Collaborative SIG Presentation: Projects to Profit Fundamentals Becky Alvarez, Rysigo Technologies Corp. and Wendy Lamar, Rolta TUSC

Agenda About the Presenters Introduction Configuration Flow

Wendy Lamar Senior Management Consultant with Rolta TUSC Over 13 Years Experience Implementing and Supporting Oracle Applications OAUG Project SIG Development Liaison Duties Include Gathering Customer ERs and Facilitating Prioritization and Communicating Those to Oracle Product Strategy

Becky Alvarez – Director of E&C Practice WHAT WE DO Rysigo Technologies Corp. provides Collaborative Work Management software and services. STRATEGIC CONSULTING SERVICES SPECIALIST AREAS Business and Finance Transformation Management Consulting ERP, CRM and Analytics Reporting Applications Management Engineering and Construction Professional Services Energy and Utilities Hi Tech / IT Transportation Oracle EBS, CRM, Primavera, OBIEE Global Deployments, Shared Service Centers Global Program Offices™ Project Centric Organizations PRODUCTS Collaborative Proposal Management Collaborative Risk Management Risk Management for Oracle Projects 70 years of collective experience designing, building and implementing many of the Oracle Application is use today. becky.alvarez@rysigo.com

Where are we in the P2P Flow Introduction Where are we in the P2P Flow

Accounting to Financial Reports Where are we now in P2P? Quote to Cash People to Paycheck Start Procure to Pay Project to Close Design to Build Accounting to Financial Reports End

How to Set Up Projects for P2P Configuration How to Set Up Projects for P2P

Configuration Define Payables Options for Discounts Prorate Expense: Discount prorated across all distribution lines Prorate Tax: Percentage of discount prorated across all tax distribution lines System Account: Credits the total discount to the discount taken account defined in AP Financial Options Prorate Expense: Oracle Payables automatically prorates discount amounts across all invoice distribution lines. Oracle Payables credits discount amounts to the invoice distribution line accounts unless the invoice is matched to a purchase order with Accrue at Receipt enabled. In this case, Oracle Payables credits the discount amounts to the price variance account defined on the purchase order. For accrual basis accounting, Oracle Projects interfaces discount amounts for all project-related invoice distribution lines with the destination type Expense to Oracle Projects. For cash basis accounting, Oracle Projects interfaces the payment amount, minus the discount amount. • Prorate Tax: Oracle Payables automatically prorates a percentage of the discount amount across the tax distribution lines. Oracle Payables credits only the percentage of the discount amount equal to the percentage of the tax amount. Oracle Payables does not prorate amounts to expense account lines. Oracle Payables credits the remaining discount amount to the Discount Taken Account that you define in the Financial Options window. For accrual basis accounting, Oracle Projects interfaces discount amounts for project-related nonrecoverable tax invoice lines to Oracle Projects. For cash basis accounting, Oracle Projects interfaces the payment amount, minus the discount amount. • System Account: Oracle Payables credits the total discount to the Discount Taken Account that you define in the Financial Options window. Oracle Payables does not distribute amounts to invoice distribution lines. For accrual basis accounting, Oracle Projects does not interface discount amounts to Oracle Projects. For cash basis accounting, Oracle Projects interfaces two expenditure items. One expenditure item is for the payment amount minus the discount, and the other expenditure item is for the amount of the discount. Together, the two expenditure items total to the full amount of the cost. Note: You can interface discounts associated with project-related invoices to Oracle Projects before or after you interface the supplier invoice to Oracle Projects. PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance , page B- 39 Specify whether a you can adjust receipt, receipt nonrecoverable tax, and exchange rate variance expenditure items in Oracle Projects when exchange rate variance exists and you convert journals to another currency. For additional information, see: Restrictions to Supplier Cost Adjustments, Oracle Project Costing User Guide. • PA: Allow Override of PA Distributions in AP/PO, page B-15 Specify whether Oracle Purchasing and Oracle Payables pass user-entered account segment values to the Account Generator workflow. If you want to enable users to override generated accounts, then you must set this profile option to Yes and also set the Replace Existing Value attribute in the Account Generator workflow to False. The default value for the Replace Existing Value is False. • PA: Default Expenditure Item Date for Supplier Cost, page B-41 Specify the source for the expenditure item date. Oracle Projects uses this profile option when you run the process PRC: Interface Supplier Costs to determine the expenditure item date for Oracle Purchasing receipts, invoice payments, and discounts. In addition, Oracle Payables uses this profile option during the invoice match process, and when you enter unmatched invoices, to determine the default expenditure item date for supplier invoice distribution lines. • PA: Default Expenditure Organization in AP/PO, page B-35 Specify the default expenditure organization for project-related information in

Configuration Profile Options PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance PA: Allow Override of PA Distributions in AP/PO PA: Default Expenditure Item Date for Supplier Cost PA: Default Expenditure Organization in AP/PO PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance , page B-39 Specify whether a you can adjust receipt, receipt nonrecoverable tax, and exchange rate variance expenditure items in Oracle Projects when exchange rate variance exists and you convert journals to another currency. • PA: Allow Override of PA Distributions in AP/PO, page B-15 Specify whether Oracle Purchasing and Oracle Payables pass user-entered account segment values to the Account Generator workflow. If you want to enable users to override generated accounts, then you must set this profile option to Yes and also set the Replace Existing Value attribute in the Account Generator workflow to False. The default value for the Replace Existing Value is False.

Configuration Supplier Invoice and Project Related Purchasing Account Generators Default Supplier Cost Credit Account (PA System Options) Interface AP & PO DFF Profile Options PA: Transfer DFF with AP Expense Reports, Vendor Invoices PA: Transfer DFF with PO Receipt Accruals Prorate Expense: Oracle Payables automatically prorates discount amounts across all invoice distribution lines. Oracle Payables credits discount amounts to the invoice distribution line accounts unless the invoice is matched to a purchase order with Accrue at Receipt enabled. In this case, Oracle Payables credits the discount amounts to the price variance account defined on the purchase order. For accrual basis accounting, Oracle Projects interfaces discount amounts for all project-related invoice distribution lines with the destination type Expense to Oracle Projects. For cash basis accounting, Oracle Projects interfaces the payment amount, minus the discount amount. • Prorate Tax: Oracle Payables automatically prorates a percentage of the discount amount across the tax distribution lines. Oracle Payables credits only the percentage of the discount amount equal to the percentage of the tax amount. Oracle Payables does not prorate amounts to expense account lines. Oracle Payables credits the remaining discount amount to the Discount Taken Account that you define in the Financial Options window. For accrual basis accounting, Oracle Projects interfaces discount amounts for project-related nonrecoverable tax invoice lines to Oracle Projects. For cash basis accounting, Oracle Projects interfaces the payment amount, minus the discount amount. • System Account: Oracle Payables credits the total discount to the Discount Taken Account that you define in the Financial Options window. Oracle Payables does not distribute amounts to invoice distribution lines. For accrual basis accounting, Oracle Projects does not interface discount amounts to Oracle Projects. For cash basis accounting, Oracle Projects interfaces two expenditure items. One expenditure item is for the payment amount minus the discount, and the other expenditure item is for the amount of the discount. Together, the two expenditure items total to the full amount of the cost. Note: You can interface discounts associated with project-related invoices to Oracle Projects before or after you interface the supplier invoice to Oracle Projects. PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance , page B- 39 Specify whether a you can adjust receipt, receipt nonrecoverable tax, and exchange rate variance expenditure items in Oracle Projects when exchange rate variance exists and you convert journals to another currency. For additional information, see: Restrictions to Supplier Cost Adjustments, Oracle Project Costing User Guide. • PA: Allow Override of PA Distributions in AP/PO, page B-15 Specify whether Oracle Purchasing and Oracle Payables pass user-entered account segment values to the Account Generator workflow. If you want to enable users to override generated accounts, then you must set this profile option to Yes and also set the Replace Existing Value attribute in the Account Generator workflow to False. The default value for the Replace Existing Value is False. • PA: Default Expenditure Item Date for Supplier Cost, page B-41 Specify the source for the expenditure item date. Oracle Projects uses this profile option when you run the process PRC: Interface Supplier Costs to determine the expenditure item date for Oracle Purchasing receipts, invoice payments, and discounts. In addition, Oracle Payables uses this profile option during the invoice match process, and when you enter unmatched invoices, to determine the default expenditure item date for supplier invoice distribution lines. • PA: Default Expenditure Organization in AP/PO, page B-35 Specify the default expenditure organization for project-related information in

Configuration

Project Suite Considerations When running the process ‘PRC: Interface Supplier Costs’ ensure that the following parameters are set to Yes: Interface Supplier Invoices Interface Receipt Accruals Interface AP Discounts

Project Suite Considerations All modules have a Create Accounting process that interfaces journal entries to Subledger Accounting. The parameters control interface to GL and posting of GL journal entry. The Create Accounting process per module typically must complete successfully prior to interface of expenditure item to Project Transactions create journal entries in the source module – cost collects in Project module

How Contract/Billable Projects are updated by POs P2P Flow How Contract/Billable Projects are updated by POs

P2P Process Flow

Create Requisition and/or PO Requisition or PO Line is Entered Referencing: Project Task Expenditure Item and Expenditure Organization Account Generator Derives Default Charge Account, Accrued Liability (Inventory AP Accrual), and Variance Accounts

Create PO

Distribute to Project

Updates Committed Costs Before After

Receive Goods / Confirm Work Receive Goods / Confirm Work - Accrue on Receipt Interfaces Cost to Project @ PO Price Receiving Transaction Processor Create Accounting for Receiving DR Inventory or Expense Account OR CIP CR Accrued Liability PRC: Interface Supplier Cost Parameter ‘ Interface Receipt Accruals’ = YES

Receive Goods / Confirm Work

Match Vendor Invoice to PO Vendor Invoice Match to PO - Variances are Interfaced to Project (New Expenditure Item) Validate Vendor Invoice Create Accounting DR Accrued Liability CR Accounts Payable DR/CR Price Variance

Match to PO

Update Projects Before Supplier Invoice for Match against PO After $5,000 Supplier Invoice Entered and Interfaced to Projects. Period to Date and Inception to Date Costs increase by the invoice amount and the Commitment is reduced by the invoice amount.

Pay Vendor Invoice Pay Vendor Invoice - Discounts Taken are Interfaced to Project (New Expenditure Item) Create Accounting DR Accounts Payable DR Discounts Taken** CR Cash PRC: Interface Supplier Cost Parameter ‘Interface Payment Discounts’ = YES **Discounts Taken dependent upon AP configuration

How Capital Projects are updated by POs P2P Flow How Capital Projects are updated by POs

Capital Project to Assets Flow

Asset Charges – AP to PA AP Distribution Line Charges Project and Asset Clearing Account: Contract Project Payables Interfaces the Cost to Oracle Assets for Capitalization and GL Accounting Payables Interfaces the Cost to Oracle Projects for Cost Collection to the Project and Reporting; No GL Impact Capital Project Payables Interfaces the Cost to Oracle Projects for Capitalization, GL Account Generation, Project Cost Collection and Reporting. Journal Entry Sources are Payables and Assets.

Capital Project Create Capital Project Collect Costs against Project Add Asset Definition including Asset Attributes at Project or Task Collect Costs against Project Distribute all Costs, Generate Cost Accounting Events, Create Accounting BEFORE Generating Asset Lines Summarize your Project Data (Project Performance or Project Summary) BEFORE Generating Asset Lines

Project Asset Setup

Project Task Asset Line

Project Task Asset Setup

Capital Project When Ready to Place the Asset in Service, Update the Asset Assignment with an Actual In Service Date (Current Period) Run the PRC: Generate Asset Lines process to Create Summary Asset Lines Adjust Lines, Associate Unassigned Lines Auto Accounting Rules Determine Journal Entry DR Asset CR CIP

Update Asset Service

PRC: Generate Asset Lines Creates the Asset Line(s)

Capital Project Run the PRC: Interface Assets to Oracle Assets process In Oracle Assets Review and Post Mass Additions Monthly: Run Depreciation Creates Accounting Interfaces and Posts Journal Entry to GL

Interface Asset to FA

View Asset in FA after Additions

Contract Project Create Contract Project Collect Costs Include Customer and Billing Setup Collect Costs Distribute Costs Generate Cost Accounting Events Create Accounting

Customer Invoice Flow

Revenue Recognition Flow

Contract Project - Revenue Generate Draft Revenue based on Distribution Rule of Project Release Generate Revenue Accounting Events Create Accounting Transfers and Posts Journal Entry to GL DR UBR CR Revenue

Contract Project - Receivables Generate Draft Invoice based on Distribution Rule of Project Approve and Release The next three steps can be combined in PRC: Submit Interface Streamline (Option XI) PRC: Interface Invoices to Receivables Autoinvoice Import PRC: Tieback Invoices from Receivables

Q & A Wendy Lamar: lamarw@tusc.com Becky Alvarez: becky.alvarez@rysigo.com