Project Costing Reconciliation Made Easy

Project Costing
Reconciliation Made
Easy
July 20
th
, 2012
Sachin Singh
Deloitte Consulting LLP
Copyright 2012 Deloitte Development LLC. All rights reserved.
Introduction
Problem Definition
Oracle Project Costing Data and Accounting flow
Existing Process for Projects Reconciliation
Case Study
Background
Solution
Benefits
Q&A
Agenda
2
Copyright 2012 Deloitte Development LLC, All rights reserved.

3 Project Reconciliation Made Easy
Disclaimer

This presentation contains general information only and is based on the experiences and
research of Deloitte practitioners.
Deloitte is not, by means of this presentation, rendering business, financial, investment, or
other professional advice or services. This presentation is not a substitute for such
professional advice or services, nor should it be used as a basis for any decision or action
that may affect your business.
Before making any decision or taking any action that may affect your business, you should
consult a qualified professional advisor.
Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by
any person who relies on this presentation.
Introduction

5
IntroductionThis presentation will.
b
c
d
a
Explain the limitations in handling an operational process.
Explain data and accounting entries flow in Oracle Project Costing
Explain the need for custom reconciliation solution.
Case Study: How to utilize a custom solution to meet reconciliation needs.
Project Reconciliation Made Easy 5

6
Problem Definition

The key issues company faces with the reconciliation of Oracle Project Costing with
Oracle General Ledger are:

Multiple reports are used for reconciliation with limited visibility of all type of costs in
Oracle Project Costing.

Non-availability of a standard report, which can provide visibility of the costs directly
booked in General Ledger therefore losing the visibility of Project details.

Non-availability of a standard report, which can provide the accounting information
of the Project costs directly booked in Oracle Project Costing when comparing it
with the costs booked in General Ledger.

Non-availability of a standard report , which could convert details of all the Project
costs in the accounting format for comparison and reconciliation purpose.

7
Oracle Project Costing Data Flow

iProcurement
Purchasing
Payables
Oracle Project
Costing
General Ledger
Inventory/OPM
Fixed Assets

8
Oracle Project Costing Accounting Flow
Payables
General
Ledger
Project
Costing
Project
Costing
Fixed Assets
General
Ledger
Cost flowing from Payables to Projects Cost flowing from Projects to Fixed Assets
Manual JE
in GL
Accounted
Transactions
in Projects
Entries in GL without project details
Accounted entries in Projects not
interfacing to GL

9
Existing Process for Project Costing Reconciliation
Reports available within EBS

AUD: Project Subledger: Detail by Expenditure Type(Oracle Project Costing)
AUD: Project Subledger: Detail by Project (Oracle Project Costing)
AUD: Project Subledger Summary (Oracle Project Costing)
Account Analysis report (Oracle General Ledger)

Steps for reconciliation

Execute AUD: Project Subledger report.
Execute Account Analysis report in General Ledger.
Download both reports and reconcile each accounting combination.
Case Study

11
Background

Client is a leading biopharmaceutical company from the Life Sciences
Industry.
Client was using out-of-the-box solution to track costs using Oracle
Project Costing.
o All cost centers related to R&D department uses Projects for tracking their
100% of the cost through Oracle Project Costing
Client was using following non-oracle systems :
o Time Entry system
o Payroll calculating and generating system
o Expense re-imbursement system
o Clinical trial payment system
Client was using Oracle Project Costing for tracking actual allocations
from different cost centers (performed in GL) and depreciation of the
fixed assets purchased for the departments.

12
Solution.Reporting Needs

Projects General Ledger
Project
Expenditure Type
Expenditure
Organization
Location
Amount
Projects Source
Natural Account
Cost Center
Location
Amount
General Ledger
Source

13
Solution.Reporting Needs

Created three layouts for providing reconciliation information:
Layout1 Summary layout to provide executive level summary at the cost
center level.
Created following detailed layouts to provide:
o Layout2 Detail information without Project Code for Accountants.
o Layout3 Detail information with Project Codes for Project Controllers and
Project Accountants.

14
Solution.Layout1

Summary Layout (Layout1) has following key features:
The report output fulfills the requirement of presenting all related costs for the
cost centers flowing to General Ledger from Project Costing.
The report output has two sections: Projects and General Ledger.
Each section provides summarized cost comparison between Project Costing
and General Ledger at the cost center level.
The summary layout is convenient for the users at the executive level.

15
Solution.Layout2
Detail Layout (Layout2) has following key features:
cost centers with additional details (e.g. Source, Expenditure Type, etc.)
The report output has two sections: Projects and General Ledger
The report compares the Expenditure Type in Projects with Accounts in GL.
The report compares the Expenditure Organization in Projects with Cost center
in GL.
The report compares the cost at the expense source level.

16
Solution.Layout3

Detail Layout (Layout3) has following key features:
cost centers by Project Number.
Project Number is shown in the report to further drilldown on Projects.
The layout helps in identifying the reconciliation differences at the Project Code
level.

17
Benefits

The custom reconciliation process helps to reduce time and effort during period
close.
This solution presents the information in user-friendly layout therefore allowing
for easy navigation.
Single source of truth review all costs and transactions related to Oracle
Project Costing and compare to General Ledger without running multiple
reports.
The reports can run at Cost Center, Natural Account, and Source level which
allows flexibility for data comparison.
Compares the information at the accounts level with the Project Code therefore
meeting needs for cross-functional users in the organization (Executive, Project
Manager, Project Controller and Accountants)
18
Questions

Contact Information:
Sachin Singh
Sr. Consultant, Deloitte Consulting LLP
sachsingh@deloitte.com
650-576-4826

As used in this presentation, Deloitte means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal
structure of Deloitte LLP and its subsidiaries


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