Accounts Receivables Accruals For FY18 June 20, 2018 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 Year End Process Overview What you should be working on Now: Clear All Prior Year Receivables Run Receivables Activity Report (Ledger 02) What you should be working on in July: Resolve Any Outstanding Items on the Year End Closing List (Fiscal 15) Resolve Unposted JE s Deadline for Cash Deposit is 6/25/18 DO NOT Enter Receipts for 2017-18 between 6/26/18 7/1/18. Accrual Processing 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 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 FY18, a necessary receivable may not be accrued o The posting from the Year-End Closing will show an error 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 all negative amounts. Including individual line items within an invoice that has a total positive amount. 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 FY18 journal entries which establish AR s (debits object 9229) and records revenue (credits objects 8xxx) in 2017-18. AR Setup FY18 6/20/18 Workshop Page 2
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 ****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 2017-18 is closed, will move the General Ledger amounts from object 9229 in FY18 to General Ledger object 9210 in FY19 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 FY19 general ledger object 9210 to offset the payments being made to the FY18 (accrued) receivables AR Setup FY18 6/20/18 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: 2018 {2017/2018} (System will default to 2019 after July 1) Click Go Scroll down the Report to see outstanding AR invoices after the Requisition detail You cannot process invoices that have pending Receipts batches If Invoice is in Receipts Status, review to see if it needs to be manually complete, or left to process through Year End Processing AR Setup FY18 6/20/18 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 FY18 receipts in FY19 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 Printed status invoices through Year End Processing The report will show all types of entries o Remember to clear every type of entry FISCAL15 Report MUST be clear prior to Closing FY18 AR Setup FY18 6/20/18 Workshop Page 5
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: 2018 {2017/2018} (System defaults to 2019, after July 1) Document Type: AR Invoice Process Default = No o NO allows you to select which invoice will move forward o YES will automatically change ALL to process without reviewing Click Go to create list Determine if Outstanding amount is Accrual, Carryover or Release Use the quick link next to Ref # to review invoice OR highlight invoice and click on the Preview Button AR Setup FY18 6/20/18 Workshop Page 6
Accrual Invoice to Next Year FY19 Enter the amount in the Accrual field (Defaults entire amount) If accrual is correct as is, 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 Automatically sets the Process field to Yes Invoice ACCRUAL Process Changes the invoice fiscal year FY18, to the next fiscal year FY19 Creates Journal Entry Record to the appropriate accounts with a transaction date 6/30/18 Creates a History Record Carryover Invoice to Next Year FY19 Enter zero in Accrual field Enter the amount in the Carryover field Automatically calculates the Release amount and sets the Process field to Yes Invoice CARRYOVER Process Does NOT create any Journal Entry Records Adds the Next Year s FY19 Accounts Creates a History Record AR Setup FY18 6/20/18 Workshop Page 7
Release the Receivable of the Invoice (Close Out) Sometimes it is better to just close out the invoice. Enter 0.00 in Accrual and Carryover fields Remaining balances will be released Automatically sets the Process field to Yes Invoice RELEASE Process Invoice will be Completed Receivable will be reversed (It will NOT reverse any payments) Creates a History Record Post Changes from the Task menu Go 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 AR Setup FY18 6/20/18 Workshop Page 8
If you want to continue to work the Year End Closing list, be sure to go back to Search Criteria, Click Go to refresh the list. Review the Message Column for Post failed error. If you hover over the error or enlarge the column, you can see the posted failed message. Example: Post failed, error = Amounts cannot be negative Example: Post failed, error = Expired Accounts Use the quick link next to the AR # to review the AR Invoice detail Go to the Receipts Tab If Status is submitted, then the AR Receipt is still in process If this is after the 6/25/18 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 AR Setup FY18 6/20/18 Workshop Page 9
3. Rollback Year End Processing Task Make Changes or Update FY18 Accounts on an Invoice that has already been processed on the Year End list. Can be used on invoices in any status, except Canceled or Complete Status The FY19 account amounts will be reset to 0.00, and the FY18 account amounts will be increased according to the amounts in the journal entries Receivables that were set up for FY19 will be reversed FY18 receivable will be re-established If an amount was released for FY18 prior to year-end with a carryover amount, it will redistribute evenly to the non-receivable accounts Go to Finance AR - Invoices Search Criteria: Enter the invoice you need to review Invoice Number: AR18-XXXXX Fiscal Year 2019 Click Go Open the Invoice Go to Tasks Select Roll Back Year End Processing Creates a History Record of the Rollback Year End Process Returns the Amounts and Accounts back to original setup. Make the appropriate changes Invoice MUST be processed again on the Year End Closing list. AR Setup FY18 6/20/18 Workshop Page 10
4. Review and 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 FY18 6/20/18 Workshop Page 11
5. Review and 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 FY18 6/20/18 Workshop Page 12
6. Review AR Invoices Go to Finance AR Invoice Search Criteria: Enter the invoice you need to review Invoice Number: IN18-XXXXX or AR18-XXXXX Blank out the Fiscal Year field to make sure you see all invoice history Click Go Open invoice Select the Accounts 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 FY18 and 9210 in FY19 for all AR s in the G/L for balancing. In the AR Account Tab you will see the original FY18 Receivable, and the FY19 9210 GL Account listed. o Note the invoice is in FY19 o Any changes to the invoice must now be done in FY19 AR Setup FY18 6/20/18 Workshop Page 13
7. Review the Ledger02 Report Go to Finance Reports Ledger Ledger02 Run the Ledger 02- Receivables/Liabilities Activity Search Criteria: Closing Year: 2018 {2017/2018} A/R or AP?: A/R 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 JE Source?: Yes - Include all JE Source Unposted JE?: Yes select unposted Journal Entries Can select specific account components to narrow search Click Go 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 AR Setup FY18 6/20/18 Workshop Page 14
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 FY18 6/20/18 Workshop Page 15
SETTING UP a Year End receivable WITHOUT an FY18 Invoice Based on District practices and procedures, you can create an invoice to process through year end OR- go straight to receipts to deposit after 7/1/18, being careful to select the correct year. 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 2017-18 to create in the correct fiscal year Fill in all the criteria required for the Invoice, Items and Accounts tabs Select Save/Close Need to Print Invoice Print an 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 AR18-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 FY19 to establish an AR*** AR Setup FY18 6/20/18 Workshop Page 16
Entering AR Receipts (Invoices that have been processed through Year End Closing or if no invoice created in Prior Year) Go to Finance AR Enter AR Receipts NOTE: Be careful to select the correct fiscal year; DO NOT Combine deposits for FY18 and FY19 Enter the current date Bank Account: COUNTY {County} Enter the invoice number for Receipt #1 (IN18-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 FY18 in FY18 after 06/25/18*** AR Setup FY18 6/20/18 Workshop Page 17
***Pre-Close*** This is before 2018 Year End Close Example #1: ALTER a receivable already processed through the Year End Closing screen FY18 has not been closed a data entry mistake in a year end receivable was set up. It is recommended to use the receivable field in the Invoice Record. Go to Finance-AR-Invoices Enter the Invoice number IN18-XXXXX Clear Fiscal Year field Open the Invoice Go to the Accounts Tab and adjust the line item amounts, as necessary Go to the Accounts Tab and Enter or Adjust the Receivable amount in the Receivable Field of the FY18 Revenue Account If the Revenue Account field is Locked the FY18 is Closed Adjusting the FY18 receivable amount will automatically adjust the Revenue Amount for FY19 Save/Close the Invoice Escape will make the appropriate changes to the revenue account and linked account that were set up for FY19 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 will create a journal entry that adjusts the revenue for the prior fiscal year AR Setup FY18 6/20/18 Workshop Page 18
Example #2: AR was set up and should not have been Go Finance AR - Invoices Search Criteria: Enter the invoice number you wish to edit Clear Fiscal Year field Click Go ***DO NOT USE TASKS TO RETURN TO OPEN*** Go to the Accounts Tab enter zero as the receivable amount in FY18 Receivable fields If the FY19 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 FY18 journal will be created that will alter the FY19 setup to zero AR Setup FY18 6/20/18 Workshop Page 19
Example #3: AR was set up with the incorrect Account code - The account codes on a FY18 AR line cannot be altered - The AR must be manually completed Go to Finance AR - Invoices Enter the invoice number you wish to edit Clear Fiscal Year field Click Go ***DO NOT USE TASKS TO RETURN TO OPEN*** Go to the Accounts Tab adjust the receivable amount in the Receivable (2018) field of the prior year revenue account to zero Adjust the 2018 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 - Creates a History Record AR Setup FY18 6/20/18 Workshop Page 20
Receipt Transactions Transactions to create accruals for cash receipts can be done starting on July 2, 2018. For AR Receipts, this can be processed using Enter AR Receipts Receipt Transactions Receipt Transactions are all types of deposits in batch format Go to Finance AR Receipt Transactions After July 1, 2018, the system will default to 2019 {2018/2019} Change the date to 2018 {2017/2018} to create accrauls for FY18 Click New to open a batch DO NOT Combine Fiscal Years in Receipt Transactions Click on the Items Tab to add Receipt Types Click New to add Receipt Types in Rcpt Type Field AR Setup FY18 6/20/18 Workshop Page 21
Enter required fields Click New to enter more items Check the Errors/Warning field for missing Data Save/Close Go to Task to Post Receipt Batch Data AR Setup FY18 6/20/18 Workshop Page 22
Status changed to Completed Batch Id will need to be submitted in Receipts Submit Receipts Transactions in Receipts Go to Finance AR Receipts Search for Status: Open OR Transaction Batch Id Go to Task to Submit for Deposit Once Receipts are approved, After July 2, 2018, send to SCOE as usual AR Setup FY18 6/20/18 Workshop Page 23
AFTER Close of FY18 Example #4: When an AR was set up and not received against Manually Complete Go to Finance AR Invoices Search Criteria: Enter the invoice number you wish to edit Clear Fiscal Year field Click Go Do not make changes to Item or Accounts Tab From the Tasks menu, select Manually Complete This will create a journal in FY19 that will credit the 9210 and debit the 8XXX revenue This will affect FY18 for the amount that was not received Example #5: 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 FY19 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 FY18 for the amount that was not received AR Setup FY18 6/20/18 Workshop Page 24