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Project Accounting OV

This document provides an overview of key concepts in Oracle Project Accounting, including: 1) Projects are units of work that can include tasks. Transactions are recorded at the task level. 2) There are three types of projects - indirect, capital, and contract projects. Contract projects track costs, revenue, and billing for external customers. 3) Expenditure types classify costs and revenue categories classify earnings. Transactions use expenditure classes like labor, expenses, or usage charges. 4) Currencies, cost and bill rates, and internal billing processes like ICB are also discussed at a high level.

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Ahmed Elhendawy
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105 views7 pages

Project Accounting OV

This document provides an overview of key concepts in Oracle Project Accounting, including: 1) Projects are units of work that can include tasks. Transactions are recorded at the task level. 2) There are three types of projects - indirect, capital, and contract projects. Contract projects track costs, revenue, and billing for external customers. 3) Expenditure types classify costs and revenue categories classify earnings. Transactions use expenditure classes like labor, expenses, or usage charges. 4) Currencies, cost and bill rates, and internal billing processes like ICB are also discussed at a high level.

Uploaded by

Ahmed Elhendawy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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R12 Oracle Project Accounting: Few Basic Concepts

August 26, 2014 neetaoraclepa Oracle Functional

 
 
 
 
 
 
16 Votes

Once 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:
Expenditure
Sr No Revenue category Expenditure type Expenditure Class
Category

1 Labor Time Labor Revenue Standard_Time Straight Time

2 Vendor Cost Service Revenue Supplier_cost Supplier Invoices

Expense Report & Supplier


3 Travel Cost Travel Revenue Travel Cost
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:

1. In the setups -> Expenditure -> Rate schedule.


2. 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.

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