By Wendy Lamar

Oracle E-Business Suite (EBS) Release 12.2 includes new functionality that provides a more accurate view of your project labor costs and expedites customer billing and revenue recognition.

Release 12.2 allows companies to integrate their payroll – Oracle or Third Party – to apply actual labor costs to labor transactions, resulting in a more accurate view of your project labor costs. This also allows the use of actual costs for calculating your burden costs when applicable. Additionally, Oracle added functionality to allow for accrual of the labor costs using either standard accrual rates or HR rate matrices to accrue this cost for reporting, expedited customer billing and revenue recognition, and/or accounting entry recognition in the general ledger.

Integration between Oracle Time and Labor (OTL), Oracle Payroll or a third-party payroll application, and Oracle Project Costing allows the timecard to be entered in OTL and interfaced to Project Costing, creating an uncosted expenditure item of expenditure type class Straight Time or Overtime. Next, after the related payroll has been processed and costed, the costed payroll information is applied to the related Oracle Time and Labor expenditure item by running the new process PRC: Process Payroll Actuals. Finally, costs appear after the concurrent program PRC: Distribute labor distributes the labor costs on the expenditure item.

In addition, new functionality allows the interface of costs directly from your payroll system to Oracle EBS Projects bypassing OTL if the transaction is not timecard related. This process results in an expenditure item of expenditure type class Miscellaneous. For example, this feature might be used to recognize a bonus or a payroll adjustment not tied to a time entry.

The primary configuration required for this functionality involves defining a labor costing rule using the Actual Cost method and defining your Pay Element Distribution Rules. These rules map the payroll element to the related expenditure item and control how to distribute the payroll costs to an existing or new expenditure item.

By configuring the labor costing rule to allow accruals, you can apply cost rates to the straight-time transactions to accrue your labor costs between payroll processing cycles. The rates used to accrue your labor costs between payroll cycles can be derived from HR rate matrices, or you can calculate labor cost accruals using rate schedules. These costs are reversed when the actual payroll costing is interfaced with projects. If you do not wish to use the labor cost accruals, you disable the functionality for the labor costing rule. For example, if both your time entry and payroll cycles are weekly, you may not need to accrue the labor costs. However, if your time entry is weekly but the payroll cycle is bi-weekly or semi-monthly, you may want to accrue these costs for reporting purposes between payroll cycles.

Register to view a new on-demand webinar that explains this functionality in more detail: The Business Benefits of New Costing Functionality in Release 12.2