accounts payables accrualsfy13 payables (pcl’s) 5 move these payables from object 9529 to object...

Accounts Payables Accruals

For FY13

June 14, 2013 Sonoma County of Education

Information Technology

FY13 Payables (PCL’s)

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References: Finance – Processes – Year End Closing – Tools – How To • Chapter 5 - Release, Carryover, Accrue Documents (see pages 5-1 to 5-23) • Tutorial Home Page – Help from the Top Tool Bar- Finance – Year End Reference Manual Year End Closing Manual – Steps 1, 10 and 11

***Continuing this Year – Manual Accruals of Due to/from Government Entities*** - The use of 9290/9590 objects will now be required for any accruals associated with

state or federal programs. - These entries will need to be manually done via a journal as the Year End Processing

activity does not allow the use of objects other than 9210/9510. - Amounts from manually created journals to 9290/9590 will remain in 9290/9590 during

the Asset/Liability roll and will need to be reversed in the new fiscal year (can copy the journal entry and move to the appropriate expense/revenue account)

- To Review Potential PCL’s Finance – Reports – Fiscal - Fiscal15

Run the Fiscal Year End Checklist (Fiscal 15) report (provides a list of all items needing to be addressed prior to close)

1. Make sure the Fiscal Year is 2013. (System will default to 2014 after July 1) 2. Change AP Payments to say Yes. (Will include pending AP payments that are not

associated with a requisition) 3. Click Go

4. Review the resulting report for any outstanding items that you know you will not want

to accrue or carry forward. Verify all balances and pending payments. Remember to also check encumbrance amounts.


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5. This report must be totally clean (no entries present) before you are ready to close the fiscal year.

6. See Step 1 of the Year End Closing manual for additional uses of this report.

Finance – Processes – Year End Closing (provides a list specific to AP’s via the selection criteria)

1. Enter search criteria: a. Fiscal Year (2013) System will default to 2014 after July 1st. b. Document Type (Select Vendor Req to start ) c. Account Code may be another limiting selection to start

2. Click Go 3. Report options from the resulting report listing:

a. From Task select Year End Processing Report Reports all detail for remaining items of each requisition

b. From the tool bar select the “Magnifying Glass” icon Snapshot with Payments for the requisition highlighted on your list

4. Review checklist and take appropriate action. (See additional info on Pages 6 & 7 )

a. Search on Pending 5. There can be no remaining entries on the processing screen prior to your close.


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- Understanding the Process • You cannot accrue or carryover requisitions in the Open status. You must submit or

cancel the requisition. Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity, deal appropriately with the req status and then return to the list without having to have the Requisition activity open.

• Documents with errors will not post. You must resolve the errors. Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity, deal appropriately with the req amount and then return to the list without having to have the Requisition activity open.

• You cannot process requisitions with negative outstanding accrual or carryover amounts. These requisitions must be resolved. Using the quick link on the processing screen enables you to go from the screen directly to the requisition activity, deal appropriately with the req amount and then return to the list without having to have the Requisition activity open.

• The accrual and carryover columns on the list are editable, but may not be set to a negative value.

• If all fields are $0 the requisition will roll to the next fiscal year with a zero dollar amount. This would not be something you would generally want. You must manually complete the requisition. Using the quick link on the processing screen that will enable you to go from the screen directly to the requisition activity, deal appropriately with the req and then return to the list without having to have the Requisition activity open.

• When you post an Accrual amount, Escape will create a journal entry in the closing fiscal year to set up the liability, add liability accounts in next year, and a write history record.

• When the Payables (PCL) year-end closing list is created, Escape makes the assumption that all requisitions are to be carried over into the next year. This is not the case in our county. Construction projects are an example of a requisition that may need to be carried over rather than release and reissued. The Carryover process allows the req or PO number to remain the same between years. This is helpful for Construction projects but can be confusing for most everything else.

• When you post a Carryover amount, Escape will internally change the fiscal year of the requisition, add accounts for next year, reverse outstanding encumbrances in the closing year, encumber amounts in the new fiscal year, and write the appropriate history records.

• When you post a Release amount on the requisition (both the accrual and carryover amounts are zero), Escape will change the requisition status to completed, reverse outstanding encumbrances, and write a history record.

• The Release column is calculated by subtracting the accrual and carryover amounts from the outstanding amount, and will be flagged as an error if the result is negative.

• The Accrual process will result in FY13 journal entries which establish AP’s (credits object 9529) and record expenses (debits objects 1xxx through 6xxx) in 2012-13.

• Reminder: The Asset/Liability roll, which takes place after 2012-13 is closed, will


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move these payables from object 9529 to object 9510. Until the Asset/Liability roll is performed, there will not be a balance in the FY13 9510 object to offset the payments being made to the FY13 (accrued) payables.


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-The Setup of Payables Finance – Processes – Year End Closing 1. Document Type = Vendor Reqs

2. Click Go (Ctrl g)

From the resulting list: 3. Determine for each line item whether to accrue, carry over or close out the amounts *****Always use the Enter Key – Not the Tab Key***** 4. Post the entry or entries

• Set up Payable for Next Year (Accrual) - This is used when you have received the

goods or services before July 1st and will pay for them next year. The payable amount is expensed to the current year account and next year’s liability account is brought into the requisition for payment next year.

- Enter the amount of the requisition (or a partial amount) in the Accrual field. For example, I used $800.00. - The Escape system does not assume an accrual. It will automatically move the

dollars to the Carryover field. Therefore you must zero out the carryover field. - Once the Carryover field has been set to zero the system will automatically

calculate the release amount and enter it in the Release column for you. - When you post an accrual amount, Escape will create a journal entry in the

closing fiscal year (FY13) to set up liability, reverse the encumbrance (FY13), add liability accounts in next year (FY14), and a write history record.

***The requisition has “crossed the line” into FY14 and can only be altered from that fiscal year.

• Carry Over Requisition to Next Year (Carryover) - You can carry forward a requisition from the current year to next fiscal year without setting up a liability. This will cause the requisition to be paid from next year’s appropriation with the same req or PO number as the current year (R13 or PO13)

• Verify the amount of the requisition (or a partial amount) in the Carryover field. The system has already made the assumption that you will be using the Carryover feature so it automatically placed the dollar amount from the req in


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the Carryover field.

• You will need to make sure that you Change the Process Field from No to Yes. Escape will not automatically change it for you in if no entry is made.

• When you post a carryover amount, Escape will create a journal entry in the closing fiscal year (FY13) to reverse the encumbrance (FY13), add expense accounts in next year (FY14), encumber the amount (FY14), and a write history record.

***The requisition has “crossed the line” into FY14 and can only be altered from that fiscal year.

• Closing Out the Requisition (Release) - Sometimes it is just better to close out the

requisition (e.g., blanket requisitions). Escape will “release” the funds and set the requisition to Complete.

• Enter zero in the Carryover field. Escape will automatically calculate the Release amount and set the process flag to Yes and release the funds.

• When you release a req amount, Escape will create a journal entry in the closing fiscal year (FY13)

• to reverse the encumbrance and a write history record.

• Select Post from the Task menu to process all requisitions flagged as Yes


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Payable Issues for Thought Expired accounts Requisitions can be accrued and carried over even if the accounts do not exist or are expired in the new year (FY14). Escape will use the following logic:

- Accrued: a. The liability account assigned uses the same fund-project year

resource of the current fiscal year account. b. If the resource is changed for the new fiscal year, Escape uses

the new value to assign the liability account. c. If the new year liability account does not exist, Escape will

create it. - Carried over:

a. If the expense account is expired prior at the start of the new year or doesn’t exist in the new year, Escape will use the Finance Error Acct defined on the Ledger tab of the Organization record.

b. If the error account is valid, Escape Online processes the requisition and gives the user the following error message: Processed - One or more accounts are missing in new fiscal year.

c. If the error account is expired or does not exist in the new year, Escape generates an error and stops the processing of the requisition for year end.

In either case a history record is written to the requisition listing the expense accounts that could not be used in the new fiscal year.

Account Distribution Tied to Line Items To appropriately distribute the accrued/carryover amounts to the liability Accounts, Escape changes the account distribution option of the req to manual. Escape Online adds the liability accounts to the requisition and distributes the amounts. Escape writes a history record detailing the amount accrued/carried over and documenting that the account distribution method was changed to manual. If there is a time when you need to roll back the year end processing, Escape will rollback the year end processing as usual, but leave the account distribution option set to manual. It would be up to you to change the account distribution option and re-evaluate the accounts. Multiple Users Sometimes there are two people working the year end list and they both try to post a requisition at the same time or the same requisition at different times. If you receive the error,

“Can not process requisition, it is already in fiscal year xxxx,” this means that the document has already been carried forward to the new fiscal year. The requisition has “crossed the line” into FY14 and can only be altered from that


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fiscal year.

Items Process Too Soon – Post Close

There will be times when you have accrued something and did not mean to. Basically, you have two options:

- Cancel the requisition, copy it and make the payment on the new req. - Make a direct payment to the vendor in the current fiscal year and manually complete the new fiscal year requisition.


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- Fixing Vendor Requisition Errors (Pre-Close) Rollback Procedure This feature is extremely handy if you need to alter account codes for a requisition that has already been accrued (crossed the line into FY14) You can rollback year end processing for a single requisition if:

The requisition has not been cancelled or completed There have been no payment on the accrued requisition The previous fiscal year is still open When you need to alter last year’s accounts You are a fiscal user or have the Rollback activity

If you have NOT closed the books for the year and discover a data entry mistake in a year-end liability that was set up follow the procedure below: Finance – Requisitions – Vendor Requisitions 1. Open the requisition that needs to be changed

2. From the task bar select the Rollback Year End Processing task.

3. Go to the Accounts tab

4. If the req amount is changing a. Change the items as necessary

**OR** b. Add an adjustment amount to get the req total to change

5. If red X in Acct Undistributed Amount, need to distribute in Accounts Tab 6. Or change the Manual Account Distribution Option


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7. Go to the Accounts tab a. Verify distribution of new cost of the req or if multiple accounts distribute

new cost of the req

**OR**

b. Add account codes if necessary 8. Save and close the requisition 9. Reprocess the requisition on the year End Closing list

• This reverses the liability and encumbrance journal entries and changes the fiscal year of the requisition back to the previous year.

• Incorrect setup of Payables will affect both fiscal years. - FY13 will be overstated if the Payable is set up over the actual amount

owed. - FY14 will be understated as you manually complete or pay short the

accrued requisition.


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- Review of Additional Payables (PCL) Information Three methods to review Payables (PCL) setup, activity and journal information: 1. Finance – Fiscal – Journal Entry Enter the R13-xxxxxx that you are interested in Zero out the Fiscal Year field so you will get a list of all journals to the PCL Select Go All journals associated with that Payables (PCL) will be listed in order of entry Open and review the adjustment entry

2. Finance – Requisitions – Vendor Requisitions Leave the fiscal Year Blank Enter and open the R13-XXXXXX you are interested in Select the History Tab All activity will display in order of entry

Remember that until the Asset/Liability Roll is done for your district later in August, you will be viewing 9529 in FY13 and 9510 in FY14 for all Payables (PCL’s).

3. Finance – Reports – Ledger Ledger 02a- Receivables/Liabilities Activity

Closing year - Enter the fiscal year for which the payables were setup (will default to FY14 after July 1)

A/R or A/P - Use the lookup to limit the report to Payables (For the final report to your accountants this should reference all)

Requisition number – Specify Invoice # to see only transactions for that invoice

Cleared items - Change Cleared items to No to limit the report to only items that have not been cleared (For the final report to your accountants this field should be Y)

Unposted JE – Change to Yes to include journals that are not posted on the report.


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- This report shows journal entry activity by requisition number, account receivable invoice number or journal entry number as it relates to account receivable and/or liability setup and clearing.

- This report page breaks on account type. - If account selection is specified, only those accrual journal entries that have

expense/revenue detail matching the selection criteria will be included in the report. - The offset objects the report uses are defined in the Ledger tab of the Organization

record. Each fiscal year must be set to a different object code. For example, the current year could be 9529 and the prior year could be 9510.

- Journal entries that do not reference a requisition or invoice and only have an offset account and a cash account will be excluded from the report.

- The description comes from the AR Invoice/Vendor Req comment. If the comment is blank, the report will use the comment from the latest JE that is found for this reference number.

- If the offset account is expired, an asterisk will show next to the amount.


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Payables (PCL) Cheat Sheet A. To SET UP an AP in 2012-13 from EXISTING requisitions/purchase orders created during FY13 1. Go to Finance – Processes – Requisition Year End Closing

Source criteria- Select Department from the drop down menu Select Document Type from the drop down menu and choose Vendor Req Select Go

From the list alter the Accrual, Carryover and/or Release column amounts to be as you need by clicking on the fields and entering the data

***The Escape system assumes that since you have created a requisition/purchase order that the items are still needed so the natural default is the Carryover column

Make sure that the Process column shows Yes 2. Select Task from the menu bar at the top of the screen 3. Select Post from the drop down menu

The screen should give a count of the ones ready for processing Select Yes if you agree with the count to continue the post

If any of the postings fail you will see a message bar and it will indicate why the post failed when you hover over the message with your mouse If you receive an error message on an item follow through on the error message and then redo the process above after the error has been corrected

B. To SET UP an AP in 2012-13 WITHOUT A PRIOR requisition/purchase order having been created in FY13 1. Go to Finance – AP - Vendor Requisition 2. Select New

Select 2012/2013 from the drop down Fill in all the criteria required for the Invoice, Items and Accounts tab On the Requisition tab select or change the default Order Type to Direct

Payment ***Since this type of payment would be for something already received it should not be necessary to have a full purchase order to send to a vendor.

3. Select submit If you do not want the requisition to go through any approvals, use the Approval Override selection 4. You do not need to print the requisition to continue the year end process 5. Now return to the steps under A. To set up an AP in 2012-13 from existing

requisitions/purchase orders


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C. To SET UP an A/P in 2012-13 and simultaneously make a 2013-14 cash payment in one step (payment type is called “Direct”). In Escape you are able to process a FY13 payment without setting up a structured payable. This requires diligence in making sure you are selecting the proper year, FY13, as you begin the direct payment process. The system knows that you are processing payables to FY13 and will: - In 12-13, credit object 9529 and debit expense objects 1xxx to 6xxx. - In 13-14, credit object 9110 (cash) and debit object 9510 (accounts payable). This process should only be used when you have received a billing for 2012-13 services/goods/reimbursements; no prior requisition or PO has been established; and you are now paying the exact amount of the bill. 1. Go to Finance – AP – Enter Direct Payments 2. Very Important – Change the fiscal year to FY13 (2012/2013) from the drop down

menu 3. Enter C for the Bank Account and continue filling out all necessary information.

***Only enter FY13 invoices together. For any FY14 invoices, start the direct payment process again without changing the fiscal year. The default is FY14.

4. Select Go 5. When submitting the FY13 payments for approval be sure to batch them together by

selecting the Payment Type as Direct when building the list for submission 6. Follow the normal AP processing steps D. To ALTER an already set up payable done through the Requisition Year End Closing process 1. Go to Finance –Requisitions – Vendor Requisitions

Source criteria- In the Reference Number field enter the Payable number you wish to alter (R13-xxxxx)

Note that the Payable number is the same as the original Req number Clear the Fiscal Year field with the space bar

Select Go 2. Open the requisition that needs to be changed

3. From the task bar select the Rollback Year End Processing task.

4. Go to the Accounts tab

5. If the req amount is changing a. Change the items as necessary

**OR**


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b. Add an adjustment amount to get the req total to change 6. Go to the Accounts tab

a. Distribute the full new cost of the req **OR**

b. Change the account codes if necessary 7. Save and close the requisition 8. Reprocess the requisition on the year End Closing list

****At this point a system created journal reverses the first accrual in both fiscal years****

E. Payables (PCL) Scenario’s ***Pre Close***

1. When a Payable (PCL) was set up and should not have been Finance – Requisitions – Vendor Requisitions

a. Leave Fiscal Year field blank on search screen b. Enter and open the vendor requisition needing alteration (Do Not Reopen the

PCL from the Task menu) c. Go to the Task tab d. Select Rollback Year End Processing (see page 10 of this manual for details) e. Change amounts accordingly (see pages 10-11 of this manual for details) f. A FY13 journal will be created that will alter the FY13 and bring the FY14 setup

to zero g. Reprocess the requisition on the Year End Closing List

2. When a Payable (PCL) was set up for the incorrect amount

Finance – Requisitions – Vendor Requisitions a. Leave Fiscal Year field blank on search screen b. Enter and open the vendor requisition needing alteration (Do Not Reopen the

PCL from the Task menu) c. Go to the Task tab d. Select Rollback Year End Processing (see page 10 of this manual for details) e. A FY13 journal will be created that will alter the FY13 and bring the FY14 setup

to zero f. Reprocess the requisition on the Year End Closing List

3. When a Payable (PCL) was set up to the incorrect resource/account code

a. Leave Fiscal Year filed blank on search screen b. Enter and open the vendor requisition needing alteration (Do Not Reopen the


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PCL from the Task menu) b. Go to the Task tab c. Select Rollback Year End Processing (see page 10 of this manual for details) d. A FY13 journal will be created that will alter the FY13 and bring the FY14 setup

to zero e. Cancel the requisition and copy it with the correct resource/account code f. Reprocess the requisition on the Year End Closing List

***Post Close*** 1. When a Payable (PCL) was setup and not paid against (formally Z’ing out)

Finance – Requisitions – Vendor Requisitions a. Blank out the Fiscal Year field on search screen b. Enter and open the vendor requisition needing to be closed (Do Not Reopen the

PCL from the Task menu) c. Make no alterations to the Accounts tab d. From the Task menu, select “Manually Complete” or “Cancel” if the requisition

has not been paid against e. This will force a journal in FY14 that will relieve the 9510 and credit the expense

side f. This will affect FY14 for the amount that was not paid

2. For a Payable (PCL) that was partially paid against but will not be totally cleared

Finance – Requisitions – Vendor Requisitions a. Blank out the Fiscal Year on search screen b. Enter and open the vendor requisition needing to be closed (Do Not Reopen the

PCL from the Task menu) c. Make no alterations to the Accounts tab d. From the Task menu, select “Manually Complete” or “Cancel” if the requisition

has not been paid against e. This will force a journal in FY14 that will relieve the remaining 9510 balance and

credit the expense side for the difference between what was set up and what was paid

f. This will affect FY14 for the amount that was not paid


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Use Tax Procedures

All Encumbrances for a requisition hit the object 9720, including sales/use tax if the requisition is marked for tax. The actual tax rate is defaulted from the Fiscal setup shown below. There is no need to separate the different tax rates on the screen.

There are districts where receiving locations may have a different tax rate than the general tax rate. The West Sonoma High District is one. The overall tax rate is 8.0 shown on the screen shot above but when items are delivered to the Analy High School site the tax rate should be 8.25.

The Escape Organization Record allows Escape to know the sites where the tax rates are different and provides an override field for use with the purchase order locations.


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The requisition shown above is set to be delivered at the Analy High Site.

The internal tax flag on the requistion is set to No. This means the system will not adjust the item amount by any tax factor as the requisition is set up. Usually supply requisitions will have this flag set to Yes.


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If the requisition is marked Yes for sales tax but the payment is made with the tax rate owed and tax rate collected as the same, the encumbered taxes do not move to the object 9580 because the system assumes the tax is included in the invoice amount paid to the vendor. When the Tax Rate Collected is different from the actual tax owed, you will need will need to enter the correct % in the Tax Rate Collected field. In the example below 8.25 is the correct rate for the Analy location but this item was received the El Molino site where the tax rate is 8.00. The difference is a -.03.

NEW in the Account Tab is the Manual Account Distribution field. Defaults to No and will automatically distribute the Expense Amount.

This will not adjust the vendor’s payment. The vendor will still receive the $15.13 as invoiced. Journals will be created at the time of payment that will charge the 9580 account a negative .03 and thereby reduce our use tax liability to state for this amount. You will see this reduction at the time you file your use tax report with Business Services.


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Another way to adjust the tax rate is to use the Unpaid Tax Amount field. In our example below we entered the $0.25 in the field. You will need to calculate this amount.

Note that the Unpaid Tax Calc Override field changed from No to Yes. This means that you have told the system that you do not want the system to look at the difference between the Tax Rate Owed and the Tax Rate Collected. You want the system to use the $0.25 as the amount to be booked to the 9580 account.

The Accounts tab automatically increased to the amount of $17.20.

The vendor will still only be receiving the $16.95 invoiced amount but as the payment is made, $0.25 will be booked to the 9580 Use Tax account. It will remain there until cleared by either you or Business Services in July.

If you have used the Unpaid Tax Amount method you cannot go back and change your entry to use the Tax Rate Collected method. The system will remember the initial entry and always go by that Use Tax setup.


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