Labor Costing Using Project Role–Based Cost Rates

Cost project labor hours using project role–specific rates. This aligns actual labor costs with planning and billing roles, improving cost tracking, margin analysis, and decision-making.

Define project role cost rate schedules and assign them to the business units and cost organizations that use project roles as the primary dimension for costing, planning, and billing. Optionally, include these schedules in labor costing overrides or use project roles as a determinant in project cost rate overrides.

Use project role-based costing to:

• Improve accuracy in cost tracking and margin analysis by aligning costing with planning and billing roles
• Support consistent use of project roles across costing, planning, and billing processes
• Avoid complex workarounds, such as mapping internal human resource jobs to project roles or relying on job-based cost rate overrides.

How to Perform Labor Costing by Project Role

Use the following steps to perform labor costing using project role-based rates:

1. Define project role cost rate schedules

   Create cost rate schedules using project roles.

2. Assign cost rate schedules

   Assign the project role cost rate schedules to the applicable business units and cost organizations that use project roles for costing, planning, and billing.

3. Configure overrides (optional)
   • Include project role cost rate schedules in labor costing overrides
   • Use project roles as a determinant in project cost rate overrides

4. Capture project roles on labor transactions

   Ensure that project roles are entered on project labor transactions, such as time cards.

5. Process and review costing results

   Review how cost rates are applied to:

   • Actual time card transactions
   • Planned labor hours

   Use available transaction analysis reports to understand how the cost rate is derived.

Tips and Considerations

• Provide project roles on transactions

  Ensure that each labor transaction includes a project role. If a project role isn’t specified, the application attempts to derive it using:

  • Task-level resource assignments
  • Project resource assignments effective on the transaction date

  If the application can’t derive a project role, the transaction is rejected.

• Control automatic project role derivation

  To require users to enter project roles at the source, disable automatic derivation by setting the profile option:

  Project Role Derived for Person-Related Project Cost Transaction (ORA_PJC_DERIVE_PROJECT_ROLE) to No.

• Understand override restrictions

  You can combine Project Role with other attributes in Project Cost Rate Overrides, except Job.

  You can’t create override combinations that include both Project Role and Job.

• Understand cost rate determination

  The cost rate applied to transactions is determined based on the precedence of:

  • Organization Costing Rules
  • Labor Costing Overrides
  • Project-specific Cost Rate Overrides

  Use transaction analysis reports to review and validate how rates are derived.

Example

Consider a professional services organization that uses project role as the key dimension in all project planning, billing, and margin analysis.

• Define a cost rate schedule containing all your project role rates.
• Assign this schedule to the relevant business unit.
• When entering time cards, ensure that each transaction includes the appropriate project role.
• The application applies the corresponding role-based cost rate during costing.
• Review transaction analysis reports to evaluate actual costs by project role.

If a time card doesn’t include a project role and the application can’t derive one from assignments, the transaction is rejected. To avoid this, require users to capture project roles when entering labor transactions.