FYED ue To Due From Business by HC120209201923

VIEWS: 0 PAGES: 9

									          Fiscal Year End
Due To/Due From Other Business Unit
            Procedures
       (Central Business Offices)




     BUSINESS SERVICES/FYE TRAINING
         The University of Montana – Missoula
                 Missoula, MT 59812
INTERENTITY RECEIVABLES (Due From Other Business Units) AND PAYABLES (Due To Other
Business Units)
Agencies that bill other State agencies or divisions for goods or services must use account 1306 - Due From
Other BU or Fund to record their receivables. Likewise, when setting up a liability for goods purchased or
services received from another State agency or division, account 2106B- Due To Other BU or Fund-B (for
items received Before June 30th) must be used. Account 1306 and 2106B should also be used for transfer
accruals.

In the State's Comprehensive Annual Financial Report (CAFR), the total of account 1306 for all agencies
must equal the total of account 2106B for all agencies. Since every account 1306 entry must be offset
with a corresponding account 2106B entry, agencies should inform the associated agency when
using either of these two accounts.

Because both accounts (1306 & 2106B) require an open item value, these transactions must be prepared
as SABHRS first documents then entered into Banner via the backdoor process. The State Interface
logic will NOT handle the specific requirements outlined by the state. The open item number must be in
the following format: first 5 digits are mandatory and must be the agency number to which the
payable is owed (account 2106B) or from which the receivable is due (account 1306); the last 5 digits
are optional and their usage is determined by the agency.

IMPORTANT CHANGE TO STATE POLICY: 1306/2106B transactions must be on the same
journal. Because of this change, there is only one method for recording the transactions.

        The transaction is initiated on a SABHRS Inter-Unit Journal Voucher by one agency; thus requiring
         the other agency to complete their offsetting entries on that journal before it can be posted. The
         initiating agency assigns the source code on the document; which will be IU. For transactions
         initiated by other agencies, an entry will be generated on Systems’ Pending IUJ Report. An
         MPYxxxxx (where Y = fiscal year) document will be assigned by Systems and distributed to the
         appropriate accountant for the required accounting. Systems will then enter the document.


REMEMBER, DO NOT INITIATE TRANSACTIONS TO ACCOUNTS 1306 OR 2106B ON
BANNER. THEY MUST BE SABHRS FIRST!!

Supporting Documentation
Agencies should provide an adequate explanation for receivable and payable/accrual transactions along with
proper supporting documentation. Receivable transactions should include a copy of the billing document
detailing the goods or services provided. Payable/accrual transactions should include a copy of an invoice
or packing slip detailing the goods or services received (may be detailed on the IU journal from the other
agency). See the Expenditure Accrual Procedures for documentation requirements for valid accruals.

Reversal of Entries in the New Year
These transactions may be reversed in the next fiscal year, but only if the other agency agrees. That
reversal will be processed as an IUJ as well. If the other agency does not agree, then the payments for
accrued expenses are recorded as a debit to 2106B and a credit to cash in the new year; and the deposits
are recorded as a debit to cash and a credit to 1306 in the new year




C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           1
                                                    Accounting Models

                         Receivables – Due from Other Business Units

   Current Fiscal Year -
  Step #1 – Initiate Receivable
  SABHRS first accrual entries are prepared on an Inter-Unit Journal (IUJ) and submitted to Systems for entry
  during the fiscal year-end process.
                                                          Debit            Credit          Open Item #
SABHRS              Due From Other BU – Acct 1306         500.00                           51040
Recvble Entry       Revenue – FOAP                                         500.00

                                                                     Debit    Credit      Doc Ref #
Banner               Due From Other BU – Acct 1306                   500.00               51040
Recvble Entry        Revenue – Index                                          500.00

   New Fiscal Year -
   Step #2 – Reversal or Payment:
   Payment – The paying agency initiates an IUJ which then appears on Systems IU report. Systems will
   submit all crystal reports containing accounts 1306 or 2106B to the appropriate accountant for SABHRS &
   Banner accounting data. Systems will look for a combination of accounts 2106B or 1306 with a cash line,
   this indicates a direct payment.

                                                                     Debit    Credit      Open Item #
SABHRS Entry         Due From Other BU – Acct 1306                            500.00      51040
                     Cash – Acct 1104                                500.00

                                                                     Debit    Credit      Doc Ref #
Banner Entry         Due From Other BU – Acct 1306                            500.00      51040
                     Cash – Acct 1104                                500.00




   Reversal – If the entry is to be reversed, the two agencies must be in agreement. An IUJ is prepared and
   submitted to Systems for entry in the new year. The other agency responds using their reversal accounting
   (account 2106B). When payment is generated, the accounting will be recorded as normal IUJ payment.

                                                                     Debit    Credit      Open Item #
SABHRS               Due From Other BU – Acct 1306                            500.00      51040
Reversal Entry       Revenue – FOAP                                  500.00

                                                                     Debit    Credit      Doc Ref #
Banner               Due From Other BU – Acct 1306                            500.00      51040
Reversal Entry       Revenue – FOAP                                  500.00


 Payment
                     Revenue - Index                                          500.00
                     Cash                                            500.00




   C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                              2
                 Payables / “B” Accruals – Due To Other Business Units
   Current Fiscal Year -
  Step #1 – Initiate Payable
  SABHRS first accrual entries are prepared on an Inter-Unit Journal (IUJ) and submitted to Systems for entry
  during the fiscal year-end process.
                                                          Debit            Credit          Open Item #
SABHRS              Expense – FOAP                        500.00
Accrual Entry       Due to Other BU/Fund-B Account 2106B                   500.00          51040

                                                         Debit                Credit      Doc Ref #
Banner               Expense – Index                     500.00
Accrual Entry        Due to Other BU/Fund-B Account 2106B                     500.00      51040


   New Fiscal Year -
   Step #2 – Reversal or Payment:
   Payment – The paying agency initiates an IUJ which then appears on Systems IU report. Systems will
   submit all crystal reports containing accounts 1306 or 2106B to the appropriate accountant for SABHRS &
   Banner accounting data. Systems will look for a combination of accounts 2106B or 1306 with a cash line,
   this indicates a direct payment.

                                                                     Debit    Credit      Open Item #
SABHRS Entry         Due From Other BU – Acct 2106B                           500.00      51040
                     Cash – Acct 1104                                500.00

                                                                     Debit    Credit      Doc Ref #
Banner Entry         Due From Other BU – Acct 2106B                           500.00      51040
                     Cash – Acct 1104                                500.00



   Reversal – If the entry is to be reversed, the two agencies must be in agreement. An IUJ is prepared and
   submitted to Systems for entry in the new year. The other agency responds using their reversal accounting
   (account 1306). When payment is generated, the accounting will be recorded as a normal IUJ payment.

                                                                     Debit    Credit      Open Item #
SABHRS               Expense – FOAP                                           500.00
Reversal Entry       Due to Other BU/Fund-B Acct 2106B               500.00               51040

                                                                     Debit    Credit      Doc Ref #
Banner               Expense – Index                                          500.00
Reversal Entry       Due to Other BU/Fund-B Acct 2106B               500.00               51040




 Payment
                     Expense - Index                                 500.00
                     Cash                                                     500.00




   C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                              3
                                          PREPARING TRANSACTIONS

Due From Other Business Units (Account 1306)
                                                                                           th
Valid receivables for goods or services provided to another state agency prior to June 30 , but not recorded
in Banner will be recorded to account 1306. The majority of these transactions may be grant related, but are
not restricted to grant funds. REMINDER: the paying agency must set up a corresponding entry to 2106B.
     Transactions Initiated by UM Campuses:
                  Prepare a SABHRS Inter-Unit Voucher using source code IU with a debit to 1306 and a
                  credit to the appropriate Fund/Org/Revenue.
                  All 1306 transactions MUST be entered as a SABHRS first document, and then entered into
                  Banner via the backdoor process. The State Interface logic will not handle the specific
                  requirements outlined by the State of Montana for the open item number.
                  An open item number is required in SABHRS. The first five digits must be the business unit
                  of the paying agency.
                                                   th
                  Document date must be June 30
                  Rule Code JIA3 for the Banner portion with a debit to 1306 and a credit to the appropriate
                  index and revenue account.
                  The Banner document reference field must contain the open item number recorded on the
                  SABHRS document. This information is used for financial statement analysis
                  Senior Accountant approval
                  Systems will assign an MP document number and process the document.

                                    SAMPLE DOCUMENT #1




                  Prepare reversing SABHRS Inter-Unit Journal Voucher
C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           4
                      o    IU source code with debit to the Fund/Org/Revenue and a credit to 1306
                      o    Open item from original transaction is required
                      o    Document date must be July 1
                      o    Rule code JIA3 for Banner side with appropriate reversing accounting
                      o    Banner document reference field must contain the open item number recorded on
                           the SABHRS side.
                      o    Senior Accountant approval

                                    SAMPLE DOCUMENT #1 REVERSAL




        Transactions initiated by Other Agency with IU source code:
                Systems received notification of pending IU Journal with IU source code. An MPYxxxxx
                (where Y = fiscal year) document number is assigned by Systems and a copy of the Crystal
                Report is distributed to the appropriate accountant for the required accounting.
                Accountant prepares Inter Unit Journal using source code IU with a debit to 1306 and a
                credit to the appropriate Fund/Org/Revenue.
                All 1306 transactions MUST be entered as a SABHRS first document, and then entered into
                Banner via the backdoor process. The State Interface logic will not handle the specific
                requirements outlined by the State of Montana for the open item number.
                An open item number is required in SABHRS. The first five digits must be the business unit
C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           5
                  of the paying agency.
                                                 th
                  Document date must be June 30
                  Rule Code JIA3 for the Banner portion with a debit to 1306 and a credit to the appropriate
                  index and revenue account.
                  The Banner document reference field must contain the open item number recorded on the
                  SABHRS document. This information is used for financial statement analysis.
                  Senior Accountant approval

                                    SAMPLE DOCUMENT #2




                  Prepare reversing SABHRS Inter-Unit Journal Voucher
                     o IU source code with debit to the Fund/Org/Revenue and a credit to 1306
                     o Open item from original transaction is required
                     o Document date must be July 1
                     o Rule code JIA3 for Banner side with appropriate reversing accounting
                     o Banner document reference field must contain the open item number recorded on
                         the SABHRS side.
                     o Senior Accountant approval


C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           6
Due To Other Business Units (Account 2106B)
                                                                                      th
Valid accruals for goods or services provided by another state agency prior to June 30 , but not recorded in
Banner will be recorded to account 2106B. REMINDER: the receiving agency must set up a corresponding
entry to 1306.

        “B” Accruals (with Other State Agency Providers) – initiated by UM Campuses:
                Prepare a SABHRS Inter-Unit Journal Voucher using source code IU with a debit to the
                appropriate Fund/Org/Program/Expense and a credit to liability account 2106B.
                “B” accruals with another State Agency MUST be entered as a SABHRS first document, and
                then entered into Banner via the backdoor process. The State Interface logic will not handle
                the specific requirements outlined by the State of Montana.
                An open item number is required in SABHRS. The first five digits must be the business unit
                of the receiving agency.
                Rule Code JIA3 for the Banner portion
                The Banner document reference field must contain the open item number recorded on the
                SABHRS document.
                Senior Accountant approval
                (See SAMPLE DOCUMENT #1 for document format)

                  Prepare reversing SABHRS First GL Journal Voucher
                     o IU source code with credit to the Fund/Org/Expense and a debit to 2106B
                     o Open item from original transaction is required
                     o Document date must be July 1
                     o Rule code JIA3 for Banner side with appropriate reversing accounting
                     o Banner document reference field must contain the open item number recorded on
                         the SABHRS side.
                     o Senior Accountant approval
                  (See SAMPLE DOCUMENT #1 REVERSAL for document format)

        “B” Accruals (with Other State Agency Providers) – initiated by Other Agency:
                Prepare a SABHRS first Due To-Due From Other Agency IU Journal form using source code
                IU with a debit to the appropriate Fund/Org/Program/Expense and a credit to liability account
                2106B.
                “B” accruals with another State Agency MUST be entered as a SABHRS first document, and
                then entered into Banner via the backdoor process. The State Interface logic will not handle
                the specific requirements outlined by the State of Montana.
                An open item number is required in SABHRS. The first five digits must be the business unit
                of the receiving agency.
                Rule Code JIA3 for the Banner portion
                The Banner document reference field must contain the open item/x-reference number
                recorded on the SABHRS document.
                (See SAMPLE DOCUMENT #2 for document format)

                  Prepare reversing SABHRS First GL Journal Voucher
                     o ONL source code with debit to the Fund/Org/Revenue and a credit to 1306
                     o Open item from original transaction is required
                     o Document date must be July 1
                     o Rule code JE1 for Banner side with appropriate reversing accounting
                     o Banner document reference field must contain the open item number recorded on
                         the SABHRS side.
                     o Senior Accountant approval


NOTE: “A” accruals may be prepared for items from other State Agencies as long as the receiving agency
does not record an entry in 1306 for the closing year. These entries must follow the rules for “A” accruals
using account code 2403 (see Expenditure Accrual Procedures).
NOTE: It’s recommended that the accountant responsible for the accruals maintain a log of transactions
recorded in liability account 2106B and transactions recorded in the receivable account 1306. This
accountant will be Systems contact person for any backdoor documents coded with either 2106B or 1306.
The majority of the 1306 transactions will be grant related and the information will be forwarded to the Grant
accountants after recording in the log. The log should contain the Banner document number, SABHRS
C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           7
document number, amount, balance sheet account, the other agency business unit/name, brief description of
transaction, responsible department (Grants, Bus Srvcs, Cont Educ, etc), other agency acknowledgment
field (for name of contact person and comments), field for recording new year reversal document. This log
will be helpful for financial statement analysis and fielding questions from the state for CAFR preparation.




C:\Docstoc\Working\pdf\03af9bca-adbc-4b4b-b97e-dadb64dcca83.doc
                                                           8

								
To top