Accounts

Payables

Accruals

For FY15

June 18, 2015

Information Technology

References:

Finance – Processes – Year End Closing – Tools – How To

  • Chapter 5 - Release, Carryover, Accrue Documents(see pages 5-1 to 5-28)
  • Tutorial

Home Page – Help from the Top Tool Bar- Finance – Year End Reference Manual

Year End Closing Manual – Steps 1, 10 and 11

***Continuing this Year – Manual Accruals of Due to/from Government Entities***

  • The use of 9290/9590 objects will be required for any accruals associated with state or federal programs
  • These entries will need to be manually done via a journal as the Year End Processing activity does not allow the use of objects other than 9210/9510
  • Amounts from manually created journals to 9290/9590 will remain in 9290/9590 during the Asset/Liability roll and will need to be reversed in the new fiscal year
  • Can copy the journal entry and move to the appropriate expense/revenue accounts
  1. Understanding the AP Process
  • You cannot accrue or carryover requisitions in the Open status.
  • You must submit or cancel the requisition.
  • Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity and deal appropriately with the req status and then return to the list without having to have the Requisition activity open
  • Documents with errors will not post
  • You must resolve the errors
  • Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity, deal appropriately with the req amount and then return to the list without having to have the Requisition activity open
  • You cannot process requisitions with negative outstanding accrual or carryover amounts
  • These requisitions must be resolved in the Finance-Requisition activity
  • Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity, deal appropriately with the req amount and then return to the list without having to have the Requisition activity open
  • The accrual and carryover columns on the list are editable, but maynot be set to a negative value
  • If all fields are $0 the requisition will roll to the next fiscal year with a zero dollar amount
  • This would not be something you would generally want to do
  • You must manually complete the requisition
  • Using the quick link on the processing screen that will enable you to go from the screen directly to the requisition activity, deal appropriately with the req and then return to the list without having to have the Requisition activity open
  • When you post anAccrualamount the Escape system will:
  • Create a journal entry in the closing fiscal year to set up the liability
  • Add liability accounts in next year
  • Write history record detailing what was done to the requisition/PO during the year end process
  • When the Payables (PCL) year-end closing list is created, Escape makes the assumption that all requisitions are to be carried over into the next year
  • This is not the case in our county
  • Construction projects are an example of a kind of requisition that may need to be carried over rather than released and reissued
  • The Carryover process allows the req or PO number to remain the same between years
  • This is helpful for Construction projects but can be confusing for most everything else
  • When you post a Carryover amount Escape will internally
  • Change the fiscal year of the requisition
  • Add accounts for next year
  • Reverse outstanding encumbrances in the closing year
  • Encumber amounts in the new fiscal year
  • Write the appropriate history record as to what happened to the requisition/PO during the year end process
  • When you post a Release amount on the requisition (both the accrual and carryover amounts are zero), Escape will
  • Change the requisition status to completed
  • Reverse outstanding encumbrances
  • Write a history record for what was done to the requisition during the year end process
  • The Release column is calculated by subtracting the accrual and carryover amounts from the outstanding amount
  • A red amount will be shown if the result is negative
  • No requisitions items with red amounts can be processed
  • The Accrual process will result in FY15 journal entries which establish AP’s (credits object 9529) and record expenses (debits objects 1xxx through 6xxx) in 2014-15
  • Stores Requisitions do go through the year end process
  • Must be addressed in the Finance–Stores activity
  • See page 5-17 of the Escape Year End Closing manual
  • Stores requisitions default to release
  • Backorders are cancelled automatically
  • Work Orders do not go through the year end process
  • Must be addressed in the Finance-Work Orders activity
  • See page 5-11 in the Escape Year End Closing manual
  • Must be manually closed or cancelled or complete
  • If the work order status is Open or Submitted you must cancel
  • If the work order status is Approved, Assigned or Ready to Expense you have a choice to cancel or complete
  • Reminder:
  • The Asset/Liability roll, which takes place after 2014-15 is closed, will move theGeneral Ledger amounts from object 9529 in FY15to General Ledger object 9510 in FY16
  • The Asset/Liability roll does not roll the specific AP’s to the next fiscal year
  • Until the Asset/Liability roll is performed, there will be no balance in the FY16general ledger object 9510 to offset the payments being made to the FY15 (accrued) payables
  1. To Review Potential PCL’s

Finance – Reports – Fiscal - Fiscal15

Run the Fiscal Year End Checklist (Fiscal 15) report

(provides a list of all items needing to be addressed prior to close)

  • Make sure the Fiscal Year is 2015 (System will default to 2016 after July 1)
  • Leave Reqs as default to No (This will provide only those reqs that have an encumbered balance)
  • Change AP Payments to say Yes (Will include pending AP payments that are not associated with a requisition)

  • Select Go
  • Review the resulting report for any outstanding items that you know you will not want to accrue or carry forward
  • Verify all balances and pending payments
  • Remember to also check encumbrance amounts
  • This report must be totally clean (no entries present) before you are ready to close the fiscal year
  • See Step 1 of the Year End Closing Manual dated 05/29/15for additional uses of this report

Next….go to

Finance – Processes – Year End Closing

(provides a list specific to AP’s via the selection criteria)

  1. Enter search criteria:
  2. Fiscal Year (2015)- System will default to 2016 after July 1s.
  3. Document Type
  4. Select Vendor Req to start for a smaller list to work from
  5. If using smaller lists be sure to run a listing for each type to verify that you have addressed all entries
  6. Account Code may be another limiting selection to start your review
  7. Process Default should say No
  8. The No selection will allow you to determine if you want to process a few items or all items
  1. Select Go
  2. Report options from the resulting report listing:
  3. From Task select Year End Processing Report

Reports all detail for remaining items of each requisition

  1. From the tool bar select the “Magnifying Glass” icon

Snapshot with Payments for the requisition highlighted on your list

  1. Review checklist and take appropriate action as defined in the process outlined below
  2. There can be no remaining entries on the processing screen prior to your close
  1. The Setup of Payables

Finance – Processes – Year End Closing

  1. Document Type = Vendor Reqs
  2. Click Go (Ctrl g)

From the resulting list:

  1. Determine for each line item whether to accrue, carry over or close out the amounts

*****Always use the Enter Key – Not the Tab Key*****

  1. Post the entry or entries from the Task menu
  2. You can post as many times as you want
  3. You will need to run a new search before each processing session
  • Accrual - This is used when you have received the goods or services before July 1st (in FY15) and will pay for them next year (FY16)
  • The payable amount is expensed to the current year account and next year’s liability account is brought into the requisition for payment next year
  • Enter the amount of the requisition (or a partial amount) in the Accrualfield
  • I used $100.00 in the example above
  • Escape automatically moves the dollars to the Carryover field
  • You must then zero out the carryover field
  • Once the Carryover field has been set to zero the system will automatically calculate the release amount and enter it in the Release column for you
  • See the 568.51 in the Release field in the example above
  • When you post an accrual amount Escape will
  • Create a journal entry in the closing fiscal year (FY15) to set up liability
  • Reverse the encumbrance (FY15)
  • Add liability accounts in next year (FY16)
  • Write history record defining what happened to the requisition during year end processing

***Once posted the requisition has “crossed the line” into FY16 and can only be altered from the FY16 fiscal year***

  • Carryover - You can carry forward a requisition from the current year to next fiscal year without setting up a liability
  • This will cause the requisition to be paid from next year’s appropriation with the same req or PO number as the current year (R15 or PO15)
  • Verify the amount of the requisition (or a partial amount) in the Carryoverfield as shown in the example above
  • Escape automatically placed the remaining dollar amount from the requisition in the Carryover field.
  • If you do not change the carry over amount you will need to make sure that you Change the Process Field from No to Yes
  • Escape will not automatically change it for you if no entry is made
  • If you want to carry over an amount different from the Escape entry you will need to change the carry over amount
  • Escape will automatically do the release math
  • Escape will automatically change the process field to yes
  • When you post a carryover amount, Escape will
  • Create a journal entry in the closing fiscal year (FY15)to reverse the encumbrance (FY15)
  • Add expense accounts in next year (FY16)
  • Encumber the amount (FY16)
  • Write history record for year-end processing results

***Once posted the requisition has “crossed the line” into FY16 and can only be altered from the 2016 fiscal year

  • Release - Sometimes it is just better to close out the requisitionas shown in example above
  • Enter zero in the Carryover field
  • Escape will automatically calculate the Release amount
  • Escape will automatically set the process flag to Yes
  • Escape will automatically release the funds upon posting
  • When you release a requisition amount Escape will
  • Create a journal entry in the closing fiscal year (FY15)
  • Release the funds (FY15)
  • Set the requisition to complete (FY15)
  • Create a journal to reverse the encumbrance(FY15)
  • Write history record to document what happen to the requisition during the year end process
  1. Select Post from the Task menu to process all requisitions flagged as Yes
  • There were no changes to R15-00020
  • If I had wanted to actually post carryover for this requisition I would have to manually change the process flag to Yes

  • Always verify that the documents to be processed match with your count
  • In our example above we were changing R15-00016,R15-00019, R15-00021 and R15-00022 (4 documents)

  • Always verify that all your entries processed
  • If there were errors the posting for items with errors would have failed

Payable Issues for Thought

Expired accounts

-Requisitions can be accrued and carried over even if the accounts do not exist or areexpired in the new year (FY16)

-If a component of an account string does not exist you will need to establish the component or fix the requisition before the year end process is attempted

-If possible, the accounts should be corrected prior to the payable being either accrued or carried over

Escape will use the following logic:

-Accrued:

  • The liability account assigned uses the same fund-project yearresourceof the base year account
  • If the resource is changed for thenew fiscal year, Escape uses the new value to assign the liabilityaccount
  • If the new year liability account does not exist, Escape will create it based on the error account and the fund-project year-resource of the base fiscal year

-Carried over:

  • If the expense account is expired prior at the start of the new

year or doesn’t exist in the new year, Escape will use the Finance Error Acct defined on the Ledger tab of the Organization record

  • If the error account is valid, Escape Online processes the requisition andgives the user the following error message: Processed - One or moreaccounts are missing in new fiscal year
  • If the error account is expired or does not exist in the new year, Escape generates an error and stops the processing of the requisition foryear end

In either case a history record is written to the requisition listing the expenseaccounts that could not be used in the new fiscal year

Account Distribution Tied to Line Items

  • To appropriately distribute the accrued/carryover amounts to the liability

Accounts, Escape changes the account distribution option of the req to manual

  • Escape Online adds the liabilityaccounts to the requisition and distributes the amounts
  • Escape writesa history record detailing the amount accrued/carried over and documenting thatthe account distribution method was changed to manual
  • If there is a time when you need to roll back the year end processing, Escape will rollback the year end processing as usual, but leave the account distributionoption set to manual
  • It would be up to you to change the account distribution option and re-evaluate the accounts

Multiple Users

  • Sometimes there are two people working the year end list and they both try to post a requisition at the same time or the same requisition at different times
  • If you receive the error:“Cannot process requisition, it is already infiscal year xxxx,”
  • This means that the document has already been carried forwardto the new fiscal year
  • The requisition has “crossed the line” into FY16 and can only be altered from that fiscal year

Items Process Too Soon – Pre Close

There will be times when you have accrued something and did not mean to.

Basically, you have two options:

  • Cancel the requisition, copy it and make the payment on the new req
  • Make a direct payment to the vendor in the current fiscal year and manually

complete the new fiscal year requisition

  • Return to the Vendor Requisition screen and select Roll Back Year End Processing
  • The Roll Back Year End requires the activity permission
  1. Fixing Vendor Requisition Errors (Pre-Close)

Rollback Procedure

This feature is extremely handy if you need to alter account codes for a requisition that has already been accrued (crossed the line into FY16)

  • You can rollback year end processing for a single requisitionONLYif:
  • The requisition has not beencancelled or completed
  • There have been no payment on the accrued requisition
  • The previous fiscal year is still open
  • When you need to alter last year’s accounts
  • You are a fiscal user or have the Rollback activity

Data Entry Correction

If you have NOT closed the books for the year and discover a data entry mistake in a year-end liability that was set up follow the procedure below:

Finance – Requisitions – Vendor Requisitions

  1. Open the requisition that needs to be changed
  2. From the task bar select the Rollback Year End Processing task.

  1. Go to the Accounts tab
  2. If the req amount is changing
  3. Change the items as necessary

**OR**

  1. Add an adjustment amount to get the requisition total to change

  1. If red X in Acct Undistributed Amount, need to distribute in Accounts Tab
  2. Or change the Manual Account Distribution Option
  3. Go to the Accounts tab
  4. Verify distribution of new cost of the req or if multiple accounts distribute new cost of the req

**OR**

  1. Add account codes if necessary
  1. Save and close the requisition\
  1. Reprocess the requisition on the year End Closing list
  2. This reverses the liability andencumbrance journal entries and changes the fiscal year of the requisitionback to the previous year
  3. Incorrect setup of Payables will affect both fiscal years
  4. FY15 will be overstated if the Payable is set up over the actual amount owed.
  5. FY16 will be understated as you manually complete or pay short the accrued requisition.
  1. Review of Additional Payables (PCL) Information

Three methods to review Payables (PCL) setup, activity and journal information:

1. Finance – Fiscal – Journal Entry

  • Enter the R15-xxxxxx that you are interested in
  • Zero out the Fiscal Year field so you will get a list of all journals to the PCL
  • Select Go

All journals associated with that Payables (PCL) will be listed in order of entry type