Overview

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The article will detail the process when Sponsored Expenditures are incurred and Contract Events are processed in PPM or Contract Events are processed in PPM Contract Management

Critical Concepts

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• Billing is created and Revenue is recorded in PPM up to the Contract Funding amount through the Generate Revenue schedule process
• See below the Unbilled and Billed Accounts related to the Revenue Accounts based on Award Type

Outline of Process

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These are the Journal entries involved in the Revenue Process

• Revenue is recognized at the Expense level for Cost Reimbursable Awards during the Billing process (in addition to sponsored projects, the Cost Reimbursable function is now available to other project types, too)
• Revenue is recognized at the Invoice level for Fixed Price/Milestone Awards during the Billing process
• Revenue is recorded at the Fund/FinU level, in IFIS it was at BFS Revenue Index
• For conversion, all amounts billed, both paid or unpaid were converted into new Invoices in OFC, one Invoice for cumulative billed and paid; separate Invoices for each unpaid Invoice in ISIS
• Hence, the Revenue for those Invoices were generated in this current fiscal year
• To ensure Revenue is not being recorded twice, a Journal was made to reverse it at the FinU level conversion, a correction file was done in January 2021 to correct misconverted amounts

Examples of Diagram above

Case 1 - Cost Reimbursable Invoice

Project Number: 1018296

Date	Action
02/01/2021	Lab supplies purchased
02/08/2021	Invoice created (including lab supplies purchased on 02/01/2021)
02/08/2021	Revenue recognized in PPM
02/09/2021	Cash received
03/01/2021	Payment applied to Invoice

Expense Incurred - Lab supplies purchased

1.  The Expense is recorded at the item level - Department Process

     Debit:      Lab Supplies Expense

     Credit:     Account Payable

Invoice Created - Including lab supplies purchased on 02/01/2021

2.   The Receivable and Revenue are recognized when the Invoice is created - Central Office Process

a.   Receivable recorded to the Invoice level (PPM to AR)

      Debit:     A/R Federal Grants Billed

      Credit:    A/R Federal Grants Unbilled

b.   Revenue is recognized at the Expense item level (PPM to GL)

      Debit:     A/R Federal Grants Unbilled

      Credit:    Federal Grants Revenue

Cash Received

3.   The payment is received and put in the Undistributed Account before being applied to the receivable (Invoice) - Central Office Process

      Debit:     Cash

      Credit:    Undistributed Cash

Applied Payment

4.   The payment is applied to the receivable from the Undistributed Account - Central Office Process

      Debit:     A/R Federal Grants Billed

      Credit:    Undistributed Cash

Revenue Flow to the General Ledger

5.   The revenue flows to the General Ledger after it is recognized in Oracle Cloud PPM on 02/08/2021

      It can be verified by running the General Ledger Transaction Details report in Oracle

                             

 

 

 

Case 2 - Fixed Price/Milestone Invoice

Project Number: 1031203

Date	Action
07/02/2020	Invoice created - Per Payment Schedule stated in the agreement
07/02/2020	Revenue recognized in PPM
02/22/2021	Cash received
03/01/2021	Payment applied to Invoice

 

 

 

 

Invoice Created 

1.   The Receivable and Revenue are recognized when the Invoice is created - Central Office Process

a.   Revenue is recognized to the Invoice level for Fixed Price/Milestone Awards (PPM to GL)

      Debit:     A/R Unbilled Private

      Credit:    Private Contracts Revenue

b.   Receivable recorded to the Invoice level (PPM to AR)

      Debit:       A/R Adv Billed Private

      Credit:      A/R Unbilled Private

Cash Received 

2.   The payment is received and put in the undistributed Account before being applied to the receivable (Invoice) - Central Office Process

      Debit:     Cash

      Credit:    Undistributed Cash

Applied Payment

3.   The payment is applied to the receivable from the Undistributed Account - Central Office Process

      Debit:     A/R Adv Billed Private

      Credit:    Undistributed Cash

 

Revenue Flow to the General Ledger

4.   The Revenue flows to the General Ledger after it is recognized in Oracle Cloud PPM on 07/02/2020- Central Office Process

It can be verified running the General Ledger report in Oracle