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process.
Project: A project is a primary unit of work that can be broken down into one or more tasks.
Task: It is the small unit of work created under the project against which transaction can be created.
Note: we cannot create transaction/expenditure items directly on the project, hence it is
mandatory for each project to have at least one task.
Project Classes:
Oracle PA has provided three pre defined project classes.
Capital projects Track asset development activities and costs, and costs are
capitalized as one or more assets.
Project Type:
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.
Expenditure category: It is the category created to classify the different types of cost an
organization may incur.
Revenue category: It is the category created to classify the different types of revenue an
organization may earn.
Expenditure type:It is the identification of cost that is associated to an expenditure item.It is
assigned to the expenditure category and revenue category during the setups.
Expenditure class: It is the classification for an expenditure type as how the expenditure type
can be used to create transaction. When an expenditure type is classified for a certain type then only
those expenditure class transactions are allowed to enter.
In Oracle Project Costing we have predefined expenditure classes.
Labor:
Straight Time: For standard time entry. We use the cost rate multiple with number of hours.
Overtime: Labor cost calculated using a premium cost rate multiplied by hours.
Allocations
Interest charges
Burden Transaction Burden transactions track burden costs that are calculated in an external
system or calculated by Oracle Project Costing as separate, summarized transactions. These costs are
created as a separate expenditure item that has a burdened cost amount, but has a quantity and raw
cost value of zero. You can adjust burden transactions that are not system-generated.
Work In Process You use this expenditure type class for Oracle Project Manufacturing WIP
transactions that you interface from Manufacturing to Oracle Project Costing. You can also use this
expenditure type class when you import other manufacturing costs via Transaction Import or when
you enter transactions via pre-approved batch entry.
Inventory This expenditure type class is used for the following transactions:
Oracle Inventory Issues and Receipts that you import from Oracle Inventory in a
manufacturing or non-manufacturing installation.
Example:
Sr No
Expenditur
Revenue
Expenditure
e Category
category
type
Expenditure Class
Labor Time
Labor Revenue
Vendor
Service
Cost
Revenue
Standard_Time
Straight Time
Supplier_cost
Supplier Invoices
Expense Report & Supplier
Travel Cost
Travel Revenue
Travel Cost
Invoices
Misc_Transactio
4
Misc Cost
Misc Revenue
ns
In the above examples for line number 1, time can be entered for expenditure type
Standard_Time.
Similarly for line number 2 & 4 the respective expenditure class transactions can be
entered.
For line number 3 supplier invoices & expense reports can be entered as it has been
classified for two different classes.
Types of Currencies
Transaction amounts are stored in the following currencies:
Project Functional Currency: The functional currency of the operating unit that
owns the project.
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.
Task Type:
Non Billable Item: It is functionality associated at the task level identifying the
expenditure items created on the task is only to record the cost incurred against it.
Note: We can adjust the task at the expenditure item window to make the non billable
as billable and vice versa. This is called as expenditure item adjustments.
Employee/Job bill rate Override: Incase a different rate needs to be updated for a particular job or
employee the same can be updated at the project or task level.
The employee name needs to be entered along with the bill rate, currency and period applicable. The
rate at the task level overwrites the rates at the project level and the rates at the project level
overwrites the rate of the bill rate schedule attached at the project level.
Cost rate: It is the rate defined at the job or employee level to derive at the basic cost for a
particular expenditure item. The cost rate scheduled are defined in the OU functional currency.
The cost rate can be defined at two levels:
1.
2.
For employee override: Navigation: Project -> Options -> Bill Rates and
Discount Overrides -> Employee Bill Rate and Discount Overrides
For job override: Navigation: Project -> Options -> Bill Rates and Discount
Overrides -> Job Bill Rate and Discount Overrides
Transfer Price Rules and Schedule: Transfer price rules control the calculation of transfer
prices for labor and non-labor cross charged transactions. To drive transfer price calculation for
cross charge transactions between the provider and receiver, use the Transfer Price Schedule window
to assign labor or non-labor (or both) transfer price rules to the provider and receiver pair on a
schedule line
ICB: It is a process, where we have different legal entities involved, and the OUs under these LE
owns the employees and projects.
Borrowed And Lent: It is a process, where we have one legal entity involved, and the OUs under
the LE owns the employees and projects. The employee and project can be in the same OU or
different OU but the LE has to be same.
Note: No internal invoice is generated in B&L process, only accounting happens to post
cost.
Labor: When an employee enters time on a specific project it is known as charging efforts of the
employee on the project for a given time frame. This time further has some cost defined to calculate
the actual cost incurred by the employees on the project.
The calculation process of the raw cost for such labor/time entered is called as Labor Cost.
The time can be entered via a third party tool or via the PA pre approved batch.
Overtime Labor cost calculated using a premium cost rate multiplied by hours.
Non labor expenditure types: The expenditure items created via supplier invoices or
expense reports are called as non labor expenditure types. The expenditure types created need to be
added in the non labor expenditure schedules.
Navigation: PA -> Setups -> Expenditure -> Rate schedule.
Oracle Projects is very useful for any Project Based Organizations. In todays world i can say all he
organizations are based on Projects for ease of maintenance and tracking.
billing the customer. Not only that you can calculate revenue for the projects, which is very
important. In detail explanation will be in my future posts.
What is Project Foundation ? Project Foundation provides the basic infrastructure and components
for the Costing and Billing to work. So what it means ? For Costing and Billing to work we need basic
infrastructure /components like Projects, Tasks, WBS(Work Break Down Structure) etc, Cost Rate
Schedules, Bill Rate Schedules.These structures are created using Project Foundation APIs and
hence the name Foundation.
What is Project Management ?
Offcourse the name itself explains that it is to manage the projects. The functions involve Project
Tracking, Performance Tracking and other standard project management functions.
What is Project Resource Management ?
This is for manging the resources of the project. Functions involve assigning resources, moving
resources /deallocating resources, competency management , creation of vacancies, advertising the
vacancies, evaluating the skills of the resources etc.
For more info: see the Oracle Projects Fundamentals User guide.