Project Costing Reconciliation Made Easy

1. Project Costing Reconciliation Made Easy Sachin Singh Deloitte Consulting LLP July 20th, 2012

2. Agenda

3. Disclaimer • This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. • Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. • Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. • Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation. Project Reconciliation Made Easy

4. Introduction

5. Introduction…This presentation will…. a Explain the limitations in handling an operational process. b Explain data and accounting entries flow in Oracle Project Costing c Explain the need for custom reconciliation solution. d Case Study: How to utilize a custom solution to meet reconciliation needs. 5 Project Reconciliation Made Easy

6. Problem Definition • The key issues company faces with the reconciliation of Oracle Project Costing with Oracle General Ledger are: • Multiple reports are used for reconciliation with limited visibility of all type of costs in Oracle Project Costing. • Non-availability of a standard report, which can provide visibility of the costs directly booked in General Ledger therefore losing the visibility of Project details. • Non-availability of a standard report, which can provide the accounting information of the Project costs directly booked in Oracle Project Costing when comparing it with the costs booked in General Ledger. • Non-availability of a standard report , which could convert details of all the Project costs in the accounting format for comparison and reconciliation purpose. 6 Project Reconciliation Made Easy

7. Oracle Project Costing Data Flow iProcurement Purchasing General Ledger Inventory/OPM Payables Oracle Project Costing Fixed Assets 7 Project Reconciliation Made Easy

8. Oracle Project Costing Accounting Flow Payables General Ledger Project Costing Fixed Assets Project Costing General Ledger Cost flowing from Payables to Projects Cost flowing from Projects to Fixed Assets Manual JE in GL Accounted Transactions in Projects Entries in GL without project details Accounted entries in Projects not interfacing to GL 8 Project Reconciliation Made Easy

9. Existing Process for Project Costing Reconciliation • Reports available within EBS • AUD: Project Subledger: Detail by Expenditure Type(Oracle Project Costing) • AUD: Project Subledger: Detail by Project (Oracle Project Costing) • AUD: Project Subledger Summary (Oracle Project Costing) • Account Analysis report (Oracle General Ledger) • Steps for reconciliation • Execute AUD: Project Subledger report. • Execute Account Analysis report in General Ledger. • Download both reports and reconcile each accounting combination. 9 Project Reconciliation Made Easy

10. Case Study

11. Background • Client is a leading biopharmaceutical company from the Life Sciences Industry. • Client was using out-of-the-box solution to track costs using Oracle Project Costing. • All cost centers related to R&D department uses Projects for tracking their 100% of the cost through Oracle Project Costing • Client was using following non-oracle systems : • Time Entry system • Payroll calculating and generating system • Expense re-imbursement system • Clinical trial payment system • Client was using Oracle Project Costing for tracking actual allocations from different cost centers (performed in GL) and depreciation of the fixed assets purchased for the departments. 11 Project Reconciliation Made Easy

12. Solution….Reporting Needs Projects General Ledger • Project • Expenditure Type • Expenditure Organization • Location • Amount • Projects Source • Natural Account • Cost Center • Location • Amount • General Ledger Source 12 Project Reconciliation Made Easy

13. Solution….Reporting Needs • Created three layouts for providing reconciliation information: • Layout1 – Summary layout to provide executive level summary at the cost center level. • Created following detailed layouts to provide: • Layout2 – Detail information without Project Code for Accountants. • Layout3 – Detail information with Project Codes for Project Controllers and Project Accountants. 13 Project Reconciliation Made Easy

14. Solution….Layout1 • Summary Layout (Layout1) has following key features: • The report output fulfills the requirement of presenting all related costs for the cost centers flowing to General Ledger from Project Costing. • The report output has two sections: Projects and General Ledger. • Each section provides summarized cost comparison between Project Costing and General Ledger at the cost center level. • The summary layout is convenient for the users at the executive level. 14 Project Reconciliation Made Easy

15. Solution….Layout2 • Detail Layout (Layout2) has following key features: • The report output fulfills the requirement of presenting all related costs for the cost centers with additional details (e.g. Source, Expenditure Type, etc.) • The report output has two sections: Projects and General Ledger • The report compares the Expenditure Type in Projects with Accounts in GL. • The report compares the Expenditure Organization in Projects with Cost center in GL. • The report compares the cost at the expense source level. 15 Project Reconciliation Made Easy

16. Solution….Layout3 • Detail Layout (Layout3) has following key features: • The report output fulfills the requirement of presenting all related costs for the cost centers by Project Number. • Project Number is shown in the report to further drilldown on Projects. • The layout helps in identifying the reconciliation differences at the Project Code level. 16 Project Reconciliation Made Easy

17. Benefits • The custom reconciliation process helps to reduce time and effort during period close. • This solution presents the information in user-friendly layout therefore allowing for easy navigation. • “Single source of truth” – review all costs and transactions related to Oracle Project Costing and compare to General Ledger without running multiple reports. • The reports can run at Cost Center, Natural Account, and Source level which allows flexibility for data comparison. • Compares the information at the accounts level with the Project Code therefore meeting needs for cross-functional users in the organization (Executive, Project Manager, Project Controller and Accountants) 17 Project Reconciliation Made Easy

18. Questions Contact Information: Sachin Singh Sr. Consultant, Deloitte Consulting LLP sachsingh@deloitte.com 650-576-4826 As used in this presentation, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries 18 Project Reconciliation Made Easy

19. Project Reconciliation Made Easy