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 Oracle® Fusion Applications Project Management Implementation Guide 11g Release 1 (11.1.2) Part Number E20384-02 Contents Previous Next

# 19 Project Foundation Configuration: Define Types and Categorizations

This chapter contains the following:

Manage Units of Measure

Manage Revenue Categories

Manage Expenditure Categories and Types

Manage Class Categories

Manage Work Types

Manage Project Statuses

## Manage Units of Measure

### Units of Measure, Unit of Measure Classes, and Base Units of Measure: How They Fit Together

Define units of measure, unit of measure classes, and base units of measure for tracking, moving, storing, and counting items.

The Quantity unit of measure class contains the units of measure Box of 8, Box of 4, and Each. The unit of measure Each is assigned as the base unit of measure.

### Unit of Measure Classes

Unit of measure classes represent groups of units of measure with similar characteristics such as area, weight, or volume.

### Units of Measure

Units of measure are used by a variety of functions and transactions to express the quantity of items. Each unit of measure you define must belong to a unit of measure class.

### Base Units of Measure

Each unit of measure class has a base unit of measure. The base unit of measure is used to perform conversions between units of measure in the class. For this reason, the base unit of measure should be representative of the other units of measure in the class, and should generally be one of the smaller units. For example, you could use CU (cubic feet) as the base unit of measure for a unit of measure class called Volume.

### Assigning Base Units of Measure to Unit of Measure Classes: Examples

Each unit of measure class must have a base unit of measure.

### Scenario

This table lists examples of unit of measure classes, the units of measure in each unit of measure class, and the unit of measure assigned as the base unit of measure for each unit of measure class. Note that each base unit of measure is the smallest unit of measure in its unit of measure class.

Unit of Measure Class

Units of Measure

Base Unit of Measure

Quantity

dozen

box

each

each

Weight

pound

kilogram

gram

gram

Time

hour

minute

second

second

Volume

cubic feet

cubic centimeters

cubic inches

cubic inches

### Defining Unit of Measure Standard Conversions: Examples

A unit of measure standard conversion specifies the conversion factor by which the unit of measure is equivalent to the base unit of measure.

### Scenario

This table lists examples of unit of measure classes, one unit of measure included in each class, the base unit of measure for the unit of measure class, and the conversion factor defined for the unit of measure.

Unit of Measure Class

Unit of Measure

Base Unit of Measure

Conversion Factor

Quantity

dozen

each

12

(1 dozen = 12 each)

Weight

pound

gram

454

(1 pound = 454 grams)

Time

minute

second

60

(1 minute = 60 seconds)

## What's a unit of measure standard conversion?

A unit of measure standard conversion defines the conversion factor by which the unit of measure is equivalent to the base unit of measure that you defined for the unit of measure class. Defining a unit of measure standard conversion allows you to perform transactions in units other than the primary unit of measure of the item being transacted. The standard unit of measure conversion is used for an item if an item-specific unit of measure conversion has not been defined.

## Manage Revenue Categories

### Revenue Categories: Examples

Your implementation team creates revenue categories to group expenditure types and event types for revenue recognition. A revenue category describes a source of your organization's revenue.

### Revenue Categories for Labor and Other Transactions

The following table illustrates possible revenue categories your implementation team can define for labor and other types of revenue.

Revenue Category Name

Description

Fee

Fee Earned

Labor

Labor Revenue

Other

Nonlabor Revenue

Payment

Payment

## What's a revenue category?

The source of revenue for an organization. Revenue categories group expenditure types and event types for revenue and invoices, and are also used to define accounting rules.

## Manage Expenditure Categories and Types

### Expenditure Classifications: Examples

Expenditures are divided into expenditure categories and revenue categories. Within these groups, expenditures are further classified by expenditure type classes, expenditure types, and nonlabor resources.

### Expenditure Classifications

This following graphic shows examples of expenditure classifications. Each expenditure type consists of an expenditure category, a unit of measure and one or more expenditure type classes.

Following are the expenditure categories, units of measure, and expenditure type classes for each expenditure type shown in the diagram.

• Expenditure Category: Labor

• Unit of Measure: Hours

• Expenditure Type Class: Straight Time

• Clerical

• Expenditure Category: Labor

• Unit of Measure: Hours

• Expenditure Type Classes: Straight Time and Overtime

• Consulting

• Expenditure Category: Outside Services

• Unit of Measure: Currency

• Expenditure Type Classes: Supplier Invoices, Expense Reports, and Usages

• Photo Processing

• Expenditure Category: Product Development

• Unit of Measure: Currency

• Expenditure Type Classes: Supplier Invoices and Expense Reports

### Expenditure Type Classes: Explained

An expenditure type class tells Oracle Fusion Projects how to process an expenditure item.

Oracle Fusion Projects predefines all expenditure type classes, which include the following:

• Straight Time

• Overtime

• Burden Transaction

• Expense Reports

• Inventory

• Miscellaneous Transaction

• Supplier Invoices

• Usages

• Work-in-Process

### Expenditure Type Classes for Labor Costs

Oracle Fusion Projects uses the following expenditure type classes to process labor costs.

• Straight Time: Labor costs calculated using a base cost rate multiplied by hours.

• Overtime: Labor costs calculated using a premium cost rate multiplied by hours.

### Expenditure Type Classes for Nonlabor Projects

Oracle Fusion Projects uses the following expenditure type classes to process nonlabor projects.

• Burden Transaction: Burden transactions track burden costs that are calculated in an external system or calculated by Oracle Fusion Projects as separate, summarized transactions. These costs are created as a separate expenditure item that has a burdened cost amount, and a quantity and raw cost value of zero.

You can adjust burden transactions that are not system-generated.

• Expense Reports: Expense reports imported from Oracle Fusion Payables or an external system.

Expense reports that you import into Oracle Fusion Projects must be fully accounted prior to import.

• Inventory: Inventory transactions imported from Oracle Fusion Inventory or an external system.

• Miscellaneous Transaction: Used to track miscellaneous project costs. Following are examples of miscellaneous transactions.

• Fixed assets depreciation

• Allocations

• Interest charges

• Supplier Invoices: Supplier invoices, discounts, and payments from Oracle Fusion Payables or an external system, and receipt accruals from Oracle Fusion Cost Management.

• Usages: You must specify the nonlabor resource for every usage item that you charge to a project.

For each expenditure type classified by a Usages expenditure type class, you also define nonlabor resources and organizations that own each nonlabor resource.

• Work-in-Process: Used when you import work-in-process transactions from third-party applications or Oracle Fusion Project Costing using Microsoft Excel or web services, or enter work-in-process transactions directly into Oracle Fusion Projects.

### Expenditure Type Class for Allocation Transactions: Points to Consider

When defining an allocation rule, you must specify the expenditure type class for the allocation transaction attributes. Choosing the expenditure type class determines how the allocated amount is created as costs on the expenditure item.

### Miscellaneous Transactions

The miscellaneous transaction expenditure type class is used to allocate the source amount as raw cost on the expenditure item.

### Burden Transactions

The burden transactions expenditure type class is used to allocate the source amount as the burden cost for the expenditure item, while expenditure item quantity and raw cost remain zero.

### Expenditure Types: Explained

An expenditure type is a classification of cost that you assign to each expenditure item that you enter in Oracle Fusion Projects. Create expenditure types for processing requirements, such as calculating raw costs, to classify costs, and to plan, budget, forecast, and report on projects.

Following are examples of other ways that you can use expenditure types:

• Assign an expenditure type to each burden cost code when capturing burden costs on separate, summarized expenditure items. The assigned expenditure type becomes the expenditure type for that type of burden cost.

• Specify default expenditure types for each resource class for different project units. The application uses the default expenditure type for planning purposes. For example, when determining the raw and burdened cost rates for a planning resource, if the resource format does not contain an expenditure type or nonlabor resource, then the application uses the default expenditure type for the resource class of the resource to determine the rates.

• Labor cost multipliers are used to calculate costs for overtime expenditure items. Associate a labor cost multiplier to an expenditure type with the Overtime expenditure type class. The costing process multiplies the standard labor cost rate by the multiplier and the hours to calculate the cost for overtime expenditure items.

• Assign an expenditure type with the Usages expenditure type class to each nonlabor resource to define nonlabor resources that are used to record usage transactions.

Expenditure types contain the following attributes.

• Expenditure and revenue categories

• Unit of measure

• Rate required

• Proceeds of sale

• Expenditure type classes

• Assigned sets

• Tax classification codes

Important

If you create and save an expenditure type, you cannot subsequently update the following attributes for the expenditure type.

• Expenditure and revenue categories

• Unit of measure

• Rate required option

Instead, you must enter an end date for the expenditure type and create a new one. The end date for an expenditure type has no effect on existing transactions. Oracle Fusion Projects uses the old expenditure type to report on and process existing transactions.

### Expenditure and Revenue Category

Expenditure categories group expenditure types for costing. Revenue categories group expenditure types for revenue and billing.

### Unit Of Measure

The expenditure type unit of measure is used as the default value on costing or planning transactions.

For inventory transactions, the primary unit of measure is from the inventory item, and not from the expenditure type on the transaction.

You must use Hours as the unit of measure for labor expenditure types.

### Rate Required Option

Enable the Rate Required option for an expenditure type that requires a cost rate.

Note

For supplier invoice expenditure types, if you specify that a rate is required, Oracle Fusion Projects requires you to enter a quantity in Oracle Fusion Payables for invoice distributions using that expenditure type. When you interface the invoice distribution to Oracle Fusion Projects, the application copies the quantity and amount to the expenditure item and calculates the rate. If you define a supplier invoice expenditure type with the Rate Required option disabled, then the quantity of the expenditure item is set to the amount you enter in Oracle Fusion Payables.

### Proceeds of Sale Option

Enable the Proceeds of Sale option for expenditure types that are used to track the proceeds of sale for a capital project.

### Expenditure Type Classes

Expenditure type classes specify how an expenditure item is processed. For example, if you assign the Straight Time expenditure type class to an expenditure type, Oracle Fusion Projects uses labor cost schedules to calculate the cost of an expenditure item with that expenditure type and expenditure type class.

You can assign multiple expenditure type classes to an expenditure type. For example, an expenditure with the expenditure type Materials can have the expenditure type class Supplier Invoice if it originated in Oracle Fusion Payables, and the expenditure type class Inventory if it originated in Oracle Fusion Inventory. This allows you to use a single expenditure type to classify as many costs as you need. You can use the same expenditure type for expenditures with different origins, and therefore different accounting, that should otherwise be grouped together for costing, budgeting, or summarization purposes.

### Assigned Sets

You must assign at least one project transaction type set to each expenditure type. You can add and delete set assignments for an expenditure type at any time, except that you cannot delete the last set assignment for an expenditure type.

### Tax Classification Codes

You can optionally select a default tax classification code to use for customer invoice lines for an expenditure type and business unit.

## Can I update or delete an expenditure category?

You can update expenditure category names and descriptions at any time. You cannot delete an expenditure category if it is used in transaction controls, expenditure types, resource transaction attributes, or cost distribution organization overrides. You can, however, stop usage of an expenditure category by setting an end date for it.

## Can I assign multiple expenditure type classes to an expenditure type?

Yes. For example, an expenditure with the expenditure type Materials can have the expenditure type class Supplier Invoice if it originated in Oracle Fusion Payables, and the expenditure type class Inventory if it originated in Oracle Fusion Inventory. This allows you to use a single expenditure type to classify as many costs as you need. You can use the same expenditure type for expenditures with different origins, and therefore different accounting, that should otherwise be grouped together for costing, budgeting, or summarization purposes.

## Can I distinguish cost of removal and proceeds of sale amounts when processing retirement costs?

Yes. When capturing retirement costs in a capital project, enter proceeds of sale amounts using expenditure types specifically created for that purpose. Oracle Fusion Projects automatically classifies amounts for all other expenditure types associated with the retirement cost task as cost of removal.

## Can I update or delete an expenditure type?

You can update expenditure type names, descriptions, and dates at any time. However, you cannot update the following attributes for the expenditure type: expenditure category, revenue category, unit of measure, rate required, and expenditure type class. To update these attributes, you must set an end date for the expenditure type and create a new expenditure type with a unique name.

You cannot delete an expenditure type and the associated expenditure type class. To stop usage of an expenditure type you can set an end date for it.

## What's an expenditure category?

Describes and groups organization costs. For example, an expenditure category named Labor refers to the cost of labor. An expenditure category named Supplier refers to the cost incurred on supplier invoices. You use expenditure categories for budgeting, transaction controls, when you define organization overrides, and in accounting rules and reporting.

## Manage Class Categories

### Setting Up Class Categories: Points to Consider

You define project classifications to group projects. Project classifications include a class category and a class code. The category is a broad subject within which you can classify projects, such as Industry Sector. The code is a specific value of the category, such as Construction, Banking, or Health Care.

You specify the following options when setting up project classifications.

• Assign to all projects

• Assign to all project types

• Available as accounting source

• One class code per project

• Enter class codes percent

• Class codes

• Project types

### Assign to All Projects

Enable this option if all projects must have a code assigned to this class category. Do not enable if this class category is optional.

### Assign to All Project Types

Enable this option if you want this class category to be required for projects of all project types.

### Available as Accounting Source

This option indicates if the class category is available as an accounting source so that Oracle Fusion Subledger Accounting can use the category to create mapping sets, account rules, journal line rules, and description rules.

Note

Only one class category at a time is available as an accounting source in Oracle Fusion Subledger Accounting. To change the class category that Oracle Fusion Subledger Accounting uses, inactivate the old class category and create a new one with a different date range.

### One Class Code Per Project

Specify whether you want to allow entry of only one class code with this class category for a project.

Note

Defining multiple class codes for one category for a project may affect reporting by class category. For example, defining multiple class codes may cause a code to be reported more than once.

### Enter Class Codes Percent and Total Percent Must Equal 100

Enable this option if you want to associate percentages with the class codes associated with this category. When you have multiple classification codes associated with a single class category, you can report the relative values of your projects in terms of sales or a similar metric. When you enable this option, the application requires class code percentages for the category regardless of the project type.

Enable the Total Percent Must Equal 100 option if you want the application to require that the sum of all class code percentages to be 100% for the selected class category. You can clear this option at any time.

### Class Codes

You can define class codes for the category to create more specific groups of projects for reporting. Assign each class code to a reference data set so that only codes that are relevant to the project unit are available for the project.

### Project Types

Associate project classifications with project types for the classification to be available for selection on projects with that project type. You can add classifications to a project type definition, and add project types to a class category definition.

Select the Assign to all projects option for a project type if you require all projects of the project type to be associated with the class category.

### Using Class Categories: Examples

Class categories and class codes enable you to classify projects. The following example illustrates how you can use project classifications.

### Scenario

InFusion Corporation designs and implements heavy engineering projects for government and private customers. Because InFusion Corporation maintains a diverse portfolio of contracts, the ability to track sector and funding is very important to corporate management.

Therefore, the organization classifies projects by market sector and funding source. The following table describes the two class categories used.

Class Category

Assign to All Projects

One Class Code per Project

Enter Percentage for Class Codes

Description

Market Sector

Yes

Yes

No

Market sector in which project work takes place.

A single class code must be provided on the project for the class category.

Funding Source

Yes

No

Yes

Source of funding for project.

At least one class code must be provided on the project for the class category. Percentages must be provided to indicate contribution for each source.

The following table describes the class codes available for the categories specified above.

Class Category

Class Code

Description

Funding Source

Private

Project funded by private organizations

Funding Source

Federal

Project funded by the federal government

Funding Source

State or Local

Project funded by a state or local government

Funding Source

Foreign

Project funded by a foreign government

Market Sector

Utilities

Project involves utility or power plant construction

Market Sector

Waste

Project involves waste disposal or recycling facility constructions

Market Sector

Mechanical

Project involves mechanical design and engineering work

Market Sector

Structural

Project involves structural design and engineering work

InFusion management can easily assess projects based on the above class categories and codes.

For example, assume you specify a class category Funding Source on your project. With this category, you select two class codes: Private and Federal. If you assign 30 percent to Private and 70 percent to Federal, then you indicate the proportion of funding received for your project from the two sources.

On the other hand, because you must select a single market sector, you indicate whether project work involves utilities, waste, mechanical, or structural activities.

## Manage Work Types

### Work Types for Billing: Explained

A work type represents a classification of work. You use work types to classify both actual and scheduled work. The billable status of a work type assigned to a scheduled assignment determines the default billable status of scheduled work.

In billing, you can use work types to classify work for the following purposes:

• To determine the default billable status of expenditure items.

• To classify cross-charge amounts into cost and revenue for cross-charge transactions.

### Billable Project Work

The default billable status of scheduled work is determined by the billable status of the work type assigned to the scheduled assignments. You can also control the billable status of actual work by the work type assigned to actual transactions. If you choose to do this, then you must change the work type on an actual transaction to change the billable status of the transaction. It is recommended that you do this in order to maintain consistency between processing of actual transactions for customer billing and reporting for billable utilization.

Tip

To use work types to determine whether an expenditure item is billable you must set the profile option Work Type Derived for Expenditure Item to Yes.

### Cross-Charge Work

Cross-charge work is project work performed by resources from one organization on a project belonging to another organization.

Typically the project-owning organization provides some compensation to the resource organization for this cross-charge work. The compensation can be in the form of sharing revenue with the resource organization or taking on the cost from the resource organization. This allows each organization to be measured on its performance independent of one another. You can classify the transfer price amount type of cross-charge work into cost or revenue based on the work type assigned to project work: scheduled or actual.

## What's a work type?

A classification of actual work. For example, a professional services enterprise may define work types such as Analysis, Design, and External Training. Use work types to determine the billability of expenditure items and to classify cross-charge amounts into cost and revenue.

When you create or import expenditure items, the default work type is inherited from the associated task. Tasks, in turn, inherit work type values from parent tasks and ultimately from the project. Project types determine the default work type value for projects and project templates.

## Manage Project Statuses

### Project Status Components: How They Work Together

Oracle Fusion Projects uses statuses for projects and progress.

• The Project status type controls which processes are allowed during each stage of a project.

Oracle Fusion Projects provides the following predefined project statuses.

• Unapproved

• Submitted

• Approved

• Rejected

• Pending close

• Closed

• The Progress status type specifies overall progress of a project, task, or resource. Progress statuses are used for reporting and do not control what you can do with a project.

Following are the predefined progress statuses:

• On track

• At risk

• In trouble

You can define additional project and progress statuses based on the available system statuses to meet your business needs.

### Status Attributes

Each status is associated with a status type and a system status. Optionally you can specify status attributes for initial project status and workflow.

• Status Type: Types are Project or Progress.

• System Status: Determines which actions are allowed for the project or progress status. Every status must map to a predefined system status.

• Initial Project Status: If this option is enabled for a project status, and if the project status belongs to a reference set that is associated with the project unit of the project, then the status is eligible for use as the starting status for the project.

Initial starting status does not apply to progress statuses.

• Workflow Attributes: Oracle Fusion Projects provides an approval workflow that allows you to separate project creation from project approval. If you enable workflow for a status, the approval workflow begins when a project changes to that status.

Project status approval workflow includes these attributes:

• Status After Change Accepted: The status that the application assigns to the project when a project status change is approved.

• Status After Change Rejected: The status that the application assigns to the project when a project status change is rejected.

The project status after workflow is rejected can be the same as the current status.

Workflow attributes do not apply to progress statuses.

### Assigned Sets

You assign project statuses to reference data sets so that only statuses that are relevant to the project unit are available for the project.

Important

Before you can select a status for a project, the status must belong to a reference data set that is associated with the project unit of the project.

### Status Controls

Status controls for a system status determine which actions are allowed for projects in a project status that is associated with the system status.

The following actions are controlled with status controls:

• Capitalize assets

• Capitalized interest

• Create burden transactions

• Create new transactions

• Summarize project data

By default, all actions are allowed for projects in an Approved system status.

Not all of the default status controls are editable. For example, if a project status is associated with the Closed system status, you cannot change the status controls to allow the creation of new transactions.

Status controls do not apply to progress statuses.

### Next Allowable Statuses

Next allowable statuses specify which statuses are permitted as the new status when a status is changed manually. You must define next allowable statuses for each project status.

Defining the next allowable statuses determines the project process flow. For example, you can specify that a project with a Requested status can have the status changed to either Approved or Rejected. This example shows two possible process flows for the project: Requested to Approved status, or Requested to Rejected status.

The following four options are available when you specify the next allowable statuses:

• All: The current status can change to any status. This is the default value.

• None: The current status cannot change.

• System Status: The next allowable statuses are based on system statuses. Specify which system statuses are next allowable statuses.

• Status Name: The next allowable statuses are based on project statuses. Specify which project statuses are next allowable statuses.

Next allowable statuses do not apply to progress statuses.

### Project Status Change Workflow: Explained

Oracle Fusion Projects provides a default Project Status Change workflow process. If you enable workflow for a project status, the approval workflow begins when a project changes to that status. The default workflow process routes a request for approval of the project status change to the project manager. You can use client extensions to modify the default workflow process to accommodate the needs of your business.

The following diagram shows the process of changing a project status.

### Project Status Change Workflow Settings

During implementation, you specify the project statuses that require approval before a project changes to that status.

For each project status with workflow enabled, you can also specify the following parameters:

• The status that the application assigns to the project when a project status change is accepted.

• The status that the application assigns to the project when a project status change is rejected.

For example, assume that during implementation, you enable workflow for the Submitted status, and configure the following workflow attributes:

• In the Status After Change Accepted field for the Submitted project status, you specify the Approved status as the status that the application assigns to the project when the status change is accepted.

• In the Status After Change Rejected field for the Submitted project status, you specify the Rejected status as the status that the application assigns to the project when the status change is rejected.

In this example, when a requester changes the project status to Submitted, the workflow process routes the status change request to the project manager's worklist. If the project manager accepts the status change, the workflow process assigns the Approved status to the project. If the project manager rejects the status change, the workflow process assigns the Rejected status to the project.

Workflow attributes do not apply to progress statuses.

The following diagram shows an example project status flow when Project Status Change workflow is used for status changes during the lifecycle of a project. In this example, a requester changes the project status to Submitted. A workflow notification is sent to the project manager, who accepts the status change. Workflow is configured to change the project status to Approved after a request to change the status to Submitted is accepted. After project completion, the requester changes the project status to Pending Close. A workflow notification is sent to the project manager, who accepts the status change. Workflow is configured to change the project status to Close after a request to change the status to Pending Close is accepted.

### Project Status Change Workflow Extensions

You can extend the functionality of Project Status Change workflow by using the following client extensions:

• Project Status Change Approver Extension: Overrides the project status change approver.

Use this client extension to specifying a status change approver other than the project manager. By default, the project status change approver is the active project manager.

• Project Status Change Workflow Enabled Extension: Determines whether to call the workflow process when the project status changes.

Use this extension to add and modify the conditions that enable workflow for project status changes.

• Project Status Change Rules Extension: Specifies the conditions that must be satisfied before a project status can change.

Use this extension to build additional rules for changing a project status. For example, you can enforce a rule that certain class categories and class codes must be assigned to a project before you can change the project to an Approved status.