Lesson-1-Overview of Oracle Project Billing.ppt

Editor's Notes

• #4: 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 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. The Oracle Enterprise Project Management Solution consists of eight products: Oracle Project Foundation (PJF) Oracle Project Costing (PJC) Oracle Project Billing (PJB) Oracle Project Resource Management (PJR) Oracle Project Management (PJT) Oracle Project Collaboration (PJL) Oracle Project Portfolio Analysis (PJP) Oracle Daily Business Intelligence for Projects (PJI)
• #5: Oracle Project Billing Oracle Project Billing enables enterprises to simplify customer invoicing, streamline corporate cash flow, and measure the profitability of contract projects. With Oracle Project Billing, you can generate revenue and revenue accounting events, and create accounting in Oracle Subledger Accounting. You can also generate customer invoices for project work. Customer invoices are interfaced to Oracle Receivables. With Oracle Project Billing, project managers can review project invoices online and analyze project profitability, and accounting managers can see the corporate impact of project work.
• #6: Contract Projects Contract projects are used to track activities, cost, revenue, and billing for services performed for and reimbursed by a customer. Types of contract projects include: Time and Materials Fixed Price Cost Plus When defining contract projects, you specify the following information: Revenue accrual method Billing method Billing cycle Other billing information For contract projects, you define additional information for revenue accrual and billing based on requirements of your project, your company, and your customer. For additional information about contract projects, refer to “Defining a Contract Project”.
• #7: Overview of People 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 labor resources. You can use transactions controls to specify which resources are allowed to charge timecard and expense report costs to projects and tasks. Oracle Project Billing: Generates revenue 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. Resources in Oracle Project Billing When you define bill rates for labor or people resources, you can enter expenditure batches, for example, timecards for a resource and then accrue revenue based on the rate defined for that resource. You have an option to override the bill rates at the time of revenue accrual. In this way, you can also generate invoices for labor.
• #8: Accounting Transactions Revenue and invoices are generated in Oracle Projects Billing. For revenue, Oracle Projects determines the default accounting using AutoAccounting. AutoAccounting selects all of the AutoAccounting parameters for each item or billing event, determines the account, validates the account against the general ledger, and updates each revenue distribution line with the appropriate default account. The invoice accounting is determined using AutoAccounting in Oracle Projects (not Receivables AutoAccounting). When you interface the invoices to Oracle Receivables, a debit entry is made to the Receivables account and/or to the Unbilled Retention account if you select to account for unbilled retention. The credit may be to the Unbilled Receivable, Unearned Revenue, and/or the Unbilled Retention accounts. Invoices are sent to the customer and receipts are applied to the invoice in Oracle Receivables. During the Generate Draft Invoices process, the default account that is credited with the invoice amount is either the unbilled receivables (UBR) account or the unearned revenue (UER) account, depending on whether you accrue revenue before or after you generate invoices. Oracle Project Billing allows you to generate invoices and revenue using separate processes, which you can run at different times. To allow for different billing cycles and revenue accrual, Oracle Projects creates the accounting distribution lines during invoice and revenue generation. Oracle Project Billing creates GL entries for revenue, but not invoices. Invoices that are created by Oracle Project Billing are sent to Oracle Receivables, where you run the Submit Accounting process to create accounting for the invoices in Oracle Subledger Accounting. If you define detailed accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts or account segments that Oracle Receivables derived using the Account Generator. You then transfer the final accounting for the invoices from Oracle Subledger Accounting to Oracle General Ledger.
• #11: Agreements and Funding In Oracle Projects, an agreement represents any form of contract, written or verbal, between you and one of your customers. For example, an agreement can be in the form of a: Purchase order Continuing service agreement Verbal authorization An agreement provides the funding for projects and tasks. Each agreement can fund the work in one or more projects. When you record an agreement, you specify payment terms for invoices against the agreement and whether there are limits to the amount of revenue you can accrue and then you can bill against the agreement.
• #12: Multi-Currency Billing With multi-currency billing, you can: Enter agreements, bill rates, and events in any currency regardless of the project functional currency Designate the project functional currency, project currency, or funding currency as the invoice processing currency for a project Designate the project functional currency and the invoice transaction currency as the revenue transaction currency Define currency conversion attributes for converting revenue and invoicing amounts to the project currency, project functional currency, and funding currency Define currency conversion attributes for converting funding amounts to the project functional currency, and the project currency Define a default invoice currency for a project customer that is different from the project functional currency and assign conversion attributes for deriving revenue in this currency Multi-Currency Options Available for Contract Projects Project Functional Currency: The principal currency you use to record transactions and maintain accounting data for your ledger. Project Currency: The user-defined project currency. 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. Funding Currency: The currency or currencies in which a project is funded Billing Transaction Currency: The currency of revenue and billing amounts for expenditure items or events. When Oracle Projects generates revenue, it calculates revenue and billing amounts for expenditure items and events in the billing transaction currency. When the Invoice by Billing Transaction functionality is enabled for a project, separate invoices are generated for each billing transaction currency, even though one or more invoices may be funded by the same agreement. Invoice Processing Currency: The common currency that summarizes billing transactions and funding amounts and performs fund checking when generating invoices.
• #13: Revenue in Foreign Currency Oracle Project Billing always generates revenue in project, project functional and project funding currencies. Oracle Project Billing generates invoice amounts in invoice transaction currency. The invoice transaction currency is an attribute that you define for each customer. On a multi-currency project, the invoice transaction currency can be a foreign currency. To include exchange rate losses or gains in foreign currency for unbilled receivables and unearned revenue when revaluating accounts in Oracle General Ledger, Oracle Projects enables you to derive revenue including unbilled receivables and unearned revenue in invoice transaction currency. The revenue transaction currency is the same as the invoice transaction currency, and is typically a foreign currency.
• #14: Project Revenue When you define a contract project, you specify the method to be used for revenue accrual. For example, for a time and materials based project, you could select the “Work” distribution rule for revenue accrual. This enables you to generate revenue based on the project’s actual billable expenditures. When you generate revenue, Oracle Projects calculates revenue, creates revenue events, creates expenditure item revenue details, and maintains funding balances. You generate revenue accounting events to determine default GL accounts using AutoAccounting, and generate accounting events. You then create accounting in Oracle Subledger Accounting, and transfer the journal entries to Oracle General Ledger.
• #15: Revenue Accrual Method and Invoice Method When you enter revenue and billing information for your project, you specify the revenue accrual method and the invoice method. The project type determines which distribution rule appears as the default value for these fields. The project type also determines which other distribution rules you can choose from. The revenue accrual method and invoice method that you select determines how revenue is calculated and how invoices are generated for the project. Note: If you want to accrue revenue or generate invoices based on percent complete, you must use the Event/Event, Event/Work, or Work/Event distribution rule.
• #16: Overview of Invoice Flow Generating Invoices Create draft invoices from detail transactions and milestones for online approval by your project or accounting managers Reviewing Invoices You should review each invoice before you approve and release it for billing. Use the Invoice Summary window or the Invoice Review report to review invoices. You can review invoice information such as: Invoice amount Withheld amount Invoice lines Withheld basis amount Currency attributes Expenditure items that back up invoice items Invoice customer In addition to reviewing invoice information, you should also review an invoice to ensure that it did not encounter any generation errors or distribution warnings during generation and to monitor the status of your invoices. If you encounter a draft invoice with a generation error, you should correct the error and regenerate the invoice. After an invoice has been reviewed, it can be approved, released, and printed. Approving Invoices After you review invoices and make any necessary adjustments, you need to approve them before you can release them for interfacing to Oracle Receivables. There are two ways to approve invoices: 1. Manual invoice approval Usually your project administrator or project manager approves invoices. Oracle Projects records the invoice approval information of the person who approved the invoice and the date it was approved. 2. Automatic invoice approval The Automatic Invoice Approve/Release Extension allows you to approve invoices automatically as part of the Generate Draft Invoice process. Releasing Invoices After you approve invoices, you need to release them for interface to Oracle Receivables. There are two ways to release invoices: 1. Manual invoice release Usually your accounting department releases invoices. Oracle Projects records the invoice release information of the person who released the invoice and the date it was released. Before you release an invoice, you determine if the invoice has tax information. 2. Automatic invoice release The Automatic Invoice Approve/Release Extension allows you to release invoices automatically as part of the Generate Draft Invoice process. Interfacing Invoices Oracle Projects generates draft invoices and interfaces them to Oracle Receivables to collect payments for the project invoices and to create accounting in Oracle Subledger Accounting. Printing Invoices You can print invoices either from Oracle Projects, or from Oracle Receivables, depending on how your company implements your invoice printing method. Note: If you print your invoices from Oracle Projects, you do not need to interface invoices before printing them.
• #17: Interfacing Invoices to Oracle Receivables Oracle Projects fully integrates with Oracle Receivables to process your invoices and track customer payments. Oracle Projects generates draft invoices and uses Oracle Receivables to collect payments for the project invoices and create accounting in Oracle Subledger Accounting. You transfer the final accounting for the invoices from Oracle Subledger Accounting to Oracle General Ledger. When you transfer invoices to Oracle Receivables, Oracle Projects also maintains project balances of unbilled receivables and unearned revenue and creates accounting transactions for these amounts. Interface Invoices to Oracle Receivables When you interface invoices to Oracle Receivables, you use an Oracle Projects concurrent program that collects all eligible released draft invoices in Oracle Projects and interfaces them to the Oracle Receivables interface tables. This concurrent program also maintains project balances of unbilled receivables and unearned revenue and creates accounting transactions for these amounts. AutoInvoice Import and Tieback Invoices Once interfaced to the interface tables, the draft invoices await further processing by the Oracle Receivables AutoInvoice process. Oracle Projects predefines most of the information that AutoInvoice needs to create your customer invoices in Oracle Receivables, such as an invoice batch source and transaction types for your invoices and credit memos. The AutoInvoice process also automatically calculates tax for project invoice lines that contain tax information. You run the Tieback process to ensure that invoice data is loaded successfully into Oracle Receivables. Create Accounting and Transfer to Oracle General Ledger You run the Submit Accounting concurrent program in Oracle Receivables to create accounting for the invoices in Oracle Subledger Accounting. If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites the accounting that Oracle Receivables created using the Account Generator. You transfer the final accounting details from Oracle Subledger Accounting to Oracle General Ledger.
• #18: Customer Retention Billing Oracle Projects enables you to set up withholding and billing terms for retention, to invoice retention amounts, and to account for unbilled retention. Retention provisions in contracts can vary greatly. Contracts may require that the withholding and billing of retained amounts for a project customer be managed at either the project or top task level. Contracts for work-based billing may require that amounts be withheld by expenditure category, while those for event-based billing require that amounts be withheld by event category.
• #19: Interproject Billing Interproject billing generates internal invoices for costs incurred between two projects (also known as provider and receiver projects). When work is performed on a receiver project: 1. The provider project generates a Receivables invoice for work/expenses incurred to the receiver project. 2. The receiver project automatically receives this internal invoice as a Payables invoice during the AR invoice tieback process. The invoice is then treated as any other supplier invoice and is interfaced to Oracle Projects as costs on the receiver project. Companies face complex accounting and operational issues that result from complex work breakdown structures. For example: Multiple organizations or departments may work together to complete a project, but the customer wishes to receive only one bill. Parts of work performed on a project may be billed externally to a customer while other work may be billed internally to another project. These types of business needs require a way to capture multiple project costs into one project regardless of where or by whom the work is performed.
• #20: Integration with Oracle Project Contracts Oracle Project Billing integrates with Oracle Project Contracts to create delivery based billing events that drive billing based on completed deliverables in the Deliverable Tracking System. Delivery Based Billing Events Delivery-based billing events are created based on completed deliverables in the Deliverable Tracking System (DTS) in Oracle Project Contracts. They are used only with Oracle Project Contracts integration. In the Oracle Project Contracts DTS, you can designate a contract deliverable line as billable. After a contract deliverable is delivered to the customer, the DTS initiates an Oracle Projects event. The billing event is automatically created in Oracle Projects for further processing. You can bill either individual events or multiple events at once. Generating a Delivery-Based Billing Event from the DTS When items are ready for billing (for example, shipped and inspected), you can select all billable deliverables ready for billing, enter an event type and date, and create an event eligible for draft invoicing. Tieback Billing Event to Deliverables You can tie back the billing event created for a deliverable to the deliverable for collection activity tracking. Workflow Message to Project Manager on Event Creation The project manager can receive a workflow notification that a billing event has been created for the contract project. The project manager can then review the event and make changes as necessary in the Oracle Project Contracts DTS. Subprojects Association If you are using Oracle Project Contracts, you can associate a project task with one or more projects to create a project hierarchy. This project hierarchy provides you with the ability to have multiple billing methods per project, complex organizational work structures, and different overhead rate structures within a project. For more information about billing project contracts, refer to the Oracle Project Contracts User Guide.