Unlike labor costs or other billable expenses, a bonus your business receives for completing a project ahead of schedule is not attributable to any expenditure item.
In these cases, you use an event, rather than an expenditure item, to account for a bonus or other sum of money. An event is an entry assigned to a top task or project that generates revenue and/or billing activity, but is not directly related to any expenditure items.
You classify events by event type. When you define an event type, you assign it one of the predefined classifications. When you enter an event, its event type classification determines how the event affects revenue and billing for a particular project.
You can define as many event types as you need, but you cannot create additional classifications.
To define an event type:
In the Event Types window, specify an event type, a description of the event, a revenue category, and a event type class.
Optionally, click Tax Classification Code to select the default tax classification code for customer invoice lines created for the event type and operating unit.
Save your work.
Event Type. Enter a unique, descriptive name for this event type.
Revenue Category. Enter the revenue category that you want to associate with this event type.
Class. Enter a classification for this event type to determine how an event affects the revenue and billing for a particular project. Oracle Projects provides you with the following classifications:
Automatic. An Automatic classification generates an automatic event for revenue or invoice amounts that may be positive or negative, depending on your implementation of billing extensions. See: Billing Extensions, Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.
Deferred Revenue. A Deferred Revenue classification generates an invoice for the amount of the event, and has no immediate effect on revenue.
Invoice Reduction. An Invoice Reduction classification reduces the amount of an invoice without affecting revenue. For example, you can use an invoice reduction event to give a discount to a customer on a particular invoice.
Manual. A Manual classification allows you to enter both a revenue amount and a bill amount. These two amounts can be different. Classify an event type as manual when you need to indicate different revenue and bill amounts.
Scheduled Payment. A Scheduled Payment classification generates an invoice for the amount of the event. Oracle Projects marks expenditure items on the project being invoiced on a first-in first-out (FIFO) basis up to the amount of the event. When you use this classification, you can show details of an invoice in the Invoice Review window by pressing the Details button. The details do not calculate the bill amount and are never printed on the invoice.
Attention: Events with Scheduled Payment classification can be entered for any project irrespective of whether the Invoice Method is Event. However, when schedule payment events are entered for projects with Invoice Method as Event, the expenditure items are marked with the event number on a first-in-first-out basis (FIFO) when processing the event. If the Invoice Method is other than Event, the schedule payment events are processed as manual events and the underlying expenditure items are not marked with the event number.
Write-On. A Write-On classification causes revenue to accrue for the amount of the write-on. A Write-On also adds the write-on amount to the subsequent invoice. Revenue and invoice amounts are identical. For example, when your business earns a bonus for completing a project on time or under budget, you can define an event type with the Write-On classification to account for the bonus amount. A write-on causes revenue to accrue and generates an invoice to bill your client for the bonus amount.
Write-Off. A Write-Off classification reduces revenue by the amount of the write-off.
Realized Gains: A Realized Gain classification allows you to create an event to support reclassification of realized gains during funding revaluation.
Realized Loss: A Realized Loss classification allows you to create an event to support reclassification of realized losses during funding revaluation. See Funding Revaluation, Oracle Projects Fundamentals.
The following table describes how each event type classification affects revenue and billing.
| Classification | Revenue Effect | Billing Effect |
|---|---|---|
| Automatic | Depends on billing extension definition | Depends on billing extension definition |
| Deferred Revenue | No effect | Bill for amount of event |
| Invoice Reduction | No effect | Reduce a bill by amount of event |
| Manual | Accrue amount of event | Bill for amount of event |
| Scheduled Payment | No effect | Bill for amount of event, FIFO |
| Write-Off | Reduce by amount of event | No effect |
| Realized Gains | Increase by amount of event | No effect |
| Realized Losses | Decrease by amount of event | No effect |
Tax Classification Code. Optionally, click Tax Classification Code to select the tax classification code for customer invoice lines created for this event type and operating unit. Oracle Projects uses this as the default tax classification code based on the Application Tax Options hierarchy that you define in Oracle E-Business Tax for the Oracle Projects application and the project's operating unit. For more information on setting up tax classification codes and the hierarchy of application tax options, see the Oracle E-Business Tax User Guide.
Fremont Corporation uses all of the event type classifications to account for a number of situations. Fremont assumes most event revenue is from labor, and they want to track revenue from these event types as variations to labor revenue: Cost-to-Cost revenue, Bonus, and Write-Off.
The following table shows Fremont's event types:
| Event Type Name | Description | Classification | Revenue Category |
|---|---|---|---|
| Bonus | Performance bonus | Write-On | Labor |
| Cost-to-Cost Revenue | Cost-to-cost revenue | Automatic | Labor |
| Fee | Fee earned | Automatic | Fee |
| Invoice Reduction | Invoice reduction | Invoice Reduction | Payment |
| Manual | Manual event | Manual | Fee |
| Milestone | Progress payment | Scheduled Payment | Payment |
| Payment | Scheduled payment | Scheduled Payment | Payment |
| Prebill | Advance payment | Deferred Revenue | Payment |
| Retainer | Retainer payment | Deferred Revenue | Payment |
| Surcharge | Surcharge | Automatic | Fee |
| Write-Off | Unearned revenue | Write-Off | Labor |
If your company uses the cost-to-cost billing method (denoted by a distribution rule of COST), you need to assign a default event type to the predefined billing extensions of Cost-to-Cost Revenue and Cost-to-Cost Invoice. Oracle Projects automatically calls and executes two predefined billing extensions for cost-to-cost revenue accrual and invoicing methods. Oracle Projects creates automatic events for the revenue and invoice amounts.
Define Event Types. See: Event Types.
In the Billing Extensions window, query the two billing extensions and assign an event type to the Default Event Type field.
Save your work.
You can change the cost and revenue budget types used as input for this extension. For example, you can use the forecast cost budget instead of the approved cost budgets. To make this change, change the cost budget type and revenue budget type on the predefined billing extension.
Fremont Corporation assigns the Cost-to-Cost Revenue automatic event type to the two predefined billing extensions, Cost-to-Cost Revenue and Cost-to-Cost Invoice.
Other Sources
Automatic Events, Oracle Projects APIs, Client Extensions, and Open Interfaces Reference
Overview of Billing Extensions, Oracle Projects APIs, Client Extensions, and Open Interfaces Reference