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New Agreements functionality in R12.1.1

In R12.1.1 some long awaited improvements have been made to the Agreements functionality. Here is a summary of these and some context about how this functionality might be used or applied. I am always happy to hear people’s opinions, particularly of examples of user requirements where this functionality can provide solutions.

Agreements Form

The Agreements form has been enhanced significantly as you can see here:

This combines with various other new fields in the application to provide the following new functionality.

Control Funding Consumption

Some excellent new functionality now exists to allow users to control how funding is consumed when Invoices are generated. The following new fields and functionality have been introduced.

Date Effective Funds Checking

On Project Types a check box exists to enable Date Effective Funds Consumption. This allows the Project Types to use this functionality but as with a lot of Project Type settings, does not mandate it.

The above Project Type definition field defaults to the Revenue and Billing information window on a Project Template or Project definition.

There is also an Agreement Override field on Events which will be enabled if the Date Effective Fund Consumption check box is ticked. When the Agreement number is entered it is validated against the Start and Expiration dates on the Agreement form and is used to govern which Agreement the Event consumes funding from. As with many of the Event fields, it can not be updated when the Event has generated Revenue or Invoices.

Start Date

The Agreements form now has a Start Date field to compliment the existing Expiration Date field. It is an optional field that when combined with the Expiration Date dictates which Agreement funding is consumed first, based on the Expenditure Item or Event Date, i.e. the Expenditure Item or Event Dates must fall within these dates.

Billing Sequence

The Agreements form now has a Billing Sequence field. This controls the order in which agreement funding is consumed. This field is also now shown in the Project Funding Inquiry form.

Summary

Combining all of the above users can now conquer the perennial problem of controlling which Agreements are used when revenue and invoices are generated, and in what order. I would envisage an extensive uptake of this functionality. I think every user of Project Billing has, at some time or other, wanted this functionality. The process for using Date Effective Funds Consumption follows the hierarchy:

1. Agreement Override: The Agreement Override on the Event is called before the system looks at the Event dates when compared to the Start and Expiration dates on the Agreements
2. Hard limits: If there are no Agreement Overrides the system looks at the Agreements with hard limits and derives the Agreement to use in the following order:
   1. Billing sequence number – lowest first
   2. Expiration date – earliest first
   3. Funds remaining
3. Soft Limits: If there are no agreements with hard limits the system uses agreements with soft limits in the same order as described above for agreements with hard limits

Prepayment Application to Agreements

Users can now apply Pre-Payments (aka Payments In Advance or On Account Receipts) in Receivables to Agreements in Oracle Projects.

Advance Required

A new flag called Advance Required has been added to the Agreements form; this specifies if an Advance is required. In this case it prevents the funding to projects exceeding the value of the pre-payments applying to the Agreement. This is an excellent new control mechanism.

New Buttons and a new Window

New buttons have been added for Apply Receipt, Unapply Receipt and View Receipts. The first two of these access a new Apply/Unapply Receipts window; these are the same apart from the window name. The View Receipts button takes you to the existing Receipt Summary window in Receivables.

Advance Amount

This field is display only and shows the Receipt amount when Receipts are applied to the Agreement. A new client extension also exists to allow users to specify which Customers must provide Advances by automatically flagging Advance Required

Summary

All the above will be useful where Payments are required in advance for specific projects. This is very topical in the current economic climate where financing the start up of a large project, and for that matter any project, may require advance payments from a Customer.

Customer Order Number

This is a new optional free-form text field. There is no validation on this field. As far as I can discern it does not appear on the standard Invoice Print so I am not sure what business requirement this satisfies. Does anyone know what the business benefit is here?

Line Of Accounting

Again this is a new optional free-form text field. There is no validation on this field. This field can be displayed on Invoices, so some benefit can be gained here through helping Customers ensure they account Invoices through their own Payables system correctly. Although I have no direct experience of customers asking for this specific information (usually an Agreement Number or Reference is enough), I can see this field having a multitude of uses where any sort of reference is requested by the customer.

Invoice and Revenue Summary

These forms also have additional fields to complement the above functionality:

10 Aug, 2009 by Barry Crawley

E-Business Suite