Year end closing
The University’s fiscal year begins on July 1st and ends on June 30th. The resources below have been developed to assist schools and departments in finalizing activity for the current fiscal year. Recording revenues and expenditures in the correct fiscal year is critical to the accuracy of fiscal year-end reports and financial statements. However, accurate reports and statements must be balanced with the necessity to close the fiscal year and open the new fiscal year as quickly as possible.
Responsibilities at the department level
- Adhere to all deadlines related to the fiscal year-end closing.
- Make a year-end schedule that assigns tasks to individuals and hold them accountable for completion.
- Ensure key personnel are available to meet all year-end closing deadlines.
- Contact sub-contractors, customers, and other suppliers to stress the importance of prompt receipt of invoices and payments. They can be identified on the accounts receivable aging reports from ARBI.
- Prior to June 30th assess the following:
- Review Unclaimed Wires listing for transactions belonging to your department.
- Review Unapproved CRRs to resolve questions, potential duplicates, or errors.
- Review Unpaid Expense Reports and Unapproved Voucher reports for transactions pending approval.
- Review Outstanding Purchase Orders to have them closed or invoices applied.
- Review T&E Profiles for employees with expense reports and OneCards to ensure active MOCODES are listed.
Additional responsibilities are listed below at the process level.
Responsibilities at Division of Finance-Accounting
Accounting Services is responsible for coordinating and completing the fiscal closing operations for the Columbia campus and for meeting the deadlines set forth in the schedule for fiscal closing. Additional responsibilities of Accounting Services are discussed below at the process level.
Closing calendars
The University’s fiscal year-end closing calendar and general ledger monthly closing calendars are posted on the Office of the Controller’s website. The calendars provide the users of the PeopleSoft Financial System with information regarding financial activity, including deadlines, system processing, and the availability of PeopleSoft Financials and the PS Web Applications.
One of the most common closing items is accruals. Departments must note that most accruals will be picked up by an automatic process; however, they are responsible for verifying that no other adjustments need to be done by Accounting Services. Transactions automatically accrued include expense reports, PO vouchers, Non-PO vouchers, ARBI invoices, CRRs, and payroll.
Refer to the following tables for more information regarding year-end closing components.
Major components
| Process |
Description |
Department Responsibility |
Accounting Services Responsibility |
| Cash in Transit |
A deposit in transit occurs when either a check is dated prior to 6/30 but is received after or when a CRR is completed on 6/30 but does not post in the GL until after 6/30. |
Departments must notify Accounting Services of any deposits that were received after 6/30 and not included in the accrual entry. |
Reviews CRRs at 6/30 and subsequent for those meeting cash in transit. Works with System to prepare entries to apply payment to correct fiscal year. |
| Accounts Receivable - Billing Module (ARBI) |
Invoices billed to external customers using the automated billing system for goods/services performed in current fiscal year for which payment is not received until the next fiscal year. |
Departments must ensure that all goods/services provided prior to 6/30 are invoiced by fiscal year-end. |
Accounting Services assists in ensuring that income was recorded by the automatic accrual prior to preparing a manual accrual entry. |
| Accounts Receivable - Miscellaneous |
Invoices billed to external customers using another billing system for goods/services performed in current fiscal year for which payment is not received until the next fiscal year. Examples include Bookstores, VetMed Clinic, and KOMU. |
Departments are responsible for monitoring the aging of miscellaneous accounts, maintaining contact with customers to ensure collection of receivables, and supplying Accounting Services with documentation of Miscellaneous Accounts Receivable and calculation of allowance for uncollectible accounts. |
Accounting Services performs a review of balances in the Misc. Accounts Receivables account. Additionally, Accounting Services works with Cashier's Office, Student Loan Collections, and individual units to prepare allowance calculations and entries. |
| Inventory |
Inventory should include all items which will be sold or charged to customers in the normal course of business, including items which will be used in construction or installed in products which will be sold. Associated with Cost of Goods Sold accounts on the Income Statement. |
The annual physical inventory of all re-saleable items must be taken on 6/30. Departments must coordinate physical inventory and recording with Accounting Services. |
Accounting Services sends the instructions for year-end inventory in June and requires all inventory sheets to be returned to Accounting Services no later than 7/5. Records and reconciles Inventory for COGS. |
| Prepaid Expenses |
Expenses paid in the current fiscal year for which services/goods are not recognized until the next fiscal year. Examples include airfare or registration fees paid in June for which the conference is in July. |
Departments must notify Accounting Services of these prepaid expenses and provide supporting documentation. |
Accounting Services reviews and records the prepaid expense based on support from the department. |
| Capital Assets |
Capital assets include land, building, vehicles, equipment, software, works of art and historical treasures meeting the identified thresholds in University policy. |
Departments must ensure that a Capital PS Account is used for purchases meeting the capitalization thresholds. They must also coordinate tagging of capital equipment with Surplus Property-Asset Management and construction of buildings with Campus Facilities. |
Accounting Services reconciles the Asset Management System to the GL to ensure that all entries are valid and reasonable. |
Major components
| Process |
Description |
Department Responsibility |
Accounting Services Responsibility |
| Accounts Payable |
Transaction to pay external suppliers using the automated payable system when services/goods are received this fiscal year and will be paid for next fiscal year. An example might be consulting work on web page design completed June 15th and the invoice posts July 20th. |
Departments must ensure that Vouchers and Expense Reports with invoice/expense dates prior to 6/30 are approved prior to the designated cutoff date for automatic accrual. If not approved by the designated cutoff date, departments provide support to Accounting to request accrual. |
Accounting Services reviews the supporting documentation and prepares the entry after checking the automated entry to ensure that the expense was not already accrued for.
Additionally, Accounting Services reviews material payables to ensure that they were recorded in the correct accounting period. |
| Accrued Liabilities |
Transactions to recognize payroll and vacation earned in the current fiscal year and will be paid in the next fiscal year. The first biweekly payroll in July is automatically recorded at the department level. Vacation accrual is automatically recorded at the campus level. |
Departments must ensure payroll is reported in the appropriate chartfields at year end. If payroll correcting entries are prepared for biweekly employees for the first payroll in July, discuss the accrual impact with Accounting Services. |
Accounting Services reviews and prepares necessary entries impacting payroll accrual based on payroll correcting entries prepared. |
| Deferred Revenue |
Used when income is received this fiscal year for services or goods to be provided next fiscal year. Example might be registration fees received in June for a conference held the following month. |
Identify and provide supporting documentation and request the income be deferred by Accounting Services. |
Accounting Services reviews the supporting documentation and prepares the entry. |
Major components
| Process |
Description |
Department Responsibility |
Accounting Services Responsibility |
| Journal Entry Approval |
Manual entries that are prepared to ensure both the balance sheet and income statement are accurate. |
Material manually prepared journal entries (JE, CE, ISE, etc.) must be reviewed and approved within WebApplications. |
Accounting Services regularly checks entries to verify departmental review and approval. |
| Accounts with Negative/Deficit Balances |
Wise stewardship of all restricted and unrestricted funds suggests effective and timely use to improve the quality of activities of the University utilizing only the funds available. When using funds not available or when recording only expenses in a chartfield, a deficit is created. |
Departments must review the deficit list sent to them by Accounting Services. Program, Project and DeptID levels must not have a deficit balance. Actions required include:
- Fund deficit balance using an appropriate funding source. Consult Accounting Services if unsure.
- Request deficit carryforward with plan of action to clear deficit submitted to VC for Finance.
- For agency funds, request payment from entity. Consult Accounting Services on how to record.
|
Accounting Services checks for negative balances prior to closing and notifies the appropriate Division Business & Fiscal Officers. Accounting Services also assists divisions with recording necessary journal entries to resolve deficits in accordance with GAAP & GASB. |
| Clearing Funds (0090) |
A clearing fund is a temporary account containing funds that need to be transferred to another chartfield once investigated. An example is the development pending account where gifts are first recorded until reconciled by Advancement. |
All clearing funds should be at a zero balance at year end. Departments should investigate and record activity to appropriately move funds via a journal entry. |
Accounting Services will verify that all clearing funds are at a zero balance and will assist in creating journal entries to move the funds out of the clearing accounts. |
Major components
| Process |
Description |
Department Responsibility |
Accounting Services Responsibility |
| Standard Journal Entries (SJEs) |
A Standard Journal Entry (SJE) allows an automated posting of the exact same entry to occur for a specific time period. For example, spreading income evenly over 12 months to the same chartfields. |
Review standard journal entries from the previous fiscal year and notify Accounting Services of any changes. |
In June of every year, Accounting Services sends a list of the current year SJEs to Division Business & Finance Officers and ask for any updates or changes. |
| Allocations |
Allocations (ALO) are used to create automatic journal entries based on a basic math problem. For example, spreading income prorated based on expenses occurring in the same chartfields. |
Departments are responsible to review current allocations and inform Accounting Services of any changes or request new allocation established. |
Accounting Services reviews the information and creates the allocation in PeopleSoft. |
Questions?
