Business Units and Projects

Business units are subsets of an enterprise that perform one or more business functions and can be consolidated in both a managerial and legal hierarchy. Project accounting is an example of a business function that's set up by business unit.

Other examples are billing and revenue management, customer contract management, and payables invoicing.

Business units are defined centrally. During implementation, you must enable the Project Accounting business unit for use with Project Financial Management applications.

You can partition financial data using business units while sharing a single approach to project management across all business units. The following graphic shows two business units, one from the United Kingdom (UK) and one from the United States (US). These business units have the same research and development processes, so a single project unit is used by both business units to facilitate common project management practices.

This diagram illustrates business units that are associated with the same project unit.

Project Setup

Each business unit that you enable requires implementing project setup options for the following areas:

Project and task owning organizations are associated with the business unit to restrict these organizations in project creation flow.

Note: To own projects or tasks, an organization must be classified as project and task owning organization, belong to the hierarchy associated with the business unit, and be active on the system date. The project type class must be permitted to use the organization to create projects.
Project expenditure organizations are associated with the business unit to restrict which organizations can incur costs on the project.
Project costing establishes calendar, asset, overtime, and processing options for project-related costs.
Project units are associated with business units to restrict the business units that can handle project transactions. When a project unit isn't associated with a business unit, any business unit in your enterprise can process project transactions.
Cross-charge transaction options define conversion rate and date types and cross-charge transaction processing methods.
Customer contract management defines business function properties, such as currency conversion, cross-charge transaction, and billing options, for each contract business unit.

Note: A project can be associated with only one business unit.

Reference Data Sharing

Assign sets to business units to determine how reference data is shared across applications. A business unit is a set determinant for the following objects:

Project accounting definition, including set-enabled reference data such as project type.
Project and contract billing, including set-enabled reference data such as invoice format.
Project rates, including set-enabled reference data such as rate schedules.