For contract projects with a revenue accrual method of Work (as-work-occurs), Oracle Projects uses a bill rate or markup to calculate the revenue for each expenditure item. It uses the same logic to calculate the bill amount for contract projects that have an invoice method of Work. Oracle Projects determines the revenue and bill amounts for billable expenditure items when you generate revenue for a project.
Oracle Projects determines bill rates for calculating revenue and bill amounts for a contract project separately from cost rates. You can use a completely different set of rate schedules for costing and billing purposes.
Oracle Projects determines the bill rate, discount, or markup for each labor expenditure item using an order of precedence. It also determines the job associated with a labor expenditure item for billing purposes when you generate revenue for a project.
The following table shows the order of precedence for how Oracle Project determines the job to apply to an expenditure item.
| Precedence | Source for the Job |
|---|---|
| 1 | Task Job Assignment Override |
| 2 | Project Job Assignment Override |
| 3 | Employee's Primary Job Assignment |
The following table shows the order of precedence that Oracle Projects uses to match an expenditure item and rate source when determining bill rate, discount, or markup for labor expenditure items with bill rate schedules. As soon as an expenditure item satisfies a rate source in the hierarchy, Oracle Projects abandons the search.
| Precedence | Type of Override or Rate Source |
|---|---|
| 1 | Assignment overrides (if assignment precedes task) |
| 2 | Employee bill rate overrides at task level |
| 3 | Assignment overrides (if assignment does not precede task) |
| 4 | Employee bill rate overrides at project level |
| 5 | Task job bill rate overrides with task job assignment overrides |
| 6 | Project job bill rate overrides with task job assignment overrides |
| 7 | Task job bill rate or discount overrides with project assignments |
| 8 | Project job bill rate overrides with project job assignment overrides |
| 9 | Task job bill rate overrides with primary job assignments |
| 10 | Project job bill rate overrides with primary job assignment |
| 11 | Labor multipliers |
| 12 | Standard labor bill rate schedule |
| 13 | Task job bill rate schedule with task job assignment overrides |
| 14 | Task job bill rate schedule with project job assignment overrides |
| 15 | Standard job bill rate schedule |
Oracle Projects searches for an override, discount, or markup with an effective date range that is active on the expenditure item date.
If both assignment and task overrides exist, Oracle Projects determines the precedence depending upon whether the Assignment Precedes Task For Actuals check box is enabled at the project level.
If none of the billing terms listed in the preceding table exist, then the labor schedule associated with the task determines whether Oracle Projects performs the calculation using a bill rate schedule or burden schedule.
You specify whether a billing schedule is based on employee or job criteria when you define a schedule. You can specify an employee-based bill rate schedule, or a job-based bill rate schedule, or both when you set up a contract project. Oracle Projects first looks for an employee-based rate when it determines bill rates. If no employee-based rate schedule is specified, or if none is available for the employee, Oracle Projects uses a job-based bill rate.
The revenue generation process returns an exception if Oracle Projects cannot determine a labor bill rate for an expenditure item.
Oracle Projects determines the bill rate, discount, or markup for each non-labor expenditure item using a precedence of rates.
The following table shows the order of precedence for how Oracle Projects determines the bill rate, discount, or markup for non-labor expenditure items.
| Precedence | Type of Override or Rate Source |
|---|---|
| 1 | Task Non-Labor Bill Rate and Discount Override: Non-Labor Resource |
| 2 | Project Non-Labor Bill Rate and Discount Override: Non-Labor Resource |
| 3 | Task Non-Labor Bill Rate Schedule: Non-Labor Resource Bill Rate |
| 4 | Task Expenditure Type Bill Rate and Discount Override: Expenditure Type |
| 5 | Project Expenditure Type Bill Rate and Discount Override: Expenditure Type |
| 6 | Task Non-Labor Bill Rate Schedule: Expenditure Type Bill Rate |
Oracle Projects searches for an override, discount, or markup with an effective date range that is active on the expenditure item date.
If an expenditure type has an expenditure type class of Usage, you can specify a rate, discount, or markup for either the expenditure type by itself or for the combination of an expenditure type and a non-labor resource, when you define a non-labor bill rate schedule or a non-labor bill rate and discount override. The expenditure type and non-labor resource combination takes precedence over the expenditure type if you define information for both.
The revenue generation process returns an exception if Oracle Projects cannot determine a non-labor bill rate for an expenditure item.
When you create a project assignment, Oracle Projects always attempts to determine a bill rate for the team role using bill rate schedules and overrides. It follows the same logic that it uses to determine bill rates for actual expenditure items. Typically, you set up bill rate schedules and overrides only for projects with a revenue accrual method of Work.
You can set up bill rate schedules and overrides for projects with a revenue accrual method of Cost or Event. Oracle Projects uses this information to determine bill rates to display on the team roles.
Note: For projects with a revenue accrual method of Cost or Event, any budget or forecast generated based on team roles does not use the displayed bill rate because Oracle Projects generates actual revenue based on actual costs accrued or billing events.