Example of Billing Transactions and Revenue

Scenario

In our example, two expenditure items were charged to a project that is associated with one contract line. The contribution percentage for this contract is 100%. To limit the types and amounts of transactions that can be recognized for revenue on the contract line, the contract has three billing controls, in the amounts of 500, 200, and 100.

Billing Transaction and Billing Control Details

Two temporary billing transactions were created from the expenditure items during revenue generation. The billing transactions were checked against the billing controls. In our example, all three billing controls apply to Billing Transaction 1, so it must pass each billing control. Billing Transaction 2 must only pass the first two billing controls, because the third control (100) is only for travel expenses.

Three billing controls are present for the contract header and the contract line. The first billing control contains funding for the entire contract, and was created at the contract header level. The second billing control is the funding amount for the contract line. The third control is for the same contract line, but limits the amount of travel expenditures that can be charged to that line.

Line	Billing Resource	Hard Limit	Revenue Funds Consumed	Revenue Funds Available
Contract Header		500	460	40
1		200	130	70
1	Travel	100	10	90

The following table displays the details for the temporary billing transactions.

Expenditure Item ID	Line	Billing Resource	Potential Revenue Amount	Eligible Revenue Amount	Qualified Revenue Amount	Recognized Revenue Amount	Amount Remaining to Recognize
1	1	Travel	60	60	40	0	40
2	1	Labor	50	50	0	0	0

The following table displays the billing controls and the funds available before and after revenue generation.

Line	Billing Resource	Hard Limit	Funds Available Before Expenditure Item 1	Funds Available After Expenditure Item 1	Funds Available After Expenditure Item 2
Contract Header		500	40	0	0
1		200	70	30	30
1	Travel	100	90	50	50

The qualified revenue amount cannot exceed the revenue funds available. In our example:

Expenditure Item 1 fully passed the second and third billing controls, but only $40 of the $60 passed the first billing control.
For Expenditure Item 2, $30 of $50 passed the second billing control, but nothing passed the first billing control, which was fully consumed by Expenditure Item 1.
Oracle Fusion Project Billing created a billing transaction for Expenditure Item 1. The qualified revenue amount is $40, the recognized revenue amount is $0, and the amount remaining to recognize is $40.

Note: The amount remaining to recognize is the difference between the qualified revenue and recognized revenue. The exception amount is the difference between the eligible revenue and the qualified revenue.
The second temporary billing transaction for Expenditure Item 2 was deleted because no revenue was recognized.
A billing transaction exception in the amount of $20 is created for Expenditure Item 1.
A billing transaction exception in the amount of $50 is created for Expenditure Item 2.

Revenue Distributions and Final Transactions

Revenue distributions are created from the billing transactions. The revenue status of a distribution is Partially Recognized if the difference between the eligible amount and the qualified amount is not zero. The status is Fully Recognized if the difference between the eligible amount and the qualified amount is zero. The revenue distribution for this example is described in the table below.

Distribution	Line	Revenue Status	Recognized Revenue
RDL1	1	Partially Recognized	40

The last steps involve updating the billing transaction and expenditure items. The following table describes the updated billing transaction.

Number	Line	Billing Resource	Eligible Revenue	Qualified Revenue	Recognized Revenue	Revenue to Recognize
1	1	Travel	60	40	40	0

The following table describes the updated expenditure items.

Expenditure Item ID	Revenue Status	Revenue Exception	Recognized Percentage	Recognized Revenue
1	Partially Recognized	Yes	67	40
2	Unrecognized	Yes	0	0

Note: Revenue is recognized for the exceptions if additional funds are added to the contract, or if the project and task on the expenditure item is funded by a new contract line with sufficient funds.