Overview of Oracle Project Accounting (PA) Module

This article will explore the overview of Project Module in Oracle E Business suite. Functionalities, features and integrations of Oracle Projects with other Oracle Modules.

The Project Accounting (PA) module provides timely and detailed solutions to project managers as well as the finance groups.  The details give you improved visibility to project revenues, work breakdown structures, invoice accountability and overall profitability to any project. With the Project Accounting Module you can:

• Put the power of data into the hands of the project managers
• Provide accurate and up to date information to finance and the project managers regarding spend rates and burdened costs for materials or labor
• Maintain draft, baseline and original versions of the project budget
• Define statuses of any project
• Utilize the power of a flexible work breakdown structure

Features of Oracle Projects

Work Breakdown Structures

• Top level tasks default to sub-tasks making data entry minimal
• Flexible budget functionality allows budgets to be set at a summary or detail level.  Budgets can also be set at various levels of tasks
• Templates are available to aid in data entry

Costing and Cost Plus Processing

• Project managers and finance decide which costs are burdened and applied to raw costs or if they are set up as a cost plus agreement
• Default rate schedules can be used, but individual schedules can also be created

Automatic Account Generation

• Each transaction entered into the Project Accounting module updates any related accounting modules
• Credit payroll costs to the correct liability accounts
• Feeds from the Auto Accounting functionality

Project Billing and Costing Oracle R12 Changes

Project Costing
Title	Functionality Details
Integration with Oracle Subledger Accounting	Oracle Subledger Accounting (SLA) provides tools to meet external reporting (US GAAP, IFRS), corporate management and fiscal reporting requirements. Project Costing has been enhanced to fully support SLA. Project Costing supports both the accounting rules defined in AutoAccounting as well as the accounting rules defined in SLA. In either case, all accounting entries are stored in SLA. "Create Accounting" process is used to generate accounting entries in SLA and interface to General Ledger.
Multiple Reporting Currencies (MRC)	Multiple Reporting Currencies provide the capability to account and report in multiple currencies in addition to the primary ledger currency. MRC amounts are calculated by SLA and stored in alternate ledgers. The MRC amounts can be viewed in accounting drilldown windows in SLA. The MRC information in Oracle Projects is no longer used and all MRC implementation options are now obsolete in R12.
Contingent Worker	A contingent worker can fill any project role including the project manager. Contingent worker costs  can optionally be processed as supplier costs or labour costs. When processing costs as labour, contingent worker timecards must be entered. Expense Report processing for Contingent Worker: The transaction flow for expense reports is the same for contingent workers and employees. However, the payment processing is different for contingent worker: payee is the continget worker supplier rather than the worker incurring the expense.
Introduction of Invoice lines in Oracle Payables	Addition of Invoice Lines in Oracle Payables has introduced the following enhancements in Project Costing: Profile Option "PA: Default Expenditure Item Date for Supplier Cost": This profile option controls the default value of the expenditure item date for invoices, receipts, payments and discounts.The value can be defaulted from the following transaction attributes: • Expenditure Item Date entered on the Purchase Order • Transaction Date for the invoice or payment • GL Date for the invoice, payment or discount • System Date when the invoice or payment is created Enhanced Expenditure Inquiry by: • Supplier • Invoice Number • Invoice Line Number • Invoice Distribution Number • Payment Number
Supplier Cost Integration	The following modifications have resulted in Project Costing due to functionality changes in Payables and SLA: • Purchasing receipt accruals are always interfaced from Purchasing to Projects.Invoice variance and discounts are interfaced from Payables to Projects. • Prepayment Invoices are captured as commitments and are no longer interfaced to Project Costing as actual cost. • Project related expense reports are created in iExpenses or Payables, they can no longer be created as pre-approved batches in Projects and are no longer interfaced to Oracle Payables.
Supplier Cost Adjustments	Supplier Costs can be adjusted in Project Costing under any of the following conditions: • The Automatic Offset feature is enabled in Payables • Cash Basis accounting is enabled in Payables for primary or secondary ledger and the invoice is fully or partially paid • The invoice is fully or partially paid and the option to allow adjustments to paid invoices is disabled in Payables • The invoice is matched to a finally closed purchase order. • The invoice is prepaid, either fully or partially. In 11i, adjustments made to supplier invoices were interfaced to Oracle Payables which in turn created and interfaced accounting entries to GL. In R12, when supplier invoice is adjusted in projects, the accounting entries required to report the adjusting activity are generated and interfaced to GL by Projects. Adjustment transactions are no longer interfaced from Projects to Payables.
Future Dated People	Enter actual project transactions for future-dated people only after they become active. In a future-dated expenditure batch, you can enter people who will be active as of the transaction dates.
Labour Costing Enhancements* (*Available with R12.2)	The following features are provided to increase flexibility and reduce maintenance overhead: • Costing with HR rates with support for multiple rates per employee • New OTL timecard layout to support Rate by Criteria • Labour costing using Payroll Actuals • Labour Cost Accruals • Expenditure Batch Reversal Program
Project Billing
Title	Functionality Details
Integration with Oracle E-Business Tax	Project Billing uses the Oracle E-Business Tax to derive appropriate tax codes for project invoices based on the tax setup defined for the project.
Customer at Top Task	Customers can be defined at the top task level. This enhancement enables invoicing customers for specific project work by top task.
Invoice Method at Top Task	Invoice methods can be defined at the top task level. This enhancement enables invoicing customers with different methods such as, fixed price and time and materials, within the same project.
Invoice Line-Level Write-Off	Invoice write-offs can be created at line level. The line level write-off can be applied by prorating an amount across selected lines or by entering an amount by line. This enables writing-off of invoice amounts for specific line items on an invoice as oppposed to prorating the amount across all lines on the invoice.
Revenue in Foreign Currency	Convert Revenue to Foreign Currency: You can optionally choose to convert the revenue amount in project functional currency to Revenue transaction currency. Invoice transaction currency is treated as the revenue transaction currency. During revenue generation, revenue is calculated in project functional currency and then converted to transaction currency. View Project UBR/UER amounts in Project Currency: Unbilled receivables and unearned revenue amounts can be viewed in the project currency in the Billings review page. The project level UBR/UER balance in project functional currency is converted to the Project currency and displayed in the billing review page.
Invoice Concessions	A credit amount can manually be applied against a customer invoice without needing to adjust any supporting transactions. Concession invoices are processed like credit memos.Concessions can be applied at the invoice header or line level.
Agreement Definition Enhancements	The following new agreement fields are added: •Start Date: to more accurately control the duration of agreement •Billing Sequence: to control the order in which agreements are used for billing purposes •Advance Required Checkbox:to control if an advance is required before invoicing can occur
Prepayment Receipt Application	Prepayment receipts entered in Receivables can be associated with agreements. These receipts will then be automatically applied to project invoices when they are interfaced to AR.
Date Effective Funds Consumpltion	When this option is enabled, the cost and event transaction dates must fall within agreement start and end dates to be billed against an agreement. Additionally, transactions are only billed against the agreement if the full transaction amount can be funded.
Standard Invoicing for Adjusted Transactions * (Available with R12.2)	Prior to R12.2, if an expenditure item is adjusted after it has been billed, the invoicing process generates a credit memo to reverse the billing of original item and will then include adjusted transaction on next standard invoice. With the new feature, reversal and adjusted transaction can both be included on next standard invoice eliminating the use of credit memo.

Creating a Oracle Project Budget

Step 1.1           Create New Cost Budget

Navigate to:

Budgets

Project Number:	Enter the Project Number for which a budget is being created.  OR
Project Name:	Enter the Project Name for which a budget is being created.
Budget Type:	Use the List of Values to choose the Approved Cost Budget Type.

Select:

Find Draft

Version Name:	Enter appropriate Version of the budget.
Change Reason:	Optional - Select from list of values.
Description:	Enter a short description, describing your budget.
Entry Method/ Resource List:	Verify that the Entry Method/ Resource List is appropriate for the new budget.  A new Entry Method/ Resource List may be selected, but the existing definition will then be deleted. The Entry Method/ Resource List defaults from the Project Type setup.
Status:	If the budget has not been “Submitted” or “Baselined”, the budget will have a “Working” Status
New Original:	If the budget is the first, the New Original field will be enabled

Step 1.2           Enter Cost Budget details

Decide on the level of detail needed for tracking cost on a specific project. The Budget Entry Method selected determines the following Budget attributes:

1)      Budget Entry Level - Project, Top task, Lowest task or Top and Lowest Task level.

2)      Time–phase - Specified Date range, GL period, PA Period or None. 

If the amounts are not entered by period, Oracle assumes an even division of the budget over the period of the project or task.

3)      Detail of budget - Summary budget line or budget lines Categorized by resources.

4)      Amount Types – Quantity, Raw Cost and/or Burdened Cost entry.

The Resource Lists selection and the way in which Resource Lists are defined will also have an impact on the level of detail.

A more detailed budget allows more detail in status tracking and exception analysis. A detailed budget requires more time and effort to plan, create, enter, and maintain the budget amounts, but can provide valuable insight into the project status.

The next form that will be displayed depends on the Budget Entry Method.

If Task level budget entry has been selected, the displayed form (See next) will show the totals for each task.  Budget values will have to be entered on an additional Task level form (See Budget Lines form).

Select:

Details

If Project level budget entry has been selected, the above form will not be displayed. The application will display the Budget Line form (See below).

Select:

Budget Lines

This example: Budget Attributes for Budget Entry Method – By lowest task, PA period:          

Budget Entry Level:	Lowest Task
Time–phase:	PA Period
Detail of budget:	Resource List
Amount Types:	All Cost Amount Types

This example: Budget Attributes for selected Resource List:

Resource Groups:	LABOR & EXPENSES
Resources:	Employees and Expenditure Types

Resource:	Using the list of values to select the appropriate resource/resource group for the budget line. Available values will depend on the Resource List setup. You cannot budget simultaneously for Resource Groups and Resources belonging to that same Resource group.
Amount Type:	Choose between Quantity, Raw Cost and Burdened Cost
Value:	Enter budget Value in appropriate column/ period

Select:

Up/Down arrows at the top of the form to navigate between tasks. Enter budget values for all appropriate Tasks.

Navigate:

Close Form/s and return to the Initial budget form

Step 2.3 Submit Cost Budget (for Approval)

Select:

Submit

Once the budget has been submitted, the status has changed to ‘Submitted’.  No additional changes are allowed to a Submitted budget.  If a need to modify the budget is identified at this point, select Rework to change the status back.  Changes are then allowed.

Step 2.4  Baseline Approved Cost Budget

Select:

Baseline

After the manager approves the budget, select Baseline to complete the budget approval process.  Submit and Baseline processes check a number of items.  If errors are identified, resolve the item and re-perform the process.

Step 2.5  Review Budget History

When a budget is baselined, the history button becomes available.  PA keeps a record of  all previous baselined budgets and they can be reviewed by selecting them in the history area. 

Select:	History

 

Step 2.0           Revenue Budgets

Project Accounting requires a revenue budget be created and baselined for all contract projects before generating any Revenues or Invoices.  The revenue budget amount must equal the project’s funding agreement in order for the budget to be ‘Baselined’.  In addition, if the contract project has a distribution rule of “Cost”, an approved cost budget must also be submitted and baselined prior to being able to baseline an Approved Revenue budget.

Step 2.1           Create New Revenue Budget

Navigate to:

Budgets

Project Number:	Enter the Project Number for which a budget is being created. OR
Project Name:	Enter the Project Name for which a budget is being created.
Budget Type:	Use the List of Values to choose the Approved Revenue Budget Type.

Select:

Find Draft

Version Name:	Enter an appropriate Version name/number for your budget.
Change Reason:	Optional - Select from list of values.
Description:	Enter a short description, describing your budget.
Entry Method/ Resource List:	Verify that the Entry Method/Resource List is appropriate for the new budget.  A new Entry Method/ Resource List may be selected, but the existing definition will then be deleted.
Status:	If the budget has not been “Submitted” or “Baselined”, the budget will have a “Working” Status
New Original:	If the budget is the first for the project, the New Original field will be enabled

 

Step 2.2           Enter Revenue Budget details

Decide on the level of detail needed for tracking revenue on a specific project. The Budget Entry Method selected determines the following Budget attributes:

1)      Budget Entry Level  - Project, Top task, Lowest task or Top and Lowest Task level.

2)      Time–phase - Specified Date range, GL period, PA Period or None. 

If the amounts are not entered by period, Oracle assumes an even division of the budget over the period of the project or task.

3)      Detail of budget - Summary budget line or budget lines Categorized by resources.

4)      Amount Types – Quantity (UOM for Resource) and/or Revenue entry.

The Resource Lists selection and the way in which Resource Lists are defined will also have an impact on the level of detail.

A more detailed budget allows more detail in status tracking and exception analysis. A detailed budget requires more time and effort to plan, create, enter, and maintain the budget amounts, but can provide valuable insight into the project status.

The next form that will be displayed depends on the Budget Entry Method.

If Task level budget entry has been selected, the displayed form will show the totals for each task.  Budget values will have to be entered on an additional Task level form (See Budget Lines form).

If Project Level budget entry has been selected, the displayed form will be for entering the Budget Line values.

Select:

Details

This Example: Budget Attributes for Budget Entry Method – Project level, GL period:

Budget Entry Level:	Project
Time–phase:	GL Period
Detail of budget:	Summarized
Amount Types:	All Revenue Amount Types

Resource:	Default value None
Amount Type:	For Revenue budget types choose between Quantity and Revenue. The Unit of measure will depend on the Resource
Value:	Enter a budget Value in the appropriate column/period

Navigate:

Close Form and return to the Initial budget form

Step 2.3           Submit Revenue Budget (for Approval)

No changes are allowed to a Submitted budget.  If a need to modify the budget is identified after a budget was submitted, select Rework to change the status back to Working.  Changes are then allowed.

Select:

Submit

Step 2.4           Baseline Approved Revenue Budget

When the budget is ready, select Baseline to complete the budget approval process.  Submit and Baseline processes check a number of items.  If errors are identified, resolve the item and continue the process.

Select:

Baseline

Step 2.5           Review Budget History

When a budget is baselined, the history button becomes available.  PA keeps a record of previous baselined budgets and they can be reviewed by selecting them in the history area. 

Select:

History

 

Contingent Worker Functionality and Setup Steps

Oracle introduced the concept of Contingent Worker to the Oracle Project Suite with the release of Family Pack M in May 2005.  Contingent Labor is defined by Oracle as:

“…an on-demand workforce, including contract workers, agency staffing, independent contractors and people who work directly for an enterprise on an on-call basis.”

This new functionality accessed features that had been incorporated into 11.5.10 for Purchasing and Human Resources, allowing the following actions to take place in the Oracle Applications:

• Define contingent workers in Oracle
• Assign contingent workers to tasks in Project Management
• Process labor costs of contingent workers in Project Costing
• Link and validate timecards against Purchase Orders
• Process contingent worker expenses in the same manner as employees

This new capability to handle contingent workers was possible due to changes across several Oracle Application modules:

New Purchase Order Line Types were added to allow the following capability:

• Specify individual named contractor start and end dates
• Define fixed price or rate based agreements with the contractor
• Specify price differentials on rate based agreements for items like overtime, weekend, holiday, travel and standby time
• Automatically generate purchase order receipts from timecards entered and approved through OTL

New HR person type allowed the following capability:

• Track contingent worker assignment history, similar to any regular employee
• Periods of service
• Breaks in assignments
• Positions
• Supervisors
• Track worker and supplier relationships

  Addition of the Supplier tab in the assignment record allowed the purchase order, purchase order line number, supplier name, supplier site and dates to be associated with the worker history

New OTL layouts for contingent workers supported the following capability:

• Association of time entry to purchase agreements
• Automation of timecard approval routings
• Generation of purchase order receipts from approved timecards
• Run the concurrent request “Retrieve Time from OTL” with parameters to optionally select individual suppliers and dates

New iExpenses functionality supported the following capability:

• Entry of expense reports on behalf of contingent workers
• Automated approval routings
• Payments to contingent worker suppliers
• Contingent workers are associated with a supplier in Accounts Payable
• Import of the iExpense information creates an automatic AP Invoice for the supplier to pay for the incurred expense with the description including the identification of the contingent worker

Within Oracle Projects, there are no differences between regular employees and contingent workers for all the normal functions.  Both are:

• Assigned to projects and tasks
• Own tasks and deliverables
• Enter progress and record issues
• Any other normal project activity, limited only by the security functions defined

With the update of Oracle Applications and the Release 12 functionality, Oracle has modified some of the 11.5.10 capability and expanded capability.

• In R12.1.1 Oracle added a new flag to identify a contingency worker clearing project.  When the clearing project is used on a purchase order, the contingency worker can charge to any approved project when using OTL.  This enhances the ability to accommodate workers who are hired to work on multiple projects over the life of their engagement.

• In R12.1.2 Oracle added several new subcontractor management functions related to control of payments, tracking contract requirements, such as insurance certificates or other items that expire and need renewal over time.

As you can see from the breadth of impact contingent workers have on the applications, setup requirements can be difficult and require a broad range of knowledge to do so successfully.

Contingent Worker related features in Oracle E-Business Suite Applications, shown in a Release 12 screen below, include additional line types in Purchasing for fixed price or rate based workers.

Purchasing Line Types

Plus the addition of a tab to record the worker details, including name, start date and end date.

New Tab

Oracle Human Resources includes new person types for contingent workers and assignment status for active contingent workers, along with links to the supplier and the PO.

Contingent Worker Assignment

One significant change from 11.5.10 to Release 12 that impacts contingent workers is the elimination of pre-approved batches for expense reports.  This means expense reports will need to be entered through iExpense.  The AP Invoice Workbench functionality is NOT enabled for contingent workers due to the expense being paid to the supplier and not the individual.

Oracle E-Business Suite Projects applications treat contingent workers just like regular employees, allowing for scheduling, costing, reporting, and billing.  However, to ease reporting requirements it may be helpful to place contingent workers in a separate organization or assign them to a resource breakdown structure, which can make use of the person type assigned in HR.