Found 617 results.

Project Cost Management: The Art of Budgeting and Expense Control

Discover the art of Project Cost Management, navigating through budgeting, expense control, and the intricacies of Oracle Fusion Project Costing. Unearth efficient strategies for time and labor utilization, delve into cost creation with ADFDI, and unlock the business benefits that drive project success.

  • Blog
  • Project Cost Management: The Art of Budgeting and Expense Control
Unlocking-the-Secrets-of-Project-Cost-Management-The-Art-of-Budgeting-and-Expense-Control
January 11, 2024

Project Cost Management: The Art of Budgeting and Expense Control

 

Overview of Project Cost Management

Costing, a fundamental procedure in financial management, entails the meticulous computation of budgets for individual projects, each meticulously assigned to their corresponding General Ledger (GL) accounts where the incurred costs will be recorded. This systematic approach to estimating, strategizing, and overseeing project expenditures is encapsulated within the realm of Project Cost Management. This financial scrutiny extends to a diverse spectrum of expenses, encompassing the following categories:

 

  • Labor
  • Miscellaneous Transactions
  • Burden Transactions
  • Supplier Invoices from Oracle Payables.
  • Expenditures submitted from Oracle Personal Time and Expense.
  • Imported expenditures

 

Types of Cost Generation

 

1. Oracle Fusion Project Costing

  • Uncosted labor and nonlabor transactions: It is created via Excel templates.

 

2. Third-Party Application

  • Uncosted labor transactions and nonlabor transactions
  • Costed or accounted labor or nonlabor transaction

 

3. Other Oracle Fusion Applications

  • Oracle Fusion Cost Management
  • Oracle Fusion Time and Labor

 

How to Use Time and Labor in Project Costing?

 

Using Time and labor

  • In the domain of timekeeping, both employees and contractors actively participate in recording hours associated with specific projects. Users enjoy the flexibility of selecting from an array of options, such as designating one or multiple projects, detailing tasks, and classifying expenses, all aimed at precisely monitoring the allocation of their time.
  • The time records submitted for their respective projects undergo scrutiny and approval by project managers. Prior to reaching the project managers, these timecards undergo an automated validation process to verify the project’s validity and functionality, ensuring compliance with organizational standards and project eligibility.

 

The following characteristics are also verified by the Time and Labour method.

  • Business unit
  • Transaction source information
  • Expenditure type and organization
  • Expenditure item date
  • Person
  • Worked hours
  • Batch name

 

Creating cost through ADFDI

Step 1: To record various project cost transactions, use Microsoft Excel spreadsheets with the Application Development Framework Desktop Integration (ADFdi).

Step 2: Enter transaction attributes and export them to Oracle Fusion Project Costing based on the transaction’s nature and source.

Step 3: Use dedicated spreadsheets to record costs from Project Costing and other programs.

 

To download the spreadsheet

 

Navigate: Home page>>Projects>>Costs>>Task>>Capture costs

Under the capture cost, we can find five capture cost methods

  • Create Labour Costs: This is used to create and export uncosted timecard batches.
  • Create Non-labor Costs: Use this to create and export uncosted nonlabor batches such as usages or other transactions.
  • Create Labour Costs for Third-Party Applications: This feature is used to create and export uncosted labor batches.
  • Non-labor Costs for Third-Party Applications: This is used to create and export uncosted nonlabor batches.
  • Create Cost or Accounted Transactions for Third-Party Applications: Use this to create and export cost or accounted labor or nonlabor batches for third-party applications.

 

To Create Labor Costs using Spreadsheet

Step 1: Click on Create Labor Cost spreadsheet and the spreadsheet will get downloaded in the respective folder.

Step 2: Open the spreadsheet and connect to our instance through ADFDI

 

Navigating-to-Capture-Costs-page-Project-Cost-Management

Fig 1.1: Navigating to Capture Costs Page

 

Step 3: The common and mandatory details to be added to the spreadsheet will be available after connecting via ADFDI.

 

ADFDI-Template-of-Labour-cost-Project-Cost-Management

Fig 1.2: ADFDI Template of Labour Cost

 

Mandatory-columns-in-ADFDI-Template-Project-Cost-Management

Fig 1.3: Mandatory columns in ADFDI Template

 

Step 4: Adding the required details click on Status view on the top to find if any errors in the details Entered.

 

Status-viewer-after-cost-upload-Project-Cost-Management

Fig 1.4: Status viewer after cost upload

 

Step 5: Click on Export on the top again

Step 6: A pop will appear with the Process Transactions Checkbox

Step 7: Click on the check box and click on OK

 

Confirmation-page-to-process-cost-Project-Cost-Management

Fig 1.5 Confirmation page to process Cost

 

Notes:

  • There will be another Pop-up with the Transaction Export summary.
  • It will show us the Number of uploaded items.

 

Transaction-export-summary-Project-Cost-Management

Fig 1.6: Transaction export summary

 

  • When the items are loaded, the Project cost will be uploaded in the Manage Project Cost.
  • In case the Cost is stuck in the interface tables, the Import costs process can be run to find the Cost upload error.

 

To run Import Cost

Navigate: Home page>>Tools>>Scheduled process>>Import costs

 

Step 1: On the Import cost page fill in the mandatory details like Business Unit, Process mode, Transaction status, Transaction source, and other details accordingly and click on Submit

 

Import-costs-process-Project-Cost-Management

Fig 2.1: Import costs Process

 

Step 2: After the Import costs process is run, the cost will be uploaded in Manage Project Cost or the error detail will be generated in the Import Costs Process report

Step 3: Navigate: Home page>>Projects>>Costs>>Task>>Manage Project Costs

Step 4: Query the project cost with the Project number, Project name, and Expenditure item date.

 

Uploaded-project-costs-Project-Cost-Management

Fig 3.1: Uploaded project costs

 

Details-of-the-particular-cost-Project-Cost-Management

Fig 3.2: Details of the particular cost

 

Step 5: Select the Project cost and click on Actions

Step 6: In the Actions dropdown – Costing, Billing, and other actions that can be made on a Project cost

Step 7: Under the Costing tab various options are available below:

  • Transfer
  • Split
  • Split and transfer,
  • Reverse,
  • Set to Capitalizable,
  • Set to Non-Capitalizable and other adjustment activities

 

Costing-options-in-project-costs-Project-Cost-Management

Fig 3.3: Costing options in project costs

 

Step 8: Under the Billing tab, various options are available as below

 

  • Set it to Billable
  • Set it to Non-Billable
  • Hold invoice until released,
  • Release invoice hold,
  • Recalculate invoice amount
  • Recalculate revenue amount and other adjustments

 

Billing-options-in-project-costs-Project -cost-Management

Fig 3.4: Billing options in project costs

 

Limitations of Oracle Fusion Project Costing

  • Oracle Fusion Project Costing stands as an all-encompassing project cost management solution, meticulously designed for monitoring and overseeing project expenditures.
  • The process of importing substantial amounts of data or entire projects through ADFDI helps reduce the need for manual data entry, and streamlining operations.
  • While Oracle Fusion Project Costing offers robust functionality, mastering its capabilities may necessitate substantial training and expertise on the part of users.
  • Integrating Oracle Fusion Project Costing with other Oracle or third-party applications can be a challenging and time-consuming endeavor, requiring careful consideration and implementation.

 

Business Benefits of Oracle Fusion Project Costing

  • The system aids in the creation and management of project budgets.
  • The system automates billing and invoicing operations, lowering the possibility of errors and guaranteeing that bills accurately reflect the job accomplished.
  • Organizations may proactively identify cost overruns and take remedial actions by having a comprehensive perspective of project costs and performance, assisting in keeping projects on schedule and within budget.
  • It assists organizations in optimizing resource allocation, controlling expenses, and making informed decisions, resulting in enhanced project outcomes and financial performance.

 

The Bottom Line:

In conclusion, this blog uncovers the intricacies of Project Cost Management, encompassing budgeting, expense control, and the features of Oracle Fusion Project Costing. It explores time and labor utilization, details the process of cost creation using ADFDI, and emphasizes the significant business advantages contributing to successful project outcomes. From cost capture to expenditure management, the guide offers practical insights and step-by-step guidance. While acknowledging the limitations of Oracle Fusion Project Costing, it underscores the system’s strengths in budget creation, automated billing, and proactive identification of cost overruns. Ultimately, it serves as a roadmap for organizations to optimize resource allocation, control expenses, and make informed decisions, leading to improved project outcomes and financial performance.

 

Author: Manojkrishnan Kumaraswamy, Oracle ERP Cloud Consultant

Oracle ERP Cloud

Simplify Processes, Improve Productivity, & Increase ROI with the future-proof & AI-driven Oracle ERP Cloud.

Read More

Categories