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Intercompany Setups and Sample Transaction Processing using Oracle Projects

Client Industry - Professional Services Firm implementing Oracle Project Accounting which has Global Operations.

Business Case - Canadian employee travels to US to work on a US project. Canadian employee needs to bill time and expenses for the US Project and the US Project Manager has to pay the Canadian office for the Canadian employees work on the US project.

Setups to support Intercompany Billing:
The setup steps are divided into the following phases:

Global Setup:

  • Define transfer price rules
  • Define transfer price schedules
  • Define additional expenditure types, agreement types, billing cycles, invoice formats, and supplier types
  • Define an internal supplier
  • Define an internal customer

Operating Unit Setup:

  • Define supplier sites for the internal supplier (receiver)
  • Define bill to and ship to sites for the internal customer (provider)
  • Define internal billing implementation options (each operating unit)
  • Define internal tax codes for Receivables invoices (provider)
  • Define internal tax codes for Payables invoices (receiver)
  • Define an agreement for intercompany billing projects
  • Dene a Project Type for Intercompany Billing Projects
  • Dene Project Templates for Intercompany Billing Projects
  • Dene Intercompany Billing Projects (receiver)
  • Dene Provider and Receiver Controls
  • Dene AutoAccounting for Intercompany Billing Transactions

Steps to process Intercompany Transactions for Contract Projects (Canada = Provider OU, US = Receiver OU):

1. Receiver OU - Create/ Approve Contract. Enter "Employee Bill Rate and Discount Overrides" at the Project/ Task Level for Provider Employee’s
2. Provider OU - Employee enters time against Receiver OU Project
3. Provide OU - Time Card is approved
4. Provider OU - Employee enters & submits expenses against Receiver OU Project
5. Provider OU - Expense is approved are processed in AP
6. Provider OU - Run Transaction Import (Timecards), Interface Expense Reports to PA, Distribute Labor Costs
7. Receiver OU - Generate Draft Revenue
8. Provider OU - Review Proj Func Burdened, Labor, Expense Report Cost/ Accounts
9. Receiver OU - Verify Labor Revenue A/C, Expense Revenue A/C
10. Receiver OU - Run Project WIP Report (on demand), Project Manager reviews WIP Report and Attests Revenue
11. Receiver OU - Generate Draft Invoice, Approve & Release Draft Invoice
12. Receiver OU - Interface to AR, Review BPA Invoice, Run BPA Master Print Program to print invoice, Mail Invoice to Customer
13. Provide OU – Generate, Approve and Release Intercompany Invoice
14. Provide OU – Interface Intercompany Invoice to Receivables
15. Provide OU - Verify Intercompany Receivables / Revenue Account, Invoice Tax Account
16. Receiver OU – Run Payables Intercompany Invoices Interface Import, AP Post , Payables Transfer to GL, Validate Accounts