Supplier Invoice Adjustments:

Accrue on Receipt Adjustment

Support in PA.PJ_PF.L
An Oracle White Paper
07/03
 Supplier Invoice Adjustments

OVERVIEW
In release 11i, Oracle Projects restricted the user’s ability to adjust supplier invoice
transactions when the cost of the items is accrued on receipt. Details regarding
this restriction are documented in the following white paper: Supplier Invoice
Adjustments: Why can’t I adjust accrue on receipt items?
As a result of this restriction, customers upgrading from 10.7 or 11.0 are required
to implement manual procedures for adjusting accrue on receipt items. These
procedures are time consuming and sometimes complicate period-end
reconciliation. Therefore, in the next scheduled family pack, Oracle Projects is
returning the functionality supported in releases 10.7 and 11.0.
The purpose of this document is to provide details regarding the adjustment
functionality supported in the next PA family pack. The following items are
discussed:
Supplier cost interface options available in Oracle Projects, Release 11i
Adjustment functionality supported in the next release
Planned back ports

RELEASE 11i INTERFACE OPTIONS

In Oracle Projects, Family Pack J (11i.PJ_PF.J), the supplier invoice interface
program, PRC: Interface Supplier Invoices from Payables, was replaced by a new
more flexible interface process, PRC: Interface Supplier Costs. Three new input
parameters allow users to specify the type or types of costs to be interfaced. The
parameters are as follows:
? ? Supplier Invoices: Interface project-related supplier invoice costs from
Payables. Valid values are Yes or No
? ? Receipt Accruals: Interface receipt accrual amounts for project-related
purchase items with a destination type of Expense from Purchasing. Valid
values are Yes or No.
? ? AP Discounts: Interface invoice payment discount amounts for project-
related supplier invoices from Payables. Valid values are Yes or No

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 2

Supplier Invoice Interface
When the Supplier Invoice option is selected, the PRC: Interface Supplier Costs
process will interface project-related supplier invoice distribution costs to Oracle
Projects. If the invoice is matched to a purchase order item that was accrued on
receipt and the accrual was interfaced to Oracle Projects, the interface process only
interfaces additional charge amounts. These amounts may include tax or freight
charges as well as price and exchange rate variances. Note that if the accrual
amount was not interfaced to Oracle Projects and the “PRC: Interface Supplier
Costs”process is submitted with a “Supplier Invoice”parameter of “Yes”and a
“Receipt Accruals”parameter of “No”, then all project-related invoice
distributions will be interfaced to Oracle Projects. Receipt accrual amounts and
invoice variance amounts will not be interfaced. This parameter setting allows you
to continue to interface only invoiced costs to projects if desired.
Note: With releases 10.7 and 11.0, only invoiced cost can be interfaced to Oracle
Projects. Receipt accrual integration is not supported.

Receipt Accrual Interface

When the Receipt Accruals option is selected, the PRC: Interface Supplier Costs
process creates expenditure items from receipt accruals generated when project-
related items with expense type destinations are received and delivered in Oracle
Purchasing. However, if the received items are invoiced and the invoice
distributions are interfaced to Oracle Projects, then the receipt accruals are not
eligible for interface.

AP Discount Interface
This functionality was included in Oracle Projects, Family Pack I (11i.PJ_PF.I).
Refer to the family pack documentation supplement for more information about
this option.

Interface Example
Users can choose to interface cost to Oracle Projects when items are invoiced or
accrued cost can be interfaced when items are received. The example on the
following pages illustrates both options.

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 3

 Transaction Processing Overview

The purchase order shown below is entered and approved in Oracle Purchasing:

PO Header

Number Supplier Ship-To Buyer Status

3018 Capp Consulting VS-Washington Marlin Approved

PO Line

Num Description UOM Qty Price Accrue on Receipt

1 Digital Camera Each 1 500 Unchecked
2 Laptop Computer Each 2 2000 Checked

PO Distributions

PO Qty Charge Account Project Task Expenditure Type

Distri
1 1 01-422-7740-000 ABC 1.1 Electronic Equipment
1 2 01-422-7740-000 ABC 1.1 Electronic Equipment

The following receiving transaction is entered in Oracle Purchasing:

Receipt Header
A direct receipt is entered.
Number Supplier Pack Slip PO Date
28765 Capp Consulting ABC-123-456 3018 02-Feb-02

Receipt Line

Quantit UOM Description Destination Location

y1 Each Digital Camera Type
Expense VS-Washington
2 Each Laptop Computer Expense VS- Washington

Oracle Purchasing records the receipt of each item with two transactions. A
receipt transaction moves the merchandise to inventory or receiving inspection
and a deliver transaction moves the merchandise to its final destination. As the
receipt and delivery transactions are created for the Laptop Computers, journal
entries are created to record the expense liability in Oracle General Ledger.

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 4

 The following journal entries are created by the receipt transaction:

Journal Header
The AP Liability is accrued when the
Journal Period Source Category Balance Type
Laptop Computers are received into
inventory or receiving inspection. Receiving USD FEB-02 Purchasing Receiving Actual

Journal Lines

Lin Account Account Description Debit Credit

e1 01-000-1410-000 Receiving Inspection 4000
2 01-000-2200-000 AP Liability Accrual 4000

The following journal entries are created when the computers are delivered to the
final expense destination:

Journal Header
The cost is recorded against the expense
Journal Period Source Category Balance Type
organization and expense account when
the computers are delivered from inventory Receiving USD FEB-02 Purchasing Receiving Actual
or receiving inspection to their final
destinations. Journal Lines

Lin Account Account Description Debit Credit

e1 01-422-7740-000 IS Department.Equipment 4000
2 01-000-1410-000 Receiving Inspection 4000

The following invoice is entered in Accounts Payable and matched to the purchase
order:

Invoice Header

Because the computer expense was Number Supplier Invoice Date Amount Status
accrued on receipt, the invoice distribution 778 Capp Consulting 10-Feb-2002 4520.00 Approved
for the Laptop Computers is charged to the
liability accrual account. Note the invoice
Distribution Lines
price variance.
Line Type Amount Account GL Date
As the camera expense was not accrued on
1 Item 500.00 01-422-7740-000 10-Feb-2002
receipt, the invoice distribution is charged
to the PO charge account. 2 Item 4,020.00 01-000-2200-000 10-Feb-2002

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 5

 Interface to Oracle Projects – Option 1: Invoiced Cost Only

All supplier cost is interfaced to Projects when items are invoiced. The “PRC:
Interface Supplier Costs”process is submitted with a “Supplier Invoice”parameter
of “Yes”and a “Receipt Accruals”parameter of “No”. The following expenditure
items are created in Oracle Projects.

Expenditure Items

Trans ID Source Project Task Expenditure Type Qty

22033 AP ABC 1.1 Electronic Equipment 500.00
22034 AP ABC 1.1 Electronic Equipment 4020.00

Cost Distribution Lines

Both expenditure items are charged to the Trans ID Line Type Amount Account GL Date
PO charge account.
22033 1 Raw 500.00 01-422-7740-000 10-Feb-2002
22034 1 Raw 4020.00 01-422-7740-000 10-Feb-2002

Interface to Oracle Projects – Option 2: Receipt Accrual Interface

Receipt accruals are interfaced to Oracle Projects from Oracle Purchasing. All
other supplier cost is interfaced to Projects when items are invoiced. The “PRC:
Interface Supplier Costs”process is submitted with a “Supplier Invoice”parameter
of “Yes”and a “Receipt Accruals”parameter of “Yes”. The following expenditure
items are created in Projects.

Expenditure Items

The accrual for the laptop computers is Trans ID Source Project Task Expenditure Type Qty
interfaced from Oracle Purchasing. The
22033 PO ABC 1.1 Electronic Equipment 4000.00
invoice price variance is interfaced from
Oracle Payables and is recorded as a 22034 AP ABC 1.1 Electronic Equipment 500.00
separate expenditure item.
22035 AP ABC 1.1 Electronic Equipment 20.00

Cost Distribution Lines

The GL Dates for the expenditure items are Trans ID Line Type Amount Account GL Date
derived from the receipt and invoice
22034 1 Raw 4000.00 01-422-7740-000 02-Feb-2002
transactions, respectively.
22033 1 Raw 500.00 01-422-7740-000 10-Feb-2002
22034 1 Raw 20.00 01-422-7740-000 10-Feb-2002

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 6

ADJUSTMENT FUNCTIONALITY IN THE NEXT PA FAMILY PACK
Oracle Projects will not support adjustments to expenditure items created from
receipt accruals interfaced from Oracle Purchasing. However, in the next family
pack, expenditure items created from invoice distributions matched to accrue on
receipt PO lines can be adjusted. This allows 10.7 and 11.0 customers to upgrade
to release 11i without changing user procedures.

Adjustment Processing
After an adjustment is made, you must cost distribute the adjustment transaction
in Oracle Projects. The cost distribution process uses AutoAccounting rules to
generate a new general ledger expense account for the adjusted cost. Since the
transaction attributes, such as billable versus non-billable, are now different, the
new account may differ from the original purchase order account.
To reflect the attribute changes on the original invoice, the adjustment transaction
is interfaced from Oracle Projects to Oracle Payables. The original invoice
distribution, charged to the AP Liability Accrual account, is not reversed. Two
new distributions are created. A negative distribution is charged to the PO charge
account and a positive distribution is charged to the general ledger account
generated by the cost distribution process in Oracle Projects.
The tax information for the new invoice distributions is copied from the original
invoice distribution. When the invoice is validated, Oracle Payables generates tax
distributions for the adjustment lines. Newly generated tax lines must be interfaced
to Oracle Projects using the PRC: Interface Supplier Cost process.
Note: If tax amounts were manually allocated to the original invoice distribution,
these allocations are not automatically applied to the new adjustment lines.

Adjustment Example
The laptop computers received and invoiced above originally were purchased for
Project ABC and charged to Task 1.1. However, the computers should have been
charged to Task 2.0. Therefore, an adjustment transaction is entered in Oracle
Projects to move the cost from Task 1.1 to Task 2.0. The tables below
demonstrate the project expenditures after the adjustment is complete.

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 7

 Expenditure Items

Trans ID Source Project Task Expenditure Type Qty

The original expenditure item created for
the laptop computers is reversed and a new 22034 AP ABC 1.1 Electronic Equipment 4020.00
expenditure item is created. 22040 AP ABC 1.1 Electronic Equipment -4020.00

When the adjustment is cost distributed, a 22041 AP ABC 2.0 Electronic Equipment 4020.00
new account is derived as a result of the
task attribute change. Cost Distribution Lines

Trans ID Line Type Amount Account GL Date

22034 1 Raw 4020.00 01-422-7740-000 10-Feb-2002
22040 1 Raw -4020.00 01-422-7740-000 10-Feb-2002
22041 1 Raw 4020.00 01-422-7050-000 10-Feb-2002

When the adjustment transaction is interfaced from Oracle Projects to Oracle

Payables, the original invoice is changed as follows:

Invoice Header

Number Supplier Invoice Date Amount Status

The original invoice distribution for the 778 Capp Consulting 10-Feb-2002 4520.00 Needs Reapproval
laptop computers is not reversed as it is
charged to the AP Liability Accrual Distribution Lines
account. Two new distribution lines are
created. One distribution negates the cost
Line Type Amount Account GL Date
accrual recorded when the computers were 1 Item 500.00 01-422-7740-000 10-Feb-2002
received. The second distribution records
the expense to the account appropriate for
2 Item 4,020.00 01-000-2200-000 10-Feb-2002
the new transaction attributes. The total 3 Item (4,020.00) 01-422-7740-000 10-Feb-2002
invoice adjustment amount is zero.
4 Item 4,020.00 01-422-7050-000 10-Feb-2002

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 8

PLANNED BACKPORTS
To support customers who are not in a position to uptake the next scheduled
release, Oracle Projects will be back porting the accrue on receipt adjustment
functionality.
Back port patches are scheduled for delivery for the following Oracle Projects
family packs:
? ? Family Pack E
? ? Family Pack I
? ? Family Pack J
? ? Family Pack K
Contact your support representative for release availability.

CONCLUSION
The Oracle Projects development team is aware of the inconvenience imposed on
users when supplier invoice adjustments are restricted. The team is actively
working to redesign the adjustment model to remove remaining restrictions.
However, more time is required to complete the redesign. Therefore, Oracle
Projects is providing customers with the option to continue using release 10.7 and
11.0 functionality after upgrading to release 11i.

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.FP.L Page 9

Supplier Invoice Adjustments: Accrue on Receipt Adjustment Support in PA.PJ_PF.L
07/2003
Author: Barbara Fox

Oracle Corporation
World Headquarters
500 Oracle Parkway
Redwood Shores, CA 94065
U.S.A.

Worldwide Inquiries:
Phone: +1.650.506.7000
Fax: +1.650.506.7200
www.oracle.com

Oracle Corporation provides the software

that powers the internet.

Oracle is a registered trademark of Oracle Corporation. Various

product and service names referenced herein may be trademarks
of Oracle Corporation. All other product and service names
mentioned may be trademarks of their respective owners.

Copyright © 2003 Oracle Corporation

All rights reserved.