What is AFP?

“Application for payment (AFP)” is a process of requesting customer for payment for the work completed on a project. This is popular in the UK in the construction industry or large projects-based execution contracts.

It involves various stages as mentioned below with  each stage requiring specific accounting:

·         Application  -Project implementation company putting a request for payment detailing the work done.

·         Certification – Customer acknowledging the work done.

·         Invoicing – Final tax invoice sent to customer.

Business Challenges

·         Multiple billing and revenue recognition methods : As complexity and variation increases in billing and revenue methods, it becomes challenging to manage them. Ensuring correct setups, processes, and accounting becomes challenging if there is no centralized platform to coordinate the billing activity.

·        Application for Payment :  AFP is a widespread method for billing in construction industry and it is not supported by Oracle EBS. Application for Payment process involves revisions, retention, and cumulative amount calculations for accounting entries to be posted to the Ledger. It is very effort-intensive if tried to manage outside the ERP.

Requirements

·         Support for various “billing types” that dictate how invoices and revenue are generated.

·         Enable Application for Payment process with revisions, retention, and cumulative amount calculations.

·         Provide flexibility to use a mix of invoice (Standalone and Consolidated Billing) and revenue (cost-based and event-based, Revenue over Time and Point-in-Time revenue) generation methods.

Our Solution

Solution involved creating a front-end layer using APEX Workbench that is seamlessly integrated with Oracle eBS through Oracle DB.

Apex was implemented on the same oracle database (as against a different database and then accessing data via dblinks), which is the recommended approach to avoid database sync, performance, and connectivity issues.

It offers :

·         Support for Application for Payment process

·         Easy and intuitive management of billing types

·         Minimizing user errors through controls, messages, and field restrictions

·         Excel-based upload of data

Solution Highlights

1. Billing Types administration

Billing types are sets of rules that determine.

·         Whether Application for Payment process is followed or not

·         When and how much revenue generation happens.

·         When and how much invoicing happens.

·         Other constraints like one-to-one relationship between Contract and Project, and maintenance of milestones.

2. Contract Creation

A single screen guides user through all the steps so they do not miss any steps and enter all mandatorily required information.

Multiple revisions are possible for baselining incrementally changing data.

3. One-stop Contracts data

All the data related to Contracts is maintained on a single screen.

–          Customer information

–          Stakeholders (“Key Members”

–          Linked projects.

–          Contract lines

–          Milestones and payment schedules

–          Documents

–          Revisions

–          Currency

–          Budgets

Contract lines and budgets can be uploaded via Excel upload functionality. It also allows drag and drop of files directly from the desktop.

4. Application for Payment information

A complete record of all applications till date including:

–          Stage amounts

–          Revisions

–          Standalone and cumulative amounts

–          Valuation and payment dates

–          Status (Applied, Certified, Fully Paid etc)

–          Projects and Tasks linkage

–          Retention calculations

–          Documentation

5. Reports repository

Easy-to-use custom reports available at a single place.

Translating Apex Transactions to Oracle

Conclusion

Above approach provides an end-to-end solution for the Contracts and Projects flow with seamless integration between APEX workbench and Oracle.

This functioned as a structured, single source of truth for all billing types and billing-related processes with a smooth flow across all projects. This has been a one of the key solution differentiators for the overall Oracle eBS implementation at our client which marked a difference from the legacy system of an old ERP plus various bolt-Ons. The result is a happy user group with a friendly user interface that also simplifies their day in a life by streamlining the process.