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Accounting for Revenue and Invoices

You need to implement each Revenue and Invoice Accounts transaction to allow AutoAccounting to determine the appropriate asset, liability, and expense accounts. Consequently, this section is organized by transaction.

Revenue and Invoice Accounts Function

When you run the PRC: Interface Revenue to General Ledger process and then the PRC: Interface Invoices to Receivables process, Oracle Projects uses the Revenue and Invoice Accounts function to determine which accounts to use when it interfaces draft revenue and draft invoices.

The Revenue and Invoice Accounts function consists of the following transactions:

Fremont Corporation assigns draft revenue and invoices to the project-managing organization when it interfaces revenue or invoices. Since each organization at Fremont has four separate accounts for unbilled receivables, accounts receivable, unearned revenue, and write-offs, implementing each Revenue and Invoice Accounts transaction is straightforward.

Unbilled Receivable Account transaction

When you run the PRC: Interface Revenue to General Ledger process, Oracle Projects may debit an asset account (usually an unbilled receivables account). This transaction balances the various revenue accounts that Oracle Projects credits when you run the PRC: Generate Draft Revenue process.

Fremont corporation uses one asset account to record unbilled receivables:
· Unbilled Receivables (1101)
To implement the Unbilled Receivables transaction, Fremont defines a rule to supply the Unbilled Receivables account code for the Account segment of its Accounting Flexfield.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Rule to Determine Account Segment Value:
Name Unbilled Receivables
Description Unbilled receivables asset account
Intermediate Value Source Constant
Constant 1101
Segment Value Source Intermediate Value
Enable the Unbilled Receivables Transaction and Assign Rules:
Function Name: Revenue and Invoice Accounts
Transaction Name: Unbilled Receivable Account
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Unbilled Receivables

Accounts Receivable transaction

When you run the PRC: Interface Invoices to Receivables process, Oracle Projects may debit an asset account (usually an accounts receivable account). This transaction is balanced by a credit to the unbilled receivables asset account or the unearned revenue liability account, based on the revenue and invoice balances of the project.

Fremont Corporation uses one asset account to record accounts receivable:
· Accounts Receivable (1100)
To implement the Accounts Receivable transaction, Fremont defines a rule to supply the Accounts Receivable account code for the Account segment of its Accounting Flexfield.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Rule to Determine Account Segment Value:
Name Accounts Receivable
Description Accounts receivable asset account
Intermediate Value Source Constant
Constant 1100
Segment Value Source Intermediate Value
Enable the Accounts Receivable Transaction and Assign Rules:
Function Name: Revenue and Invoice Accounts
Transaction Name: Accounts Receivable
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Accounts Receivable

Unearned Revenue Account transaction

When you bill a client for an invoice amount that is greater than the revenue accrued for the project, Oracle Projects uses the Unearned Revenue Account transaction.

When you run the PRC: Interface Invoices to Receivables process, Oracle Projects may credit a liability account (usually an unearned revenue account). This transaction balances the receivables asset account that Oracle Projects credits.

Fremont Corporation uses one liability account to record unearned revenue:
· Unearned Revenue (2100)
To implement the Unearned Revenue transaction, Fremont defines a rule to supply the Unearned Revenue account code for the Account segment of its Accounting Flexfield.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Rule to Determine Account Segment Value:
Name Unearned Revenue
Description Unearned revenue liability account
Intermediate Value Source Constant
Constant 2100
Segment Value Source Intermediate Value
Enable the Unearned Revenue Transaction and Assign Rules:
Function Name: Revenue and Invoice Accounts
Transaction Name: Unearned Revenue Account
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Unearned Revenue

Invoice Write-Off Account transaction

When you write-off an uncollectible invoice, Oracle Projects uses the Invoice Write-Off Account transaction.

When you run the PRC: Interface Invoices to Receivables process, Oracle Projects may debit an expense account (usually a write-off account) and credits an asset account (usually an accounts receivable account).

Fremont Corporation uses one expense account to record invoice write-offs:
· Write-Offs (5500)
To implement the Write-Off transaction, Fremont uses an existing rule to supply the Write-Offs account code for the Account segment of its Accounting Flexfield.
Fremont also uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Enable the Write-Off Transaction and Assign Rules:
Function Name: Revenue and Invoice Accounts
Transaction Name: Invoice Write-Off Account
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Write-Off

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