Agreements and Project Funding

In Oracle Projects, an agreement represents any form of contract, written or verbal, between you and one of your customers. For example, an agreement may correspond to a purchase order, a continuing service agreement, or a verbal authorization.

An agreement provides the funding for projects and tasks. Each agreement you define includes the following items:

  • A customer
  • A hard or a soft limit for revenue and/or invoice
  • A currency amount
  • An organization that owns the agreement

If you specify a hard revenue and invoice limit on an agreement, Oracle Projects prevents revenue accrual and billing activity beyond the amount you funded to a particular project or task. If you specify a soft revenue and invoice limit, Oracle Projects provides a warning telling you when revenue and billing for the project exceeds the amount you funded.

Note: You can specify a hard limit for both revenue and invoice limit, or a hard limit for revenue or invoice limit.
No project or task can accrue revenue without an agreement to fund its revenue budget.

From the Agreements window, you can open the Funding window to allocate funds to one or more projects (or to top tasks within a project), and to see how much unused funding remains for an agreement. Each agreement that funds a project can be entered in a different currency.

For any agreement, you can review the revenue and billing activity associated with the agreement, such as the amount of revenue accrued, the amount invoiced, and the amount of funding that is allocated and has a baseline.
All revenue and invoices in Oracle Projects are recorded against an agreement, and all items that accrue revenue against an agreement subsequently bill against the same agreement.

Important Fields

1. Customer : Enter the Customer who is providing the agreement funding.

2. Agreement Number :
Enter a Number to identify this agreement, such as the customer’s purchase order number.
The agreement number must be unique for this customer and agreement type, although two customers can each have an agreement with an identical agreement number.
Attention: You cannot change this number once you create an invoice against this agreement and interface the invoice to Oracle Receivables.

3. Agreement Type : Enter an agreement Type.

4. Currency & Amount :
Choose the currency code of the agreement from the list of values. The list of values is restricted to the currencies defined in Oracle General Ledger.
Note: The currency field can only be updated if the Multi Currency Billing implementation option is enabled at the operating unit and the funds have not been allocated.

Enter the Amount of this agreement.

5. Payment terms : Enter the payment terms (defined in Oracle Receivables) for any invoices funded by this agreement.

6. Revenue or/and Invoice Limit : Choose the Revenue Hard Limit or/and Invoice Hard Limit check box to impose a hard limit on revenue accrual and invoice generation for projects funded by this agreement. Otherwise, Oracle Projects imposes a soft limit.

A hard limit prevents revenue accrual and invoice generation beyond the amount allocated to a project or task by this agreement.
A soft limit issues a warning when revenue accrual and invoice generation exceed the amount allocated to a project or task.

7. Expiration Date : Enter the date this agreement expires. If you do not want to enforce an expiration date, leave this field blank.
If you generate draft revenue or an invoice for projects funded by this agreement after the agreement expiration date, Oracle Projects creates distribution warnings for revenue and invoices.

8. Administrator : Enter the administrator of this agreement. An agreement administrator can be a future–dated employee. However, this is not recommended or likely, because agreement owners are almost always current employees.

9. Organization :  Enter the name of the organization that owns the agreement.
Note: You can choose any project owning organization( in the project owning organization hierarchy assigned to the operating unit) as the organization that owns the agreement.

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