chapter 12 - Page 10
Adjusting Expense Reports

Adjusting Expense Reports


You can adjust expense reports that you enter in Oracle Internet Expenses in both Oracle
Project Costing and Oracle Payables.
When you make adjustments to expense report costs in Oracle Project Costing, you run the
following processes to distribute the costs, create cost accounting events for the adjustments,
and create accounting for the accounting events in Oracle Subledger Accounting:
• PRC: Distribute Expense Report Adjustments
• PRC: Generate Cost Accounting Events
• PRC: Create Accounting
When you make adjustments to expense report invoices in Oracle Payables, you revalidate the
invoice and create accounting for it in Oracle Payables. You then run the process PRC:
Interface Expense Reports from Payables in Oracle Projects to interface the adjustments to
Oracle Project Costing.
Adjustments to project-related expense reports follow the same logic as adjustments to project-
related supplier costs. For a detailed discussion about supplier cost adjustments, see the lesson
titled "Integration with Oracle Purchasing and Oracle Payables."

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Chapter 12 - Page 11
Practice - Enter and Approve an Expense Report
Overview
In this practice, you will enter and submit an expense report for Amy Marlin. You will then
approve the expense report as Casey Brown and audit the expense report as Donald Gray.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter an Expense Report

You traveled to Montreal to meet with clients regarding the XX Capital Services project. Enter
an expense report for your travel expenses. In Oracle Internet Expenses, create a new expense
report. Use the responsibility iExpenses, Vision Services (USA). Enter the general expense report
information as specified in the following table:

Field Value
Name Marlin, Ms. Amy (34)
Services Department 422
Reimbursement Currency USD - US dollar
Expense Template Travel
Purpose Meeting in Montreal
Approver Brown, Ms. Casey

Enter the receipt-based expenses as specified in the following table:

Line Date Receipt Receipt Expense Justification


Amount Currency Type
1 Yesterday's Date 260.50 USD Airfare Bird Airlines to Montreal
2 Today's Date 198.00 CAD Hotel Le Chateau Simard

Enter the project allocations as specified in the following table:

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Chapter 12 - Page 12
Line Project Task Project Expenditure
Number Number Organization
1 XXCS 2.2 Services-East
2 XXCS 3.0 Services-East

Submit the expense report.

Record the expense report number: _______________________

Approve an Expense Report

You are now in the role of Casey Brown, the expense report approver. Log in as CBROWN with
the password of WELCOME and select the iExpenses responsibility. Find the notification for
your expense report (look for your expense report number) and approve it.

Audit the Expense Report

Log in as DGRAY with the password of WELCOME and select the Internet Expenses Auditor,
Vision Services responsibility to audit the expense report. Use the advanced search option on the
Expenses Audit tab to find your expense report. Enter today's date as the Receipt Package
Received Date. Verify that you received the two receipts and then complete the audit.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 13
Solution - Enter and Approve an Expense Report
Enter an Expense Report

1. Responsibility = iExpenses, Vision Services (USA)

2. Navigate to the Expense Reports page.

• (N) Expenses Home

3. (B) Create Expense Report

4. Enter the general expense report information as specified in the following table:

Field Value
Name Marlin, Ms. Amy (34)
Services Department 422
Reimbursement Currency USD - US dollar
Expense Template Travel
Purpose Meeting in Montreal
Approver Brown, Ms. Casey

5. (B) Next

6. (B) Show Receipt Currency

7. Enter the receipt-based expenses as specified in the following table:

Line Date Receipt Receipt Expense Justification


Amount Currency Type
1 Yesterday's Date 260.50 USD Airfare Bird Airlines to Montreal
2 Today's Date 198.00 CAD Hotel Le Chateau Simard

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Chapter 12 - Page 14
• (B) Save

• (B) Next

8. Allocate the costs to your XX Capital Services project.

• (ST) Project Allocations

• Enter the project allocations as specified in the following table:

Line Project Task Project Expenditure


Number Number Organization
1 XXCS 2.2 Services-East
2 XXCS 3.0 Services-East

• (B) Save

9. Review the expense report.

• (B) Next

10. (B) Save

11. Review the Reimbursable Amounts.

• (B) Next

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Chapter 12 - Page 15
• Click the Warning icon to view any policy violations.

• (B) Return

12. (B) Submit

You have submitted the expense report for approval.

• Record the expense report number: _______________________

Approve an Expense Report

13. (H) Logout

14. Log in as Casey Brown.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 16
Field Value
User Name CBROWN
Password WELCOME

15. Responsibility = iExpenses

16. Approve the expense report.

• Review the list of open notifications on the Expenses Home page.

• Select the hyperlink for the expense report that you created (look for your expense report
number).

• Review the expense report.

• (B) Approve

• (H) Home

17. (H) Logout

Audit the Expense Report

18. Log in as Donald Gray.

Field Value
User Name DGRAY
Password WELCOME

19. Responsibility = Internet Expenses Auditor, Vision Services

20. Find your expense report.

• Enter the expense report number in the Search by Expense Report Number field.

• (B) Go

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Chapter 12 - Page 17
21. Complete the audit.

• Enter today's date in the Receipt Package Received Date field.

• Select the Receipt Verified check box for the two receipts.

• Select Complete Audit from the list in the Expense Report Action field.

• (B) Apply

22. (H) Logout

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Integration with Oracle Internet Expenses


Chapter 12 - Page 18
Guided Demonstration - Run Expense Report Export
Run Expense Report Export

1. Log out

2. Log in Donald Gray.

Field Value
User Name DGRAY
Password WELCOME

3. Responsibility = Internet Expenses Auditor, Vision Services

4. (T) Expenses Export

5. Accept the default values on the Schedule Request: Name page.

6. (B) Next

7. Accept the default values on the Schedule Request: Parameters page.

8. (B) Next

9. Accept the default values on the Schedule Request: Schedule page.

10. (B) Next

11. Accept the default values on the Schedule Request: Notifications page.

12. (B) Next

13. Accept the default values on the Schedule Request: Printing page.

14. (B) Next

15. Review the request parameters.

16. (B) Submit

17. (B) OK

18. Select the Refresh button to update the status until the program is complete.

19. (ST) Export Results and review any rejections.

20. (H) Logout

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Chapter 12 - Page 19
Practice - Interface Expense Report Costs
Overview
In this practice, you will validate and create final subledger accounting for your expense report
invoice in Oracle Payables. Next, you will interface the expense report costs for you project to
Oracle Project Costing and review the expense report expenditure items.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Validate and Create Accounting for the Expense Report Invoice

As a result of the instructor running Expense Report Import in the previous guided
demonstration, your expense report is now an expense report invoice in Oracle Payables. Log in
as SERVICES with the password of WELCOME and select the Oracle Payables, Vision Services
(USA) responsibility.

First, find the invoice on the Invoice Workbench in Oracle Payables. Next, validate the invoice.
After the invoice is validated, create final subledger accounting for the invoice. Select the Final
Post option when you create accounting. Verify that the invoice status is Validated and that
Accounted is Yes.

Interface Expense Report Costs

Switch your responsibility to Projects, Vision Services (USA) and Run the program PRC:
Interface Expense Reports from Payables. Ensure that you select your project as a program
parameter. The program PRC: Interface Expense Reports from Payables automatically submits
the program AUD: Supplier Costs Interface Audit. Review the output report for AUD: Supplier
Costs Interface Audit.

Note your Request ID __________________________

View the Results in Expenditure Inquiry

After the program is complete, query the expense report expenditure items for your XX Capital
Services project in Expenditure Inquiry. Review the expenditure items.

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Chapter 12 - Page 20
Solution - Interface Expense Report Costs
Validate and Create Accounting for the Expense Report Invoice

1. Log in as SERVICES:

Field Value
User Name SERVICES
Password WELCOME

2. Responsibility = Payables, Vision Services (USA)

3. Navigate to the Find Invoices window.

• (N) Invoices > Entry > Invoices

• (I) Find

4. Find your expense report invoice.

• Enter the header find criteria::


− Invoice Number = Enter your expense report number

• (B) Find

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Chapter 12 - Page 21
5. Validate the invoice.

• (B) Actions... 1

• Enable the Validate option.

• (B) OK

6. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

• Select the Final Post option.

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Chapter 12 - Page 22
• (B) OK

• (B) OK for the message.

7. Verify that the invoice status is Validated and that Accounted is Yes.

8. Close the Invoices window and return to the Navigator.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 23
Interface Expense Report Costs

9. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA)

• (B) OK

10. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

11. Select to run a Single Request.

12. (B) OK

13. Select the program PRC: Interface Expense Reports from Oracle Payables from the list of
values in the Name field and Vision Services for the operating unit.

14. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
End GL Date Leave Blank
End Expenditure Item Date Leave Blank

15. (B) OK

16. (B) Submit

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Integration with Oracle Internet Expenses


Chapter 12 - Page 24
• Note your Request ID __________________________

17. (B) No in the Decision dialog box

18. Find your request.

• Select the All My Requests option button.

• (B) Find

19. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRCPRC:
Interface Expense Reports from Payables automatically submits the program AUD:
Supplier Costs Interface Audit. Look for the AUD: Supplier Costs Interface Audit
program request with your Request ID in the parameters.

20. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

21. Close the output page and the Requests window and return to the Navigator.

View the Results in Expenditure Inquiry

22. Navigate to the Find Project Expenditure Items window

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Chapter 12 - Page 25
• (N) Expenditures > Expenditure Inquiry > Project

23. Query the expenditure items from the expense report on your project.

• Enter the find criteria:


− Project Number = XXCS
− Project Name = XX Capital Services
− Expenditure Type Class = Expense Reports

• (B) Find

24. Close the open windows and return to the Navigator.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 26
Agenda

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Integration with Oracle Internet Expenses


Chapter 12 - Page 27
Integration with Oracle Internet Expenses Implementation Steps

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Integration with Oracle Internet Expenses


Chapter 12 - Page 28
Install and Implement Oracle Internet Expenses

Install and Implement Oracle Internet Expenses


To use integration with Oracle Internet Expenses, you must first implement Oracle Internet
Expenses. For details, see the setup steps in the Oracle Internet Expenses Implementation and
Administration Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses


Chapter 12 - Page 29
Set Profile Options for Project-Related Expense Report Entry

Set Profile Options for Project-Related Expense Report Entry


• PA: Allow Project-Related Entry in Oracle Internet Expenses - Specify whether you
can enter project-related information on expense reports. If you set this option to Yes, then
you must set the OIE: Enable Projects profile option to Yes or Required.
• OIE: Enable Projects - Specify whether you can enter project-related information on
expense reports in Oracle Internet Expenses. If you set this option to Yes or Required, then
you must set PA: Allow Project-Related Entry in Oracle Internet Expenses profile option
to Yes. Select one the following values:
- Yes - Enables the entry of project information.
- No - Disables the entry of project information.
- Required - Requires the entry of project information.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 30
Set Profile Options for Project-Related Expense Report Approval

Set Profile Options for Project-Related Expense Report Approval


• PA: AutoApprove Expense Reports - Specify whether to automatically approve project-
related expense reports submitted in Oracle Internet Expenses. If you set the profile option
PA: AutoApprove Expense Reports to Yes, then Oracle Internet Expenses does not use the
approver specified on the expense report, even if you set the profile option OIE: Approver
Required is set to Yes or Yes with Default. Instead, Oracle Internet Expenses approves the
expense report without management involvement.
• OIE: Enable Approver - Specify whether to enable the Approver field in Oracle Internet
Expenses. When you set this profile option to Yes, the Approver field is available for you
to specify a different employee to approve your expense report. When this profile option is
set to No, the Approver field is hidden.
• OIE: Approver Required - Specify whether you must designate an approver for your
expense reports. Select one the following values:
- Yes - You must always designate an approver.
- Yes with Default - You must always designate an approver and an employee's
supervisor, as defined in Oracle HRMS, is the default value in the Approver field.
- No - You are not required to designate an approver.

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Chapter 12 - Page 31
Note: If you set the OIE: Approver Required profile option to Yes or Yes with Default, do not
set the OIE: Enable Approver profile option to No. If you do, the Approver field does not
appear on the General Information page, but users receive a message that the field is required.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 32
Define the Project Expense Report Account Generator

Define the Project Expense Report Account Generator


The Project Expense Report Account Generator is an Oracle Project Costing workflow process
that determines the default account for each project-related expense line created in Oracle
Internet Expenses. When you submit a projects-related expense report, the Expense Report
workflow process uses the Project Expense Report Account Generator to assign the proper
accounting to each project-related expense line on the expense report. The default logic of this
process returns the CCID (Code Combination ID) of the employee who incurred the project-
related expenses. You can define the Project Expense Report Account Generator to meet your
requirements.
Note: When you adjust expense report expenditure items in Oracle Project Costing, Oracle
Project Costing uses AutoAccounting (not the employee's default expense account) to
determine the default expense report cost account. See the lesson titled "Accounting for Costs."
For additional discussion regarding the account generator and Oracle Project Costing, see the
Oracle Projects Implementation Guide.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 33
Define a Project-Related Expense Report Template

Define a Project-Related Expense Report Template


In the Expense Report Templates window in Oracle Payables, define project-related expense
report templates. You must define at least one project-related template to submit project-related
expense reports using Oracle Internet Expenses. To define an expense report template for
project-related expense reports:
• Enable the template for Oracle Internet Expenses.
• Assign an Oracle Project Costing expenditure type to each expense item.
- Note: If you want the expense types that appear in the Expense Type list of values in
Oracle Internet Expenses to match the names of the expenditure types in Oracle
Project Costing, then you can define an expense report template where you name each
expense item with the same name as its associated expenditure type.
Instruct users who enter project-related expense reports in Oracle Internet Expenses to use this
template. For additional information about defining expense report templates, see the Oracle
Payables Implementation Guide.

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Integration with Oracle Internet Expenses


Chapter 12 - Page 34
Summary

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Integration with Oracle Internet Expenses


Chapter 12 - Page 35
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Integration with Oracle Internet Expenses


Chapter 12 - Page 36
Integration with Oracle Time
and Labor
Chapter 13

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Integration with Oracle Time and Labor


Chapter 13 - Page 1
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Integration with Oracle Time and Labor


Chapter 13 - Page 2
Integration with Oracle Time and Labor

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Integration with Oracle Time and Labor


Chapter 13 - Page 3
Objectives

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Integration with Oracle Time and Labor


Chapter 13 - Page 4
Agenda

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Integration with Oracle Time and Labor


Chapter 13 - Page 5
Oracle Time & Labor Overview

Oracle Time & Labor Overview


Oracle Time & Labor integrates with Oracle Project Costing to enable employees and
contingent workers to enter and submit project-related timecards. Employees and contingent
workers enter their own time, which you can subject to an approval process according to your
business rules. You can transfer approved timecards to Oracle Project Costing, Oracle Payroll,
and Oracle Human Resources. After you import the timecards into Oracle Project Costing, you
cost the timecards and derive the default accounting using AutoAccounting. During cost
processing, the raw cost and any additional burden cost is calculated. Finally, you generate cost
accounting events and create accounting for the timecards in Oracle Subledger Accounting.
Oracle Time & Labor integration includes:
• Entry of project information on timecards
• Validation of time against chargeable projects, tasks, and expenditure types and against
transaction controls that you may have implemented
• Transfer of project-related timecards to both Oracle Project Costing and Oracle Payroll
• Automatic population of timecards with projects and expenditure types from your
resource assignments when you use Oracle Project Resource Management

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Integration with Oracle Time and Labor


Chapter 13 - Page 6
Disconnected Time Entry

Disconnected Time Entry


You can record your time when away from the office using a spreadsheet and then upload the
spreadsheet to Oracle Time & Labor for review and submission. Once you save the template as
a spreadsheet, you can enter your time for the week. You can add or update existing line items
as desired. You can scroll down within the saved file to view the valid list of projects and
tasks. This feature allows you to select and enter the correct project and task information on the
timecard. When you have entered all the time data, save your work and upload to Oracle Time
& Labor.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor


Chapter 13 - Page 7
Collecting and Processing Project-Related Timecards

Collecting and Processing Project-Related Timecards


The following steps outline the procedure for collecting project-related timecards in Oracle
Time & Labor and processing project-related timecards in Oracle Project Costing:
1. Enter and submit timecards - Employees and contingent workers enter and submit
project-related timecards. People assigned to projects managed through Oracle Project
Resource Management can use the Autopopulate template to automatically record their
projects, tasks, and expenditure types.
2. Approve timecards - During implementation, you define approval and routing rules
using Oracle Workflow. You can set up Oracle Time & Labor to automatically approve
timecards, or require management review and approval.
3. Transfer time to Oracle Project Costing and import transactions - Oracle Human
Resources, Oracle Payroll, and Oracle Project Costing can retrieve timecards from Oracle
Time & Labor. In Oracle Time & Labor, you assign an application set and retrieval rule
group to employees and contingent workers. The application set determines which
applications can retrieve the timecards for an employee or contingent worker and the
retrieval rule group determines the retrieval rules for each application. The retrieval rules
specify which approval processes must be complete for a timecard before another

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Integration with Oracle Time and Labor


Chapter 13 - Page 8
application can retrieve the data. For information about defining application sets, retrieval
rule groups, and retrieval rules, see the Oracle Time & Labor Implementation and User
Guide.
When the timecards are ready for retrieval, you run the program PRC: Transaction Import
to transfer timecards from Oracle Time & Labor to Oracle Project Costing. This program
transfers timecards that belong to employees and contingent workers with Oracle Project
Costing in their application set and retrieval rule group, and that meet the retrieval rules
for Oracle Project Costing. When you submit PRC: Transaction Import, select Oracle
Time and Labor for the Transaction Source parameter and leave the Batch Name
parameter blank.
4. Distribute labor costs - In Oracle Project Costing, run the program PRC: Distribute
Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects. The
program computes the labor costs for timecard hours and determines the default GL cost
account.
5. Generate cost accounting events - Run the program PRC: Generate Cost Accounting
Events for the Labor Costs process category to derive a default cost clearing account
using AutoAccounting and to create accounting events in Oracle Subledger Accounting.
6. Create accounting and transfer to GL - Run the program PRC: Create Accounting for
the Labor Costs process category to create accounting for the timecards in Oracle
Subledger Accounting. When you run the process in final mode, you can choose to
transfer the final journal entries to Oracle General Ledger and to post the journal entries
in Oracle General Ledger.
For additional discussion regarding costing processes, see the lesson titled “Performing Cost
Processing.”

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Integration with Oracle Time and Labor


Chapter 13 - Page 9
Guided Demonstration - Set Timecard Approval Style
The approval process alerts the appropriate person when timecards are ready for review and
approval. In Oracle Time & Labor, the approval style defines who approves timecards. The
approval style also defines what data needs to be approved for each application, and which data
changes require resubmission. For more information about defining approval styles, see the
Oracle Time & Labor Implementation and User Guide.

In this guided demonstration, the instructor will set the Proj Override timecard approval style to
Project Manager. As a result, when you submit a timecard for Amy Marlin in the next practice,
Oracle Time & Labor will route it for approval to the project manager for each charged project.

Approve Timecards

1. Responsibility = OTL Application Developer, Vision Services (USA)

2. Navigate to the Preferences window.

• (N) Preferences

3. Update the approval style.

• (T) Preferences

• Select and expand the Preferences Tree tree node.

• Select and expand Proj Overrides tree node.

• Select Proj Override - Approval Style tree node.

• Click in the Preferences Values field.

• Change the values as specified in the following table:

Field Value
Approval Style Project Manager
Override Approval Style Project Manager

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Integration with Oracle Time and Labor


Chapter 13 - Page 10
• (B) OK

• (I) Save

4. Close the open windows and return to the Navigator.

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Integration with Oracle Time and Labor


Chapter 13 - Page 11
Practice - Enter and Approve a Timecard
Overview
In this practice, you will enter a timecard and charge time to your XX Capital Services project
and to the Feasibility Study project. You will then approve the resulting timecards as Donald
Gray, the project manager of the XX Capital Services project, and as Bob Cochran, the project
manager of the Feasibility Study project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Prerequisite
IMPORTANT: Each student will submit a timecard as Amy Marlin. Because a person can have
only one timecard for a period, the instructor must assign each student a period for which to
create and submit a timecard for Amy Marlin. Starting with the period for next week, the
instructor will assign each student a unique period to use for this practice.

Tasks
Enter a Timecard

Submit your timecard in Oracle Time & Labor to account for your work for the week. Use the
responsibility OTL, Vision Services (USA).

Enter the general timecard information as specified in the following table:

Field Value
Period IMPORTANT: Select the unique period
that the instructor assigns to you.
Overriding Approver Leave Blank
Comments Enter brief comments
Template Leave blank
Overwrite No

You worked 6 hours a day, Monday through Friday, performing professional duties on your XX
Capital Services project. Charge this time to task 3.0. You also worked 2 hours a day performing
clerical duties for the Feasibility Study project. Charge this time to task 1.1.1. After you enter the
timecard lines, review and submit the timecard.

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Integration with Oracle Time and Labor


Chapter 13 - Page 12
In the previous demonstration, the instructor changed the timecard approval style to route
timecards to project managers for approval. As a result, Oracle Time & Labor will route the
approval notification for the XXCS project to Donald Gray for approval and the approval
notification for the Feasibility Study project to Bob Cochran for approval.

Approve the Timecard for the XXCS Project as Donald Gray

Log in as the user DGRAY with the password of WELCOME. Navigate to Donald Gray's
worklist. Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin, review the notification, and approve the timecard. The 30 hours represents the amount
charged to the XXCS project where Donald Gray is the project manager.

Important: Select the hyperlink that has the dates for the timecard period that your instructor
assigned to you.

Approve the Timecard for the Feasibility Study Project as Bob Cochran

Log in as the user BCOCHRAN with the password of WELCOME. Navigate to Bob Cochran's
worklist. Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin, review the notification, and approve the timecard. The 10 hours represents the amount
charged to the Feasibility Study project where Bob Cochran is the project manager.

Important: Select the hyperlink that has the dates for the timecard period that your instructor
assigned to you.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor


Chapter 13 - Page 13
Solution - Enter and Approve a Timecard
Enter a Timecard

1. Responsibility = OTL, Vision Services (USA)

2. Navigate to the Recent Timecards page.

• (N) Time > Time Entry

3. (ST) Create Timecard

4. Enter the general timecard information as specified in the following table:

Field Value
Period IMPORTANT: Select the unique period
that the instructor assigns to you.
Overriding Approver Leave Blank
Comments Enter brief comments
Template Leave blank
Overwrite No

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Integration with Oracle Time and Labor


Chapter 13 - Page 14
Important: Be sure to select the period that your instructor has assigned to you. Amy
Marlin can have only one timecard per period.

5. Enter the project information in the first timecard line as specified in the following table:

Field Value
Project XXCS
Task 3.0
Type Professional - (Straight Time)

6. Enter 6 hours of time for each day, Monday-Friday for the first line.

7. Enter the project information in the second timecard line as specified in the following table:

Field Value
Project Feasibility Study
Task 1.1.1
Type Clerical - (Straight Time)

8. Enter 2 hours of time for each day, Monday-Friday for the second line.

9. (B) Save

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Chapter 13 - Page 15
10. (B) Continue

11. (B) Submit

In the previous demonstration, the instructor changed the timecard approval style to route
timecards for the appropriate project managers for approval. As a result, Oracle Time &
Labor will route the time for the XXCS project to Donald Gray for approval and the time for
the Feasibility Study project to Bob Cochran for approval.

Approve the Timecard for the XXCS Project as Donald Gray

12. (H) Logout

13. Log in as Donald Gray, as specified in the following table:

Field Value
User Name DGRAY
Password WELCOME

14. Responsibility = Workflow

15. Navigate to the Worklist.

• (N) Self Service Workflow > Notifications

16. Approve your timecard.

• Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin.

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Integration with Oracle Time and Labor


Chapter 13 - Page 16
Important: Select the hyperlink that has the dates for the timecard period that your
instructor assigned to you.

• Review the notification.

• (B) Approve

17. (H) Logout

Approve the Timecard for the Feasibility Study Project as Bob Cochran

18. Log in as Bob Cochran, as specified in the following table:

Field Value
User Name BCOCHRAN
Password WELCOME

19. Responsibility = Workflow

20. Navigate to the Worklist.

• (N) Self Service Workflow > Notifications

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Integration with Oracle Time and Labor


Chapter 13 - Page 17
21. Approve your timecard.

• Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin.

Important: Select the hyperlink that has the dates for the timecard period that your
instructor assigned to you.

• Review the notification.

• (B) Approve

22. (H) Logout

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Integration with Oracle Time and Labor


Chapter 13 - Page 18
Guided Demonstration - Import Timecard Costs
Import Timecard Costs

1. Log in as SERVICES as specified in the following table:

Field Value
User Name SERVICES
Password WELCOME

2. Responsibility = Projects, Vision Services (USA)

3. Navigate to the Submit Request window for Transaction Import.

• (N) Expenditures > Transaction Import > Import Transactions

4. Define the parameters for the program PRC: Transaction Import as specified in the
following table:

Field Value
Transaction Source Oracle Time and Labor
Batch Name Leave Blank

5. (B) OK

6. (B) Submit

7. (B) No in the Decision dialog box

8. Find your request.

• (M) View > Requests

• Select the All My Requests option button.

• (B) Find

9. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

10. (B) View Output

11. Review the output report.

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Integration with Oracle Time and Labor


Chapter 13 - Page 19
12. Close the report page and open windows and return to the Navigator when finished.

Review the Imported Expenditure Items in Expenditure Inquiry

13. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

14. Query all expenditure items for the class.

• Enter the header find criteria:


− Operating Unit = Vision Services
− Item Dates (From) = Monday of the current week

• (T) Expenditure

• Enter supplier find criteria:


− Transaction Source = Oracle Time and Labor

• (B) Find

• (B) Yes for the Decision message

15. Review the imported expenditure items.

16. Close the open windows and return to the Navigator when finished.

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Integration with Oracle Time and Labor


Chapter 13 - Page 20
Editing Timecards in Oracle Time & Labor

Editing Timecards in Oracle Time & Labor


A retro adjustment is a change made to a timecard in Oracle Time & Labor after you have
transferred it to other applications. The preference Timecard Status Allowing Edits in Oracle
Time & Labor controls whether you can edit existing timecards. The preference specifies
whether you can only edit new, working, and rejected timecards, or can also edit submitted,
approved, or even processed timecards in Oracle Time & Labor. The preference also specifies
the age of the oldest timecard that you can edit, and how far in advance you can enter
timecards.
Note: If you made any changes to the original timecard data in Oracle Project Costing, then
you cannot edit the timecard in Oracle Time & Labor. You receive an error when you try to
submit the adjusted timecard.

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Chapter 13 - Page 21
Contingent Worker Timecards with PO Integration

Contingent Worker Timecards with PO Integration


Contingent workers can enter project-related timecards in Oracle Time & Labor with Oracle
Purchasing integration:
• Each timecard line is related to a project and purchase order line.
• The contingent worker must enter a timecard line for each type of work performed (for
example, regular and overtime).
• An amount check is performed against the purchase order during timecard approval.
• You interface approved timecards to Oracle Purchasing and Oracle Project Costing.
• Oracle Project Costing uses the cost rates stored on the purchase order to calculate
contingent worker labor costs.
• You interface additional cost, such as nonrecoverable tax or invoice price variances, to
Oracle Project Costing from the supplier invoice in Oracle Payables.
• You can bill contingent worker costs as labor.
To use this integration, you must enable the Import Contingent Worker Timecards with
Purchase Order Integration implementation option. You can optionally set up AutoAccounting

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Chapter 13 - Page 22
function transactions to determine default credit and debit accounts for contingent worker labor
costs that are different from the default accounts for employee labor costs.
Note: When contingent workers are allowed to enter timecards that are not related to a
purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
assignment in Oracle HRMS.
2. Contingent worker enters project-related timecards in Oracle Time & Labor and assigns a
purchase order and purchase order line to each timecard line.
3. Contingent worker submits timecard for approval. An amount check takes place against
the purchase order during approval processing.
4. Manager approves timecard.
5. Process contingent worker timecards in Oracle Project Costing:
a. Run PRC: Transaction Import for the transaction source Oracle Time and Labor.
b. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
c. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
d. Run PRC: Create Accounting (for the process category Labor Cost).
6. Process contingent worker timecards in Oracle Purchasing and Oracle Payables:
a. Run the program Retrieve Time from OTL in Oracle Purchasing to automatically
generate purchase order receipts from approved timecards.
b. Match supplier invoice to the receipt to reduce outstanding balances.
c. Process and pay supplier invoice in Oracle Payables.
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
additional costs, such as nonrecoverable tax or invoice price variances.
For information about uploading contingent worker timecards using Microsoft Excel, see the
lesson titled "Entering Expenditures."

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Chapter 13 - Page 23
Agenda

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Integration with Oracle Time and Labor


Chapter 13 - Page 24
Integration with Oracle Time & Labor Implementation Steps

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Chapter 13 - Page 25
Install and Implement Oracle Time & Labor

Install and Implement Oracle Time & Labor


Some implementation considerations to review for project-related timecards:
• Timecard layouts - Using the Timecard Layout preference, assign timecard layouts to
people who will submit timecards. The layout determines the fields that they can enter,
how the fields are arranged on the page, and the instruction text that they see. Oracle Time
& Labor provides a predefined layout for project-related timecards.
• Timecard templates - A template stores timecard data for reuse. Oracle Time & Labor
predefines a dynamic template named Oracle Project Resource Management Assignments.
This template generates time and labor entries from the project, type, and hours information
held in Oracle Project Resource Management for the person’s assignments. Optionally, you
can enable users to create their own private templates.
• Override approvers - The predefined Oracle Project Costing timecard layout has an
Override Approver field. You can restrict the availability and use of this field. You can also
define and apply a custom Override Approval Style segment and not use the predefined
Oracle Project Costing Override Approver.
For details, see the Oracle Time & Labor Implementation and User Guide.

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Chapter 13 - Page 26
Set Profile Options for Project-Related Timecards

Set Profile Options for Project-Related Timecards


Set the following profile options related to project-related timecards in Oracle Time & Labor:
• PA: Allow Time Entry of Negative Hours - Determines whether you can enter negative
hours on timecards in Oracle Time & Labor.
• PA: AutoApprove Timesheets - Indicates whether to automatically approve timecards
submitted in Oracle Time & Labor. If you set this profile option to yes, then you do not
need to route or review your timecards.
• PA: Enable Business Messages on Time Entry - Indicates whether Oracle Time &
Labor displays a business message. If you set this profile option to Yes, then Oracle Time
& Labor calls the Business Message Display client extension. For information about the
Business Message Display client extension, see Oracle Time & Labor Implementation and
User Guide.
• PA: Override Approver - Indicates whether you can enter an overriding approver for
timecards in Oracle Time & Labor.

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Chapter 13 - Page 27
Implement Client Extensions to Route and Approve Timecards

Implement Client Extensions to Route and Approve Timecards


You can modify the AutoApproval client extensions to route and approve timecards according
to your requirements and to enforce business rules. The AutoApproval Extensions contain
procedures to define conditions under which timecards are approved automatically.
• AutoApproval Profile Options Extension - This procedure performs custom validation
for all the expenditure items in an expenditure.
• Expenditure Summary AutoApproval Extension - This procedure contains default
logic to read the values of the PA: AutoApprove Timesheets profile option.
• Timecard AutoApproval Extension - Use this procedure to incorporate additional
approval logic for timecards.
• AutoApproval Routing Extension - Use this procedure to define rules for routing
timecards for approval.
• Timecard Entry AutoApproval Extension - Use this procedure to define validations
during entry and approval of timecards in Oracle Time & Labor.
For information, see: Oracle Projects APIs, Client Extensions, and Open Interfaces Reference
and Oracle Time & Labor Implementation and User Guide.

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Chapter 13 - Page 28
Summary

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Chapter 13 - Page 29
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Chapter 13 - Page 30
Allocations and
AutoAllocations
Chapter 14

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Allocations and AutoAllocations


Chapter 14 - Page 1
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Allocations and AutoAllocations

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Objectives

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Agenda

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Chapter 14 - Page 5
Overview of Allocations

Overview of Allocations
The allocations feature can distribute amounts between and within projects and tasks, or to
projects in other organizational units. For example, you can distribute amounts such as salaries,
administrative overhead, and equipment charges across several projects and tasks. Your
allocations can be as simple or elaborate as you like.
You identify the amounts to allocate (source) and then define the targets, the projects and tasks
to which you want to allocate the source amounts. Optionally, you can offset the allocations
with reversing transactions. Oracle Project Costing gathers source amounts into a source pool,
and then allocates to the targets using the basis method that you specify in the allocation rule.
When you allocate amounts, you create expenditure items whose amounts are derived from one
or more sources:
• Existing summarized expenditure items in Oracle Project Costing
• A fixed amount
• Amounts in an Oracle General Ledger account balance

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Chapter 14 - Page 6
Allocation Terminology

Allocation Terminology
• Allocation - An allocation distributes existing amounts between and within projects and
tasks.
• Allocation Rule - A set of attributes that describes how to allocate amounts in a source
pool to specified target projects and tasks.
• Autoallocation Set - A group of allocation rules that you can run in a sequence that you
specify (step-down allocations) or at the same time (parallel allocations).
• Basis Method - How you use an allocation rule to allocate the amounts from a source
pool to target projects. The basis methods include options to spread the amounts evenly,
allocate by percentage, or prorate amounts based on criteria you specify.
• Full Allocation - An allocation method that distributes the total amounts in the specified
source pool. Use a full allocation to process an allocation rule only once in a run period.
• GL Allocation Batch - Allocation batches created in Oracle General Ledger. For
example, GL allocation batches include Mass Allocation, Recurring Journals, and Mass
Budget.
• Incremental Allocation - An allocation method that creates expenditure items based on
the difference between the transactions processed from one allocation to the next. This

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Chapter 14 - Page 7
method is generally suitable if you want to use an allocation rule in allocation runs several
times in a given run period.
• Offsets - Reversing transactions that you can use to balance allocation transactions with
the source or other project.
• Source Pool - A combination of all allocation rule defined source amounts. These costs
can be comprised of summarized projects costs, posted Oracle General Ledger balances,
or fixed amounts.
• Target - The projects and tasks that receive allocation amounts. Allocation rules specify
the targets.

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Chapter 14 - Page 8
Difference between Allocation and Burdening

Difference between Allocation and Burdening


Allocation uses existing amounts to generate expenditure items, which you can then assign to
specified projects. Burdening uses a set percentage to increase the total cost amount of
expenditure items. This set percentage is an estimate of the overhead. Whether your company
uses allocations, burdening, or both in a particular situation depends on how your company
works and how you have implemented Oracle Project Costing.

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Chapter 14 - Page 9
Allocation Rules Implementation Steps

Allocation Rules Implementation Steps


Steps to define an allocation rule:
1. Name the allocation rule and define the basic allocation rule information.
2. Define the sources.
3. Define the targets.
4. Define the offset. (optional)
5. If the basis method is Prorate, then specify how to prorate the amounts.

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Chapter 14 - Page 10
Allocation Rules

Allocation Rules
Allocation rules define how Oracle Project Costing generates allocation transactions:
• The source of the amounts you are allocating.
• The targets - the projects and tasks to which to allocate amounts.
• How much of the source pool you want to allocate, and if you want to include a fixed
amount, GL balance, or client extension (or any combination of these).
• The time period during which the rule is valid.
You can create as many rules as needed, and use them in as many allocation runs as needed.
You can leave the original expenditure amounts in the source project, or offset the amounts
with reversing transactions. In most cases, the reversing transactions decrease the project
balance by the amount of the allocation.
Each allocation rule belongs to an operating unit and cannot be shared with other operating
units. Allocation rule source projects must be from the same operating unit. When cross-charge
is enabled, depending on the Targets Selection, you can allocate to target projects that are in
different operating units, legal entities, or business groups from the source project operating
unit. Offset projects must always be in the same operating unit as source projects.

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Chapter 14 - Page 11
Basis Method

Basis Method
The basis method defines how the rule divides amounts in the source pool among the targets.
• Spread Evenly - This method is the most simple and direct. The rule divides the source
pool amount equally among all the chargeable target tasks included in the rule.
• Target % and Spread Evenly - Specify the percentage of the source pool 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.
• Prorate and Target % and Prorate - These two proration basis methods provide precise
control over how the rule distributes the source pool. The rule 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. For the Prorate basis method, the rule uses the basis attributes to
apportion the source amount among all the tasks defined by the rule. For the Target % and
Prorate method, the rule first uses the target percentage to calculate the amount to allocate
to the line, and then goes on to apportion the results among all the tasks.
• Use Client Extension Basis - Another way to define percentages and a basis is to use the
Allocation Basis extension. If you use this extension, then you cannot use the Basis
window.

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Chapter 14 - Page 12
Basis Method - Spread Evenly

Basis Method - Spread Evenly


In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the spread evenly basis method, the allocation program
divides the total amount of the source pool evenly among all chargeable tasks.

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Chapter 14 - Page 13
Basis Method - Target Percent and Spread Evenly

Basis Method - Target Percent and Spread Evenly


In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the target percent and spread evenly basis method, the
allocation program first multiplies the source pool amount by the target line percentage. Within
each target line, the allocation program then divides the source pool amount evenly among the
chargeable tasks.

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Chapter 14 - Page 14
Basis Method - Prorate

Basis Method - Prorate


In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the prorate basis method, the allocation program prorates the
costs based on the total labor hours for each chargeable target task. For example, because
project 1, task A has 10% of the labor hours (40 hours out of 400 hours), it receives 10% of the
source pool allocation ($100 out of $1000). Note that while this example uses labor hours, you
can use other options for the proration basis.

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Chapter 14 - Page 15
Basis Method - Target Percentage and Prorate

Basis Method - Target Percentage and Prorate


In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the target percentage and prorate basis method, the
allocation program first multiplies the source pool amount by the target line percentage that
you assign to each project. Within each target line, the allocation program then prorates the
source pool amount among the chargeable tasks based on the total labor hours for each
chargeable target task. Note that while this example uses labor hours, you can use other options
for the proration basis.

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Chapter 14 - Page 16
Allocation Rule Definition

Allocation Rule Definition


1. Select the operating unit that owns the allocation rule.
2. Enter a unique rule name and optional description, and specify the effective dates.
3. Select a basis method.
4. For Allocation Method, select Full or Incremental:
- To use the rule only once within the same GL or PA run period, select Full.
- Full allocations distribute all the amounts in the specified projects in the
specified amount class.
- If you generate allocation transactions using a full allocation rule more than
once in a run period, then you will create duplicate transactions in your target
projects. If this happens, then you can reverse the duplicates.
- To use the rule several times within the same GL or PA run period, select
Incremental.
- Incremental allocations create expenditure items based on the difference
between the transactions processed in the previous and current run.
5. For Allocation Period Type, select GL or PA.

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Chapter 14 - Page 17
- This field specifies if you want to identify amounts based on the Oracle General
Ledger (GL) fiscal calendar or the Oracle Projects (PA) calendar.
6. Specify the attributes that you want to associate with this rule:
- Target Selection
- Select Operating Unit, Legal Entity, Business Group, or All. The last three
options require cross-charge setup.
- The option you select determines the available project when you select targets
on the Targets window.
- Auto Release
- Enable this option to release the allocation transactions automatically. If this
option is not enabled, then you must release the transactions in a separate step.
- Allow Duplicate Targets (Available only if the rule uses the full allocation method.)
- Enable this option to be able to allocate an amount to a chargeable task two or
more times.
- If you do not allow duplicates, then the rule creates one transaction per target
project and task, even if an allocation run returns a particular target project and
task several times.
7. Select the Allocation Transaction Attributes
- Expenditure Organization
- Expenditure Type Class
- Expenditure Type

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Chapter 14 - Page 18
Source Definition

Source Definition
The rule accumulates the amounts for the source pool during a specific period of time. The end
date of that time period is based on the amount class. The amount class is the period or periods
during which the amounts are accumulated. The allocation period type and the amount class
determine the start date.
You must define at least one source. All source projects and tasks must be open and from the
same operating unit. The exception report for the allocation run lists any duplicate projects.
If you are using projects as sources, then the results can change each time you run the
allocation if project statuses change.
To define sources:
1. In the Allocation Pool % field, enter a percentage to specify how much of the source pool
to allocate. The default value is 100%.
2. (Optional) In the Fixed Source Amount field, enter an amount to include in the source
pool.
3. For Amount Class, select from the list of values. Depending on the allocation period type
you selected in the Allocation Rule window, PA or GL precedes the field name.

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Chapter 14 - Page 19
4. To use projects as sources, go to Step 5. To use only GL accounts as sources, skip to Step
7.
5. For Amount Type, select from the list of values.
6. Specify the projects whose amounts you want to include in the allocation pool.
- Client extension
- To use projects designated in the Allocation Source client extension, enable the
use Client Extension Sources check box.
- Designate one or more projects
- For Line Num, enter a number greater than 0. You can enter project information
in the following fields: Project Org, Project Type, Class Category, Class Code,
Project, and Task. To exclude a line, select the Exclude check box on the
appropriate line. If you do not enter a task, then the rule uses the amounts for all
the tasks on the source line. You can add columns (Project Name, Service Type,
Task Name, and Task Org) to the Sources window.
- Limit the resources that are part of the designated projects (optional)
- If you do not limit the resources, the rule uses all the resource types in the
specified project in the source pool amount. Select the Resources button. In the
Resources window, enter a name for the resource list. In the Resource field, you
can enter the resource or resource group and the percent you want to include. To
exclude a specific resource, select Exclude on the appropriate line.
- If you exclude a resource, then Oracle Project Costing excludes the entire
amount for that resource regardless of the specified percentage.
7. (Optional) One or more GL accounts whose amounts you want to include in the allocation
pool in the GL Sources region:
- For Line Num, enter an integer greater than 0. Then select from the list of values for
Account and Description.
- You cannot select or enter GL summary accounts (also known as accounts that
contain a parent segment value).
- In the % field, enter the percentage of the account balance that you want to include.
- To subtract the amount in the GL summary account from the source amount, select
Subtract.

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Chapter 14 - Page 20
Target Definition

Target Definition
Targets are the projects and tasks to which the allocation distributes amounts. You specify the
projects and tasks either in the Target window or with the Allocation Target client extension.
You must define at least one target. Target projects must be open and target tasks must be
chargeable.
How the Target Interacts with the Basis
The rule charges allocation transactions to the target projects and tasks according to the basis
method. The rule first allocates the specified percentage of the source pool to each target line,
and then uses the information in the Basis window to prorate the allocated amount across the
tasks on each line.
Duplicate Target Projects
You can include the same project on multiple lines in the Target window. For example, you
can enter Project Y in the Project field on one line, and then specify a project organization that
includes Project Y on a different line. If you include the same project on multiple lines, then
the Allow Duplicate Targets option in the Allocation Rule window affects the way the rule
behaves:

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Chapter 14 - Page 21
• If you allow duplicate targets, then the rule allocates amounts to the project as many times
as it appears in the transactions the PRC: Generate Allocations Transactions program
generates.
• If you do not allow duplicate targets, then the rule allocates amounts only to the project
with the lowest line number.
To define targets:
To use projects designated in the Allocation Target client extension, enable the Use Client
Extension Targets option.
Specify one or more open projects to which to distribute the amounts in the allocation pool:
• Enter a number in the Line Num field, and then select from the list of values to enter
project information in the Project Org, Project Type, Class Category, Class Code, Project,
and Task fields.
• If you do not enter a task, then the rule distributes the allocation to all the chargeable tasks
in the proportion specified by the basis method.
• You can add columns (Billable/Capitalizable, Service Type, Task Name, and Task Org) to
the Targets window.
• (Optional) If you selected one of the target percentage basis methods in the Allocation
Rule window (Target % and Spread Evenly or Target % and Prorate), then enter a value in
the % field. The value is the percentage of the source pool to allocate to the line. The total
percentage for included targets must equal 100.
• To exclude a project from the target definition, select Exclude on the appropriate line. To
exclude a specific task within a project, enter the project on two lines: on one line, leave
the Task field blank; on the other line, enter the task that you want to exclude and select
Exclude.

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Chapter 14 - Page 22
Offset Definition

Offset Definition
Offsets are reversing transactions that you can use to balance the allocation transactions with
the source or other project. All projects and tasks to which you apply offsets must be open and
chargeable. Do not specify an offset to the source project if you do not want to change the total
amount in the source project. All offset projects and tasks must be open and chargeable, and in
the same operating unit as the source projects. The rule creates the offset transactions for the
offset project and task when you run PRC: Generate Allocations Transactions.
To define the offset:
1. Select an offset method.
If the source is an Oracle General Ledger account and you want to create offsetting
transactions, then select the offset method Use Client Extension for Project and Task or
Specific Project and Task.
- None - The rule does not create any offset transactions.
- Source Project and Task - The rule creates reversing transactions for the source
projects and tasks.

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Chapter 14 - Page 23
- Source Project, Use Client Extension for Task - The rule creates reversing
transactions in specific tasks in the source project. Specify the tasks in the Allocation
Offset Tasks client extension.
- Use Client Extension for Project and Task - The rule creates reversing transactions
in projects and tasks as specified in the Allocation Offset Projects and Tasks client
extension.
- Specific Project and Task - The rule creates reversing transactions in one project
and one of its tasks, as specified in the Project and Task fields.
2. For the fields in the Offset Transaction Attributes region, select from the list of values:
- Expenditure Organization
- Expenditure Type Class
- Expenditure Type

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Chapter 14 - Page 24
Prorated Basis Method Definition

Prorated Basis Method Definition


1. In the Allocation Rule window, select the Basis button.
2. Enter the Basis information:
- Basis Category - Select Budget (to use the estimated amounts from the project
budget) or Actual (to use the actual amounts in the project).
- Relative Period - Enter a number to denote the current (0) or earlier (less than 0)
period. For example, to use the period preceding the current one, enter -1.
- Budget Type (Available only if the basis category is Budget) - Select from the list of
budget types. The list of values displays only cost (non-revenue) budget types. The
allocation program uses the latest budget baseline to compute the basis.
3. For Resource List, choose from the list of values those resources to include in the basis
computation.
4. In the Resources area, choose resources and resource groups from the list of values. To
exclude a specific resource or resource group, select Exclude on the appropriate line.
- If you include a resource group, then you cannot also include a resource that is a
member of that group. However, you can exclude the resource.

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Chapter 14 - Page 25
Copy Allocation Rules

Copy Allocation Rules


Copy a rule to use an existing rule as a template. You can copy rules only within the same
operating unit. For example, the definition of a set of rent allocation rules can be basically the
same; with only a few differences from rule to rule (such as identifying a different set of target
projects). Create the first rule and then copy it to create other similar rules.
To copy an allocation rule:
1. In the Allocation Rule window, find an existing rule that you want to use as a template.
2. Select the Copy To button.
3. Enter a new name and optional description, and then choose OK.
- You see the new rule in the Allocation Rule window.
4. Change the attributes of the rule as needed.

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Chapter 14 - Page 26
Deleting or Modifying Allocation Rules

Deleting or Modifying Allocation Rules


If an allocation run exists for a rule, you cannot:
• Delete the rule.
• Modify the allocation method.
• Modify the basis method, allocation period type, source amount class, source amount type,
or offset method for an incremental rule.
• Delete or modify source lines.
Error messages notify you of other restrictions as you work with an allocation rule.

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Chapter 14 - Page 27
Practice - Define an Allocation Rule
Overview
In this practice, you will define an allocation rule to allocate a fixed amount of shared cost to
tasks in your XX Capital Services project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the General Allocation Rule Information

The finance department has asked you to define an allocation rule to allocate a fixed amount of
shared costs each month to the tasks in your XX Capital Services project. The costs must be
allocated in full once each GL period. The rule should prorate the costs based on the total
burdened cost for each chargeable task.

Name your rule XXService Allocation. Enter the allocation rule information as specified in the
following table:

Field Value
Operating Unit Vision Services
Name XXService Allocation
Description Enter a brief description
Effective Date From Today's Date
Effective Date To Leave Blank
Basis Method Prorate
Allocation Method Full
Allocation Period Type GL
Targets Selection Operating Unit
Expnd Org Services-East
Expnd Type Class Miscellaneous Transaction
Expnd Type Support Svcs Allocation
Auto Release No
Allow Duplicate Targets No

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Chapter 14 - Page 28
Define the Source

The finance department has calculated that they need to allocate a fixed shared cost amount of
100,000.00 USD each month. Use this information to define the source for the allocation rule.

Define the Targets

Allocate the costs to your XX Capital Services project. Your project manager has obtained an
exception that exempts task 3.0 of your XX Capital Services project from the allocation. Define
the targets for the allocation rule accordingly.

Define the Offset

The finance department wants you to create a transaction on task 8.0 of the Service Center
project to offset the allocation transactions. Use the same expenditure organization, expenditure
type class, and expenditure type for the offset transaction that you use for the allocation
transactions.

Define the Basis Information

The amount that the rule allocates to each chargeable task is based on the actual total burdened
cost for the fiscal year to date. Define the basis method and specify a relative period of 0 (current
period) to determine the actual total burdened cost for each task.

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Allocations and AutoAllocations


Chapter 14 - Page 29
Solution - Define an Allocation Rule
Define the General Allocation Rule Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Allocation Rule window.

• (N) Allocations > Allocation Rules

3. Enter the allocation rule information as specified in the following table:

Field Value
Operating Unit Vision Services
Name XXService Allocation
Description Enter a brief description
Effective Date From Today's Date
Effective Date To Leave Blank
Basis Method Prorate
Allocation Method Full
Allocation Period Type GL
Targets Selection Operating Unit
Expnd Org Services-East
Expnd Type Class Miscellaneous Transaction
Expnd Type Support Svcs Allocation
Auto Release No
Allow