Project Ledger setup

Before you can set up Project Ledger, you must complete Global Ledger setup.

Global Ledger setup includes these tasks:

  • Enterprise group
  • Finance enterprise group
  • Calendars
  • Accounting entities
  • Accounts
  • Chart of accounts
  • Ledgers
  • Currency
  • HR organization and employees

    HR organizations and employees are maintained in Global Human Resources. See the Global Human Resources Administration Guide for setup instructions.

See Global Ledger setup to create this setup:

  • Project chart hierarchy: a simplified chart of accounts for reporting and budgeting.
  • Project Ledger: for project-specific transactions.
  • Project reporting basis for reporting and budgeting.

We recommend creating one or more project reporting bases for reporting. A project reporting basis is required for project budgets and project report settings. The reporting basis defines the structures included in the budget. Structures include accounting units, accounts, projects, and account categories. If you do not include accounting unit or account in your budget dimensions or budget edit, the structures are still used. The structures are used to define the parameters for which accounting units and accounts are used. The accounting units and accounts are used for defining commitments, encumbrances, and actuals when calculating total obligations. For example, you can create a project chart hierarchy that does not include an undistributed retained earnings account. The project chart is then assigned to the reporting basis, which limits the accounts returned on the project reports.

We recommend creating a project chart of accounts containing project accounts. A chart of accounts can include expense, revenue, billed/unearned accrual, earned/unbilled accrual, and work in progress asset. The structure is similar to the account category structure.

Receivables setup

Before using Project Invoicing and Revenue or Grant Accounting, you must complete Receivables setup.

Project funding by external customers or grants requires a customer to be set up for the Receivables company. These fields are required in order to create contracts in Project Ledger:

  • Receivable Company, including the Projects tab information
  • Receivable Customer
  • Receivable Process Level
  • Accounts Receivable Code

Project funding

Project funding is set up using Finance Dimension 2, or user dimension, setup. For Project Invoicing and Revenue or Grant Accounting, select Project Invoicing on the Options tab of the finance enterprise group. You are required to use Finance Dimension 2 to set up the project funding structure. Finance Dimension 2, project funding, is used in conjunction with Project Ledger to maintain the project funding sources. Project funding sources are customers and grantors.

Note: Users do not see any links or menu items for project funding in project setup until a dimension structure is created. Dimension structures are created in the finance enterprise group.

The project contract billing method is set at the project contract level. The billing method can be overridden at the posting project level and at the account or user dimension level. You can specify the Billing Override Level on the Options tab of the finance enterprise group.

Contract billing rules including billing method, markup percent, tax status, and revenue account or revenue account category are defined at the project contract. If no overrides exist, these billing rules are used by all billable posting projects and expenditures under the contract:

  • Project contract bill method
  • Markup percent
  • Bill rate
  • Tax status
  • Revenue account or revenue account category

You can override billing rules and revenue accounts or revenue account category at the posting project level. Fields include billing method, markup percent, revenue account or revenue account category, revenue finance structure, tax status, and tax code. The override is used to calculate billable amounts, tax amounts, and journal postings for the posting projects. All other posting projects and expenditures use the parameters assigned to the project contract or project funding source if these conditions are met:

  • They are designated as billable and eligible for the project funding source.
  • They do not have overrides defined.

You can override billing rules and revenue accounts or revenue account category at a project cost account level. Override fields include billing method, markup percent, revenue account or revenue account category, revenue finance structure, tax status, and tax code. The override is used to calculate billable amounts, tax amounts, and journal postings for that posting project and dimension combination. The billing override key field is dependent on the billing override dimension defined on the finance enterprise group.

See Creating project funding hierarchies.

Project hierarchy

A project represents a temporary endeavor undertaken to create a unique product or service. For example, a capital, billable, grant, or internal project.

  • Projects are temporary in nature with a begin and end date.
  • Projects have an operational or work breakdown structure. For example, project, phase, and task.
  • Projects have employees including employee assignments and person responsible.

Projects are defined in a parent-child hierarchy within a project structure. You can set up multiple project structures. One project structure must be designated as an enterprise structure. The enterprise structure defines project dates, person responsible, budget ID, and billing information. The enterprise structure is the default project structure on reporting bases.

Note: On the finance enterprise group, you can rename the default label, Project, to a label that reflects the structure that you use, for example, Activity. For the purpose of this guide, we use the default label of Project. If you change the name on the finance enterprise group, the name is changed on all the related forms.

Each project hierarchy is contained in a project structure. Your project can include an indefinite number of levels of projects in a parent-child structure. You can define a project contract at any summary level of the enterprise structure if Project Invoicing is selected on the finance enterprise group.

A level represents a layer in an project's hierarchy. For example, a project hierarchy might include three levels: project, phase, and task. Project is a parent of phase, which is a parent of task. Each level is part of, or reports up into, the level above it. Each project must have a unique name, which can be up to 25 alphanumeric characters. You cannot change a project name after you define it.

You use projects to further define your project hierarchy. By defining projects at different levels, you build a structure that resembles the breakdown of your project work structure or operational view of projects. You define two types of projects:

  • Posting projects are used to post journal entries. Posting projects are the lowest child projects in any branch of the project structure. You cannot define additional child projects below a posting project. Posting projects use the project code specified in the finance structure when creating journal entries.
  • Summary projects are used to summarize the activity of child projects for consolidation and reporting.