By Ravi Shankar, PgMP, PMP, PMI-RMP and PMI-SP
Oracle E-Business Suite (EBS) Projects Applications Release 12 provides rich functionality to support multi-currency processing capabilities in accruing revenue and generating invoices. Revenue is always processed in the project functional currency, distinct from the project and project funding currencies. Revenue amounts derived in the billing transaction currency (invoice processing currency) are converted to project functional, funding, and project currency during the revenue generation process. In addition, the Release 12 EBS system tracks and posts the revenue, unbilled receivables, and unearned revenue in both the functional and billing transaction currency to the general ledger, thereby giving complete visibility, both at the project level and in the general ledger, of the details of revenue in the different currency options.
As regards invoicing, the EBS system provides features to invoice and bill in any currency, independent of the project’s functional and funding currency. For this purpose, multi-currency billing has to be enabled in the Implementation Options that would facilitate entering funding agreements, bill rate schedules, and billing assignments in any currency independent of the project’s functional currency. Invoice by bill transaction currency is the feature to generate invoices based on the transaction currency of expenditure items, event currency, and the bill rate schedule currency. If this feature is implemented, the system does not read the invoice currency defined and chosen in the Project Customers region of the project. Instead, it generates an invoice based on the bill transaction currency.
While Budgets and Forecasts can be entered in any transaction currency, we can enter approved revenue budgets only in the project functional currency.
Invoicing can be generated based on the project functional currency, the project currency, or the project funding currency. The R12 system derives the applicable currency conversion attributes to compute the respective currency amounts if the invoicing currency differs from the project’s functional currency. We can also choose to use the project functional currency conversion attributes to derive the Receivables functional currency values when the invoice processing currency differs from the functional currency of the Set Of Books/Ledger. While funding and invoicing can be in any currency, the revenue budget must still be only in the functional currency of the Set Of Books/Ledger if they are entered in Professional forms. For this purpose, the R12 system uses the exchange rate when funding is allocated, using the project’s appropriate rate type defined in the Billing tab of the Currency region.
Suppose a hard limit is defined for the funding for revenue and invoice. In that case, the R12 system ensures that the revenue amount does not exceed the hard limit in the funding currency and the corresponding baselined revenue budget.
Funding in foreign currency can be periodically revaluated to align the funding backlog (funded amount less invoice generated) to the current exchange rates to the project functional currency. The system creates funding adjustment lines considering the funding backlog, paid invoices, realized gains, losses, and unpaid invoices. This additional/decrement funding has to be baselined to ensure the hard limits imposed in the Funding agreement window are complied with. Optionally, the realized gains and losses can be treated as a net increase and decrease in the projected revenue and posted to GL.
