Oracle Projects - The Basics of Integration

Mehmood Merali Ernst and Young LLP Introduction

This paper introduces the basic concepts of integrating Oracle Projects (PA) with five other modules, namely Oracle General Ledger (GL), Oracle Purchasing (PO), Oracle Payables (AP), Oracle Receivables (AR) and Oracle Assets (FA). This paper discusses the following items for each integration point: 1. 2. 3. the flow of data across the integration point; the set up parameters necessary to enable inter-module integration; and, the required concurrent manager processes to push or pull data across these integration points. AutoAccounting and Flexbuilder in Oracle Projects, please refer to the paper by Edward Charity of Ernst & Young, LLP, entitled Understanding Oracle Projects AutoAccounting and Flexbuilder Functions, presented at OAUG Sep 97 in Orlando, Florida.). Project costs are summarized in PA and transferred to GL via the journal import table, where they are posted to the general ledger. Data Flow PA collects detailed project cost and revenue. These costs are distributed to valid accounts in the chart of accounts defined in the GL. PA uses AutoAccounting and Flexbuilder features to derive these accounts. Once distributed, PA transactions are then summarized and transferred into the journal import table. The journal import process posts these transactions to the general ledger. The tieback costs and revenue process in PA verifies that these costs and revenues were posted to valid account code combinations in the general ledger. Oracle predefines a journal source and several journal categories for this integration. The journal source is called Project Accounting and the journal categories are as follows: Labor Cost; Total Burdened Cost; Usage Cost; and, Revenue. Set up Parameters Oracle Projects (PA) is a sub-ledger which collects detailed project costs and revenue. These detailed costs and revenue are distributed using the AutoAccounting (and Flexbuilder) feature of PA. These features ensure that costs and revenue are charged to valid accounts and account code combinations as per the chart of accounts. (For more information on the The following set up parameters are required to enable data to flow from PA to GL.

References in this paper to navigation paths, form names, implementation options, etc are for Oracle Projects 10.7 SC. These may be available under different paths and options in other releases, or may not be available at all, especially in earlier releases. The scope of this paper does not include differences between Oracle Projects release 10.7 SC and other releases. In addition to the information in this paper, this presentation at OAUG will also include discussion of sample debit and credit entries of each integration transaction.

Integration between Oracle Projects and General Ledger

In PA, set up implementation options as follows: Setup>System>Implementation Options>Costing

Copyright 1998 by Mehmood Merali

Setup>Journal>Categories

Setup>System>Implementation Options>Billing Concurrent Manager Processes The following concurrent processes must be executed for the data to be pushed into the journal import table, and subsequently pulled from this table to be posted into the GL: (please note: expenditures must be distributed and invoices generated prior to running these processes.) PRC: Interface Labor Costs to GL; PRC: Interface Usage Costs to GL; PRC: Interface Total Burdened Costs to GL; and, PRC: Interface Revenue to GL. Once data has been interfaced into the journal import table, the journal import must be submitted from the GL module. This process brings the summary PA transactions into GL and are ready to be posted. After they are successfully posted, the tieback process is ready to be invoked. To tieback costs and revenue from GL to PA, the following concurrent processes must run successfully: PRC: Tieback Labor Costs from GL; PRC: Tieback Usage Costs from GL; PRC: Tieback Total Burdened Costs from GL; PRC: Tieback Revenue from GL; Please note: you can use any combination of streamline processes or perform individual functions to invoke these interfaces. They must

In GL, ensure journal entry source and categories are predefined, as follows: Setup>Journal>Sources

Copyright 1998 by Mehmood Merali

be invoked in the correct order for them to run successfully.

Integration between Oracle Projects and Purchasing

The integration between PA and PO allows you to view committed costs of requisitions and purchase orders within PA. This is accomplished by entering project related information into the source requisition or purchase order. The project related information is carried through the Req -> PO -> AP invoice > PA project expenditure process automatically. Flexbuilder is also automatically invoked to build account flexfields. Data Flow Commitments from PO are visible in PA via the Project Status Inquiry (PSI) feature. There is no intermediary import or interface table between these modules. However, for project related requisitions and purchase orders, each line item must contain the following PA information: project name task name expenditure type expenditure organization expenditure item date

In addition, you should review the profile option PA: Allow Override of PA Distribution in AP/PO. This parameter allows you to enable or disable a user from over-riding the accounting flexfield generated by Flexbuilder. The parameter can be set at a site level as well as at a responsibility level. Concurrent Manager Processes There are no concurrent manager processes to be run for the PO to PA integration.

Integration between Oracle Projects and Payables

The integration between PA and AP allows for three types of transactions to flow between them. These are: supplier invoices; expense reports; and, adjustments. Data Flow Supplier invoices are sent from AP to PA. Each invoice must contain project related information for this interface, as follows: project number task number expenditure type expenditure organization expenditure item date quantity, if setup option Cost Rate Required is set to Yes.

You can adjust the project information on a requisition or purchase order at any time. If the changes are made after the requisition and purchase order have been approved and processed, reversing entries are automatically created. However, you must update both the requisition and the purchase order in PO with the relevant changes to project information. Set up Parameters To charge PO and PA against projects, you must first set up your FlexbBuilder rules. (For more information on the AutoAccounting and Flexbuilder in Oracle Projects, please refer to the paper by Edward Charity of Ernst & Young, LLP, entitled Understanding Oracle Projects AutoAccounting and Flexbuilder Functions, presented at OAUG Sep 97 in Orlando, Florida.).

Expense reports entered into PA for project related expenditures are sent to AP via the AP interface tables. AP creates invoices from these expense reports using the InvoiceImport feature, approves and pays the invoices and transfers these accounting transactions directly to GL. Please note that the PA AutoAccounting rules take precedence over the employees default expense account when determining the invoice liability account (and it does not invoke Flexbuilder) The tieback process is then invoked in PA to ensure that AP transactions have been successfully interfaced. The tieback process is run after AP Invoice Import has run.

Copyright 1998 by Mehmood Merali

AP can also create pre-payments or advances and apply them to PA expense reports and invoices in AP. The expense report must be already interfaced (AP interfaces table) or loaded (AP invoice tables) in AP. Set up Parameters The following parameters and flexfields must be set up in PA and AP. SYSADM: Profile>System>Value PA: Summarize Expense Report lines PA: Default Expenditure Organization in AP/PO (note: expenditure org. must have HR Classification default value) AP: Invoice Import Source = Oracle Projects PA: Expenditure Type Class = Supplier Invoices Concurrent Manager Processes The following concurrent manager processes must be invoked to enable the interface from AP to PA. PA: Interface Supplier Invoices from Payables PA: Distribute Expense Report Costs PA: Interface Expense Reports to Payables AP: Invoice Import PA: Tieback Expense Reports from Payables For adjustments, the following processes must be invoked: PA: Distribute Supplier Invoice Adjustment Costs PA: Interface Supplier Invoice Adjustment Costs to Payables Please note: you can use any combination of streamline processes or perform individual functions to invoke these interfaces. They must be invoked in the correct order for them to run successfully.

the asset is ready to be placed in service, it is interfaced to FA. Data Flow When expenditures for capital projects are collected PA, they are classified as capitilazable or non-capitalizable. These costs are then interfaced from PA to FA via the FA Mass Additions Table from where they are posted to the FA Assets Table. They are then posted to the GL via the GL interface table, at which point the CIP account is relieved and costs transferred to the asset account. Please note that there is no tieback mechanism from FA to PA. As well, if changes are made to project related information in FA, they are not visible in PA. Set up Parameters The following set up parameters are required in FA to enable data to flow from PA: (please note that these are also required for FA implementation.) define corporate book define category flexfield define location flexfield define asset key flexfield

Concurrent Manager Processes The following concurrent manager processes must be invoked to enable the interface from PA to FA. PA: Generate Assets Lines PA: Interface Assets to Oracle Assets FA: manually review Mass Additions table and update queue status from New, Merged or Cost Adjustment to Post FA: Post Mass Additions FA: Create Journal Entries To generate asset cost lines, you must first cost and distribute all expense, usage and supplier invoice costs in PA and interface these and AP

Integrating Oracle Projects and Assets

PA collects project related expenditures for capital projects. Using AutoAccounting and Flexbuilder features, these costs are assigned to a Construction In Process (CIP) account. When

Copyright 1998 by Mehmood Merali

invoice costs to the GL prior to placing an asset in service in PA.

Setup>Financials>Flexfields>Descriptive>Segm ents

Integrating Oracle Projects and Receivables.

PA integrates into AR by generating draft invoices and sending them to AR for printing and tracking customer payments. Data Flow PA loads the invoices into AR via ARs AutoInvoice feature. Project information is stored in the invoice via the transaction flexfield. Set up Parameters Oracle predefines the following parameters in AR: Invoice Source = PA INVOICES; AutoInvoicing Rule = PA INVOICES Line Ordering Rule = PA LINE ORDER Grouping Rule = PA GROUPING RULE In AR, you can verify the predefined AutoInvoice source for PA invoices by following the navigation path below: Setup>Financials>Flexfields search for Line Transaction Flexfield You can also verify the predefined AR Line Ordering Rules as follows: Setup>Transactions>AutoInvoice>Line Ordering Rules

You can also verify the predefined AR Grouping Rules as follows: Setup>Transactions>AutoInvoice>Grouping Rules

To verify the AR AutoInvoice source segments for PA invoices, follow the navigation path below:

Copyright 1998 by Mehmood Merali

Concurrent Manager Processes The following concurrent process must be executed for the data to be pushed into the AR: PRC: Generate Draft Revenue PRC: Generate Draft Invoices PRC: Interface Invoices to Receivables Once data has been interfaced into AR, the following process must be run in AR: Interfaces > AutoInvoice > AutoInvoice Master Program with Invoice source of PA INVOICES.

Once data has been interfaced to AR, you tieback interfaced invoices into PA by running the following concurrent manager process: PRC: Tieback Invoices from Receivables

Copyright 1998 by Mehmood Merali

Conclusion
There are many benefits of implementing an ERP system such as Oracle Applications. One of them is the ability to integrate modules to allow accurate and natural data flow. Oracle Projects is one application module that is integrated with many other modules. By integrating Oracle Projects to these other modules, you benefit from: on-line validation of expenditures with transaction controls for each project. Transaction controls determine who can charge what types of costs during specific time periods; automated generation of accounting flexfields via Flexbuilder; single source of all project related expenditure and revenue data; reduction or elimination of duplicate data entry, and the related cost of time and accuracy; timely and accurate reporting of project related transactions into the general ledger; and, validation and adjustments of data at a single source.

About the Author

Mehmood Merali Ernst & Young, LLP Mehmood Merali is a management consultant in Ernst & Young s Oracle Service Line. He is based out of Ernst & Youngs Seattle Office. Mr. Merali has implemented several Oracle ERP implementations in various capacities. He has served as a team lead, module lead, Finance lead, Manufacturing lead and Demand Team lead. Currently, he is assisting an international, high-tech capital equipment manufacturer implement the full suite of fifteen Oracle applications, including Finance, Manufacturing, Supply and Demand. Mr. Merali has presented several papers at national and international conferences over the past five years. He is a certified Information Systems Professional (I.S.P.) of Canada, and a Certified Management Consultant (CMC) with the Institute of Certified Management Consultants of Canada.

Copyright 1998 by Mehmood Merali