Month End Procedures FPM

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  • Finance Division

    The Financial Procedures Manual

    Chapter 10

    MonthEnd Guidance

    Also available on-line at: Issued: May 2006 http://www.admin.cam.ac.uk/offices/finance/procedures Revised July 2010

  • Month-End Guidance

    Finance Division

    Contents

    1. Purpose of Month-End Procedures 2 2. How to use this Guidance 3 3. Month-End Timetable 3.1 Overview of Processes 4 4. Detailed Month-End Guidance 4.1 Purchasing 5 4.2 Accounts Payable 5 4.3 Accounts Receivable (including Internal Trading 6

    & Banking) 4.4 Inventory 8 4.5 Fixed Assets 8 4.6 Grants 9 4.7 General Ledger 9

    5. Glossary of Terms 10

    Version 2.2 July 2010

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  • Month-End Guidance

    Finance Division

    1. Purpose of Month-End Procedures Month-end procedures are tasks performed every month (or period) prior to and following the closedown of the relevant CUFS modules (e.g. the General Ledger). CUFS modules are closed down for each period as this provides a clear cut-off point to review (or to report on) the financial position of the department/University. It is good practice to closedown financial systems for each period to allow the institution to compile its management accounts (e.g. showing the actual expenditure v. budget) to assess its financial position. Therefore, month-end procedures will involve running reports to check transactions and balances, as well as preparing management accounts to assess the financial position of the Department. Departments should ensure that a member of staff is responsible for ensuring month-end procedures are completed typically the Departmental Administrator.

    The benefits to Departments of month-end procedures include:

    Providing a cut-off point on which to report on the financial position of the department. This is essential for accurate management reporting.

    Helps to ensure transactions/invoices are processed in the correct GL period.

    Prevents backposting of transactions by closing off earlier periods so

    previously reported financial information is not affected.

    Improving your efficiency by routinely completing pre-planned procedures to a set timetable.

    Helps with the preparation of your departments year-end accounts.

    Helps to improve the Universitys financial position by:

    ~ allowing good quality management information to be produced for better decision-making; ~ for collecting debts from our customers more quickly; and ~banking receipts more promptly

    This document provides a summary of the general departmental month-end procedures. It is intended for the guidance to be flexible and departments may wish to amend and add to these procedures based upon their own organisational requirements. As such this document only provides a guide of minimum best practices for departments and does not represent a definitive list of month-end procedures.

    Version 2.2 July 2010

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  • Month-End Guidance

    Finance Division Version 2.2 July 2010

    2. How to use this Guidance This guidance sets out the key procedures that departments should be undertaking each month, analysed within each CUFS module. It has been prepared in the context of the Universitys overall month-end timetable. The guidance can be adapted by departments to meet their own requirements. This guidance should be used together with the Finance Training Manual - `How to Run Month-End, which expands upon these instructions to include the relevant CUFS reports.

    3. Month-end Timetable The closing dates for each ledger are as follows: Module Working Day 3 Working Day 4 Working Day 5 Accounts Receivable Accounts Payable Grants Inventory Purchasing Last day for Deposit Movements General Ledger Fixed Assets September Month End 5 October 2010 6 October 2010 7 October 2010 October Month End 3 November 2010 4 November 2010 5 November 2010 November Month End 3 December 2010 6 December 2010 7 December 2010 December Month End 5 January 2011 6 January 2011 7 January 2011 January Month End 9 February 2011 10 February 2011 11 February 2011 February Month End 3 March 2011 4 March 2011 7 March 2011 March Month End 5 April 2011 6 April 2011 7 April 2011 April Month End 4 May 2011 5 May 2011 6 May 2011 May Month End 3 June 2011 6 June 2011 7 June 2011 June Month End 5 July 2011 6 July 2011 7 July 2011

    Working days for each month except January which is extended by 4 working days.

    All modules will close at 5pm on the stated days.

    How to Run Month-End Manual available at: http://www.admin.cam.ac.uk/offices/finance/training/manuals

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  • Month End Guidance Module

    Last working day of calendar month 3 4 5 6 7

    Purchasing

    Accounts Payable

    Accounts receivable (inc. Cash and Banking and Internal Trading )

    Grants

    Inventory

    Fixed Assets

    General Ledger

    GL Module Closed

    Run and Action Open PO (UFS) Report

    Run Invoice Register Report

    Run Invoice on Hold Report

    Run Incomplete (AR) Invoices Report AR Module

    Closed

    Claim BACS receipts from weekly F.D. spreadsheet

    Expenditure posted to dummy suspense Grants should be corrected Grant

    Module Closed

    Journal expenditure to match correct income (source of funds)

    Review and clear departmental suspense accounts/review GL accounts for miscodings and correct as necessary

    Review and process journals for deposit account movements

    Inform Finance Division of fixed asset disposals

    AP Invoice (tick Track as Asset box)

    Run Material Distribution report

    Stocktake or cycle count

    Inventory Module Closed

    Review status of all grants on a cyclical basis

    Funds check failures should be reviewed and cleared

    Internal Trading: raise any AR invoices/process any AP invoices

    Arrange for banking of monies

    Run Receipt Register Report and complete receipt batches

    Run Unapplied Receipts Register

    AP Module

    Closed

    PO Module Closed

    Run Budget v. Actual Report (UFS)

    Fixed Assets Module Closed

    Run Value of Inventory report

    Run Fixed Asset Additions report

    Review the Departmental Summary Report distributed by Finance Division

    Process petty cash journal

    Credit control procedures send Dunning Letters

    Run Ageing 7 Buckets by Account report

    3.1 Overview of Processes

  • 4. Detailed Month-End Guidance 4.1 Purchasing An overview of the purchasing cycle is given as follows:

    Supplier Receipt Payment to Requisition Selection Purchase Order Goods/Services Supplier

    Purchase Invoice Payment

    Receive Goods and Services

    Raise Purchase Order

    Quotations Contracts Pre-Suppliers

    Raising an internal purchase requisition

    Although raising a purchase order creates a commitment on CUFS, once goods/services have been received then this becomes a legal obligation to pay the supplier. Prior to the month-end we should establish that any incomplete purchase orders are actioned and closed.

    Quarter-End Guidance - Purchasing

    Each quarter-end run Open Purchase Orders Report (UFS) to identify incomplete purchase orders Close purchase orders by receiving the goods, matching against the invoice, /cancelling the order or manually closing the order.

    4.2 Accounts Payable Accounts Payable (AP) describes the procedure for processing supplier invoices and employee expense claims, and other disbursements processed via the AP module. A summary of the AP cycle is given as:

    Invoice Entry Coded to an Account Approval Payment

    Payment of Supplier/ Employee by Cheque: Finance Division

    Primary and Secondary Approval of Purchase Invoices

    Matching Invoices to Purchase Orders (where raised) ~coded directly to relevant account/project

    Enter Invoice Using the Batching System

  • Month-End Guidance

    Finance Division

    Version 2.2 July 2010

    Month-End Guidance Accounts Payable

    Approve all AP invoices for the month (this is ongoing). Review supplier statements and check all invoices are secondary

    approved/or current (i.e. not due for payment). Review employee expense claims/advances to ensure they are up-to-date

    and processed Review credit card statements to supporting receipts/vouchers and journal

    expenditure from the department suspense account to relevant cost centre. Run Invoice Register (CAPSA) report to identify invoices not primary

    approved. Run Invoices on Hold (CAPSA) Report to list invoices placed on hold and

    then action all holds, as necessary. Review and approve any invoices that are coded to a project and are now

    unapproved as a result of the AP Tie Back process.

    4.3 Accounts Receivable (Including Internal Trading &

    Banking) Accounts Receivable concerns income generated from sales for services rendered with the following steps being involved.

    Send to Debt Invoice Customer Receipts Management Credit Control

    Statements/ Dunning Letters

    Income Collected and Receipted

    Invoice Sent to Customer

    Raise Sales Invoice

    It will be necessary to raise sales invoices promptly to ensure income is collected quickly. 4.3.1 Internal Trading Internal Trading refers to inter-department (internal to the University) purchases and sales when one department trades (sells goods or services) to another department. Dept A Dept B Finance Division Sales Invoice Action Invoice Reviews

    Disputes

    Raise Internal AR Invoice

    Locate Internal AP Invoice on CUFS, code to appropriate Dept account & approve.

    When invoices are disputed, queries should be resolved by referring to Head of Department in the first instance. Final Arbitration is with the Finance Division

    Finance Division Reviews Matching of AP and AR Invoices

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  • Month-End Guidance

    Finance Division

    4.3.2 Banking It is important to ensure that all monies (cash and cheques) received during the month are banked and receipted promptly and at least weekly. It will also be necessary to balance your petty cash float each week.

    Month-End Guidance Accounts Receivable (AR)

    Complete AR invoices, credit notes and batch receipts for the month (this is ongoing).

    Print and send AR invoices and customer statements. Print and send Dunning letters as part of credit control. Run Incomplete Invoices report to identify any incomplete sales

    transactions and complete/cancel transactions as necessary. Run Unapplied Receipts Register to identify any receipts unapplied to

    specific invoices and match these receipts to the invoices report. Run Ageing 7 Buckets by Accounts report to show invoices with no

    remittance, and review use for credit control. Review and write-off bad debts (with the Head of Department approval).

    A. Internal Trading

    Raise Internal Trading AR invoices promptly to departments in accordance with agreed terms.

    Process Internal Trading AP invoices promptly (within the same month if possible)

    Review and agree Internal Trading invoices in dispute and refer to arbitration as necessary.

    B. Banking

    Complete all receipt batches for cash and cheques received on or before the last day of the month.

    Run the Receipt Register report for cash receipt batches. Arrange for banking of all monies received up to the last day of the month

    (including vending machines, photocopier sales, pay phones, key deposits). Claim BACS receipts/bank transfers from the weekly Finance Division

    spreadsheet. Process monthly petty cash journal for balancing your petty cash float.

    Version 2.2 July 2010

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  • Month-End Guidance

    Finance Division

    4.4 Inventory These procedures only apply to departments using the CUFS Inventory module. It will be important for the departments with stores to ensure an accurate record of stock is maintained and that stock is allocated accurately within the department.

    Month-End Guidance Inventory

    Ensure stock is physically secure (on-going) Complete all inventory issues and recei...

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