The Activity Labor Cost Capitalization feature allows you to add Labor Expense Type (LET) attributes to project activities. These LETs are mapped to finance expense categories like (Capital Expense or Operational Expense). Activity labor cost is properly rolled up into finance under appropriate expense category based on its LET.
Important!
Follow the configuration steps carefully to ensure proper labor cost roll-up from activities to finance. Please contact Oracle Customer Support if you have any questions.
Set up the Finance Template to include all the sub-categories like standard effort, overtime effort, timesheet effort and timesheet overtime effort even if you are not currently using these categories. Labor cost data may not roll-up properly if the template is not set up as per the recommendations.
To setup and configure Activity Labor Cost Capitalization:
- Modify the Finance Template.
- Ensure that the Finance Template has a separate category for Capital Expense and Operational Expense.
- The Capital parent category should include a sub-category Resource Capital Expense of type Capital Expense-Resource Activity based Finance Category. It should include all standard effort, overtime effort, timesheet effort and timesheet overtime effort.
- The Expense parent category should include a Resource Operation Expense sub-category of type Operational Expense-Resource Activity based Finance Category. It should include all standard effort, overtime effort, timesheet effort and timesheet overtime effort.
- The Expense parent category should include a Resource Neutral Expense sub-category of type Resource based Finance Category. It should include all standard effort, overtime effort, timesheet effort and timesheet overtime effort.
- Set the field Resource Computation Enabled to Yes.
- Create Labor Expense Types (LETs) based on your company's business needs. See topic Creating Labor Expense Types.
- Set a default LET in the activity template. For more information, see topic Creating Activity Templates.
- Manage the Activity Labor Cost Capitalization Settings. For more information, see topic Managing Activity Labor Cost Capitalization Settings.
- Select Yes for the field Labor Cost Capitalization Enabled.
- Select Yes for the field Is Labor Expense Type required for Activities. Oracle recommends that you mark Yes for this field if you have enabled Labor Cost Capitalization.
- Enable Project Level Efforts.
- Edit project finance settings. Ensure that the Project Manager has enabled these settings.
- The Finance Tracking Start Date should be the same date as the project start date. The actuals will not flow if they are not the same.
- Select Yes for Resource Computation Enabled.