Revenue Generation Process (Oracle Projects Help)


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Revenue Generation Process

When you generate revenue, Oracle Projects first selects projects, tasks, and their associated events and expenditure items that are eligible for revenue generation. Oracle Projects next calculates the potential revenue and then creates revenue events and expenditure items.

Selection Criteria

Projects: Oracle Projects first determines if a project is eligible for revenue accrual. To accrue revenue, a project must meet the following criteria:

Must have a status that allows revenue generation (for more information, see: Project Statuses)

Must be a contract project

Must have a baselined revenue budget

Within the specified range (if you specify a start and end project number, for mass generation only)

Must have expenditure items or events that are eligible for revenue accrual or transaction independent billing extensions that are assigned at the project type, project, or top task level

Expenditure Items: For each project selected, Oracle Projects then selects expenditure items that are eligible for revenue accrual based on the following criteria for items:

Approved

On a ready-to-accrue task

Billable and cost distributed

Not revenue distributed, partially distributed, or marked for revenue recalculation

Occurred on or before the accrue through date

If the project uses cost-to-cost revenue accrual, items must also:

Have project or task cost budgets that include burdened costs and revenue budgets that include revenue amounts

Note: Without these amounts, Oracle Projects cannot successfully generate revenue for your project.

Have a summarized cost distribution line which must be in a PA Period that ends on or before the accrue through date

If the revenue accrual is based on percent complete, you must have entered percent complete at the funding level.

Events: For each project selected, Oracle Projects then selects events that are eligible for revenue accrual based on the following criteria for events:

On a ready-to-accrue task

Are not revenue distributed

Have a completion date on or before the accrue through date

Revenue amount not equal to zero

Have an event type classification of Write-On, Write-Off, Manual, or Automatic

If the project uses cost-to-cost revenue accrual, events must also:

Have the event type matching the event type that you specified for the cost-to-cost billing extension.

Billing Extensions: For each project selected, Oracle Projects then selects expenditure items and events that are eligible for revenue accrual based on the criteria that you define in your billing extensions. If you define transaction independent billing extensions, Oracle Projects executes these extensions for each project with an active billing assignment, even if there are no transactions to process. See also: Billing Extensions.

Calculate Potential Revenue

Oracle Projects next calculates the total potential revenue that can be accrued for each project. Potential revenue is the full revenue amount that could be accrued if enough funding is available. Projects that use task level funding calculate the potential revenue for each task, while projects that are funded at the project level have a single potential revenue amount for the project.

Oracle Projects calculates the bill amounts for all expenditure items when calculating revenue, except for cost and event billing projects, which do not bill expenditure items.

As-Work-Occurs (Time and Materials)

For projects that use as-work-occurs (or time and materials) revenue accrual, the total potential revenue is simply the sum of the revenue of all expenditure items plus events.

For these projects, the revenue for each expenditure item is calculated by applying a bill rate or markup. The bill rate or markup for each item is determined by using a precedence of rates, as follows:

Bill Rate Precedence for Labor: If any of the following labor billing terms exist, Oracle Projects uses the bill rate override or markup:

Task or Project Employee Bill Rate Override

Task or Project Job Bill Rate Override

The job is determined in the following order:

Task Job Assignment Override

Project Job Assignment Override

Employee's Primary Job Assignment

Task or Project Labor Multiplier

Note: If both a task and project value exist, the task value takes precedence over the project value.

If none of the preceding billing terms exists, the Task Labor Schedule determines if the labor revenue is calculated with a Bill Rate or Burden Schedule.

When you create the Billing Schedules during setup, you specify if the schedule is based on employee or job criteria. Oracle Projects uses the bill rate or markup if the task labor bill rate schedule type is Employee, and uses the bill rate markup if the type is Job.

Oracle Projects determines the effective job for labor items from the task assignment override, then the project assignment override, and finally the primary job assignment. It then uses the job that was just determined along with the task job title override, project job title override, and primary job title, to determine the correct job billing title for each labor item

Oracle Projects determines the employee billing title for labor items from the task employee billing title override, the project employee billing title, and the primary employee billing title.

Bill Rate Precedence for Non-Labor: If any of the following non-labor billing terms exist, Oracle Projects uses the bill rate override or markup:

Task or Project Non-Labor Resource Bill Rate Override

Task Non-Labor Bill Rate Override

Task or Project Expenditure Type Bill Rate Schedule for Non-Labor Resource Override

Task Non-Labor Bill Rate Schedule for Expenditure Type

If none of the preceding billing terms exist, you will receive a generation error.

Items that have partially accrued revenue due to having previously reached a hard limit do not have their revenue and bill rates recalculated.

After all of the bill rates are assigned, Oracle Projects rejects those items for which no bill rate or markup is found, and creates distribution warnings.

Oracle Projects also calculates the bill amounts for each item for projects which accrue cost-to-cost revenue based on percent complete but bill on a time and material basis.

Cost-to-Cost (Percent Spent)

For projects using cost-to-cost revenue accrual method, Oracle Projects uses the following formula to calculate revenue to accrue for the revenue generation run:

Oracle Projects accrues the cost-to-cost revenue using an automatic event with an event type that you specified for the cost-to-cost billing extension. See: Billing Extensions.

Creating Event and Expenditure Item Draft Revenue

After Oracle Projects calculates potential revenue for expenditure items, it searches for agreements against which to accrue draft revenue, based on the project customer billing contributions and the amount of funding available. Oracle Projects first creates draft revenue for events, then for expenditure items.