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June 6, 2017
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In This Issue
FMS News
Year-End Closing Newsletter
The 2017 Year-End Closing Newsletter provides our readers with information that will be helpful throughout the year-end closing process.

Specific items that you should be aware of are discussed in the Year-End Closing Overview, available here: https: // fms . iu . edu / operations / 2017-year-end-newsletter /.

The Year-End Closing Schedule contains important deadlines. You may want to print out a copy so you can access it more easily. It is available here: https: // fms . iu . edu / operations / 2017-year-end-newsletter / 2017-closing-schedule /.
Invoice Processing
As fiscal year end approaches, it is important to clarify the procedures that we follow in processing invoices at the end of the year. The INVOICE DATE is used to determine which fiscal year that invoice is charged against, regardless of the year of the PO creation. The invoice date is the date presented on the first page of an invoice that has been assigned by the vendor.

All invoices received by AP up to and including Monday, July 3 with an invoice date of June 30 or before will be processed in the Fiscal Year 2017 accounting books. Invoices dated July 1 or later will be processed in the Fiscal Year 2018 accounting books.

KFS utilizes a post-back logic that books Fiscal Year 2017 expense for invoices dated June 30 or before and processed on Wednesday, July 5. The post-back period ends on July 5. General ledger expenses book to Fiscal Year 2018 regardless of the invoice date beginning July 6.

June or prior invoices, billing service, and/or maintenance contracts with period begin dates of July 1, 2017 or later, will be processed as received. Similarly, membership billings for Fiscal Year 2018 memberships that expect payment in advance of June 30, 2017, will be processed as received. Accounts Payable will tabulate the invoice and accounting detail so that a financial reporting adjustment can be made to the Fiscal Year 2017 reports.

Beginning with invoice processing on July 1, 2017, the billings referenced in paragraph four will be processed by the following procedure if the purchase order is encumbered for FY2018.
  1. The invoice date on the payment request document will be entered as July 1, 2017 if the actual invoice date is June 30, 2017 or prior. KFS will book the expense to FY18.
  2. The pay date will be populated based on billing invoice date and defined procedures. For example, a June 1, 2017 membership billing of a FY18 PO with Net 30 Day payment terms will be processed with an invoice date of 7/1/2017 and pay date 7 days from processing.
* Here is a reminder for subscription and membership payments from the Financial Management Services Newsletter, March 2016 as found in the FMS Newsletter Archives on the FMS Training webpage, available here: go . iu . edu / 1ALD. (Note: procurement card payments are permitted in addition to DV payment processing. Check with Purchasing if you have questions.
  • Subscriptions should be processed on a DV (unless they require a contract signature or are software subscriptions). The billing notice is typically generated through a renewal reminder rather than through an invoice; therefore, a DV is the appropriate method for payment.
  • Memberships should be processed on a DV if the membership does not require an agreement or ongoing services/data sets (such as Cloud) which would require a security review.
The $1,000 limit on Disbursement Voucher transactions applies to "Compensation for Services" and "Payments for Contractual Agreements" and not to subscription / membership payments.

As an additional reminder, units requesting memberships in External Organizations are required to submit a membership application. Detail for Sponsorship & Membership Applications is located on the Indiana University Brand Guidelines webpage.

The procedure documented above has been followed for the past five fiscal years.

Goods, or merchandise, are rarely pre-billed. If you order equipment or supplies in the month of June and ask for a delivery of July 1 or later, the vendor may ship your product early and issue an invoice on the date shipped. In this case, the invoice will be processed in FY17. Please keep this in mind when placing orders for products that you do not wish to take delivery of until after the fiscal year-end.
Funding Recurring Purchase Orders
At times throughout the year, but especially at fiscal year-end, recurring Purchase Orders (POs) could run out of encumbered funds. You must encumber funds for all billing expected to be paid on your recurring order through the end of the fiscal period so that payment processing is not delayed.

KFS PURAP does not allow the processing of invoices against a PO that is not funded. Indiana University receives invoices that must be paid but the payment is delayed until funds are encumbered on the PO.

The practical results of the recurring Purchase Orders being unfunded are:
  • Multiple communications occur between Accounts Payable, the Department, and Purchasing; and
  • Payment delays are created at no fault of the vendor.
To avoid these consequences, please review all recurring POs to ensure funds are available.
Guide to Accounts Payable Liability Object Code 9041
Accounts Payable object code 9041 is the offset object code for invoice expenses, credit memo credits, and cash disbursements.

Reports are written and published in IUIE to study 9041 activity and status throughout the year as well as at fiscal year-end. The Guide to Accounts Payable Liability Object Code 9041 explains the reports available and their use. The guide can be found at: go . iu . edu / 1ANj.
Capital Assets Closing Information
At year-end, Capital Asset Management creates a snapshot of all the university’s assets. This snapshot provides the status and location of capital assets as of June 30 which is used for financial reporting purposes and for federal and state audits. To ensure this information is as accurate as possible, please inform your capital asset representative of known asset location changes so updates can be made in KFS prior to June 30.

In addition, all Asset Retirement, Asset Transfer, and Equipment Loan/Return Documents must be approved (not just initiated) on or before June 30, 2017. Any Retirement or Transfer document not approved by June 30 will be routed to Capital Asset Management to be held “for approval” until after final close.

To ensure that all initiated documents have been approved, run the Unapproved Documents in Inbox by Chart and Org report to view the pending documents for your organization. The report can be found in IUIE in Kuali Financial/Capital Asset Management System/Inventory Control Reports/.

Capital Asset Document Type Codes are:
  • AT:  Asset Transfer
  • ARG: Asset Retirement Global
  • ELR:  Equipment Loan Return
If you have any questions or concerns, please contact Capital Asset Management at capasset @ iu . edu.
Non Student Accounts Receivable Write-Off Deadlines
According to IU policy I-500, Accounts Receivable balances over 12 months old and lacking current productive activity will be written off even if the invoices are placed with a collection agency.

Any invoices 365 days old prior to June 30, 2017 should be written off by the billing organization no later than close of business on June 23, 2017. Please also add collection notes in the Notes and Attachments section of any KFS invoices that will be 90+ days old prior to fiscal year end.

Please ask the following questions prior to writing off an invoice to ensure you are using the correct edoc in KFS:
  • Is the invoice a duplicate or need to be reversed? If the answer is yes, and the invoice is from the current fiscal year, please use the Invoice Correction edoc to reverse the invoice. If the invoice is from a prior fiscal year, please email nonstdar @ iu . edu for additional information.
  • Was the invoice short paid due to returns, price adjustments, or to remove open balances that will not be received due to costs associated with doing business, i.e. bank fees deducted for wire transfer payments? If the answer is yes, use a Credit Memo edoc to clear the remaining balance of the invoice.
  • Is the balance of an outstanding invoice due to non-payment stemming from the customer not being able to pay (bankrupt, dispute, unresponsive, etc.)? If the answer is yes, use the Write-Off edoc to write off the invoice as bad debt. Please do not use the Write-Off edoc to clear small balances under $1 from invoices.
Remember…writing off an invoice does not prevent you from collecting the money from the customer! If you have any questions about Non Student Accounts Receivables, please contact nonstdar @ iu . edu.
Service Billing Restrictions
On July 1, 2017, several changes will be made to the KFS Service Billing (SB) document:
  • Account Restrictions – the account on the income side of the SB will be required to be in the auxiliary service (AUXSER), external agency (EXTAGY), internal agency (INTAGY) sub-fund group or be in the 55* series.
  • Object Code Restrictions – an income object code will be required on the income side and an expense object code will be required on the expense side.
  • Approval to Use the SB – access to the SB document requires approval by Financial Management Services. Approved users will be added to the Service Bill Processor role in KFS.
If you are a current Service Billing user and your current billing does not meet the account and object code restrictions above, Auxiliary Accounting will be contacting your fiscal officer to help with this transition.

If you are a current Service Billing user and your billings already meet the account and object code restrictions, no action is needed on your part.

If you have any questions, please contact auxacct @ iu . edu.
Auxiliary Voucher Routing Changes
Auxiliary Accounting will be implementing changes to the Auxiliary Voucher (AV) routing as of July 25, 2017 (after FY17 final close).

The routing changes are being made to mitigate risk to university financial statements. The changes will allow Auxiliary Accounting staff to concentrate their efforts on the transactions that are most material to university financial statements as well as toward utilizing data analytics tools to verify the accuracy of accrual vouchers.

As of July 25, 2017, two individuals outside of Auxiliary Accounting will be required to approve each auxiliary voucher.

The first approver will be the initiator of the document.

The second approver will be one of two individuals, depending on who initiated the document.
  • If the initiator of the document is NOT the fiscal officer or their delegate (for the AV), the document will route to the fiscal officer or their delegate for approval. The department needs to take no further action.
  • If the initiator of the document IS the fiscal officer or their delegate, a second approver must be established by adding org review routing for AV documents. Visit go . iu . edu / org-review for instructions on how to establish org review routing.
Note: In the event that your department’s fiscal officer or their delegate occasionally initiates AVs but is not the regular initiator of AVs, please email auxacct @ iu . edu for guidance BEFORE establishing org review routing.

Review ASOP 26: Auxiliary Voucher Approval & Review Process for additional information about the second approver and continued University Administration oversight.

Please contact auxacct @ iu . edu with any questions.
New REU Payment Procedures
University Tax Services, in collaboration with Office of Research Administration, Student Information Services, and Accounts Payable, are creating a new Tax Standard Operating Procedure (TSOP). This TSOP will provide guidance to units and departments at Indiana University on how to appropriately process payments related to sponsored research programs during the summer (such as REUs) for undergraduate students. This TSOP will also include information on how to process stipend payments in the most efficient and compliant manner and where to direct questions related to the program.
  • IU students will have payments processed through SIS.
  • Non-IU students will have payments processed through KFS on a DV.
When finalized, this TSOP will be found on University Tax Service’s website under Standard Operating Procedures. To review current TSOPs please visit https: // fms . iu . edu / tax / standard-operating-procedures /.

Please direct any questions regarding this process to University Tax Services at taxpayer @ iu . edu.
Tax Issues for Out-of-State Employees
Indiana University is now registered to withhold taxes in 43 states. This helps ensure IU’s employees are taxed correctly. Because of the added complexity this entails, it is more crucial than ever departments ensure they are handling out-of-state employees correctly. Departments must process a new edoc every time an employee changes the state from which they work. Incorrect state tax withholdings will occur if this process is not completed in a timely manner, which may result in taxes owed by the employee during tax filing.

For more information on when and how to process these edocs, please consult the SOP concerning out-of-state employees at: http: // hr . iu . edu / employment / managing_Out-of-State_EE-SOP . pdf.

It is also crucial that employees submit updated state tax withholding forms whenever they move to a new state. Employees must submit updated state tax withholding forms to University Tax Services via fax or mail. Timely submission of the forms ensures that proper tax withholding occurs on all employee paychecks.

These forms can be submitted via mail to:
University Tax Services – Poplars 503
400 E. Seventh Street
Bloomington, IN 47405-3085

Or via secure fax to:
(812) 856-4861

Current state tax withholding forms can be found at: https: // fms . iu . edu / tax / employees / working-outside /

If you have questions regarding taxes for out-of-state employees, please contact University Tax Services at taxpayer @ iu . edu.
University Finance Fundamentals Registration Open
Our pilot session of University Finance Fundamentals was a great success! Over 120 online and 21 in-person participants joined us for our pilot session. A big thank you for your patience during the pilot and to the staff members who joined us. We look forward to offering these sessions on a regular basis starting this August.

Registration is now open for the University Finance Fundamentals 2017-18 series. UFF is an engaging learning experience designed to give IU staff a deeper understanding of the concepts and procedures related to university finance. The series inspires ownership of university finance and introduces staff to subject matter experts within the University Controller’s office.

IU staff have the option of attending in-person on the Bloomington campus or online in a web conference meeting room. Remote participants will hear the same presentation as in-person participants, and will be encouraged to ask questions and participate in activities.

To register, please visit: go . iu . edu / reg4uff.

If you have questions regarding the UFF series, please visit our FAQ page here: https: // fms . iu . edu / training / uff / faqs or contact fmstrain @ indiana . edu.
Online Training Offerings
The FMS Training team held its first round of online training this past May. The classes were a great success, and we enjoyed meeting staff from many regional campuses! Thank you to those who participated.

KFS Financial trainings will be held online every other month. Staff from every campus, including Bloomington, are welcome to participate. Online participants will gain hands-on experience using KFS, answering polling prompts, and interacting with the presentation using the Zoom web conferencing software.

To view course offerings, please visit https: // cust . fms . iu . edu / cgi-bin / train / catalog. If you have any questions, please contact the FMS Training team at fmstrain @ indiana . edu.
Events Calendar
Thu, Jun 8, 2017
Financial Processing Basics 2
Poplars W183
Tue, Jun 13, 2017
Disbursement Voucher Basics
Poplars W183
Wed, Jun 14, 2017
Disbursement Voucher Special Considerations
Poplars W183
Thu, Jun 15, 2017
Introduction to Financial Reports
Poplars W183
Wed, Jun 21, 2017
Kuali Time for Supervisors and Payroll Processors
Poplars W183
View more events and register at fms . iu . edu / training »
FMS Support
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Fulfilling the Promise
Financial Management Services
400 E. Seventh Street
Bloomington, IN 47405