Finance SeminarFinance Seminarwww.wesleyan.edu/finance/financeDeptwww.wesleyan.edu/finance/financeDept

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YEAR ENDYEAR END

�� Why all the deadlines?Why all the deadlines?

�� WorkflowWorkflow

�� A/P vouchers and A/P vouchers and deadlinesdeadlines

Purchase OrdersPurchase Orders

�� DepositsDeposits

�� Accruals and prepaid Accruals and prepaid expensesexpenses

�� Budget informationBudget information

�� Accrual and prepaid Accrual and prepaid �� Purchase OrdersPurchase Orders

�� Purchasing CardPurchasing Card

�� TravelTravel

�� Year end payroll Year end payroll chargescharges

�� Central bill expensesCentral bill expenses

�� Accrual and prepaid Accrual and prepaid examplesexamples

Why all the deadlines?Why all the deadlines?

�� Budget analysisBudget analysis�� Budget analysisBudget analysis

�� Audited Financial StatementsAudited Financial Statements

�� Internal Control ReportInternal Control Report

�� Federal Government OversightFederal Government Oversight

�� KPMG Audit ProceduresKPMG Audit Procedures

WORKFLOWWORKFLOWWORKFLOWWORKFLOW

WORKFLOWWORKFLOW

�� All All SmartdocsSmartdocs must be processed by year must be processed by year end.end.

�� Follow up on Denied statusFollow up on Denied status

�� Request DeletionsRequest Deletions�� Request DeletionsRequest Deletions

To Find Document StatusTo Find Document StatusFind an existing value Find an existing value -- JournalsJournals

Find and existing value: VouchersFind and existing value: Vouchers

OR: WFS InquiryOR: WFS Inquiry

Accounts Payable VouchersAccounts Payable VouchersDetermining the Fiscal YearDetermining the Fiscal Year

What it ISWhat it IS

�� The work is performed The work is performed

What it is NOTWhat it is NOT

�� Order dateOrder date

�� The goods are receivedThe goods are received

�� The travel occursThe travel occurs

�� Payment datePayment date

�� Invoice dateInvoice date

�� Budget funds Budget funds availableavailable

Accounts Payable DeadlinesAccounts Payable Deadlines

Contact Vendors for Accelerated BillingContact Vendors for Accelerated Billing

Expenses IncurredAnd Billed

Vouchers Due Paid ByAnd Billed

Through May 31 June 9 June 30 - depending..

June June 23 June 30

Unbilled Accrual N/A

PURCHASE ORDERSPURCHASE ORDERS

�� Review Open purchase orders to be sure Review Open purchase orders to be sure vouchers cleared the encumbrances.vouchers cleared the encumbrances.

�� Open purchase orders will not carry Open purchase orders will not carry forward to the next fiscal year.forward to the next fiscal year.forward to the next fiscal year.forward to the next fiscal year.

PURCHASING CARDPURCHASING CARD

�� Carefully review for prepaid expenses and Carefully review for prepaid expenses and notify Susan Pavis.notify Susan Pavis.

–– Goods paid in FY 2010, received FY 2011Goods paid in FY 2010, received FY 2011

–– Travel paid in FY 2010, occurs in FY 2011Travel paid in FY 2010, occurs in FY 2011–– Travel paid in FY 2010, occurs in FY 2011Travel paid in FY 2010, occurs in FY 2011

�� Additional download dates for budget Additional download dates for budget reviewreview

–– June 15, 22, July 6June 15, 22, July 6

TRAVEL TRAVEL

�� Charged to the year in which the travel Charged to the year in which the travel occursoccurs

�� Crosses fiscal yearsCrosses fiscal years

–– Charged to the year in which the majority of Charged to the year in which the majority of –– Charged to the year in which the majority of Charged to the year in which the majority of travel takes place.travel takes place.

–– If it is exactly half the expenses must be split.If it is exactly half the expenses must be split.

–– Accrual may be necessary for estimated Accrual may be necessary for estimated expenses.expenses.

Timing of Year End Payroll ChargesTiming of Year End Payroll Charges

Pay Period Ending Check Date Distribution to Financial System

Sunday, June 27 Friday, July 2 Thursday, July 1

Sunday, July 4 Friday, July 9 Thursday, July 8 3/5 of the payroll

CENTRAL BILLED EXPENSESCENTRAL BILLED EXPENSES

EXAMPLESEXAMPLES

�� Physical Plant LaborPhysical Plant Labor

�� Wes StationWes Station

�� Cardinal Technology CenterCardinal Technology Center�� Cardinal Technology CenterCardinal Technology Center

�� Purchasing CardPurchasing Card

�� FEDEXFEDEX

�� Bon AppetiteBon Appetite

�� Machine ShopMachine Shop

During the month of June these expenses will be billed During the month of June these expenses will be billed weekly.weekly.

DEPOSITSDEPOSITS

�� HIT SUBMITHIT SUBMIT

�� CASH CASH -- Deposit transmittals due to Cashier by Deposit transmittals due to Cashier by 10:00 Monday, June 28.10:00 Monday, June 28.

�� CHECKS CHECKS –– Deposit transmittals due to Cashier by Deposit transmittals due to Cashier by �� CHECKS CHECKS –– Deposit transmittals due to Cashier by Deposit transmittals due to Cashier by 10:00 Wednesday, June 3010:00 Wednesday, June 30

�� If cash is due for work performed in FY 2010, If cash is due for work performed in FY 2010, may request a receivable with Susan Pavis.may request a receivable with Susan Pavis.

Year End Accruals Year End Accruals and Prepaid Expensesand Prepaid Expenses

�� The process of posting transactions for The process of posting transactions for year end accruals and prepaid expenses is year end accruals and prepaid expenses is year end accruals and prepaid expenses is year end accruals and prepaid expenses is used to assure proper matching of used to assure proper matching of transactions to the appropriate fiscal year. transactions to the appropriate fiscal year.

Accrual vs PrepaidAccrual vs Prepaid

�� Year end accrual transactions would be required Year end accrual transactions would be required for an item that has been contracted for and will for an item that has been contracted for and will be received by June 30th, but the invoice be received by June 30th, but the invoice paperwork will not be received in time to paperwork will not be received in time to process the AP voucher(s) according to the year process the AP voucher(s) according to the year process the AP voucher(s) according to the year process the AP voucher(s) according to the year end deadlines. end deadlines.

�� Common types of accrual requests:Common types of accrual requests:��Services performed but not yet billed.Services performed but not yet billed.

��Travel that occurs during June with documentation Travel that occurs during June with documentation received in July.received in July.

Accrual vs PrepaidAccrual vs Prepaid

�� Prepaid expenses are transactions that require Prepaid expenses are transactions that require payment during the old fiscal year but which are payment during the old fiscal year but which are appropriate to be charged to the new fiscal year. appropriate to be charged to the new fiscal year.

�� Common types of prepaid expense requests:Common types of prepaid expense requests:Common types of prepaid expense requests:Common types of prepaid expense requests:

��Reimbursement for airfare for travel occurring after Reimbursement for airfare for travel occurring after July 1st.July 1st.

��Deposits for catalogs and publications relating to the Deposits for catalogs and publications relating to the new fiscal year.new fiscal year.

Year End AccrualsYear End AccrualsAccounting ProcessAccounting Process

1) A best guess estimate is created for the 1) A best guess estimate is created for the target transaction/activity requiring an target transaction/activity requiring an accrual. This estimate can be based on a accrual. This estimate can be based on a quote/advertisement etc.quote/advertisement etc.quote/advertisement etc.quote/advertisement etc.

2) The estimate is submitted to Finance 2) The estimate is submitted to Finance (Susan Pavis (Susan Pavis -- spavis@wesleyan.eduspavis@wesleyan.edu ). ). Email notification of this estimate is Email notification of this estimate is acceptable. acceptable.

Year End AccrualsYear End AccrualsAccounting ProcessAccounting Process

3)3) The request for accrual should contain the The request for accrual should contain the same information as a normal AP voucher:same information as a normal AP voucher:

�� Vendor Information Vendor Information �� SmartkeySmartkey/account for the old fiscal year to be /account for the old fiscal year to be

charged.charged.charged.charged.�� Amount of the accrual (best guess estimate)Amount of the accrual (best guess estimate)�� Description of the item (include as much Description of the item (include as much

information as possible)information as possible)�� Authorizations to process the transaction. Use Authorizations to process the transaction. Use

the published guidelines to determine what the published guidelines to determine what authorizations are necessary.authorizations are necessary.

Year End AccrualsYear End AccrualsAccounting Process Accounting Process

4) The originator of the request will receive 4) The originator of the request will receive a confirmation (via email) that the accrual a confirmation (via email) that the accrual has been received and accepted as valid. has been received and accepted as valid. has been received and accepted as valid. has been received and accepted as valid.

5) The Finance office will process a journal 5) The Finance office will process a journal entry to charge the departmental account entry to charge the departmental account for the old fiscal year.for the old fiscal year.

Year End AccrualsYear End AccrualsAccounting ProcessAccounting Process

6)6) When the original invoice is received for the accrual When the original invoice is received for the accrual item, the AP voucher must be completed as follows. item, the AP voucher must be completed as follows.

�� Complete the AP Voucher in the new fiscal year as Complete the AP Voucher in the new fiscal year as normalnormal with the department with the department smartkeysmartkey and appropriate and appropriate attachments.attachments.

ADAD--HOC Susan Pavis into workflow as an approver.HOC Susan Pavis into workflow as an approver.�� ADAD--HOC Susan Pavis into workflow as an approver.HOC Susan Pavis into workflow as an approver.

�� Note: F10 Accrual in “Instructions to AP”.Note: F10 Accrual in “Instructions to AP”.

�� If this Susan Pavis is not notified, there is a possibility If this Susan Pavis is not notified, there is a possibility that the department will be charged twice for the same that the department will be charged twice for the same item (once in the old fiscal year and for a second time item (once in the old fiscal year and for a second time in the new fiscal year).in the new fiscal year).

Year End AccrualsYear End AccrualsAccounting ProcessAccounting Process

7)7) Finance will verify the accrual transaction Finance will verify the accrual transaction and process a journal entry that will give and process a journal entry that will give and process a journal entry that will give and process a journal entry that will give the department the department smarkeysmarkey a credit to offset a credit to offset the payment. the payment.

Year End AccrualsYear End AccrualsAccounting Process Accounting Process

�� Examples of the accounting entries can be Examples of the accounting entries can be found at the end of the presentation.found at the end of the presentation.found at the end of the presentation.found at the end of the presentation.

�� Any Questions on Accruals??Any Questions on Accruals??

Prepaid ExpensesPrepaid ExpensesAccounting ProcessAccounting Process

1) The department identifies a 1) The department identifies a transaction(s) that relates to the new transaction(s) that relates to the new fiscal year but which requires payment fiscal year but which requires payment prior to July 1st . This type of entry prior to July 1st . This type of entry prior to July 1st . This type of entry prior to July 1st . This type of entry requires a prepaid expense transaction. requires a prepaid expense transaction. Another way to view a prepaid expense is Another way to view a prepaid expense is that it is an accrual in reverse.that it is an accrual in reverse.

Prepaid ExpensesPrepaid ExpensesAccounting ProcessAccounting Process

2)2) The department will complete the AP The department will complete the AP voucher as usual, except;voucher as usual, except;�� Ad hoc Susan Pavis into workflow.Ad hoc Susan Pavis into workflow.

�� Note “Prepaid Expense” in “Instructions to AP”.Note “Prepaid Expense” in “Instructions to AP”.�� Note “Prepaid Expense” in “Instructions to AP”.Note “Prepaid Expense” in “Instructions to AP”.

3)3) Finance will process a journal entry to Finance will process a journal entry to credit the department credit the department smartkeysmartkey in the old in the old year and charge the year and charge the smartkeysmartkey in the new in the new year.year.

Prepaid ExpensesPrepaid ExpensesAccounting ProcessAccounting Process

�� Examples of prepaid expense entries can Examples of prepaid expense entries can be found at the end of the presentation.be found at the end of the presentation.be found at the end of the presentation.be found at the end of the presentation.

�� Any Questions on Prepaid Expenses??Any Questions on Prepaid Expenses??

BUDGETSBUDGETSBUDGETSBUDGETS

� Wesleyan has balanced its budget for 17 consecutive years.

University

VP VP Dean

Dept. Dept. Dept. Dept.

Smartkey Smartkey Smartkey Smartkey

ReportsReports

� Inquiry Reports (Updated nightly)

– Smartkey Summary

– Smartkey/Account Summary

– Transaction Detail

– Personnel Earnings Detail– Personnel Earnings Detail

� Deficit Reports Distributed to Fiscal Managers

– May 14th

– June 14th

– July 1st

Budget StatusBudget Status

� Use Smartkey Summary for overall budget status. General guideline is:

– April Month-End = % spent should be approx. 83.3%

– May Month-End = % spent should be approx. 91.7%

– June Month-End = % spent should be approx. – June Month-End = % spent should be approx. 100.0%

� Drill down to Smartkey/Account Summary or Transaction Detail to research problem smartkeys.

Budget Checking/WarningsBudget Checking/Warnings

� Budget Checking occurs at the level at which your department budgets (Attribute = KK Value)

– TP = Program level

– TS = Account Subgroup level (e.g., travel)

– TD = Account detail level (e.g., airfare, lodging)– TD = Account detail level (e.g., airfare, lodging)

� Budget warnings may indicate that there are insufficient funds for the po, voucher or journal entry.

– You should transfer budget to fund the expense prior to submitting the po, voucher or journal.

Budget TransfersBudget Transfers

�� Budget transfers are not reflected in WFS until Budget transfers are not reflected in WFS until they have been fully approved.they have been fully approved.

DeadlinesDeadlines

�� June 30June 30th th –– deadline for budget transfers to be deadline for budget transfers to be fully approved.fully approved.

Payroll RedistributionsPayroll Redistributions

�� A payroll redistribution is a specialized journal to A payroll redistribution is a specialized journal to transfer payroll expenses.transfer payroll expenses.

Important dates/deadlines:Important dates/deadlines:

�� June 9June 9th th –– deadline for payroll redistribution prior to deadline for payroll redistribution prior to May 31May 31stst (90 day limit still applies)(90 day limit still applies)May 31May 31stst (90 day limit still applies)(90 day limit still applies)

•• Final payroll for June will be reflected in Personnel Final payroll for June will be reflected in Personnel Earnings Detail in WFS on July 8.Earnings Detail in WFS on July 8.

�� July 9July 9thth @ 12:00 pm @ 12:00 pm –– deadline for June payroll deadline for June payroll redistributionredistribution

�� These deadlines are applicable for all funds (including These deadlines are applicable for all funds (including grants). grants).

PoliciesPolicies

� With the exception of certain faculty research smartkeys, the University does not carry forward unrestricted operating budget funds.

� Open purchase orders will not carry forward.

Fiscal ManagersFiscal Managers

�� Academic AffairsAcademic Affairs

�� Admission & Financial AidAdmission & Financial Aid

�� Diversity and Strategic Diversity and Strategic Part.Part.

�� Finance and AdminFinance and Admin

Janine Lockhart x2723

Kathleen Norris x2978

Patricia Blount x4771

Sun Chyung x2249�� Finance and AdminFinance and Admin

�� Student AffairsStudent Affairs

�� Physical PlantPhysical Plant

�� PresidentPresident

�� University RelationsUniversity Relations

Sun Chyung x2249

Rick Culliton x2627

Peter Crowley x2585

Joan Adams x2004

Deb Treister x2935

Resources in FinanceResources in Finance

�� A/P VouchersA/P Vouchers

�� BudgetsBudgets

�� Gifts/GrantsGifts/Grants

�� TravelTravel

�� Commercial CardCommercial Card

Tammy Harley x2843

Sun Chyung x2249

Kim Savinelli x3683

Tami Sabo x2958

Tami Sabo x2958�� Commercial CardCommercial Card

�� PayrollPayroll

�� Expense AccrualsExpense Accruals

�� Faculty Research AcctsFaculty Research Accts

�� MiscellaneousMiscellaneous

Tami Sabo x2958

Evelyn Harris x2835

Susan Pavis x2839

Janine Lockhart x2723

Valerie Nye x3192

QUESTIONSQUESTIONSQUESTIONSQUESTIONS

Accrual ExampleAccrual ExampleAccounting Process and EntriesAccounting Process and Entries

In June, a request was made for $500 to be In June, a request was made for $500 to be charged to the department for the old charged to the department for the old fiscal year for services performed during fiscal year for services performed during fiscal year for services performed during fiscal year for services performed during June, but which will not be billed until June, but which will not be billed until July. This request has been approved by July. This request has been approved by the departmental chair. Finance has the departmental chair. Finance has notified the department that this entry will notified the department that this entry will be accrued.be accrued.

Accrual ExampleAccrual ExampleAccounting Process and EntriesAccounting Process and Entries

Accrual entries for old fiscal year via journal entry Accrual entries for old fiscal year via journal entry initiated by Finance based on email:initiated by Finance based on email:

1)1) Debit/charge the departmental Debit/charge the departmental SmartkeySmartkey..

2)2) Credit the accrual Credit the accrual SmartkeySmartkey..2)2) Credit the accrual Credit the accrual SmartkeySmartkey..

Department

Smartkey/Account

Debit Credit

$500 - JNL

Accrual

Smartkey/Account

Debit Credit

$500 - JNL

Accrual ExampleAccrual ExampleAccounting Process and EntriesAccounting Process and Entries

Accrual entries for new fiscal year via accounts payable voucher Accrual entries for new fiscal year via accounts payable voucher initiated by department:initiated by department:

1)1) Debit/charge the departmental Debit/charge the departmental SmartkeySmartkey via the A/P via the A/P Voucher.Voucher.

2)2) AdAd--hoc Susan Pavis into workflow and note “accrual”.hoc Susan Pavis into workflow and note “accrual”.3)3) Finance will process a journal entry to debit the accrual Finance will process a journal entry to debit the accrual

SmartkeySmartkey and credit the department.and credit the department.3)3) Finance will process a journal entry to debit the accrual Finance will process a journal entry to debit the accrual

SmartkeySmartkey and credit the department.and credit the department.

Department

Smartkey/Account

Debit Credit

$500 – VCHR (Dept)

$500 – JNL (Fin)

Accrual

Smartkey/Account

Debit Credit

$500 – JNL (new year)

Accrual ExampleAccrual ExampleAccounting Process and EntriesAccounting Process and Entries

�� The net effect of these entries is that the Department account has been The net effect of these entries is that the Department account has been charged in the old fiscal year, the transactions net to zero in the new year charged in the old fiscal year, the transactions net to zero in the new year and the Accrual account has been cleared to $and the Accrual account has been cleared to $--00-- after the new fiscal year after the new fiscal year has opened.has opened.

Department Department SmartkeySmartkey

Old YearOld Year

DebitDebit CreditCredit

$500 $500 -- JNLJNL

Department Department SmartkeySmartkey

New YearNew Year

DebitDebit CreditCredit

$500 $500 ––VCHRVCHR $500 $500 ––JRNLJRNL

Prepaid Expense ExamplePrepaid Expense ExampleAccounting Process and EntriesAccounting Process and Entries

�� In this example In this example -- $750 is needed to be $750 is needed to be paid by May 31st as a deposit for a paid by May 31st as a deposit for a paid by May 31st as a deposit for a paid by May 31st as a deposit for a brochure to be used for the Fall semester.brochure to be used for the Fall semester.

Prepaid Expense ExamplePrepaid Expense ExampleAccounting Process and EntriesAccounting Process and Entries

Prepaid expense entries for old fiscal year via accounts Prepaid expense entries for old fiscal year via accounts payable voucherpayable voucher

1)1) Charge the Department Charge the Department SmartkeySmartkey

2)2) Ad Hoc Susan Pavis into Workflow with Instructions Ad Hoc Susan Pavis into Workflow with Instructions to AP “Prepaid” to AP “Prepaid” to AP “Prepaid” to AP “Prepaid”

3)3) Susan will prepare a journal entry to prepaid Susan will prepare a journal entry to prepaid expense account.expense account.

Department Smartkey

Debit Credit

$750 – VCHR (Dept)

$750 – JRNL (Finance)

Prepaid Expense Smartkey

Debit Credit

$750 - JRNL (old year)

Prepaid Expense ExamplePrepaid Expense ExampleAccounting Process and EntriesAccounting Process and Entries

Prepaid expense entries for new fiscal year via Prepaid expense entries for new fiscal year via journal entry prepared by Finance.journal entry prepared by Finance.

1)1) Charge the departmental Charge the departmental SmartkeySmartkey..

2)2) Credit the prepaid expense Credit the prepaid expense SmartkeySmartkey..2)2) Credit the prepaid expense Credit the prepaid expense SmartkeySmartkey..

Department

Smartkey/Account

Debit Credit

$750 – JRNL (finance)

Prepaid Expense

Smartkey/Account

Debit Credit

$750 – JRNL (Finance)

Prepaid Expense ExamplePrepaid Expense ExampleAccounting Process and EntriesAccounting Process and Entries

�� The net effect of these entries is that the Department The net effect of these entries is that the Department smartkeysmartkey has been has been chargedcharged in the new fiscal year and the Prepaid Expense entry has cleared in the new fiscal year and the Prepaid Expense entry has cleared to $to $--00-- after the new fiscal year has opened.after the new fiscal year has opened.

Dept. Dept. SmartkeySmartkey –– New YearNew Year

DebitDebit CreditCredit

$750 $750 -- JRNLJRNL

Dept. Dept. SmartkeySmartkey –– Old YearOld Year

DebitDebit CreditCredit

$750 $750 –– VCHRVCHR $750 $750 -- JRNLJRNL