Je Best Practices 3-25-10

8/8/2019 Je Best Practices 3-25-10

1/6

Journal Entries Best PracticesUpdated 3-25-10

General Information:

A successful upload does not mean the journal has been posted. After it is uploaded it must bereviewed prior to posting in the General Ledger (GL). Currently all manual Web ADI journalsare reviewed and posted to the GL daily by the Financial Reporting or the Accounting Servicesstaff (Reviewer). The reviewer is not reviewing the journal via the WebADI template but rather through the Oracle GL; therefore, some information provided on the template is not readilyviewable and entry rows are re-sorted by the Natural Class value. (See Journal TemplateExample)

All journal entries can be set up to post multiple debits to one credit or a single debit andmultiple credits compound journal entries. Compound journal entries are especially helpful for inter department charges and allocations from a single chart string to multiple chart strings.

Correcting Transactions:

If you discover an error on your journal, you should check to see if the entry has been posted tothe GL. If not, changes can be made to the data by the Reviewer prior to posting. Changes thatcan be made include descriptions, chart strings, and amounts, or delete specific rows. Un posted

journals can also be deleted in entirety.

Posted journals can be reversed by the Reviewer by selecting the journal and clicking the reverse button. The reversal entry is created by the system and then posted so there's no need to uploadanother journal. The system names the journal to indicate it is a reversal and to include the

original name so the two journals can be easily matched for financial analysis.

Journal entries cannot be used to correct transactions posted to the GL by the following satelliteor Oracle subsystems (referred to as sources in the GL and IRA reports): Receivables, Payable,Advance, Banner, Benesoft, Cashiering, CBORD, Computer Store, The Daily Dartmouth,FAMIS, Inventory, OGA (Projects), Oracle Labor Distribution (OLD), Payroll, TelephoneServices (Pinnacle), Utilities Billing System, and Yardi. Please contact a representative for thesatellite or Oracle subsystems regarding what information they need to make the correction. (SeeCorrecting Transactions by Source).

Journal entries can be used to correct transactions from the Hanover Inn, PCard, Travel System,

and Resource25. Journal entries can also be used to correct transactions from a service/rechargecenter (the Source name will always begin with SRVCTR) but the natural class must remainin the Service Center range (7811-7826). Service Center transactions can also be corrected bythe Service Center. Journal entries to correct a transaction should not be done until the originaltransaction has posted.

1


2/6

Pcard transactions should be reviewed and then allocated to the correct chart string using thePcard system. The Pcard holder should have a backup designated to perform this task if they areout of the office. Once the Pcard system has posted to the GL, the only recourse for correction isa journal entry. These journal entries should be the exception to the rule rather than the normal

means to allocate Pcard charges.

Correcting Chart Strings by Journal Entry (if allowed):

When crediting an expense natural class in order to move a charge to another chart string,make sure the charge has been posted to the chart string being credited (including sub-activity).The same holds true when debiting a revenue natural class. Make sure that the revenue has been

posted (credited) to the chart string being debited (including sub-activity).

Example Original entry in GL debit $583.21 in 20.538.368000.426103.0000.7433

Incorrect credit $724.45 to 20.538.368000.426103.0000.7433(amount is greater than original entry)or

credit $538.21 to 20.542.368000.493214.0000.7434(incorrect org and natural class)

Correction credit $538.21 or less to 20.538.368000.426103.0000.7433

The Reviewer will look at the transactions in the chart string being credited when moving anexpense or the chart string being debited when moving revenue to see that the charge/revenuewas indeed posted to that chart string. When nothing is found to be moved or the entry is for more than the chart strings year to date balance, the entry will either be rejected or you will becontacted for more information.

In order to determine whether to debit or credit a chart string when correcting a transaction, youneed to know the balance of the transaction being moved (corrected). Expenses are debit or

positive balances, whereas revenues are credit or negative balances. Therefore, in order to movean expense, the string must be credited and to move revenue, the string must be debited.

A cash/credit card clearing natural class should be used when revenue, for example credit cardreceipts, posts to one chart string but include several types of revenue. Journal entries debiting acash/credit card clearing chart string are considered reasonable, whereas many debits to revenuenatural classes are not (exceptions may be allowed).

Example, incorrect Credit card deposit credit $400 4673 Other IncomeJournal entry debit $400 4673 Other Income

credit $150 4673 Fines and Feescredit $250 4657 Program Revenue

Example, correct Credit card deposit credit $400 1091 Cash Clearing Credit Cards

2


3/6

Journal entry debit $400 1091 Cash Clearing Credit Cardscredit $150 4673 Fines and Feescredit $250 4657 Program Revenue

WebADI:

Accounting Date The default is the current date, but you can choose any date from any open period. This is especially important at month end when two periods are open. During the firstthree or four business days of each month you may post to either the current month or the

previous month. For example, if you want the journal you are uploading on August 2 nd to post inJuly, it must have a July date.

Batch Name and/or Journal Name The batch name and journal name can be the same or different as long as one contains your first initial, full last name , followed by unique description.The first initial and full last name identifies the person uploading the journal entry in case that

person needs to be contacted about their entry. The unique description provides a uniqueidentifier for each journal on reports.

Examples S Munnro SC Billing 8-23D Pirel correct FY07

Journal Description For the reviewer, the description is the first key to understanding what theentry is doing in order to determine if the entry should be posted or not. It provides theinformation needed to determine if the entry is backwards, a prior year adjustment, or a reversal.If the entry is appropriate based on the description, it will be posted. If not, it will be rejected or further information will be requested, which all takes time. If you do not provide a description,one will be added for you by the system. This description, Journal Import followed by a number,is not meaningful to the Reviewer or readers of reports; therefore, a unique journal description isrequired.Examples Correct FY07 meal charges

Write off uncollectible receivable

When submitting a revised journal, due to an entry being rejected during the review process,include in the journal description Rejected JE resubmit followed by the journal descriptioninformation.Example Rejected JE resubmit refund overchg

Journal Amounts No line should include a zero amount or a negative amount in either the debitor credit columns.

Journal Line Descriptions If you do not provide a description, one will be added by the system.This description, Journal Import Created, is not meaningful to the reviewer nor does it addhelpful information to reports; therefore, journal line descriptions are required. They can beindividually unique or the same on all lines. This information appears on the journal reviewscreen and is used by the reviewer to determine appropriateness of the entry; therefore uniqueinformation about each line should be included here rather than as Additional Line Info.Examples Prof Rivars Aug

FY08 program funding

3


4/6

Additional Line Info This information is not readily viewable by the reviewer and the systemdoes not add information here if left blank; therefore, this information is not required (is requiredwhen using Transfer Natural Class Values). This information, however, can be viewed on

reports, so it may be beneficial for the reader of a report to have this additional information.(This field could be used for the offset chart string, ie where the transaction is being movedto/from).

Successful Upload You should always note the number of rows being uploaded and verify thatnumber with the xxx rows successfully uploaded message you receive. This is extremelyimportant for large entries where every row of the journal is not viewable on one screen andtherefore the green smiley faces cannot be readily seen for all rows. This will ensure that ALLrows were uploaded successfully. We have discovered a few instances where rows inserted atthe end of an entry were not included in the upload probably due to a formatting change.

Inter Department Transactions: There are two types of inter department transactions: (1)inter department services should use internal revenue and expense natural classes (see InternalRevenue and Expense Natural Class Use) and (2) departments sharing costs or one departmentassisting with the funding of another departments costs have the option of either splitting thePO/invoice into two or more chart strings or recording a transfer using transfer natural classes.Generally, sharing costs by crediting an expense natural class is not allowed.

Inter department transactions (transactions between entity values < 40) occur any time onedepartment charges another for services provided. Some examples would be use of onedepartments photocopier by another department, a rental of a meeting room at the Skiway,

printing services provided by DPMS, meals/rooms provided by the Hanover Inn, and Vox car rentals. The provider of the service (ie. the department recording the inter department revenue)determines the correct natural classes to use and submits the journal entry. Inter departmentrevenue and inter department expense must net to $-0-. These are internal transactions whichmust be accounted for separately from the Colleges real (external) revenue and expenses.

There are three categories of inter department revenue/expense natural classes. Service andRecharge Centers must calculate rates to charge for their services, submit this rate documentationto the Controllers Office annually, and record revenue and expense in natural class ranges 4811-4825 and 7811-7825, respectively. All other departments must use inter department naturalclasses, 4851- 4883 (revenue) and 7851-7883 (expense).

When recording an inter department transaction, inter department revenue must equal inter department expense. Inter department revenues are in the 48xx natural class range and inter department expenses are in the 78xx natural class range. There is a direct relationship betweenthe revenue and expense natural classes for each type of service.Example debit 4862, credit 7862.

4


5/6

Transactions posted to inter department expense natural classes cannot be moved to externalexpense natural classes.

Example of an unallowed journal entry debit 8151 Non Travel Meals Localcredit 7857 Inter Dept Meals Beverages

Inter department expense can be credited if the debit is to another inter department expensenatural class, but there must be an inter department expense recorded in the chart string beingcredited. There must be sufficient reason to make a correction since it is the provider of theservice who determines what expense natural class to use.

Example Original entry in GL debit 7869 Inter Dept ServicesCorrection debit 7864 Inter Dept Waste Removal

credit 7869 Inter Dept Services

Transfers:

Transfers are the means for departments to provide general support to other departments. Thissupport has nothing to do with providing services (use inter department natural classes) or splitting of specific costs (split the invoice using expense natural classes). Transfer naturalclasses are based on funding or activity values. The chart string providing the funding is debitedand the chart string receiving the funding is credited. To determine what transfer natural class touse, refer to the Transfer Natural Class Chart (Transfer Matrix).

Transfers to a restricted funding source (535000-784699) from any other funding source is onlyallowed if it is agreed that a portion of a specific cost will be funded by the unrestricted funding.The WebADI journal template and documentation of the agreement (as a separate tab in theWebADI template or separately) must be sent to the Reviewers after uploading the journal sothey can determine if the entry should be posted or not. Transfers out of RFM (Restricted FundsManagement) category level 4 are not allowed.

Entries to Balance Sheet Natural Classes :

The balance sheet funding value - 909000 must be used in combination with the followingtypes of balance sheet natural classes (assets and liabilities)(1000-2999): cash, cash on hand,

petty cash, clearing chart strings, revenue receivables, allowance for doubtful accounts, prepaidexpense, inventory, deferred charges, investments (purchase of and realized gains/losses),auxiliary capitalized fixed assets, auxiliary accumulated depreciation, deferred revenue, accounts

payable, and other short-term liabilities.

The following types of balance sheet natural classes (assets and liabilities) are not used incombination with the balance sheet funding value 909000: notes and loans receivable, internalloans receivable/payable, non-Auxiliary capitalized fixed assets, non-Auxiliary accumulated

5


6/6

depreciation, gifts in kind, real estate for sale, long-term liabilities, and bonds/notes payable. For these balance sheet natural classes, use the same funding value as the offset chart string.

The balance sheet activity value - 910000 - is used with the following balance sheet naturalclasses (assets and liabilities) when the Institutional entity 001 is used: cash, accounts payable,

cash advances, fringe pool.

6

Documents

Je Best Practices 3-25-10