Project Billing Overview

Overview of Oracle Project
Billing
Overview
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Overview of Oracle Project Billing
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Objectives
Objectives
After completing this module, you should be able to do the

following:
• Explain where Project Billing is positioned within
Oracle Projects
• Describe the overall Project Billing Process
• Discuss/Demonstrate the key areas that are part of the
Project Billing process
• Explain the accounting flow for revenue and invoicing

Agenda
Agenda
• Oracle Project Billing Overview

• Project Billing Key Areas

Oracle Enterprise Project Management Solution
Project Enterprise
Initiatives Portfolio Management Integration
Sales Financials
Delivery Project Resource
Management Management HR
Research
Construction Global Supply Chain
Project
Information Repository Sales
Technology
Collaboration Accounting and Asset
Product Operations Management
Development
Marketing Documents
Enterprise and Project Insight
Personalized Role-Based Views

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)

Oracle Project Billing
Billing Methods Manage Backlog

Accrue Revenue
& Margin
– Time & Materials Automatic Generation
– Fixed Price Funding Limit Mgmt.
Track Project
– % Spent Billings
– % Complete
– Milestone Collect
– Cost Receivables in
Generate Invoices
Reimbursable Oracle
Online Review & Approval Receivables
Drilldown to Detail

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.

Contract Projects
Contract Projects
Revenue
Track
Cost
Contract
Projects
Billing
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”.

Overview of People Resources In Oracle Projects
Overview of People Resources In Oracle Projects
Participate as team Staff resources on Budget Labor Costs

members projects
Oracle Project Oracle Project

Collaboration Oracle Project Management
Resource
Management
Collect Labor Costs Bill Labor Hours
Oracle Project Oracle Project

Costing Billing
Shared Resource Pool
Oracle Project Foundation
Overview of People Resources in Oracle Projects

Oracle Projects provides a centralized resource pool as part of the core foundation in which
employees and contingent workers are identified as resources. Each of the applications in the
Oracle Projects suite utilizes this resource pool differently:
• Oracle Project Costing: Collects project-related timecard and expense report costs for
labor resources. You can use transactions controls to specify which resources are allowed
to charge timecard and expense report costs to projects and tasks.
• Oracle Project Billing: Generates revenue by billing labor hours on a project
• Oracle Project Management: Creates a budget for labor costs to plan and manage the
financial performance of projects throughout the project lifecycle
• Oracle Project Collaboration: Allows resources to participate as team members for
communicating progress against assigned tasks by directly accessing the published
workplan, and assigns actions to fellow team members so that the ownership and steps to
resolution are communicated clearly and consistently
• Oracle Project Resource Management: Locates the appropriate resources to staff project
requirements based on competencies and availability. As a resource, you can also search
for requirements that match your particular skills.

Resources in Oracle Project Billing
When you define bill rates for labor or people resources, you can enter expenditure batches, for
example, timecards for a resource and then accrue revenue based on the rate defined for that
resource. You have an option to override the bill rates at the time of revenue accrual. In this
way, you can also generate invoices for labor.

Accounting Transactions
Invoices
Invoices Customers
Oracle Oracle
Projects Receivables
Receipts
Revenue Invoice and

Accounting Receipt
Accounting
Oracle
Subledger
Accounting
Transfer to GL
Revenue and invoices are generated in Oracle Projects Billing.
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.
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.

Agenda
Agenda
• Oracle Project Billing Overview

• Project Billing Key Areas

Key Features of Oracle Project Billing
Key Features of Oracle Project Billing
Key components include:

• Agreements and Funding
• Multi-Currency Billing
• Project Revenue
• Invoices
• Interfacing Invoices to Oracle Receivables
• Customer Retention Billing
• Interproject Billing
• Integration with Oracle Project Contracts

Agreements and Funding

Agreement
Total = $ 500K
Funded = $ 300K
$150K $50K $100K

Project A Project B Project C Project D
Bid & Proposal Time & Material Fixed Price Cost Plus
$50K Task 1 Task 2 $30K Task 3 $70K
Task 1.1 Task 1.2 Task 3.1 Task 3.2
Task 3.1.1 Task 3.1.2
Example of an agreement funding three projects. In Project B, the top

tasks are also individually funded.

In Oracle Projects, an agreement represents any form of contract, written or verbal, between
you and one of your customers. For example, an agreement can be in the form of a:
• Purchase order
• Continuing service agreement
• Verbal authorization
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.

Multi-Currency Billing
Multiple currencies can be associated with a project.
Agreement 1
Funding Currency: CAD
Project A
Customer ABC Corp.
Project Currency: USD
Invoice Currency: USD
Project Functional Currency: CAD
Agreement 2
Funding Currency: GBP
USD = US Dollars
CAD = Canadian Dollars
GBP = British Pounds
With multi-currency billing, you can:
• Enter agreements, bill rates, and events in any currency regardless of the project functional
currency
• Designate the project functional currency, project currency, or funding currency as the
invoice processing currency for a project
• Designate the project functional currency and the invoice transaction currency as the
revenue transaction currency
• Define currency conversion attributes for converting revenue and invoicing amounts to the
project currency, project functional currency, and funding currency
• Define currency conversion attributes for converting funding amounts to the project
functional currency, and the project currency
• Define a default invoice currency for a project customer that is different from the project
functional currency and assign conversion attributes for deriving revenue in this currency

Multi-Currency Options Available for Contract Projects
• Project Functional Currency: The principal currency you use to record transactions and
maintain accounting data for your ledger.
• Project Currency: 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.
• Funding Currency: The currency or currencies in which a project is funded
• Billing Transaction Currency: 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. When the Invoice by Billing Transaction functionality is enabled for a project,
separate invoices are generated for each billing transaction currency, even though one or
more invoices may be funded by the same agreement.
• Invoice Processing Currency: The common currency that summarizes billing
transactions and funding amounts and performs fund checking when generating invoices.

Revenue in Foreign Currency
Project
Project Functional Invoice Transaction
Project Funding
Revenue Currencies Invoice Currency
Oracle Project Billing generates revenue in project, project functional and

project funding currencies while generating invoices in invoice
transaction 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.

Project Revenue
Project Revenue
• Contract project revenue is the amount recognized as

income to be received for work performed on a project.
• Revenue recognition can use various methods to
calculate project revenue.
• A project’s billing method can differ from the revenue
method.
Project Revenue
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. This enables you to generate revenue based on the project’s actual billable
expenditures.
When you generate revenue, Oracle Projects calculates revenue, creates revenue events, creates
expenditure item revenue details, and maintains funding balances. You generate revenue
accounting events to determine default GL accounts using AutoAccounting, and generate
accounting events. You then create accounting in Oracle Subledger Accounting, and transfer
the journal entries to Oracle General Ledger.

Revenue Accrual Method and Invoice Method
Billing methods are used to determine how Oracle Projects generates

bills for projects.
Billing Method Description
Cost/Cost Accrues revenue and bills using the ratio of actual cost to
budgeted cost (percent complete)
Cost/Event Accrues revenue using the ratio of actual cost to budgeted
cost (percent complete) and bills based on events
Cost/Work Accrues revenue using the ratio of actual cost to budgeted
cost (percent complete) and bills as work occurs
Event/Event Accrues revenue and bills based on events
Event/Work Accrues revenue based on events and bills as work occurs
Work/Event Accrues revenue as work occurs and bills based on events
Work/Work Accrues revenue and bills as work occurs

When you enter revenue and billing information for your project, you specify the revenue
accrual method and the invoice method. The project type determines which distribution rule
appears as the default value for these fields. The project type also determines which other
distribution rules you can choose from. The revenue accrual method and invoice method that
you select determines how revenue is calculated and how invoices are generated for the
project.
Note: If you want to accrue revenue or generate invoices based on percent complete, you must
use the Event/Event, Event/Work, or Work/Event distribution rule.

Overview of Invoice Flow
Generate Draft Invoice
Review and Adjust Invoice
Approve Invoice
Release Invoice
Interface Invoice
Print Invoice

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

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 Projects
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 Projects 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 Projects generates draft invoices and interfaces them to Oracle Receivables to collect
payments for the project invoices and to create accounting in Oracle Subledger Accounting.
Printing Invoices
You can print invoices either from Oracle Projects, or from Oracle Receivables, depending on
how your company implements your invoice printing method.
Note: If you print your invoices from Oracle Projects, you do not need to interface invoices
before printing them.

Interfacing Invoices to Oracle Receivables
Tieback
Invoices
Interface
Released Invoices to AR AutoInvoice Invoice
Invoices Oracle Interface Import Tables
Receivables Tables
GL Transfer to Subledger Submit

Interface Oracle General Accounting Accounting
Tables Ledger Entries
Oracle Projects integrates with Oracle Receivables and Oracle

Subledger Accounting to process project invoice transactions.

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 and create accounting in Oracle Subledger
Accounting. You transfer the final accounting for the invoices from Oracle Subledger
Accounting to Oracle General Ledger. 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 Oracle Receivables, you use an Oracle Projects concurrent
program that collects all eligible released draft invoices in Oracle Projects and interfaces them
to the Oracle Receivables interface tables. This concurrent program 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. The AutoInvoice
process also automatically calculates tax for project invoice lines that contain tax information.
You run the Tieback process to ensure that invoice data is loaded successfully into Oracle
Receivables.
Create Accounting and Transfer to Oracle General Ledger
You run the Submit Accounting concurrent program in Oracle Receivables to create accounting
for the invoices in Oracle Subledger Accounting. If you define your own detailed accounting
rules in Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites the
accounting that Oracle Receivables created using the Account Generator. You transfer the final
accounting details from Oracle Subledger Accounting to Oracle General Ledger.

Customer Retention Billing
Invoiced Amount = $ 550

Retention Amount = $100
Retention is a provision in a contract to hold back a portion of the

invoiced amounts.

Oracle Projects enables you to set up withholding and billing terms for retention, to invoice
retention amounts, and to account for unbilled retention.
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.

Interproject Billing
Receiver
Project
Payables
Costs
invoice
Interproject
Invoices
Receivables
Invoice
Collect
Costs
Provider
Project
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.

Integration with Oracle Project Contracts
Completed Generate Delivery-based

Deliverable billing event
Deliverable Tracking Bill it

System
Oracle Project Contracts Oracle Projects
When a deliverable is completed in Oracle Project Contracts, it

automatically creates a billing event in Oracle Projects.

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.

• 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.

Summary
Summary
In this module, you should have learned how to:

• Explain where Oracle Project Billing is positioned
within Oracle Projects
• Describe the overall Project Billing Process
• Discuss/Demonstrate the key areas that are part of the
Billing process
• Explain the accounting flow for revenue and invoicing


Project Billing Overview

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Overview of Oracle Project

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Overview of Oracle Project Billing

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

After completing this module, you should be able to do the

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

• Oracle Project Billing Overview

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Oracle Enterprise Project Management Solution

Personalized Role-Based Views

Oracle Enterprise Project Management Solution

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Oracle Project Billing

Billing Methods Manage Backlog

Oracle Project Billing

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Overview of People Resources In Oracle Projects

Participate as team Staff resources on Budget Labor Costs

Oracle Project Oracle Project

Collect Labor Costs Bill Labor Hours

Oracle Project Oracle Project

Shared Resource Pool

Oracle Project Foundation

Overview of People Resources in Oracle Projects

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Revenue Invoice and

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

• Oracle Project Billing Overview

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Key Features of Oracle Project Billing

Key components include:

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Agreements and Funding

$150K $50K $100K

$50K Task 1 Task 2 $30K Task 3 $70K

Task 1.1 Task 1.2 Task 3.1 Task 3.2

Task 3.1.1 Task 3.1.2

Example of an agreement funding three projects. In Project B, the top

Agreements and Funding

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Multiple currencies can be associated with a project.

Copyright © Oracle, 2004. All rights reserved.

Overview of Oracle Project Billing 425005174.doc

Copyright © Oracle, 2004. All rights reserved.