Dynamic Balance file Static Balance file Summary Balance files.

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Accounting File Structure Dynamic Balance file Static Balance file Summary Balance files

Transcript of Dynamic Balance file Static Balance file Summary Balance files.

What is Accounting

Accounting File StructureDynamic Balance fileStatic Balance fileSummary Balance filesOverview There are two balance files containing balances by Departmental Accounting Center, Category, and accounting period: Dynamic (current) file which contains balance information for the current and future open months, and Static (historical) file which contains balance information for closed months. There are two balance files containing balances by Departmental Accounting Center, Class (excluding classes 1, 2 and 3), Summary Institutional Category, and accounting periods: Dynamic Summary (current) file which contains balance information for the current and future open months, and Static Summary (historical) file which contains balance information for closed months. Dynamic Balance fileThe dynamic file contains the 8 available months with regard to pending items, commitments, revenues, transfers, and expenditures. There are 17 available months with regard to budget, encumbrances, estimated revenues, and planned items. When a month is rolled, the balances for that month are moved to the Static file, and the dates for the dynamic file are rolled forward one month. Base MonthThe base month (month 1) for the dynamic balances stored in the MONTH-GROUP in the format YYYYMM. This value is bumped one month as balances are moved to the STATIC-BALANCE file. The base month is normally a period in a closed month.Balance InformationCurrent balances are maintained in the dynamic balance file by departmental center, departmental category, and month, for:Budget Estimated revenuePending (e-business charges)Planned activityCommitmentsEncumbrancesExpendituresRevenueTransfers (intrafund and interfund)In addition, budget life-to-date and expenditures life-to-date are maintained by category for viewing and reporting purposes.Static Balance fileContains closed period financial balances by Departmental Center, Departmental Category, and Period. As new periods are rolled, financial activity is moved here from the Dynamic Balance file where they are managed. The Static file is organized by fiscal year and has twelve periods of information.Dynamic Summary BalanceContains current and future financial balances by Departmental Accounting Center, Class (excluding classes 1, 2 and 3), Summary Institutional Category, and accounting periods. These balances are updated in batch on a nightly basis. The balances for periods closed are rolled to the Static Summary Balance file where they are frozen. This file is used for webBASIS presentation. On the web, we summarize balances by Institutional Category, except for salaries, wages, and fringe benefits (consolidated into 'A', SalWagFB) and all revenues (consolidated into 'A', Revenues). This value is used on the 'Summary Balance' files in place of Institutional Category in order to provide a more appropriate level of aggregation.

Static Summary BalanceContains closed period financial balances by Departmental Accounting Center, Class (excluding classes 1, 2 and 3), Summary Institutional Category, and accounting periods. As periods are closed, financial activity is rolled here from the Dynamic Summary Balance file.

Period/MonthFiscal Year - July through JuneJuly is the 1st period and June is the 12th periodFiscal YearThe University of Arkansas operates on a 12 month fiscal year that runs from July 1 through June 30. Fiscal year 2015 (often noted as FY15) begins July 1, 2014 and ends June 30, 2015. Accounting activity continues to take place as the old fiscal year ends and the new fiscal year begins. The accounting records for the old fiscal year are adjusted and closed during July and August while the new fiscal year activity begins on July 1. Allowing both fiscal years to be available simultaneously is made possible by using periods.

Accounting PeriodsThe accounting periods at the University correspond to months. Financial transactions have an effective date which determines the period where the activity will be recorded. Each month remains open into the following month so that activity can be posted retroactively, but within limits. (For example, the receiving entry on the PO line is used as the effective date for the expense as long as the period is still open, otherwise the oldest date still open is used.)Effective DateThe date a financial transaction (or other activity) is effective, which defines the accounting period in which the transaction is recorded. Many rules are used and enforced by the system in order to properly account for activity. One being that the accounting period associated with an effective date must be open. If the period is not open, the effective date must be changed (sometimes automatically by the system).CalendarsChanges (inputs/entries) to the current file are allowed for any month which is open as defined by the ECAL (expenditure calendar) for procurement and salary transaction, CALM (GJIM calendar) controls the open month or months for expense, fund, account code, and interdepartmental transfers, and ACAL (Actual accounting calendar) controls the open months for journal entry and its the final calendar to determine whether the month is open or not.Monthly CloseEvery month Financial Affairs closes its accounting activity for a month (or period). After a month has been closed, no more entries for that month may be posted. Typically, the monthly close happens around the 6th working day of the following month. Except of course during the fiscal year end which normally remains open for approximately 3 weeks.Closed PeriodsOnce the ACAL (Actual Accounting calendar) date has past, no financial activity is allowed to post to that period.BucketsExpenseRevenueBudgetBudget and Estimated RevenueBudget and estimated revenue transactions are normally created in PSB (Position System/Budget) during the budget cycle. Once the operating budget is finalized, balances within DART are updated accordingly. All of the budget is posted to the July period of the next fiscal year using the budgeted institutional categories. Fringe benefit budget amounts are calculated and posted according to the salary to which it relates. The department then has the option to distribute budget to departmental categories within that institutional category, and/or to distribute budget amounts over the next 12 months. For sponsored cost centers, the budget is established based upon the grant proposal or any amendments.

Balance ForwardBalance forward is the remaining balance, either positive or negative, in the cost center. Encumbrances, commitments, and planned amounts are ignored when calculating the ending balance to carry-forward.These entries are treated as an addition to budget for purposes of departmental accounting. These entries are processed using journal entries and posted in July of the next fiscal year. This amount can then be distributed out over other categories and months as the user desires.RevenuesRevenues or income are monetary inflows received from an external entity for some service provided. These may include sales, service fees, application fees, and registration fees. Interdepartmental charges for services are not revenue, and should not be recorded as such.

ExpendituresAn expenditure that has been made by the University, typically a payment to a vendor for goods or services or employee payroll. Some common expenditures in your department may include salaries, supplies, travel, communications, utilities, and equipment.

E&G Charge backsEducational and General charge backs are the monetary inflows that relate to the provided services or the operating activities of the department. These are inter-departmental charges for goods or services, and are not considered revenue.E&G Charge backs have been set-up as an institutional category with an expenditure type. Since these are an expenditure type, the inflows are posted as a negative amounts.EncumbrancesAn amount expected to be charged against a cost center based upon a known obligation. Most common are amounts associated with open Purchase Orders orders that have been placed for goods or services that have not yet been provided, and thus are outstanding obligations of the University. Salaries are also encumbered for appointed positions within the current fiscal year. Once expenses have occurred (an invoice has been paid against a PO or a Payroll has run and employees have been paid), the encumbrances are relieved or removed.On the Dynamic Balance file, an encumbrance is reflected in the period it was first incurred or the Dynamic-Balance-Base-Month, whichever is later. On Static Balance file, it represents the outstanding encumbrance at the end of the associated period.

Managing EncumbrancesManaging your encumbrances is an important process for ensuring the available funds by cost center are as accurate as possible. Estimating how much you plan to spend using a blanket purchase order and increasing the PO line amount by that amount will encumber funds in DART.

Planned ActivityThis is an anticipated amount, usually an expense, that is expected to occur in the future. These Planned Amounts are specified by the department so that they can be aggregated with other financial data in order to provide a more complete picture of the finances for a cost center. (They alter the ending balance)

PendingAn e-business charge that has downloaded, but not yet expensed. E-business charges include: VWR, Voyager, procurement (P-Card) card, Master Card (Sams Club only), and administrative travel (T-Card) card.The charges download using the default cost center on the PA (Procurement Authorization), but can be moved to other approved cost centers. The Pending amounts are updated as the cost centers and/or categories are changed.Each E-Business partner (vendor) has a cut-off date for payment each month. Once paid, an expense is recorded and the Pending amount is relieved (reduced).CommitmentsA commitment represents a requisition amount that have not been assigned a purchase order number. The requisition has been approved by all reviewers.Once requisition lines are placed on a PO the Commitment is relieved (reduced) and an encumbrance is created.General LedgerAccounting systems backboneGeneral LedgerThe general ledger contains all the accounts for recording transactions relating to the universitys assets, liabilities, fund balance, revenues, and expenses. The general ledger is the central repository for accounting data transferred from all subsidiary ledgers. The general ledger is the backbone of any accounting system. General Ledger A General Ledger is similar to a bank account; it records assets (cash and investments) held in the account, as well as liabilities and fund balances.Liabilities represent the University's financial obligations to outside parties who have furnished resources to the University, for example, monies owed to a vendor. In other words, they are the bills or debts the University owes.The Fund Balance is the net amount of assets and liabilities.General Ledger (cont)General ledger accounts are used to record assets, liabilities, and fund balances. Asset accounts include such things as cash, money market investments, and accounts receivable. Accounts payable and notes payable are examples of liability account items. All accounting transactions flow through the general ledger.

Except..The following activities do not post to the General Ledger:CommitmentsEncumbrancesPending E-business ChargesPlanned ActivityWe do post transactions on the Accounting Detail file for Budget and Estimated Revenue. However, these transactions are not in the General Ledger.AssetsAssets - represent items of value that the University owns or controls. They have the ability or potential to provide future benefits to the University. Cash, money market investments, and accounts receivable are the most common types of assets found in your general ledger. Asset account codes begin with 001XXXX.

LiabilitiesLiabilities - represent the University's financial obligations to outside parties who have furnished resources to the University. Generally, we think of these as the bills or debts of the organization. Loans, mortgages, credit card balances, and accounts payable are all examples of liabilities. It is important to note that liabilities are debts or obligations that have not been paid, but are known to be owed or due. Accounts payable would be the most common type of liability found in the general ledger. Liability account codes begin with 002XXXX.

Fund BalanceFund Balance is the net amount of your assets and your liabilities. Depending upon the account activity, this can be a positive or negative number. A minus sign (-) beside the fund balance indicates you have more assets than liabilities at that point in time. A fund balance amount with no minus sign beside it indicates your liabilities exceed your assets. Simply put, you have overspent your account.

Trial Balance The trial balance is a report run at the end of an accounting period, listing the ending balance in each account by company. The report is primarily used to ensure that the total of all debits equals the total of all credits.Financial Affairs runs the trial balance for all companies daily.Fund AccountingFund accounting is a method of accounting emphasizing accountability rather than profitability, used by non-profit organizations and governments. A fund or company is a self-balancing set of accounts, segregated for specific purposes in accordance with laws and regulations or special restrictions and limitations.Subsidiary LedgersWhere the activity takes placeSubsidiary LedgersA Subsidiary Ledger is used to expend funds from general ledger accounts. It is often used to separate and summarize the financial activity of departments before it is summarized in the General Ledger.UPS transactions Labor transactionsARS transactionsISIS transactionsBookstore (Ratex) systemEtc.

UPS TransactionsUPS expensing job runs nightly for all transactions that had been disbursed since the last time the job ran. E-business expenses are separately identified for posting purposes.Check Accounting runs nightly for all payments that were produced since the last time the job ran.These transactions all run through the general ledger. Managing Cash in the GLBalance SheetCost Center levelBalance Sheet Cost CentersBalance sheet cost centers are identified with a company and 10000000000. Unless a company is designated as cash at the cost center level, all class 1, 2, and 3 summary transactions post to this cost center.9900 balance sheet cost center maintains all the bank account balances and fund balances by company. Cash at Cost Center LevelCash at the cost center level is an indicator on the company file. If yes, then all asset, liability, and fund balance activity is posted at the cost center level. In essence, allowing for a trial balance view of the cost center. Explosion RulesBank AccountsCashAP Liability

Debits and CreditsThe type of account determines whether its normal or positive balance is a debit or a credit. Assets and expenses normally debit balances. On the other hand, liabilities, fund balances, and revenues normally have credit balances. Additionally, the account type determines whether a debit or credit action increases or decreases an accounts balance.Assets = Liabilities + Fund BalanceThe accounting equation. Explosion RulesIn order to reduce the number of nightly entries, we summarize activity that is posted to the general ledger. All entries must have an off-setting entry so it is balanced. For example, all purchase order entries use an explosion rule (code) of 25 (UPS Expense) when expensing. The off-setting entry creates an Accounts Payable Liability in the general ledger. When the payment is made to the vendor, the check accounting routine uses explosion code 46 (UPS Check Accounting) which relieved the AP liability with off-setting entries to reduce cash and reduce the bank account.

Special ProcessingSome explosion codes have special processing rules:

CA = when source Company-No manages cash at the CCC level, don't substitute Co-Center-No L4 = substitute the Company number for the Last 4 digits of the Account-No Summarized TransactionsAccounting Detail file