Accounts Receivables Accruals For FY16 June 16, 2016 Information Technology
Understanding the Accrual 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. Escape You must process/clear all outstanding receipts prior to processing any AR accruals o Accrual balances are based on the last known amount remaining on the invoice It is important to deposit and post all current year receipts in FY16 by 6/27/16 Cash Deposit deadline before you begin o Invoice amounts will default as accrual dollar amounts for Year End Processing o Should prevent potential data entry errors If a receipt has not been posted in FY16, a necessary receivable may not be accrued o The posting from the Year-end Closing will show an error (see page 7 for example) Documents with errors will not post o Errors must be resolved first in Finance-AR-Invoices The accrual and carryover columns on the year end list are editable, but may not be set to a negative value o You must clear the negative amount in Finance-AR-Invoices The entire outstanding amount will be set to the accrual column because Escape Online assumes the invoice is to be accrued o You may carryover invoices You must manually change the accrual amount o Watch for negative release amounts (red) when you manually change field amounts The accrual process will result in FY16 journal entries which establish AR s (debits object 9229) and records revenue (credits objects 8xxx) in 2015-16. After 6/27/16 deposits to AR s(ar16-xxxxx) must be done in FY17 and reference the FY16 accrual invoice o To become an AR in FY17 the invoice must have gone through the Year End Process NOTE: An invoice must be created first in order to process through Year-End or a manual journal entry can be created to book receivable. AR Setup FY16 6/16/16 Workshop Page 2
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 ****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 Amounts from manually created Journal Entries to 9290/9590 will move to 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 account). Reminder: o The Asset/Liability roll, which takes place after 2015-16 is closed, will move the General Ledger amounts from object 9229 in FY16 to General Ledger object 9210 in FY17 The Asset/Liability roll does not roll the specific AR s to the next fiscal year o Until the Asset/Liability roll is performed, there will be no balance in the FY17 general ledger object 9210 to offset the payments being made to the FY16 (accrued) receivables AR Setup FY16 6/16/16 Workshop Page 3
1. Review Potential AR s Go to Finance - Reports - Fiscal - Fiscal15 Run the Fiscal Year End Checklist (Fiscal15) This provides a list of all items needing to be addressed prior to close Section 2 User Options Fiscal Year: 2016 {2015/2016} (System will default to 2017 after July 1) Department: Can search by Department is desired Click Go Review Fiscal15 Year End Checklist for any outstanding receipts In Report scroll down to see outstanding AR invoices after the Requisition detail You cannot process invoices that have outstanding Receipts Deadline for cash deposit is 6/27/16 Fiscal15 Report MUST be totally clear before you can close the year AR Setup FY16 6/16/16 Workshop Page 4
After the last cash deposit date o You will need to cancel those receipts if unable to make deadline o Any remaining items on the Year End Closing AR list must be accrued using the Year End Closing Process All invoices in Printed status will accrue o Enter your FY16 receipts in FY17 against the new accrued AR s The Fiscal15 Report MUST be totally clear before you can close the year After you work the list rerun the report to verify that there are no remaining entries after you have processed all status Printed invoices through Year End Processing The report will show all types of entries o Remember to clear every type of entry 2. Process Year End Closing for AR Invoices Provides a list specific to ARs Provides the screens to set up AR accruals Go to Finance - Processes - Year End Closing Enter search criteria: Fiscal Year: 2016 {2015/2016} System will default to 2017 after July I Department Order Location Document Type: AR Invoice Process Default = No o NO allows you to select which invoice will move forward o YES will automatically change ALL Vendor Name Accounts Click Go AR Setup FY16 6/16/16 Workshop Page 5
Working Your AR Year End Closing list Determine if Accrual, Carryover or Release of all items: Use the quick link next to Ref # to review invoice OR highlight invoice and click on the Preview Button Be sure to use the Enter Key, not the Tab key in Year End Closing list Accrual Invoice to Next Year This will change the invoice s fiscal year to the next fiscal year, add the appropriate accounts and write a history record Enter the amount in the Accrual field (Defaults entire amount) If accrual is correct, then change the Process field to Yes Prior Year Receivables can be accrued If accrual amount is less than invoice, the difference will be released Escape Online will automatically set the Process field to Yes Carryover Invoice to Next Year It will simply add the next year s accounts and write a history record, this will not create any journal entries, Enter the amount in the Carryover field Escape Online will automatically set the Process field to Yes Release Invoice (Close Out) Sometimes it is better to just close out the invoice Enter 0.00 in Accrual Amount and funds will be released Escape will reverse the receivable, but payments will NOT be reversed Escape Online will automatically set the Process field to Yes AR Setup FY16 6/16/16 Workshop Page 6
Post Changes from the Task menu Got to Task Menu to select Post to process all Account Receivables flagged Yes in Process column Verify that you want to process these invoices Be sure you agree with the posting count before clicking Yes If you want to continue to work the Year End Closing list, be sure to go back to Search Criteria to refresh the list. Review the Message Column for Post failed error. If you hover over the error or enlarge the Message Column, you can see the posted failed due to Outstanding receipts. AR Setup FY16 6/16/16 Workshop Page 7
Use the quick link to review the AR Invoice Go to the Receipts Tab If Status is submitted, then the AR Receipt is still in process If this is after the 6/27/16 Cash Deadline, then you will need to delete the AR Receipts Review the Year End Closing list again to verify that these items have cleared 3. Correcting A/R Invoice Errors Sometimes mistakes are made, data entry errors with the dollar amounts, invoices received but not entered against AR invoice, etc. If you have NOT closed the books for the year and discover a data entry mistake in a year-end receivable that was set up, then you should use the Receivable field in the Invoice record. Go to Finance AR - Invoices Search for the invoice that needs to be changed (be sure to enter 2016 in the fiscal year) ***DO NOT USE TASKS TO RETURN INVOICE TO OPEN*** Enter invoice number IN16-XXXXX in search criteria Remove the fiscal year (Remember that once you have posted from the Year End Process screen, the invoice is now in FY17) Go to the Accounts Tab Enter or adjust the receivable amount in the Receivable field of the prior year revenue account When the revenue account column is locked, the fiscal year 2016 is closed Adjust Receivable amount in 2016 Receivable field This will automatically adjust the revenue amount for 2017 Save/Close the Invoice AR Setup FY16 6/16/16 Workshop Page 8
Escape Online will make the appropriate changes to the revenue account and linked account that were set up for the new fiscal year Increasing this value will cause the revenue account amount to be decreased by the same amount and the linked account to be increased When you save the invoice, Escape Online will create a journal entry that adjusts the revenue for the prior fiscal year (shown below) Go to Finance Fiscal Journal Entries Search Invoice number to view adjustments Blank out Fiscal Year Click Go to view journals entries AR Setup FY16 6/16/16 Workshop Page 9
4. Clear Journal Entries Go to Finance Fiscal Journal Entries Post or delete all journal entries that have not been posted or cancelled Search for JEs in the Open, Submitted or Audit status The order is important as you complete or address an open status item it could then move to the Submitted or Audit status and be missed during other status searches Determine if Journal Entry should be posted or deleted Re-run the journal search to verify there are no outstanding journal entries AR Setup FY16 6/16/16 Workshop Page 10
5. Clear Budget Transfers Go to Finance Fiscal Budget Transfers Post or delete all budget transfers that have not been posted or cancelled Search for Budget Transfers in the Open, Submitted or Audit status The order is important as you complete or address an open status item it could then move to the Submitted or Audit status and be missed during other status searches Determine if Journal Entry should be posted or deleted Re-run the journal search to verify there are no outstanding budget Transfers AR Setup FY16 6/16/16 Workshop Page 11
6. Review of Additional AR Information Three methods to review Receivable (AR) setup, activity and journal information: a. Go to Finance Fiscal Journal Entries Search Criteria: Source: AR {AR} AR Invoice Number: IN16-XXXXX Blank out Fiscal Year field to get a list of all journals for the AR Click Go All journals associated with that AR will be listed in order of entry Open and review any adjustment entries Note that IN16-00664 shows the journal posting in FY16 o Journal entries will show for the posting year o Unaccrued invoices do not record journal entries in posting year o Note the AR journal number is AR16-04998 while the AR invoice number is IN16-00664 AR Setup FY16 6/16/16 Workshop Page 12
b. Go to Finance AR Invoice Enter the invoice you need to review Invoice Number: IN16-XXXXX Blank out the Fiscal Year field to make sure you see all invoice history Click Go Select the History Tab from the invoice All activity will display in order of entry Remember that until the Asset/Liability Roll is done for your district later in August, you will be viewing 9229 in FY16 and 9210 in FY17 for all AR s in the G/L for balancing o Note the invoice is in FY17 o Any changes to the invoice must now be done in FY17 c. Go to Finance Reports Ledger Ledger02 Run the Ledger 02a- Receivables/Liabilities Activity Closing Year: 2016 {2105/16} A/R or AP?: Select A/R to limit the report to receivables Specify Invoice # to see only transactions for that invoice or leave blank to see all (Blank is the best setting for first review) Cleared Items: NO Do NOT Show Cleared Items Unposted JE?: Yes select unposted Journal Entries Can select specific account components to narrow search Click Go See report criteria shown on the next page AR Setup FY16 6/16/16 Workshop Page 13
This report shows journal entry activity by: o Account receivable invoice number o Journal entry number as it relates to account receivable and/or liability setup and clearing o The offset objects the report uses are defined in the Ledger tab of the Organization record The current year is set to 9229 and the prior year is set to 9210 o Journal entries that do not reference a requisition or invoice and only have an offset account and a cash account will be excluded from the report o The journal entries made to 9290/9590 will not be present on the report o The description comes from the AR Invoice comment If the comment is blank, the report will use the comment from the latest JE that is found for this reference number o If the offset account is expired, an asterisk will show next to the amount AR Setup FY16 6/16/16 Workshop Page 14
7. Entering AR Receipts (Invoices that have been processed through Year End Closing) Go to Finance AR Enter AR Receipts NOTE: Cannot deposit funds in FY16 after 6/27/16 Enter the current date Bank Account: COUNTY {County} Enter the invoice number for Receipt #1 (IN16-XXXXX) Enter the Amount Received Receipt Type: C{Check} is default or use drop down to select Enter a Comment Continue entering AR Receipts Click Go to create batch From List go to Tasks to select Submit for Deposit Verify number of receipts before selecting Yes ****You cannot deposit money for FY16 in FY16 after 06/27/16*** AR Setup FY16 6/16/16 Workshop Page 15
8. SET UP a Year End receivable WITHOUT FY16 invoice having already been set up ***Escape does not have a way to set up receivables without an invoice first being created. It takes the Year End Closing process to move the receivable entries to the next year so FY16 receipts can be made in FY17. Create an Invoice Make sure customer exists before starting the process Go to Finance AR Customer to search Go to Finance AR Invoice Select New Select on 2015/16 to create in FY16) Fill in all the criteria required for the Invoice, Items and Accounts tabs Select Save/Close Need to Print Invoice Go to Finance AR Print Invoice Enter your Department from the drop down menu Status option: Open Click Go (Note the list will provide you with an AR16-xxxxx invoice) From the List screen select the Tasks menu Select Print Invoices You do not have to actually print the invoices but you will need to select the printer icon so the system thinks you have The Print Invoice Step is what moves the invoice to a status Printed and the entry to show on the AR Year End Closing screen Go to Finance Processes Year End Closing to process new invoice ***You MUST return to the Year End Processing screen and move the new invoice to FY17 to establish an AR*** AR Setup FY16 6/16/16 Workshop Page 16
***Pre-Close*** This is before 2016 Year End Close 1. ALTER a receivable already processed through the Year End Closing screen Go to Finance AR Invoice Search Criteria: Enter the invoice number you wish to edit Fiscal Year: Blank out Click Go ***DO NOT UUSE TASKS TO RETURN TO OPEN*** Go to the Items Tab and adjust the item amounts as necessary. From the Accounts tab enter or adjust the receivable amount in the Receivable field of the prior year revenue account. Note the FY field shows 2016 Critical Alert Click OK to adjust Edit the negative amount in 2017 to 0.00 to automatically adjust the difference to 9210 Save/Close and journal will be created to make the adjustment AR Setup FY16 6/16/16 Workshop Page 17
2. When an AR was set up and should not have been Go Finance AR - Invoices Search Criteria: Enter the invoice number you wish to edit Fiscal Year: Blank out Click Go ***DO NOT USE TASKS TO RETURN TO OPEN*** Go to the Accounts Tab enter zero as the receivable amount in all the 2016 Receivable fields of the prior year revenue account (shown on the next page) If the 2016 revenue amount line shows dollars be sure to also zero out each line This will automatically adjusts the 9210 receivable on the screen Go to the Invoice Tab and enter an Adjustment Amount to clear the Undistributed Amount and Amount Outstanding Both the Amt Outstanding and the Undistributed Amount fields must be zero Go to Tasks Menu to select Manually Complete Save/Close and a FY16 journal will be created that will alter the FY16 setup to zero AR Setup FY16 6/16/16 Workshop Page 18
3. When an AR was set up with the incorrect Account code - The account codes on a FY16 AR line cannot be altered - The AR must be manually completed Go to Finance AR - Invoices Enter the invoice number you wish to edit Fiscal Year: Blank out Click Go ***DO NOT USE TASKS TO RETURN TO OPEN*** Go to the Accounts Tab adjust the receivable amount in the Receivable (2016) field of the prior year revenue account to zero Adjust the 2017 revenue account to zero The 9210 receivable will automatically zero out on the screen when the first two lines are changed to zero Return to the Invoice Tab and enter an Adjustment Amount to clear the Undistributed Amount and Amount Outstanding. By adjusting the accounts tab first you will be able to see the undistributed amount on the invoice screen and use that amount needed in the Adjustment Amount field Go to Tasks menu to select Manually Complete Save/Close AR Setup FY16 6/16/16 Workshop Page 19
***Post Close*** 1. When an AR was setup and not received against Manually Complete Go to Finance AR Invoices Search Criteria: Enter the invoice number you wish to edit Fiscal Year: Blank out Click Go Do not make changes to Item or Accounts Tab From the Tasks menu, select Manually Complete This will create a journal in FY16 that will credit the 9210 and debit the 8XXX revenue This will affect FY16 for the amount that was not received 2. For a receivable that was partially received against but will not be totally cleared Go to Finance AR Invoices Search Criteria: Enter the invoice number you wish to edit Fiscal Year: Blank out Click Go Do not make changes to Item or Accounts Tab From the Tasks menu, select Manually Complete This will force a journal in FY17 that will credit the remaining 9210 balance and debit the 8XXX revenue for the difference between what was set up and what was not received. This will affect FY17 for the amount that was not received Escape References: Finance Processes Year End Closing AR Invoices - Chapter 5, pages 19-24 Home Page Help from the top Tool bar - Finance - Year End Reference Home Page Workshops - Year End Closing Manual Steps 1, 10 and 11 AR Setup FY16 6/16/16 Workshop Page 20