White Paper

Oracle Projects To Oracle Accounts

Receivable

Process of Oracle Billing

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Business Need:
Oracle Projects fully integrates with Oracle Receivables to process your invoices and track customer
payments. Oracle Projects generates draft invoices and uses Oracle Receivables features to create
invoices and interface the accounting transactions to Oracle General Ledger.
Oracle Project Billing helps improve cash flow and project profitability by streamlining and managing
your billing processes. You can easily review and manage invoices, revenue, and funding for all of
your projects. Oracle Project Billing is an integrated part of Oracle Projects, a suite of solutions that
helps companies to predictably and successfully deliver global projects by integrating, managing and
providing insight into enterprise project information. Oracle Projects is part of the Oracle E-Business
Suite, an integrated set of applications that are engineered to work together.
Data predefined by Oracle Projects:
Oracle Projects predefines most of the information that Auto Invoice needs to create your customer
invoices in Oracle Receivables, such as an invoice batch source, transaction types for your invoices
and credit memos, as well as other information.

1. Invoice Batch Source

Oracle Projects creates the source of an invoice that you interface to Oracle Receivables. An invoice
batch source also determines how Auto Invoice processes an invoice.
The batch source controls your invoice batch numbering sequence, supplies transactions with a
default transaction type and grouping rule, and indicates which calculation and validation options
you want Auto Invoice to use. All Oracle Projects transactions use the same Oracle Receivables batch
source. Oracle Projects predefines a batch source of PROJECTS INVOICES.

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2. Invoice Transaction Types
Oracle Projects creates standard invoices with an invoice transaction type. An invoice credit memo
transaction type reduces the amount outstanding on the original invoice by the amount of the credit
and reverses the appropriate general ledger transactions.
Oracle Projects predefines two invoice transaction types for the processing of invoices:
• Projects Invoice – creates an open receivable, posts to the general ledger, and is printed.
• Projects Credit Memo – corresponds to the invoice transaction type for processing credit
memos and write offs; creates an open receivable, posts to the general ledger, and is not
printed by default.
You use the Oracle Receivables Transaction Types form to define additional transaction types.

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3. Line Ordering Rules
Line ordering rules tell Auto Invoice how to order Oracle Projects invoice lines on an invoice. Oracle
Projects predefines an invoice line ordering rule named Projects Line Order that uses the following
attributes:
• Project Manager
• Line Number
• Line Type (Standard or Tax)
4. Line Grouping Rules
Line grouping rules tell Auto Invoice how to group Oracle Projects invoice lines into an invoice. Each
grouping rule is associated to the batch source that you use for your invoicing.
Oracle Projects predefines a grouping rule named Projects Grouping Rule that uses the following
attributes:
• Project Number
• Draft Invoice Number
• Agreement Number
• Project Organization
5. Credit Memo Reason Quick Codes
Oracle Projects predefines two Quick Codes to process credit memos and write offs. Oracle
Receivables predefines the Credit Memo Reason Quick Code Type under which Oracle Projects
predefines two credit memo reason Quick Codes:
• Projects Write Off
• Projects Credit Memo

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Implementation of Oracle Receivables for use with Oracle Projects:
Oracle Projects interfaces with Oracle Receivables to process your invoices and track customer
payments.
Your implementation of Oracle Receivables for use with Oracle Projects involves the following areas:
1. Specifying system options
2. Defining transaction types for invoice processing
3. Updating profile options for integration with other products
4. Defining Automatic Accounting in Oracle Receivables
5. Defining Salespersons and Credit Types
6. Customers and Contacts
Oracle Projects predefines all of the information required for the Oracle Receivables Auto Invoice
program to process Oracle Projects invoices.
1. Specifying Oracle Receivables System Options
Your first step in implementing Oracle Receivables involves specifying system parameters that
pertain to Oracle Projects.
Purge Interface Tables Option
You need to tell Oracle Receivables Auto Invoice to purge rows from its interface tables. When you
tie back invoices, Oracle Projects’ processing requires that successfully processed rows are purged
from Oracle Receivable’s interface tables. You must enable the Purge Interface Tables option for
Oracle Projects to correctly interface and tie back invoices to Oracle Receivables. This option is
located in the Auto Invoice zone of the Invoices and Customers alternate region.

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Require Sales rep Option
If you are not interfacing sales rep credit information to Oracle Receivables from Oracle Projects, you
must disable the Require Sales rep option. If you are interfacing sales rep information, enable the
Require Sales rep option. This option is located in the miscellaneous alternate region.

2. Defining transaction types for invoice processing

Oracle Projects generates draft invoices and uses Oracle Receivables features to post them to Oracle
General Ledger, and maintain and track customer payments on them. Oracle Receivables uses
transaction types to determine whether the transaction generates an open receivable balance and
whether it posts to Oracle General Ledger.
Oracle Projects predefines two transaction types to process your invoices in Oracle Receivables:
• An invoice transaction type (Projects Invoice)
• An invoice credit memo transaction type (Projects Credit Memo)
Verify that the predefined PROJECTS INVOICES Batch Source values are correct.
Before you make changes to the transaction types for invoicing, verify that the predefined PROJECTS
INVOICES Batch Source is accurate. You should see the following values:

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 Name: PROJECTS INVOICES

Description: Project Accounting Invoices

Type: Imported

Active: Yes

Automatic Batch Numbering: No

Automatic Invoice Numbering: No

Standard Transaction Type: Projects Invoice

Credit Memo Batch Source: NULL

3. Updating Profile Options for Integration With Other Products

Receivables Only
• PA: Receivables Invoice Line UOM
• AR: Tax: Allow Ad Hoc Tax Changes
• AR: Tax: Allow Override of Customer Exemptions
• AR: Tax: Allow Override of Tax Code
• AR: Use Invoice Accounting For Credit Memos
• AR: Transaction Flex field Quick Pick Attribute
General Ledger
• GL: Set of Books Name
4. Defining Automatic Accounting in Oracle Receivables
Because the Automatic Accounting feature in Oracle Receivables is different from the Auto
Accounting feature in Oracle Projects, you need to define Automatic Accounting for both Oracle
Receivables and Oracle Projects.
The Oracle Receivables Automatic Accounting feature determines default general ledger accounts
for your invoice transactions. You need to implement Oracle Receivables Auto Accounting before
you can run the Oracle Receivables Auto Invoice feature.
However, Oracle Projects invoices do not use the Auto Accounting transactions created by Oracle
Receivables. The accounting transactions determined by the Auto Accounting feature in Oracle
Projects are passed to the Auto Invoice interface tables and are used by Auto Invoice when creating
invoices in Oracle Receivables. The only Auto Accounting codes in Oracle Receivables that are used
for Oracle Projects invoices are those for tax.
5. Sales reps and Credit Types
You can interface sales credit information for project invoices to Oracle Receivables for sales
commission reporting. If you choose to not interface sales credit information to Oracle Receivables,
you can use credit receiver information in Oracle Projects for reporting purposes.

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Transferring Sales Credit to Oracle Receivables
If you want to interface sales credit information to Oracle Receivables, during your implementation
of Oracle Receivables for Oracle Projects, you enable the Require Sales rep option in the System
Options window. This section continues your implementation of sales credit receivers.
You can interface sales credit information to Oracle Receivables for project invoices. Sales credit
information is based on credit receivers you enter in Oracle Projects. If you interface sales credits to
Oracle Receivables, the credit receiver must be a sales rep in Oracle Receivables and the credit type
must be a sales credit type in Oracle Receivables.
You enter credit receivers at the project level using the Credit Receivers window located under the
Billing Information option. You interface the information to Oracle Receivables by enabling the
Transfer to AR option.
Define Sales Credit Types
You use the Oracle Order Entry Sales Credit Types window to define the type of credit you want to
allocate to sales reps in Oracle Receivables for project invoices. You can use sales credit types to
determine if sales credit is a quota or a non-quota amount.
Define Sales reps
When you interface Oracle Projects invoices to Oracle Receivables, Oracle Projects assigns a primary
sales rep to the invoice and interfaces sales credit lines for the invoice based on the project's credit
receivers.
Oracle Projects assigns the project manager on the project as the primary sales rep as long as the
project manager is defined as a sales rep in Oracle Receivables.
Set the Allow Sales Credits option
If you want to send sales rep information to Oracle Receivables, you need to enable the Allow Sales
Credits option in the Invoice Sources window for the predefined batch source of PROJECTS
INVOICES. When you set this option to Yes, Oracle Receivables ensures that sales credit lines are
assigned valid credit types as defined in Oracle Order Entry and have valid sales reps as defined in
Oracle Receivables.
6. Customers and Contacts
You can specify the revenue and billing contribution of a paying customer for project work, define
the relationship of a customer to this project, and enter other information about this project's
customer. The customer you choose must be an active customer in the Oracle Receivables database.
You must enter at least one customer on a contract project to fund the project and accrue revenue
and invoice the customer. The contribution percentage must sum to 100%.
Customers and Contacts Window
You can enter the following customer information at the project level only:
Project Customers
Name/Number – You can choose any active customer in the Oracle Receivables customer database.
Relationship – The relationship between this customer and your project, such as Primary, or Non-
Paying.
Contribution – The percentage of this project's revenue and billing you expect this customer to
contribute. If you enter more than one customer for this project, the total customer contributions

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towards revenue and billing must sum to 100% before you can accrue revenue or bill invoices
against this project.
Bill Site – An address where you want to send this customer's invoices. You can choose any active
billing address defined for this customer in the Oracle Receivables database. You need to enter a bill
site for any customer whose contribution is greater than zero percent.
Work Site – An address where work will be performed for this project. You can choose any active
ship-to-address defined for this customer in the Oracle Receivables database. You need to enter a
work site for any customer having a billing contribution greater than zero percent.
Contacts
Type – A contact type, such as Billing or Shipping to identify a contact. You need to enter a billing
contact for each paying customer on a contract project. You can enter only one billing contact for
each customer associated with this project. The billing contact in Oracle Projects becomes the billing
contact for contract projects' invoices interfaced to Oracle Receivables.
Name – You can choose any active contact name defined for this customer in the Oracle Receivables
database.
Job Title – The job title of the contact.

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Process Flow of Projects to Receivables:
The process flow of Projects to Receivables involves the following steps:

1. Creation Of Draft Invoices

2. Release of Invoices
3. Interface Invoices to Oracle Receivable
4. Auto Invoice
5. Tie Back of Invoices from Oracle Receivable

1. Creation Of Draft Invoices

This process creates invoices from expenditure items and events. In addition to regular invoice
generation, this process deletes unreleased draft invoices, and creates invoice write-offs, credit
memos, and invoice cancellations.
To submit the process for all projects, submit the PRC: Generate Draft Invoices for a Range of
Projects process from the Submit Request window.
To submit the process for one project, submit the PRC: Generate Draft Invoices for a Single Project
process from the Submit Request window.

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2. Release of Invoices
After you approve invoices, you need to release them for interface to Oracle Receivables.
There are two ways to release invoices:
• Manual invoice release
• Automatic invoice release
3. Interface Invoices to Oracle Receivables
This process collects all eligible draft invoices in Oracle Projects and interfaces them to the Oracle
Receivables interface tables. The process also maintains the project balances of unbilled receivable
and unearned revenue and creates accounting transactions for these amounts.
Once interfaced to these interface tables, the draft invoices await further processing by Oracle
Receivables’ Auto Invoice process. If any of the draft invoices are rejected during the interface to
Oracle Receivables, then the interface status for these invoices is set to Rejected in Interface. Those
draft invoices that successfully interface have the transfer status Interfaced.
From the Submit Request window, you can submit the PRC: Interface Invoices to Receivables process
This Process Inserts Invoice details in Receivable Interface Tables.

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4. Auto Invoice
Run the Auto Invoice Import or Master program to transfer transactions from other systems into
Receivables. You can import invoices, credit memos, debit memos, and on-account credits using
Auto Invoice. Receivables ensure that the data you import is accurate and valid.
The Submit Requests window lets you process important transactions and leave other transactions
for later processing. You can use this window to run several Auto Invoice submissions at the same
time.

5. Tieback Invoices from Oracle Receivables

This process determines the status of draft invoices interfaced to Oracle Receivables. If invoices are
successfully processed through Oracle Receivables Auto Invoice process, this tieback process
updates the invoice interface status to Accepted. If Oracle Receivables Auto Invoice process rejects
draft invoices, the tieback process deletes all rejected rows from the interface tables and updates
the invoice status to Rejected. Rejected invoices are corrected and re-transferred.
From the Submit Request window, you can submit the PRC: Tieback Invoices from Account
Receivables process.

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Accounting of Transactions:
When you interface invoices to Oracle Receivables, Oracle Projects uses Auto Accounting to
determine the accounts for receivables, unbilled receivables, unearned revenue, and write off
account for each invoice. The accounting transactions that the process creates are interfaced to
Oracle Receivables interface tables. Oracle Projects does not use Oracle Receivables Auto
Accounting to determine account coding except for tax transactions for taxable invoice lines. If an
invoice line is taxable, Oracle Receivables Auto Accounting determines the tax account coding.
Accounting Entries
There are two events in Oracle Billing
• Billing Event – Invoicing in Oracle Projects
• Revenue Event – Revenue Generation
Accounting Entries depend upon which event occurs first.
If Billing Event occurs first:
Invoice Creation

Receivables Account ----- DR

Unearned Revenue Account CR
When Revenue is generated
Unearned Revenue Account ---- DR
Revenue Account CR
If Revenue Event occurs first:
When Revenue is generated
Unbilled Receivable Account ---- DR
Revenue Account CR
Invoice Creation

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Receivable Account ---- DR
Unbilled Receivable Account CR
Conclusion:
Thus entire cycle of Integration of Oracle Projects and Receivable cycle flows and ultimately results
in creation of Invoice in Receivables as well as updating customer balances.

And also updating Unbilled Receivable and Unearned Revenue Accounts against each project in the
Oracle Projects.

About the Author:

Janhavi Gupte

Janhavi is an Oracle Finance Consultant with total experience of 11 years.

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