March, 2015 - FMS Newsletter
Financial Management Services

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March, 2015

FMS Website Expanded

Auxiliary Accounting, Capital Asset Management, Non-Student Accounts Receivable and Student Loan Administration Webpage Update

As many of you may already be aware, Auxiliary Accounting, Capital Asset Management, Non-Student Accounts Receivable and Student Loan Administration moved from the Office of the Treasurer to Financial Management Services (FMS) as of July 1, 2014. As part of this change, the website resources previously available for these areas on the Office of the Treasurer’s website have now been moved and incorporated into the FMS website. If you have any bookmarks referencing the Office of the Treasurer’s website, please take moment to update your bookmarks. The webpages for these areas on the Office of the Treasurer’s website will remain active only for a short while longer.

If you have not visited our webpages in a while, we would like to invite you to do so. We have updated a great deal of reference material and training material, as well as several standard operating procedures.

Disbursement Voucher Supporting Documentation PDF File Names

These quick tips can help you successfully upload Disbursement Voucher (DV) supporting documentation for the correct DV.

  • Ensure your PDF file’s first page is the DV coversheet.
  • Name the file using the DV number first, the payee name (last name or company name) next, and amount last.
    Reason: When you browse your folders during the upload process, the payee name and dollar amount are helpful for confirming the right file is selected. Additionally, the file will be easier for you to find if future retrieval is necessary.
    Example: “35661110 Sage 250.00.pdf”
  • If your DV is disapproved and you need to initiate a new DV, print a new coversheet from the new DV and discard the coversheet from the disapproved DV.
    Reason: procedure requires uploading the paperwork to the current DV number. A new coversheet with complete support pages makes the complete audit record and will need to be uploaded to the new DV. Coversheets are printed from the link at the top of a DV document.

Note: PDFs retained by the department should be stored on a secure server that is backed up regularly by procedure.

Procurement Card Statement PDF File Names

This quick tip can help you successfully upload Procurement Card statements with receipt documentation.

  • Name the file using the unique identifier first, statement year, month, and day next, and the cardholder name last. The cardholder name is the individual name or the department name that appears on the statement and on the credit card.

    Reason: the upload process includes specifying your procurement card’s unique ID and selecting the correct statement month. You can ensure that you browse to the correct file via these visible file name details.

    Example: “PCBL10001801 2015-01-12 VPCFO Business Office.pdf”

Note: PDFs retained by the department should be stored on a secure server that is backed up regularly, by procedure.

Credit Memos and Refund Checks

Definitions:

Credit memorandums (Credit memos) are issued by vendors to credit IU for damaged goods, returned items, and sometimes in an overpayment situation. Credit memos are processed in KFS to reduce the net amount of a future payment.
Refund checks payable to Indiana University also return money. Refunds checks are deposited and the general ledger account credited.

Question 1: When do we ask for a credit memo and when do we ask for a refund check?

The answer depends on the unique circumstances of each financial transaction. Please contact FMSAPHLP@indiana.edu and describe the specific details for a final determination by Accounts Payable (AP).

Question 2: How do credit memos and refund checks affect the General Ledger?

Vendor credit memos are processed in KFS similarly to a payment request document. However, the general ledger (GL) entries are the opposite of payment request entries. Like payment requests, GL pending entries are created when the document is submitted by AP. These entries are debits to liabilities and credits to expenses. The entries book to the GL overnight. The cash transaction is a net reduction to a check payment to the vendor. The entries for the check disbursement are debits to cash and credits to liabilities.

Refund checks are processed on either cash receipt (CR) documents or advance deposit (AD) documents. There are pending GL entries during that day for each document that book to the general ledger that evening. The entries are debits to cash and credits to expenses.

Question 3: How do credit memos and refund checks affect the Purchase Order (PO) encumbrance?

An encumbrance is the name given funds that have been reserved after a purchase requisition is finalized and funds are placed aside for that transaction. In other words, those funds are “held” and no longer available for commitment to other transactions from a budgeting perspective. The purpose of an encumbrance is to avoid overspending and to predict cash flow as a planning tool.

When Accounts Payable submits a credit memo, the funds are re-encumbered on the PO. When the credit memo posts to the GL, the actuals will decrease by the same amount.

Refund checks have no impact on PO encumbrances. In the event that an additional payment needs to be made from the refunded PO, funds must be manually re-encumbered to the PO.

IUIE Report to Determine if a Check Has Cleared the Bank

You do not need to contact FMS Cash Control to determine whether or not a check has cleared the bank. There is a report that will give you that information. It is located in the IUIE at:

  • Master Catalog / Kuali Financial  / Predisbursement Processor / PDP Disbursement Status Report

The following screenshot shows the report requirements and output parameters.

Create Global Account Doc

Disbursement Number is the check number printed on the check submitted to the payee.

Customer Payment Document Number is the KFS document ID associated with the document initiated to pay the payee.

Moving Capital Equipment

According to university policy FIN-ACC-I-170, if capital equipment is moved to a different room, the asset location must be updated in KFS within 30 days of the change. Adherence to this policy makes it easier to find the assets not only for inventory purposes, but also in the event of an audit. It is also important for the asset’s location to be correct for cost purposes and to ensure compliance with contract and grant regulations.

Every organization with capital equipment must have a process in place to notify your organization’s asset representative when equipment moves to a new location. If assets move frequently between two to three locations, we suggest adding a note to the Organization Text field of the asset, providing the other possible locations. If the asset is found to be located in either of these locations, the asset would still be in compliance with university policy. If your organization has assets that move frequently, it would be to your benefit to utilize the Organization Text field for this purpose. See CSOP 8.0 Capitalization of Moveable Equipment for more information.

Federal auditors will be on campus verifying asset locations this spring. They will expect to find assets in the locations that are specified in the Capital Asset Management Module. Items that are not located in their correct location could result in the loss of federal indirect cost dollars.

Create Global Account Doc

Tax Tidbits

University Tax Services Year in Review

The last tax form is in the mail, and we thought we would share with you the number of forms we produced and highlight some of our accomplishments.

Form Number Form Name Number Issued
W-2 Wage and Tax Statement 51,367
1042-S Foreign Person's U.S. Source Income Subject to Withholding 2,066
1098-T Tuition Statement 107,581
1099-K Merchant Card and Third-Party Network Payments 134
1099-MISC Miscellaneous Income 5,417
1099-R Distribution From Pensions, Annuities, Retirement… 394

Withholding income tax in other states:

  • Registered to withhold in 27 states and 7 local jurisdictions outside Indiana
  • Implemented ADP Tax Services for payroll tax payments and reporting
  • Worked with Payroll and UHRS to add an eDoc field to capture primary work location

Updated our website with new information:

System improvements:

  • Added 1098-T e-consent and SSN update to the class registration process. Increased the e-consent rate by 33%, saving the university over $25,000 in printing and postage
  • Updated the KFS Vendor record to include additional tax form information needed to implement Foreign Account Tax Compliance Act (FATCA)
  • Updated internal systems for process improvement.

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