TRAINING Accounts Payable Year End Close Process Presented by: Sandra King, Office of Business Services

Welcome FY09 Accounts Payable Year-End Closing Workshop June 16, 2009

Topics of Discussion  Year end process and your role in the close  Key dates for submitting items to our office related to:  Vendor Invoices  Accounts Payable and Travel Payments  Petty Cash & Employee Reimbursements  Invoices Corrections  Accruals  Carry Forward Purchase Orders  Check Deposits

GOAL  To close the accounting books on time  To close the accounting books accurately  Ensure all vendors, employees and students payments are recorded in the proper year

What is the Fiscal year?  Montgomery College’s fiscal year runs from July 1 to June 30th  A new Fiscal Year starts on July 1.  Specific year end deadlines are set in order to close the books and prepare the financial statements

Closing DEADLINES Closings:  June 15 th Last day for P-card Charges  June 30th Last day to submit the following Petty Cash Reimbursement Local Travel under $25  July 10 th, all FY09 invoices, travel, employee reimbursements

So how are we going to achieve our goals?  By staying current ensure all payment requests for FY 09 has been forwarded to Accounts Payable  Meet or beat the deadlines dates(making sure invoices are in the hands of Accounts Payable and not inter office mail by the due dates  Ask for clarification and help  Ensuring you have received invoices from vendors and all Goods & Services must be completed and received by June 30, .

What Determines the fiscal Year? Completed or Date of Receipt of Goods and Services Determines fiscal year  If received before June 30 th -FY09  If received after June 30 th -FY10

Blanket Purchase Orders  All (B#) Blanket Purchase Orders will be closed as of June 30 th.  Departments must make sure they have received and approved all invoices for the blanket purchaser order  If not, contact the vendor immediately to send the invoices to Accounts Payable  Example –June payment for a lease

What happens if the final June invoice is not received by June 30 th for Blanket Orders or other types of payments  You must contact the vendor immediately to forward an invoice to Accounts Payable  If no invoices is received by July 10 th, you must submit an accrual listing with information to Accounts Payable

Definition of an Accrual  What is an accrual? If goods have been received or services performed prior to June 30 th, the related expense must be recognized in the current fiscal year regardless of whether the goods/services have been paid for

Account Payable - Accruals  Accruals will appear on your June ledger  The accrual will be reversed on your July ledger  The actual invoice payment will hit your ledger in the month paid in the new year. This charge and the accrual reversal in July should net to $0 in the new year.  If invoices are over the accrued amounts the differences will be charged to the next fiscal year

ACCRUALS  At the end of June, Accounts Payable has to accrue our obligations. An obligation is any amount the University owes. In Accounts Payable, we base the obligation amount on three things: Amount of unpaid invoice. Amount of items received, but not yet paid. Amount reported by colleges or departments.

EXAMPLE  Example: Accrual  Submit a PO for a computer costing $3,200 in May  The computer is received in June  The invoice is received and processed in July (in new fiscal year)  Because the computer was received before year end, it represents an expense to fiscal year 2009

Fiscal Year _____________ MONTGOMERY COLLEGE ACCOUNTS PAYABLE ACCRUAL REQUEST FORM Fund, org, account, program Dollar AmountVendor NamePO# Inv or Order # Date Received- goods/servic esReason For Accrual Example $1,500.00Formost Printing Inc A /11/09 Invoice not received by 6/30 ` NOTE: ONLY FOR GOODS & SERVICES RECEIVED PRIOR TO JUNE 30. **SUPPORTING BACKUP DOCUMENTATION MUST BE ATTACHED (Contract, Packing List, Quote, Invoice) Must be received in Accounts Payable no later than July 10. Account Manager's Signature: Date: Ext.______________ Account Manager (Print) Departme nt: PRINT FORM MAIL TO: Accounts Payable, MKE 230-Attn Sandra King, AP Manager

Where can I find the accrual form?  The accrual form is located on the Accounts Payable website 

Accrual Form Required Information Accrual Information Required Vendor name Amount Account number Account manager approval Purchase order number Supporting Backup Reason for Accrual

Accrual Documentation  Documentation To support your accrual request is also needed and may include the following:  Copy of the PO,  Contract for services  Packing Lists  Order Form/Confirmation  Proof of Delivery Receipts  Written documentation from vendor on letterhead

Carryover Encumbrances/ Purchase Orders  What are carryover encumbrances/purchase orders? Purchase orders that are established in current fiscal year (FY09) but, no payment and receipt of goods or services are not completed by June 30, 2009.

What should be done if I have a carryover purchase order?  A listing must be completed using the carry over request form online and forwarded to Accounts Payable by July 10,  Written details supporting the carry forward purchase orders must be provided  There can be no changes to carryover purchase orders. Any differences over the purchase orders are paid out of the next fiscal year.

Important to Know about Carry Forward Purchase Orders  NOTE  payment will not be made to vendors until August of the next fiscal year once FY09 budgets are rolled and the year is closed.

Questions

Invoice Corrections  Journal entries-account cleanup CUT off Date is July 10, 2009 for all corrections  Invoice journal correction form must be completed and forwarded to Accounts Payable with supporting backup documentation.  During the year, there is only one cut off date to get journals in for the month. There is no provision for corrections and adjustments after the cut off date for that year. They must be posted into the next fiscal year.

Accounts Payable - Prepaid  Expenses for the coming fiscal year that require payment prior to July 1 st can be submitted to Accounts Payable clearly marked FY 10  Examples: Subscriptions and membership renewals, insurance, etc.  A prepaid account is used when payment is made in FY09. An entry is made in July to charge your department account.

Accounts Payable-Final Cut off Date  All invoices, travel and requests for payment must be received in Accounts Payable no later than July 10, 2009, at 5:00 p.m.  Accrual listing and supporting backup is due for goods and/or services received by June 30,  Carryover purchase order requests form are due by July 10, 2009.

Removing PO Encumbrances  Encumbrances remaining on Purchase Orders (POs) as of June 30, 2009 are carried forward to FY 2010  If the departments would like encumbrances on regular purchase orders removed before they are carried forward into the new year, please submit the request to Accounts Payable by June 30th

Travel & Employee Reimbrursement  All local and long distance travel completed as of 6/30 should be recorded as an expense of FY 2009  All travel reports and employee reimbursements processed before 6/30 will be charged to FY 2009  All travel reports and employee reimbursements submitted after 7/10 will be paid out of the next fiscal year FY10 budget.  The department must submit paper work and orginal receipts to Accounts Payable by June 30, 2009.

Deficits/Over Expenditures  Units are responsible for monitoring balances in their accounts throughout the year.  A deficit is when the cash balance in general ledger is negative.  Deficits must be cleared in a timely manner, but no later than June 30 th (fiscal year end)

REFUND CHECKS FOR DEPOSIT  Do not hold checks. Please bring all checks sent directly to your department to the Cashier’s window as they are received.  Cash Closing – done on June 30th  June 30 th deposits will be recorded to fiscal 2009  If you deposit money after 6/30, the funds will appear on your FY10 ledger.

Your Role in the Close  Ensure all deadlines are met and you have followed all of the year-end close processes.  Ask questions if you need help!

Where do you go for help?  Visit Accounts Payable Website:  Contact Accounts Payable at X75338 or X75336  Accounts Payable

Questions?