Accruals Template - PDF

							        NREL Accrual System

                                                                                                              Presentation to Oracle
                                                                                                              User Group Meeting at
                                                                                                              FMSIC

                                                                                                              Kevin Novotny

                                                                                                              April 14, 2009




NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC
    Custom Accrual System History
         •     Accounting Accrual Specialist maintained a manual accrual
               system up until the mid 80’s
         •     Custom mainframe accrual system developed in 80’s for both
               receiver and non-receiver required accruals.
         •     Custom Oracle receiver required (3-way match) system
               developed in early 90s with implementation of Oracle
               Purchasing, Oracle GL and Oracle Accounts Payable.
               Mainframe receiver required system ended at this time.
         •     Custom Oracle non-receiver required (2-way match) systems
               developed in the summer of 1999 to complete the replacement
               of the mainframe system.




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    Monthly Accrual Transaction Volume

         •     Approximately 3,000 purchase order distribution lines meet
               accrual criteria

         •     Approximately $50 million of costs are accrued

         •     Accruals and reversals are a standard month-end process

         •     Approximately 250 new and/or modified purchase orders and
               subcontracts are manually reviewed for period of performance
               determination




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    Oracle Accrual System Linkages
          Purchasing
          •     Contract or purchase order period of performance
          •     Project number
          •     Expenditure type
          •     PO status (open, closed)
          Payables
          •     Invoice information
          Projects
          •     Project number validation
          •     Accrual costs by project and expenditure type
          General Ledger
          •     Accrued costs by project and account
          Other Systems
          •     Data warehouse (including commitment reporting)


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    Selection Criteria

         3-way match
         Receiver required
         • P.O. line item(s) have been received (Oracle Receiver)
         • P.O. line is open
         • P.O. line is not fully invoiced
         • No minimum dollar value


         2-way match
         Non-Receiver Action (NRA)
         • P.O. header >$5,000
         • P.O. is for non-capital equipment project type




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         Elements of Non- Receiver Accrual (NRA)
                        Program

          •        Collect Program
          •        Generate Schedule Program
          •        Calculate Accruals Program
          •        Review & Edit Accrual form
          •        Transfer to PA/GL Program




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         Elements of Non- Receiver Accrual (NRA)
                        Program


         Collect Program

         The program collects all POs meeting the following criteria for
              subcontracts and other non-receiver POs:
         •    PO header total is $5,000 or more
         •    PO line(s) are not closed or cancelled
         •    PO is a 2-way match


         NOTE: Start and end dates are required for calculation. POs without a
             period of performance (POP) are placed on system hold for
             manual input for the POP




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         Elements of Non- Receiver Accrual (NRA)
                        Program

          Generate Schedule Program

          •        Generates accrual period lines for each PO line
          •        Updates accrual schedule for revised PO lines
          •        The period of performance (POP) start and end dates for the
                   PO lines is generated from the PO Header, contract, or
                   manually overridden by the Accrual Specialist




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         Elements of Non- Receiver Accrual (NRA)
                        Program

         Calculate Accruals Program
         There are four steps:
         1. Calculates a preliminary straight-line accrual amount for each period of
            the POP based on PO line value
         2. Updates the accrual schedule for revised PO lines
         3. Updates the Invoice Amount (from Accounts Payable) with any new
            invoices in the current period
         4. Calculates the actual accrual amount for the current period based on
            prior month accrual reversal, current month schedule and current
            month invoices




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         Elements of Non- Receiver Accrual (NRA)
                        Program

          Accrual Specialist reviews and edits accrual form for:

          •Subcontract and PO revisions to the standard calculation
          •POP dates to subcontract and/or PO documents
          •PO lines placed on “hold” by the program
          •Requests from the Financial Analyst to modify the accrual schedule due to
          incremental funding, variable work schedule or deliverable schedule

          Accrual schedules may be adjusted at any time during the
          month

          Note: When accrual amounts are modified the accrual schedule must
          always equal the PO line amount. PO lines are always fully accrued by
          the end of the POP




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             Elements of Non- Receiver Accrual (NRA)
                            Program

    Transfer to Projects/General Ledger
    This program transfers calculated accrual amounts to Projects and
      GL

    •     Project number(s) and expenditure type/account number are derived from PO
          distribution lines
    •     One PO line may be split between multiple projects - accruals are prorated
          based on PO line percentages – not applicable to subcontracts
    •     Various accrual liability accounts are used based on PO type
           • Subcontract accruals
           • Other non-subcontract accruals
    •     Reversal transactions are created with a reversal date in the following
          accounting period
    •     The Oracle-delivered programs are run to load accruals into Projects and GL




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         Some Areas to Note
          •Financial Analysts receive a preview of proposed accruals
          about 5 days before each month end and after month end (data
          provided via Excel)
          •Period of performance changes (including contract extension)
          require actual contract modification via Contracts and Business
          Services
          •Receipt Required accruals do not involve any manual
          intervention
          •Project managers or Financial Analyst review and input is
          encouraged
          •The accruals are run only once a month and limits NREL from
          loading the data warehouse more frequently. There is a mid-
          month Oracle report for accruals and invoices. NREL needs an
          approach that will allow us to load our data warehouse more
          frequently.




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    Conclusion

         •     Both the receiver required and non-receiver required accrual
               systems are flexible, reliable systems
         •     Provides cost estimates for work performed or products received
               but not yet invoiced
         •     Allows project manager input for service agreements and
               subcontracts for better cost estimates
         •     Assist in management of uncosted balances
         •     Oracle allows view capabilities for financial analysts
         •     Data Warehouse allows data query and data extracts for detail
               data and analysis needs




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    Custom Accrual System



         Questions?

         For more information about the accrual system please
         Contact Phyllis Linenberger at 303-275-4525 or at
         Phyllis.linenberger@nrel.gov




National Renewable Energy Laboratory                       Innovation for Our Energy Future