In an earlier post, I had detailed information about COGS.
Then in another post, I detailed how vanilla functionality accomplishes that here.
In this post, I would like to get real and discuss what happens when Contract Currency <> Ledger Currency.
Going back to what Oracle provides…………
the best fit at this time is the below equation (from post detailing vanilla Project Process Configurator functionality )
(“CalculationLevelNonlaborRawCostinProjectFunctionalCurrencyITD”
+ “CalculationLevelLaborRawCostinProjectFunctionalCurrencyITD”
– “CalculationLevelEventRevenueinContractCurrencyITD”)
One can immediately sense that this is not going to work if ProjectFunctionalCurrency <> ContractCurrency.
“Houston – We have a problem !” – We cannot force all contracts to be in ProjectFunctionalCurrency.. Can we ??
(& yes – I checked – Oracle does not have any other relevant data sources available at this time)
How do we go about ‘solutioning’ this ?
- Since contract events can be entered in contract currency only.. we will need to come up with a way to calculate COGS Accrual amounts in ContractCurrency albeit the amount should translate to Ledger(ProjectFunctional) Currency.
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- something like (Sum of all applicable costs in Ledger Currency – Sum of historical COGS cleared in Ledger Currency) * ExchRate (so that the resulting amount is in Contract Currency)
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Is there any vanilla functionality that does this for us ?
- No
- The last time I have a heart to heart discussion with Oracle Product Manager – he understood the need & was hinting that he may be thinking of achieving this based on “Project Expenditures” instead of “Contract Events”.
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- That is one way to skin the cat (as we did have 2 methods to achieve this in EBS R12 world based on Client’s preference)
- but – since COGS needs to be tied to Revenue even when the Revenue is not expenditure based – the most predominant method was to use a Revenue Event.
- I am still keeping my fingers crossed to hear back from Oracle. Am sure this is not on the top of their agenda with AI and stuff coming along.
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How to Automate this ?
- As you can see, the math is there – but we need something Automatic
- This is where it becomes a little technical.
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- We can build a OTBI Report that can churn up the data needed to create a Event
- Make the report deliver to a OIC server (on demand).
- Set the OIC server to pick up these reports and invoke APIs to create the needed events
- & yes – I have got this done at clients I work with.
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