An expenditure type is a classification of cost that you assign to each expenditure item you enter in Oracle Projects and is made up of the following elements:

1. An expenditure category (used to group expenditure types for costing)
2. A revenue category (used to group expenditure types for revenue and billing)
3. A unit of measure
4. One or more expenditure type classes
5. You also specify whether an expenditure type requires a cost rate: For supplier invoice expenditure types, if you specify that a rate is required, Oracle Projects requires you to enter a quantity in Oracle Payables for invoice distributions using that expenditure type. When you interface the invoice distribution to Oracle Projects, Oracle Projects copies the quantity and amount to the expenditure item and calculates the rate. If you define a supplier invoice expenditure type with the Rate Required option disabled, then the quantity of the expenditure item is set to the amount you enter in Oracle Payables.

Multiple Expenditure Type Classes Per Expenditure Type
You can assign multiple expenditure type classes to an expenditure type. For example, an expenditure with the expenditure type Materials can have the expenditure type class Supplier Invoice if it originated in Oracle Payables, and the expenditure type class Inventory if it originated in Oracle Inventory.
This feature allows you to use a single expenditure type to classify as many different costs as you require. You can use the same expenditure type for expenditures that have different origins (and therefore different accounting), but which should otherwise be grouped together for costing, budgeting, or summarization purposes.

To define expenditure types:

Navigate to the Expenditure Types window.
1. Name: Enter a unique name for the expenditure type.

2. Expenditure Category and Revenue Category: Enter the expenditure category and revenue category you want to associate with this expenditure type.
  
3. Unit of Measure: Enter the unit of measure you want Oracle Projects to use when calculating the cost for this expenditure type. You must enter Hours for labor expenditure types.
  
4. Rate Required: If this expenditure type requires a cost rate, check the Rate Required check box, then choose Cost Rate to navigate to the Expenditure Cost Rates window and enter a cost rate and its effective date(s). The rates can be defined by operating unit.
If this expenditure type does not require a cost rate, do not check the Rate Required check box.

Note: If you create a non-labor expenditure type without checking the Rate Required check box, you cannot subsequently require and enter a cost rate for that expenditure type. Instead, you must disable the expenditure type and create a new one that requires a cost rate and has a unique name. If you check the Rate Required check box when you create a non-labor expenditure type, you can change the cost rate at any time.

Non-labor costs are calculated either by expenditure type or by non labor resources.
You can enter the cost rate either in expenditure type or in non labor resource.  If you enter cost rate in an expenditure type then system would consider the same rate for all the operating units but if you want to put different cost values in different operating unit then create a non-labor resource and attach it to the expenditure type. You can attach different cost rates in different OUs to the same non-labor resource.
         

5. Tax Classification Code: Optionally, click Tax Classification Code and select the tax classification code for customer invoice lines for this expenditure type and operating unit. Oracle Projects uses this code as the default tax classification code based on the Application Tax Options hierarchy that you define in Oracle E-Business Tax for Oracle Projects and the specified operating unit. For more information on setting up taxes and the hierarchy of tax options for an application and operating unit, see the Oracle E-Business Tax User Guide.

6. Description and Dates: In the Description, Dates region, enter a description for the expenditure type. You can optionally enter effective dates for the expenditure type.

7. Expenditure Type Classes: In the Expenditure Type Class region, enter the expenditure type class or classes you want Oracle Projects to associate with this expenditure type, to determine how to process the expenditure item.

Notes: If you create and save an expenditure type, you cannot subsequently update the following attributes for the expenditure type:

• Name
• Expenditure Category
• Revenue Category
• Unit of Measure
• Rate Required check box

Instead, you must enter an end date for the expenditure type and create a new one that has a unique name. When you enter an end date for an expenditure type, the end date has no effect on existing transactions. Oracle Projects uses the old expenditure type to report on and process existing transactions. You cannot use the old expenditure type for new transactions that have an expenditure item date after the end date.

Example:  Company ABC Corp is doing an oracle apps R12 implementation project for a mobile manufacturing company Mobile India
1. Expenditure Categories – Bill, Salary, Transport, Facility
2. Revenue Categories – Client, Others
3. Expenditure Types:             
                                                                               Expenditure Categories                     Revenue Categories 

Expenditure type class: Usage, Miscellaneous, Expense Report, Supplier Invoices, Burdened Transaction, Straight time, over time, Inventory and Work in Process.