Rajasekhar Reddy Adam

Cross-charge, Borrowed and Lent,Inter-

Company Processing in Oracle Projects
Main Objectives
Cross Charge Overview
Cross Charge Terminology
Cross Charge Processing Methods
Borrowed and Lent Accounting Processing
Intra-Operating Unit
Required Setup
Example
Screen Shots
Inter-Operating Unit
Required Setup
Example
Inter Company Billing
Setup & Example
Transfer Price Rules
Transfer Price Schedules
Transfer Price Amount Calculation

Employee - ABC belongs to Organization "Org1"
He is working for a Project - "Project1" which
belongs to a different organization "Org2"
If he enters a Time card against "Project1", this is a
cross charge transaction.
Cross Charge Overview
Cross Charge Terminology
Borrowed and Lent
Cross charge transaction
Cross charge type
Intercompany (across legal entities)
Interoperating unit(across operating units)
Intraoperating unit (within a single operating unit)
Intercompany billing
Provider operating unit
Provider organization
Receiver operating unit
Receiver organization
Transfer price

Cross Charge Processing Methods
Borrowed and Lent Accounting
Cross charge transactions between different Operating units within same
legal entity (Inter-operating Unit) or between organizations within same
Operating unit (Intra-Operating Unit).
Creates accounting entries to pass costs and revenue across
organizations without generating internal invoices
Intercompany Billing Accounting
Generates physical invoices and corresponding accounting entries at
agreed upon transfer prices between internal seller (provider) and buyer
(receiver) organizations when they belong to different legal entities or
operating units


Intra-Operating Unit
Intra-Operating Unit is a scenario where both the Provider and Receiver
organization are within the same Operating Unit.
Required Setup
Cross Charge should be enabled both at Project and Task Level. Along with the
transfer price Rules Set.
In the Implementation Options Screen, under the Cross Charge tab (Cross
Charges within an Operating Unit), the Processing Method selected should be
"Borrowed and Lent".
The following Auto Accounting Functions should be setup.
Borrowed and Lent Credit Account
Borrowed and Lent Debt Account
Labor Revenue Borrowed Account
Usage Revenue Borrowed Account

Steps to process
Enter a Pre-Approved Expenditure Against the above project.
Distribute the costs by running PRC: Distribute Labor Costs
Run PRC: Distribute Borrowed and Lent Amounts
Run PRC: Generate Cost Accounting Events.
Run PRC: Generate Cross Charge Accounting Events.
Run PRC: Create Accounting.
Inter-Operating Unit
Inter-Operating Unit is a scenario where both the both Provider and
Organizations are from different Operating Units..
Required Setup
Cross Charge should be enabled both at Project and Task Level. Along with the
transfer price Rules Set.
In the Implementation Options Screen, under the Cross Charge tab (Cross
Charges within an Operating Unit), the Processing Method selected should be
"Borrowed and Lent". This has to be set in the Receiver Operating Unit.
In the Provider Operating Unit:
Go to Setup Costing Provider and Receiver Controls
Search for the Operating Unit - Vision Services (Provider OU)
Under provider controls Receiver section, add the Receiver Operating Unit
Enable Allow Cross Charge
Select Borrowed & Lent for the Processing Method
Steps to process
Enter a Pre-Approved Expenditure Against the above project.
Distribute the costs by running PRC: Distribute Labor Costs
Run PRC: Distribute Borrowed and Lent Amounts
Run PRC: Generate Cost Accounting Events.
Run PRC: Generate Cross Charge Accounting Events.
Run PRC: Create Accounting.
Inter Company Billing
Work performed by a provider operating unit and charged to a project
owned by a receiver operating unit. The provider operating unit creates a
Receivables invoice, which is interfaced as a Payables invoice to the
receiver operating unit.
For Inter Company Billing the Provider and Receiver must be in different
legal entities.
Steps to process
Consider the following Operating units which belong to two different legal entities.
Legal Entity 1 - Projects Vision Communications Receiver Operating Unit
Legal Entity 2 - Projects Vision Services Provider Operating Unit

Go to SetupCosting Provider and Receiver Controls
Query up the Provider Operating Unit (Vision Services in our example)
Under the Provider Controls Tab.Setup the Receiver details as follows:
Receiver Operating unit = Vision Communications
Enable Allow Cross Charge
Processing Method = Inter Company Billing
Inter Company Billing Project = (Inter Company Project created in Provider OU)
Enter an Invoice Grouping Method.

Go to SetupCosting Provider and Receiver Controls.
Query for the Receiver OU (Vision Communications in our example)
Under the Receiver controls Tab, setup the Provider details as follows:
Operating Unit =Vision Services
The supplier will be defaulted based on the setup done in the Implementation Options screen in Vision
Services (Provider OU) under the Internal Billing Tab.
Enter a Supplier Site (mandatory). If not done the Receiver project will not be available in the Pre-
Approved batches screen to enter Expenditure Items.



A Transfer Price Schedule should exist for the corresponding Provider
and Receiver combination



Auto accounting Setup The function Intercompany Invoice Accounts
should be configured



In Projects Vision Communications OU (Receiver Operating Unit)
Create a project "Contract New Project"
Enable Cross charge at both Project and Task Levels.
Under the Cross Charge Section, assign an Intercompany Tax
Receiving Task at the project level
In Projects Vision Services OU (Provider Operating Unit)
Create an Intercompany project type (Intercompany Billing should be
enabled)
The project type should be a Contract project type
Create a template and project based on the above project type.
In the project, under Customers and Contacts, ensure that the
customer contact is be the one defined, in the Vision Communications
(i.e. Receiver OU) in the Implementation Options screen Internal
BillingReceiver Options (Customer name).
The project should have baselined funding



Enter a pre-approved Expenditure Item against project "Contract New
Project"
Distribute the cost. Note: The expenditure item should be entered and
distributed from the Provider Responsibility
From The Provider Responsibility Run PRC: Generate Intercompany
Invoices for a Single Project.
Approve and Release the Invoice.
Run PRC: Interface Intercompany Invoices to Receivables
Go to a Receivables Responsibility for the operating unit and run the
Auto invoice Import Program.
Run PRC: Tieback Invoices from Receivables
Once the processes are successfully completed, data will be inserted
into the following AP tables:
AP_INVOICE_LINES_INTERFACE
AP_INVOICES_INTERFACE
Run the Payables Open Interface Import from a Payables responsibility
(In the Receiver OU i.e. Vision Communications Responsibility)
Run PRC: Interface Supplier Costs (In the Receiver OU i.e. Vision
Communications Responsibility)



Thank You