Accounts Payables Accruals

Transcription

1 Accounts Payables Accruals For FY18 June 20, 2018 Information Technology

2 Understanding the AP Process The goal of year-end accrual process is to recognize revenues and expenses in the period in which it was incurred, regardless of when payment is received or paid, to ensure accurate presentation of revenues and expenses. Accrual basis accounting records revenues at the time when services or sales are made rather than when cash is actually paid or received. As we get closer to the end of the fiscal year, districts should be reviewing requisitions that do not have a status of Complete, Cancelled or Denied. It is extremely important that you do so before the books are closed, since all requisitions must be either carried forward or closed. AP Batches for are due by 12 noon on 6/21/18 DO NOT create batches between 6/21-7/1/18 Escape Release, Carryover, Accrue Documents You cannot accrue or carryover requisitions in the Open status. o Review the requisition and determine if it needs to be submitted or cancelled o Use the quick link on the processing screen to go directly to the requisition activity Documents with errors will not post o Documents with errors must be resolved o Use the quick link on the processing screen to go directly to the requisition activity Requisitions cannot be processed with negative outstanding accrual or carryover amounts o These requisitions must be resolved in the Finance-Requisition activity o Use the quick link on the processing screen to go directly to the requisition activity The accrual and carryover columns on the list are editable, but may not 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 o This would not be something you would generally want to do o You must manually complete the requisition OR use the Complete? field in Year End Processing List. Posting an Accrual amount in Escape will: o Create a journal entry in the closing fiscal year to set up the liability o Add liability accounts in next year o Write history record detailing what was done to the requisition/po during the year end process Accounts Payable Accruals FY18 June 20, P a g e

3 When the Payables year-end closing list is created, Escape makes the assumption that all requisitions are to be carried over into the next year o This is not the case in our county o Construction projects are an example of a kind of requisition that may need to be carried over rather than released and reissued o The Carryover process allows the requisition or PO number to remain the same between years Posting a Carryover amount Escape will internally o Change the fiscal year of the requisition o Add accounts for next year o Reverse outstanding encumbrances in the closing year o Encumber amounts in the new fiscal year o Write the appropriate history record as to what happened to the requisition/po during the year end process Posting a Release amount on the requisition (both the accrual and carryover amounts are zero), Escape will o Change the requisition status to completed o Reverse outstanding encumbrances o 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 o A red amount will be shown, if the result is negative o No requisitions items with red amounts can be processed The Accrual process results in FY18 journal entries to establish AP s (credits object 9529) and record expenses (debits objects 1xxx through 6xxx) in Stores Requisitions do go through the year end process o Must be addressed in the Finance Stores activity o Stores requisitions default to release o Backorders are cancelled automatically Work Orders do not go through the year end process o Must be addressed in the Finance-Work Orders activity o 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 Accounts Payable Accruals FY18 June 20, P a g e

4 ****Manual Accruals of Due To/From Government Entities**** Must use 9290/9590 objects for any accruals associated with state or federal programs (Example: Cafeteria) Manual Journal Entries will need to be done, as the Year End Processing activity does not allow the use of objects other than 9210/9510. Manual Journal Entries created with 9290/9590, balances will remain in these object codes during the Asset/Liability roll and will need to be manually reversed in the new fiscal year Reminder: o The Asset/Liability roll, which takes place after is closed, will move the General Ledger amounts from object 9529 in FY18 to General Ledger object 9510 in FY19 The Asset/Liability roll does not roll the specific AP s to the next fiscal year o Until the Asset/Liability roll is performed, there will be no balance in the FY18 general ledger object 9510 to offset the payments being made to the FY19 (accrued) payables Accounts Payable Accruals FY18 June 20, P a g e

5 1. Review Potential Accounts Payable Go to 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) Fiscal15 Report must be clear before close of Year Section 2 User Options Fiscal Year =2018 (System will default to 2019 after July 1) Reqs? = No - Do NOT include Requisitions having zero encumbrance balance Payments = Yes (Will include pending AP payments that are not associated with a requisition) Click Go Create Favorites to Save Time! Review the report for any outstanding items that should not be accrued or carry forward o Verify all balances and pending payments o Remember to also check encumbrance amounts The Fiscal 15 report MUST be completely clear (no entries present) before you are ready to close the fiscal year. Accounts Payable Accruals FY18 June 20, P a g e

6 2. Process Year End Closing for Payables Go to Finance Processes Year End Closing Provides a list specific to AP s via the selection criteria Enter search criteria: Fiscal Year = 2018 (System will default to 2019 after July 1) Document Type = Vendor Req or use drop down menu to select Review other fields to narrow search OR Click Go to generate the list Accounts Payable Accruals FY18 June 20, P a g e

7 Report options from the resulting report listing: o From Task select Year End Processing Report Reports all detail for remaining items of each requisition o From the tool bar select the Magnifying Glass icon Snapshot with Payments for the requisition highlighted on your list Review checklist and take appropriate action as defined in the process on next page There can be no remaining entries on the processing screen prior to your close Accounts Payable Accruals FY18 June 20, P a g e

8 3. Setup Payables Go to Finance Processes Year End Closing Document Type = Vendor Reqs Click Go or (Ctrl G) From the list: Determine for each line item whether to accrue, carry over or close out the amounts *****Always use the Enter Key Not the Tab Key***** Post the entry or entries from the Task menu o You can post as many times as you want o You will need to run a new search before each processing session Accounts Payable Accruals FY18 June 20, P a g e

9 Accrual Option This is used when you have received the goods or services before July 1st (in FY18) and will pay for them next year (FY19) The accrual (or payable) amount is expensed to the current year (2018) account and next year s (2019) liability account is brought into the requisition for payment next year Enter the amount of the requisition (or a partial amount) in the Accrual field Example: $ items have been received, invoice to be paid FY19 Escape automatically moves 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 in the Release column and change Process to YES Use Task to post the accrual or continue to work the list Posting will create the necessary JE s and history record. Always verify that the documents to be processed match with your count Always verify that all your entries processed If there are errors, the posting will fail and you will get an error message Accounts Payable Accruals FY18 June 20, P a g e

10 Review Posted Accrual in Vendor Requistions Go to Finance Requisitions Vendor Requisitions Once Posted, Escape will create the necessary JE s. Review the Account TabNotice the original FY18 account lists the $ Liability and the account line for FY18. The final account line for FY19 Object 9510 lists $ accrual amount. The History Tab will provide a description of the transaction using the Year End Process. ACCRUAL NOTES: Setting up Accruals will create journal entries in the closing FY18 fiscal year and set up the FY19 Liability. Setting up an accrual in the next fiscal year (FY19) allows Escape to setup the liability out of the account and the remaining balance will go to the expense account. The expense account is always brought into the next year along with the liability account. If you pay more that the liability, Escape will use the base year expense account. If you pay less that the liability, Escape will flag the final payment and release the liability using the base year account (debits the liability to clear the account and credits the expense account increasing the available balance for the account). Reverses the encumbrance (FY18) Adds liability account in the next year (FY19) ***Once posted the requisition has crossed the line into FY19 and can only be altered from the FY19 fiscal year*** Accounts Payable Accruals FY18 June 20, P a g e

11 Carryover Option You can carry forward a requisition from the current year (base year) to next fiscal year without setting up a liability. This will cause the requisition to be paid from the next year s budget with the same requisition or PO number as the current year (R18 or P18). The fiscal year of the requisition will change to the next fiscal year, but the status will remain the same. Verify the amount of the requisition (or partial amount) in the Carryover field 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 to 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 default, you will need to change the carry over amount. o Escape will automatically do the release calculation o Escape will automatically change the Process field to Yes Use Task to post, Escape will: Create a journal entry in the closing year (FY18) to reverse the encumburace (FY19) Add expanse accounts in the next year (FY19) Encumber the amount in FY19) Always verify that the documents to be processed match with your count Always verify that all your entries processed If there are errors, the posting will fail and you will get an error message Accounts Payable Accruals FY18 June 20, P a g e

12 CARRYOVER NOTES: Setting up a Carryover will allow requisitions or PO s to remain the same between the years. Posting a Carryover amount in Escape will change the fiscal year of the requisition and add accounts for the Next Fiscal Year (FY19) It will reverse outstanding encumbrances in the Closing Fiscal Year (FY18). Encumber new amounts in the New Fiscal Year (FY19) This is NOT recommended! EXCEPT in the case of Construction Contract Agreements Construction projects ae an example of the kind of requisition that may need to be carried over rather than released and reissued. ***Once posted the requisition has crossed the line into FY19 and can only be altered from the 2019 Fiscal year Accounts Payable Accruals FY18 June 20, P a g e

13 Release Option Sometimes it is just better to close out the requisition o 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 o When you release a requisition amount Escape will Create a journal entry in the closing fiscal year (FY18) Release the funds (FY18) Set the requisition to complete (FY18) Create a journal to reverse the encumbrance(fy18) Write history record to document what happen to the requisition during the year end process Accounts Payable Accruals FY18 June 20, P a g e

14 Complete Option Sometimes a requisition will be listed on the Year End Closing list will all zeros. You will need to select Yes in the Complete? Column. This will complete the requisition in the current year and it will NOT carry the requisition over to the next fiscal year. One of the most common reasons that a district might have requisition listed with zero amounts is a result of not flagging the last payment as the final payment. o Enter Yes in the Complete? field Escape will automatically complete the requisition in the current fiscal year. NOTES: If the Requisition in Progress and there are no funds to release (accrual, carryover and release all equal zero) the requisition will be carried over to the next Fiscal Year (FY19). If you do NOT want it to carry over then you will need to complete the requisition in the current year. Accounts Payable Accruals FY18 June 20, P a g e

15 Payable Issues for Thought Expired accounts Requisitions can be accrued and carried over (not accrued), even if the accounts do not exist or are expired in the New Year (FY19). Escape will create the following error if you try to process the Vendor Requisition using the Year End Process: The following account(s) are expired, don t exist, or contain expired components for FY If a requisition is carried over using the error account, a history record is written to the requisition listing the expense accounts that could not be used in the next fiscal year. If a component of an account string does NOT exist you will need to establish the component OR fix the requisition prior to processing the Year End Process. There is no other option. Accounts should be corrected prior to the payable being accrued or carried over. If an AP Document on the year end list does not have accounts for the New Year, remember to create or unexpired the accounts in the New Year before processing. If the AP Document has already been carried over to the new fiscal year (prior to closing) it is recommended to Roll back the Year End Processing to correct the requisition Go to Finance Requisitions Vendor Requisitions Open the requisition, Go to Tasks Select Rollback Year End Processing Create or Unexpire the accounts in the new Fiscal Year Reprocess the Vendor Requisition in the Year End Processing Activity -OR- Open requisition Enter in the correct expense account Delete the error account Accounts Payable Accruals FY18 June 20, P a g e

16 Escape will use the following logic: Accrued: The liability account assigned uses the same fund-project year resource of the base year account If the resource is changed for the new fiscal year, Escape uses the new value to assign the liability account 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 and gives the user the following error message: Processed - One or more accounts 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 for year end In either case a history record is written to the requisition listing the expense accounts 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 requisition to manual Escape Online adds the liability accounts to the requisition and distributes the amounts Escape writes a history record detailing the amount accrued/carried over and documenting that the account distribution method was changed to manual If there is a time when you need to roll back the year end processing, Escape will roll back the year end processing as usual, but leave the account distribution option set to manual o It would be up to you to change the account distribution option and reevaluate the accounts Accounts Payable Accruals FY18 June 20, P a g e

17 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 in fiscal year xxxx, o This means that the document has already been carried forward to the new fiscal year o The requisition has crossed the line into FY19 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 three options: Cancel the requisition (If no payments), copy it and make the payment on the new req Make a direct payment to the vendor in the current fiscal year and Manual Complete the new fiscal year requisition Return to the Vendor Requisition screen and select Roll Back Year End Processing o The Roll Back Year End requires the activity permission Review Payables There are a few different methods you can use to review your Payables Setup through Vendor Requisitions, Journal Entry information and Ledger02 Receivables/Liabilities Reports. Accounts Payable Accruals FY18 June 20, P a g e

18 1. Review Vendor Requisition Activity Go to Finance Requisitions Vendor Requisitions Leave the fiscal Year Blank Enter and open the R18-XXXXX you are interested in Review the Accounts Tab to see is Liability Account listed for the new fiscal Year Review History Tab All activity will display in order of entry o History will always tell you if you have moved the requisition through the accrual process Remember that until the Asset/Liability Roll is done for your district after Closing, you will be viewing the general ledger object 9529 in FY18 and the general ledger object 9510 in FY19 for all Payables if you are verifying using the G/L. 2. Review Journal Entry Activity Go to Finance Fiscal Journal Entries Enter the R18-xxxxxx that you are interested in Zero out the Fiscal Year field so you will get a list of all journals Select Go All journals associated with that Payables will be listed in order of entry type Open and review the adjustment entry Accounts Payable Accruals FY18 June 20, P a g e

19 3. Review Report Activity Go to Finance Reports Ledger Ledger02 Receivable/Liabilities Activity Fiscal Year: 2018 (will default to 2019 after July 1) A/R or A/P?: A/P Only or Leave blank to get of AP and AR Requisition Number: To narrow search Cleared items: No Do NOT Show Cleared Items JE Source: Yes Include all JE Source Unposted JE: Yes to include journals that are not posted on the report Create Favorites to Save Time! The goal of running the Ledger02 report is to make sure the report is clear. Accounts Payable Accruals FY18 June 20, P a g e

20 This report shows journal entry activity by: o requisition number o journal entry number as it relates to account liability setup and clearing o Page breaks on account type o If account selection is specified Only those accrual journal entries that have expense/revenue detail matching the selection criteria will be included in the report o The offset objects the report uses are defined in the Ledger tab of the Organization record The current year is 9529 and the prior year is 9510 o Journal entries That do not reference a requisition and only have an offset account and a cash account will be excluded from the report o The description comes from the Vendor Requisition comment If the comment is blank, the report will use the comment from the latest JE that is found for this reference number o Journal Entries to 9290/9590 in prior year will not show on this report o If the offset account is expired, an asterisk will show next to the amount Accounts Payable Accruals FY18 June 20, P a g e

21 Quick Tip #1: Remember that you can create your list as specific or unspecific as you like. If you are searching for Open requisitions remember to select OPEN in Section 3-Requisitions using the Req. Status field. This will create a list of only your open status requisitions. OPEN requisitions cannot be processed through the Year End Process and will need to be submitted to Ready for Payment Status or Completed. Quick Tip #2: Important Reminder: All Government Due to/due From Requisitions will need to be paid or completed. Do not use the Year End Closing Process to Accrue or Carryover requisitions using government funds. Refer to information on page 1 of this document, or the Year End Manual Steps 10 & 11. You can create a list of all your outstanding Fund 13 Cafeteria Fund Requisitions by creating a list using the following search criteria: Accounts Payable Accruals FY18 June 20, P a g e

22 Working and Clearing the Year End Closing List Go to Finance Processes Year End Closing Step 1: Review the Status Column. o Consider the status of each item. o Are the items listed ready to be processed or do you need to review further? Step 2: Begin working and processing. o Remember you can always use the quick link to review the requisition detail. o Does the item need to be Accrued, Carried Over, Released or completed? o Process each line until the list is cleared. Step 3: Process and Post changes. o Go to Task to Post; Re-do your search to refresh, items to process as YES, will be removed from the list and the appropriate JEs will be posted. o Continue to work through your list until all items are processed. Accounts Payable Accruals FY18 June 20, P a g e

23 Example #1 - Accrual Outstanding amount is $2, , use the quick link to review the requisition, then determine if it will be an accrual, carryover, or release. In our example, we received the goods, so will change the Accrual to $2,849.29, carryover is Release amount will calculate automatically 0.00 Example #2 - Carryover Outstanding amount is $1,532.50, Carryover since this construction project is not complete, change the Process field to Yes. Example #3 - Release Outstanding amount is $241.07, amount will be released since we have made all payments. Change the carryover amount to Release amount will automatically change to the full release amount. Example #4 Partial Accrual and Partial Release Outstanding amount is $172.43, change the Accrual amount to $150.00, Carryover Amount is $0.00, the Release amount will calculate the difference automatically. Accounts Payable Accruals FY18 June 20, P a g e

24 Example #5 Clear Negative Outstanding Requisition with a negative amount listed. This item will need to be reviewed and processed before closing FY18 Outstanding amount is negative, cannot process a negative amount through the year end process. This must be resolved in the Vendor Requisition by using Task to manually complete. Leave as NO in Process column to further review. Example #6 Complete? Outstanding Requisitions with zero amounts listed. These items will need to be reviewed and most likely completed. They are typically requisitions that were already paid in full and the Account Tech probably forgot to flag them as a Final Payment. This requisition has been reviewed and confirmed that all payments have been made and it needs to be flagged as Complete?. Since all columns are already at zero amounts, this can be processed by simply updating the Complete? Column to reflect Yes. The item will complete automatically upon posting the list. Continue working the list until all Vendor Requisitions have been processed. Accounts Payable Accruals FY18 June 20, P a g e

25 Prior to Closing FY18 How to Fix Vendor Requisitions that were processed thru Year End Closing Step 4: Roll back items processed in error. o If an item has been Accrued, Carried Over, Released or Completed in error you can roll back the Year End Process on the item. Once you roll back the year end process they will re-appear on your list. Example #7 - Requisition was RELEASED in Error District has just received a final invoice and packing slip and want to make the payment. The District will need to use the Rollback Complete/Cancel from the Tasks dropdown. Go to Finance Requisitions Vendor Requisitions Leave the Fiscal Year Blank Enter the Requisition Number: R Notice the Status is Complete Open the Requisition Line Go to Task to select Rollback Complete/Cancel The Rollback Complete/Cancel will return the requisition to open status and create an additional history record. The District can now process the requisition for the Final Payment, or update the Year End Closing list to reflect accordingly. Accounts Payable Accruals FY18 June 20, P a g e

26 Example #8 - Requisition was processed with an incorrect ACCRUAL amount. The District just realized that they setup a Accrual with the incorrect amount. FY18 is still open and they would like to fix the requisition to reflect accurately in FY19. Go to Finance Requisitions Vendor Requisitions Leave the Fiscal Year Blank Enter the Requisition Number: R Notice the Status is Ready for Payment Open the Requisition Line Go to Task to select Rollback Year End Processing Notice the Outstanding Amount has been returned to the Original Amount Reprocess through the Year End Closing process Accounts Payable Accruals FY18 June 20, P a g e

27 Example #9 - Requisition was processed with an incorrect ACCRUAL amount, and incorrect ACCOUNT LINES The District just realized that they setup a Accrual with the incorrect amount and the incorrect Account Lines. FY18 is still open and they would like to fix the requisition to reflect accurately in FY19. Step 1: Go to Finance Requisitions Vendor Requisitions Leave the Fiscal Year Blank Enter the Requisition Number: R Notice the Status is Ready for Payment Open the Requisition Line Go to Task to select Rollback Year End Processing Requisition will now reappear on the Year End Process list with original information. The History Tab of the Requisition will now show that it was rolled back Accounts Payable Accruals FY18 June 20, P a g e

28 Continue Example #9 - Requisition was processed with an incorrect ACCRUAL amount, and incorrect ACCOUNT LINES Step 2: Go to Finance Requisitions Vendor Requisitions Enter the Requisition Number: R Open the Requisition Line Go to the Accounts Tab o Update the Items (if needed) o Add an Adjustment Amount (if needed) o Distribute the full new cost of the Requisition o Change the Account Code (if necessary) In this example the district needed to add an account line item and account line, increasing the requisition for additional services $ They remembered to distribute the full new cost of the requisition. Notice there is a line for Fiscal Year 2019, this was created with the orignal Year End Process activity. Since we rolled the Year End Process back it now reflects ZERO dollars. The changes are also noted in the History Tab of the requisition. Accounts Payable Accruals FY18 June 20, P a g e

29 Continue Example #9 - Requisition was processed with an incorrect ACCRUAL amount, and incorrect ACCOUNT LINES Step 3: Go to Finance Processes Year End Closing R now indicates an Outstanding amount of $3,134.08, instead of $1, It now includes the increased amount and account line. Reprocess and Accrue the updated requisition amount using the Year End Closing process. The requisition will be correct for the next Fiscal Year FY19. Accounts Payable Accruals FY18 June 20, P a g e

30 Setup AP and AR Accruals Without Using Year End Closing Transactions to create accruals can be done starting on July 2, 2018 Accruals for 2018 { 2017/2018} can be created throughout the closing process Be sure to follow District practices and procedures Dates for Current Year Payments are set in the Organization Record For AP Payments, items can be processed using Enter Payments Enter Direct Payments Enter Employee Payments Payment Transactions Payment Transactions are all types of Payments in batch format Accounts Payable Accruals FY18 June 20, P a g e

31 Payment Transactions Go to Finance AP Payment Transactions After July 1, 2018, the system will default to 2019 {2018/2019} Change the date to 2018 {2017/2018} to create accruals for FY18 Click New to open a batch for multiple Payment Types DO NOT Combine Fiscal Years in Payment Transactions Add Comment Click on Items Tab Click NEW to add Vendors or Employee Ids Accounts Payable Accruals FY18 June 20, P a g e

32 Choose the Payment Type in Pymt Type field use the drop down menu to to select o AP = Vendor Requisitions Payments o Direct = Direct Payments o Employee = Employee Payments The Payment Type will change the required fields and will be indicated by RED X for the Required Example: Multiple payment types in one Payment Transactions Batch Go to Task to Post Payment Batch Data Error Message will be received if missing data Accounts Payable Accruals FY18 June 20, P a g e

33 Check Error Message Column for detail on missing data Add missing data Save/Close Status changed to Completed Batch Id will need to be submitted in Payments Accounts Payable Accruals FY18 June 20, P a g e

34 Submit Payment Transactions Go to Finance AP Payments Search by Transaction Batch Id OR Search Status: Open for ALL Open Payments Click Go to get list of payments Go to Task to Submit for Approval Once approved, After July 2, 2018, send to SCOE as usual Accounts Payable Accruals FY18 June 20, P a g e

35 AFTER Close of FY18 The following items are the most common issues that can occur after the prior year (FY18) has been closed. 1. Requisition was processed through the Year End Process and should have been closed. o Confirm NO payments have been made. o DO NOT return the Requisition to Open. o Go to Tasks and select Manual Complete or Cancel The requisition status will be updated to Cancelled or Completed and create a History record. The system will create a Journal Entry in FY19 that will relieve the 9510 amounts and credit the expense. 2. Requisition was processed through the Year End Process and the amounts or accounts are incorrect. o Confirm NO payments have been made. If payments have already been made. Advise your CBO or Business Manager so they can make the necessary account adjustments. o DO NOT return the Requisition to Open. o Go to Tasks and select Manual Complete or Cancel Accounts Payable Accruals FY18 June 20, P a g e