r12 oracle financial applications overview table of...

R12 Oracle Financial Applications Overview Student Guide - Volume 3

D49294GC20

Edition 2.0

February 2009

D58764

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THESE eKIT MATERIALS ARE FOR YOUR USE IN THIS CLASSROOM ONLY. COPYING eKIT MATERIALS FROM THISCOMPUTER IS STRICTLY PROHIBITED

Copyright © 2009 Oracle. All rights reserved. This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and print this document solely for your own use in an Oracle training course. The document may not be modified or altered in any way. Except where your use constitutes "fair use" under copyright law, you may not use, share, download, upload, copy, print, display, perform, reproduce, publish, license, post, transmit, or distribute this document in whole or in part without the express authorization of Oracle. The information contained in this document is subject to change without notice. If you find any problems in the document, please report them in writing to: Oracle University, 500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not warranted to be error-free. If this documentation is delivered to the United States Government or anyone using the documentation on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS The U.S. Government’s rights to use, modify, reproduce, release, perform, display, or disclose these training materials are restricted by the terms of the applicable Oracle license agreement and/or the applicable U.S. Government contract. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

Author

Sarita Chebbi, Pratima Mahtani, Paul Scott, Dee Fairbanks Simpson

Technical Contributors and Reviewers

Barbara Nicholls, Cynthia Prier, Paul Scott, Kathryn Wohnoutka, Bruce Ingram

This book was published using: oracletutor

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Copyright © 2009, Oracle. All rights reserved.

R12 Oracle Financial Applications Overview Table of Contents i

Table of Contents

eBusiness Suite Overview................................................................................................................................1-1 eBusiness Suite Overview .............................................................................................................................1-3 Objectives ......................................................................................................................................................1-4 Agenda...........................................................................................................................................................1-5 Key Business Flows.......................................................................................................................................1-6 Forecast to Plan .............................................................................................................................................1-7 Procure to Pay................................................................................................................................................1-8 Demand to Build............................................................................................................................................1-10 Campaign to Order ........................................................................................................................................1-12 Click to Order ................................................................................................................................................1-13 Order to Cash.................................................................................................................................................1-14 Contract to Renewal ......................................................................................................................................1-16 Request to Resolution....................................................................................................................................1-17 Project to Profit..............................................................................................................................................1-18 People to Paycheck........................................................................................................................................1-20 Summary........................................................................................................................................................1-21

Accounting to Financial Reporting ................................................................................................................2-1 Accounting to Financial Reporting................................................................................................................2-3 Objectives ......................................................................................................................................................2-4 Agenda...........................................................................................................................................................2-5 Purpose of General Ledger ............................................................................................................................2-7 General Ledger Capabilities ..........................................................................................................................2-8 Functions and Features ..................................................................................................................................2-9 General Ledger Accounting Cycle ................................................................................................................2-10 Journal Entry Functions.................................................................................................................................2-11 Sharing Ledgers Across Oracle Applications ................................................................................................2-12 Accounting Entries Interface Information .....................................................................................................2-13 Subledger Integration ....................................................................................................................................2-15 Reporting and Analysis .................................................................................................................................2-17 Interface Data Transformer (IDT) .................................................................................................................2-18 IDT Responsibility and Data Menus .............................................................................................................2-20 IDT Transformation Rule Sets.......................................................................................................................2-21 Open Integration with External Processing ...................................................................................................2-22 Open Integration with External Processing: GL Business Events .................................................................2-23 Open Integration with External Processing Benefits ....................................................................................2-25 Advanced Global Intercompany System (AGIS) ..........................................................................................2-26 AGIS Features ...............................................................................................................................................2-27 AGIS Journals Balancing Process .................................................................................................................2-28 AGIS Implementation Considerations...........................................................................................................2-30 Agenda...........................................................................................................................................................2-31 Elements ........................................................................................................................................................2-32 Chart of Accounts Structure ..........................................................................................................................2-34 Chart of Accounts..........................................................................................................................................2-35 Business Requirements..................................................................................................................................2-36 Creating Vertical Structures ..........................................................................................................................2-37 Defining Hierarchies......................................................................................................................................2-38 Account Hierarchies ......................................................................................................................................2-39 Building the Chart of Accounts Structure......................................................................................................2-40 Creating Accounting Flexfields.....................................................................................................................2-41 Defining and Assigning Value Sets ...............................................................................................................2-42 Defining the Accounting Flexfield Structure.................................................................................................2-43 Management Reporting and Security ............................................................................................................2-46

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R12 Oracle Financial Applications Overview Table of Contents ii

Management Reporting and Security Example .............................................................................................2-47 Defining Segment Values ..............................................................................................................................2-49 Secondary Tracking Segment ........................................................................................................................2-50 Secondary Tracking Segment Benefits..........................................................................................................2-52 Selecting Account Combinations ..................................................................................................................2-53 Using Dynamic Insertion...............................................................................................................................2-54 Defining Cross-Validation Rules...................................................................................................................2-55 Defining Flexfield Security Rules .................................................................................................................2-58 Accounting Calendar .....................................................................................................................................2-59 Defining Period Types...................................................................................................................................2-60 Accounting Period Statuses ...........................................................................................................................2-61 Unlimited Currencies.....................................................................................................................................2-62 Selecting Currencies ......................................................................................................................................2-63 Creating a Ledger ..........................................................................................................................................2-64 Accounting Setup Manager ...........................................................................................................................2-65 Ledger Options ..............................................................................................................................................2-67 Linking a Ledger to a Responsibility.............................................................................................................2-72 Sharing a Ledger Across Oracle Applications...............................................................................................2-73 Account Hierarchy Manager..........................................................................................................................2-74 Security Definitions.......................................................................................................................................2-75 Replacement for Disabled Accounts..............................................................................................................2-77 Control Accounts...........................................................................................................................................2-78 Account Analysis & Drilldown .....................................................................................................................2-79 Accounting and Reporting Sequencing .........................................................................................................2-80 Accounting and Reporting Sequencing Benefits ..........................................................................................2-81 Agenda...........................................................................................................................................................2-82 Subledger Accounting (SLA) Overview........................................................................................................2-83 Subledger Accounting ...................................................................................................................................2-84 Subledger Accounting Definition ..................................................................................................................2-85 Subledger Accounting Engine .......................................................................................................................2-87 Agenda...........................................................................................................................................................2-88 Simultaneous Opening and Closing of Periods .............................................................................................2-89 Simultaneous Year-End Closing Journals .....................................................................................................2-90 Simultaneous Currency Translation...............................................................................................................2-91 Financial Reporting Across Ledgers..............................................................................................................2-92 Simultaneous Currency Translation...............................................................................................................2-93 Agenda...........................................................................................................................................................2-94 Performing Journal Entry Functions..............................................................................................................2-95 Types of Journal Entries ................................................................................................................................2-96 Journal Creation Methods..............................................................................................................................2-97 Automatic Journal Copy................................................................................................................................2-98 Integrated Web-based Spreadsheet Interface.................................................................................................2-99 Integrated Web-based Spreadsheet Interface Benefits...................................................................................2-100 Journal Components ......................................................................................................................................2-101 Grouping Journals into Batches.....................................................................................................................2-103 Manual Journal Entries ..................................................................................................................................2-104 Performing Additional Journal Actions.........................................................................................................2-106 Posting Journals.............................................................................................................................................2-107 Posting to a Prior Period................................................................................................................................2-109 Automatic Posting .........................................................................................................................................2-110 Performing Online Inquiries for Accounts and Journal Entries.....................................................................2-111 Reversing Journal Entries ..............................................................................................................................2-112 Creating Reversing Journals ..........................................................................................................................2-113 Reversing Journals Automatically .................................................................................................................2-114 Journal Reversal Criteria ...............................................................................................................................2-115 Journal Reversal Benefits ..............................................................................................................................2-118 Recurring Journals.........................................................................................................................................2-119

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R12 Oracle Financial Applications Overview Table of Contents iii

Recurring Journal Types................................................................................................................................2-120 Formula Recurring Journals ..........................................................................................................................2-121 MassAllocations ............................................................................................................................................2-122 MassAllocations versus Recurring Journals ..................................................................................................2-123 Journal Line Reconciliation...........................................................................................................................2-124 Agenda...........................................................................................................................................................2-125 Budgeting ......................................................................................................................................................2-126 Budgets ..........................................................................................................................................................2-127 Anatomy of a Budget.....................................................................................................................................2-128 Available Methods.........................................................................................................................................2-129 Multiple Versions ..........................................................................................................................................2-130 Define Budget Organizations ........................................................................................................................2-131 Entry Methods ...............................................................................................................................................2-132 Creating Journals ...........................................................................................................................................2-133 Loading with Web ADI .................................................................................................................................2-134 Budget Wizard: Overview .............................................................................................................................2-135 Agenda...........................................................................................................................................................2-136 Foreign Currency Concepts ...........................................................................................................................2-137 Conversion.....................................................................................................................................................2-138 Conversion Example......................................................................................................................................2-139 Revaluation....................................................................................................................................................2-140 Revaluation Example.....................................................................................................................................2-141 Translation.....................................................................................................................................................2-142 Translation Rates ...........................................................................................................................................2-143 Currency Rates Manager Description............................................................................................................2-144 Currency Rates Manager Description (continued) ........................................................................................2-145 Currency Rates Manager Features.................................................................................................................2-146 Currency Rates Manager Benefits .................................................................................................................2-148 Cross-Ledger and Foreign Currency Allocations .........................................................................................2-149 Cross-Ledger and Foreign Currency Allocations Benefits ...........................................................................2-150 Entered Currency Reporting and Analysis ....................................................................................................2-151 Entered Currency Reporting and Analysis Benefits .....................................................................................2-153 Agenda...........................................................................................................................................................2-154 Consolidations ...............................................................................................................................................2-155 Consolidating Data in Multiple Instances......................................................................................................2-156 Consolidation Workbench .............................................................................................................................2-157 Consolidation Mapping .................................................................................................................................2-159 Streamlined Consolidation Mappings............................................................................................................2-162 Consolidation Mappings................................................................................................................................2-163 Consolidation Mappings Benefits..................................................................................................................2-165 Mapping Rules...............................................................................................................................................2-166 Using Account Mapping Rules......................................................................................................................2-167 Using Segment Mapping Rules .....................................................................................................................2-168 Using Segment Rollup Rules.........................................................................................................................2-169 Hierarchy Viewer ..........................................................................................................................................2-171 Preparing Subsidiary Data .............................................................................................................................2-172 Posting Consolidation Journal Entries...........................................................................................................2-173 Creating Eliminating Entries .........................................................................................................................2-174 Agenda...........................................................................................................................................................2-176 Reporting Options .........................................................................................................................................2-177 Financial Statement Generator ......................................................................................................................2-178 Defining Row Sets.........................................................................................................................................2-179 Defining Column Sets ...................................................................................................................................2-180 Defining Ad Hoc Reports ..............................................................................................................................2-181 Enterprise Planning and Budgeting ...............................................................................................................2-182 E-Business Intelligence .................................................................................................................................2-183 Oracle Discoverer ..........................................................................................................................................2-184

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R12 Oracle Financial Applications Overview Table of Contents iv

XBRL Financial Reporting Features .............................................................................................................2-185 XBRL Financial Reporting Benefits..............................................................................................................2-187 GL Standard Reports Integration With XML Publisher ................................................................................2-188 Simultaneous Accounting for Multiple Reporting Requirements..................................................................2-189 Summary........................................................................................................................................................2-190

Procure to Pay Flow Overview.......................................................................................................................3-1 Procure to Pay Flow Overview......................................................................................................................3-3 Objectives ......................................................................................................................................................3-4 Agenda...........................................................................................................................................................3-5 Procure to Pay Flow ......................................................................................................................................3-6 Purchasing Integration...................................................................................................................................3-8 Procure to Pay Lifecycle................................................................................................................................3-12 Oracle Procure to Pay Process.......................................................................................................................3-14 Introduction to Legal Entities ........................................................................................................................3-15 RFQs and Quotations.....................................................................................................................................3-16 Requisitions ...................................................................................................................................................3-18 Suppliers ........................................................................................................................................................3-21 Purchase Orders.............................................................................................................................................3-22 Receiving.......................................................................................................................................................3-24 Invoicing........................................................................................................................................................3-26 Payment .........................................................................................................................................................3-28 Summary........................................................................................................................................................3-29

Suppliers Overview..........................................................................................................................................4-1 Suppliers Overview .......................................................................................................................................4-3 Objectives ......................................................................................................................................................4-4 Agenda...........................................................................................................................................................4-5 Overview .......................................................................................................................................................4-7 How Oracle Products Use Supplier Information ...........................................................................................4-8 Flow of Default Values..................................................................................................................................4-10 Agenda...........................................................................................................................................................4-11 Suppliers in the Trading Community Architecture (TCA) ...........................................................................4-12 TCA Security by Functional Areas................................................................................................................4-13 Agenda...........................................................................................................................................................4-14 Suppliers Page ...............................................................................................................................................4-15 Supplier Record Structure..............................................................................................................................4-16 Enter/Update Suppliers..................................................................................................................................4-18 Supplier Level Versus Site Level Entry ........................................................................................................4-20 Supplier Site Settings.....................................................................................................................................4-21 Avoiding Duplicate Suppliers........................................................................................................................4-22 Agenda...........................................................................................................................................................4-24 Key Reports ...................................................................................................................................................4-25 Agenda...........................................................................................................................................................4-27 Merge Suppliers.............................................................................................................................................4-28 Data Example - Supplier Merge ....................................................................................................................4-30 Agenda...........................................................................................................................................................4-31 Responsibility for Supplier Entry/Maintenance.............................................................................................4-32 Supplier Naming Conventions.......................................................................................................................4-33 Supplier Naming Convention Examples........................................................................................................4-35 Supplier Conversion Methodology................................................................................................................4-37 Fax or E-Mail Setup ......................................................................................................................................4-38 Agenda...........................................................................................................................................................4-40 Oracle Purchasing and the Enterprise Structure ...........................................................................................4-41 Oracle Inventory Organizations.....................................................................................................................4-42 What is an Item? ............................................................................................................................................4-44 Oracle Applications That Use Items..............................................................................................................4-45 Summary........................................................................................................................................................4-47

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R12 Oracle Financial Applications Overview Table of Contents v

Purchasing Overview ......................................................................................................................................5-1 Purchasing Overview.....................................................................................................................................5-3 Objectives ......................................................................................................................................................5-4 Agenda...........................................................................................................................................................5-5 Item Attributes...............................................................................................................................................5-7 Item Master Organization and Child Organizations ......................................................................................5-9 Overview of Creating an Item .......................................................................................................................5-11 Describing Item Attributes - Purchasing .......................................................................................................5-12 Defining Item Relationships - Purchasing .....................................................................................................5-16 Agenda...........................................................................................................................................................5-17 Central Procurement ......................................................................................................................................5-18 Document Access Levels...............................................................................................................................5-20 Security, Approval Limits, and Approval Routing Options ..........................................................................5-21 Agenda...........................................................................................................................................................5-23 Purchase Requisitions....................................................................................................................................5-24 Information Flow...........................................................................................................................................5-28 Agenda...........................................................................................................................................................5-29 Professional Buyer's Work Center.................................................................................................................5-30 Benefits..........................................................................................................................................................5-31 User Interface ................................................................................................................................................5-32 Agenda...........................................................................................................................................................5-33 Request for Quotation....................................................................................................................................5-34 Agenda...........................................................................................................................................................5-35 Sourcing Rules...............................................................................................................................................5-36 Create a Sourcing Rule ..................................................................................................................................5-37 Create a Sourcing Rule Assignment ..............................................................................................................5-38 Levels of Sourcing Rule Assignments...........................................................................................................5-40 Sourcing Rules with an ASL Source Document............................................................................................5-41 Agenda...........................................................................................................................................................5-42 Purchase Orders Process................................................................................................................................5-43 Origin.............................................................................................................................................................5-45 Information Flow...........................................................................................................................................5-46 Management Interfaces..................................................................................................................................5-47 Purchasing e-Commerce Capabilities ............................................................................................................5-49 Purchasing XML Capabilities........................................................................................................................5-50 Creating Purchase Orders ..............................................................................................................................5-51 Maintaining Purchase Orders ........................................................................................................................5-52 Agenda...........................................................................................................................................................5-53 Printing and Communication.........................................................................................................................5-54 Document Attachments .................................................................................................................................5-55 Document Attachment Types ........................................................................................................................5-56 Setup – Define Purchasing Options ...............................................................................................................5-57 Agenda...........................................................................................................................................................5-58 Receiving Process..........................................................................................................................................5-59 Receiving in Oracle Purchasing.....................................................................................................................5-62 Open Interface ...............................................................................................................................................5-63 Agenda...........................................................................................................................................................5-65 Purchasing Accounting Considerations .........................................................................................................5-66 Purchasing Period-End Accrual Cycle ..........................................................................................................5-67 Accounting Implementation Considerations..................................................................................................5-68 Summary........................................................................................................................................................5-69

Payables Overview...........................................................................................................................................6-1 Payables Overview ........................................................................................................................................6-3 Objectives ......................................................................................................................................................6-4 Agenda...........................................................................................................................................................6-5 Payables Process............................................................................................................................................6-7

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R12 Oracle Financial Applications Overview Table of Contents vi

Invoice Structure............................................................................................................................................6-8 Types of Invoices..........................................................................................................................................6-10 Invoice Lines .................................................................................................................................................6-12 Line Types .....................................................................................................................................................6-13 Distribution Types .........................................................................................................................................6-14 Matching to a Purchase Order .......................................................................................................................6-15 Match Approval Level Options .....................................................................................................................6-16 Purchase Order Shipment Match ...................................................................................................................6-18 Receipt Match................................................................................................................................................6-19 Matching to Distributions for Assets .............................................................................................................6-20 Invoices: Matching to Distributions for Expenses.........................................................................................6-21 Invoices: Matching to Distributions for Inventory ........................................................................................6-22 Invoice Approval Workflow Resubmission...................................................................................................6-24 Gapless Invoice Numbering for Self-Billing Invoices...................................................................................6-25 Holds and Releases........................................................................................................................................6-26 Invoice Validation .........................................................................................................................................6-29 Levels of Invoice Validation .........................................................................................................................6-31 Invoice Validation Concurrent Processing ....................................................................................................6-33 Invoice Processing for Contract Financing, Retainage, and Progress Terms ................................................6-34 Agenda...........................................................................................................................................................6-36 Setting Up Payables for Expense Reports .....................................................................................................6-37 Expense Reporting Process............................................................................................................................6-38 Expense Report Import Program ...................................................................................................................6-39 Processing and iExpenses ..............................................................................................................................6-40 Agenda...........................................................................................................................................................6-41 Invoice Payments...........................................................................................................................................6-42 Payment Manager Terminology ....................................................................................................................6-43 Using the Invoice Workbench .......................................................................................................................6-45 Time Zone Support........................................................................................................................................6-46 Invoice Payment Methods .............................................................................................................................6-47 Manual Payment ............................................................................................................................................6-49 Creating Quick Payments ..............................................................................................................................6-50 Invoice Payments: Formatting Payments ......................................................................................................6-55 Agenda...........................................................................................................................................................6-56 Key Processes................................................................................................................................................6-57 Period Close...................................................................................................................................................6-59 Mass Additions Accounting - Periodic Accrual [Period End] .......................................................................6-60 Subledger Accounting and General Ledger...................................................................................................6-62 Accounting Process Error Validation and Reporting.....................................................................................6-63 Agenda...........................................................................................................................................................6-64 Daily Business Intelligence ...........................................................................................................................6-65 Agenda...........................................................................................................................................................6-67 Oracle iSupplier Portal Invoice Matching Controls.......................................................................................6-68 Attachments...................................................................................................................................................6-69 PO Number Display.......................................................................................................................................6-70 Retroactive Pricing of Purchase Orders Support ...........................................................................................6-71 Attachments...................................................................................................................................................6-72 Agenda...........................................................................................................................................................6-73 Payables Integration with E-Business Tax ....................................................................................................6-74 Multiple Organization Access Control ..........................................................................................................6-76 Summary........................................................................................................................................................6-78

Assets Overview ...............................................................................................................................................7-1 Assets Overview............................................................................................................................................7-3 Objectives ......................................................................................................................................................7-4 Agenda...........................................................................................................................................................7-5 Overview .......................................................................................................................................................7-7

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R12 Oracle Financial Applications Overview Table of Contents vii

Assets Integration ..........................................................................................................................................7-8 Asset Life Cycle ............................................................................................................................................7-9 Agenda...........................................................................................................................................................7-10 Positioning.....................................................................................................................................................7-11 Regions..........................................................................................................................................................7-12 Calendar Region ............................................................................................................................................7-14 Accounting Rules Region..............................................................................................................................7-16 Natural Accounts Region...............................................................................................................................7-18 Subledger Accounting Architecture...............................................................................................................7-20 Asset Categories Positioning .........................................................................................................................7-21 Asset Categories Regions ..............................................................................................................................7-22 Agenda...........................................................................................................................................................7-23 Adding Assets Manually ...............................................................................................................................7-24 Asset Additions Required Data .....................................................................................................................7-26 QuickAdditions..............................................................................................................................................7-27 Detail Asset Additions...................................................................................................................................7-30 Agenda...........................................................................................................................................................7-31 Additions Integrator.......................................................................................................................................7-32 Mass Asset Additions Process .......................................................................................................................7-33 Mass Additions Process.................................................................................................................................7-35 Using the Mass Additions Interface Table ....................................................................................................7-36 Step 1 - Mass Additions Create .....................................................................................................................7-37 Step 2 - Prepare Mass Additions ...................................................................................................................7-39 Step 3 - Post Mass Additions.........................................................................................................................7-40 Step 4 - Delete Mass Additions .....................................................................................................................7-41 Accounting for Mass Additions Periodic Accrual [Period End]....................................................................7-42 Agenda...........................................................................................................................................................7-44 Asset Adjustments .........................................................................................................................................7-45 Single Asset Reclassification.........................................................................................................................7-47 Adjusting Units..............................................................................................................................................7-48 Adjusting Financial Information....................................................................................................................7-49 Single Asset Transfers ...................................................................................................................................7-50 Mass Transactions .........................................................................................................................................7-52 Mass Reclassification ....................................................................................................................................7-53 Using Mass Changes .....................................................................................................................................7-54 Mass Asset Transfers.....................................................................................................................................7-55 Performing Physical Inventory ......................................................................................................................7-56 Entering Physical Inventory ..........................................................................................................................7-58 Physical Inventory Comparison.....................................................................................................................7-59 Physical Inventory Reconciliation.................................................................................................................7-61 Integrating Web ADI with Physical Inventory ..............................................................................................7-62 Agenda...........................................................................................................................................................7-64 Enable/Disable Group Assets ........................................................................................................................7-65 Allow CIP Member Assets in Group Assets..................................................................................................7-66 Agenda...........................................................................................................................................................7-67 Depreciation Elements...................................................................................................................................7-68 Basic Depreciation Calculation .....................................................................................................................7-70 Depreciation Methods....................................................................................................................................7-72 Run Depreciation Process..............................................................................................................................7-73 Depreciation Program Processes ...................................................................................................................7-75 Automatic Rollback of Depreciation .............................................................................................................7-76 Agenda...........................................................................................................................................................7-78 Tracking Asset Retirements...........................................................................................................................7-79 Retiring an Asset ...........................................................................................................................................7-80 Fully Retiring Assets .....................................................................................................................................7-81 Partially Retiring Assets ................................................................................................................................7-82 Mass Asset Retirements.................................................................................................................................7-83

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R12 Oracle Financial Applications Overview Table of Contents viii

External Retirements .....................................................................................................................................7-86 Retirements: Reinstating Retired Assets........................................................................................................7-88 Agenda...........................................................................................................................................................7-89 Assets Journal Entries Flow...........................................................................................................................7-90 Oracle Subledger Accounting........................................................................................................................7-92 Journal Entries Created..................................................................................................................................7-93 Summary........................................................................................................................................................7-95

Order to Cash Flow Overview........................................................................................................................8-1 Order to Cash Flow Overview.......................................................................................................................8-3 Objectives ......................................................................................................................................................8-4 Agenda...........................................................................................................................................................8-5 Overview: Order to Cash...............................................................................................................................8-6 Overview: Click to Order ..............................................................................................................................8-7 Overview: Order to Cash Lifecycle ...............................................................................................................8-9 Overview: Order Lifecycle ............................................................................................................................8-10 Order Processing: Order Entry Methods .......................................................................................................8-11 Order Processing: Pricing Process.................................................................................................................8-12 Order Processing: Viewing and Managing Orders ........................................................................................8-13 Shipping Execution: Shipping Process ..........................................................................................................8-14 Shipping Execution: Scheduling....................................................................................................................8-15 Collection: AutoInvoice Process ...................................................................................................................8-16 Collection: Receivables Process ....................................................................................................................8-17 Summary........................................................................................................................................................8-18

Customers Overview .......................................................................................................................................9-1 Customers Overview .....................................................................................................................................9-3 Objectives ......................................................................................................................................................9-4 Agenda...........................................................................................................................................................9-5 Party Model ...................................................................................................................................................9-7 Integrating Party Information ........................................................................................................................9-9 Party Model Definitions ................................................................................................................................9-10 Relationships .................................................................................................................................................9-11 Managing Parties ...........................................................................................................................................9-12 Customer Accounts........................................................................................................................................9-13 Multi-Org Access Control (MOAC)..............................................................................................................9-14 Agenda...........................................................................................................................................................9-15 Profile Classes ...............................................................................................................................................9-16 Profile Class Characteristics ..........................................................................................................................9-17 Managing Customer Account Profiles...........................................................................................................9-18 Agenda...........................................................................................................................................................9-19 Entry Methods ...............................................................................................................................................9-20 Business Issues ..............................................................................................................................................9-21 Business Purposes..........................................................................................................................................9-22 Multiple Sites and Business Purposes Centralized Example ........................................................................9-23 Multiple Sites and Business Purposes Decentralized Example .....................................................................9-24 Creating Customers .......................................................................................................................................9-25 Review Information.......................................................................................................................................9-27 Agenda...........................................................................................................................................................9-28 Customer Account Relationships ..................................................................................................................9-29 Merge Parties or Customer Accounts ............................................................................................................9-30 Customers Online Integration........................................................................................................................9-32 Agenda...........................................................................................................................................................9-33 Required Setup Steps for Customers .............................................................................................................9-34 Profile Options...............................................................................................................................................9-35 Optional Setup Steps for Customers..............................................................................................................9-36 Summary........................................................................................................................................................9-38

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R12 Oracle Financial Applications Overview Table of Contents ix

Order Management Overview........................................................................................................................10-1 Order Management Overview .......................................................................................................................10-3 Objectives ......................................................................................................................................................10-4 Agenda...........................................................................................................................................................10-5 Items ..............................................................................................................................................................10-6 Items: Master Organization and Child Organizations ...................................................................................10-7 Items: Creation ..............................................................................................................................................10-8 Items: Describing Item Attributes – Order Management...............................................................................10-9 Items: Describing Item Attributes – Order Management (continued) ...........................................................10-10 Items: Describing Item Attributes - Invoicing ...............................................................................................10-17 Items: Describing Attributes Controls at Master Level .................................................................................10-19 Items: Describing Attributes Controls at Child Level ...................................................................................10-20 Order Entry: Order Creation Methods ...........................................................................................................10-21 Order Entry: Order Management Workflows ................................................................................................10-22 Order Entry: Processing Constraints..............................................................................................................10-23 Order Entry: Defaulting Rules.......................................................................................................................10-24 Order Entry: Credit Checking........................................................................................................................10-26 Order Entry: Order Header ............................................................................................................................10-27 Order Entry: Order Transaction Type............................................................................................................10-28 Order Entry: Entering Header Customer Information ...................................................................................10-30 Order Entry: Entering Header Pricing Information .......................................................................................10-31 Order Entry: Entering Additional Header Information..................................................................................10-33 Order Entry: Applying Sales Credits .............................................................................................................10-34 Order Entry: Line Statuses.............................................................................................................................10-35 Order Entry: Entering Line Information........................................................................................................10-36 Order Entry: Entering Line Information (continued).....................................................................................10-37 Entering Line Pricing Information.................................................................................................................10-38 Order Entry: Line Pricing Fields ...................................................................................................................10-40 Order Entry: Line Date Fields .......................................................................................................................10-41 Order Entry: Entering Line Shipping Information........................................................................................10-42 Order Entry: Entering Return Information ....................................................................................................10-43 Order Entry: Ordering Service Programs ......................................................................................................10-45 Order Entry: Splitting Order Lines ................................................................................................................10-46 Order Scheduling and Booking: Available to Promise..................................................................................10-47 Order Scheduling and Booking: Schedule.....................................................................................................10-48 Order Scheduling and Booking: Reserve.......................................................................................................10-49 Order Scheduling and Booking: Scheduling Options ....................................................................................10-50 Order Scheduling and Booking: Booking Orders..........................................................................................10-51 Drop Shipment...............................................................................................................................................10-52 Internal Requisition .......................................................................................................................................10-53 Order Import..................................................................................................................................................10-55 Configurator ..................................................................................................................................................10-56 iStore .............................................................................................................................................................10-57 iStore: Shopping Carts...................................................................................................................................10-58 iStore: Checkout and Ordering ......................................................................................................................10-59 iStore: Checkout and Ordering (continued)...................................................................................................10-61 iStore: Home Page .........................................................................................................................................10-62 iStore: Home Page (continued)......................................................................................................................10-63 Order Management: Mass Updates................................................................................................................10-68 Order Management: Automatic System Holds - Credit Check Hold.............................................................10-69 Order Management: Creating and Applying Holds .......................................................................................10-71 Order Management: Apply Holds .................................................................................................................10-72 Order Management: Apply Holds (continued) ..............................................................................................10-73 Order Management: Release Holds ...............................................................................................................10-74 Pricing: Pricing Engine..................................................................................................................................10-75 Pricing: Pricing Engine (continued) ..............................................................................................................10-77 Pricing: Pricing Engine Pyramid ...................................................................................................................10-78

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R12 Oracle Financial Applications Overview Table of Contents x

Pricing: Process .............................................................................................................................................10-79 Pricing: Single Versus Multiple Currency Price Lists ...................................................................................10-80 Pricing: Price List Creation ...........................................................................................................................10-81 Pricing: Price List Header..............................................................................................................................10-82 Pricing: Price List Header (continued) ..........................................................................................................10-83 Pricing: Price List Line..................................................................................................................................10-84 Pricing: Price List Line (continued)...............................................................................................................10-85 Pricing: Price List Line Values......................................................................................................................10-86 Pricing: Price List Line Values (continued)...................................................................................................10-88 Pricing: Price List Maintenance.....................................................................................................................10-89 Pricing: Formulas ..........................................................................................................................................10-90 Pricing: Formulas (continued) .......................................................................................................................10-91 Pricing: Types of Formulas ...........................................................................................................................10-92 Pricing: Dynamic Calculation........................................................................................................................10-93 Pricing: Static Calculation .............................................................................................................................10-94 Pricing: Component Types ............................................................................................................................10-95 Pricing: Attributes..........................................................................................................................................10-97 Pricing: Factor Lists.......................................................................................................................................10-98 Pricing: Factor Lists (continued) ...................................................................................................................10-99 Pricing: Qualifiers..........................................................................................................................................10-100 Pricing: Seeded Qualifier Contexts................................................................................................................10-101 Pricing: Modifiers..........................................................................................................................................10-102 Pricing: Modifier Structure............................................................................................................................10-103 Pricing: Some Modifier List and Line Type Relationships ...........................................................................10-105 Pricing: Some Modifier List and Line Type Relationships (continued) ........................................................10-106 Shipping: Ship Order .....................................................................................................................................10-107 Shipping: Concepts........................................................................................................................................10-109 Shipping: Concepts (continued) ....................................................................................................................10-110 Shipping: Pick Release Concepts ..................................................................................................................10-114 Shipping: Pick Release Concepts (continued) ...............................................................................................10-115 Shipping: Pick Release Process .....................................................................................................................10-117 Shipping: Pick Release Process (continued)..................................................................................................10-119 Shipping: Ship Confirm Process....................................................................................................................10-124 Shipping: Ship Confirm Process (continued) ................................................................................................10-126 Shipping: Delivery Line Processing Statuses (continued).............................................................................10-132 Shipping: Delivery Line Processing Statuses ................................................................................................10-133 Returns: Standard Return...............................................................................................................................10-134 Returns: Returns in iSupport .........................................................................................................................10-135 Daily Business Intelligence ...........................................................................................................................10-136 New Features in Release 12...........................................................................................................................10-138 New Features in Release 12 Multi-Org Access Control ...............................................................................10-139 New Features in Release 12: Integration with Receivables – Customer Acceptance ....................................10-140 New Features in Release 12: Integration with Receivables – Partial Period Revenue Recognition ..............10-141 New Features in Release 12: Integration with Payments – Credit Card related Enhancements ....................10-142 New Features in Release 12: Integration with Payments Payment Due with Order (Pay Now Pay Later) ...10-143 New Features in Release 12: Integration with TSO – Recurring Charges....................................................10-144 New Features in Release 12: Integration with eBTax – Vertex....................................................................10-145 New Features in Release 12: RosettaNet Native Payloads ...........................................................................10-146 New Features in Release 12 Sales Contracts Workbench.............................................................................10-147 New Features in Release 12 Mass Scheduling .............................................................................................10-148 Summary........................................................................................................................................................10-149

Receivables Overview......................................................................................................................................11-1 Receivables Overview ...................................................................................................................................11-3 Objectives ......................................................................................................................................................11-4 Agenda...........................................................................................................................................................11-5 Overview .......................................................................................................................................................11-7

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R12 Oracle Financial Applications Overview Table of Contents xi

Transactions Overview ..................................................................................................................................11-9 Invoice Entry Methods Overview..................................................................................................................11-10 Agenda...........................................................................................................................................................11-11 AutoInvoice Process ......................................................................................................................................11-12 AutoInvoicing................................................................................................................................................11-14 Integration......................................................................................................................................................11-15 Interface Tables .............................................................................................................................................11-16 Transaction Batch Sources ............................................................................................................................11-18 Grouping Rules..............................................................................................................................................11-19 Line Ordering Rules ......................................................................................................................................11-20 Transaction Flexfields ...................................................................................................................................11-21 Correcting Errors ...........................................................................................................................................11-22 Exception Handling Windows.......................................................................................................................11-23 Agenda...........................................................................................................................................................11-25 Creating a Standard Invoice Manually ..........................................................................................................11-26 Invoice Components ......................................................................................................................................11-27 Entering Invoice Dates ..................................................................................................................................11-29 Standard Invoice Line Types .........................................................................................................................11-30 Completing Transactions ...............................................................................................................................11-31 Invoice Transaction Flow ..............................................................................................................................11-32 Invoice Correction Methods ..........................................................................................................................11-33 Overview of Corrections................................................................................................................................11-34 Updating Invoices..........................................................................................................................................11-36 Creating Debit Memos...................................................................................................................................11-37 Creating Adjustments ....................................................................................................................................11-38 Applying Different Types of Credits .............................................................................................................11-39 Credit Memo Options ....................................................................................................................................11-40 On-Account Credit Options...........................................................................................................................11-42 Voiding Transactions.....................................................................................................................................11-43 Agenda...........................................................................................................................................................11-45 Oracle Receivables Overview........................................................................................................................11-46 Receipts .........................................................................................................................................................11-47 Receipt Creation ............................................................................................................................................11-48 Manual Receipt Entry Process.......................................................................................................................11-49 Receipt Types ................................................................................................................................................11-50 Manual Receipts versus QuickCash Receipts................................................................................................11-52 Applying Batch Receipts ...............................................................................................................................11-53 Applying Receipts to an Invoice....................................................................................................................11-54 Applying Receipts at Line Level ...................................................................................................................11-55 AP/AR Netting ..............................................................................................................................................11-57 Applications Window....................................................................................................................................11-58 Deposit Applications .....................................................................................................................................11-60 Credit Cards...................................................................................................................................................11-61 Processing Credit Card Refunds....................................................................................................................11-63 Processing Credit Card Transactions.............................................................................................................11-65 Creating Credit Card Transactions ................................................................................................................11-66 Agenda...........................................................................................................................................................11-67 Overview of Advanced Collections...............................................................................................................11-68 Advanced Collections – Collection Methods ................................................................................................11-70 Collection Methods........................................................................................................................................11-72 Identifying Customers With Overdue Accounts............................................................................................11-74 Agenda...........................................................................................................................................................11-75 iReceivables...................................................................................................................................................11-76 Features .........................................................................................................................................................11-77 Credit Memo Workflow ................................................................................................................................11-78 Agenda...........................................................................................................................................................11-80 Calculating Tax on Transactions ...................................................................................................................11-81

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R12 Oracle Financial Applications Overview Table of Contents xii

Calculating Tax Using the Tax Classification Code......................................................................................11-82 Tax Partner Process Overview.......................................................................................................................11-83 Agenda...........................................................................................................................................................11-84 Period Closing Process ..................................................................................................................................11-85 Agenda...........................................................................................................................................................11-86 Daily Business Intelligence ...........................................................................................................................11-87 Summary........................................................................................................................................................11-89

Cash Management Overview..........................................................................................................................12-1 Cash Management Overview.........................................................................................................................12-3 Course Objectives..........................................................................................................................................12-4 Agenda...........................................................................................................................................................12-5 Overview .......................................................................................................................................................12-7 Overview of Bank Account Model................................................................................................................12-8 Agenda...........................................................................................................................................................12-10 Defining Banks..............................................................................................................................................12-11 Defining Bank Branches................................................................................................................................12-13 Linking Bank and Branches in Oracle Treasury............................................................................................12-15 Creating Bank Accounts: Selecting Branch, Legal Entities, and Functions ..................................................12-16 Bank Balance Types ......................................................................................................................................12-18 Entering Account Balances Manually or Uploading Automatically..............................................................12-19 Creating Reports for Account Balances and Interest Calculations ................................................................12-20 Creating a Bank Transfer...............................................................................................................................12-23 Authorizing a Bank Transfer .........................................................................................................................12-24 Calculating Interest on Bank Accounts .........................................................................................................12-25 Agenda...........................................................................................................................................................12-26 Reconciliation................................................................................................................................................12-27 Integration......................................................................................................................................................12-28 Oracle Receivables and Payables ..................................................................................................................12-29 Oracle Payroll, Treasury, and General Ledger ..............................................................................................12-30 AutoReconciliation........................................................................................................................................12-32 Setting Up Bank Transaction Codes..............................................................................................................12-33 Bank Statement Open Interface .....................................................................................................................12-34 Importing Bank Statements ...........................................................................................................................12-36 Bank Statement Validation ............................................................................................................................12-37 Bank Statement Interface Errors....................................................................................................................12-38 Entering Bank Statements Manually .............................................................................................................12-39 Reconciling Bank Statements Automatically ................................................................................................12-40 Reconciling Bank Statements Manually........................................................................................................12-41 Creating Miscellaneous Transactions ............................................................................................................12-42 Recording a Bank Transmission Error...........................................................................................................12-43 Recording Transactions from External Systems............................................................................................12-44 Open Interface ...............................................................................................................................................12-45 Manually Clearing and Unclearing................................................................................................................12-46 Clearing and Reconciling Transactions in Oracle Payables ..........................................................................12-47 Clearing and Reconciling Transactions in Oracle Receivables .....................................................................12-48 Transferring Entries to Your General Ledger ................................................................................................12-49 AutoReconciliation Matching........................................................................................................................12-50 Adjustment Method .......................................................................................................................................12-51 Manual Reconciliation Matching ..................................................................................................................12-52 Agenda...........................................................................................................................................................12-53 Cash Forecasting ...........................................................................................................................................12-54 Cash Forecasting Advantages........................................................................................................................12-56 Cash Forecast Template.................................................................................................................................12-57 Generating a Cash Forecast ...........................................................................................................................12-58 Cash Forecasting by Transaction Currency ...................................................................................................12-59 Cash Forecasting by Temporary Labor and Fixed Price Services .................................................................12-60

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R12 Oracle Financial Applications Overview Table of Contents xiii

Agenda...........................................................................................................................................................12-61 Cash Positioning............................................................................................................................................12-62 Agenda...........................................................................................................................................................12-64 Cash Management Reports ............................................................................................................................12-65 Batches Available for Reconciliation Report ................................................................................................12-69 Summary........................................................................................................................................................12-70

Appendix 1 Internal Controls Manager Overview .......................................................................................13-1 Internal Controls Manager Overview ............................................................................................................13-3 Objectives ......................................................................................................................................................13-4 Agenda...........................................................................................................................................................13-5 Overview .......................................................................................................................................................13-6 OICM Business Flow ....................................................................................................................................13-8 OICM Footprint.............................................................................................................................................13-13 Integration with E-Business Suite Applications ............................................................................................13-14 Benefits of Oracle Internal Controls Manager...............................................................................................13-16 Application Controls Monitoring ..................................................................................................................13-17 Process Revision Management ......................................................................................................................13-18 Risk Library...................................................................................................................................................13-19 XML Publisher Reports.................................................................................................................................13-20 Dashboards ....................................................................................................................................................13-21 Data Security .................................................................................................................................................13-22 Extensible Attributes .....................................................................................................................................13-23 Set up User and Responsibilities ...................................................................................................................13-24 Summary........................................................................................................................................................13-25

Appendix 2 Internet Expenses Overview.......................................................................................................14-1 Internet Expenses Overview..........................................................................................................................14-3 Objectives ......................................................................................................................................................14-4 Agenda...........................................................................................................................................................14-5 Overview .......................................................................................................................................................14-7 Advantages of Using Oracle Internet Expenses.............................................................................................14-8 Agenda...........................................................................................................................................................14-9 Expense Reporting Process............................................................................................................................14-10 Expense Report Import Program ...................................................................................................................14-11 Agenda...........................................................................................................................................................14-12 Expense Management....................................................................................................................................14-13 Agenda...........................................................................................................................................................14-15 Expense Reporting Methods..........................................................................................................................14-16 Online Using Credit Card ..............................................................................................................................14-17 Disconnected Expense Reporting ..................................................................................................................14-19 Agenda...........................................................................................................................................................14-20 Expense Reporting Features ..........................................................................................................................14-21 Entering Foreign Currency Expenses ............................................................................................................14-22 Expense Reporting Features ..........................................................................................................................14-23 Agenda...........................................................................................................................................................14-26 Descriptive Flexfields....................................................................................................................................14-27 Product Features ............................................................................................................................................14-28 Online Policy Compliance.............................................................................................................................14-36 Per Diem and Mileage ...................................................................................................................................14-37 Location and VAT Setup...............................................................................................................................14-38 Short Paying and Adjusting Expense Reports ...............................................................................................14-39 Audit Management and Automation..............................................................................................................14-40 Product Features ............................................................................................................................................14-42 Agenda...........................................................................................................................................................14-44 Workflow Processes ......................................................................................................................................14-45 Expenses Workflow Process..........................................................................................................................14-46 Agenda...........................................................................................................................................................14-47

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R12 Oracle Financial Applications Overview Table of Contents xiv

Oracle Projects Integration ............................................................................................................................14-48 Oracle Grants Accounting Integration...........................................................................................................14-49 Oracle Approvals Management (AME) Integration ......................................................................................14-50 Other Product Integration ..............................................................................................................................14-51 Summary........................................................................................................................................................14-52

Appendix 3 Lease Management Overview ....................................................................................................15-1 Lease Management Overview .......................................................................................................................15-3 Objectives ......................................................................................................................................................15-4 Agenda...........................................................................................................................................................15-5 Overview .......................................................................................................................................................15-6 Lease Management in the Oracle E-Business Suite......................................................................................15-7 Lease Management CRM Applications.........................................................................................................15-8 Lease Management ERP Applications ..........................................................................................................15-9 Optional Integration for Additional Lease Management Functionality ........................................................15-10 Opportunity to Booking.................................................................................................................................15-11 Invoice to Termination ..................................................................................................................................15-22 Asset Return to Disposal ...............................................................................................................................15-31 Period Open to Period Close and Inquiry to Resolution................................................................................15-35 Summary........................................................................................................................................................15-38

Appendix 4 Trading Community Architecture (TCA) Overview ...............................................................16-1 Trading Community Architecture (TCA) Overview .....................................................................................16-3 Objectives ......................................................................................................................................................16-4 Agenda...........................................................................................................................................................16-5 Overview .......................................................................................................................................................16-6 TCA Origins ..................................................................................................................................................16-7 TCA Principles ..............................................................................................................................................16-9 TCA Recognition...........................................................................................................................................16-10 TCA Evolution ..............................................................................................................................................16-11 Customer Data Management (CDM).............................................................................................................16-12 CDM Product Family ....................................................................................................................................16-13 Customer Data Hub .......................................................................................................................................16-14 Customer Data Spoke ....................................................................................................................................16-15 Customer Data Librarian ...............................................................................................................................16-16 Customers Online ..........................................................................................................................................16-17 CDM Training Overview: TCA Fundamentals Course .................................................................................16-18 CDM Training Overview: TCA Enabling Infrastructure...............................................................................16-19 CDM Training Overview: Customers Online................................................................................................16-20 CDM Training: Customer Data Librarian .....................................................................................................16-21 CDM Training: Customer Data Hub (The Solution) .....................................................................................16-22 TCA Model....................................................................................................................................................16-23 Summary........................................................................................................................................................16-24

Appendix 5 Treasury Overview .....................................................................................................................17-1 Treasury Overview ........................................................................................................................................17-3 Objectives ......................................................................................................................................................17-4 Agenda...........................................................................................................................................................17-5 Overview .......................................................................................................................................................17-6 Integration......................................................................................................................................................17-7 Straight Through Processing Capabilities......................................................................................................17-8 Enhanced Regulatory Compliance.................................................................................................................17-9 Expanded Bond Functionality .......................................................................................................................17-10 Cash Positions and Forecasting .....................................................................................................................17-11 Automatic Bond Rate Resetting ....................................................................................................................17-12 Bank Account Update Program .....................................................................................................................17-13 Cash Pooling Across Legal Entities...............................................................................................................17-14 Summary........................................................................................................................................................17-15

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R12 Oracle Financial Applications Overview Table of Contents xv

Appendix 6 Enterprise Project Management Solution Overview ...............................................................18-1 Oracle Enterprise Project Management Solution Overview ..........................................................................18-3 Objectives ......................................................................................................................................................18-4 Agenda...........................................................................................................................................................18-5 Oracle Enterprise Project Management Solution...........................................................................................18-6 Oracle Project Foundation .............................................................................................................................18-7 Oracle Project Costing...................................................................................................................................18-9 Oracle Project Billing ....................................................................................................................................18-11 Oracle Project Resource Management...........................................................................................................18-13 Oracle Project Management ..........................................................................................................................18-15 Oracle Project Collaboration .........................................................................................................................18-17 Oracle Project Portfolio Analysis ..................................................................................................................18-19 Oracle Daily Business Intelligence for Projects ............................................................................................18-21 Example Projects Business Flow...................................................................................................................18-24 Agenda...........................................................................................................................................................18-26 Oracle Projects Integration with Other Oracle Applications .........................................................................18-27 Oracle Projects Integration with Other Oracle Applications (continued) ......................................................18-28 Oracle Product Lifecycle Management .........................................................................................................18-29 Oracle Assets .................................................................................................................................................18-31 Oracle Asset Tracking ...................................................................................................................................18-33 Oracle Cash Management..............................................................................................................................18-35 Oracle General Ledger...................................................................................................................................18-36 Oracle Grants Accounting .............................................................................................................................18-39 Oracle Human Resources ..............................................................................................................................18-40 Oracle Internet Expenses ...............................................................................................................................18-41 Oracle Internal Controls Manager .................................................................................................................18-43 Oracle Inventory ............................................................................................................................................18-44 Oracle Master Scheduling/MRP and Supply Chain Planning........................................................................18-45 Oracle Payables (Accrual) .............................................................................................................................18-47 Oracle Payables (Cash)..................................................................................................................................18-49 Oracle Purchasing..........................................................................................................................................18-50 Oracle Project Contracts ................................................................................................................................18-52 Oracle Project Manufacturing........................................................................................................................18-53 Oracle Receivables ........................................................................................................................................18-55 Oracle Sales ...................................................................................................................................................18-57 Oracle Shipping Execution ............................................................................................................................18-59 Oracle Subledger Accounting........................................................................................................................18-61 Oracle Time & Labor ....................................................................................................................................18-63 Oracle Workflow ...........................................................................................................................................18-65 Summary........................................................................................................................................................18-66

Appendix 7 Project Costing Overview...........................................................................................................19-1 Oracle Project Costing Overview ..................................................................................................................19-3 Objectives ......................................................................................................................................................19-4 Agenda...........................................................................................................................................................19-5 Oracle Project Costing and Integration..........................................................................................................19-6 Overview of Projects and Tasks ....................................................................................................................19-10 Project Classes and Project Types .................................................................................................................19-11 Overview of Project Templates .....................................................................................................................19-12 Organizing a Project Structure.......................................................................................................................19-13 Basic Project Information ..............................................................................................................................19-14 Burden Schedules for Costing .......................................................................................................................19-16 Organization Overrides..................................................................................................................................19-17 Project Currency............................................................................................................................................19-18 Currencies and Expenditures .........................................................................................................................19-19 Costing Currency Options .............................................................................................................................19-20 Agenda...........................................................................................................................................................19-21

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R12 Oracle Financial Applications Overview Table of Contents xvi

Controlling Expenditures Overview ..............................................................................................................19-22 Project Statuses..............................................................................................................................................19-23 Task Chargeable Status .................................................................................................................................19-24 Transaction Dates ..........................................................................................................................................19-25 Transaction Controls......................................................................................................................................19-26 Exclusive and Inclusive Transaction Controls...............................................................................................19-28 Allowable Charges for Each Transaction Control .........................................................................................19-29 Determining if an Item is Chargeable............................................................................................................19-30 Agenda...........................................................................................................................................................19-31 Costing Flow: Enter Expenditures.................................................................................................................19-32 Expenditures Overview .................................................................................................................................19-33 Pre-Approved Batch Expenditure Entry Flow Overview ..............................................................................19-36 Enter Pre-Approved Batches .........................................................................................................................19-37 Upload Expenditure Batches from Microsoft Excel ......................................................................................19-39 Upload Contingent Worker Timecards..........................................................................................................19-41 Agenda...........................................................................................................................................................19-43 Costing Flow: Import Transactions ...............................................................................................................19-44 Overview of Transaction Sources..................................................................................................................19-45 Overview of Transaction Import ...................................................................................................................19-46 Costing Flow: Distribute Costs......................................................................................................................19-47 Cost Distribution Processing Flow ................................................................................................................19-48 Determining Costs .........................................................................................................................................19-49 Burden Cost Calculations ..............................................................................................................................19-51 AutoAccounting: Distribution Programs .......................................................................................................19-52 Cost Distribution Concurrent Programs ........................................................................................................19-53 Agenda...........................................................................................................................................................19-55 Costing Flow: Create Accounting .................................................................................................................19-56 Integration with Oracle Subledger Accounting .............................................................................................19-57 Generating Cost Accounting Events..............................................................................................................19-58 AutoAccounting: Generate Accounting Events.............................................................................................19-59 Creating and Transferring Accounting ..........................................................................................................19-60 Oracle General Ledger Journal Import ..........................................................................................................19-61 Agenda...........................................................................................................................................................19-62 Integration with Oracle Purchasing and Oracle Payables..............................................................................19-63 Integration with Oracle Internet Expenses.....................................................................................................19-64 Integration with Oracle Time & Labor ..........................................................................................................19-65 Integration with Other Applications ..............................................................................................................19-66 Agenda...........................................................................................................................................................19-67 Allocations and AutoAllocations...................................................................................................................19-68 Asset Capitalization.......................................................................................................................................19-69 Asset Capitalization: Capitalized Interest......................................................................................................19-70 Cross Charge .................................................................................................................................................19-71 Budgetary Controls and Budget Integration ..................................................................................................19-72 Summary........................................................................................................................................................19-73

Appendix 8 Project Billing Overview.............................................................................................................20-1 Oracle Project Billing Overview....................................................................................................................20-3 Objectives ......................................................................................................................................................20-4 Agenda...........................................................................................................................................................20-5 Oracle Project Billing ....................................................................................................................................20-6 Agenda...........................................................................................................................................................20-7 Contract Projects............................................................................................................................................20-8 Overview of Projects and Tasks ....................................................................................................................20-9 Overview of Project Templates .....................................................................................................................20-10 Project Classes and Project Templates ..........................................................................................................20-11 Defining Project Templates ...........................................................................................................................20-12 Defining Projects ...........................................................................................................................................20-13

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R12 Oracle Financial Applications Overview Table of Contents xvii

Project Classes and Project Types .................................................................................................................20-14 Billing Information Tab.................................................................................................................................20-15 Billing Assignments Tab ...............................................................................................................................20-17 Distribution Rules Tab...................................................................................................................................20-18 Customers ......................................................................................................................................................20-19 Default Top Task Customer...........................................................................................................................20-20 Project Contact Information ..........................................................................................................................20-21 Currency Options...........................................................................................................................................20-22 Revenue in Foreign Currency........................................................................................................................20-24 Bill Rates .......................................................................................................................................................20-25 Customer Billing Retention ...........................................................................................................................20-27 Defining the Retention Level and Terms.......................................................................................................20-28 Billable Status Control...................................................................................................................................20-30 Billable Transaction Control..........................................................................................................................20-31 Agenda...........................................................................................................................................................20-32 Overview of Agreements...............................................................................................................................20-33 Overview of Project Funding.........................................................................................................................20-34 Example: Agreements and Funding...............................................................................................................20-35 Agreements and Funding Process Flow.........................................................................................................20-36 Generating Invoices and Revenue Accrual....................................................................................................20-37 Agenda...........................................................................................................................................................20-39 Project Revenue Overview ............................................................................................................................20-40 Methods of Revenue Accrual ........................................................................................................................20-41 Hard Limit Processing Overview ..................................................................................................................20-42 Revenue Process Flow to GL ........................................................................................................................20-44 Revenue Flow................................................................................................................................................20-45 Generate Draft Revenue ................................................................................................................................20-47 Creating Revenue Distribution Lines ............................................................................................................20-49 Generate Revenue Accounting Events ..........................................................................................................20-50 Create Accounting .........................................................................................................................................20-51 Review Project Revenue................................................................................................................................20-52 Detailed Accounting Transactions.................................................................................................................20-54 View Accounting Lines .................................................................................................................................20-56 Accrue-Through Date ....................................................................................................................................20-58 Releasing Revenue ........................................................................................................................................20-59 Agenda...........................................................................................................................................................20-60 Invoice Concepts ...........................................................................................................................................20-61 Hard Limit Processing for Invoices ...............................................................................................................20-62 Overview of Accounting Dates .....................................................................................................................20-63 Review of Billing Amounts ...........................................................................................................................20-65 Methods of Invoicing.....................................................................................................................................20-66 Overview of Invoice Flow.............................................................................................................................20-67 Generating Invoices.......................................................................................................................................20-69 Invoice-Related Setup Steps ..........................................................................................................................20-71 Defining Invoice Formats ..............................................................................................................................20-72 Defining Invoice Print Method......................................................................................................................20-74 Interfacing Invoices to Oracle Receivables ...................................................................................................20-76 Invoice Flow to Oracle Receivables ..............................................................................................................20-77 Viewing Invoices in Oracle Receivables .......................................................................................................20-78 Accounting Transactions ...............................................................................................................................20-80 Agenda...........................................................................................................................................................20-82 Interproject Billing ........................................................................................................................................20-83 Agenda...........................................................................................................................................................20-84 Integration with Oracle Project Contracts .....................................................................................................20-85 Summary........................................................................................................................................................20-87

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R12 Oracle Financial Applications Overview Table of Contents xviii

Appendix 9 Property Manager Overview......................................................................................................21-1 Appendix 6: Oracle Property Manager Overview .........................................................................................21-3 Objectives ......................................................................................................................................................21-4 Agenda...........................................................................................................................................................21-5 Oracle Property Manager: An Overview .......................................................................................................21-6 Who can Use Oracle Property Manager ........................................................................................................21-7 Flow of Information in Oracle Property Manager .........................................................................................21-8 Managing Properties and Locations ..............................................................................................................21-9 Managing Space Assignments.......................................................................................................................21-11 Managing Leases ...........................................................................................................................................21-13 Managing Rent Agreements ..........................................................................................................................21-14 Paying or Billing Rent ...................................................................................................................................21-15 Summary........................................................................................................................................................21-17

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R12 Oracle Financial Applications Overview Table of Contents xix

Preface

Profile

Before You Begin This Course

• No prerequisites

Prerequisites

• None

How This Course Is Organized

R12 Oracle Financial Applications Overview Ed 2 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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R12 Oracle Financial Applications Overview Table of Contents xx

Related Publications

Oracle Publications Title Part Number

Oracle General Ledger User’s Guide See Oracle MetaLink

Oracle Purchasing User’s Guide See Oracle MetaLink

Oracle Payables User’s Guide See Oracle MetaLink

Oracle Assets User’s Guide See Oracle MetaLink

Oracle Order Management User’s Guide See Oracle MetaLink

Oracle Receivables User’s Guide See Oracle MetaLink

Oracle Cash Management User’s Guide See Oracle MetaLink

Oracle Projects Fundamentals User’s Guide See Oracle MetaLink

Oracle Project Costing User Guide See Oracle MetaLink

Oracle Project Billing User Guide See Oracle MetaLink

Oracle Project Resource Management User Guide See Oracle MetaLink

Oracle Internal Controls Manager Implementation Guide See Oracle MetaLink

Oracle Internet Expenses Implementation and Administration Guide See Oracle MetaLink

Oracle Lease Management User's Guide See Oracle MetaLink

Oracle Trading Community Architecture User Guide See Oracle MetaLink

Oracle Treasury User Guide See Oracle MetaLink

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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R12 Oracle Financial Applications Overview Table of Contents xxi

Typographic Conventions

Typographic Conventions in Text Convention Element Example Bold italic Glossary term (if

there is a glossary) The algorithm inserts the new key.

Caps and lowercase

Buttons, check boxes, triggers, windows

Click the Executable button. Select the Can’t Delete Card check box. Assign a When-Validate-Item trigger to the ORD block. Open the Master Schedule window.

Courier new, case sensitive (default is lowercase)

Code output, directory names, filenames, passwords, pathnames, URLs, user input, usernames

Code output: debug.set (‘I”, 300); Directory: bin (DOS), $FMHOME (UNIX) Filename: Locate the init.ora file. Password: User tiger as your password. Pathname: Open c:\my_docs\projects URL: Go to http://www.oracle.com User input: Enter 300 Username: Log on as scott

Initial cap Graphics labels (unless the term is a proper noun)

Customer address (but Oracle Payables)

Italic Emphasized words and phrases, titles of books and courses, variables

Do not save changes to the database. For further information, see Oracle7 Server SQL Language Reference Manual. Enter [email protected], where user_id is the name of the user.

Quotation marks

Interface elements with long names that have only initial caps; lesson and chapter titles in cross-references

Select “Include a reusable module component” and click Finish. This subject is covered in Unit II, Lesson 3, “Working with Objects.”

Uppercase SQL column names, commands, functions, schemas, table names

Use the SELECT command to view information stored in the LAST_NAME column of the EMP table.

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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R12 Oracle Financial Applications Overview Table of Contents xxii

Typographic Conventions in Code Convention Element Example Caps and lowercase

Oracle Forms triggers

When-Validate-Item

Lowercase Column names, table names

SELECT last_name FROM s_emp;

Passwords DROP USER scott IDENTIFIED BY tiger;

PL/SQL objects OG_ACTIVATE_LAYER (OG_GET_LAYER (‘prod_pie_layer’))

Lowercase italic

Syntax variables CREATE ROLE role

Uppercase SQL commands and functions

SELECT userid 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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R12 Oracle Financial Applications Overview Table of Contents xxiii

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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R12 Oracle Financial Applications Overview Table of Contents xxiv

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Appendix 1 Internal Controls Manager Overview Chapter 13 - Page 1

Appendix 1 Internal Controls Manager Overview Chapter 13

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Internal Controls Manager Overview

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Objectives

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Agenda

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Overview

Overview

Oracle Internal Controls Manager (OICM) is a comprehensive tool for executives, controllers, internal audit departments, and public accounting firms to document and test internal controls and monitor ongoing compliance. It is based on Committee of Sponsoring Organizations (COSO) standards. Internal Controls In many countries, governmental regulations apply to the testing and reporting of corporate internal controls. In the United States, the Sarbanes-Oxley Act of 2002 makes reporting on a company's internal control mandatory for both management and external auditors. Features

• Exposure of internal audits to Sarbanes Oxley certifiers • Integration of internal policies to your system • Highlight of application control points • Comparison of internal policies to external guidelines • Comparison actual practices to internal policies

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• Risk and issues library • Validation of financial values from the consolidated level to the transactional level at

every subsidiary

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OICM Business Flow

OICM Business Flow

The slide shows a high level view of the tasks to set up Internal Controls Manager. • Establish program office Typically authorized by the enterprise’s most senior

executives, the program office establishes internal and external oversight responsibility and sets the operating parameters, which include the dates and milestones by when internal controls need to be in place and the organization personnel whose involvement is critical for compliance. Specific audit projects are conducted as a scheduled activity or the result of trigger events.

• The program office also establishes a framework to assess and manage the entity's risk and the controls mitigating that risk. The COSO framework is the most prevalent framework for assessing the effectiveness of an organization's internal controls.

• Author business processes For companies to identify, define, and document their business processes to ensure an adequate control environment, OICM offers three ways:

- Spreadsheet Upload: Users can define new business processes using the familiar spreadsheet interface. They can define a parent process and its entire child processes and load them in the same spreadsheet, for any number of levels.

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- Oracle Tutor Upload: Through Oracle Tutor, a process-authoring tool, users can document new business processes or customize delivered, pre-defined processes. The process definition in Oracle Tutor can also be uploaded into OICM. Oracle Tutor is delivered as part of a purchase of Oracle Internal Controls Manager.

- Oracle Workflow: Oracle workflow, an embedded process-modeling tool, is delivered with all Oracle E-Business Suite applications. Not just a business drafting tool, it is also the business processes and activities database leveraged by OICM.

• Process documentation serves the basis of ongoing compliance checking. Once the processes are defined using any of the above methods, documentation can be associated to the applicable processes.

• Establish risk and control library To protect shareholder value, management identifies the risks and possible impacts associated with each business process in their organization. Controls based on control objectives mitigate risks. Audit procedures test controls for effectiveness. OICM provides a library that stores the risks, controls, audit procedures, and their association. Leading audit and risk practices define and deliver standard business process risk, control, and audit procedure definitions to give companies a head start. Oracle has worked with these leaders to ensure these definitions can be easily uploaded into the OICM risk and control library.

• Library Integrity OICM allows you to manage changes to library objects such as risks, controls and audit procedures with the level of control that is required within your company. OICM provides the various reports that enable you to periodically verify the accuracy and integrity of the objects that are present in your library, such as risks that are not mitigated by any control, controls that are not verified by any audit procedure and others.

• Key Account Mapping Part of the responsibilities of the internal audit function is maintaining the relationship between a business process and the key accounts that impact it. OCIM allows you to associate each process with multiple accounts, establishing the link between the accounts and the risks to which they are exposed.

• Business Process Variation Even though many companies like to implement standard processes across the entire enterprise, there may be instances where this is not feasible. For example, the regulations of a particular country may require variations to a standard process. OICM provides a framework for companies to manage business process variations. Once standard processes have been established, individual organizations can customize the standard processes to suit their needs. Using the standard process as a baseline for their organization, users can add, change or delete processes.

• Risk Assessment OICM can be used to create risk assessments surveys and allows auditors to record their evaluations based on the results those surveys. OICM leverages Oracle iSurvey for survey management. Using iSurvey, you can quickly build questionnaires, easily identify survey participants, deploy the surveys via email, and allow respondents to fill out questionnaires via the web. Oracle iSurvey also enables you to provide a confidential feedback mechanism that addresses the "whistleblower" provision of Sarbanes-Oxley Act.

• Audit Projects - Internal audit departments and external audit firms conduct risk-based audits that

are managed as projects. OICM provides tools to efficiently execute and manage

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audit projects. OICM is fully integrated with Oracle Projects so that audit projects can be created and managed in the same fashion as any other project. Oracle Projects allows project managers to resource, schedule and execute projects. Projects, which are classified as an audit project, are visible in OICM. While the project management is done in Oracle Projects, scoping of the project and the project's fieldwork evaluation is managed through OICM.

- Audit projects can be scoped to include only processes from certain lines of businesses in certain companies in the enterprise. The scope determines the auditable units for a particular audit project and defines the context in which the audit tasks, procedures, and steps will be executed. Once the audit project has been scoped, OICM automatically builds the list of all the audit procedures that test the process controls, and organizes them under the appropriate tasks in the project.

• Segregation of Duties Segregation of duties reduces the occurrences of fraud and errors in process execution by ensuring that a single individual is not responsible for performing too many duties for a business process or a financial transaction. OICM uses Oracle e-Business Suite user security model, to define list of incompatible functions, monitor violations and take corrective actions. These correction requests can be assigned priorities, assigned to different people, and can be tracked through their lifecycle.

• Auditor's Evaluation OICM allows the auditor to document the results and conclusions of fieldwork. For every audit procedure, control, risk, process and auditable unit in the scope of the project, the auditor can record his or her opinion in OICM.

• Findings and Remediation During the execution of an audit project, an auditor may find that there are ineffective controls or processes, unmitigated risks or room for improvement. The auditor may recommend remedial actions to fix these problems. OICM provides a framework for users to log findings and remediation actions. An approval process for findings can be setup using this framework. Findings can be assigned and reassigned to a particular individual. A threaded discussion capability also allows auditors and their supporting staff to collaborate on findings.

• Business Process Certification To facilitate the quarterly and annual certification process, OICM allows the Global Operations Controllers or their offices to create and manage process certifications on a periodic basis. Process owners are presented with the list of processes, risks and controls that were added, modified or deleted since the last certification. Process owners of higher-level processes can review the certification status of the sub processes as part of their certification process. OICM provides the process owners with lists of sub processes not yet certified and sub processes certified with issues. Global process owners can monitor the certification status of the standard and variant processes. All process owners can see the audit evaluations for their processes. Based on this information, process owners can determine whether or not to certify a process, to certify without reservation, or to certify with issues.

• Financial Statement Certification Once the process owners have certified all the businesses processes in the enterprise, the signing officers perform financial certifications. Signing officers need to identify the significant financial accounts and sign off that there are adequate controls for the significant processes that impact those accounts. OICM provides signing officers with all the changes since the last financial certification, including all process, risk and control additions, changes or deletions. The processes that have not been certified or that have certified with issues are also presented.

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Using a simple interface, signing officers can view internal audit evaluations and process owner certifications, with the ability to "drill down" on findings and issues. OICM also allows the signing officers view processes in the context of company financial statements. For every line in the financial statement, OICM displays the processes certified with issues, processes not certified, organizations and processes with ineffective controls, unmitigated risks and ineffective controls. Using this information the signing officer can evaluate the adequacy of internal controls for each and every line in the financial statement.

• Library integrity You can manage changes to library objects such as risks, controls, and audit procedures. Through OICM reports, you can periodically verify the objects’ accuracy and integrity, such as unmitigated risks or controls not verified by any audit procedures.

• Key account mapping While internal audit maintains the relationship between a business process and the key accounts impacting it, you can associate each process with multiple accounts, establishing the link between the accounts and the risks to which they are exposed.

• Business process variation OICM provides a framework for companies to manage business process variations when standard process implementation is not feasible. For example, the regulations of a particular country may require variations to a standard process. Once standard processes have been established, individual organizations can customize the standard processes as a baseline for their organization.

• Risk assessment Through OICM leveraging on Oracle iSurvey, you can create risk assessments surveys and auditors can record their evaluations based on the survey results. You can quickly build questionnaires, easily identify survey participants, deploy the surveys via email, and have respondents fill out questionnaires via the web. You can provide a confidential feedback mechanism addressing the "whistleblower" provision of Sarbanes-Oxley Act.

• Auditor's evaluation The auditor can document the results and conclusions of fieldwork. For every audit procedure, control, risk, process, and auditable unit in the scope of the project, the auditor can record his or her opinion in OICM.

• Findings and remediation During the execution of an audit project, an auditor may find ineffective controls or processes, unmitigated risks, or room for improvement. The auditor may recommend remedial actions. OICM provides a framework to log findings and remediation actions. An approval process for findings can be set up using this framework. Findings can be assigned and reassigned to a particular individual. Through a threaded discussion capability, auditors and their supporting staff can collaborate on findings.

• Business process certification To facilitate the quarterly and annual certification process, the Global Operations Controllers or their offices can create and manage process certifications periodically. Process owners are presented with the list of processes, risks, and controls that were added, modified, or deleted since the last certification. They can review the sub processes certification status with sub processes lists not yet certified and certified with issues. They can monitor the certification status of the standard and variant processes. They can see the audit evaluations for their processes and can determine whether or not to certify a process, to certify without reservation, or to certify with issues.

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• Audit projects Internal audit departments and external audit firms conduct risk-based audits managed as projects. OICM provides tools to efficiently execute and manage audit projects and is fully integrated with Oracle Projects to create and manage audit projects as any other project. Through Oracle Projects, project managers can resource, schedule, and execute projects. Projects, which are classified as an audit project, are visible in OICM. While the project management is done in Oracle Projects, scoping of the project and the project's fieldwork evaluation is managed through OICM. Audit project scope, which includes only processes from certain lines of businesses in certain companies in the enterprise, determines the auditable units for a particular audit project and defines the context in which the audit tasks, procedures, and steps will be executed. OICM automatically builds the list of all the audit procedures that test the process controls, and organizes them under the appropriate tasks in the project.

• Segregation of duties This reduces fraud and errors in process execution by ensuring that a single individual is not responsible for performing too many duties for a business process or a financial transaction. OICM uses Oracle e-Business Suite user security model to define incompatible functions, monitor violations, and take corrective action, which can be assigned priorities, assigned to different people, and tracked through their lifecycle.

• Financial statement certification Once the process owners have certified all the businesses processes in the enterprise, the signing officers perform financial certifications. Signing officers need to identify the significant financial accounts and sign off that there are adequate controls for the significant processes that impact those accounts. OICM provides signing officers with all the changes since the last financial certification, including all process, risk and control additions, changes or deletions. The processes that have not been certified or that have certified with issues are also presented. Using a simple interface, signing officers can view internal audit evaluations and process owner certifications, with the ability to "drill down" on findings and issues.

Through OICM, the signing officers can view processes in the context of company financial statements. For every line in the financial statement, OICM displays the processes certified with issues, processes not certified, organizations and processes with ineffective controls, unmitigated risks, and ineffective controls. Using this information, the signing officer can evaluate the adequacy of internal controls for each and every line in the financial statement.

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OICM Footprint

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Integration with E-Business Suite Applications

Integration with E-Business Suite Applications

OICM is independent of the applications. It tests, validates, and can be deployed in any Oracle or non Oracle environment. Integration with other modules in the Oracle E-Business suite provides additional benefits:

• Oracle Tutor is a powerful preferred application for mapping and documenting your business processes and workflows. It offers procedure authoring, automatic flowcharting, and role based publishing. It contains predefined business models and flows. Business processes authored in Tutor can be uploaded into OICM, creating the same processes in OICM along with a visual diagram of the process flow.

• Oracle Workflow charts your processes through the E-Business suite, controlling, and enforcing your business flows. It is an active work management tool and the database of business processes and process activities. Business workflows defined in the Oracle Workflow Builder can be made available as processes in OICM, ensuring that the process is executed in the way that you set it up.

• Oracle Files is a document management tool. Help files and process documentation developed using Oracle Tutor or any other tool can be associated with procedures and

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applicable processes. It provides document version control, check in, check out, and storage in an Oracle Database.

• Oracle Scripting is used to quickly build questionnaires, easily identify survey participants, deploy surveys via e-mail, and have respondents fill out questionnaires via the internet. By obtaining employee and stakeholder feedback on processes and internal controls, it provides an effective control environment and performs high level risk assessments. The survey results help in assessing audit extent to be performed. Once seeded, survey scripts can be deployed and used with minimal changes. You can review a seeded survey, make organization specific changes, and then redeploy them to collect information from survey participants.

• By creating audit procedures as projects set up in Oracle Projects, you benefit from the Oracle Projects applications: Oracle Project Management, Project Costing, Project Resource Management, Project Collaboration, and Project Intelligence.

• Through integration with Oracle Approvals Management, you can have a formal approval of risks, controls, and audit procedures. Approval is required for the creation and modification of these risk library objects, without requirement to customize any application code. These rules are setup in Oracle Approvals Management and determines who must approve a risk library object before it can be used. Approvers can be one or more individuals in a hierarchy.

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Benefits of Oracle Internal Controls Manager

Benefits of Oracle Internal Controls Manager

Organizations are striving for improved Corporate Governance and they are attempting to achieve these following objectives:

• Reduce risk of non-compliance or the perception of non-compliance • Enable compliance with the Act and facilitate certification required by the Act • Accelerate reporting and contain and reduce costs

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Application Controls Monitoring

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Process Revision Management

Process Revision Management

The revisions are submitted for approvals and different approval hierarchies and approval mechanisms can be setup. Also, processes can be created online. Additionally, you can create processes from existing Oracle Workflow processes. At creation time, you can choose any processes from the workflow table and import that into the risk library.

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Risk Library

Risk Library

• Multiple Risk Classifications: Oracle Internal Controls Manager allows administrators to setup multiple regulations like Sarbanes Oxley Regulations, Basel II and ISO 9000. Administrators can then create different risk types and associate each risk type with one or more of these regulations. The users can then assign a risk to multiple risk types, as in previous releases.

• Upload of Control Activities from Oracle Tutor: Oracle Tutor allows the identification of control activities in the process documentation. This feature will allow the upload of control activities into Oracle Internal Controls Manager into the process hierarchy.

• Multiple Organizational Hierarchies for Information Rollup: Rollups of organizational information like number of risks and controls can now be performed based on the legal, managerial and HR hierarchies, and also in audit engagements and certifications.

• Risk Event Tracking: Risk analysts can record risk events (incidents). In addition to the standard set of attributes, you can capture additional incident attributes. You can generate reports based on different parametric criteria. This feature is targeted to banks for complying with the Basel II regulations.

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XML Publisher Reports

XML Publisher Reports

As part of certifying a business process, the process owner can execute an assessment. Procedures can be run to substantiate the assessment and thereby the certification.

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Dashboards

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Data Security

Data Security

Only users with the appropriate roles have the privileges to perform actions on these objects, for example, create a control, approve a control and associate risks with a control.

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Extensible Attributes

Extensible Attributes

Each of these attributes can be validated by a pre-determined set of values.

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Set up User and Responsibilities

Set up User and Responsibilities For further information, refer to Introduction to Oracle Internal Controls Manager in Implement Internal Controls Manager.

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Summary

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Appendix 2 Internet Expenses Overview Chapter 14 - Page 1

Appendix 2 Internet Expenses Overview Chapter 14

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Internet Expenses Overview

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Objectives

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Agenda

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Overview

Overview

Oracle Internet Expenses helps employees to enter and submit expense reports using a computer or standard Web browser, Web-enabled mobile device, or Excel spreadsheet.

• Oracle Internet Expenses integrates with Oracle Payables to provide quick processing of expense reports for payment.

• Oracle Workflow automatically routes expense reports for approval and enforces reimbursement policies.

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Advantages of Using Oracle Internet Expenses

Advantages of Using Oracle Internet Expenses

OIE streamlines and automates expense management for a higher return on investment. • It reduces administrative costs and data entry errors since data entry is streamlined and

accessible anywhere online (mobile, desktop, browser) or offline (spreadsheet). • It enforces spend policy to control expenses, showing any policy deviations. • It eliminates expensive IT customizations through global accommodation for local

statutory regulations and automates audit management, conserving staff for analytical work and providing better information to management.

• It increases productivity when employees can flexibly create expense reports using a standard Web browser, a connected Web-enabled mobile device, a disconnected spreadsheet, and/or downloaded credit card transactions.

• It improves cycle times by routing expense reports via workflow to managers for approval and to accounts payable department for reimbursement.

• It increases employee satisfaction when their status-related questions can be self-answered within the application.

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Agenda

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Expense Reporting Process

Expense Reporting Process

• You create and submit an expense report using either expense reporting methods: using computer or web browser, mobile device, credit card, or Excel spreadsheet.

• The Expenses Workflow notifies the approving authority for online review. • If the report is rejected, the Rejection process notifies you by email. You can access and

update the rejected expense report from the Expenses Home page. • For AP approvals, the AP Approval process determines whether a report requires audit. It

automatically approves if audit is not needed. The audit rules determine whether audit is required. If required receipts are missing or there are questions about policy compliance, auditors can request more information, shortpay, reject or adjust the expense report. For all cases, notifications are sent to the preparer.

• After manager and/or accounts payable department approval, the Expense Report Import program converts the expense report into an invoice and Oracle Payables creates payment or prints the Invoice Import Exceptions Report for expense reports that cannot be imported and have to be resubmitted.

• The employee is notified and receives payment by check or direct deposit, depending on the company policy or setup.

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Expense Report Import Program

Expense Report Import Program

The Expense Report Import Program converts expense reports created in Oracle Internet Expenses into invoices in Oracle Payables for payment.

• During the Expenses workflow process, it only processes an expense report that has been approved by the authorized manager and the accounts payable department.

• It verifies that all information necessary for invoice creation is provided and is valid. - Reports that fail import appear in the Invoice Import Exceptions Report in Oracle

Payables. - The accounts payable department modifies data in the Audit Expense Reports page

and then re-imports the report.

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Agenda

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Expense Management

Expense Management

• Expenses Home The Oracle Internet Expenses Home Page allows users immediate access to a variety of expense reporting information, workflow notifications, and their corporate credit card account information. Employees are alerted to changes and transactions that require their attention, and these items are highlighted and linked, so that they can be addressed in a timely and efficient manner. You can easily configure the application to include your own links in the Shortcuts section. You can also access expense reporting, credit card account information, preferences, and projects and tasks.

- The Update Expense Reports table displays saved expense reports pending submission.

- The Track Submitted Expense Reports table lists submitted expense reports outstanding or paid within the last 30 days.

• Expense Reports You can create new expense report, import spreadsheet expenses, export, perform a save and advanced search in this window.

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Expense Management

Expense Management

• Credit Card Transactions The Credit Cards Transaction History page allows employees to view Internet Expenses credit card transactions in a way that is similar to the card issuer statement. Employees can query the credit card transactions for a date range. The page lists the transactions, shows transaction detail information, and displays status, transactions in dispute, totals, and any classification to business or personal.

• Expenses Preferences Through this window, you can define default values for fields that are consistent from one expense report to the next, define certain data entry preferences, such as the time entry format to use, and authorize another user to enter expenses on their behalf and check which users they are authorized delegates for.

• Dispute Credit Card Transactions End users can mark questionable credit card transactions as disputed, while following up on the dispute with the card provider. The employee can enter and save notes on interactions with relevant parties concerning the dispute. If a credit is received, they can match the disputed item to the credit.

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Agenda

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Expense Reporting Methods

Expense Reporting Methods

• Online Using Standard Web Browser You can access expense reports using your computer and a standard Web browser and the workflow process routes the expense reports for approval. You can import corporate credit card charges if your system administrator has implemented the feature.

• Online Using Web-Enabled Mobile Devices You can create, edit, and submit the same expense reports while online, using a wireless Web-enabled mobile device, such as a Web-enabled phone, a pager, or a PDA: Palm Pilot, Pocket PC, and other similar devices. Managers can approve or reject expense reports from their mobile devices.

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Online Using Credit Card

Online Using Credit Card

You can include your corporate credit card transactions in your expense reports. You can automatically pre-populate expense reports with transactions from the employer’s credit card, increasing service levels by reducing the time required to complete expense reports and increasing information accuracy, reducing manual correction errors.

• You can establish whether the employer or employees pay for card charges, improving cash management and increasing service levels to travelers.

• You can maximize cash flow and decrease total costs by paying your charge card issuer based on more extended terms or direct payment for discounts.

• Oracle Internet Expenses provides aging reports to identify users with outstanding charges not submitted on expense reports. Oracle Workflow sends notifications to them and their managers to submit reports for these transactions.

Reimbursement for corporate credit card transactions depends upon company payment policy. There are three reimbursement policies:

• Employee pays • Company pays

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• Both pay Refer to R12 Implement and Use Internet Expenses for additional details.

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Disconnected Expense Reporting

Disconnected Expense Reporting

You can create expense reports out of the office or without access to the corporate intranet. Using the Export Expense Spreadsheet function while connected to your company intranet, you can export and save the expense spreadsheet template copy to enter expense report data when offline. You upload the data entered into Internet Expenses to create an expense report. The transferred data appears as an expense report in Oracle Internet Expenses that you can update, save, or submit for approval. The Excel Expense Spreadsheet Template is downloaded from OIE to enter expenses when away from the office, contains the same fields as your OIE implementation, is used with Microsoft Excel 5.0 or higher to enter expenses in the spreadsheet, and supports descriptive flexfields and project-related information. How the template is set up by the system administrator determines what fields appear in the spreadsheet and which are required. The expense report does not have to be complete to upload it to Internet Expenses.

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Agenda

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Expense Reporting Features


• Third Party (Proxy) Entry OIE enables entering expense reports for others. • Changing Cost Centers Oracle Internet Expenses defaults the employee’s cost center

based on human resources table information. You can charge expense reports to other cost centers by changing the default value.

• Designating Approvers You can direct your expense reports to a manager other than the one responsible for approving employee expense reports. If you enter a different cost center when creating an expense report, you can configure Oracle Internet Expenses to enter an alternate approver. In this case, the approver specified must have authority to approve expense reports assigned to that cost center. Also refer to R12 Implement and Use Internet Expenses.

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Entering Foreign Currency Expenses

Entering Foreign Currency Expenses

When entering foreign currency expenses for cash and other expenses, you must enter the exchange rate between receipt and reimbursement currency when the expense was incurred. You can also set up default exchange rates. Credit card expenses retrieve the appropriate exchange rate automatically. For example, an employee at a US company travels on business in Europe and incurs expenses in Great Britain. When creating an expense report for the trip, the employee must enter the exchange rate between the US dollar and the pound sterling on the date each expense was incurred.

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• Saving In-Progress Expense Reports Oracle Internet Expenses performs no required fields validation on a partially completed expense report saved as a work-in-progress report, even with missing information. You can then access the saved expense report, add or update information, and submit the report for approval.

• Reviewing Expense Reports When reviewing an expense report summary before submission for approval, for each report item, Oracle Internet Expenses displays the amount, the expense type, and other data you entered, including each expense type totals and expense source subtotals. You can also display charges either by expense type, expense group, or project.

• Viewing Expense Report History You can check the expense reports status. The status display indicates whether a report was approved by management or the accounts payable department. You can also view payment information, drill down to view individual expense line data, and search the reason for an expense report adjustment.

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• Itemizing Receipts You can track detailed expenses by itemizing receipts to separate a receipt into multiple expense lines and assign an expense type to each line. You can also designate a receipt portion as personal expense.

• Withdrawing Expense Reports When you want to update expense data after submission, you can withdraw an expense report from the approval process until you receive both manager and accounts payable approvals. The expense report remains in your queue for fixing, resubmitting, or deleting.

• Duplicating Expense Reports If you repeatedly incur the same expenses, you can copy prior expense reports for faster entry. All cash and other expenses are copied to the new expense report.

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• Ad Hoc Reporting Using Oracle Discoverer, you can develop ad hoc reports based on seeded expense reporting business areas. The business areas are targeted for use by operations teams with visibility across the entire company. This helps you to provide decision makers with information in a format that is meaningful to them.

• Expense Report Export Payables personnel can run the Expense Report Export concurrent program from the Internet Expenses Auditor and the Internet Expenses Audit Manager responsibilities. A new user interface allows payables personnel to review the export results online and analyze them quickly. Four categories of results list the expense reports for which invoices were created, the expense reports that had prepayments applied, the expense reports placed on hold, and the expense reports that were rejected. Existing expense import has been renamed to expense report export to reflect the change in the process.

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Agenda

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Descriptive Flexfields

Descriptive Flexfields

By setting up descriptive flexfields, you can enter information for which there is no corresponding field in Oracle Internet Expenses. Descriptive flexfields are fields used to collect expense information that your organization requires. You can also map descriptive flexfields to expense types that you define. When you select a specific expense type, Oracle Internet Expenses displays fields defined specifically for that expense type. Note that descriptive flexfields collect receipt-level information only, not header-level information, meaning that the information a user enters in a descriptive flexfield relates to a specific expense line, not to the entire report.

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Product Features

Product Features

• Multiple Reimbursement Currencies The currency in which an expense report is paid is the reimbursement currency. You can set up Oracle Internet Expenses to let employees specify a reimbursement currency different from your functional currency.

• Multiple Expense Templates An expense template defines the list of expense types such as airfare, car rental, and meals, that users choose from when they enter their expense reports. You can define multiple expense report templates for use with Oracle Internet Expenses. Employees can then select one of the values when they create expense reports.

• Applying an End Date to Expense Types By applying an end date to expense types, you can retire expense types no longer in use and exclude them from appearing in user interface choice lists.

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Product Features

Product Features

• Flexible Requirements for Original Receipts An original receipt is a receipt issued by a merchant as a record of a transaction and usually accompanies expense reports. When you define expense report templates for use with Oracle Internet Expenses, you can indicate whether an original receipt is required for an expense type. You can also indicate that an original receipt is required only if the expense exceeds a certain amount. If you do not submit required original receipts, your expense reports may be short paid.

• Missing Original Receipts When you indicate the absence of original receipts, the status of a receipt remains required.

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Product Features

Product Features

• Line Level Accounting You can split expense reports across cost centers at the line level. To obtain manager approval for charges to different cost centers, you must implement Oracle Approvals Management. See Module 2, Applications Setup, of the 11i Implement and Use Internet Expenses.

• Refund Tracking You can set up Oracle Internet Expenses to enter refunds on expense reports, such as an unused airline ticket refund. You report the refund of a previously reimbursed expense by entering a negative receipt. Depending on your company policy, you can apply the credit lines to other expense lines in the same expense report, enter the credit lines on a future expense report, or require payment remittance to the company for the refunded amount.

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Product Features

Product Features

• Required Justifications and Purpose You can set up Oracle Internet Expenses to require employees to enter justifications for specific expenses and a purpose for all expense reports. When you define expense report templates for use with Oracle Internet Expenses, you can indicate whether a justification is required for an expense type such as airfare, meals, and car rental. If an expense report contains an invalid or unapproved justification, the report may be short paid.

• Expense Report Number Prefixes You can define a prefix for every expense report entered in Oracle Internet Expenses. You enter a prefix value to easily identify invoices in Oracle Payables originally created as self-service expense reports.

• Collecting Tax Information By indicating that an expense line includes tax and by choosing a tax code, Oracle Internet Expenses automatically calculates the tax amount using the tax code information defined in Oracle Payables.

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Product Features

Product Features

• Multi-Row Display Configuration You can modify the appearance and behavior of the expense multi-row pages.

• Client Extensions Oracle Internet Expenses provides several client extensions to extend its functionality for specific requirements.

• Expense Itemization Rules The Itemization wizard helps you to require itemization and determine which expense types for the itemization are independent of each other. If itemization is required, you can also identify into which expense types a receipt can or should be itemized for faster expense entry and more accurate accounting.

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Product Features

Product Features

• Credit Card Transactions If your company issues corporate credit cards to employees, you can set up Oracle Internet Expenses to automatically populate expense reports with credit card transactions. You can also specify whether your company or the employees pay the credit card provider. The Credit Card workflow automatically informs employees and managers of payments created for corporate card transactions and any transactions that have not been submitted on an expense report.

• Home Currency in Workflow Notifications Display the expense report amount in a currency meaningful to the approver. The total for an expense report created using a reimbursable currency different from the approver's functional currency is converted for display in the approval notification.

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Product Features

Product Features

• Expenses Workflow Process The Expenses workflow process defines the set of business processes for administrative tasks related to the expense reporting approval process. It handles the manager and the accounts payable approval process for expense reports. You can set up and configure the process definitions of the Expenses workflow processes according to your company’s needs. For a detailed description of the process definitions of these workflow processes and the required setup steps and optional configurations you can make to the workflow process, see R12 Implement and Use Internet Expenses.

• Contact Us Enables end users to contact your help desk personnel. You have options to initiate a service request process, open a formatted page with contact and problem description fields, open a URL, or open an email composer window.

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Product Features

Product Features

• Predefined Methods for Routing Expense Reports for Manager Approval When you set up the Expense Report workflow process, Oracle Internet Expenses includes three predefined methods to determine how workflow routes expense reports to managers for approval:

- Go Up Management Chain - One Stop Then Go Directly - Go Directly to Person with Signing Authority For a detailed explanation of how these three methods work, see: Finding and Verifying

Approvers. • Expense Line Drill Down in Workflow Notifications Expense report notifications

include the ability to drill down into the details of an expense line, providing a manager with additional information to make an appropriate approval decision.

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Online Policy Compliance

Online Policy Compliance

The Internet Expenses Setup responsibility helps expense administrators to set up role-based, location-based policy schedules for online enforcement of expense policies. With built-in flexibility for local rules, this feature includes:

• Expense types categorization for expense type classification into seeded categories • Category-based options and rules • Category-based new fields for less descriptive flexfields • Exchange rate defaulting and tolerance checking • Policy violation flagging during expense report entry for employees, managers in Oracle

Workflow, and accounts payable auditors • Prevention or allowance of expense report submission based on policy violations

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Per Diem and Mileage

Per Diem and Mileage

• Calculation: With the Internet Expenses Setup responsibility, expense administrators can set up rate schedules for per diem and mileage expense reimbursement calculation, accommodating global statutory requirements with built-in flexibility for local rules:

- Time-based per diems - Free meals and accommodations for per diems - Distance mileage thresholds

• Setup: With the Internet Expenses Setup responsibility, you can do the following: - Set up specific options and rules per operating unit and handle multi-org and multi-

business groups - Share or copy rate and policy schedules and access their change logs - End date rate and policy schedules and mass update rate and policy schedules For a detailed description of rate and policy schedule setup, see R12 Implement and Use

Internet Expenses.

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Location and VAT Setup

Location and VAT Setup

• Locations Setup The Internet Expenses Setup responsibility includes setting up locations for use in rate and policy schedules, VAT-related setup and future reporting and analysis purposes.

• VAT Merchant Fields Setup Through the Internet Expenses Setup responsibility, an expense administrator have merchant-related data captured from users for VAT reclamation based on location.

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Short Paying and Adjusting Expense Reports

Short Paying and Adjusting Expense Reports

• Short Paying Expense Reports Depending on how you set up Oracle Internet Expenses, your accounts payable department may require that employees provide original receipts or justifications for some expense lines in their expense reports. When it short pays expense reports by identifying the expense lines which have missing required receipts and/or inadequate justifications, the Expense Report workflow process creates a new expense report from lines with missing required receipts and a new expense report from lines with inadequate justifications and eliminates the lines short paid by your accounts payable department from the original expense report and approves it.

• Adjusting Expense Reports If an expense line violates a reimbursement policy, your accounts payable department adjusts the expense report by reducing the total amount of the expense line. For example, if you have a travel policy stating that meals cannot exceed $35, your accounts payable department can adjust expense lines for meals exceeding this limit. The employee receives payment for the expense line, less the amount of the adjustment. When your accounts payable department adjusts expense reports, the AP Approval workflow process informs employees of the reasons for and amounts of the adjustments.

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Audit Management and Automation

Audit Management and Automation

• Audit Management The expense report auditor has a new HTML-based tool with the following features:

- Configurable views of expense report listings and line information - Currency and exchange rate information - All Verified shortcut - Quick and advanced search - Shared service center support for multi-organization environments

• Audit Automation With this feature, you can automate expense report auditing-related processes, including selecting which expense reports to audit, identifying expense reports with policy violations, and approving certain types of expense reports automatically without audit.

With an automation engine, you can automatically select expense reports for audit. Based on these rules, the system routes the selected expense reports either to a receipt-based audit process or to an online audit queue for a paperless audit. You

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can easily configure the automation engine without IT coding or Workflow modification.

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Product Features

Product Features

• Audit Queue Balancing With the Audit Queue, Oracle Internet Expenses manages the paperless audit workload between multiple auditors. When an expense report is marked for paperless audit and approved by management, it is placed in the audit queue of a specific auditor based on the audit manager's definition of available auditors and their workload.

• Expense and Violation Reporting Analysis of expense and employee adherence to company policies is critical for enterprise spend management. Expense and violation reports provide top management with a multi-dimensional view of employee expenses and their adherence to company policies and assist decision-makers in forming new policies and evaluating employees.

This multi-dimensional view includes display of expenses by management hierarchy, expense category, time period, and policy violation types. You can also drill down to the details of expense receipts and expense policy violations.

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Product Features

Product Features

• Management Reporting Search for employee expense reports by employee name, cost center, and period. Managers can also drill down to expense report details and view expense lines. Expense report details are categorized by expense type.

• Enhancements to Credit Card Outstanding Transactions Management Processes The Credit Card Outstanding Transactions Management processes provides three programs and reports with credit card transactions aging, new options and parameters, and escalated notifications to managers and employees, ensuring timely submission of credit card transactions on expense reports and obtaining discounts for early payments.

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Agenda

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Workflow Processes

Workflow Processes

• Expenses Workflow Process The Expenses workflow process consists of several workflow processes:

- Server Side Validation process: Ensures company policy compliance in expense reports and populates Oracle Payables tables for Payables Invoice Import program

- Manager (Spending) Approval process: Defined when setting up Internet Expenses and checks Manager Approval, Manager Notification, or No Manager Involvement

- AP Approval process: Checks if AP department manual review and approval is needed and adjusts (Short pays) the expense report with missing receipts or policy violation

- Shortpay Unverified Receipt Items process: Initiated by short paid report, creates new expense report with short paid line(s), and notifies employee via email

• Credit Cards Workflow The Credit Cards workflow consists of independent workflow processes and notifications that perform various activities.

For more information, see Internet Expenses Workflow Processes in R12 Implement and Use Internet Expenses.

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Expenses Workflow Process

Expenses Workflow Process

• Bothpay process: Initiated only if the expense report has corporate credit card charges and both the employee and company are responsible for paying the credit card issuer.

- For expense reports with out-of-pocket cash and credit card expenses, this workflow creates a separate report for credit card charges and notifies the employee by email. The notification informs of report approval, payment creation, or specific amount.

• Rejection process: Initiated by report rejection during approval process. - It notifies the accounts payable department of its previous report approval and the

employee, then waits for the expense report to be resubmitted. - Workflow restarts when the report is resubmitted and deletes the report from the

Oracle Payables interface tables if it is not resubmitted within the specified time.

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Agenda

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Oracle Projects Integration

Oracle Projects Integration

Oracle Internet Expenses integrates with Oracle Projects to add project-related information to expense reports. You must use a project-related expense report template when entering expenses. You can use the Projects and Tasks tab on the Expenses Home page to see a list of available projects and tasks in Oracle Projects. You enter a unique project and task for each expense item. When the expense report is submitted, each project-related expense item is assigned to an expense account in Oracle Projects. Also see R12 Implement and Use Internet Expenses. The project-related expense report must be defined in Oracle Payables. See the R12 Oracle Payables User’s Guide, Release for more information. (Help) Oracle Financial Applications > Oracle Payables > Setup > Invoice > Expense Report Templates

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Oracle Grants Accounting Integration

Oracle Grants Accounting Integration

Oracle Internet Expenses integrates with Oracle Grants Accounting to enter award information on their expense reports and collect reimbursement from the award that sponsored the activity. Both products provide the following features for entering and managing award-related expenses:

- Enter award information on expense reports. - Enter award information in disconnected mode in a Microsoft Excel spreadsheet

and upload to Oracle Internet Expenses. - Search expenses by award number. - Display the award number in the workflow notification.

Oracle Grants Accounting introduces an Award field in Oracle Internet Expenses. You must associate an expense with the appropriate project, task, and award(s) to collect and bill costs by award. For more information, see R12 Implement and Use Internet Expenses.

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Oracle Approvals Management (AME) Integration

Oracle Approvals Management (AME) Integration

Oracle Approvals Management builds routing rules for document approvals expense reports. With this integration, the expense report workflow process uses the Oracle Approvals Management definition in place of the Find Approver Method of the Find Approver function in the Oracle Internet Expenses application and the signing limits of the Verify Authority function are ignored.

• Through approval rules, you automatically route expense approvals to cost center owners, cost center business managers, project managers or award managers.

• You can also set approval rules to control the escalation of expense reports for policy violations.

For more information, see R12 Implement and Use Internet Expenses. For more information on Oracle Approvals Management, refer to the Oracle Approvals Management Implementation Guide available on OracleMetaLink.

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Other Product Integration

Other Product Integration

Oracle Internet Expenses also integrates with the following products: • Oracle Applications Library • Oracle Human Resources • Oracle System Administration • Oracle Payables

For more information, see R12 Implement and Use Internet Expenses. O

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Summary

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Appendix 3 Lease Management Overview Chapter 15 - Page 1

Appendix 3 Lease Management Overview Chapter 15

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Lease Management Overview

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Objectives

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Overview

Overview

Since executives and top management are interested in e-business processes, which cross traditional boundaries between departments, lines of business, and geographic regions worldwide, you view Oracle Lease Management (OLM) functionality from the perspective of key business flows, which cross functional or departmental responsibilities. The key business flows for OLM are defined in terms of an asset based lender’s functional requirements. Asset-based finance processes can be segmented into seven basic key business flows:

• Opportunity to Quote • Credit to Booking • Invoice to Receipt • Quote to Termination • Asset Return to Disposal • Period Open to Period Close • Inquiry to Resolution

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Lease Management in the Oracle E-Business Suite

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Lease Management CRM Applications

Lease Management CRM Applications

Additional CRM Applications (Back-end Applications) Advanced Pricing, Human Resources, Universal Work Queue, Fulfillment, and System Administrator are required to run the Lease Management application. O

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Lease Management ERP Applications

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Optional Integration for Additional Lease Management Functionality

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Opportunity to Booking


1. Opportunity to quote Asset based finance sales and contract origination start with selecting the required assets, structuring the deal and presenting a quote. Select assets Select which assets to finance to provide the basis for lease costs and asset descriptions. When options such as upgrades or add-ons are part of this selection process, capturing these items and their costs is necessary. At this point, an initial credit screen may be conducted and a decision may be made to reject or pursue the opportunity. Structure the deal The lessor uses Oracle Lease Management to capture the quote details provided by the salesperson about the selected assets and financial product for calculating payments, residual, and yield. Generate quote The payment agreement between the customer and the salesperson may be iterative. The salesperson must be able to choose alternative assets, products or even modify the costs. Lease contracts provides version control to manage these iterations to generate the quote and obtain the customer’s agreement.

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2. Credit to Booking This process takes the quote through credit approval, vendor payment, contract authoring, and activation to a booked lease or loan. Assets selected in the Opportunity to Quote business process are identified to enable asset tracking. Complete credit application The credit application process begins with reviewing customer information collected in the Opportunity to Quote process to identify whether the prospect is already a customer and whether their existing credit limit allows for credit approval. For new applicants, a credit application is necessary to complete the credit investigation. The salesperson submits a credit request during authoring of the lease sales quote, that is sent to the Credit Management functionality of Oracle Receivables. Credit analysts working with Credit Management make the credit decision. Workflow notification of credit acceptance or rejection can be sent to Lease Management where a credit line can be created. Make credit decision The credit decision is made in the Credit Management functionality of Oracle Receivables. The decision to create a credit line is made in Lease Management in order to manage and control funding requests.

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Author contract Enter parties Lessors establish relationships with outside program owners, brokers, and participants, identifying lease program participants and defining their roles in the program agreement. Organization hierarchies establish accounting structures and booking level at which the equipment is purchased, to monitor sale, application, and contract volumes. OLM manages complex financial structures with multiple parties and syndications. Program Relationship Management (PRM) is a set of user defined business rules to manage the terms and conditions governing the parties’ responsibilities in the lease transaction. A typical multiple-party lease transaction includes a vendor/manufacturer (program owner), the point of origin for the equipment, a dealer (program participant) authorized to sell the equipment, and a lessor agreeing to finance the equipment on behalf of the customer. Brokers are another type of party that may participate in the lease transaction . They manage all interaction with program owners, participants, and customers and bring it to the lessor for a fee. They engage in broker programs with the lessor similar to the process described in program owner programs: user sets up the broker organization and then authors the broker

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program agreement. Based upon that agreement, a lease contract template is authored which becomes the basis for all lease contracts negotiated under that program.

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Create vendor program templates Each program owner has one master template, but many program templates as defined by the business. The program template variables are adjusted to accommodate the program owner’s specific requirements. This template will be used for creating subsequent programs. By using the master template all subsequent programs will be compliant with the guidelines agreed upon with the program owner . Enter program agreement The program owner relationship requires that programs be established to meet reporting requirements, drive defaults within the system when booking new contracts, and drive system and process functionality, and ensure that the booking process will be expeditious and booked contracts are accurate. Create contract template Once a program is established, users create a lease contract template with terms that impact the contractual relationship between lessor and lessee. They create an inactive contract with basic data: customer, contract number, program, master contract and product category. They enter additional information: program, product, interest, terms and conditions, assets, real estate, fees, miscellaneous cash, invoicing, evergreen, purchase order, non-usage based billing service and maintenance, filings, insurance, third parties, and funding. They may generate streams. They can copy all data from an existing contract, except for contract number, streams, and journal entries.

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Create contract End users create a new contract manually or by copying an existing contract or a contract template. They enter the contract header and details, gather third party insurance data, and decide whether the new contract relates to a re-lease, a new asset, or a restructure. They may copy the asset from an existing active or inactive contract and may split it into multiple assets or from one contract line with multiple assets into multiple contract lines, each with one asset. For a re-lease, they may select off lease assets. Enter financial details As users enter data related to real estate, warrants, and syndication, simple validations are performed: from a pre-approved list of values, selecting an appraiser in real estate and selecting common or preferred shares in warrants. Syndicated contracts include multiple investors participating in the loan/lease funding. Disbursements are made to the funding participants during cash receipt or billing. The timing and amount of money disbursed is identified within the rules setup between the two investing parties.

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Activate contract Determine contract funding Users may determine contract funding prior, during, or after booking and decide on a supplier, funding type, and funding amount. The funding process creates invoices in Oracle Payables based on contract terms, including vendor, billing terms, and asset costs.

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Request streams & activate contract Users complete pre-stream contract validation and generate streams by calling the stream generator. They have the option to create draft journal entries, submit the contract for approval, and book the contract. Pay vendor Manual disbursements You can create a manual disbursement to pay for one-off or ad hoc expenses and send it to Payables to generate the invoice and disbursement. Run the Pay Invoice Prepare for AP Transfer and Pay Invoices Transfer to AP Invoice Interface concurrent programs to send the data to Oracle Payables and generate Payables invoices. Funding When you purchase or fund the equipment from a supplier, you must pay for it and lease-related fees (the funded amount). You can fund a portion or all of the total lease cost, but not more than the total cost at the time of booking. The lease’s inherent value is the asset cost going on lease plus any assessed costs that the lessor passes to the lessee, excluding accrued interest paid prior to the start date or other costs not included in the yield calculation or capital cost. You run Pay Invoices Creation of Auto-Disbursement Process to pick up the approved funding and Pay Invoice Prepare for AP Transfer and Pay Invoices Transfer to AP Invoice

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Interface to send the disbursement data to Oracle Payables and generate Payables invoices. Pass-throughs You can create contract lines for fees negotiated into the deal. You can define the fee accounting by associating them to seeded fee types and with activities such as commissions, customer service activities, and documentation fees. The pass-through fee type generates a billing for fee payment and automatically generates an expense to be disbursed to a supplier or vendor and can be associated to specific assets. For example, if a vendor provides services for the leased equipment, you may want to bill the lessee for the cost of these services and then pass-through all or some partial amount of the fee payments received from the customer to the vendor. If the payment is recurring, the pass-through disbursement and expense will also be recurring. Pass-through fees When you create the pass-through expense, you can determine whether the disbursement is to be sent when the payment invoice is billed, when the payment invoice is due, or when the payment is received.You run the Pay Invoices Creation of Auto-Disbursement Process to pick up the disbursements generated by the payment billing and then run Pay Invoice Prepare for AP Transfer and Pay Invoices Transfer to AP Invoice Interface to send the disbursement data to Oracle Payables and generate the Payables invoices.

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Journalize accounting entries OLM is not integrated with Purchasing, so there is no purchase order that is generated. OLM creates the invoice and then sends it to Accounts Payable. To initiate the funding, the user selects the contract or contract batch eligible for funding, determines the supplier, funding amount, and funding type, which is loaded into the Oracle Payables interface tables, and validates data imported in AP to create invoices. Once streams are returned from lease price modeling software, such as SuperTRUMP from Ivory Consulting, values may be calculated in the aggregate or distributed to each contract asset. Distribution can be prorated based on the original equipment cost (OEC) of the asset divided by the total OEC of the contract, based on the quantity of each asset divided by the total quantity of all assets on the lease, or equally among the assets. To activate the contract, the origination group analyzes them, routes them for approval, and performs a booking review. OLM performs an automated quality check to identify incompatible terms or entries based upon user defined checklists. The user completes the

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process, drafts contract journal entries, and then activates the contract. The amounts to be disbursed are calculated in Accounts Payable to generate an invoice. The users may approve invoices online before payment or creation of accounting entries.

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Invoice to Termination


3. Invoice to Receipt: This process starts with the identification of items to be billed, calculation of fixed and variable rates, and application of taxes to generate invoices and book the receivable. This includes the identification of fees, costs and expenses to be approved for disbursement to vendors and suppliers. Billing amounts may be generated manually or automatically, including usage based billing rates, calculations and adjustments. As payments and electronic transfers are received, receipts are applied to invoices and billing items created for late payments, which trigger notification to initiate collection of delinquent accounts. Create billing item Decide the appropriate billing method. To process a billing item manually, users enter invoice information for a refund, termination, funding, credit memo, or supplier’s invoice. They identify vendors that have submitted invoices to be paid and passed through to the customer. If a vendor’s invoice is not available, the user may create a one-off invoice or billing item. They use a standard process in Oracle Receivables to calculate finance charges based on variable interest rates or on fixed accounting updates and interest tables updated and maintained to generate the interest calculations. Products are often tied to rates within this table. After any change in rates, all contracts tied to the rate through its product are modified to reflect the change.

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Generate invoice Generate receivable Users use Auto Invoice Import to send the billing data from OLM to Oracle Receivables where the invoice is created and tax calculated. They can adjust and format invoices and may apply credit or partial credit to any invoice. Through a consolidated invoice print program, they can customize invoice formats and create payment methods to define manual or automatic receipts and assign remittance bank to the receipt. Print & send invoice Users can set up rules for each invoice group to print documents associated with contract billing and invoicing, such VAT schedules, coupon books, and requests to pay. They can define mailing dates to suit customers preferring to receive invoices at defined number of days prior to due date. An eligibility date (grace days) may be set for non direct deposit payers for payment later than the due date. Create item for A/P & approve disbursement Users create disbursement data in OLM which is transferred to Oracle Payables for processing and approving payments to vendors and suppliers before disbursing or creating invoice accounting entries.

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Initiate payment Users create payments for multiple invoices, format them to print checks, and create and confirm payment batches. Invoice payment history is updated. When you void a payment, Payables automatically reverses accounting and payment records so your general ledger will have correct data and the paid invoice status is reset to Unpaid.

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Invoice to Terminatio

Syndication Companies invest in contract funding known as syndicated contracts. A disbursement is made to the funder during cash receipt or billing. The timing and amount of money disbursed is identified within the rules set up between the two investing parties. Collect outstanding payments Identify the delinquent case, evaluate data elements, and select a strategy. The case is assigned to an agent or department based upon business rules and reviewed for the appropriate strategy. Once communication has been made with the delinquent account, the user evaluates the strategy results, negotiates payment amounts, and arranges payment details. When the strategy is completed, management must evaluate the resolution: Repurchase Repurchases occur when a customer has defaulted and not been able to make their payments within a certain period of time and the vendor is required to buy the deal back. They occur based on agreement between the vendor and lessor and is transparent to the customer. Predetermined business rules govern when lessor is entitled to repurchases. Cure Cures are vendor payments due to a customer not making required payments. They occur based on an agreement between the vendor and lessor and is transparent to the customer. Predetermined business rules govern when lessor is entitled to cures.

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Repossess assets The user sends repossession instructions to the asset manager to mange the repossession and update asset status. Transfer As customer accounts become delinquent, the collector may send a notice of intent to report. Still, if no payment is received, the account will be reported monthly to the credit bureaus and it may be passed to an external third party to collect on the leasing company’s behalf. The case information will be downloaded into an export file which the user organization can transmit via a third party software package. This process manages the transfer of the case, allows the case’s outstanding balance to be monitored while it is with the third party and to be retrieved from the third party based on business rules. Receive payments Process payments received Through OLM, users can receive invoice payments several ways. When they initiate an AutoReceipt, receipts are created, approved and formatted. By using remit automatic receipt, customer payment transfers are created, approved and formatted. They can perform manual receipts at the same time or separately depending upon the function security option set up by system administrator. They can combine these remit automatic receipt operations in a single step or perform each separately. When the user initiates an Auto

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LockBox process, also a standard Oracle Receivables process, manual data entry is eliminated by automatically processing receipts sent to banks. This Auto LockBox process reads data and formats data from the bank file, validates the data for compatibility with Oracle Receivables, and transfers data in the Quick Cash tables.

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Apply cash rules Users may enter receipts in OLM by reviewing receipts imported from an Auto LockBox transmission, making entries through Quick Cash receipts, or entering receipts manually. OLM uses predefined cash application rules to allocate receipts to invoices. For manual entry, the invoice can be found based on various methods. Through OLM, they can review invoice details and apply the receipt to the invoice. Journalize accounting entries OLM transfers records to Oracle Receivables and Oracle Payables that are fully distributed with accounting entries (account code combinations). Oracle Receivables and Oracle Payables have standard interfaces and processes that are used to submit the accounting entries to the General Ledger for review and posting.

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4. Quote to Termination This process manages repurchase, restructure, and contract termination alternatives when the lease or loan expires. Restructured contracts are processed through contract authoring, stream generation, analysis, and approvals used in contract authoring, activation, and booking. Assets sold or disposed are retired in Fixed Assets and forwarded to Asset Return to Disposal for remarketing. When they are to be re-leased or remarketed, they are returned and may be managed in Oracle Inventory. Partial terminations are also supported. Quote termination, repurchase, or restructure When the contract ends, termination can begin with a quote request from a program partner, lessee, or internal associate in order to restructure or terminate an existing contract. Alternatively, asset managers, collectors, or customer service representatives can generate a request to return leased assets (repurchase). Restructure contract When the lease term ends, the customer can opt to extend the same yield and rental amount (this is not a renewal which may change payments and yields). A restructure quote is a response to a request extending an existing contract beyond the documented terms. Here, the user gathers additional information, restructures contract terms, and communicates the restructure quote to the appropriate parties.

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Repurchase Asset managers, collectors, or customer service representatives can generate a request to return leased assets. Based on predefined business rules, Oracle Lease Management assigns a remarketer to dispose of the returned assets. Terminate contract A termination quote is a response to a request to end an existing contract or rollover an existing transaction into a new contract. Termination quotes may occur prior to contract expiration or at end of term. Predefined business rules determine the approvals required to terminate contracts and exercise purchase options.

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Asset Return to Disposal


5. Asset Return to Disposal This processes asset returns, remarketing, and sales. Shipping instructions and asset evaluation are supported for returned assets. Returns may be accounted for as scrap, repurchases, or inventory to be remarketed. Through OLM, the remarketer can establish prices, bill for costs incurred, calculate third party commissions, and adjust inventory quantities and status for tracking. Off-lease amortization is also supported. Return Asset When the asset comes off-lease, OLM provides data required to calculate the off lease asset book value, capture amortization period and charges, ensure amortization is not greater than book value, and continue with existing tax depreciation. When the lessee does not exercise an option to purchase, the contracted assets are returned to be remarketed, re-leased, or scrapped and the leased assets to be relocated or remarketed from their current location. Internal or third party inspectors inspect and document the asset condition. If an asset requires repair, the remarketer determines the party responsible for repair

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costs, the asset return date, return method, and the decision to remarket or scrap. To remarket the asset, the remarketer sends shipping instructions, determines the asset’s condition, creates billing items for damages and creates the asset in inventory. If the disposition is scrap, the remarketer disposes the asset as scrap.

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Remarket asset When an asset is available to remarket, the remarketer will solicit the asset through a variety of channels. Sell asset The asset may then be available on the Internet, at specialty stores created using Oracle iStore. Re-lease asset When you choose to re-lease an off-lease asset, the asset can be selected if the contract was authored with the re-lease option. To specify that an off-lease asset is available for re-leasing, you update the asset’s Return Status field to Re-lease. When you specify that an asset is available for re-lease, the asset status changes to Re-lease, a validation process verifies that the contract has expired or terminated, and then the item is available for re-leasing. Scrap asset When you choose to scrap an off-lease asset, the asset is retired from Oracle Assets at a value of zero and a gain or loss on disposal of the asset is calculated. To scrap an off-lease asset, you update the asset’s Return Status field to Scrapped. When you specify that an asset available for scrapping, The asset status changes to Scrapped, a validation process verifies that the contract has expired or terminated, and then you cannot change the asset status to any other choice.

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Record remarketing costs If the decision was made to sell the asset, through Oracle Lease Management, the remarketer can record remarketing costs, calculate third party commissions, and create payment invoices. Then the remarketer creates and processes the order, reduces inventory, and identifies the asset as exchanged, traded or converted. The user then creates a billing item and recognizes payment on receipt. Journalize accounting entries Oracle Lease Management supports generation of the journals to properly account for the asset sale and return and to write-off transactions.

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Period Open to Period Close and Inquiry to Resolution


6. Period Open to Period Close Through the accounting from Period Open to Period Close, accruals, loss provisions, write-downs, periodic adjustments, and journal entries specific to the asset based finance industry are processed . Oracle Lease Management uses Oracle Payables, Receivables, Inventory, Fixed Assets, and Workflow to manage the accounting functions. Generate accruals OLM supports concurrent programs that generate accruals for income and amortization at month end for all active contracts in accrual status. From interface tables, the contract import will import contracts during conversions or as part of a regular interface into OLM. You can import property tax charges from a filing entity or enter manual journal entries for a contract. You run the concurrent program that loads journal entries into the GL Interface tables marks the journal entry in the OLM subledger as Posted. You submit the GL Import program in Oracle General Ledger. You run another concurrent program to re-amortize streams for contracts based on floating interest rates. You can view the streams and journal entries for active contracts and the streams and accounting for an active contract.

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Calculate loss provision When an account becomes delinquent or uncollectible, the lessor may accrue a specific loss provision against a contract or a contract’s receivables without terminating the contract or affecting its open items and streams. General loss provisions may be recognized based on delinquency rates and historical trends. The calculation for general loss provision may be at the contract level, ignoring contracts with specific loss provisions, applying user specified loss rates or basing on historical delinquency rates. Calculate write down values SFAS 13 requires at least annual evaluations of the estimated residual value of assets on capital leases. Through OLM, you can recompute contract amortization streams as if the revised residual had been in place since contract inception per SFAS 13, replace the old contract stream with new, and generate journal entries for the transaction. OLM updates the date of last residual value update or review. SFAS 13 also requires at least annual evaluation of both the current fair market value (FMV) and end-of-lease term (EOT) salvage value of assets on operating leases. If the current estimate of EOT salvage value is less than the booked salvage, the asset is considered to be “permanently impaired, ” which may include an immediate writedown of the asset’s book value and an increase in the asset’s book amortization stream throughout the remainder of the lease term. If the current FMV of an operating lease asset is less than

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current book value, an immediate writedown is made for the lesser of the EOT salvage value deficiency or the current FMV deficiency. The excess of the EOT salvage value deficiency over the current FMV deficiency is taken as additional book amortization over the remaining lease term. Perform periodic adjustments OLM provides the data required to properly account for assets exchanged, traded or converted. The user has access to the data required to calculate the applied proceeds, depreciation on carryover, and qualified tax gains. Journalize accounting entries OLM supports generation of the journals for all accounting transactions for leases and loans. 7. Inquiry to Resolution This process starts with initial contact from employees, customers, vendors, and partners. The inquiry is logged and tracked through satisfactory resolution communicated to the appropriate designated parties. It manages specific requests: insurance quotes, claims, cancellation, contract transfers, equipment exchanges, asset modifications, and lease renewals. OLM uses Oracle Telesales, CRM Foundation, Receivables, Payables, Fixed Assets, Installed Base, and Workflow to manage the Inquiry to Resolution functions.

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Summary

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Appendix 4 Trading Community Architecture (TCA) Overview Chapter 16 - Page 1

Appendix 4 Trading Community Architecture (TCA) Overview Chapter 16

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Trading Community Architecture (TCA) Overview

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Objectives

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Agenda

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Overview

Overview

Trading Community Architecture (TCA) is Oracle's central customer data repository, essentially our Customer Master. Other than customers, it stores entities: partners, prospects, contacts, employees, and all entities within a trading community, including suppliers. It is an architecture and a model, not a module, so you do not log in to TCA per se. The TCA data model is constructed on the HZ schema. Lying above this schema is an Enabling Infrastructure layer consisting of functionality such as a Data Quality Management tool, which is used for cleansing and data duplication, and D&B integration functionality, which supports real time and batch updates to customer and prospect data from Dun and Bradstreet. TCA provides a large set of APIs, which enforces integration and standards across the E-Business Suite and third party applications, governing the usage of the TCA data model. The combination of the TCA data model and the TCA Enabling Infrastructure supports many E-Business Suite applications, where customers are modeled and used for transactional purposes.

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TCA Origins

TCA Origins

TCA was created as a natural extension to the Receivables centric model. This facilitates the customer’s common view from all perspectives to support business flows such as "campaign to cash," which span front office and back office applications, with the integration of CRM functionality into the 11i Oracle E-Business Suite. Oracle also wanted to separate the intrinsic characteristics of a prospect or customer from the role an entity plays in an implementing organization's trading community. For example, in TCA, the customer’s global characteristics as an organization are separated from the financial relationship that the implementing organization has with that customer. By doing this, we are able to limit which users have access to update certain types of information and to model each entity within the trading community only once, regardless of how many roles they may have with the implementing organization. Through TCA, we can create a central repository of information relating to all members of a trading community, to support both business-to-business and and business-to-customer business models.

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The TCA Best Practices model evolved from working with many Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) teams to create a view of the customer base which supports all flows throughout the E-Business Suite.

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TCA Principles

TCA Principles

• Create a central repository for the entire E-Business Suite to store information relating to all members of a trading community: prospects, customers, contacts, employees, partners, distributors, suppliers

• Separate the intrinsic characteristics of the trading community members from the roles they play in a trading community

• Model each entity only once • Record complex business relationships between trading community entities, including

third party relationships • Support all business models, industries, and geographies

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TCA Recognition

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TCA Evolution

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Customer Data Management (CDM)

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CDM Product Family

CDM Product Family

Components • CDM Price List Products

- Customer Data Hub - Customer Data Spoke - Customer Data Librarian

• CDM Foundation Components - TCA Data Model - TCA Infrasturcture - Customers Online

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Customer Data Hub

Customer Data Hub

Customer Data Hub (CDH) provides a data model and infrastructure (TCA) to create and maintain a physical, central customer database. It comes with any and all Oracle Applications. It may be purchased as a stand-alone product and priced per central processing unit (CPU). O

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Customer Data Spoke

Customer Data Spoke

Through Customer Data Spoke (CDS), in conjunction with your middleware of choice, data synchronization exists between the Customer Data Hub and "Spoke" applications. It priced per production database, such as Spoke, that is integrated with the Customer Data Hub. O

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Customer Data Librarian

Customer Data Librarian

Customer Data Librarian (CDL) is an easy-to-use, process-driven application designed to support the full range of activities performed by Information Quality (IQ) professionals tasked with maintaining enterprise customer data. It manages all data in TCA whether it comes from an EBS application or an external system. It is priced per user, with a minimum of five users.

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Customers Online

Customers Online

Customer Online (CO, formerly, OCO) provides a comprehensive user interface to view, create, and update data stored in TCA. It also provides comprehensive relationship management and the ability to view all transactions for any customer. It may be used by any licensed EBS application user. CDH, if purchased based on per CPU pricing, offers unlimited usage of CO.

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CDM Training Overview: TCA Fundamentals Course

CDM Training Overview: TCA Fundamentals Course

For further information, refer to Implement and Use Customer Data Management.

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CDM Training Overview: TCA Enabling Infrastructure

CDM Training Overview: TCA Enabling Infrastructure


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CDM Training Overview: Customers Online

CDM Training Overview: Customers Online


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CDM Training: Customer Data Librarian

CDM Training Overview: Customer Data Librarian


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CDM Training: Customer Data Hub (The Solution)

CDM Training Overview: Customer Data Hub (The Solution)


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TCA Model

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Summary

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Appendix 5 Treasury Overview Chapter 17 - Page 1

Appendix 5 Treasury Overview Chapter 17

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Treasury Overview

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Objectives

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Agenda

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Overview

Overview

Treasury uses the terms front, middle, and back office activities, which roughly refer to position analysis and financial deal capture, policy setting and controls, and payment processing and accounting-related activities. Treasury helps optimize all major treasury operations, improving the department’s overall efficiency, profitability, and control. Deal capture, market rate upload, accrual and revaluation calculations, and accounting are totally automated to support financial instruments commonly used by corporate or government treasury departments, from short term liquidity or long term money market instruments, in house banking transactions, equity investments, foreign exchanges transactions, to more advanced financial derivatives. Treasury passes all treasury-related accounting entries to Oracle General Ledger, showing all your projected operational cash flows and exposures and eliminating the need to build these links and maintain them. Oracle’s E-Business Suite is important within the treasury department, which might have bank accounts and cash balances across many subsidiaries across the globe. Leveraging the internet is also provides centralization. Companies can centralize their hardware and human resources at a headquarter level, improving not only efficiencies but also control.

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Integration

Integration

Oracle Treasury and Oracle Risk Management combine with Oracle Cash Management to provide Oracle’s complete Treasury solution. All three products may be important to treasury departments depending on their specific needs. Oracle Cash Management also integrates with Oracle XML Gateway to communicate with banks. Through Oracle Treasury, you can view important cash flow and exposure information generated by other input sources like Oracle Receivables, Order Management, Payables, Payroll, Projects, Purchasing, and Sales for informed investing, borrowing, and hedging decisions. Treasury maintains several open interfaces to load data electronically. For instance, if a company chooses not to use the entire E-Business Suite, they can still see and reconcile cash flow data from other applications. It also provide interfaces for importing market rate data from third party providers like Reuters or Bloomberg. It helps users to import transaction data electronically than manually entering all their deal information.

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Straight Through Processing Capabilities

Straight Through Processing Capabilities

Straight Through Processing (STP) is automation of the entire treasury accounting cycle. With a single program that can be scheduled to run at any time, you can automate everything, end-to-end, at once for every company in the system, saving half- to full-day time. You can automatically import discounted securities into the system using an open interface. Since discounted securities, like commercial paper, are often bought or issued frequently, STP should help eliminate potential data entry error while saving users more time.

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Enhanced Regulatory Compliance

Enhanced Regulatory Compliance

Oracle Treasury has expanded existing support for FAS 133 and IAS 39 hedge accounting, with deal revaluation functionality, flexible accounting structure, and financial derivatives support. It also defines information necessary for clear hedge documentation and reporting. It has support for new types of hedge designations and several new regulatory compliance reports related to hedges and hedge instruments. Oracle Treasury has improved controls for corporate governance. For example, it provides more refined separation of duties or principals for deal entry, deal validation, and payment generation capabilities. You can set up the system so that one person in the treasury department can enter a specific type of deal that someone else is only authorized to validate that it has been entered correctly and yet a third person can release any related payments. Oracle Treasury also has responsibilities that can be assigned to users that closely match common business roles.

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Expanded Bond Functionality

Expanded Bond Functionality

Treasury’s Bond functionality supports floating rate notes (FRN). Through this, you can change interest rates on individual coupon periods as market rates change. Also, rather than simple interest where cash flows occur on the coupon dates, compound bond calculations assume that interest is reinvested periodically at some quasi coupon frequency. All the common business day conventions can adjust coupon calculation and payment dates when they would, otherwise, fall on weekends or holidays. You can adjust the dates back or forward automatically, taking into account month end dates, using the conventions of Following, Previous, Modified following or Modified previous. This applies to other deal types besides bonds, specifically Wholesale Term Money transactions and Interest Rate Swaps. Through callable bond support, you can track specific call provisions like dates or prices when you set up your bond issue. You can query all your callable bonds and easily create an Oracle Discoverer report with listed your upcoming call dates. You can also repurchase bonds that have been issued as debt, in addition to reselling investments.

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Cash Positions and Forecasting

Cash Positions and Forecasting

Cash positioning and cash forecasting are fundamental processes for any treasury department. Oracle Treasury has two screens to meet the basic business needs in net cash flow summary and cash book areas. Available directly to Oracle Treasury users, this functionality is actually delivered in Oracle Cash Management. Also, Oracle Treasury accommodates the Oracle Cash Management functionality of establishing target balances and short names on bank accounts.

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Automatic Bond Rate Resetting

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Bank Account Update Program

Bank Account Update Program

The Bank Account Update Program allows for a mass change of Settlement bank accounts. A settlement bank account is captured in Oracle Treasury when the users first create a deal. Many deals can have multiple payments or receipts associated with them for many years in the future. For example, a bond that is bought today and decided to hold until maturity may be paying coupons twice a year for the next ten years. The originally captured bank account serves as a default bank account during the settlement process. In addition, in the cash forecast, all the future-dated cash flows are also associated with this bank account. However, as part of banking relationships management over the years it may decided to close certain bank accounts to optimize the banking structure. If that happens, this new program will help the in redirecting all future cash flows that are now associated with a closed bank account to a new bank account, reducing manual effort and improving accuracy of cash forecasts.

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Cash Pooling Across Legal Entities

Cash Pooling Across Legal Entities

Cash Pooling Across Legal Entities facilitates automatic update of the inter-company loan balances when the cash pool activity takes place. This can be especially important in the shared services centers as this feature allows to process large volumes of inter-company activity very quickly and efficiently. This feature allows you to assign bank accounts that belong to different legal entities to the same physical cash pool. Whether the cash pool is outsourced to the bank or internally managed, the fund transfer activity within the pool triggers the creation of Inter-company Funding deals in Oracle Treasury. If the inter-company lending activity is centralized in the shared services center, this feature automates manual posting to the inter-company balances and allows you to process thousands of balance adjustments each day.

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Summary

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Appendix 6 Enterprise Project Management Solution Overview Chapter 18 - Page 1

Appendix 6 Enterprise Project Management Solution Overview Chapter 18

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Oracle Enterprise Project Management Solution Overview

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Objectives

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Agenda

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Oracle Enterprise Project Management Solution

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)

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Oracle Project Foundation

Oracle Project Foundation

Oracle Project Foundation provides the common foundation (functionality) shared across the products in the Oracle Enterprise Project Management Solution. The purpose of Oracle Project Foundation is to package all the common elements of Oracle Projects into a single place. Period Definition Periods are used to define project accounting periods (PA periods). PA periods are used in transaction processing. Calendar Definition Calendars are used to determine resource availability and over commitment. Organization Definition To configure Oracle Projects to meet your business requirements, you must make critical implementation decisions regarding how you set up your organizations in Oracle Projects. Oracle Projects uses organizations for the following business purposes:

• Management of projects and tasks • Employee assignments • Expenditure entry

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• Non–labor resource ownership • Budget management • Resource definition for project status reporting • Burden cost processing • Invoice and collections processing • Reporting • Forecasting

Resource Definition A single collection of your resources, their skill sets, and their availability enables you to utilize and manage your resources both effectively and efficiently. Each individual has various attributes defined, such as personal information, work patterns, location, and competencies. Project and Organization Security Oracle Project Foundation enables you to set up responsibility–based enterprise security that provides all users function security access at the application level. You can also implement an extended project security mechanism based on project and organization roles. Project and Task Definition Oracle Project Foundation provides the ability to create projects and tasks. A project is a primary unit of work that can be broken down into one or more tasks. Organization Forecasting Organization forecasting enables you to generate organization–level financial forecasts for the revenue, cost, margin, margin percent, utilization, and headcount amounts associated with your project–level staffing plans. Utilization Utilization functionality enables you to generate and report on your resources’ actual and scheduled utilization. Using Oracle Project Costing, you can report on your resource’s actual resource utilization based on actual hours from timecards. Using Oracle Project Resource Management, you can report on scheduled utilization based on project resource assignments. Multilingual Support (MAL) Oracle Applications supports Multilingual Support, enabling you to run Oracle Applications in multiple languages from a single installation of the Applications in one database instance. O

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Oracle Project Costing

Oracle Project Costing

Oracle Project Costing provides an integrated cost management solution for all projects and activities within an enterprise. Oracle Project Costing acts as a central repository for transactions, processes project costs, and creates corresponding accounting entries to satisfy corporate finance requirements. When you use Oracle Project Costing, you can track and account for all project costs. Costs may be entered directly into Oracle Project Costing using expenditure batches, imported from other Oracle Applications, or imported from external systems. You collect cost distribution lines in Oracle Project Costing which uses AutoAccounting to determine the default accounts for raw and burden costs. Oracle Project Costing also creates cost accounting events for Oracle Subledger Accounting, and transfers the accounting entries to Oracle General Ledger. Cross Charge A cross charge takes place when an expenditure item’s expenditure organization is different from the 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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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 could 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.

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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. Agreements 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. Revenue Accrual 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

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for revenue accrual. This enables you to generate revenue based on the project's actual billable expenditures. When you generate revenue, Oracle Projects calculates the potential revenue and then creates accounting events for Oracle Subledger Accounting. You can generate revenue for a range of projects or for a single project. After you generate revenue accounting events you create accounting entries in Oracle Subledger Accounting for the accounting events, and you can transfer the final accounting to Oracle General Ledger. Customer Invoices When you define a contract project, you also identify the method to be used for invoicing. For example, you can use a distribution rule of "Event" and then enter milestone events to invoice your project customer(s) as milestones are achieved. When you generate invoices, Oracle Projects calculates bill amounts, creates formatted invoices for printing and posting, and maintains funding balances. Billing Retention Retention is a provision in a contract to hold back a portion of invoiced amounts for the duration of the project. Oracle Projects enables you to set up withholding and billing terms for retention, to invoice retention amounts, and to account for unbilled retention. Billing Extensions Billing extensions allow you to implement and automate company–specific billing methods. With billing extensions, you can automatically calculate summary revenue and invoice amounts during revenue and invoice generation based on unique billing methods. These billing amounts are accounted for using events. To implement your company–specific billing methods, you design and write rules to calculate billing amounts using PL/SQL procedures. You then enter the billing extension definition in Oracle Projects to specify additional information, such as the procedure name to call. Multi-Currency Billing With multi–currency billing, you can enter agreements, bill rates, and events in any currency regardless of the project functional currency. You can also designate the project functional currency, project currency, or funding currency as the invoice processing currency for a project.

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Oracle Project Resource Management

Oracle Project Resource Management

Oracle Project Resource Management is an integrated project staffing application to help you manage project resource needs, and profitability. Oracle Project Resource Management empowers key project stakeholders such as project managers, resource managers, and staffing managers with the information they need to make better use of their single most critical asset: their people. Features of Oracle Project Resource Management include: Resource Pool Definition The resource pool is the collection of all your valid resources into a single group. The implementation of resources and resource-related information is part of the setup of Oracle Project Foundation. Resource Searches Resource searches are primarily done to fill a resource requirement on a project. When searching your resource pool for potential matches to requirements, you specify criteria to limit the search. You can also search for a resource that meets specific criteria outside the context of a project requirement. This search includes all the attributes used for a requirement–based resource search.

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Schedule Maintenance After a resource has been assigned to a project, you can view the stage at which the assignment exists. You can approve an assignment using the Oracle Workflow or manually. Approvers can approve or reject an assignment. Rejected assignments can be updated and resubmitted for approval. You can also determine if your resources are overcommitted and handle them accordingly. Nominations and Approval Processing You can nominate candidates for a requirement to track a list of potential people to assign to fill the requirement. As the candidates are nominated, an Oracle Workflow process notifies the resource manager, the staffing manager, and the resource of the nomination. This list of notification recipients may vary depending upon the implementation of the workflow processes. Candidates are assigned a score based on the weightings defined for the requirement. This score helps identify the level of match between the requirement and candidate. Reporting Oracle Project Resource Management transactional reporting is supported by a web based Oracle Discoverer solution. The predefined workbooks, worksheets and End User Layer (EUL) provide you and your users the ability to query and manipulate transactional data to proactively measure and analyze corporate performance.

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Oracle Project Management

Oracle Project Management

Oracle Project Management provides project managers the visibility and control they need to deliver their projects successfully, improve profitability, and operate more efficiently. It presents project managers with a comprehensive integration of the major elements of project management: programs, plans, progress, issues, changes, documents, effort and cost, financial information, performance, exceptions, and status reports. Workplan and Progress Management You can set up two types of structures in Oracle Projects: workplan structures and financial structures. A structure is sometimes referred to as a work breakdown structure, or WBS. A workplan contains a hierarchical organization of tasks within a project. Each workplan contains an unlimited number of tasks and you can define as many levels as you want. Workplan management helps project managers and team members deliver projects on time. Financial structures help project and financial administrations track financial information for a project. You can collect progress for deliverables, task resource assignments, tasks, and projects. This information allows you to report on whether workplan execution is on track.

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Integration with Microsoft Project You can continue to use Microsoft Project when working with your projects, while benefiting from the features that Oracle Projects has to offer. You can send and receive a project, send an update, view real-time project information, and receive real-time values for task attributes. You can use Microsoft Project to update the project schedule, progress, and budget information. After all project details have been entered, you can then send the project plan to a workplan or financial structure. Budgeting and Forecasting You can create budgets and forecasts to manage the financial performance of a project throughout the project lifecycle. You can also create multiple budgets and forecasts for a project to demonstrate different scenarios. You can compare budget and forecast amounts to project actuals using reporting tools such as Project Performance Reporting and Project Status Inquiry to track project status and performance. Project Status Reporting You can report relevant project status information for targeted audiences, controlling the content, publishing, frequency, and format. For example, you can provide a monthly internal management report for your project steering committee, and a weekly team project status report for your project. Issue and Change Management Oracle Projects provides you with a centralized system to manage issues and change requests. This functionality enables team members to work together collaboratively to resolve issues and communicate and implement changes to the project. Using issue management, you can track issues and change requests from creation through to completion, and deal with concerns or outstanding questions on projects. Document Management Oracle Projects enables you to attach and store documents with projects on which you are a team member. You can utilize folders and versions and ensure security for all documents. Project Performance Reporting Oracle Projects provides you with an at-a-glance comparison of actual versus planned performance as defined in project budgets and forecasts. You can view performance in the areas of effort, cost, profitability, earned value, billing, and collections, or capital costs. With Project Performance Exceptions Reporting, project managers can view a summary of problems and issues on a project through visual indicators that denote exceptions, and focus on solving the critical problems. Earned Value Management Earned Value Management provides a method of managing projects by understanding the mathematical relationships between project scope, work, and budget to determine project health. The metrics used in calculating earned value enable you to gain knowledge of the true health of a project. You can also use the various earned value metrics to monitor trends in a project.

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Oracle Project Collaboration

Oracle Project Collaboration

Oracle Project Collaboration streamlines team collaboration and execution of project work. Oracle Project Collaboration shares information with Oracle Project Management, and provides a personalized view for team members. Most functionality in Oracle Project Management is also used in Oracle Project Collaboration. This functionality includes issues, change documents, and project status reporting. Team members, as opposed to project mangers, interact with these functions via Oracle Project Collaboration. Task Progress Communication Internal team members can communicate progress against assigned tasks by directly accessing the published workplan. They can report accurate information by capturing the soft and hard elements of task progress. Progress information includes a color-coded graphical progress indicator (red, yellow, green icon), textual information, percent complete, effort, work units, and actual and estimated task dates. Collaborative Issue Resolution A central issue repository creates awareness across the project team by enabling communication of context-sensitive information including issue status, priority, due date, reporting source and classification, document attachments, actions required for resolution,

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progress status and resolution. Team members can assign actions to fellow team members so that the ownership and steps to resolution are communicated clearly and consistently. Collaborative Change Request and Change Order Resolution For all projects on which they are assigned, team members have visibility into open change requests and change orders and the actions for which they are responsible. Team members can implement and report progress information on existing documents, raise new change documents, and assign actions to their team members, driving toward rapid resolution. Collaborative Document Sharing Team members can access project documents easily and securely. They can attach documents to projects, issues, and change requests, and change orders. Quick Access to Common Functions The shortcuts available from Team Member Home provide easy access to frequently performed functions. Available shortcuts include:

• Time Entry (via Oracle Time and Labor) • Expense Entry (via Oracle Internet Expenses) • Task Progress Update • Schedule and Profile View (via Oracle Project Resource Management) • Utilization View • Open Requirement Search (via Oracle Project Resource Management) • Add Administrative Assignments (via Oracle Project Resource Management)

Desktop Integration Team members can continue to use their daily desktop tools to access their up-to-the-minute project information. Workflow notifications are sent via e-mail, allowing team members to collaborate without logging into Oracle Projects. Issue and change lists can be downloaded to the desktop for use within Microsoft Excel. Oracle Projects delivers seamless integration between the Oracle Projects applications and Microsoft Project through an easy to use web interface. The intuitive graphical user interface is an extension of existing Microsoft Project menus and windows, and each function and process preserves the enterprise business rules and function security defined in Oracle Projects.

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Oracle Project Portfolio Analysis

Oracle Project Portfolio Analysis

Oracle Project Portfolio Analysis provides a solution to make project funding decisions based on your business and financial objectives. You can group the projects within a portfolio into scenarios, and analyze the financial impact of funding or rejecting those projects. After you have analyzed the projects, you can approve, reject, or place the projects on hold. Oracle Project Portfolio Analysis has the following integration points directly with Oracle Project Management:

• Project managers enter scores for their projects in Oracle Project Management, and the scores are displayed in Oracle Project Portfolio Analysis

• Oracle Project Portfolio Analysis uses the financial plans from Oracle Project Management to calculate financial measures such as return on investment, net present value and internal rate of return for your portfolios. Budgets, actuals, and forecasts are reported to Oracle Project Portfolio Analysis with current project data.

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With Oracle Project Portfolio Analysis, you can do the following: Portfolio Creation Oracle Project Portfolio Analysis provides you with the ability to define your organization’s goals and strategy. By establishing common corporate objectives for your projects, you create a grouping of projects that share these goals. Create Planning Cycle A portfolio planning cycle is a series of activities with the specific purpose of examining a set of active projects and new project proposals in order to select projects to be funded. During the planning cycle, the portfolio analyst examines and selects projects based on their alignment with your organization’s strategic objectives, financial objectives, and financial constraints. When you create a planning cycle, you specify investment criteria and targets for financial metrics and the investment mix. Submit Projects The initiation of a planning cycle generates a workflow notification that is sent to project managers, asking them to submit their projects to the planning cycle. This notification contains the name of the cost and revenue financial plans used by Oracle Project Portfolio Analysis. Collect Projects and Build Scenarios The initial scenario provides a listing of all projects that are in the current planning cycle. Projects that qualify to be included in the portfolio are automatically collected into the initial scenario on the due date specified in the planning cycle. Rank Projects Review the weighted strategic scores for projects, and rank the projects based on their scores. The values for return on investment, net present value, payback period, and internal rate of return fields are calculated based on the project costs and benefits for the funding period of the planning cycle. Compare Scenarios After you create the scenarios, analyze the projects and compare them against the targets that were set for the planning cycle. Charts and graphs are available to measure investment ranking, strategic alignment, financial justification, and project status. Recommend Scenarios After comparing the scenarios, a portfolio analyst can recommend the scenarios that are beneficial to the organization. Approve Plan As the approver of a portfolio, you can view the scenario summary of a portfolio. This summary provides an overview of all the financial and strategic measures of the recommended scenarios. You can review the performance and recommended funding approval status of each project. Carefully review the portfolio, approve a scenario, and approve the portfolio plan for the planning cycle. Close Planning Cycle You close the planning cycle after the plan has been approved. A closed planning cycle is retained as history, and remains visible for portfolio reviewers. You cannot make any changes to a plan once it is closed.

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Oracle Daily Business Intelligence for Projects

Oracle Daily Business Intelligence for Projects

Oracle Daily Business Intelligence for Projects is a component of Oracle Daily Business Intelligence (DBI), a suite of reporting and analysis applications. DBI provides a management-reporting layer for business users of the Oracle e-business suite products. Oracle Daily Business Intelligence for Projects delivers aggregate and detailed information about the projects in an enterprise directly to the people who need it. It is a comprehensive reporting solution that provides cross-project visibility to full lifecycle performance–from opportunity bookings, to resource utilization, to profitability and activity analysis. Executive managers can use Oracle Daily Business Intelligence for Projects to review information in both graphic and tabular formats. Single Repository of Project Metrics for All Stakeholders Utilizing secure, role–based portals, Oracle Daily Business Intelligence for Projects provides daily summaries of key metrics including revenue, cost, margin, bookings, backlog, utilization, and resource availability. Root Cause and Exception Management Oracle Daily Business Intelligence for Projects provides multiple perspectives of the data to enable you to analyze overall trends and identify exceptions. For example, you can:

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• Use summary data to stay informed. • Use trend and comparative analysis to develop insight.

Key Performance Measures Use key performance measures to determine top-line performance, monitor trends, and analyze change. Performance measures available in Oracle Daily Business Intelligence for Projects are:

• Revenue • Cost • Margin • Margin % • Capital Projects Cost • Capital Cost • Forecast Cost • Capital Cost % of Capital Projects Cost • Expense • Contract Projects Cost • Contract Projects Cost % Of Budget • Billable Cost • Billable Cost % Of contract Projects Cost • Non Billable Cost • Bookings • Backlog • Book to Bill Ratio • Total Utilization % • Billable Utilization % • Available Resource Capacity Hours

HTML Reports Reports provide breadth of content in graphical and tabular format. HTML Reports available in Oracle Daily Business Intelligence for Projects (Daily Business Intelligence 6.0) are:

• Projects Profitability - Projects Actual Profitability - Projects Forecast Profitability - Projects Profitability Overview - Projects Profitability Trend - Projects Profitability Cumulative Trend - Projects Profitability Detail

• Projects Cost - Projects Cost Summary - Projects Cost Trend - Projects Cost Cumulative Trend

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- Projects Cost Detail • Capital Projects Cost

- Capital Projects Cost Summary - Capital Projects Cost Trend - Capital Projects Cost Cumulative Trend - Capital Projects Cost Detail

• Contract Projects Cost - Contract Projects Cost Summary - Contract Projects Cost Trend - Contract Projects Cost Cumulative Trend - Contract Projects Cost Detail

• Projects Resource Availability - Projects Available Time Summary - Projects Availability Trend - Projects Current Available Resources - Projects Available Resources Duration - Projects Available Resource Detail

• Projects Utilization - Projects Resource Utilization and Availability - Projects Utilization Summary - Projects Utilization Trend - Projects Actual Utilization - Projects Actual Utilization Detail - Projects Scheduled Utilization - Projects Scheduled Utilization Detail - Projects Expected Utilization - Projects Expected Utilization Detail

• Projects Bookings and Backlog - Projects Bookings and Backlog Summary - Projects Bookings and Backlog Detail - Projects Bookings and Backlog Activity - Projects Bookings and Backlog Activity Details - Projects Bookings Summary - Projects Bookings Trend - Projects Bookings Source Trend - Projects Backlog Summary - Projects Backlog Trend

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Example Projects Business Flow

Example Projects Business Flow

This section presents an example business flow through Oracle Projects using a contract project. While the flow follows steps in a general sequence, once the project is defined, the various activities may occur throughout the life of the project. Define Project Once the project is created, the project manager may submit the project for approval. Contract funding is defined for contract projects using Agreements. Define Budgets & Forecasts Using Oracle Project Management, the project manager defines a draft cost and a draft revenue budget. Once a budget is ready, the project manager can submit it for approval, leveraging the Oracle Workflow routing and notification functionality. When approved, this version of the budget becomes the current baseline. Staff Project Oracle Project Resource Management is used to define staffing requirements for the project. The staffing manager evaluates the pool of available resources and either directly assigns resources or nominates candidates. When the resource assignments are approved, they are committed to the project.

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Collect Costs Once work begins on the project, Oracle Project Costing enables the project team to collect costs and manage expenditures. For example, resources submit timecards; recording the number of hours they worked on particular project and task combinations. Revenue & Invoices For contract projects, the project manager can generate, review, and release revenue. You then generate revenue accounting events, create accounting in Oracle Subledger Accounting, and transfer the final accounting to Oracle General Ledger. Manage Project Invoices For contract projects, the customer(s) associated with the project are identified when the project is created. When the time comes to invoice the customer, you can generate, review, approve and release a draft invoice. Released invoices are interfaced to Oracle Receivables. Payments from the customer are applied to invoices in Oracle Receivables. Collaborate on Project Execution Oracle Project Collaboration enables the project’s team members to record any issues that arise. The project manager can publish status reports to team members who are both internal and external to the enterprise. Reporting and Analysis Throughout the life of the project, analysis is performed:

• Executives review comprehensive project reports using Oracle Daily Business Intelligence for Projects. These reports allow cross-project visibility.

• The project manager uses Oracle Project Management to create and publish status reports. • Project team members review project information using Oracle Project Collaboration.

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Agenda

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Oracle Projects Integration with Other Oracle Applications

Oracle Projects Integration with Other Oracle Applications

Oracle Projects provides a comprehensive solution to project management. This solution includes extensive integration with other Oracle e-business suite products. Throughout this integration, data flows seamlessly to and from Oracle Projects. This lesson provides an overview of the major points of integration between Oracle Projects and other Oracle Applications. Additional details regarding this integration are found throughout the lessons in the R12 Projects Fundamentals Learning Path.

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Oracle Projects Integration with Other Oracle Applications (continued)

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Oracle Product Lifecycle Management

Oracle Product Lifecycle Management

Managing the lifecycle of an item often requires a project workplan to manage the development process. The Oracle Product Lifecycle Management (PLM) solution provides the central product model for Oracle’s e-business suite. Oracle Product Lifecycle Management is the process of managing a product from initial concept to obsolescence or retirement. Oracle Projects is integrated with Oracle Product Lifecycle Management to address the enterprise project management and execution needs for the product lifecycle management solution. Oracle Product Lifecycle Management allows you to define a lifecycle tracking project for an item to track and report on the tasks required in each lifecycle phase. Using Oracle Product Lifecycle Management integration, you can associate other related projects with an item for greater visibility. With the integration of Oracle Projects and Oracle Product Lifecycle Management, you can:

• Define lifecycles for items or item revisions. • Define a lifecycle tracking project to manage the item through its lifecycle. • Track tasks by item lifecycle phase. • Associate related projects with an item.

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Create a Lifecycle Tracking Project You can use a lifecycle tracking project to track and manage all required tasks in each item lifecycle phase. You can define the project based on a project template. The project template can default the tasks, milestones, and resources. You can create a lifecycle tracking project either in Oracle Projects or in Oracle Product Lifecycle Management. In Oracle Product Lifecycle Management, when you are within the context of an item/item revision, there is a function to create a project. Associate Project with an Item or Item Revision You can associate a project with an item or item revision to track all activities across the various phases of the complete product lifecycle. This association can be done in either Oracle Projects or Oracle Product Lifecycle Management. You can track what projects are associated with which items or item revisions via project/item associations. Track and Report Progress of Item by Lifecycle Phase You can leverage the various functions within Projects, including tasks, workplan, progress, and more to manage the lifecycle activities.

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Oracle Assets

Oracle Assets

Oracle Projects allows you to manage asset capitalization using capital projects. In a capital project, you can collect construction–in–process (CIP) and expense costs for each asset you are building. You can also define retirement adjustment assets and capture cost of removal and proceeds of sale amounts (retirement work in process, or RWIP) for assets you are retiring. You use Oracle Projects to collect all asset cost detail transactions, summarize them to create asset lines in Oracle Projects, and transfer them to Oracle Assets to become depreciable fixed assets. Oracle Assets integration includes:

• Inquiry of project information on mass addition lines. • Drilldown to project asset line details in Oracle Projects from project–related mass

addition lines in Oracle Assets. • Copying of project information from mass addition lines to asset source lines during Mass

Additions Posting process. • Inquiry of project information on asset source lines. • Drilldown to project asset line details from project–related asset source lines.

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• Coordination with Oracle Payables so that supplier invoice lines are not interfaced to Oracle Assets by both Oracle Payables and Oracle Projects when the invoice line is associated with a capital project.

Generate Asset Lines Run the concurrent program PRC: Generate Asset Lines to collect all eligible costs, summarize them, and create asset cost lines and/or retirement cost lines. Interface Asset Costs to Oracle Assets Run the Oracle Projects concurrent program PRC: Interface Assets to Oracle Assets to interface the asset cost and/or retirement cost lines to Oracle Assets. Post Mass Additions After you interface the costs to the Oracle Assets Mass Additions table, you can make changes to the asset definition, if necessary, and then run the Post Mass Additions process in Oracle Assets. Oracle Assets creates accounting entries in Oracle Subledger Accounting to clear CIP and RWIP accounts, and posts the asset costs to the appropriate asset or group depreciation reserve account. Transfer to Oracle General Ledger The Transfer to GL concurrent program transfers the accounting entries from Oracle Subledger Accounting to Oracle General Ledger. Tieback Asset Lines from Oracle Assets The Tieback Asset Lines from Oracle Assets concurrent program identifies and updates Oracle Projects assets and asset lines that have been interfaced to Oracle Assets. For assets, the program updates the asset details to reflect the asset number assigned in Oracle Assets and the period in which the asset was posted. The program updates each asset line to reflect the Oracle Assets period in which the asset line was posted.

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Oracle Asset Tracking

Oracle Asset Tracking

Oracle Asset Tracking is a fully integrated solution in the Oracle E-Business suite designed to deploy and track internal products and assets at internal or customer sites, while providing the ability to automatically capture financial transactions. 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, Oracle Order Management, and Oracle Payables, and stores information collected from them. Oracle Asset Tracking integration includes:

• Creating project-related purchase orders linked to Oracle Asset Tracking

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• Entering receipts for project-related purchase orders in Oracle Purchasing and validating the receipts against the Oracle Asset Tracking repository

• Importing tracked items and cost into Oracle Project Costing • Monitoring costs in Oracle Project Costing • Generating asset lines for non-depreciable tracked items in Oracle Project Costing • Costing and interfacing the asset lines to Oracle Assets to create assets

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Oracle Cash Management

Oracle Cash Management

Cash Forecasting in Oracle Cash Management captures cash flow information from Oracle Projects. It also captures cash flow information from these other Oracle applications that store project–related information: Oracle Purchasing, Oracle Receivables, Oracle Order Management (with Oracle Project Manufacturing), and Oracle Payables. By integrating Oracle Projects with Oracle Cash Forecasting, you can define and generate a cash forecast for a specific project. You can report on cash flows from Oracle Projects sources throughout your enterprise, and across organizations as needed. You are also able to forecast in any currency, and analyze your project’s currency exposure by forecasting transactions that are entered in a particular currency.

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Oracle General Ledger


Oracle Projects integrates with Oracle General Ledger via Oracle Subledger Accounting and enables you to update your general ledger with Oracle Projects activity. You can generate accounting events at any time and as often during an accounting period as you want. Oracle Subledger Accounting uses the accounting events to generate the accounting and transfers the final accounting to an Oracle General Ledger interface table. Journal Import and Posting After Oracle Subledger Accounting transfers accounting entries to the Oracle General Ledger interface table, you run the Journal Import program. This program creates journal entries for your cost, revenue, and cross-charge transactions, which you can post to Oracle General Ledger at any time. Optionally, you can transfer the accounting to Oracle General Ledger and post the journal entries when you run the Create Accounting program.

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Oracle Projects budget integration enables you to integrate project budgets with non-project budgets. Bottom–Up Budget Integration When enterprises use bottom-up budgeting, they build organization–level budgets by consolidating budget amounts from lower-level sources. When you define budget integration for a project, the project budget can be consolidated automatically. When you submit a bottom-up integrated budget to create a baseline version, Oracle Projects validates the submitted budget version, creates a baseline version, generates accounting events, creates budget journal entries in final mode for the accounting events in Oracle Subledger Accounting, and validates the budget amounts against an Oracle General Ledger budget. You run the process PRC: Transfer Journal Entries to GL to transfer budget journal entries from Oracle Subledger Accounting to Oracle General Ledger. Top–Down Budget Integration When top-down budgeting is used and encumbrance accounting is enabled, Oracle Projects enables you to integrate project budgets with funding budgets. When you approve the project cost budgets and create a baseline, the system generates encumbrance entries to reserve funds

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in the funding budget for the anticipated project costs. These reservations ensure that budgeted funds are not consumed before project costs are incurred. They also give management a more complete picture of each organization’s financial position. As future projects and future purchases are evaluated, management can review the costs of their current expenditures, the anticipated costs of approved commitments and approved projects, and the funds available for future use. The reservations ensure that funds will be available when project costs are incurred in Oracle Purchasing and Oracle Payables.

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Oracle Grants Accounting

Oracle Grants Accounting

Oracle Grants Accounting extends the functionality of Oracle Projects to provide an award and project management solution for grant receiving organizations. Grants Accounting enables you to track multi-funded projects and the required compliance terms and conditions by award. Oracle Grants Accounting supports the validation of allowable costs and effective dates, as well as budgetary controls, to ensure compliance. Features that are part of Oracle Grants Accounting include:

• Multifunded projects • Award management • Funds control by award • Award Status Inquiry • Government reporting • Integration with Oracle Financials • Integration with Oracle Labor Distribution • Integration with Oracle Grants Proposal

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Oracle Human Resources

Oracle Human Resources

Oracle Projects shares organization, job, and employee information with Oracle Human Resources. If your business does not use Oracle Human Resources, you can enter this data in Oracle Projects. Oracle Projects fully integrates with Oracle Human Resources to keep track of employees and information relevant to them. If you have installed Oracle Human Resources, you must use an Oracle Human Resources responsibility to define employees. Otherwise, you enter this information in Oracle Projects and other Oracle Applications that integrate with it (for example, Oracle Payables, Oracle Receivables, and Oracle Purchasing). If you are not using Oracle Human Resources, you will have access to a set of human resources tables to store employee data. This information is shared across all applications that need to use it, including Oracle Projects. Oracle Projects does not own this data.

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Oracle Internet Expenses


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 to Oracle Project Costing.

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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 imports the transactions to the Expenditure Items table. 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 to interface the adjustments.

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Oracle Internal Controls Manager

Oracle Internal Controls Manager

Oracle Internal Controls Manager is a comprehensive audit tool that offers web based risk and audit management features. With Oracle Internal Controls Manager, you can document and test internal controls and ongoing compliance and your company can increase internal control testing efficiency, improve risk assessment confidence, and lower external audit verification costs. Integration with Oracle Project Applications Oracle Projects allows project managers to resource, schedule and execute projects. Oracle Internal Controls Manager is fully integrated with Oracle Projects so that the audit project can be created and managed in the same fashion as any other project. Projects which are classified as an audit project are visible in Oracle Internal Controls Manager. While project management is done in Oracle Projects, scoping of the project and the project’s fieldwork evaluation is managed through Oracle Internal Controls Manager.

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Oracle Inventory

Oracle Inventory

In a non-manufacturing environment, you enter issues and receipts into Oracle Inventory. After you process costs, these transactions become costed transactions. Next, run the Cost Collector. You can initiate the Cost Collector from the Project Cost Transfers window in Oracle Inventory to collect and then transfer costs to Oracle Projects. Next, in Oracle Projects, run the program PRC: Transaction Import to create expenditures in Oracle Projects. If the import program rejects any transactions, then you can review and correct them using the Review Transactions window. After you correct the transactions, resubmit the PRC: Transaction Import program. The program imports the transactions into Oracle Project Costing as accounted and costed. You cannot modify the cost distribution lines in Oracle Project Costing.

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Oracle Master Scheduling/MRP and Supply Chain Planning

Oracle Master Scheduling/MRP and Supply Chain Planning

A deliverable can result from the need to satisfy an external contractual obligation, or the need to fulfill an internally planned activity. Using Oracle Master Scheduling/MRP and Supply Chain Planning integration, you can initiate manufacturing demand for a project item deliverable. Define Deliverable In Oracle Project Management, you can create project deliverables, associate them with workplan tasks, and track them. Define Planning Attributes Define the planning attributes for the deliverable action. Before you can initiate planning, you must select a financial task, and a demand schedule. You must also enter the appropriate quantity, weight, volume, and unit of measure information. Generate or Relieve Demand for the Deliverable For project item deliverables, you initiate manufacturing planning by clicking Initiate Demand to generate a demand schedule. You can also initiate demand for multiple projects and deliverables within a project by running the PRC: Initiate Project Deliverable Actions concurrent program. After you initiate demand for your project item deliverable, a demand

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schedule is generated in the manufacturing planning system. After the item deliverable is shipped, you can relieve the manufacturing demand for the shipped item quantity by running the concurrent program PRC: Relieve Project Deliverable Demand.

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Oracle Payables (Accrual)

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, and you are matching an invoice to a purchase order or receipt using the Invoices windows instead of manually creating invoice lines and distributions, Oracle Payables automatically copies the project information from the purchase order 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.

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Entering Invoices You can enter project-related invoices directly in the Invoices windows in Oracle Payables. You can enter project-related information at the invoice level, which populates the project-related information at the invoice line level. You can override these default values at the invoice line level. If you choose not to automatically generate the distributions for an invoice line, you can enter project-related information in the Distributions window. An invoice can have both project-related and non-project-related distributions. Importing Invoices You can import through the Payables Open Interface tables projects-related invoices from the Invoice Gateway and other systems. For example, import expense report invoices from Oracle Internet Expenses. You can also import invoices from third party systems if the invoices are accounted. 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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Oracle Payables (Cash)

Oracle Payables (Cash)

When the primary accounting method in Oracle Payables is cash basis accounting, you interface payments to Oracle Projects as actual costs. You cannot interface costs from Oracle Payables to Oracle Projects as actual costs until you pay the invoice. After you enter payments for a supplier invoice, you interface the costs to Oracle Projects as actual costs. You can interface partially paid invoices to Oracle Projects. 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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Oracle Purchasing

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. When you automatically create purchase orders from requisitions using Oracle Purchasing AutoCreate feature, Oracle Purchasing automatically copies the project information from the requisition to the purchase order. Entering Requisitions You enter project-related purchase requisitions using the Requisitions window in Oracle Purchasing. You can enter default project information in the Project Information tabbed region of the Requisitions Preferences window. Oracle Purchasing uses this default information to populate the requisition distribution lines you create during your current session. The requisitions distribution line has a Project tabbed region for you to enter project-related information. 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. You can enter default project information in the iProcurement Preferences page. Oracle iProcurment

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saves this default information and uses it to populate the billing information when you check out. 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; the project information on the requisition is not updated. 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 using the Distributions window for purchase orders in Oracle Purchasing. When you use this window, you specify project-related information in the Project tabbed region of the distribution line. 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 requisitions. You can drill down to the details for a distribution line to enter and view project-related information for a purchase order distribution. Entering Releases You enter project-related releases against blanket purchase agreements and planned purchase orders using the Enter Releases window in Oracle Purchasing. When you use this window, you specify if the release distribution line is project-related. If it is project-related, you continue to enter project information for the line. 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 and create subledger accounting for the receiving transaction in final mode. If you do not create the subledger accounting in final mode, you may encounter issues if you make adjustments to the transactions. Next, you interface receipt accruals to Oracle Projects 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.

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Oracle Project Contracts

Oracle Project Contracts

Oracle Projects integrates with Oracle Project Contracts, enabling you to create delivery–based billing events to drive billing. You manage funding in Oracle Project Contracts, and the agreements are automatically maintained in Oracle Project Billing. Assign a Master Project to a Contract You can assign a “master” project at the contract header level and subprojects or master project top tasks at the contract line or subline level. Create Project Agreement from the Funding Workbench You can create a project agreement from the Funding Workbench. You can update the project agreement from the Funding Workbench before or after a baseline has been created. Collect and Report on Project Costs Manufacturing and engineering costs can be collected into Oracle Project Costing. Initiate Billing and Generate Invoices and Revenue You can create a deliverable-based billing event from Oracle Project Contracts. You can then generate revenue and invoices in Oracle Project Billing using the events.

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Oracle Project Manufacturing

Oracle Project Manufacturing

Oracle Project Manufacturing is a solution for companies that manufacture products using projects. When used as a part of the Oracle Project Manufacturing functionality, Oracle Projects acts as a cost repository for manufacturing–related activities from other products in the Oracle Project Manufacturing suite. Project manufacturing is a type of manufacturing environment where production requirements are driven by large projects. The incorporation of Oracle Projects in the Oracle Project Manufacturing suite allows you to:

• Set up the Work Breakdown Structure for a manufacturing project in Oracle Projects. The manufacturing costs are then tracked by project and task, and are imported into Oracle Projects using the Transaction Import process.

• Track projects and tasks defined in Oracle Projects throughout various manufacturing applications.

• Charge project costs from inventory and work in process to a project and task. • Include project costs from manufacturing and distribution in your budget to actual cost

analysis in Oracle Projects. • Integrate with Oracle Enterprise Asset Management to create a preventive maintenance

strategy for assets and rebuildable inventory items.

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Associate Project References Throughout the Manufacturing Process You can plan, schedule, process, and cost against a specific project or a group of projects. If Oracle Project Manufacturing is installed, and the Project References Enabled and Project Control Level parameters are set in the Organization Parameters window, you can assign project and, if required, task references to sales orders, planned orders, jobs, requisitions, purchase orders, and other entities within Oracle Manufacturing. If the Project Cost Collection Enabled parameter is also set, you can collect and transfer manufacturing cost to Oracle Projects. Cost Collector Process When costs are incurred in Oracle Manufacturing that are related to a project, the Cost Collector process in Oracle Cost Management passes those costs to Oracle Projects. The Cost Collector finds all costed transactions in Oracle Manufacturing that have a project reference and passes the referenced transaction costs to the correct project, task, and expenditure type into Oracle Projects. Transactions Import Oracle Projects imports the costs using the Transaction Import concurrent program.

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Oracle Receivables

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. 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 Receivables, you use an Oracle Projects process that collects all eligible released draft invoices in Oracle Projects and interfaces them to the Oracle Receivables interface tables. This process 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. You run the Tieback concurrent program to ensure that invoice data is loaded successfully into Oracle Receivables.

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Sending Invoice Accounting to Oracle Subledger Accounting After AutoInvoice creates invoices, you run the Submit Accounting process in Oracle Receivables to create accounting for the invoices in Oracle Subledger Accounting. When you create the accounting in final mode, you can choose to transfer the accounting entries to Oracle General Ledger. Post Invoices in Oracle General Ledger After the accounting entries are transferred to Oracle General Ledger, you post the invoice entries data to update your account balances.

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Oracle Sales

Oracle Sales

Integration with Oracle Sales applications enables project organizations to optimize the sales lifecycle. Using this integration, both the selling and the delivery organizations gain visibility of the opportunity and the planning of the project throughout the sales cycle. The integration leverages the opportunity win probability when forecasting the anticipated revenue for the project. As the sales team updates the opportunity win probability, the project forecast values can be regenerated to take account of the updated probability. Sales managers are often required to align organization goals to reduce sales cost while meeting revenue expectation. The integration enables sales managers to increase the revenue and margin by tracking and managing presale costs. It facilitates delivery planning by leveraging the project and resource planning capabilities in Oracle Projects. You can create pursuit and delivery project requests for an opportunity based on criteria such as Category (product category for opportunities), opportunity win probability, close date, opportunity status, and sales stage. After a project request is created, you can create project from a project request. Typically, you create an indirect (pursuit) project from a pursuit project request to track the presale costs. You can also create a contract (delivery) project from a delivery project request for delivery planning. Later, when the sales team updates an opportunity, the pipeline project can be updated.

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Create a Sales Opportunity Using Oracle Sales, you can track and manage sales opportunities, record customer or prospect contacts and interactions, and manage information. As the opportunity evolves, the information gathered is used to automatically create project requests for the projects that will be required to plan and execute the work and to track the effort in winning the deal. Create Project Requests Every opportunity may have one delivery project request and one pursuit project request created for it. You run the concurrent program, PRC: Manage Project Requests and Maintain Projects, in Oracle Projects to control:

• Which opportunities are used to create project requests • Whether an opportunity has a delivery project request created for it • Whether an opportunity has a pursuit project request created for it

Create Project from a Project Request A project administrator monitors incoming project requests and coverts them to projects:

• The delivery project request creates a delivery project, which is used to plan the work during the sales cycle before the opportunity is won. When the win probability reaches 100%, the same project can be approved and used to deliver the work. The delivery project is typically a Contract type project.

• The pursuit project request can be used to create a pursuit project, to track the pre-sales effort and cost of sales, since the true value of the customer may also include opportunity time and costs. A pursuit project is typically an Indirect type project. Optionally the pursuit effort and costs can be tracked as designated task(s) on the delivery project.

After the project is approved, the project manager manages the execution and closes the project when it is completed. Update Opportunity Information and Update Project Information When sales team updates an opportunity, you can run PRC: Manage Project Requests and Maintain Projects to update the pipeline project. If the probability, expected approval date, or opportunity value is updated on the opportunity, these changes are applied to the project, and workflow notifications are sent to the Project Manager and the Staffing Owner to inform them of the changes. This notification alerts them so that they may take appropriate actions, such as making staffing changes or performing forecast regeneration. O

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Oracle Shipping Execution

Oracle Shipping Execution

Define Deliverable In Oracle Project Management, you can create project deliverables, associate them with workplan tasks, and track them. You can define deliverables at the project or task level. As part of the deliverable definition, you can also define deliverable actions such as the shipping action. Define Shipping Attributes Define the shipping attributes for the deliverable action. Before you can initiate shipping, you must select a financial task, a ship from organization and location, and a ship to organization and location. You can also enter the appropriate quantity, weight, volume, and unit of measure information. Initiate Shipping of the Deliverable When a deliverable is ready to be shipped, you can initiate shipping by marking the deliverable action as Ready to Ship. To send a shipping request to the Shipping application, you choose Initiate Shipping. You can initiate shipping action for only one deliverable at a time. You must save the action before you can initiate shipping.

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Perform Shipping Transaction and Delivery After you initiate shipping, you perform the shipping transactions and deliveries in Oracle Shipping Execution. The project manager, task manager, or deliverable owner can view the shipping detail information, such as shipping status, delivery number, tracking number, and quantity. Note: When you create the shipping transactions in Oracle Shipping Execution, you must use Oracle Project Contracts as the source and the project number as the order number. You do not need to implement Oracle Project Contracts to integrate project deliverables with Oracle Shipping Execution.

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Oracle Subledger Accounting

Oracle Subledger Accounting

Oracle Projects fully integrates with Oracle Subledger Accounting so that you can create accounting for your project-related transactions. Oracle Projects generates accounting events and creates the subledger accounting entries for the accounting events. Oracle Projects predefines setup for Oracle Subledger Accounting so Oracle Subledger Accounting accepts the default accounting information from Oracle Projects 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 Projects derives using AutoAccounting, or the Project Budget Account Generation workflow for integrated budgets. Oracle Subledger Accounting integration includes:

• A set of predefined accounting rules that Oracle Subledger Accounting uses to create accounting for project-related accounting events

• The ability to define your own detailed accounting rules for Oracle Projects using a centralized accounting setup consistent with other subledgers

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• A set of concurrent programs in Oracle Projects that you use to generate accounting events, create accounting in Oracle Subledger Accounting, transfer journal entries from Oracle Subledger Accounting to Oracle General Ledger, and sweep transaction accounting events

• A full audit trail and exception reporting • Inquiry of subledger journal entries • Transfer of subledger accounting entries to Oracle General Ledger and the option to post

the journal entries in Oracle General Ledger as part of the transfer process For additional information about Oracle Subledger Accounting and Oracle Projects, refer to the R12 Oracle Project Costing Fundamentals course.

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Oracle Time & Labor

Oracle Time & Labor

Oracle Time & Labor integrates with Oracle Projects to validate time against chargeable projects, tasks, and expenditure types and to check for transaction controls that you may have implemented. The following steps outline the procedure for collecting project-related timecards in Oracle Time & Labor and processing those timecards in Oracle Projects: 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. 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. Transfer Time to Oracle Projects and Import Transactions Oracle Human Resources, Oracle Payroll, and Oracle Projects 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

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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 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 Projects. This program transfers timecards that belong to employees and contingent workers with Oracle Projects in their application set and retrieval rule group, and that meet the retrieval rules for Oracle Projects. When you submit PRC: Transaction Import, select Oracle Time and Labor for the Transaction Source parameter and leave the Batch Name parameter blank. Distribute Labor Costs In Oracle Projects, run the program PRC: Distribute Labor Costs for a Single Project 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. 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. 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.

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Oracle Workflow

Oracle Workflow

Oracle Projects provides the ability to integrate with Oracle Workflow to automate some activities. Oracle Workflow automatically routes approvals and notifies the appropriate users of current approval status. Oracle Projects provides default processes for each workflow. These workflows include:

• Oracle Project Foundation - PA: Project Workflow

• Oracle Project Costing - PA AutoAllocations Workflow

• Oracle Project Resource Management - PA: Project Assignment Approval Workflow - PA: Candidate Notification Workflow

• Oracle Project Management - PA: Budget Workflow - PA: Project Execution Workflow

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Summary

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Appendix 7 Project Costing Overview Chapter 19 - Page 1

Appendix 7 Project Costing Overview Chapter 19

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Oracle Project Costing Overview

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Objectives

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Agenda

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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.

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• 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.

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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.

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– 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.

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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.

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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.

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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."

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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.

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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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• 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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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.”

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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.

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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.

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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.

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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.

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Agenda

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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.

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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.

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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.

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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).

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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.

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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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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.

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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. O

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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. O

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Agenda

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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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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.

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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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• 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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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.

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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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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.

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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.

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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.

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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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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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Agenda

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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.

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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."

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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."

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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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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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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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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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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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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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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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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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Agenda

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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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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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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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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.” O

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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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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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Agenda

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Integration with Oracle Purchasing and Oracle Payables

Integration with Oracle Purchasing and Oracle Payables

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.

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Integration with Oracle Internet Expenses

Integration with 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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Integration with Oracle Time & Labor

Integration with 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.

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Integration with Other Applications

Integration with Other Applications

Integration with Oracle Inventory 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. Integration with Oracle Project Manufacturing When used as a part of the Oracle Project Manufacturing functionality, Oracle Project Costing acts as a cost repository for manufacturing-related activities. Integration with Oracle Asset Tracking

Oracle Asset Tracking is a fully integrated solution in the Oracle E-Business suite designed to deploy and track internal products and assets at internal or customer sites, while providing the ability to automatically capture financial transactions. You can create project-related purchase orders linked to Oracle Asset Tracking and import tracked items and cost into Oracle Project Costing. You can also generate asset lines for non-depreciable tracked items and interface the asset lines to Oracle Assets to create assets.

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Agenda

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Allocations and AutoAllocations

Allocations and AutoAllocations

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. AutoAllocations provide the ability to generate allocations more efficiently. You can group processes and run them in a specified sequence or at the same time. AutoAllocations is an Oracle General Ledger and Oracle Project Costing feature. In Oracle General Ledger, the allocation definition is called a batch. In Oracle Project Costing, the allocation definition is called a rule.

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Asset Capitalization

Asset Capitalization

Using capital projects, 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.

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Asset Capitalization: Capitalized Interest

Asset Capitalization: Capitalized Interest

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. To accommodate this business requirement, Oracle Project Costing enables you to calculate and record capitalized interest for capital projects. To meet the requirements of regulated businesses such as those in the utilities industry that can recognize multiple types of capital interest, you can set up Oracle Project Costing to separately calculate capitalized interest for multiple interest types such as debt and equity.

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Cross Charge

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. The legal, statutory, or managerial accounting requirements of such projects often present complex operational control, billing, and accounting challenges. Cross charge enables project managers to easily view the current total costs of the project, regardless of who performs the work or where it is performed. You can choose one of the following processing methods for cross charge transactions:

• Borrowed and Lent Accounting • Intercompany Billing Accounting • No Cross Charge Process

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Budgetary Controls and Budget Integration

Budgetary Controls and Budget Integration

Budgetary Controls You can enforce budgetary controls against a GL budget and a project cost budget. Budgetary controls enable you to monitor and control expense commitment transactions. 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 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.

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Summary

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Appendix 8 Project Billing Overview Chapter 20 - Page 1

Appendix 8 Project Billing Overview Chapter 20

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Oracle Project Billing Overview

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Objectives

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Agenda

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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.

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Agenda

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Contract Projects

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”.

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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 in Oracle Projects 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: • Contract projects: Contract projects track cost, revenue, and billing. • Indirect projects: Track overhead activities and costs. • Capital projects: Track product/asset development activities and costs, and costs that are

capitalized as one or more assets.

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A project template includes the following elements: • Basic project information • Project Structures: financial and/or workplan • Agreement and funding (optional) • Project and task options • Budgets and forecasts (optional) • Quick Entry fields which specify fields to enter when creating a new project • Project Option controls -- these control the project options to display or to hide for

projects created from a template In a multi–organization environment, project templates belong to only one operating unit. Project templates can only be maintained and copied within an operating unit. However, project template numbers must be unique across operating units. A project template number cannot duplicate any project or project template number within the Oracle Projects installation.

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Project Classes and Project Templates

Project Classes and Project Templates

You cannot change the project class when you copy a project from a template. You can never change the project class of a project. You may find it most efficient to create a project template for each project type that your company uses, so that you can set up the appropriate parameters for each project type in each template.

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Defining Project Templates

Defining Project Templates

To create a project template, navigate to the Projects, Templates window or to the Project Templates page. Define a new project template or copy an existing project template. Enter project and task information as needed on the project template. If you copy an existing project or project template to create a new project template, the project and task information associated with the source project or project template is copied onto the new project template.

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Defining Projects

Defining Projects

A project is a primary unit of work that can be broken down into one or more tasks. To create a new project, you find a template or an existing project that best matches your project needs. You then copy the template, use Quick Entry to modify information unique to the new project, and modify or add tasks and any other project options that are required for your project definition. When you create a project from a template or another project, Oracle Project Foundation copies the project, its project structure, and all of the project and task options to the new project. It also copies the budget amounts to the new project’s budget. If you copy from a template with an agreement, funding, and baselined revenue and cost budget, Oracle Project Foundation copies them to the new project. If you copy a project from an existing project that has an attachment, the attachment is copied to the new project. Oracle Project Foundation does not copy any transactions associated with the source project to the new project; these transactions include expenditure items, requisitions, purchase orders, supplier invoices, and billing events (contract projects).

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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 in Oracle Project Foundation. You must set up project types for each operating unit. Project Type Setup Steps specific to contract projects

• Billing Information • Billing Assignment • Distribution Rules

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Billing Information Tab

Billing Information Tab

Oracle Project Billing provides you with the ability to define revenue and invoicing rules for your projects, generate revenue, create invoices, and integrate with other Oracle Applications to process revenue and invoices. Oracle Project Billing also integrates with Oracle Receivables. You use contract projects to track activities, cost, revenue, and billing for services performed for and reimbursed by a customer. Define the billing information that will be used for contract projects:

• Funding Level: The level at which you allow funding for contract projects of this project type. You can choose from the values of Project, Top Task, or Both.

• Billing Job Group: Enter a default job group for billing purposes. The job group you enter serves as the default Billing Job Group when you define a contract project with this Project Type.

• Bill Rate Schedules – Labor: Select Bill Rate Schedule or Burden Schedule for labor billing. When calculating labor revenue and invoicing, the system looks first for the employee–based bill rate schedule. If an employee–based rate is not specified, or if one is not available, the system then looks for a job–based bill rate. If Oracle Project Resource Management is installed, you must specify a job–based bill rate schedule.

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• Bill Rate Schedules – Non–Labor: Select Bill Rate Schedule or Burden Schedule for non–labor billing.

• Invoice Formats: Select the default labor and non-labor invoice formats. • Billing Cycle: Select the default billing cycle for projects of this type.

- First Bill Offset Days: Enter the default number of days that elapse between the project start date and the date of the project’s first invoice.

• Baseline Funding without Budget: Enable this check box if you want to automatically create a revenue budget when you baseline the funding.

• Revaluate Funding: Enable this check box if you want to revaluate (revalue) funding before generating revenue and invoices.

• Funding Revaluation Includes Gains and Losses: This option can be enabled only if the Funding Revaluation includes Gains and Losses option is enabled in the Implementation Options window and Revaluate Funding is enabled for the project type. Check this box if you want your revaluation to include gains and losses in project revenue.

- If this functionality is not enabled, the revaluation process only considers the funding backlog amount.

• Realized Gains and Losses Event Types: If the Funding Revaluation Includes Gains and Losses option is enabled, define new gains and losses event types. These event types record the realized gains and losses events while processing funding revaluation.

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Billing Assignments Tab

Billing Assignments Tab

Billing extensions allow you to implement and automate company–specific billing methods. With billing extensions, you can automatically calculate summary revenue and invoice amounts during revenue and invoice generation based on unique billing methods. These billing amounts are created using events. To implement your company–specific billing methods, you design and write rules to calculate billing amounts using PL/SQL procedures. You then enter the billing extension definition in Oracle Projects to specify additional information, such as the procedure name to call. Assign billing extensions to project types using the Billing Assignments tab. Enter information in the following fields:

• Name: Select billing extensions to be used in revenue accrual or invoicing, or both. • Currency: Enter the currency for the billing extension. • Amount and Percentage: Enter an amount or percentage to be used in the billing

extension calculation. • Active: Deselect to disable the billing assignment.

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Distribution Rules Tab

Distribution Rules Tab

You use distribution rules to determine how contract projects will generate revenue and bills. Distribution rules are in the format of Revenue Method/Billing Method. For each contract project type, you must select at least one distribution rule from the predefined list. Select the distribution rule information using the following fields:

• Name - You select the distribution rules that will be allowed for any project of this project

type. Distribution rules are predefined in Oracle Projects. Select one or more distribution rules on the Distribution Rules tab.

• Default - Enable this check box if you want to use the distribution rule as the default value for

projects of this project type. You can only have one default distribution rule for each project type.

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Customers

Customers

A customer is an organization or person with whom you have a selling relationship. This selling relationship can result from the purchase of products and services or from the negotiation of terms and conditions that provide the basis for future purchases. You can assign one or more customers to a project. You use customers, contacts, and addresses defined in Oracle Receivables. You can also assign customers to indirect projects with Oracle Project Billing. You can assign internal customers for interproject billing. You define customers in either the Customers or Customer Summary window. Customers can be defined either in Oracle Receivables or in Oracle Projects.

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Default Top Task Customer

Default Top Task Customer

When you define a project’s customer information, you can select a customer to be the default customer for all the top level tasks of the project. The default top task customer is used as the primary customer when you create a new project by copying the existing project. You must enable this option for at least one of the customers if the Customer at Top Task option is enabled in the project-level Billing Setup window. At any given point in time only one customer can be specified as the default top task customer. You can change the default top task customer at any point in time, however, it applies only to tasks created after the setting has been changed.

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Project Contact Information

Project Contact Information

Each customer must have one primary bill-to address, one primary ship-to address, and one primary bill-to contact. The primary bill-to contact must be entered in the Accounts region of the Customers page in Oracle Receivables. Contact Types Contact types specify how the contacts of a particular customer are involved with a project. You can use project contacts to direct certain pieces of correspondence, such as invoices, to the appropriate customer contact.

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Currency Options

Currency Options

When a new project is created, the default value for the project currency code is copied from the functional currency defined in the Implementation Options for the project-owning operating unit. You can enter conversion attributes for the project in the Billing tab of the Currency window. Billing Currency Options In the Billing tab of the Currency window, you can:

• Enable multi-currency functionality • Select the currency type(s) to use for the revenue transaction currency • Select the currency type(s) to use for the invoice processing currency • Define currency conversion attributes

Currency option checkboxes: • Enable Multi Currency Billing • Invoice by Bill Transaction Currency • Use Project Functional Currency Conversion Attributes for Receivables Functional

Currency

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Bill Transaction Currency for Cost Based Revenue: This is 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. Search for and select one of the following options:

• Expenditure Functional Currency • Expenditure Transactional Currency • Project Currency: This is 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.

• Project Functional Currency: This is the principal currency you use to record transactions and maintain accounting data for your ledger.

Revenue Transaction Currency: Select one of the following: • Project Functional Currency Only • Project Functional and Invoice Transaction Currency

Invoice Processing Currency: Select between the project functional currency, the project currency and the funding currency as the invoice processing currency for the project. Funding and invoice amounts are converted to this currency and used to check against funding and to evaluate hard and soft limits when generating invoices. Note: You can select funding currency as the invoice processing currency for a project only if all past and future funding allocated to the project has the same currency. Conversion Attributes: Define the following conversion attributes to the project functional currency, project currency, and the funding currency:

• Currency • Rate Date Type • Rate Type • Rate Date • Rate

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Revenue in Foreign Currency

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.

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Bill Rates

Bill Rates

A bill rate is an amount or percentage that is applied to a unit to calculate revenue and invoicing. Bill rates are used for projects that use cost-based billing. You can specify the following bill rates in Oracle Projects:

• Employee Bill Rates: Standard hourly bill rates or percentage markups assigned to employees. You can assign a different bill rate to each employee for customer invoicing.

• Job Bill Rates: Standard hourly bill rates assigned by job title. For example, all System Administrators can have one bill rate, while all Consultants can have a different bill rate.

• Non-Labor Bill Rates: Standard bill rates or standard markups assigned to non-labor expenditure type or non-labor resources.

Dates and Bill Rates All bill rate schedules and overrides are specified with start and end dates. To determine the effective bill rate date, Oracle Projects uses one of the two dates to compare with the start and end dates of a particular bill rate. Otherwise, the expenditure item date is used. Burden Schedules for Revenue and Invoicing

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You can define one or more schedules for different purposes of costing, revenue accrual, and invoicing. Oracle Projects applies the burden multipliers to the raw cost amount of an expenditure item to derive an amount; this may be the total cost, revenue amount, or bill amount. Employee and Job Bill Rate Schedules When you create the Billing Schedules during setup, you specify if the schedule is based on employee or job criteria. When you set up a contract project, you can specify an employee–based bill rate schedule, or a job–based bill rate schedule, or both. When calculating revenue, the system first looks for an employee–based rate, if one is specified for the project. If no employee–based rate is specified or if none is available for the employee, a job–based bill rate is used. Bill Rates and Discount Overrides You can assign and override a job’s standard bill rate for a project or lowest task by rate or discount. When you override a job’s standard bill rate by rate override, the new job bill rate becomes the job’s bill rate for this project or lowest task.

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Customer Billing Retention

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Defining the Retention Level and Terms

Defining the Retention Level and Terms

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. Contracts may also include a variety of conditions for the billing of withheld amounts. For each project customer, you can define retention terms at either the project level or the top task level to reflect the granularity of the terms specified by the contract with the project customer. You cannot change the retention level after an amount has been withheld for the project customer. Defining Retention Terms Retention terms determine how amounts are withheld from project invoices and how the withheld amounts are billed to the project customer. Retention terms include:

• Withholding Terms: These terms apply to all sources of project invoice amounts for the specified project or top task. For each term, you can define a withholding percentage or amount. Optionally, a threshold amount can be defined to determine the maximum amount to be withheld per term. Each term represents a distinct retention withholding basis. This

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basis is used to determine the grouping of retention lines on project invoices. You can choose to define more detailed withholding terms by expenditure category for work-based billing and event revenue category for event-based billing.

• Withholding Terms by Expenditure Category: You define withholding terms for specific classifications of cost, such as labor or materials. The following expenditure classifications are available for this definition:

- Expenditure category - Expenditure type - Non-Labor resource

• Terms defined at a more granular level take precedence over those defined at less granular levels. For example, a term defined for an expenditure category of Labor and an expenditure type of Regular Time will take precedence over a term defined only for the expenditure category of Labor.

• Withholding Terms by Event Revenue Category: You define withholding terms for specific types of milestone events such as fees or incentives. The following classifications are available for this definition:

- Revenue category - Event type

• Terms defined at a more granular level take precedence over those defined at less granular levels. For example, a term defined for a revenue category of Milestone and an event type of Fee will take precedence over a term defined for only the revenue category of Milestone.

• Billing Terms: Retention invoices bill project customers for previously withheld retention amounts. Billing terms control the timing and calculation of retention invoices. You define retention billing terms at the same retention level as retention withholding terms. To define a billing term, select one of the following retention billing methods:

- Total Withheld Amount - Percent Complete - Billing Cycle - Retention Billing Client Extension O

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Billable Status Control

Billable Status Control

All expenditure items charged to the task default to the billable indicator based on the task billable status and transaction controls. You can change the billable status of an item. O

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Billable Transaction Control

Billable Transaction Control

You can use transaction controls to specify whether to allow charges, further controlling the allowable charges. You can define some transaction controls to allow charges and others not to allow charges to record exceptions. Inclusive transaction controls limit charges to only the transaction controls entered; Oracle Projects then rejects any charges that are not listed as chargeable in the transaction controls. Exclusive transaction controls allow all charges except those that are specified as non–chargeable in the transaction controls. Using transaction controls, you can also specify which items are nonbillable. Otherwise, the billable status of the item is determined from the task billable status. Transaction Control Extension To define more complex rules for implementing company–specific expenditure entry policies, you may need to use the transaction control extension. Some examples of rules that you may define are:

• All entertainment expenses are non–billable. • You cannot charge new transactions to projects for which the work is complete; you can

only transfer items to these projects.

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Agenda

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Overview of Agreements

Overview of Agreements

An agreement represents any form of contract, written or verbal, between you and one of your customers. For example, an agreement may correspond to a contract, a purchase order, a continuing service agreement, or a verbal authorization. An agreement provides the funding for projects and tasks. Each agreement you define includes the following items:

• A customer • A hard or a soft limit for revenue and/or invoice • A currency amount • An organization that owns the agreement

If you specify a hard revenue and invoice limit on an agreement, Oracle Projects prevents revenue accrual and billing activity beyond the amount you funded to a particular project or task. If you specify a soft revenue and invoice limit, Oracle Projects provides a warning telling you when revenue and billing for the project exceeds the amount you funded. Note: You can specify a hard limit for both revenue and invoice limit, or a hard limit for revenue or invoice limit. No project or task can accrue revenue without an agreement to fund its revenue budget.

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Overview of Project Funding

Overview of Project Funding

You must fund a project before the project can accrue revenue and be billed. Funding is the step that allocates an amount associated with a customer agreement to a specific project. The total amount of allocated project funding must equal the current approved project revenue budget amount in order to successfully baseline the project. Optionally, top tasks on projects can be individually funded. If top tasks are funded, then the same requirement of matching budget amounts to funding amounts applies at the top task level of the project.

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Example: Agreements and Funding

Example: Agreements and Funding

The diagram above illustrates how a single agreement can fund multiple projects and tasks. In this example, a single agreement is used to fund four projects. The agreement has a total value of $500,000. The amount funded is $300,000.

• Project A, a bid and proposal project, has been funded with $0. While this does not allow the project to generate any revenue, it gives the user a link to relate specific bid & proposal projects to agreements for reporting purposes.

• Project B, a time and materials project, is funded at $150,000 at the project level. It has a work breakdown structure with three tasks, namely Task 1, Task 2, and Task 3. Task 1 is funded at $50,000. Task 2 is funded at $30,000 and the remainder of the funding for Project B is assigned to Task 3. Task 3 has two sub-tasks: Task 3.1, and Task 3.2. Task 3.1 in turn has two sub-tasks: Task 3.1.1 and Task 3.1.2.

• Project C, a fixed price project, is funded at $50,000. • Project D, a cost plus project, is funded at $100,000.

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Agreements and Funding Process Flow

Agreements and Funding Process Flow

Create Agreement: When an agreement is created, it provides the funding for projects and tasks. You can create an agreement before a project exists. You can create a project before an agreement exists. However, at the time of funding, you need both. Fund Project: You can allocate an agreement’s funds to a project or top-level task in the agreement’s currency. Funding Baseline: You must create a baseline for funding before you can use budget amounts for project status reporting.

• Note: You must first enter a revenue budget for the project. The amount of the revenue budget must be equal to the total funding amount of the project.

Generate Revenue: Generate revenue using various methods including time and materials, percent complete, and cost plus. Generate Invoices: Create draft invoices from detail transactions and milestones for online approval by your project or accounting managers.

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Generating Invoices and Revenue Accrual

Generating Invoices and Accruing Revenue

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. Revenue Accrual 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. For projects that use As-work-occurs (or Time and Materials) revenue accrual, the total potential revenue is simply the sum of the revenue of all expenditure items plus events. For these projects, Oracle Projects calculates the revenue for each expenditure item by applying a bill rate or markup. Items that have partially accrued revenue due to having previously reached a hard limit do not have their revenue and bill rates recalculated. After calculating revenue, Oracle Projects determines GL account combinations, and maintains funding balances. You can generate revenue for a range of projects or for a single project. After you generate revenue, you generate revenue accounting events, create the accounting in Oracle Subledger Accounting, then transfer the journal entries to Oracle General Ledger.

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Customer Invoices When you define a contract project, you also identify the method to be used for invoicing. For example, you can use a distribution rule of “Event” and then enter milestone events to invoice your project customer(s) as milestones are achieved. When you generate invoices, Oracle Projects calculates bill amounts, creates formatted invoices for printing and posting, and maintains funding balances.

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Agenda

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Project Revenue Overview

Project Revenue Overview

Oracle Project Billing generates revenue based on the transactions that you charge to your projects. You configure your projects to accrue revenue based on your company policies. You can review revenue amounts online, and can also adjust transactions; these transactions are then processed to adjust the revenue amounts for your project. When you generate revenue, Oracle Project Billing calculates revenue, creates revenue events, creates expenditure item revenue details, and maintains funding balances. You run the concurrent program PRC: Generate Revenue Accounting Events to derive GL accounts using AutoAccounting and generate accounting events. You then run the concurrent program PRC: Create Accounting to create accounting in Oracle Subledger Accounting. You transfer the final accounting from Oracle Subledger Accounting to Oracle General Ledger, where you post the journal entries. Project Revenue

• Revenue recognition can use various methods to calculate project revenue. • A project’s billing method can differ from the revenue method. • Revenue recognition can be controlled to meet contracting requirements. • Revenue can be apportioned to meet intercompany revenue reporting requirements.

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Methods of Revenue Accrual

Methods of Revenue Accrual

As-work-occurs Based on bill rates or markups applied to detail transactions:

• Time and Materials (T&M) when using bill rates, or • Cost plus when using burden schedules

Cost-to-cost Based on the ratio of the actual costs to budgeted costs and revenue (referred to as percent spent) Event-based Based on the Oracle Project Billing client extensions calculations or direct user input from externally calculated amounts; for example:

• Automated milestone creation • Percent progress complete calculations

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Hard Limit Processing Overview

Hard Limit Processing Overview

For projects funded by hard limit agreements, total accrued revenue cannot exceed the total funded amount. The Generate Draft Revenue concurrent program checks the available funding and accrues the allowable amount of revenue. If a hard limit is encountered (more revenue to accrue than available funding), the revenue is accrued up to the hard limit and a warning is created for the draft revenue. Potential revenue is the total amount of revenue that could be accrued if unlimited funding existed. Hard limit processing for expenditure items When there are not enough funds to cover the total potential revenue to accrue, the total allowable revenue is prorated to items processed in that run. The items are marked as partially distributed. Hard limit processing for events Events are processed only if the full revenue amount can be accrued under the funding limit.

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Example of Partially Distributed Expenditure Items • Revenue budget for top task 3.0 is $1,000. • Funded by an agreement with Enforce Revenue Limit = Yes • Expenditures total potential revenue is $6,940 • Revenue Warnings: Revenue has reached the hard limit. • Potential Revenue: Amount of additional revenue that would have been generated if there

were sufficient revenue budget or no hard limit is $5,940. Partially Revenue Distributed Potential Employee Task Distributed Amount Revenue Revenue Cheng 3.1 Partial 6 hrs 140.63 1080 Cheng 3.2 Partial 6 hrs 140.63 1080 Gray 3.1 Partial 6 hrs 78.13 600 Gray 3.2 Partial 6 hrs 78.13 600 Marlin 3.1 Partial 6 hrs 46.88 290 Marlin 3.2 Partial 6 hrs 46.88 290 Robinson 3.1 Partial 6 hrs 234.38 1500 Robinson 3.2 Partial 6 hrs 234.38 1500 Total Revenue Available 1000.00 6940

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Revenue Process Flow to GL

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Revenue Flow

Revenue Flow

Oracle Project Billing generates revenue based on the transactions that you charge to your projects. You configure your projects to accrue revenue based on your company policies. When you generate revenue, Oracle Project Billing first selects projects, tasks, and their associated events and expenditure items that are eligible for revenue generation. Next, it calculates the potential revenue and then creates revenue events and expenditure items. When you are ready to generate revenue, you run the following concurrent programs:

• PRC: Generate Draft Revenue for a Single Project or PRC: Generate Draft Revenue for a Range of Projects

- This process calculates revenue amounts and uses AutoAccounting to determine the default revenue credit account.

• PRC: Generate Revenue Accounting Events - Uses AutoAccounting to determine the default unearned revenue and unbilled

receivables accounts. It also calculates the amounts to be distributed to the unearned revenue and unbilled receivables accounts. Finally, the program generates accounting events.

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• PRC: Create Accounting - Creates subledger journal entries for accounting events. You can optionally select

Revenue as the process category to limit the program to revenue accounting events. You can run the program in either draft or final mode. Optionally, the process can post journal entries in Oracle General Ledger.

• 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 the program PRC: Transfer Journal Entries to GL.

• Journal Import in Oracle General Ledger - Imports the final accounting entries into Oracle General Ledger.

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Generate Draft Revenue

Generate Draft Revenue

You can generate revenue for a single project, or for a range of projects using the PRC: Generate Draft revenue concurrent program. Oracle Project Billing first creates draft revenue for events, then for expenditure items. After the system calculates potential revenue for expenditure items, it searches for agreements against which to accrue draft revenue, based on the project customer billing contributions and the amount of funding available. This process creates revenue distribution lines for each eligible expenditure item and revenue event. If you select Project Functional Currency and Invoice Transaction Currency as the revenue transaction currency on your multi-currency contract project, the Generate Draft Revenue process calculates revenue in the invoice transaction currency conversion attributes that you define for the customer. If your project has multiple customers, the process generates revenue in the project functional currency for all customers, and calculates revenue in the invoice transaction currency for the customer that you specify. PRC: Generate Draft Revenue for a Range Of Projects

• Referred to as “mass” revenue generation • Generate revenue for all projects in the company on a predefined schedule • Can run multiple requests in parallel for different project number ranges

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• Typically a central Information Services or an Accounting function PRC: Generate Draft Revenue for a Single Project

• Referred to as “on-demand” revenue generation • Generate revenue for a single project needing immediate changes to revenue and customer

invoices after adjustments are made • Run by project administrators or invoicing accountants.

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Creating Revenue Distribution Lines

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Generate Revenue Accounting Events

Generate Revenue Accounting Events

The generate revenue accounting events program collects revenue distribution lines in Oracle Projects and uses AutoAccounting to determine:

• The default unearned revenue and unbilled receivables accounts. • The amounts to be distributed to the default unearned revenue and unbilled receivables

accounts. Oracle Projects calculates these amounts in the revenue transaction currency. Finally, the program creates accounting events in Oracle Subledger Accounting. If the program is able to successfully generate a revenue accounting event, then it updates the status of the revenue distribution line to Accepted. If the process cannot successfully determine an account or is unable to generate an accounting event, then it updates the status of the revenue distribution line to Rejected.

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Create Accounting

Create Accounting

After you generate revenue accounting events, you can create accounting in Oracle Subledger Accounting by running the concurrent program PRC: Create Accounting from Oracle Projects. This process creates draft or final accounting entries in Oracle Subledger Accounting for the accounting events created by the generate accounting events process. If you define your own detailed accounting rules in Oracle Subledger Accounting, those accounts override the default accounts or individual segments of accounts that Oracle Projects derives using AutoAccounting. You can run the PRC: Create Accounting concurrent program in draft mode if you want to review the results before you create the final accounting, or you can run the process in final mode. You can optionally choose to transfer the journal entries to Oracle General Ledger, initiate the journal import process, and post the journal entries in Oracle General Ledger. If you choose not to have the process transfer the journal entries to Oracle General Ledger, then you can run the concurrent program PRC: Transfer Journal Entries to GL to transfer the final journal entries from Oracle Subledger Accounting to Oracle General Ledger.

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Review Project Revenue

Review Project Revenue

You can use the Revenue Review window to delete or regenerate a project’s unreleased revenue or to release and unrelease revenue. From this window, you can click the Run Request, Unrelease, Release, Totals, Lines, or Open buttons to:

• Regenerate or delete revenue for a project • Change revenue status from released to unreleased

- Note: You can unrelease revenue only if you have not performed any of the following actions: released draft invoices for this draft revenue, subsequently generated draft revenue, and summarized draft revenue for the project.

• Release unreleased revenue • View the total revenue amount for the draft revenue displayed based on your search

criteria • View the revenue lines • View all of the revenue information for a single draft revenue line on one screen

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In addition to the information in the Revenue Summary window, the Revenue window displays the Released Date field and the Warning check box. The Revenue window contains three alternative regions:

• Interface: Select this to review the status of revenue after you successfully interface it to Oracle General Ledger.

• Revenue Exceptions: Select this to view exception reasons and warnings encountered while generating draft revenue.

• Revenue Transaction Currency: Select this to view the revenue amounts in revenue transaction currency.

You can control the access to the Revenue Review window using function security and project security. Function security can be used to control the release, unrelease, and run functions in Revenue Review. Project security controls what projects you can view and update.

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Detailed Accounting Transactions

Detailed Accounting Transactions

Revenue Lines Window The Revenue Lines window displays the task, revenue source, revenue category, and amount for the revenue lines comprise a draft revenue item. Examples of the information you can review in the Revenue Lines window for a revenue line include:

• Line Number • Task Number and Task Name • Revenue Source and Revenue Category • Project Functional Revenue Amount • Project Currency and Project Functional Currency • Project Revenue Amount • Revenue Transaction Amount • Revenue Transaction Currency • Funding Currency • Funding Revenue Currency

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Revenue Line Details Window You use the Revenue Lines Details window to view the details for a selected revenue line. You can customize the window to display the fields you want to view by using the folders feature. Examples of the information you can review in the Revenue Line Details window include:

• Accrual Rate • Default Account Description • Default Account • Accrued Revenue • Borrowed/Lent • Quantity • Raw Cost • Revenue Transaction Amount • Revenue Transaction Currency • Revenue Transaction Exchange Rate • Revenue Transaction Rate Date • Revenue Transaction Rate Type

For additional information about the Revenue Line window and the Revenue Line Details window, see Reviewing Revenue, Oracle Project Billing User Guide.

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View Accounting Lines

View Accounting Lines

The View Accounting option from the Tools menu enables you to review the accounting entries for revenue transactions for which you created accounting in Oracle Subledger Accounting. If the revenue is not accounted in Oracle Subledger Accounting, then the drilldown does not show any information. To view the accounting lines:

1. Navigate to the Revenue Review window 2. Query a revenue transaction 3. Select View Accounting from the Tools menu, and the View Revenue Accounting

window opens. 4. To optionally view the accounting detail for the selected line as T-accounts, choose T-

accounts. - Note: From an Oracle General Ledger journal, you can select the Drilldown option

from the Tools menu to view the subledger journal entry lines associated with that journal.

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5. You can optionally view accounting in reporting currencies when you assign reporting currencies to a ledger. To view accounting in a reporting currency, select the Reporting Currency button, choose a ledger in the Choose Reporting Currency window, and select the Change button.

Note: While defining ledgers, you can define as many reporting currencies as you want for a given primary ledger. Whenever reporting currencies are defined for a primary ledger, all accounting entries made in the primary ledger are automatically transferred to each reporting currency ledger. For more information on reporting currencies, refer to the R12 Oracle General Ledger User Guide.

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Accrue-Through Date

Accrue-Through Date

You can specify the accrue-through date for revenue generation to control what items and events are processed for revenue accrual.

• Billable items with an expenditure item date on or before the accrue-through date are processed.

• Revenue events with a date on or before the accrue-through date are processed. Example It is June 2, and you want to accrue revenue for the month of May. You specify “31-MAY-XX” as the date through which to accrue revenue.

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Releasing Revenue

Releasing Revenue

You can release revenue using the Revenue Review window. When you release an invoice which is based on revenue details, Oracle Projects automatically releases the associated revenue. You use the Invoice Summary window to release invoices. If you regenerate draft revenue for a single project, the process deletes any draft revenue that is pending, and replaces it with the new amount.

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Agenda

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Invoice Concepts

Invoice Concepts

Oracle Project Billing provides you with rich functionality to help you meet your invoice processing needs. With Oracle Project Billing, you can manage and control your invoices, review and adjust them online, and review the detailed information that backs up your invoice amounts. When you generate invoices, Oracle Project Billing calculates bill amounts, creates formatted invoices for printing and posting, and maintains funding balances.

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Hard Limit Processing for Invoices

Hard Limit Processing for Invoices

In Oracle Project Billing, an invoice is created with all items and events that can be fully billed with available funding under the hard limit. Any items and events that would cause the limit to be exceeded remain unbilled. Bill amounts for items are not prorated. A hard limit prevents invoice generation beyond the amount allocated to a project or task by an agreement. For projects funded by hard limit agreements, the total invoiced amount cannot exceed the total funded amount. A hard limit prevents invoice generation beyond the amount allocated to a project or task by this agreement.

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Overview of Accounting Dates

Overview of Accounting Dates

The manner in which accounting dates are derived for invoices depends upon your transaction accounting method: Period-End Date Accounting

• PA Date - The PA date is set to the end date of the earliest PA period that includes or follows

the invoice bill through date and has a status of Open or Future. • GL Date

- The GL date is set to the end date of the earliest GL period that includes or follows the PA date of the draft invoice and has a status of Open or Future according to the period status in Oracle Receivables.

Expenditure Item Date Accounting • PA Date

- The PA date is set to the invoice bill through date if that date falls in a PA period with a status of Open or Future. If the invoice bill through date falls in a closed PA period,

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then the PA date is set to the start date of the earliest open or future enterable PA period that follows the invoice bill through date.

• GL Date - The GL date is set to the invoice date if that date falls in a GL period with a status of

Open or Future according to the period status in Oracle Receivables. If the invoice 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 invoice date.

Expenditure Item Date Accounting with Common Accounting Periods • PA Date

- A PA date is required for all project transactions. Therefore, the system must derive the PA date for invoices when the invoices are generated. However, invoice GL dates are based on invoice dates, which are not assigned until invoices are released. Therefore, for invoices, the system cannot copy the PA date from the GL date. The PA date must be derived before the GL date is assigned.

- The PA date is set to the invoice bill through date if that date falls in a PA period with a status of Open or Future. If the invoice bill through 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 invoice bill through date.

• GL Date - When you interface invoices to Oracle Receivables, the GL date must fall in a GL

period with a status of Open or Future as defined in Receivables. The GL date is derived from the invoice date, which is assigned during the invoice release process. If the invoice date falls in a GL period that is closed in Receivables, then the system sets the GL date to the first day of the next open or future enterable period as defined in Oracle Receivables.

For additional discussion regarding transaction accounting methods, see the course titled “R12 Project Costing Fundamentals.”

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Review of Billing Amounts

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Methods of Invoicing

Methods of Invoicing

Oracle Project Billing supports three methods of invoicing: As-work-occurs

• Based on bill rates or markups applied to detailed cost transactions: - Time and Materials (T&M) when using bill rates, or - Cost plus when using burden schedules

Cost-to-cost • Based on the ratio of the actual costs to budgeted costs and revenue (referred to as percent

spent) Event-based

• Based on the Oracle Projects client extensions calculations or direct user input from externally calculated amounts; for example:

- Automated milestone creation - Percent progress complete calculations

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Overview of Invoice Flow

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

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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 Project

Billing 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 Project Billing 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 Project Billing interfaces the invoices to Oracle Receivables using the AutoInvoice Import program. In turn, Oracle Receivables creates accounting in Oracle Subledger Accounting. Printing Invoices

You can print invoices either from Oracle Project Billing, or from Oracle Receivables, depending on how your company implements your invoice printing method.

Note: If you print your invoices from Oracle Project Billing, you do not need to interface invoices before printing them.

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Generating Invoices

Generating Invoices

When you generate invoices, the program creates invoices from expenditure items and events. In addition to regular invoice generation, this program deletes unreleased draft invoices, and creates invoice write–offs, credit memos, and invoice cancellations. There are two key differences between running a concurrent program for a single project and a range of projects:

• When you run the program for a range of projects, it determines whether an invoice can be generated based on the billing cycle. But when you run it for a single project, the billing cycle is ignored.

• When you run the program for a single project, unreleased invoices are automatically deleted and regenerated. When you run the program for a range of projects, the “Delete Only Unapproved Invoice” parameter controls the behavior.

Program Parameters Some of the parameters that affect the behavior of PRC: Generate Draft Invoices for a Range of Projects are:

• If an agreement is specified as a parameter, the program generates invoices for all projects associated with that agreement.

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• If a customer is specified as a parameter, the process generates invoices for all projects that have the specified customer. For multi-customer projects, invoices are generated for all customers even if you select a specific customer.

• The “Delete Only Unapproved Invoice” is not applicable if you set the ‘Exclude New Transactions” parameter to ‘No’.

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Invoice-Related Setup Steps

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Defining Invoice Formats

Defining Invoice Formats

An invoice format determines how Oracle Project Billing creates an invoice line. You can define different formats for labor, non–labor, retention, and retention billing invoice line items. You can specify if you want to use the format for customer invoices, intercompany invoices, or both. You can also specify how you want to summarize expenditure items, and the fields you want an invoice line to display. In addition to this, you can include free–form text on an invoice line. You can use customer invoice formats only for contract projects, and intercompany invoice formats only for invoices generated by intercompany billing projects. You can also share invoice formats between customer and intercompany invoices. The grouping option specifies which expenditure items you want to summarize in an invoice line, and whether an invoice line item is labor, non–labor, or retention. Which grouping options you can select depends on the purpose of the invoice format. The choice of fields you can display in an invoice line depends on the purpose of the invoice format and which grouping option you choose. To define an invoice format

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• In the Invoice Formats window, specify an invoice format name, format type, use, and a grouping option. You must also specify a From effective date.

• Specify start and end positions for each field you want to include in the invoice line and any text that you want to display in the line.

• Save your work.

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Defining Invoice Print Method

Defining Invoice Print Method

Oracle Project Billing provides you with powerful methods to create, adjust, review, approve, and print invoices. You should determine your company's invoice printing strategy as part of your implementation process. Invoice Printing Strategy You need to consider your company's invoice printing requirements and constraints as factors in formulating an appropriate invoice printing strategy for your company. These considerations may include:

• The groups in your organization that create and print invoices • The printers and types of printers available for printing invoices • The preformatted paper that your company uses to print invoices • The frequency of creating and printing invoices in your organization

Oracle Receivables Printing Options Oracle Project Billing interfaces invoices to Oracle Receivables for printing. Oracle Receivables provides an invoice printing program. You should examine the format of the

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Oracle Receivables invoices and the invoice printing program and determine if it meets your business requirements. If it does not, you can modify the standard report or create a new report. Oracle Project Billing Printing Options To print invoices from Oracle Project Billing, you need to write a custom invoice printing program. The benefit of printing invoices from Oracle Project Billing rather than Oracle Receivables is that you can print invoices once they are released in Oracle Project Billing without waiting until the invoices are interfaced to Oracle Receivables. You may create a custom report which you use to download released invoices data from Oracle Project Billing into a spreadsheet, word processor, or any other tool to do flexible formatting. If some invoice lines have tax information, you must print the related invoices after they are interfaced to Oracle Receivables, because the Oracle Receivables AutoInvoice program calculates the tax amounts for these invoices. If you print from Oracle Project Billing, you need to report the tax amounts, rates, and accounting from the Oracle Receivables invoice tables.

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Interfacing Invoices to Oracle Receivables

Interfacing Invoices to Oracle Receivables

• Invoices are interfaced to Oracle Receivables using the AR AutoInvoice Import program. - Invoice Batch Source: PA Invoices

• Invoices and invoice lines are interfaced to Oracle Receivables. - Detail backup of invoices can be reported in Oracle Project Billing. - All accounting transactions, except for tax, are determined by Oracle Projects

AutoAccounting. Oracle Receivables AutoAccounting rules are not used. • For billing, Oracle Project Billing interfaces the accounting that it creates using

AutoAccounting to Oracle Receivables along with the associated customer invoice. In turn, Oracle Receivables creates accounting in Oracle Subledger Accounting. You can set up your own Oracle Receivables rules in Oracle Subledger Accounting to overwrite the accounts.

- Note: To define your own setup in Oracle Subledger Accounting, you must copy the predefined data and make changes to the copy. You cannot directly modify the predefined data that Oracle Project Billing provides in Oracle Subledger Accounting.

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Invoice Flow to Oracle Receivables

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Viewing Invoices in Oracle Receivables

Viewing Invoices in Oracle Receivables

Each invoice and invoice line in Oracle Project Billing corresponds to an invoice and invoice line in Oracle Receivables when you successfully interface and create an invoice in Oracle Receivables. You can view any invoice in Oracle Receivables that originates in Oracle Project Billing either from an Oracle Projects invoice inquiry window, or by using Oracle Receivables. Oracle Project Billing does not interface invoice line detail (such as expenditure item details or event details) to Oracle Receivables. The following information appears for each line:

• UOM = Each • Quantity = 1 • Unit Price = amount of invoice line • Item = (Oracle Projects leaves this field blank)

Use the Invoice Number, Invoice Date, and/or Total Invoice Amount to query Oracle Project Billing invoice information in Oracle Receivables. In addition, for any invoice, you can query on the following project information in the Invoice Transaction Flexfield that Oracle Project Billing passes to Oracle Receivables. You query this information by specifying values in the PROJECTS INVOICES context value descriptive flexfield for the Invoice Transaction Flexfield.

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• Project Number • Draft Invoice Number • Agreement Number • Project Organization • Project Manager

When you process invoices in Oracle Receivables, you can also identify invoices in Oracle Receivables based on project information, using the value that you specify for the AR: Transaction Flexfield Quickpick Attribute profile value. You can set this profile to display any project information that Oracle Project Billing passes to Oracle Receivables in the Transaction Flexfield. Note: PROJECTS INVOICES is the current seeded Invoice Batch Source. In the earlier releases, the Invoice Batch Source used was PA INVOICES. This is now user-defined.

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Accounting Transactions

Accounting Transactions

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.

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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.

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Agenda

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Interproject Billing

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.

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Agenda

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Integration with Oracle Project Contracts

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.

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• 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.

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Summary

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Appendix 9 Property Manager Overview Chapter 21 - Page 1

Appendix 9 Property Manager Overview Chapter 21

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Appendix 6: Oracle Property Manager Overview

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Objectives

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Oracle Property Manager: An Overview

Oracle Property Manager: An Overview

Oracle Property Manager takes care of two property-related business needs: lease administration and space management.

• Lease administration: Oracle Property Manager allows users to abstract lease information and establish the relationship between a lease and the leased premises. You can abstract critical lease information such as that related to key dates, rent, service providers, insurance, and any defined rights or obligations. After processing rent, you can send billing or payment information to Oracle Receivables, Oracle Payables, or Oracle Subledger Accounting, as appropriate.

• Space management: Oracle Property Manager allows users to set up leased or owned property, from the level of an office park or region, down to the office or cubicle level. Oracle Property Manager also enables users to create and track employee space assignments. The space management features of Oracle Property Manager allow users to perform tasks such as space planning and charging occupancy costs to departments or business units.

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Who can Use Oracle Property Manager

Who can Use Oracle Property Manager

Both tenants and landlords can use Oracle Property Manager. The application has three types of users:

• Retail users: Retail users, such as fast food chains and retail outlets, use Oracle Property Manager for lease administration and space management tasks. Store chains may own their own property and lease it to franchisees, or rent property in several locations from large landlords such as mall owners or property investment trusts.

• Commercial users: Commercial users such as the owners of office parks and shopping malls use Oracle Property Manager to run their real estate business. Such customers may need to manage thousands of leases for locations spread across a very large geographic area.

• Corporate users: Corporate users employ Oracle Property Manager to perform lease administration and space management tasks, primarily on leased office space.

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Flow of Information in Oracle Property Manager

Flow of Information in Oracle Property Manager

Oracle Property Manager divides information into two major areas: • Locations are buildings, land, and their subdivisions. • Leases contain critical lease information, including tenancy details, service provider

information, and rent terms. Leases may have one or more associated rent agreements relating to provisions for variable rent charges, periodic rent increases, or recovery of leased property-related expenses.

The key associations in Oracle Property Manager (indicated by the dashed lines in the diagram above) are:

• Assignment records that associate locations with employees or customers • Tenancy (Location) records that associate a lease with one or more locations

The key information flows in Oracle Property Manager are: • The transfer of calculated rent from rent agreements to the main lease • The generation of schedules and items from lease payment or billing terms and their

periodic transfer to Oracle Payables or Oracle Receivables • The transfer of information to Oracle General Ledger via Oracle Subledger Accounting

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Managing Properties and Locations

Managing Properties and Locations

In Oracle Property Manager you define physical space in terms of Location, which is a user-defined three-tier hierarchy, and Property, which serves as a container for one or more locations.

• Property contains the portfolio attributes that you can use to manage and report on the properties that your organization owns or leases. Property attributes include type, region, and responsibility.

• Locations are the key objects for representing physical space in Oracle Property Manager. You define locations using a three-level hierarchy. For example, land, parcel, and section or building, floor, and office. You can change the name of any level in the hierarchy.

You enter specific types of information for a location depending on its level in the location hierarchy. For example:

• For buildings, you specify the address, service providers, and a description of features, such as parking, amenities, and elevators.

• For offices, you specify the size and seating capacity. This information rolls up the location hierarchy to parent locations. For example, the rentable area for a building is the sum of the rentable areas entered for all its offices.

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In addition, Oracle Property Manager enables you to define the type, status, or the ability to assign locations at each level. For example, you can define an office, floor, or an entire building as non-assignable, sub-leased, or under construction.

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Managing Space Assignments

Managing Space Assignments

Oracle Property Manager supports two basic types of space assignments: customer space assignments and employee space assignments.

• Customer space assignments: Oracle Property Manager automatically assigns space to customers when you create revenue leases or subleases. You create customers in Oracle Receivables.

• Employee space assignments: When you create an employee space assignment, Oracle Property Manager associates an employee record from Oracle HRMS with a location record.

Keep the following points in mind when create space assignments: • You can track space assignments in Oracle Property Manager over time, as assignments

are date effective. • You can assign multiple occupants to a location and the same occupant to multiple

locations. • You can use the location and space assignment open interface tables provided by Oracle

Property Manager to integrate with graphical space management tools and Computer Aided Design (CAD) applications.

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Employee Space Assignments When you create employee space assignments, Oracle HRMS sends the employee’s cost center information to Oracle Property Manager. You can use cost center information for allocating occupancy costs. Note that you can also assign a location directly to a cost center, without specifying an employee. Creating cost center space assignments allows you to correctly allocate costs for vacant space.

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Managing Leases

Managing Leases

In Oracle Property Manager, you enter key information abstracted from the lease document in the Lease window. You enter basic information including key dates, whether you are creating a revenue or expense lease (that is, whether you are a landlord or tenant on this lease) or a sublease, and whether the lease is in draft status, or is approved. The Lease window contains several tabs that enable you to enter information related to the lease, such as:

• The contacts and service providers who provide services connected with the location that you are leasing.

• The locations that the lease covers. Note that the location records created in the Lease window are sometimes referred to as tenancy records.

• The rent payments you make if you are a tenant or the rent you bill if you are a landlord.

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Managing Rent Agreements

Managing Rent Agreements

Commercial leases often contain associated rent agreements that specify how tenants must pay rent other than flat base rent. In Oracle Property Manager, you can use the Rent Increase, Variable Rent, and Recoveries modules to abstract the terms of these agreements, calculate rent amounts, and send the payment or billing term information to the main lease. Rent Increase Use the rent increase feature to specify how base rent grows over time, either using a fixed percentage, or an index such as the Consumer Price Index (CPI.) Variable Rent Use the variable rent feature to calculate rent based on a variable amount. The variable amount is most often based on sales volumes, but you could also base variable rent on utility usage, storage, taxes, or common area maintenance expenses. Recoveries Use the recoveries feature to calculate operating or common area maintenance expenses. Note that the recoveries feature is used only by landlords to calculate recoverable amounts and pass them on to their tenants based either on tenants’ prorata share, or on a predefined rate or amount.

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Paying or Billing Rent

Paying or Billing Rent

Rent processing is at the heart of the lease module of Oracle Property Manager. Rent processing is based on the concept of lease terms. A term specifies that a certain amount is to be paid to a supplier (landlord) or billed to a customer (tenant) at a certain frequency (for example quarterly), for a certain period of time. To create lease terms, perform one of the following:

• Manually create terms in the Payments or Billings tab of the Lease window. • Create rent increase, variable rent, or recovery agreements. Once you have entered the

appropriate information, calculated rent, and approved terms, Oracle Property Manager transfers the terms from the agreement to the lease.

Scheduling Payments or Billings When you finalize a lease or transfer terms from rent agreements, Oracle Property Manager creates schedules and items based on the term details. Schedules and items represent a stream of individual payment or billing charges that Oracle Property Manager uses to create and send transactions to Oracle Receivables or Oracle Payables.

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• An item is a single instance of a rent payment or billing. For example, if you create a rent term for $1,000 per month from January 2006 to December 2007, Oracle Property Manager creates 24 items, that is, one for every month in the two years.

• A schedule is a group of items for a specific lease that are scheduled for the same day. You can approve and export schedules or individual items to Oracle Payables or Oracle Receivables at frequencies of your choice. Normalizing Rent Payments or Billings Oracle Property Manager supports normalization or straight-line rent calculation as defined by the Financial Accounting Standards Board (FASB.) FASB rules mandate that lease payments should be recognized on a straight-line basis over the life of the lease, regardless of when they are actually paid. As part of this process, Oracle Property Manager transfers accrued liability or accrued asset amounts to Oracle General Ledger via Oracle Subledger Accounting.

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Summary

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