FY 2013-2014
Year-End Accruals
and Deferrals
TRAINING SESSION
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QUICK OVERVIEW
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AP TEAM INTRODUCTIONS
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SEND ALL COMMUNICATION
TO
ACCOUNTS_PAYABLE@CSUMB.EDU
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ACCRUALS
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Purchase Early
and continue to submit approved invoices
for payment or vouchering (auto accrual),
process manual accruals & deferrals
up through June 20 for processing into
LEGAL (posts against budget in MB500) for
June 23 (date to review Data Warehouse)
NOTE: If you submit invoices to AP then
do not have to place on the accrual
template.
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CASH BASIS METHOD
A major accounting method that
recognizes revenues and
expenses at the time physical
cash is actually received or paid
out.
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CASH BASIS
Bring money in: DR Cash
CR Revenue
Pay money out: DR Expense
CR Cash
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ACCRUALS
ACCOUNTING METHOD
At fiscal year-end (June 30), generally
accepted accounting principles requires
income to be recognized in CSUMB books
at the time the revenue is earned (but not
necessarily received) and records
expenses when liabilities are incurred (but
not necessarily paid for).
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Different Types of POs
• 2-Way Match
Usually Blanket POs
• 3-Way Match
Cannot be a Blanket
POs
For services
Usually for goods
An invoice is matched
to the PO.
An invoice is matched to
the PO and Receiver
Does not require
receiving in CFS
Requires receiving in
CFS
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FY 2013-2014
BY
JUNE 30, 2014
GOODS & SERVICES
NEED TO BE
RECEIVED ON CAMPUS …
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TO ACCRUE: Placing the expense in
FY13/14 if not paid by 6/30/2014.
PURPOSE:
 Practicing Accrual Basis Accounting, by
 Placing the expense liability where incurred.
 Using Prior Year Funding.
 Minimize finding by Auditors.
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BASIC ACCRUAL CONCEPT
FY 2013 – 2014
FY 2014 – 2015
• DR – EXPENSE (+)
• CR - CASH (-)
• CR – ACCRUAL (-)
• DR – ACCRUAL (+)
Decreases Budget
Pay Bill
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NET EFFECT
FY 2013/2014 DR – EXPENSE (+)
(An increase in expense, decrease in funding)
FY 2014/2015 CR – CASH (-)
(A decrease in cash, no effect to funding)
Looks like a regular payment
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Actuals Ledger vs. GAAP
Ledger
Actuals Ledger (Legal Books)
Departments can view on Data Warehouse
(11G)
GAAP Ledger
•
•
•
Departments cannot view this activity
Used by Accounting Department for
Financial Reporting
It is our responsibility to provide reliable
and relevant financial statement
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WHAT IS VOUCHERING?
• Vouchering is when AP enters an
invoice into CFS Finance
• The expense posts and the offset is a
liability account in the balance sheet
• CSUMB pays Vendors, net 30 days
• The liability is cleared when AP pays
the invoice, and cash is decreased
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ACCRUALS MAY EITHER BE IN THE FORM OF
A. AUTOMATED ACCRUAL ENTRIES
1. VOUCHERING PROCESS
2. GL015 CFS JOB
OR
B. MANUAL ACCRUAL JOURNAL ENTRIES
1. LEGAL (Actuals Ledger)
2. GAAP
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A. AUTOMATED ACCRUALS
1. VOUCHERING PROCESS:
Invoice vouchered in FY 2013/2014 by 6/30/2014
but not paid by 5/29/2014, which is the last
check run of the year.
2. GL015 CFS JOB:
If goods are received on a Purchase Order (PO)
by 6/30/2014 but not vouchered and paid
by 5/29/2014, by running a CFS job (GL015), we
will automatically accrue these three-way
matches.
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DIRECT PAYMENT
Automatic Accrual
RECEIVER
INVOICE
$
Goods or
Services
Rec’d by
6/30/2014
AP Vouchers
but does not
pay invoice
by 6/30/14
(ACTUALS)
AP AUTO
ACCRUAL
Rec’d by
6/30/2014
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B. MANUAL ACCRUAL JE
1. LEGAL (Actuals Ledger)
6/23/2014 Accounting Dept processes Manual
Accruals, for goods or services received by
6/30/2014, that were not accrued through the
automated process:
i) DIRECT PAYMENT – Complete Template
ii) TWO-WAY MATCH PO – Complete Template
iii) THREE-WAY MATCH PO
PO closed in error, receiving error or no
receiving in CFS by June 30th - Complete Template
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AP Manual Accrual – LEGAL
Direct Payment
RECEIVER
Goods or Services
Rec’d by
6/30/2014
Complete
AP Accrual
TEMPLATE
(ACTUALS)
AP MANUAL
ACCRUAL
Invoice was not received by 6/30/2014
6/25/2014, at 5:00 pm, last day to post in LEGAL
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Example of manual accrual (using the full CFS chartstring):
Expense
AP
Cash
BBA
________________________________________
FY13/14 – Journal Entry
6XXXXX (Expense Account)
Debit (+)
201800 (Accounts Payable Liability Account) Credit (-)
Note the expenditure posts in FY13/14.
NET BBA FY13/14 ($100.00)
$100.00
FY14/15 – Reverse Journal Entry
201800 (Accounts Payable Liability Account) Debit (+)
6XXXXX (Expense Account)
Credit (-) ($100.00)
FY14/15 – Pay Vendor with Check
6XXXXX (Expense Account)
Debit (+) $100.00
108090
(Cash – Wells Fargo)
Credit (-)
Note the net effect on expenditures in FY14/15 is zero
NET BBA FY1415
(100.00)
($100.00)
$100.00
100.00
(100.00)
($100.00)
$0.00
_________________________________________
Balance:
$100.00
$0.00
($100.00)
($100.00)
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Accrual Rule of Thumb
Actuals Ledger (Legal Books)
Departments to review FY13/14
Data Warehouse on 6/20/2014.
If expense not reflecting as of 6/19/2014,
then write up a manual accrual and turn in
to Accounts Payable by 5:00 p.m. on
6/20/2014.
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SERVICE CONTRACTS
Understand your service contract, MOU or
agreement.
Know what you are liable for paying by
June 30, 2014 to fulfill the agreement.
For example: If paying for services in July
(CY) for June activity (PY), then you need
to manually accrue June activity.
DO NOT WAIT FOR THE INVOICE/BILL
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SERVICE CONTRACTS
Look closely at the service dates on your
invoice/bill.
If crosses fiscal years then only accrue
portion for FY 2013/2014 (PY).
Estimate using percentages or ratios as
required.
Provide calculations with documentation.
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SCENARIO 1
Department received an invoice for a
desktop computer and monitor after the
last AP check run for the fiscal year but
prior to closing legal books.
What do you do next?
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SCENARIO 1
Find out if the sensitive equipment have
been received by the Receiving
Department and when it was received.
Accrual wise, does it matter if
sensitive equipment is being
held by Receiving pending IT
release?
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SCENARIO 1
IT is holding received items for release does
not affect the accrual process.
Items have to be received on CAMPUS by
June 30, and not necessarily in the Dep’t to
be accrued.
What if purchase was made on a payment
request and not a 3-way match PO?
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SCENARIO 1
Then you submit the original approved
invoice immediately to AP to voucher in
FY13/14.
What if not enough time to get
the invoice approved by
6/30/2014?
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SCENARIO 1
Then place on an ‘AP & Travel Manual
Accrual Template’ and submit on June
20, 2014 to be accrued by AP.
I missed the June 20 deadline to
submit the accrual … what do I do
now?
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SCENARIO 1
Forward the approved invoices ASAP to AP
to voucher in FY13/14 and pay in FY14/15.
OR place on the accrual template for
posting into LEGAL or GAAP depending on
time restraints. List on template that items
are sensitive equipment.
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SCENARIO 2
Can I place an emergency order with
Office Max after May 16, 2014?
After May 16 orders will not be on the
last merchant bill for FY13/14 which is
accrue by AP. Do not place on accrual
template for order up through May 16.
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SCENARIO 2
YES, you can place the order but goods
and services have to be received by June
30 in order to accrue (proof of receiving is
required).
•
•
Make sure order did not get on last billing
Submit ‘AP & Travel Manual Accrual’
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B. MANUAL ACCRUAL JE
2. GAAP
After July 1st up through to July
10, if goods or services received
by June 30 but not accrued in the
Legal Books, then will be accrued
in GAAP by July 17.
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2 Ways Posted to GAAP
A manual accrual gets into GAAP:
One way is through Accounts Payable.
a. In the current year, AP reviews all
invoices to see if goods or services
have been received by June 30th.
b. If should be accrued, then given to
Accounting to journal the accrual.
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2 Ways Posted to GAAP
A manual accrual gets into GAAP:
Another way is by the Departments:
By July 15th, if no invoice received on
goods or services received June 30th,
then the Department submits the ‘AP
Manual Accrual Template’.
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MANUAL ACCRUALS Cont’d
Departments do not need to include the following
payments on the template:
•
•
•
•
•
•
•
•
•
•
•
•
Airline Tickets (BTA) prior to May 26
Arrowhead
CA Technology Agency invoices
DGS (Department of General Services)
Enterprise (CRBTA) prior to May 26
*Office Max & Office Depot for the month of June where rec’d by 6/30
Payroll (GAAP Accrual Only except for ESF)
ProCard June file for 5/16-6/16/2014 only
ProCard Use Tax June file only for 5/16-6/16/2014 ProCard purchases
Travel with cash advances and prepaid travel
Utilities, i.e. DGS and Central Plant
Unvouchered, approved invoices sent to AP with proof of receiving
*Unless not on the final statement that posted to the GL and goods or
services received by 6/30
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MANUAL ACCRUALS Cont’d
Accounting and Departments will not accrue
since 12 months of activity is posted to GL for
FY13/14 (June 1-May31)
•
•
•
•
•
Cost-Per-Click
Merchant Fees
Office Max
TeleCom
Postage
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Difference between
KEEP OPEN PO LISTING and
AP MANUAL ACCRUAL LISTING
Open PO Listing:
• By sending Procurement an ‘Keep Open PO
Listing’ you request that your prior year
purchase orders are not closed for
FY2013/2014. Deadline date for this is
5/30/2014.
• Do not confuse with the Manual Accrual
Template that AP requires
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ACTUALS ACCRUAL
TYPE
PO
Receiver in CFS
Invoice
(Goods or Services)
Direct NO
Payment
Receiving
not required in CFS
*YES
rec’d by
(Actual goods or services 6/30/2014
rec’d by 6/30/2014)
PO
2-way
Match
YES
PO
3-way
Match
YES
Receiving
not required in CFS
(Actual services rec’d by
6/30/2014)
Receiving is required
in CFS by 6/30/2014
(primarily goods)
*YES
rec’d by
6/30/2014
NO
Would be
an auto
accrual if
AP has
Invoice to
voucher
AUTO
ACCRUAL
MANUAL
ACCRUAL
Invoice not
Vouchered not rec’d or sent
to AP
paid by AP
-Complete
Template
* Invoice
Invoice not
Vouchered not rec’d or sent
to AP
paid by AP
-Complete
Template
*Invoice
Run CFS Job
(GL015).
Require
receiver but
not invoice.
PO closed in
error. Did not
accrue
automatically
-Complete
Template
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GAAP ACCRUAL
NOT POSTED
TO ACTUALS
GAAP
ACCRUAL
(All Funds)
PO
FY 13/14
PO Open
RECEIVER
INVOICE
YES
Approved
invoices to
AP by
7/10/2011
Goods or
Services rec’d by
6/30/2014
guarantee
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DEFERRALS
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PREPAID EXPENSE
Accounting Deadlines
Prepaid Expense definition:
Amounts that are paid prior to the period they cover
(Paying FY14/15 expense in FY13/14).
Prepaid Expenses can include:
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–
–
–
–
Travel (follow earlier instructions)
Insurance (insurance accounts only)
Licenses (use same account # of item purchased that is being licensed)
Memberships (account # 660804 – except Library Acquisitions)
Maintenance Agreements (use same acct # of item purchased
agreement for)
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–
–
–
–
–
–
–
Postage (accounts # 660014, 660015 & 660016 - depends on type)
Rent (account # 660831)
Services (account # 613001 & 613813)
Space Rental (account # 660041)
Subscriptions (account # 660804-except CSUMB Library Acquisitions)
Telephone bill (account # 604001)
Utilities (account # 605000-605005 - depends on type)
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Warranties (use same account # of item purchased warranty for)