In This Issue
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.
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.
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
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.
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.
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:
The following screenshot shows the report requirements and output parameters.
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.
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.
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.
Withholding income tax in other states:
Updated our website with new information: