Revenue Accrual and Invoice Generation Based on Percent Complete
Oracle Projects can generate revenue and invoices based on the percent complete that you enter for a project. You can enter the percent complete for all the levels in the work breakdown structure (WBS). However, to generate revenue or invoices based on percent complete, you must enter percent complete at the funding level (project or top task).
Each percent complete entry you make has an As Of Date, so that Oracle Projects can maintain percent complete history. When you use percent complete as the basis for revenue accrual or generation of draft invoices, Oracle Projects uses the As Of Date to determine the current percent complete.
Revenue accrual based on physical percent complete is different from percent complete based on our budget (Actual Cost / Budgeted Cost). The method based on budgets, is also sometimes referred to as Percent Spent or Cost-to-Cost Revenue Accrual. See: Cost-to-Cost (Percent Spent).
Revenue accrual based on physical percent complete is also different from revenue accrual on an as-work-occurs (or time and materials) basis, where the total potential revenue is the sum of the revenue of all expenditure items plus events. See: As Work Occurs (Time and Materials).
Oracle Projects performs the physical percent complete revenue calculation using the following predefined billing extensions:
- Percent Complete Invoicing
The revenue and invoice processes call the appropriate billing extension to calculate the revenue or invoice amount and to create an event.
See Also
Setup Requirements for Percent Complete Revenue and Invoicing
Processing Percent Complete Revenue and Invoicing
Processing Percent Complete Revenue and Invoicing
To accrue revenue or generate draft invoices based on percent complete, you submit the PRC: Generate Draft Revenue or PRC: Generate Draft Invoices process. To submit the process for one project, submit PRC: Generate Draft Revenue for a Single Project or PRC: Generate Draft Invoice for a Single Project. You can also submit a project streamline request.
The revenue or invoice process performs the following steps:
1. The process calls the billing extension for each project or top task (depending on whether the project is funded at the project or top task level). The calling procedure specifies whether it is a revenue or invoice calling process and whether the call is made at the project or task level.
2. The billing extension determines the budget amounts, event amount, existing revenue amounts, funding balance, and percent complete.
3. If the percent complete cannot be determined, then the percent complete used by the process is zero, the revenue or draft invoice amount is zero, and no event is created.
4. The process calculates the accrued revenue or draft invoice amount, using the formulas shown in Figure 1 - 37 and Figure 1 - 38.
5. The billing extension creates an event. The description of the event includes the event type and the formula that was used to calculate the revenue or draft invoice amount.
The event revenue or invoice is subtracted from budgeted revenue to obtain the net available budgeted revenue or invoice amounts. The process then effectively apportions the event revenue or invoice for the duration of the project.
Agreements with Hard Limits
If the agreement funding the project has a hard limit, the Remaining Funding Balance is the amount of funding left. This portion of the formula (part A) is required because revenue for an event cannot be partially accrued. If the amount calculated in part B of the formula is greater than the amount of funding, then the Remaining Funding Balance is taken as the accrued revenue or draft invoice. An event is still created in this case.
If the agreement has no hard limit, only part B of the formula is used.
See Also
Percent Complete
Events
Event Types
Billing Extensions
Automatic Events
Assigning Event Types
Entering Agreements
Generate Draft Invoices
Generate Draft Revenue
