To: University Managers From: Katie Udkovich, Manager Accounting Operations Date: May 22, 2023 Subject: Fiscal Year 2023: Year-End Closing Procedures
RIT’s 2023 fiscal year-end is rapidly approaching and We need your help! Please review this information with individuals in your department who are involved in the year-end closing process.
Important Reminders for FY23:
Departments prepare own accrual journal entries – Departments prepare their own accrual journal entries regardless of amount, with the exception of the following vendors. Refer to the accrual processing framework on the Controller’s Office website for more information.
Accounts Payable will only verify invoices > $5,000 to ensure proper accounting for FY23.
Accounts Payable will accrue the June-23 charges for:
Xerox copier/printers under the RIT MPS program
Datrose temporary staff charges
Accounting will accrue the June-23 charges for:
FedEx & UPS
There will be 2 business days between preliminary (prelim) statements and resumption of posting year-end journal entries.
Prelim close – July 7th -> Prelim dept. statements – July 10th -> Posting resumes morning of July 12th
Important dates for Oracle payroll transactions - adhere to the following due dates to submit and approve payroll changes to ensure inclusion in final payroll run for FY23, including EAF’s.
June 15th – bi-weekly pay period
June 22nd – semi-monthly pay period
Year-End Close Online Course - the year-end close financial workshop is offered through the RIT’s Talent Roadmap system. The course is easily accessible, captioned, and mobile enabled. Open Lab Zoom sessions are scheduled to give users a chance to ask any follow up questions they may have after viewing the online course.
Year-End Virtual Open Lab Sessions
Accounting will host one open lab session for participants to “pop-in” to the Zoom session and ask questions. There will be no formal presentation during this session and it is strongly encouraged that you complete the year-end online course noted above. Use the links below to join the open lab on the designated date.
The dates outlined below have been established to ensure that all transactions are properly recorded in the University’s financial enterprise system – Oracle. Other important links to year-end information are also available on the Controller’s Office web page: Fiscal 2023 Year-End Closing Process and Procedures.
We recognize that year-end closing procedures can be confusing. If questions arise or you need additional information, please contact the RIT Service Center at help.rit.edu or 475-5000.
Significant Year End Processing Dates:
Friday, June 23, 4:30 pm
Purchase Order Invoices & Invoice Payment Forms
Travel Expense Reports - Oracle RIT Employee Expense Reimbursements*
Approved FY23 Purchase Order invoices and Invoice Payment Forms (IPFs) must be received in Accounts Payable to be processed for inclusion in the preliminary statements. Submit completed documents as soon as possible to ensure Accounts Payable can process paperwork seamlessly and efficiently.
The last day that Oracle Online Employee Reimbursements must be entered and approved in AP to be reflected on the preliminary statements. * Supervisory approval is required by this date in order to be included on preliminary statements.
Friday, June 23, 4:30 pm
All Oracle Online payment entries including Summer Salary, Add Pays, Special Assignments
All Oracle online payroll entries for work completed prior to July 1 must be entered and approved by June 23 for salary items to be included on the preliminary department statements.
*These must have completed supervisory approval in order to be included on preliminary statements.
Monday, June 26 - Friday, July 10
Invoice Payment Forms
Travel Expense Reports, Oracle RIT Employee Expense Reimbursements*
IPFs received in Accounts Payable between June 26 and July 10, for goods and services received on or before June 30 > $5,000, will be verified and accrued if necessary by Accounts Payable. See invoice accrual process in the year-end workshop online course for department responsibility for accruals.
Online Employee Reimbursements entered and approved between June 26 and July 10 will be accrued by Accounts Payable.
*These must have completed supervisory approval in order to be included on preliminary statements.
Wednesday, June 28, 12:00 pm
Cash receipt deposits and Petty Cash receipts
Complete a deposit slip and bring to USC Student Financial Services. There is a secure drop box in the lobby.
Wednesday, July 5, 4:30 pm
Purchase Order Goods Accruals
The last day users can process June journal entries for the transactions to be reflected on preliminary department statements.
The last day that FY23 invoices may be entered into the accounts receivable system or cash received on or before June 30 may be applied to invoices.
Items received in Oracle by Central Receiving on or before June 30, 2023 (i.e., PO’s received without approved invoices in the accounts payable system) will be accrued by PSO. Verify open PO’s to ensure that quantities and dates received are correct.
Monday, July 10
Preliminary Department Statements
Preliminary June 2023 department statements and other standard reports available after Accounting closing schedule is updated online. Do not print your financial reports in advance of the closing completion. Review information on your preliminary department statements to determine if adjustments are needed for final close.Posting of JE's resumes morning of July 12, 2023.
Thursday, July 13, 4:30 pm
The last day for users to process/obtain approval/submit JEs for the transactions to be reflected on the final June 2023 department statements.
Tuesday, July 18
Final Department Statements
Final June 2023 department statements and other standard reports will be available after the Accounting closing schedule is updated online. Do not print your final financial reports in advance of the closing completion, since they may not contain complete information.
Fiscal Year 2023 Transaction Examples
Fiscal Year 2023 Expenses
RIT accounts for expenditures on an accrual basis. This means that expenditures are recognized in the year in which goods are received or services are rendered, not necessarily the year in which they are ordered or the year in which payment is made.
Expenditures - Your department’s FY23 budget will be charged for the value of services rendered or merchandise received on or before June 30, 2023. Your department’s FY24 (next year’s) budget will be charged for services or merchandise received on or after July 1, 2023.
When items ordered on a purchase order for goods are delivered directly to your department, forward Central Receiving documentation as evidence of receipt (i.e. packing slip or invoice) so the information can be updated in the Oracle purchasing system. (Central Receiving contact information: Fax 5-6815, ext. 5-2119, email: firstname.lastname@example.org).
In April 2023, your department issued a purchase order for 12 chairs, which are received in August 2023. The cost of the chairs is a FY24 (next year’s) expense because the chairs were received in FY24 (after June 30, 2023)
In July 2023, your department receives an invoice for a reference textbook received in May 2023. The cost of the textbook will be charged to your FY23 (this year’s) budget since the textbook was received in FY23 (prior to July 1, 2023).
Airfare – All airfare booked with an RIT designated travel agent for a departure date prior to June 30, 2023 must be expensed for all RIT employees and non-RIT employees through “Oracle Reimbursement for Travel”.
Payroll – Your department’s FY23 budget will be charged for all salaries and wages earned on or before June 30, 2023. Your department’s FY24 (next year’s) budget will be charged for all salaries and wages earned on or after July 1, 2023. Wages earned in the bi-weekly pay period beginning on June 2 and ending on June 15 will be paid on June 23. The payroll distribution report for June 2023 will reflect these charges.
Accounting will process an accrual prior to the preliminary June closing for the FY23 expense earned for the pay period June 16 through June 29 which is paid on July 7th . The one payroll day of June 30th will also be accrued, which is part of the pay period from June 30 through July 13th , paid on July 24th . The accruals will be automatically reversed in FY24. The payroll distribution report for June 2023 will not reflect these charges since they are paid in FY24 (July 2023).
Regular salaries for faculty and staff paid semi-monthly are not accrued since they will be paid on June 30, 2023 for the period June 16 – 30.
All Oracle Online Additional Payments, Special Assignments and Summer Salaries must be entered and approved by June 24th , to be reflected on your June preliminary department statements. Online entries for work performed in FY23 entered up to July 10th will be reflected on your final June department statements.
A student in your department worked 40 hours during the pay period June 16th – June 29th and was paid $528 (40 x $13.20) on July 7th. Prior to the preliminary June closing, Accounting will charge $528 to your department’s FY23 budget on the student salary line (71250). In July (FY24), Accounting will reverse the accrual and a credit of $528 will be reflected on the student salary line. The impact on your FY24 budget will be $0 ($528) actual payroll expense paid on July 7th less $528 accrual reversal).
On June 23rd , your department processes an online exempt Additional Payment entry for a staff person for extra work performed during the pay period June 1 – 15. The Payroll Office will process the Additional Payment amount with the pay date of July 15. This amount will be charged to your department’s FY23 budget through an accrual and will be reflected on your June preliminary and final department statements.
All income for goods or services provided to an organization outside of RIT during FY23 should be recorded by June 30, even if the payment has not yet been received from the customer. Invoices should be prepared using Oracle Accounts Receivable prior to or when the services are rendered. Alternatively, your department should prepare a journal entry in FY23 to debit the department’s accounts receivable account XX.XXXXX.04000.00.XXXXX.00000 and credit the appropriate departmental income account.
Image Permanence Institute (IPI) provides research testing for 3M Corporation on May 19, 2023. Although 3M is not expected to pay until July, an invoice should be processed through Oracle Accounts Receivable or a journal entry prepared to record the transaction. The entry will debit accounts receivable 01.66500.04000.00.00000.00000 and credit corporate contracts income 01.66500.52100.15.00000.00000. If at the end of June, the invoice amount remains unpaid, it will remain in accounts receivable and a reconciliation of the balance sheet account will be required. For additional information regarding account reconciliations visit the Controller’s web page.
Sometimes, especially during the latter part of the fiscal year, it is necessary to prepay expenses relating to the following year’s (FY24) budget. This often occurs with maintenance and service contracts, fees for seminars, membership dues, and subscriptions. Submit invoices to Accounts Payable marked “FY24 Prepaid Expense.” After verifying dates of service, AP will charge these expenses to a prepaid general ledger account in FY23. These payments will not be reflected on your FY23 budget.
In July 2023, Accounts Payable will prepare the journal entry (Oracle category = Prepaid) to charge these expenses to the appropriate departments. The payments will be reflected on your FY24 budget.
In June 2023, your department issues a purchase order for an annual copier maintenance contract and prepays for the service for the period July 1, 2023 through June 30, 2024. Submit invoices to Accounts Payable marked “FY24 Prepaid Expense.” After verifying dates of service, AP will charge these expenses to a prepaid general ledger account in FY23 and they will be reflected on your FY24 budget.
In May 2023, it is necessary to pay in advance for a business trip you will take in July 2023 (e.g., hotel reservations, conference registration, etc.), and you prepare an Invoice Payment Form. Submit invoices to Accounts Payable marked “FY24 Prepaid Expense.” After verifying dates of service, AP will charge these expenses to a prepaid general ledger account in FY23 and they will be reflected on your FY24 budget.
In May 2023, you charge a registration fee for a conference being held in August 2023 on your procurement card. Prepare a journal entry (Oracle category = Prepaid) and email Accounting - email@example.com, applicable approvals and supporting documentation, indicating the batch name in the subject line. Valid documentation includes: invoice/receipt showing the event date and a copy of the transaction record from ActivePay. Debit the prepaid account 01.15199.09000.00.00000.00000 with a line description: date of event, name of vendor & invoice #. Credit the appropriate expense account for your department. This entry will be automatically reversed in July 2023, charging the expense to your FY24 budget.
When RIT receives income in advance of providing the service, it is considered deferred income. The income is recorded in the year the service is rendered, not when the payment is received. If you receive a payment in FY23 for services to be provided in FY24, record the income in your department’s deferred income account: XX.XXXXX.36280.00.XXXXX.00000. When the service is rendered in FY24, prepare a journal entry to debit deferred income and credit your department’s income account. Entries impacting net assets (balance sheet) require department approval, regardless of the amount.
In April 2023, Gates-Chili High School made a deposit to reserve the Field House for their high school graduations for 2023 through 2025. In 2023, the Field House will record the deposit in their deferred income account. In 2023, after the first graduation ceremony, they will debit their deferred income account and credit their income account for the amount of the deposit received for year 1. They will continue this process for each of the subsequent years until 2025 at which time all revenue will be recognized.
In June 2023, several alumni made reservations and paid the fee to attend the 2023 Brick City Weekend (in October 2023). In June 2023, Alumni Relations will record the fee in their department’s deferred account 01.XXXXX.36280.00.XXXXX.00000. In October 2023, after Brick City Weekend, Alumni Relations will prepare a journal entry to debit the deferred income account and credit revenue.
Processing Year-End Invoices, Invoice Payment Forms & Travel Expense Reimbursements:
Procurement Services & Accounts Payable will verify the accrual of Purchase Orders and Invoice Payment Forms >$5,000 and Travel Expense Reimbursements for FY23 starting Friday June 26th until Thursday, July 10th at 4:30 p.m. The goods or services must have been received by June 30 and the travel date must have started on or before June 30.
At the close of business on Friday, June 30, purchase orders goods received in Oracle by Central Receiving on or before June 30 and not yet invoiced will be automatically accrued by the Procurement Services Office. These items will be charged to your department’s FY23 budget through the accrual process and will be reversed automatically in FY24. When the invoice arrives, it will be processed and paid in FY24, with no impact to your FY24 budget.
If items were delivered directly to your department, bypassing Central Receiving, email a copy of the packing slip or invoice to Receiving at firstname.lastname@example.org, on or before June 30. Receiving will update the purchasing system and the item will be accrued automatically.
Purchased services are now a two-way match and are no longer received in Oracle. Departments are responsible for preparing accrual entries for services. Invoices for services must be obtained from vendor and submitted to AP.
Invoice Payment Forms:
Departmental Action Required – For all goods and/or services received on or before June 30 for which the vendor has not provided an invoice and goods not received in Oracle, departments should prepare an accrual journal entry (Oracle category = Year-End Accrual). Email supporting documentation to email@example.com for the accrual entry along with the batch name. Entries impacting net assets (balance sheet) require department approval, regardless of the amount. Valid documentation includes: packing slip/receipt showing the receipt date. Debit the appropriate expense account for your department and credit the accounts payable accrual account: 01.15199.32900.00.00000.00000. When the actual invoice is received, indicate on the face of the invoice “Accrued FY23”. The payment will be processed with no impact to your FY24 budget.
Your department contracted for consulting services provided during April and May 2023. The consultant has not sent an invoice, and cannot be reached in July. Prepare a “Year-End Accrual” journal entry with the anticipated amount due to the consultant. This amount will be charged to your FY23 budget through the accrual process and reversed in FY24. When the invoice arrives, mark it prominently with “Accrued FY23” prior to sending to Accounts Payable. The invoice will be paid in FY24.
Procurement Card Purchases
The closing date for items to appear on your June procurement card statement from PNC is June 30. If you make last minute purchases the transactions may not be charged against your FY23 budget. On Thursday July 6th, Accounting will download from ActivePay all entries with a transaction date of June and a post date of July and prepare an accrual journal entry (Oracle category = Year-End Accrual) to debit the expense account on the ActivePay transaction (if not the default account you must change it in ActivePay by July 5th ) and credit the accounts payable accrual account. This should eliminate the need for individual departments to prepare accrual JEs.
You purchased lab supplies at Home Depot on your procurement card for $324.92 on June 30. The charge does not appear on your PNC statement but it does appear on-line (ActivePay) on July 2nd. Accounting will prepare a “Year-End Accrual” journal entry for $324.92. The amount will be charged against your FY23 budget through the accrual process and be reversed in FY24. When July billing information is received from ActivePay, the lab supplies will be charged to your department in FY24, with no impact to your FY24 budget.
When an item is purchased on a purchase order, encumbrance entries are made automatically in the general ledger to record the anticipated expenditure. An encumbrance is not an expense; it is for information and budget planning purposes only. The actual expense is not charged to your department’s budget until the merchandise or service has been received and the invoice is paid.
In June 2023 you ordered two cases of paper for your copier. When the requisition was placed and the purchase order generated, an encumbrance was recorded on your department supply line. The paper was delivered on June 19, and the invoice was approved for payment in Accounts Payable on June 26. At that time, the encumbrance will be reversed and the actual expense will be recorded on the ledger.
In June 2023 you ordered special forms to be delivered in August 2023. This expense will be charged to your FY24 budget since the order will be received after June 30, 2023. The amount of the order will be encumbered at the time the order is placed and it will be reflected on your June department statement in the encumbrance column. The actual expense will be recorded in FY24 when the special forms are received and the invoice is approved for payment. Open encumbrances at June 30 will be carried over into FY24.
Monthly Department Statements
There are two monthly department statements:
RIT – Dept Stmt – Excl Enc - contains an “Available Balance Column” that does not include encumbrances (Working Budget – YTD Actual = Available Balance) and the Encumbrance column is removed. Use this column to determine the actual balance remaining on each line of your budget.
RIT – Dept Statement - can be used monthly for planning purposes. The encumbrance column is included, the Available Balance column does includes encumbrances (Working Budget – Encumbrances – YTD Actual = Available Balance) and the Available Bal Excl Enc that does not include encumbrances (Working Budget – YTD Actual = Available Balance).