KUALI FINANCIAL SYSTEM (KFS) ACCOUNTS RECEIVABLE TRAINING WELCOME! SEPTEMBER 2015 JIM HEWLETT ANALYST
High-Level Overview What is Accounts Receivable (AR)? High-Level Overview of AR Process, Authorization, Separation of Duties, Policies and Procedures AR Maintenance Documents AR Transaction Documents AR Reporting in KFS and FIS Decision Support (DS) Other Help Resources
Note on this Training In addition to KFS AR, departments have option of using Banner or establishing Feeds for AR transactions This training does not cover those options Refer to the Accounting website for more info on Banner and Feed options (go to afs.ucdavis.edu, click on Systems Information, and Document Help for help instructions/information on Accounts Receivable for KFS AND Banner)
What is Accounts Receivable? Accounts Receivable (AR) represent money due for services performed or merchandise sold to external nonuniversity customers (e.g., individuals and organizations outside UC Davis).
Accounts Receivable Process 1. Receive authorization to sell goods or services (if more than $500/year) 2. Provide the good or service 3. Invoice for the good or service 4. Run monthly aging reports 5. Collect payment, or send billing statements 6. Write off as bad debts (as last resort)
Accounts Receivable Authorization Process Billing for less than $500.00 annually (total across ALL customers) - Department chair approval is generally the only approval needed, with completed/signed business contract. See http://manuals.ucdavis.edu/ppm/340/340-09.pdf Billing for $500.00 or more on a ONE-TIME basis - Submit a completed Special Sale/Service Authorization form to the Contracting Services Office.
AR Authorization Process Billing for ONGOING services or goods - If your department plans to provide ongoing fee-based services or goods to UCD departments, other UC campuses, or to external parties, your department should request a rate (contact your dean s office for assistance). After rate has been approved, Accounting & Financial Services (A&FS) will assign fund number for activity (assigned to self-supporting sub-fund group). Billing for agricultural by-products - Submit a Request for Disposition of By-Products form (see http://manuals.ucdavis.edu/ppm/340/340-09.pdf) Additional situations (e.g., teaching aids, surplus property, etc.) addressed in http://manuals.ucdavis.edu/ppm/340/340-09.pdf
AR Separation of Duties No one person should have complete control over all AR functions. Should be two different roles/persons: #1: Person collecting cash and issuing cash receipts (cash includes checks and credit card transactions) #2: Person performing the monthly ledger review/maintaining Accounts Receivable records
AR Policies and Procedures University AR policies/procedures are posted at http://manuals.ucdavis.edu/ppm/330/330-90.pdf
Let s go through the KFS AR Process! Process starts with setting up your organization options and defaults, including phone # and account information (if not already in KFS) Next, you will set up information on the goods/services for which you will be invoicing (if not already in KFS) Then you will set up your Customer information (if not already in KFS) Finally, start invoicing!
AR Maintenance Documents Maintenance Documents are accessible from the Reference Tables tab in KFS The ones that departments use are highlighted here:
AR Maintenance Documents Each Maintenance Document starts with a Lookup screen to ensure that what you want to create is not already in the system In search results, Edit link will only appear if the organization is one to which your KFS user ID is assigned In search results, Copy link allows you to create a new attribute based off of the existing organization data After confirming that the attribute is not in KFS, click on the Create New button in the upper right corner
Organization Options Defines the SPECIFIC organization under which customers will be invoiced. Data from this document is used on printed invoices and statements. Completion of this document enters the organization into the Organization Options table. EACH organization that uses KFS Accounts Receivable must have an entry in this table. In other words, if you wish to set up AR billing for three separate organization codes in your department, you will need to complete three Organization Options documents (as well as the other AR Maintenance documents).
Organization Options The Chart and Organization assigned to your user ID in KFS default in the Billing Chart and Organization fields, but you can override this information if you are creating this document for a different organization (not common). The Billing Chart and Organization are for the department that is creating the invoices; the Processing Chart and Organization are used for the department that processes the invoices. Users in the Processing organization can complete the Application and Application Adjustment documents (to be discussed later in this training).
Organization Options For most departments, the Processing Chart and Organization are the same as the Billing Chart and Organization. If each of your orgs are set up in KFS AR, you can process AR invoices for those orgs that are part of your organization hierarchy
Organization Options Enter the Organizational Postal Code. For organizations located on the Davis campus, be sure to add the 4-digit zip code extension of 5270. Enter the Message Text that you want printed on your invoices. Enter a departmental contact Phone Number for AR related inquiries
Organization Options: Routing If Organization Options are being set up for the first time, the Document will route for approval to the Dean s Office for which your organization reports If edits are being done to data for an organization where an initial Organization Options document has already been processed, there will be no automatic routing
Organization Options
Organization Accounting Default The Organization Accounting Default (OADF) document is used by organizations to establish or maintain the KFS accounts and objects that will be used to record an organization's AR transactions. The information entered on this document defaults on invoice and payment documents. If necessary, it is possible to override this default information on the Customer Invoice document
Organization Accounting Default Enter the FY (Fiscal Year) and the COA and Billing Chart and Organization Enter the accounting information that will be used as the Org Income Account Defaults, which is the credit side of the transaction when invoices are generated. Most non-school of Medicine departments use Object 0060; SOM often uses different object codes.
Organization Accounting Default Enter the accounting information that will be used as the Org Receivable Account Default, which is the debit side of the transaction when invoices are generated. This account can be a separate (balance sheet) receivable account in the department organization (contact General Accounting to set up a new account) or the accounts will be the same account entered in the Org Income Account Default section. Enter Object 0299 (Accounts Receivable) in the Object field. Enter the accounting information that will be used as the Org Income Account Default, which is the credit side of the transaction when invoices are generated. This account will record the income earned. For most departments, the object entered in the Object field will be 0060 (Income). Note: If you are invoicing from a General Fund (SFGT=3,G) account, you must use a reimbursement object in the Object field (720R) as income (0060) is not allowed in General Fund accounts. General Funds should not be used for ongoing sales activities.
Organization Accounting Default Enter the account information that will be used as the Org Writeoff Account Default for your organization. In most cases, the account will be the same account entered in the Org Income Default field. In the Object field, enter 7360 (Bad Debt Expense). If you want to charge bad debt to a revenue account (IN Account Type), use object 0064 (Income Writeoff) in the Object field.
Organization Accounting Default: Routing Document routes to the Fiscal Officer(s) assigned to the account(s) cited on the document for review and approval
Organization Accounting Default
Customer Invoice Item Code The Customer Invoice Item Code document is used to identify all goods and/or services that an organization sells to an external customer. An organization should assign specific accounting information to each item Having account info assigned to each item saves data entry time on the Customer Invoice document! Invoice item codes are unique to your organization. This accounting information is then searchable on the Customer Invoice document.
Customer Invoice Item Code The Chart and Organization assigned to your user ID defaults on the document. You can override this information if you are processing this document for a different organization. If you change the Chart/Organization, the defaults assigned to that organization will display Enter an Item Code (up to 6 characters); the item codes are unique to your organization. Enter a Description for the item code. Enter a Stock Number for the item code, if you have one. Enter a Unit Price for the item code. If the price will vary, you can leave this field blank and manually enter it on the invoice document.
Customer Invoice Item Code For new item codes, the Tax Indicator default is No (unchecked). If the item is taxable, check the box. Note: Services are generally not taxable while goods are. Please contact Tax Accounting to determine if your product is taxable and whether it must be reported as Unrelated Business Income Tax (UBIT). The accounting information will default based on what was entered on the Organization Accounting Default document and will be the account credited for the items billed. Remember: General Funds accounts (those with a sub-fund group type of G ) may not be used to record income.
Customer Invoice Item Code: Routing Document routes to the Fiscal Officer(s) assigned to the account(s) cited/any applicable Organization Review hierarchies on the document for review and approval
Customer Invoice Item Code
Customer Customer document is used to add or maintain information for all persons, companies, groups, etc. that are to be billed for items or services provided by an organization within the university. This document can also be used to maintain notes regarding the customer. This document routes to A&FS for review and final approval Customer codes are NOT unique to your organization Before adding a new customer record, use the Lookup screen to make sure Customer record is not already in KFS!
Customer Enter a customer name, and select a Customer Type by clicking the dropdown arrow. The type of customer drives what other fields are required. Generally should enter Customer Name as First Name followed by Middle Name (if applicable) and Last Name
Customer: Tax Information Tax information is Optional (UCD PPM 320-22), and should ONLY be entered in appropriately identified fields If an Individual, you can enter Social Security Number (SSN), or for non-individuals, the Federal Employer Identification Number (FEIN) field NOTE: The FEIN and SSN are encrypted in KFS; once entered, only authorized KFS users will be able to see this data. Check the Tax Exempt Indicator and complete the Resale/Tax Exempt Number field, if the customer is exempt from paying sales tax. Tax information should NOT be entered in the NOTES section of the Customer document
Customer Enter an Email Address, Phone Number for the Customer If there is a different contact person from the Customer, complete the Contact Name and Contact Phone Number fields Enter at least one address for the Customer; if only one address is indicated, it should be identified as Address Type of Primary If editing an existing Customer record, you can add additional addresses, but you should not create a new Customer record if all you need to do is add a new address for a Customer already in KFS
Customer: Routing Document routes to A&FS for review and approval
Customer
Customer
AR Transactional Documents AR Transactional Documents are available on the Main Menu in KFS Once your departmental AR maintenance data is in KFS, you can invoice your customers
Customer Invoice Used to create the invoices sent to external (non-campus) customers for goods and/or services sold by the university.
Customer Invoice: Routing Document routes to the Fiscal Officers/any applicable Organization Review hierarchies for review and approval
Customer Invoice: Printing The Customer Invoice can only be printed AFTER the required approvals have taken place A Generate Print File button will appear at the bottom of the document Any KFS user can print the invoice Let s complete a Customer Invoice document and then we ll show you what the printed invoice displays
Customer Invoice
Customer Invoice
Customer Invoice
Customer Invoice: Related Documents Tab The Related Documents section displays all of the related activity (e.g., Credit Memos, Application, Application Adjustments)
Customer Invoice: Printed Invoice Header Text field displays here Invoice Number is KFS Document # Message Text field from the Organization Options document displays here Customer Purchase Order Number field displays here Organization Invoice Number field displays here
Customer Invoice: Printed Invoice
Customer Invoice: Post Approval/Payment Processing When the Customer Invoice document is Fully Approved, the cited Income Account is credited. Departments do not process customer payments.
Customer Invoice: Post Approval/Payment Processing Payments are received and processed by the Cashier s Office with the creation of an Application document (or Application Adjustment document to correct a previous payment issue). As payments are posted against the invoice, the cited Receivable Account is debited If an overpayment is received, the amount that is overpaid is placed in an Unapplied bucket for the organization to apply at a later time (either on the Application Adjustment or Application document)
Customer Invoice: Voiding If a Customer Invoice is issued in error (and no payments have been processed), you can void it by clicking on the Void button at the bottom of the fully approved Customer Invoice document
Customer Credit Memo Used to post a credit to a customer's account Starts with Customer Invoice Lookup to locate invoice to credit The Customer Credit Memo can be used as long as the referenced Customer Invoice is fully approved and open. When entering a credit line on the Credit Memo: Only enter quantity or price; do not enter both. The number in the Quantity or Price field is the number to reduce the invoice by.
Customer Credit Memo: Routing Document routes to the Fiscal Officers/any applicable Organization Review hierarchies for review and approval
Customer Credit Memo
Customer Invoice Writeoff A write-off is the classification of unrecovered revenue as a bad debt, and removes the balance from the customer's account and charges the amount as an expense to the department. Write-offs are done to remove balances for which collection efforts have not been successful
Customer Invoice Writeoff The referenced Customer Invoice must have an open amount A note is required in the Customer Information section to identify the business reason for the writeoff
Customer Invoice Writeoff: Routing Document routes to the Fiscal Officers/any applicable Organization Review hierarchies for review and approval If the writeoff is for $50 or more, the document will also route to A&FS for approval
Customer Invoice Writeoff: Writeoffs should be rare
Application Adjustment This document can be used for correcting payments posted to the wrong customer and invoice. It can also be used to reverse a payment and refund the customer for an overpayment at the same time!
Application Adjustment The first time an adjustment is made, the user is required to enter a Payment Application document number If creating an adjustment for a Payment Application where another adjustment has already been processed, the previous Application Adjustment document number should be entered System will validate that the document number entered is assigned to the organization for which the user is assigned; the system will not allow a user to apply payments that do not belong to their organization
Application Adjustment Four actions can be performed on the document: Move a payment to another invoice within the same organization Refund the customer Return to C.O. (Cashier s Office) Manage the unapplied payments The Return to C.O. option is generally used when a department has received a payment in error from a customer and there aren t any open invoices within that organization for which it can be applied Once payment is distributed to the Cashier s Office or Refunded to the Customer, that $ is NO longer available for future adjustments
Application Adjustment: Routing Document routes to the Fiscal Officers/any applicable Organization Review hierarchies for review and approval In addition to the above routing, doc routes to A&FS for approval when the selected action is a refund or referred to central office
Application Adjustment
Application Adjustment
Application Used by Cashier s Office to Apply Payments based on departmentissued Customer Invoice documents As mentioned earlier, departments do not process payments made against Customer Invoice documents, but departments can use the Application document to manage Unapplied payments (overpayments)
Application Document is a good alternative to the Application Adjustment document if all you want to do is deal with your organization s Unapplied payments. Save time! Quick Apply functionality allows you to apply multiple unapplied payments at one time! NOTE: An organization can ONLY process Unapplied payments assigned to their organization or subordinate billing organizations.
Application: Routing Document routes to the Fiscal Officers/any applicable Organization Review hierarchies for review and approval
Application
AR Reports in KFS AR reports in KFS can help you manage your departmental KFS AR activity There are also options which allow you to print billing statements for invoices for which the customer has not made payment
Billing Statement Generation Enter the desired search criteria for generating billing statements for customers; refer to the A&FS website for timelines on when billing statements should be sent
Billing Statement Generation (Page 1)
Billing Statement Generation (Page 2)
Customer Aging Report Use this report to determine when you need to send Billing Statements to your customers Hopefully your Customer Aging Report won t have this many invoices that are this outstanding!
Customer Invoice This report option allows departments to print multiple Customer Invoices at one time when entering a From and To Date in the search criteria Alternative to printing out individual Customer Invoices (as previously discussed)
Customer History Summary Manage your Customer Billing and Payment History in one convenient location!
Customer History Detail Manage the timeliness of payments made by your customers
Customer Unapplied Payment Summary Use the information on this report to create any needed Application or Application Adjustment documents
Customer Unapplied Payment Detail Manage the timeliness of payments made by your customers
AR Reports in FIS Decision Support (DS) As an alternative to the KFS AR Reports, the FIS DS reports can be helpful since you can include subordinate organizations in your results
Unapplied Payments (FIS407) Displays information on overpayments that have not been applied on an Application or Application Adjustment document
Customer History (FIS408) This report includes KFS Customer History from the time of KFS AR go-live and any still OPEN DaFIS Invoices It does not include information on CLOSED DaFIS Invoices
AR Aging Report (KFS) (FIS409) Manage the timeliness of your customers payments for all of your organizations (including subordinate orgs) in one report!
Best Practices in KFS AR When creating codes (such as for Invoice Items, etc.), use only alpha and numeric characters and NO blank spaces Use the Organization Reference Identifier field on the Customer Invoice Item Code and Organization Accounting Default documents, and that information will display on your ledger reports (helps identify transactions more easily) Don t create new addresses for Customer unnecessarily Don t write off Customer Invoice except as a last resort
Help Resources Accounting website: http://afs.ucdavis.edu.ucdavis.edu ://afs.ucdavis.edu tp://afs.ucdavis.edu FIS Help Desk: (530)752-3855 OR fishelp@ucdavis.edu help@ucdavis.edu We want to ensure your success in KFS!
Thank You for Your Time!