Invoice and Revenue Method Components

Invoice methods and revenue methods control the way you create invoices and recognize revenue for contracts. During implementation you create the methods and assign them to bill plans and revenue plans.

Any contract or contract line that uses the bill or revenue plan calculates the invoice or revenue amount according to the instructions in the invoice or revenue method.

Method Classification

Invoice method classifications and revenue method classifications are predefined by Oracle Fusion Project Billing. Select an invoice or revenue method classification to set the approach for calculating invoice or revenue amounts.

The following table describes the different invoice method classifications.

Invoice Method Classification	Description
Amount Based	Generate invoices and revenue as billing events are completed.
Percent Complete	Generate invoices as progress is estimated. The percent complete invoice method automatically creates a billing event using an inception-to-date formula based on the calculation level in the bill plan. If the calculation level is contract line, the event is created for the contract and contract line. If the calculation level is associated project, the event is created for the contract line and its associated project and task.
Percent Spent	Generate invoices as progress is calculated, based on actual cost to date over budget cost. The percent spent invoice method automatically creates a billing event using an inception-to-date formula based on the calculation level in the bill plan. If the calculation level is contract line, the event is created for the contract and contract line. If the calculation level is associated project, the event is created for the contract line and its associated project and task.
Rate Based	Generate invoices as costs are incurred, using an invoice-specific set of bill rates, a burden schedule, or transfer price rates. The cost reimbursable classification method bills on cost directly, without applying any rate or markups.

The following table describes the different revenue method classifications.

Revenue Method Classification	Description
Amount Based	Recognize revenue as billing events are completed.
As Billed	Recognize revenue after invoices are finalized, using a common set of bill rates, a burden schedule, or transfer pricing for both invoicing and revenue.
As Incurred	Recognize revenue as costs are incurred, using a revenue specific set of bill rates, a burden schedule, or transfer pricing for both invoicing and revenue.
Percent Complete	Recognize revenue as progress is estimated. The percent complete revenue method automatically creates a billing event using an inception-to-date formula based on the calculation level in the revenue plan. If the calculation level is contract line, the event is created for the contract and contract line. If the calculation level is associated project, the event is created for the contract line and its associated project and task.
Percent Spent	Recognize revenue as progress is calculated, based on actual cost to date over budget cost. The percent spent revenue method automatically creates a billing event using an inception-to-date formula based on the calculation level in the revenue plan. If the calculation level is contract line, the event is created for the contract and contract line. If the calculation level is associated project, the event is created for the contract line and its associated project and task.
Rate Based	Recognize revenue as costs are incurred, using a revenue-specific set of bill rates, a burden schedule, or transfer price rates. Tip: Use this revenue classification method if you are using a fixed price for invoices, or if you require different burden schedules for invoices and revenue.

Intercompany Billing Option

If the invoice or revenue method will be used for intercompany contracts, enable the intercompany billing option to calculate the intercompany invoice or revenue amounts. Intercompany invoices and revenue use a rate-based classification method. Select a labor and nonlabor schedule for use when generating invoices or calculating revenue.

Note: An intercompany contract can use an invoice or revenue method that's not enabled for intercompany billing, or an invoice or revenue method that's enabled for intercompany billing. Enable the intercompany billing option if the invoice or revenue method will be used for intercompany contracts only.Intercompany invoices can use any type of invoice method classification.

Rate Definition

Select schedules for labor and nonlabor if your invoice or revenue method uses a rate-based classification method.

The schedule types for labor are Person and Job.