Faculty of Arts and SciencesFY17 Year-End Information

Year End Processing..................................................................................................................................2

General Ledger Closing Schedule..........................................................................................................................................2

Accounts Payable................................................................................................................................................................ 3

HCOM Invoices...............................................................................................................................................................................3

Payment Requests..........................................................................................................................................................................3

Purchase Orders.............................................................................................................................................................................3

Travel & Reimbursements.................................................................................................................................................... 3

Purchasing Cards................................................................................................................................................................. 4

AP Adjustment Form........................................................................................................................................................... 4

Internal Billing Journal Vouchers...........................................................................................................................................4

Absence Management......................................................................................................................................................... 4

Gift Deposits....................................................................................................................................................................... 5

Year End Fund Balances....................................................................................................................................................... 5

Credit Vouchers.................................................................................................................................................................. 5

Claiming Incoming Wires......................................................................................................................................................6

Accrual Process........................................................................................................................................7

Accounts Payable Accruals...................................................................................................................................................7

Prepaid Expenses................................................................................................................................................................ 8

Accounts Receivable Accruals...............................................................................................................................................8

Deferred Revenue............................................................................................................................................................... 9

Payroll............................................................................................................................................................................. 10

Year-End Reporting................................................................................................................................12

Whom to Call?.......................................................................................................................................13

Appendix A............................................................................................................................................14

Appendix B............................................................................................................................................15

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Year End Processing

NOTE: There are no significant changes to the FY17 closing process or deadlines. The key messages are:

Accruals, prepaids, receivables and deferrals are only for external and non-sponsored transactions.

The accrual, prepaid, receivable and deferral threshold is $10,000 for non-Construction in Progress and non-equipment invoices. Please refer to pages 6-8 for guidance on each type of accrual and further explanation on how to apply the threshold, either by invoice or in aggregate. We ask that departments adhere to the threshold and do not adjust items less than $10,000 since the additional journals require more work for everyone during a very busy time.

The threshold to accrue for capital equipment (object codes 6801-6816) is $100,000 per invoice.

If you have changes to the coding for capital equipment purchased via AP (object codes 6801 – 6816), they must be processed using the AP Adjustment Form. Refer to the AP Adjustment Form section for further information.

If a department tries to upload a journal voucher after the 3rd close, the journal will NOT post to the GL.

Any compensation-related accruals should be credited to object code 2196 (not 2190). This is a new code in FY17!

Please visit the FAS Office of Finance website for Year-End reference guides at the link below.

http://finance.fas.harvard.edu/pages/reference-guides

General Ledger Closing Schedule

FAS Office of Finance Deadline Central Deadline Depts submit to

finjrnl@fas.harvard.eduDepts post directly to

Oracle

    1st Close Thursday, July 6, noon Friday, July 7, 2pm     2nd Close Thursday, July 13, noon Friday, July 14, 2pm  

AP Accruals Thursday, July 20, 10am n/a     3rd Close Thursday, July 20, noon Friday, July 21, 2pm     4th Close (FAS tubs only - no depts

– to Rebecca Solari)Wednesday, July 26, 5pm n/a

 

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Accounts Payable

All paper approved invoices received by Accounts Payable by 12pm on Friday June 23rd will be included in the first close reports. The final deadline for invoices is by 5 pm on Thursday, July 6, to be included in FY17.

HCOM Invoices

Payment RequestsHCOM Payment Requests submitted by 5:00 p.m. on Thursday, July 6 will be processed for FY17 (June 30 effective date), assuming the invoices are not on hold.

Purchase OrdersInvoice payments for Purchase Orders that have been created on or before June 30 and where the goods or services have been physically received on or before June 30 must be posted to FY17 if the invoice amount is $10,000 or greater. These payments can be posted to FY17 in two ways: automatically by A/P or during the A/P Accrual Process.

To have an invoice payment post automatically to FY17 the associated PO invoice needs to be submitted AND received in HCOM (when receiving is required) by 5:00 p.m. on Thursday, July 6.

Purchase orders received in HCOM between July 1 and noon on July 10 and matched with an invoice by A/P will be posted to FY17.

Purchase orders with vendors who invoice Harvard electronically and transmit invoices July 1st or later will post to FY17 as the GL date is hard coded as the system date for all electronic invoices. Refer to Appendix A for the list of e-Invoicing Vendors.

Final FY17 AP data will be available in HDW on Tuesday, July 11.

Invoices that remain on hold past the July 10 deadline will post to FY18.Because of the above, between July 1 and July 10, departments, centers, and tubs should only receive in HCOM for FY17 purchase orders – those where the goods or services were physically received on or before June 30. They should not receive any FY18 purchase orders (where the goods or services are physically received on or after July 1) until July 11 or later.

For invoices that are not posted to FY17 via the AP process, please refer to the section on Accounts Payable Accruals.

Travel & Reimbursements

All travel completed as of June 30 should be recorded as an FY17 expense. For travel reimbursements that are not posted to FY17 via the payment process, please refer to the section on Accounts Payable Accruals.

Employee and Non-Employee ReimbursementsTravel expense reimbursements, including corporate card payments, must be submitted by 5:00 p.m. on Friday, June 23, to be included in FY17.

Travel reimbursements can be submitted to either: 1033 Massachusetts Avenue, 2nd Floor or the Travel & Reimbursement Office drop box at Smith Center 744.

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Purchasing Cards

Sweep dates for FY17 charges to the PCard are June 28 at 3 p.m. (for transactions loaded to the settlement system between June 9-15), June 29 at 3 p.m. (for transactions loaded to the settlement system between June 16-22), and July 5 at 3 p.m. (for transactions loaded to the settlement system between June 23-29). All sweeps after July 5 will be posted to FY18.

AP Adjustment Form (for capital equipment purchases in object codes 6801-6816)

For departments that have coding changes to capital equipment purchased via AP – these must be processed using the AP Adjustment Form. They cannot be made via journal entry. The deadline for approving AP Adjustment Forms is noon on Monday, July 10. Any forms approved after this deadline will be posted to FY18.

For non-AP transactions that were charged to 68xx, such as PCard and Internal Billings, these can be corrected via journal entry since they were not originally transacted through AP.

For more information, please refer to the FAS Finance AP Adjustment Form Procedures document on the FAS Finance website under Reference Guides. Job aid materials can be found on Eureka under Fixed Assets.

Internal Billing Journal Vouchers

Internal billing entries must be entered into the Oracle general ledger system by the second close deadline, Friday, July 14 @ 2:00 p.m. Internal billing journal vouchers that must be uploaded by the FAS Office of Finance must be received at finjrnl@fas.harvard.edu by Thursday, July 13th @ 12:00 p.m.

After the second close, internal billing journal vouchers can be processed by the FAS Office of Finance, but only with express permission of the department being charged which must be included in the email to finjrnl@fas.harvard.edu

Please keep the following in mind when processing Internal Billing journals:

The debit and credit object codes must be in the same Mega Object range FAS INTRA tubs include 110, 310, 325, 340, 355, 370, 385, 400, 415 INTER tubs are all others outside of FAS, including tub 420, but excluding non-consolidating tubs Object codes that include ‘INTRA’ or ‘INTER’ in the description can only be used on the credit side of a

journal (unless the JV is correcting/reversing a previously posted IB journal). For example, in a Lab Services internal billing, 8100 will be debited and either 8109 or 8110 will be credited.

Include your phone # in the line description.  (The line description for internal billings should include:  originating tub, billing unit contact name, phone ext, description of service or goods, date of service or goods.)

Payroll / Absence Management in PeopleSoft

For all Absence Approvers, Adjusters and Administrators:

All reported paid time off for FY17 (July 1, 2016 through June 30, 2017) must be entered and approved by 3:00 pm on Thursday, June 29. This will ensure accurate reporting of the University's vacation liability as we close

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out the year. Please take a moment to review any new or outstanding requests and take the appropriate action. Vacation time taken affects department financial results as the department will receive a credit for the salary and fringe associated with time taken and recorded.

For additional year-end payroll information, please refer to the Year End Review from 6/9/17 (FY17) located on the FAS Office of Finance website at http://finance.fas.harvard.edu/links/reference-guides-if-applicable/fiscal-year-end

Gift Deposits

New Gift FundsGifts for which a new gift fund must be established must be received by Linda Kuros in the FAS Office of Finance (1414 Mass Ave, 4th Floor Rm 449) no later than 5:00 p.m. on Friday, June 23. The following documents are required:

1. Check with envelope (to indicate postmark date)2. Completed FAS New Gift Account Request Form (located on the FAS website)3. Fund terms

Existing Gift FundsGift deposits to existing funds must be received by Alumni and Donor Services (ADS), formerly the RSO, no later than 3:00 p.m. on Wednesday, July 19.

For additional gift processing information, please refer to the Gift Processing Guidelines document from ADS (Alumni and Donor Services) located on the FAS Office of Finance website at http://finance.fas.harvard.edu/links/reference-guides-if-applicable/fiscal-year-end

Year-End Fund Balances

Departments are responsible for monitoring balances in their various unrestricted and restricted funds throughout the year. Deficit balances must be corrected by journal by third close deadlines. Exceptions on clearing fund deficits should be discussed with your Budget Analyst in advance of year-end close.

Income can never be moved into or out of restricted funds. To clear deficits in a restricted fund, expenses will need to be moved from the deficit fund to an appropriate fund with an adequate balance. For more details on moving expenses from a restricted gift fund, refer to the document ‘How to Zero-Out a Restricted Gift Fund in Deficit’ posted on the FAS Finance website under Fiscal Year-End.

As described in the guidance on Funds, Fund balances, and Subventions, the carry forward of fund balances from subvention or Dean’s discretionary funds is normally not permitted. Saving of any part of a subvention requires written approval from the FAS Dean.

Credit Vouchers (Cash Receipts) for Depositing Cash and Checks

The deadline for submitting credit vouchers to the Cash Receipts Office is Thursday, June 29 at 4pm. Their office is located at 1033 Massachusetts Avenue, 2nd Floor. As always, cash, U.S. checks and foreign checks must be processed on separate credit vouchers.

There is a Credit Voucher Form and instructions available on the Office of Treasury Management website at http://otm.finance.harvard.edu/complete-credit-voucher-form

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Process for Claiming Incoming Wires on the Unclaimed Wires Report

The Unclaimed Wire Report is located in OBI under the Cash Management dashboard. This report is used to look for receipts from external parties related to your department. While you may be anticipating a check payment, the vendor may have paid via wire. Please review this report throughout the year and claim wires as funds are received. To claim a wire to post to your dept, email Cash Management at cash_receipts@harvard.edu and provide the following information to process the income transfer:

• Receipt number (IW#) and receipt date • Actual amount of the wire• Complete 33 digit string of coding• Description of wire to be recorded on GL

Similar to the Cash Receipts form, you must provide a description for the wire. We recommend that you use the following format for reimbursements, refunds and other misc. income. Please keep the descriptions brief but include enough information that others will know what it is for, like these examples:

Reimb from XXX for J. Smith travel 4/1-4/15 (code to expense)Refund from XXX for overpmt of invoice XXX (code to expense)Income from XXX for rent Jan-Mar (code to income)

The deadline for claiming a wire for FY17 is Friday, July 7th at noon.

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Accrual Process

In order to recognize revenue and expenses in the proper year, it may be necessary to record entries for accounts payable accruals, prepaid expenses, accounts receivable, and deferred revenue. This requirement complies with Generally Accepted Accounting Principles (GAAP) and ensures the accuracy and completeness of University and FAS financial statements. The FY17 threshold for mandatory accruals is $10,000 for non-CIP and non-equipment expenses, $100,000 for equipment expenses (object codes 6801-6816) and $1M for CIP (Construction in Progress) expenses.

GAAP adjustments can only be created for external and non-sponsored transactions; i.e. funds paid to external entities (A/P and Prepaid Expenses) or funds received from external parties (A/R and Deferred Revenue). Accrual entries cannot be created for transactions that are internal to Harvard, even if outside of one’s department or tub. For more information on accruals and why they are required, refer to Appendix B.

Please refer to the separate ADI files for examples of what is needed for support as part of the journal submission when you send a Prepaid, Accrued Revenue or Deferred Revenue journal to FAS Finance. The Accounts Payable Accrual is managed through a separate process as explained below.

Accounts Payable Accruals (2191)

The University requires all departments to accrue accounts payable invoices for goods or services received or performed by June 30 but not yet paid. To the extent that invoices that exceed the following thresholds do not get captured in the June ledger via AP payments, departments will need record them as A/P accruals.

$10,000 or greater for FY17-related non-CIP expenses $100,000 or greater for FY17-related equipment $1M or greater for CIP expenses which are accrued by OPRP, not by the dept

The A/P accrual is processed during the third close. Each department in tubs 370, 385 and 420 will be contacted by FAS Finance and the FAS affiliate tubs will be contacted by the Office of the Controller with a report of invoices that should potentially be accrued.

Departments and tubs will also be asked to provide a list of additional expenses not on this list that must also be accrued. We ask that departments adhere to the thresholds, unless material to their department.

Please note that consistent with prior year, the timeframe for this process is extremely tight. The report to departments will be distributed by Tuesday, July 18. The deadline to return is 10:00 a.m. on Thursday, July 20. Instructions will be noted in the email. FAS Finance will review and upload the file at the end of the 3rd close.

FY17 accruals for departments will be reversed in July by FAS Finance. There is no action required by the departments.

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Prepaid Expenses (0540)

In situations where a department has paid an invoice in FY17 for goods or services that will not be received or performed until FY18, the expense must be recorded as a prepaid expense. Prepaid expenses must be setup for individual expenses of $10,000 or greater. We ask that departments adhere to the threshold and do not adjust items less than $10,000 since the additional journals require more work for everyone during a very busy time.

A prepaid expense is recorded using a journal voucher. This journal will credit the expense coding used on the original expense transaction. You will debit the following coding using your Tub and Org:

Tub.Org.0540.000000. XXXXXX.XXXX.XXXXX

*Activities, sub activities, and roots may be used but are not required, but fund must remain 000000*

Journal SubmissionPlease email your journal and supporting back-up (invoice and Excel calculation to determine the prepaid) no later than the third close to Finjrnl@fas.harvard.edu . The deadlines for submitting journals for each close are outlined in the FY17 Year End Calendar. Prepaid expense journals will be reversed by the FAS Office of Finance in July, FY18. For questions regarding prepaid journals, please contact Maria Geovanos at geovanos@fas.harvard.edu

Accounts Receivable Accruals (0130)

An accounts receivable (A/R) accrual should be recorded in cases where a department has not yet received payment (cash) for goods provided or services performed during FY17. Accounts receivable accruals must be established for all billings, reimbursements, or other outside income of $10,000 or greater in aggregate on a program-wide basis. For example, if you have 10 external customers who as of 6/30 each owe $3,000 in fees for a conference which was held in FY17, you would accrue for $30,000 of A/R. If it was just 2 customers totaling $6,000, then you would not need to accrue. We ask that departments adhere to the threshold and do not adjust items less than $10,000 since the additional journals require more work for everyone during a very busy time.

For departments using the Oracle A/R system, the billings may be processed by entering invoices into the A/R system by 4:00 p.m. on Wednesday, July 12, as noted in the FY17 Year End Calendar. *Please note* From July 1st to July 13th, the GL date in Oracle A/R will automatically default to the July date. In order for transactions to be included in FY17 during this time, users will have to enter the date of June 30, 2017 to override the default date. This process applies to invoices and credit memos entered both manually and via feeds.

For those not using the Oracle A/R System, or in cases where the deadline to submit an A/R invoice has passed, a journal will need to be prepared to record the revenue in FY17 and set up a receivable on the balance sheet. The journal will credit the department’s coding using the appropriate income object code (or expense object code, if appropriate). You will debit the following coding using your Tub and Org:

Tub.Org.0130.000000.XXXXXX.XXXX.XXXXX

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*Activities, sub activities, and roots may be used but are not required, but fund must remain 000000*

Journal SubmissionPlease email your journal and supporting back-up (detail of receivables from sub-system, tracker or Excel calculation) no later than the third close to Finjrnl@fas.harvard.edu . The deadlines for submitting journals for each close are outlined in the FY17 Year End Calendar. A/R Accrual journals will be reversed by the FAS Office of Finance in July, FY18. For questions regarding prepaid journals, please contact Miguelina Rodriguez at mrodriguez@fas.harvard.edu

Deferred Revenue (2606)

Deferred revenue should be recorded when cash has been received in FY17 but the goods or services will not be provided by a department until FY18. This receipt represents unearned income and must be deferred until FY18. Examples include:

Summer or fall program income received before year-end Executive and continuing education program revenue received in FY17 for programs offered in

FY18 Publications/ subscription revenue where subscription revenue has been received in FY17 for

months which fall into FY18 Conference fees received in FY17 that relate to a conference to be held in FY18

Deferred revenue must be setup for income of $10,000 or greater in aggregate on a program-wide basis. For example, if you have 10 external customers who as of 6/30 have paid $3,000 in fees for a conference which will be held in FY18, you would defer $30,000 in revenue. If it was just 2 customers totaling $6,000, then you would not need to defer. We ask that departments adhere to the threshold and do not adjust items less than $10,000 since the additional journals require more work for everyone during a very busy time.

Deferred revenue is recorded using a journal voucher. This journal will debit the income coding used on the original receipt transaction. You will credit the following coding using your Tub and Org:

Tub.Org.2606.000000. XXXXXX.XXXX.XXXXX

*Activities, sub activities, and roots may be used but are not required, but fund must remain 000000*

Journal SubmissionPlease email your journal and supporting back-up (Detail Listing of posted revenue and Excel calculation to determine the deferral) no later than the third close to Finjrnl@fas.harvard.edu . The deadlines for submitting journals for each close are outlined in the FY17 Year End Calendar. Prepaid expense journals will be reversed by the FAS Office of Finance in July, FY18. For questions regarding prepaid journals, please contact Miguelina Rodriguez at mrodriguez@fas.harvard.edu

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Year End Payroll Posting Dates

There will be no Payroll Accrual at the end of FY17.

Pay Run ID Pay Frequency

Check Date Pay Period

BW070117 Bi-Weekly 07/07/17 06/18/17 - 07/1/17

WKLY070216 Weekly 07/07/17 06/25/17 - 07/1/17

The weekly and biweekly paychecks paid to employees on Friday, July 7 is for work performed from June 18-July1. Because the payrolls essentially comprises FY17 work in its entirety (7/1/17 is a Saturday), the check itself will be posted to the General Ledger in June 2017 as a 6/30/17 entry. As this is not an accrual entry, it will not be reversed in July.

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Year-End Reporting

Fiscal Year 2017 Close Dates

Detail Listing Report Periods: Show Transactions "Between Dates"

CREW Updated Actuals Available

in HUBS

First Close Fiscal June entries from June 1 through July 7 Saturday , July 8 Saturday, July 8

Second Close Fiscal June entries from July 8 through July 14 Saturday, July 15 Saturday, July 15

Third Close Fiscal June entries from July 15 through July 21 Saturday, July 22 Saturday, July 22

Fourth Close Fiscal June entries from July 22 through July 28 Saturday, July 29 Saturday, July 29

Fifth Close Fiscal June entries from July 29 through August 2 Thursday, August 3 Thursday, August 3

Every year-end we experience exceptional reporting demands during the closings. Following these suggestions on reporting will reduce the time required to run your reports:

Use the Detail Listings "close" dates to limit to the specific transactions that occurred in each close. Choose the specific close (First Close, Second Close, etc.) from the report period pick list. Note that the start and end dates populated for these periods will display July dates. For these closing periods only, these dates refer to the actual entry dates of fiscal month June entries. It is strongly recommended that you take advantage of using the close dates to narrow the scope of your data rather than capturing all of the Prior Fiscal Year data throughout the close periods.

IMPORTANT NOTE: Fiscal Year 2017 close dates will not be displayed in the Detail Listings report period names until July 1. On July 1, these dates automatically update to the FY2017 dates. This does NOT preclude setting up and scheduling reports in advance. The FY2017 dates will automatically repopulate all scheduled reports.

Schedule your closing reports to run on the Year-End "Event" dates. Enter all of the chart segment parameters you can for a given report request to increase performance

for yourself and the whole University. Never use your security view to filter your data. For example, a user wants to see amounts for a range of objects within the tub and org for which they have a view. Because of their view limitation, the user will get the same result whether tub and org are entered as parameters or not. However, not including tub and org will make the query take much longer to run, tying up system resources and slowing things down for all report users.

Only use transaction reports like the Detailed Listing when you really need to see the transaction line detail. Summary-level balances can be retrieved in reports such as the Summary Actuals Listing report, Fund Summary report, Fund, Gift, & Unrestricted Unexpended Balance report, and the Budget Variance report.

Preserve server disk space by deleting unneeded reports instead of waiting for them to purge. (Note: Report requests are systematically purged after seven days.) This is especially important if you have report output that you know is large.

Keep in mind that, as of July 1, the Current Fiscal Year to Date option will reflect FY2018. To retrieve FY2017 year-to-date transactions, select the Prior Fiscal Year date period from the period pick list.

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Whom to Call?

For questions relating to... Please contact:

Transaction TypeContact (FAS Finance noted in green)

Location Phone

HCOM and Travel Andry McFall 1414 Mass Ave 6-4292

PCard transactions Joshua Dunn 1414 Mass Ave. 5-7652

AP Accrual (accrual journal logistics) FAS ASAP 1414 Mass Ave. 6-7136

AP Accrual (accounting questions) Rebecca Solaria 1414 Mass Ave 6-1810

Prepaid Expenses (accounting questions) Maria Geovanos 1414 Mass Ave 5-9107

A/R Accruals & Deferred Revenue (accounting questions) Miguelina Rodriguez 1414 Mass Ave 6-6238

Journal vouchers

Manual Journal Vouchers & ADI Journals Uploaded by Departments

FAS ASAP 1414 Mass. Ave 6-7136

ADI Journals to FAS Finance Email Finjrnl 1414 Mass. Ave finjrnl@fas.harvard.edu

Journal Vouchers for FOURTH CLOSE(Affiliated Tubs Only)

Rebecca Solari 1414 Mass Ave 6-1810

A/P Invoices and Web Voucher Payments Accounts Payable 1033 Mass. Ave., 2nd floor 5-8500

Credit vouchers Cash Receipts 1033 Mass. Ave., 2nd floor 6-8332

Check voids / re-deposits Accounts Payable 1033 Mass. Ave., 2nd floor 5-4175

Wires and drafts Cash Management 1033 Mass. Ave., 4th floor 5-4175

Travel authorization forms Reimbursements & Card Services

1033 Mass. Ave., 2nd floor 5-7760

Web Voucher Reimbursements Reimbursements & Card Services

1033 Mass. Ave., 2nd floor 5-7760

A/R invoices Accounts Receivable 1033 Mass. Ave., 2nd floor 5-3787

Cost transfers - sponsored funds Sponsored Research Smith 617 6-2513

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Appendix A

List of Vendors that Invoice Harvard Electronically

E-Invoicing Vendors are able to invoice automatically once items ship. Therefore, it’s possible to get a receiving hold 1st notification when the items are still in transit. These vendors' invoices have a GL date that is hard coded based on the date the invoice arrives in the electronic mailbox at Harvard. Meaning, invoices received in the email mailbox by June 30 AND received in HCOM by noon on July 11 will be posted to FY17. Otherwise, invoices will be posted to FY18. See the link below for a list of e-invoicing vendors http://hwpi.harvard.edu/files/fas_finance/files/e-invoicing_vendors.docx

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Appendix B

Accounting for Accruals and Deferrals – What are they and why do we do them?

BackgroundEach year, the University is required to issue a report on its financial condition for use by a broad audience, including the federal government, the Massachusetts Attorney General’s Office, rating agencies, bondholders, donors, and alumni. This report includes a balance sheet and a change in net assets statement (the non-profit equivalent of a profit-and-loss statement). These financial statements must be produced in compliance with “Generally Accepted Accounting Principles” (GAAP).

GAAP requires that the University include in its financial statements expenses that are incurred during the year, as well as income earned during the year FOR EXTERNAL AND NON-SPONSORED TRANSACTIONS ONLY. As such, there may be transactions that are paid or received in the following fiscal year that must be reported in the current fiscal year. To accomplish this, we process “accruals” and “prepaids” for expenses and “receivables” and “deferred revenue” for revenues. To ensure accurate financial statements, we are required to record these adjustments for all “material” transactions. We have set the materiality threshold at $10,000 for non-CIP and non-equipment, $100,000 for equipment and $1M for CIP (Construction in Progress). Therefore, adjusting entries must be processed for applicable transactions that are greater than or equal to these thresholds. However, we encourage departments to accrue at a lower level if material to your department or program. In general, these entries are processed by a tub’s central financial office, although the central tub office often relies upon departmental administrators to provide information needed to complete these entries.

Below is further information regarding each of the four types of adjusting entries:

Accounts Payable (AP) Expense Accrual (2191)An entry should be recorded when a good or service has been received/performed in the current fiscal year but will not be paid until after year-end. This includes items for which an invoice has been received but not paid, as well as items for which an invoice has not yet been received. This entry is called an A/P accrual. A debit is made to the expense where the payment will ultimately be coded and a credit is made to the AP Closing Accrual object code (2191) on the balance sheet.

For invoices that were not processed by the AP cutoff and applied to FY17 and for invoices that have not been received by year-end, the department should process the accrual based either the known cost or an estimated cost if one can reasonably be calculated. Any such costs that are for $10,000 or more for non-CIP and non-equipment, $100,000 or more for equipment or $1M or more for CIP (Construction in Progress) must be accrued during the 3rd Close. Separate instructions will be emailed to the Departments regarding the accrual process in mid-July.

Departments should not delay processing these expenses because of a lack of funding. Departments should consult with their Budget Analyst if there is a funding issue.

Example: A department orders and receives two computers at the end of June. However, the bill is not received until July and is not processed until August. Because the computers were received in June, an A/P accrual journal for these expenses should be processed.

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Prepaid Expenses (0540)An entry should be recorded when a bill has been paid in the current fiscal year for a good or service that will not be received/performed until the next fiscal year. This entry records a prepaid expense. A debit is made to the Prepaid object code (0540) on the balance sheet and a credit is made to the same expense coding string from which the bill was paid.

Prior to year-end, the department should determine what expenses have been paid for goods or services that will not be received/performed until after June 30. Any such amounts that are for $10,000 or more must be recorded as prepaid expenses.

Example: A department pays a vendor for elevator maintenance for the period from May 1 of this year through April 30 of the following year. Since two months of this period are in the current fiscal year and ten months are in the following fiscal year, a journal should be processed to record 10/12ths of the contract cost as a prepaid expense.

Revenue Receivables (0130)An entry should be made when a department has not received income owed to it by year-end for goods or services provided by the department during the current fiscal year. This entry is called an accounts receivable (A/R) accrual. A debit is made to the accounts receivable object code (0130) on the balance sheet and a credit is made to the income coding string where the revenue will ultimately be coded.

Prior to year-end, the department should determine what income has been earned in the current fiscal year and whether it has been fully collected/received. Any amounts not recorded in the G/L by 6/30 should be recorded as accounts receivable in June. If the amount due is not exactly known, an estimate should be calculated and posted to the General Ledger. Any such amount of $10,000 or more must be recorded.

As long as the receivable transaction is processed through the Oracle General Accounts Receivable system by 5 p.m. on July 13, no journal entry is necessary. The A/R system properly records the A/R accrual and income. If the transaction has not been processed by the deadline, a journal entry to record the receivable should be done. For income received that is processed through the Cash Management Office, if the transaction is not submitted by the Credit Voucher deadline of June 29, a receivable journal entry should be recorded. *Please note* From July 1st to July 13th, the GL date in Oracle A/R will automatically default to the July date. In order for transactions to be included in FY18 during this time, users will have to enter the date of June 30, 2017 to override the default date. This process applies to invoices and credit memos entered both manually and via feeds.

Example: A department provides services to an outside institution in May, but doesn’t receive payment from the customer until July. Because the service was provided in the current fiscal year, an A/R journal for this income should be processed.

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Deferred Revenue (2606)An entry should be recorded when revenue has been received in the current fiscal year but the department will not provide the good or service until the next fiscal year. This entry records deferred revenue (“unearned income” that should be included in income in the following year). A debit is made to the income coding string where the revenue has already been recorded and a credit is made to the deferred revenue object code (2606) on the balance sheet.

Prior to year-end, the department should determine what income has been received in the current fiscal year where the good or service is not going to be provided until after June 30. Any such amounts of $10,000 or more, on a program basis, must be deferred.

Example: A department receives tuition income in May for an executive education course that will be held during the last two weeks of July. Since this income relates to a course that will be held in the following fiscal year, a journal should be recorded to defer this revenue.

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