Last few days I have been involved with the Oracle Projects module.

I’ll
try and put forth some basic learning of this module.
Oracle Projects is meant primarily for organizations that are project-
oriented. Using this module, it becomes easy to track costs, budget and
track the project status.

Oracle Projects consists of the following products:

Prior to Oracle Projects Setup, one has to setup the Set of Books in GL,
setup Organization and
in Oracle HRMS, define employees and job in HRMS and create
customer in Oracle Receivables. However if Oracle Projects is being
installed as a standalone package then one needs to define all above
in Oracle Projects itself. Some other mandatory setups include defining
locations, defining implementation options, defining Project Accounting
periods, defining expenditure types and categories, define revenue
categories, etc. Also one has to create a burdening hierarchy in Oracle
HRMS which may vary from the Project or Task Organization hierarchy.

Invariably a Project is broken into a hierarchy of tasks as per Work

One can have three different Project Types for managing the cost of a
project: Indirect, Capital and Contract. An Indirect Project Type is
used to track the overhead costs and labor hours for overhead activities
like Admin, Legal, etc. Capital Project Type is selected to track costs
and labor hours related to asset development activities which ultimately
results in an asset for the organization. A Contract Project Type is
selected in case the costs are reimbursed by a client.

Oracle Costing is the used for processing of expenditures for finding out
costs which can be attributed to projects and tasks which can then be
posted to GL corresponding to different account lines. There are two
cost amounts associated to each transaction: Raw and Burdened. The
raw cost is the actual cost of the work performed, and the burden cost
is the indirect cost or overhead of work performed, like administrative
cost. The Burden cost is calculated by multiplying Raw Cost with the
Burden Multiplier. The burdened cost is the total cost that is incurred,
i.e., the sum of raw cost and burden cost.
Burden Cost = Raw Cost x Burden Multiplier
Burdened Cost = Raw Cost + Burden Cost
More on Oracle Projects, primarily I’ll try and provide inputs on
Burdening Cost and Oracle Project Billing in subsequent days.
nce we understand the basic terminologies of PA it would be easier to move ahead with the process.

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

Task: It is the small unit of work created under the project against which transaction can be created.

Note: we cannot create transaction/expenditure items directly on the project, hence it is mandatory for
each project to have at least one task.

Project Classes:

Oracle PA has provided three pre defined project classes.

Indirect projects – Track overhead activities and costs of the organization. Note: Does not generate
revenue and invoicing process.

Capital projects – Track asset development activities and costs, and costs are capitalized as one or more
assets.

Contract projects – Contract projects created with external customer to track cost, revenue, and billing.

Project Type:

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.

Examples of Indirect project: Admin Project, Transport Facility etc.

Example of Contract project: External Project, Intercompany project etc.

Expenditure category: It is the category created to classify the different types of cost an organization
may incur.

Revenue category: It is the category created to classify the different types of revenue an organization
may earn.
Expenditure type:It is the identification of cost that is associated to an expenditure item.It is assigned to
the expenditure category and revenue category during the setups.

Expenditure class: It is the classification for an expenditure type as how the expenditure type can be
used to create transaction. When an expenditure type is classified for a certain type then only those
expenditure class transactions are allowed to enter.

In Oracle Project Costing we have predefined expenditure classes.

Labor:

Straight Time: For standard time entry. We use the cost rate multiple with number of hours.

Overtime: Labor cost calculated using a premium cost rate multiplied by hours.

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.

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.

Example:

Sr No Expenditure Category Revenue category Expenditure type Expenditure Class

1 Labor Time Labor Revenue Standard_Time Straight Time

2 Vendor Cost Service Revenue Supplier_cost Supplier Invoices

3 Travel Cost Travel Revenue Travel Cost Expense Report & Supplier Invoices

4 Misc Cost Misc Revenue Misc_Transactions Miscellaneous and usages

In the above examples for line number 1, time can be entered for expenditure type “Standard_Time”.

Similarly for line number 2 & 4 the respective expenditure class transactions can be entered.

For line number 3 supplier invoices & expense reports can be entered as it has been classified for two
different classes.
Types of Currencies

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.

Task Type:

Billable Item: It is a functionality associated at the task level identifying the expenditure items created
against the task to be billed to the client.

Non Billable Item: It is functionality associated at the task level identifying the expenditure items created
on the task is only to record the cost incurred against it.

Note: We can adjust the task at the expenditure item window to make the non billable as billable and
vice versa. This is called as expenditure item adjustments.

Employee/Job bill rate Override: Incase a different rate needs to be updated for a particular job or
employee the same can be updated at the project or task level.

The employee name needs to be entered along with the bill rate, currency and period applicable. The
rate at the task level overwrites the rates at the project level and the rates at the project level
overwrites the rate of the bill rate schedule attached at the project level.

Cost rate: It is the rate defined at the job or employee level to derive at the basic cost for a particular
expenditure item. The cost rate scheduled are defined in the OU functional currency.
The cost rate can be defined at two levels:

In the setups -> Expenditure -> Rate schedule.

Overrides: Labor Costing Overrides

( Navigation: PA Responsibility->Setup->Costing->Labor->Labor Costing Overrides.)

Bill rate: It is the rate defined at the job or employee level to derive at an amount which will be billed to
the client.

The bill rate can be defined at two levels:

In the setups -> Expenditure -> Rate schedule.

Overrides: At the project level as employee or job override.

For employee override: Navigation: Project -> Options -> – Bill Rates and Discount Overrides ->
Employee Bill Rate and Discount Overrides

For job override: Navigation: Project -> Options -> Bill Rates and Discount Overrides -> Job Bill Rate and
Discount Overrides

Transfer Price Rules and Schedule: Transfer price rules control the calculation of transfer prices for labor
and non-labor cross charged transactions. To drive transfer price calculation for cross charge
transactions between the provider and receiver, use the Transfer Price Schedule window to assign labor
or non-labor (or both) transfer price rules to the provider and receiver pair on a schedule line

ICB: It is a process, where we have different legal entities involved, and the OUs under these LE owns
the employees and projects.

The OU to which the employee is assigned is called PROVIDER OU.

The OU to which owns the project is called RECEIVER OU.

Note: In ICB process, an internal invoice is generated in provider OU.

Borrowed And Lent: It is a process, where we have one legal entity involved, and the OUs under the LE
owns the employees and projects. The employee and project can be in the same OU or different OU but
the LE has to be same.
Note: No internal invoice is generated in B&L process, only accounting happens to post cost.

Labor: When an employee enters time on a specific project it is known as charging efforts of the
employee on the project for a given time frame. This time further has some cost defined to calculate the
actual cost incurred by the employees on the project.

The calculation process of the raw cost for such labor/time entered is called as Labor Cost.

The time can be entered via a third party tool or via the PA pre approved batch.

Overtime – Labor cost calculated using a premium cost rate multiplied by hours.

Non labor expenditure types: The expenditure items created via supplier invoices or expense reports
are called as non labor expenditure types. The expenditure types created need to be added in the non
labor expenditure schedules.

Navigation: PA -> Setups -> Expenditure -> Rate schedule.