Account for Service Costs

You can now accrue unposted service costs as Service Work in Process and recognize the expense as a cost of service at a later point when the service charge is posted in the Service Logistics application.  Previously, any costs incurred in a service work order would get expensed right away. After you opt in to this feature, the Material and Resource transactions created in Maintenance would use the new Service Work in Process Valuation accounting line type instead of Maintenance Expense. After you post the service charges (debrief charges) in the Service Logistics application, service cost lines along with recognition percentage will be interfaced to Costing. Using this information, Service Cost Recognition transactions will be created to reverse the appropriate amount from Service Work in Process Valuation and post it to the new Service Work in Process Recognition accounting line type.

Field Service Debrief Cost Accounting

WIP Material Issue

Accounting Line Type Debit Credit
Service Work in Process Valuation X  
Inventory Valuation   X

WIP Resource Transactions

Accounting Line Type Debit Credit
Service Work in Process Valuation X  
Resource Absorption   X

Field Service Billing Cost Recognition

Service WIP Recognition

Accounting Line Type Debit Credit
Service Work in Process Recognition X  
Service Work in Process Valuation  

X

Let's take an example of a service work order where both parts and resources have been reported and Service WIP option is enabled.

Example: Cost Distributions when service WIP is enabled

Example: Cost Distributions when service WIP is enabled

After the charges are posted in the Service Logistics application, the invoice and revenue recognition information gets interfaced to costing. Based on this information, the cost processor would create the following distributions to recognize the service costs.

Example: Cost Distributions created to recognize service costs

Example: Cost Distributions created to recognize service costs

You can use the Maintenance Work Order Costs page to search for the maintenance work orders using the Service Request Number and Service Document Number.

New filters in maintenance work order costs page

New filters in maintenance work order costs page

You can track the total recognized costs, recognized material, and recognized resource costs for each work order that has Service WIP enabled.

New columns added to the maintenance work order costs page

New columns added to the maintenance work order costs page

You can use the new Service Cost Recognition Report to track the total costs accrued in Service WIP and the Service Cost Recognition details.

Service Cost Recognition Report

Service Cost Recognition Report

Service providers now have a systematic way to record service costs when the associated revenue is recognized.

Steps to Enable

  1. In the Setup and Maintenance work area, search for and select the Manage Administrator Profile Values task.
  2. On the Manage Administrator Profile Values page, search for and select the ORA_RCL_WIP_ACCOUNTING profile option code.
  3. In the Profile Values section, set the Site level to Yes. The default value is No.
    • Yes = if you want to use Service Work in Process Valuation instead of Maintenance Expense
    • No = if you want to continue using the Maintenance Expense accounting line type
  4. Click Save and Close. Change in the profile value will take effect the next time you sign in.

Tips And Considerations

The Service Cost Recognition transaction will move the costs from the Service Work in Process Valuation to Service Cost accounts that can be different for different purposes such as warranty reserve, subscription cost of goods sold, time and material cost of goods sold, and installation cost of goods sold. You can configure the SLA mapping sets and account rules to achieve this using the SLA sources such as Subscription Type and Work Order attributes.

Key Resources

  • Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management Guide, available on the Oracle Help Center.
  • Oracle Fusion Cloud SCM: Using Cost Management Guide, available on the Oracle Help Center.

Access Requirements

Users who are assigned a configured job role that contains the following privilege can access this feature:

  • View Maintenance Work Order Costs (CST_REVIEW_MAINTENANCE_WORK_ORDER_COSTS_PRIV)
  • Run Service Cost Recognition Report (CST_RUN_SVC_WIP_RECOGNITION_REPORT_PRIV)