Limit Processing
Limit processing is a feature within the JD Edwards EnterpriseOne Advanced Contract Billing system that enforces the limit amounts that you set up for advanced contract billing contracts so that you do not invoice or recognize revenue over the limit amounts.
When you enter contracts in the Create/Edit Advanced Contracts program (P52G01M), you enter these two sets of amounts:
Funded amounts
Awarded amounts
Both funded and awarded amounts are divided into these three amounts:
Cost
The amount that you bill for the cost of the work completed for the contract. The system calculates cost amounts using time and material (T&M), cost plus, lump sum, unit price, milestone, progress, applied burden, component, and labor burden billing lines.
Fee
The amount that you bill for fees that you calculate in addition to the cost. The system calculates fee amounts using fee billing lines.
Award fee
The amount that you bill for earning an award if certain incentives are met, for example, if work is completed ahead of schedule. The system calculates award fee amounts using award fee billing lines.
In addition to setting up amounts for a contract, you also specify the level at which the system applies the limits during invoice processing and revenue recognition. Using the Billing Limit and Revenue Limit fields on the contract, you can specify one of the following methods for applying limits:
Awarded By Line
Awarded By Total
Funded By Line
Funded By Total
No Limit
For the Awarded By Line and Awarded By Total methods, the system uses the awarded amounts from the contract when applying limits. For the Funded By Line and Funded By Total methods, the system uses the funded amounts from the contract when applying limits.
If you select the Awarded By Line or Funded By Line method, the Journal Generation (R48132) and the Invoice Generation (R52121) programs apply the cost, fee, and award fee limits separately to the corresponding transactions in the Billing Detail Workfile table (F4812). If you select the Awarded By Total or Funded By Total method, the R48132 and the R52121 programs apply the total of the cost, fee, and award fee limit amounts for a contract to the total of all cost, fee, and award fee transactions for the funding level in the F4812 table.
For example, if you set up a funding level with funded limit amounts of 100,000.00 USD for cost, 10,000.00 USD for fees, and 5,000.00 USD for award fees, the system applies the limits as follows:
Funded By Line method
You can bill and recognize revenue for the funding level for only 100,000.00 USD in cost amounts, 10,000.00 USD in fee amounts, and 5,000.00 USD in award fee amounts.
Funded By Total method
You can bill and recognize revenue for the funding level for a total of 115,000.00 USD.
At some point during the life of the contract, you might exceed one or more limit amounts for a contract. If the R48132 or R52121 program calculates a limit excess, the system does not allow you to invoice or recognize revenue for the excess amount. The system creates a record in the Billing Detail Workfile table (F4812) for the excess amount and populates the Transaction Class field (TCLS) on the record with the value that corresponds to the type of amount that was exceeded. The values for limit excess records are:
I: Cost limit excess
J: Fee limit excess
K: Award fee limit excess
L: Total limit excess
The system also creates a billing line for the funding level contract with a billing line type (PRTP) of X, which is an excess billing line.
The system displays excess billing lines in these programs:
Contract Billing Line Detail Revisions (P5202)
Billing Line Inquiry (P5222)
The system uses the Advanced Contract Billing Limit Summary table (F52G200) to keep track of the cumulative invoice and revenue amounts and the limit excess amounts. Using the revenue and billing limit methods, the Create A/R Entries (R48199) and the Create G/L Entries (R48198) programs create new or update existing records in the F52G200 table as follows:
Awarded By Line or Funded By Line method
The system creates up to four records for each funding level, depending on what type of amounts are included in the invoice or revenue batch. For example, if the invoice or revenue batch contains cost, fee, and award fee amounts, the system creates three records. These first three records store the cumulative invoice, cumulative revenue, and limit excess amounts separately for the cost, fee, and award fee amounts. The fourth record stores the total cumulative invoice and the total cumulative revenue amounts, but not the total limit excess amount.
Awarded By Total or Funded By Total method
The system creates only one record for each funding level and stores the total cumulative invoice, total cumulative revenue, and total limit excess amounts.
Contract terms or user error might require you to change the billing or revenue limit methods from awarded by total or funded by total to awarded by line or funded by line. If you have already generated invoices or recognized revenue for the funding level, the system considers the amounts that are stored in the record in the F52G200 table to be cost amounts. The next time that you process invoices or recognize revenue for the funding level, the system populates the cost amount record in the F52G200 table with what were previously the total amounts.
Your customer might eventually provide you with additional awarded and funded amounts for a contract. After you change the contract to reflect the new limit amounts, the system includes all or part of the amount that was previously held as excess the next time that you generate invoices or recognize revenue.
You can use the Advanced Contract Billing Limit Summary Inquiry program (P52G200) to review the information that is stored in the F52G200 table for each funding-level contract.