Using Project Budgetary Control in Procure-to-Pay Applications

Julian Kozicki

Great Projects

Using Project Budgetary Control in Procure-to-Pay Applications

• Projects Mini-Pack H Overview• Budgetary Control• Online Funds Checking• Budget Account Generation• Bottom Up Budgeting - Setup and Initiation• Top Down Budgeting – Setup and Initiation• Summary• Questions and Answers

Projects Mini-Pack H Overview

• Oracle Projects Mini-Pack H released December 2001

• Documentation supplement only available in Metalink (current version March 2002)

• Features include:– Budgetary Controls within Procure-to-Pay cycle for

project level budgets

– Budget Integration with Oracle General Ledger

– Bottom-up or Top Down Budgeting

Projects Mini-Pack H Overview(Continued)

Bottom-Up BudgetingAllows the creation of centralized organization-level budgets from

defined project budgets and non-project budgets. Project budgets are interfaced to Oracle General Ledger by creating budget journals.

Top Down BudgetingAn overall organization-level budget, that defines overall spending

limitations, allows centralized control over organization spending. Project budgets consume funds from the organization-level budget, which is maintained in Oracle General Ledger.

Budgetary Controls

• Allows the organization to monitor and control expense commitment transactions entered against a project by checking available funds– Project-related purchase requisitions and purchase orders

entered in Oracle PO– Supplier invoices entered in Oracle Payables– Expenditure adjustments in Oracle Projects

• Significant additional capabilities than available from Transaction Control Client Extension

• Exceptions include expense reports, time sheets, inventory purchases, and usage costs.

Purchasing Payables

Project Costing/Project Billing

General Ledger

Committed Project Costs

InvoiceCosts

StandardBudget

Budget Transactions

Funds Check

Funds Check

Funds Check

BudgetaryControlBalances

Budget Journals

Internal System FlowsBudgetary Control for Bottom-Up Budgeting

Purchasing Payables

Project Costing/Project Billing

General Ledger

Committed Project Costs

InvoiceCosts

Encumbrances

Encumbrance Transactions

Funds Check

Funds Check &Encumbrances

Funds Check &Encumbrances

BudgetaryControlBalances

Encumbrance Journals

Internal System FlowsBudgetary Control for Top-Down Budgeting

FundingBudget

Budgetary Controls

• Prerequisites– Must enable budgetary controls in Oracle

General Ledger– Must enable encumbrance accounting in

General Ledger and Oracle Payables (for Top-Down Budgeting only)

– Must apply General Ledger patches 1995914 and 2002508

Online Funds Checking

• Procedure called by workflow at several points within Oracle Purchasing, Oracle Payables, and Oracle Projects applications (check funds option and transactional approval) where if the funds check fails, the transaction is not approved.

• Can customize work flow based upon business rules to trigger actions by project managers, project approvers, and others so that budgets can be increased or budget funds checking time intervals and control levels can be changed

Transaction Funds Check Window Results

Budget Funds Check Results Window

Online Funds Checking(Continued)

• Based upon Time Intervals and Control Levels and GL date of the transaction– Time Interval can be period-to-date, year-to-date, or

project-to-date for a period, year, or project

– Control Level can be Absolute, Advisory, or None

– Can be set by Resource, Resource, Group, Lowest Task, Top Task or Project (can also be rolled up)

• Set by Project Type, but can be overridden in Templates and Projects, if desired.

Project Types WindowBudget Integration Options

Project Budget Account Generation

• Each project budget line must have an account number assigned to integrate with General Ledger

• A new Project Budget Account Workflow is provided to perform this task– Must be customized – generates a dummy account when first installed– Uses can use constants, parameters, or SQL in the same way as the

Purchasing and Payables Account Generator

• Project Budget Account Workflow is activated two ways:– Manually, by selecting the Generate Budget Accounting option from the

Tools menu of the Budgets window– Automatically, when an integrated budget is submitted for baselining

• Option may be set to manually override the budget account assigned in Project Budget Account Workflow

Budget Account Details Window: by Budget Line Tab

Navigate: Budgets>Tools menu>select Review Budget Accounting option

Budget Account Details Window: by Account Tab

Navigate: Budgets>Tools menu>select Review Budget Accounting option

Bottom-Up Budget Integration Initiation Procedures

• Define the organization-level budgets in Oracle General Ledger

• Define Budget Integration for the projects

• Enter project budget amounts and generate accounts for each project budget line

• Baseline project budgets and interface the budget amounts to General Ledger

• Create budget journal entries from the interfaced amounts in General Ledger

• Review and post the budget journal entries

Bottom-Up Budget IntegrationImplementation Steps

• Define Project Budget Account workflow account generation process

• Set profile option: PA: Allow Override of Budget Accounts (Y or N)

• Set profile option: PA: Enable Budget Integration and Budgetary Control Feature (Y)

• Define Integration for Project Types, Templates, and Projects

Top-Down Budget IntegrationInitiation Procedures

• Define General Ledger Funding Budgets• Define Budget Integration• Create Project Encumbrances

– Create Project Budget and generate accounts for each line

– Baseline Project Budget and create encumbrance lines for import to General Ledger

– Create and post encumbrance journals in General Ledger

• Liquidating Project Encumbrances• Year-End Budget Rollover

Top-Down Budget IntegrationImplementation Steps

• Define Project Budget Account workflow process• Set profile option - PA: Allow Override of Budget

Accounts (Y or N)• Set profile option - PA Enable Budget Integration

and Budgetary Control Feature (Y)• Set profile option - PA: Days to Maintain BC

Packets (default = 3)• Define integration details for project types,

templates, and projects

Summary

• Closes the budgetary control loop for project and non-project organization level budgets

• Provides automated funds checking to prevent approval of requisitions, purchase orders, or invoices that exceed defined project budget limits

• Can customize workflow to provide notifications and other actions where budget amounts are exceeded

• Provides a central repository of project and non-project budgets in Oracle General Ledger

• Easy setup, but requires additional projects user training on new budget integration procedures and additional training for General Ledger, Payables, and Purchasing users for funds checking business rules.

Locking Down Project Level

Budgets Throughout the Entire

Procure-To-Pay Cycle

= High ROI Potential

&Q U E S T I O N SQ U E S T I O N SA N S W E R SA N S W E R S

About Great Projects

Management Consultants specializing in Oracle Projects Suite applications and related technology:

– Oracle Projects Costing– Oracle Projects Billing– Project Manufacturing– iTime and iExpense– Project Resource Management– Project Contracts– Integration through Activity Management Gateway (including MS Project Connect)– Grants Accounting– Project Collaboration– Custom Reporting and on-line dashboards using Oracle BIS, Discoverer, Project

Kiosk, or using 9iAS Portal technology– Project Intelligence– Integration to/from legacy systems

Contact Information:

Julian KozickiManaging DirectorGreat ProjectsAtlanta GA

E-mail: jpkozicki@gr8projects.comPhone: 770-739-6810