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Oracle Project Billing User Guide

Release 12.1
Part Number E13587-04
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Inter-Project Billing
This chapter covers the following topics:
Overview of Inter-Project Billing
Inter-Project Billing Project Relationships
Inter-Project Billing Process
Overview of Processing Flow for Inter-Project Billing
Adjusting Inter-Project Billing Invoices
Overview of Inter-Project Billing
Inter-project billing functionality in Oracle Projects handles inter-project billing project relationships and the billing
of inter-project transactions. These features are described in detail on the following pages.
The section covers the following topics:
Business Needs and Examples
Inter-Project Billing Project Relationships
Inter-Project Billing Process
Overview of Processing Flow for Inter-Project Billing
Adjusting Inter-Project Billing Invoices
Inter-project billing generates internal invoices for costs incurred between two projects. During project setup, you
define an inter-project billing relationship. This relationship enables you to invoice internally between the two
projects, also called provider and receiver projects. (See definition of terms.)
Once the work has been performed, the provider project generates an Oracle Receivables invoice for expenses
incurred. The receiver project receives this invoice as an Oracle Payables invoice during the AR invoice tieback
process. The invoice, like any supplier invoice, is interfaced to Oracle Projects as cost on the receiver project.
Note: To use inter-project billing you must implement multi-organization setup even if only one operating unit is
setup.
See also: Setting Up Inter-Project Billing: Oracle Projects Implementation Guide.
Business Needs and Examples
Enterprises face complex accounting and operational issues that result from complex work breakdown structures.
Multiple organizations or departments may work together on a project, yet the customer wishes to receive only one
bill. Parts of the work performed 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.
With inter-project billing, projects can be managed and controlled separately, and can bill both internally and
externally. Using this model to define your work structure provides flexibility in managing your projects and
consolidates costs for reporting purposes.
Consider the following examples:
Example 1:
Business Needs Example 1
During an auto accident, a telephone pole owned by the local telephone company is knocked down. A contract
project is set up to track the cost of the repair. These costs will be billed to an insurance company. While the repair
is under way, the telephone company decides to replace the old transformer at the top of the downed pole. These
costs will need to be capitalized and will be billed internally to a capital project. The contract project will bill the
insurance company for repair work performed on the pole, and, using inter-project billing, will bill a receiver project
for work performed on the transformer. The receiver project can exist at any organization level in the enterprise,
regardless of operating unit or ledger.
Example 2:
Company ABC is an advertising company with a multiple organization structure. The London operating unit, ABC's
headquarters, received a contract from a German customer. The customer wants ABC to produce and air live
shows in Paris, New York, and Tokyo to launch its new line of high-end women's apparel. ABC will plan and design
the show using resources from the London operating unit. The Paris, New York, and Tokyo operating units are
each responsible for the successful execution of these live shows with their local resources.
Using the structure shown above, the customer project is divided into several related contract projects. The London
operating unit owns the primary customer project, or receiver project, and bills the external customer. The related
projects, or provider projects, are subcontracted to their respective internal organizations and internally bill the
London organization to recover their project costs.
Related Topics
Inter-Project Billing Project Relationships
Inter-Project Billing Process
Inter-Project Billing Project Relationships
You use the inter-project billing feature to enable a primary (or receiver) project to delegate its tasks to related
subcontract (or provider) projects. The provider and receiver projects can be in the same or different operating
units and even in different business groups if you have enabled these roles in the provider and receiver operating
units and you have identified the operating units as valid providers and receivers for each other.
To establish the project relationship
1. Create a receiver project and identify the tasks that will be performed by other projects as receiver tasks.
2. Define one or more provider projects.
3. For each provider project, specify the receiver project and task to charge in the Project Customers window.
Prerequisite: You must select existing customers that are associated with a receiver operating unit on the
Implementation Options window (Internal Billing tab). See: Internal Billing Implementation Options, Oracle
Projects Implementation Guide.
Inter-Project Billing Process
To bill inter-project work and expenditures, you use processes and AutoAccounting functions similar to those used
for external customer billing with the following differences:
When you bill inter-project work, an additional Payables invoice is created in the receiver operating unit that is
charged to the receiver project and task based on the provider operating unit's Receivables invoice. The Payables
invoice is automatically generated when the provider operating unit runs PRC: Tieback Invoices from Receivables.
Oracle Projects generates inter-project invoices even when the provider and receiver projects are in the same
operating unit.
You must import the internal Payables invoices into Oracle Payables in the receiver operating unit. The Open
Interface Import process calculates recoverable and non-recoverable tax amounts. After you review and validate
the invoices in Oracle Payables, you run the process Create Accounting to create accounting for the accounting
events in Oracle Subledger Accounting. The invoice is treated like any other supplier invoice that is interfaced to
Oracle Projects as costs for the receiver project and tasks.
For inter-project billing, you use the same draft revenue and draft invoice processes that you use for external
customer billing. As a result, the provider project tracks unbilled receivable and unearned revenue amounts and
accounts for them accordingly. You can configure AutoAccounting, the Account Generator, and Oracle Subledger
Accounting (optional) to generate different accounts for inter-project billing and third-party receivables and
payables.
See also: Workflow: Project Supplier Invoice Account Generation, Oracle Projects Implementation Guide.
Overview of Processing Flow for Inter-Project Billing
The processing flow for inter-project billing as detailed in the following diagram is the same as for any contract
project, with the following exception: After you interface draft inter-project billing invoices to Oracle Receivables,
the tieback process copies them into the Payables system of the receiver operating unit.
Processing Flow
The inter-project billing processing flow consists of the following steps:
1. Enter transactions and distribute costs on your provider project.
2. Generate a draft inter-project invoice by running the Generate Draft Invoice process. See: Generate Draft
Invoices, Oracle Projects Fundamentals.
3. Approve and release the draft inter-project invoice.
Review, approve, and release the draft inter-project invoice using the standard functionality of Oracle Project
Billing.
4. Interface the draft inter-project invoice to Oracle Receivables.
5. Interface the draft inter-project invoice to Oracle Payables.
6. Run Open Interface Import in Payables.
7. Interface the draft inter-project invoice to Oracle Projects.
Entering Inter-Project Transactions
To record work performed by a provider resource, expenditures are entered in the provider project. The
expenditures are charged to the receiver project and tasks. The expenditure organization is the resource owning
organization. The expenditure type can be any type that is defined in the provider project. When the expenditure is
interfaced to the receiver project via a Payables invoice, the expenditure type and expenditure organization are
overridden by the Provider Controls defined in the receiver's operating unit.
Interface the draft inter-project invoice to Oracle Receivables
You submit a streamline process (choose the XI: Interface Draft Invoice to AR parameter) to execute the processes
Interface Invoices to Receivables, AutoInvoice, and Tieback Invoices from Receivables.
Inter-project invoices are interfaced to Oracle Receivables with the invoice batch source "PA Internal Invoices."
Inter-project invoices and intercompany invoices share this batch source. (See: Interface Intercompany Invoices to
Receivables, Oracle Projects Fundamentals) The streamline process executes AutoInvoice twice, once for inter-
project invoices and once for customer invoices. The tieback process automatically interfaces the inter-project
invoices to the receiver operating unit's payables.
You can also execute each of these processes separately. To generate invoices in Oracle Receivables for both inter-
project invoices and customer invoices, you must run AutoInvoice twice, identifying the appropriate batch source
each time.
Interface the draft inter-project invoice to Oracle Payables
When the provider operating unit runs the Tieback Invoices from Receivables process, the successfully interfaced
inter-project invoices are automatically interfaced to the interface table of the receiver operating unit's Oracle
Payables. Inter-project invoices interfaced to Oracle Payables have the following attributes:
Source. All inter-project invoices have the source "Inter-Project Invoices."
Supplier. The supplier is identified by the provider operating unit's internal billing implementation options.
Supplier Site. The supplier site is identified by the provider operating unit's internal receiver controls.
Invoice Amount. The Payables default invoice amount is the amount of the related Receivables invoice,
including taxes.
The interface process populates the following project-related attributes for inter-project Payables invoice
distributions as indicated below:
Project Number. The number of the receiver project is derived from the receiver task number linked to the
provider project customer.
Task Number. The number of the receiver task linked to the internal project customer.
Expenditure Item Date. The invoice date of the inter-project Receivables invoice.
Expenditure Type. The expenditure type specified by the receiver operating unit in the Internal Receiver
Controls tab.
Expenditure Organization. The expenditure organization specified by the receiver operating unit in the
Internal Receiver Controls tab.
In addition, the interface process matches the tax code from each invoice line of the Receivables invoice to the
appropriate Payables tax code and populates it in the Payables invoice distribution. This process indicates that the
Payables invoice distributions do not include tax amounts, so that the Payables Open Interface process creates the
tax lines for the entire invoice by grouping the tax lines based on the following attributes:
Tax code
Project information (project, task, expenditure item date, expenditure type, expenditure organization)
Note: Tax group support in Oracle Payables is provided only by the Canadian or other localizations.
The following table shows the expenditure attributes for an Inter-Project billing method:
Billing Method Work Breakdown Structure Expenditure Type Expenditure Organization Quantity
Inter-Project Project: Receiver
Task: Receiver
Receiver Controls Receiver Controls 1
Run Open Interface Import in Payables
The receiver operating unit runs the Payables Open Interface Import process to create inter-project Payables
invoices from the records in the interface table. Payables Invoice Import does the following:
Converts amounts from the transaction currency to the functional currency of the receiver operating unit
based on the default conversion attributes defined in the receiver operating unit's Payables system options.
(The Receivables invoice amounts are copied as the transaction currency amounts on the Payables invoice.)
You can customize the Payables Open Interface Workflow process to override the default currency
conversion attributes for the invoice and distribution amounts.
Derives the internal Payables account from supplier information. You can either associate supplier types for
internal suppliers with internal cost accounts or otherwise modify the Workflow-based account generation
process to determine the appropriate intercompany cost account.
Generates recoverable and non-recoverable tax lines (if you have specified a percentage for recoverable tax
amounts) based on the tax codes interfaced from Oracle Receivables.
Oracle Payables uses the rounding accounts specified in the Oracle Payables system options to account for
discrepancies due to rounding tax amounts.
Interface the draft inter-project invoice to Oracle Projects
You must interface the entire inter-project Payables invoice (and related tax lines) created by the Payables Invoice
Import process to the receiver operating unit's Oracle Projects system. To do this, run the process PRC: Interface
Supplier Costs, which identifies inter-project invoices as those invoices with an invoice source of Inter-Project
Invoice.
Adjusting Inter-Project Billing Invoices
All adjustments made in the provider project are subject to the standard billing processes and can result in the
creation of a credit memo. You must interface such credit memos to Oracle Receivables, and the tieback process
interfaces them to the receiver operating unit's Oracle Payables system as negative invoices.
The inter-project billing process creates transactions on the receiver project and tasks, which you can adjust in
Oracle Projects as you would any other transaction.
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