Transcript Journal Entries Actual Transactions & Batch Reference ID's Controller’s Office Training Presentation Updated As Of February 2014

Journal Entries
Actual Transactions & Batch Reference ID's
Controller’s Office
Training Presentation
Updated As Of February 2014
What You Should Know Before Preparing
a Journal Entry
What is a transaction and what fields does it contain?
What is the purpose of a Batch Reference ID?
What is the purpose of a Journal Entry and what
procedures should be followed?
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Three Types of Transactions Found In Your Accounts
Budget transactions
• These are shown as a systematic yearly feed dated 06/01
• Some accounts may include budget revisions during the fiscal year
Actual transactions
• Journal Entries, wire transfers (EFT), A/P – DEGA, cash disbursements and cash receipts are examples
of actual transactions
Encumbrance transactions - (also called Commitments)
• These are used to decrease the free balance of an account
• They can reflect a commitment for which payment has not been made
• They can reflect a commitment for indirect costs
• They limit expenditures to a specified level either authorized by the sponsor or determined by the
university
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Transactions in Your Accounts Contain The Following Fields
Indicator
Transaction
code
Debit/Credit
account and
sub-object
Reference
1 and 2
(7 characters)
•D (debit) or C
(credit) or left
blank to default
Date
Description
(20 characters)
Amount
•P/F/N – partial,
final or no
liquidation of
commitment
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Batch # includes
subsystem
or individual
employee’s
3 digit ID
Transaction Codes
Budget – 020 to
029
Transaction Codes
these are the three digits that identify the
type of transactions in your accounts
Actual – Cash
Receipts - 030 to
039
You will find them on journal entry forms
and in the first column of the Account
History Detail screen in DMAS.
Actual – Cash
Disbursements 040 to 049
For a complete listing and explanation visit
the General Accounting section of the
Controller’s Office website
Encumbrance –
050 to 059
Actual – Journal
Entry – 060 to
069
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Batch Reference ID Field
Batch reference initials identify the individual or sub-system that
originated a transaction
Controller’s Office web-site General Accounting section contains a
current listing of all authorized ID’s and their contact information
Batch reference numbers are used on budget, actual and
encumbrance transactions
The last three digits typically correspond to the transaction code.
For example, journal entry transactions would start with a 6
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FRS Batch Reference Number
Required field
To be included on all
journal entry forms,
wire transfers and
international drafts
Six digit alpha numeric
which includes the
following:
Examples:
ACX625 journal
entry
3 digit Batch
Reference ID
followed by:
(JE transaction code
starts with 6)
JLS429 Cash Disb
3 digit number
starting with first
digit of transaction
code
(Cash Disbursement
transaction code
starts with 4)
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Journal Entries - Non Salary
The Journal Entry (JE) form is found in the Controller’s web-site Forms section @
www.miami.edu/controller
Form FA11 is to be used only when Sponsored accounts are involved
Review and become familiar with Financial Policies & Procedures B016 Journal Entries found in the Controller's Office web site
and copied on the next slide
Journal entries are used to modify totals in the respective accounts
Always attach explanations and supporting documentation including approvals
Individual submits JE & Batch Control Form (with Batch Reference ID) and upon review they are entered real time into FRS by the
Controller’s Office or Medical Finance
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Journal Entry Policy B016-page 1
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UNIVERSITY OF MIAMI
FINANCIAL POLICIES & PROCEDURES
JOURNAL ENTRIES
B016
PURPOSE
A journal entry is used to record accounting transactions in the accounting system. Journal entries are used to (1) record original transactions in the
accounting system, (2) correct previous entries recorded in the accounting system, (3) move transactions from one account to another, or one sub
object to another, (4) accrue expenses, (5) defer revenue, (6) fund accounts via transfers, (7) record budget adjustments, and (8) record
encumbrances and their liquidation.
POLICY
All journal entries must contain adequate documentation, and must be approved by the department supervisor or designee, and are subject to
review by the Controller's office.
The Director of the General Accounting Unit of the Controller’s Office may authorize certain types of journals to be submitted without supporting
documentation. In these cases, the Controller's Office review is limited to completeness of the entry, proper use of the S/L and G/L accounts with
the corresponding sub objects, and proper approval and review of certain sub objects by a responsible designated individual or department. The
Controller’s Office will review supporting documentation for such journals on a random basis by performing on-site reviews. Departments must
maintain the supporting documentation for a period of seven (7) years. A department failing to maintain proper supporting documentation will lose
the privilege of submitting entries without documentation.
The Budget office approves journal entries revising budgets.
PROCEDURE
Journal Entry Form
Journal entries are entered in the accounting system through the use of specific forms coded by type of transaction as follows:
Simple Journal Entry – records and/or adjusts actual amounts in the accounting system and requires a debit entry and a credit entry in a one-to one
relationship.
Compound Journal Entry – records and/or adjusts actual amounts in the accounting system. The number of debit entries do not equal the number of
credit entries. However, the total amount of the debits must equal the total amount of the credits, a one to many relationship.
Miscellaneous Accounting Input – is used to record cash receipts, cash disbursements or encumbrance adjustments. Cash receipts and cash
disbursement require only either a debit or a credit entry. The accounting system automatically records the other side of the entry by either debiting
cash or crediting cash depending on the transaction. In the University’s accounting system, this is known as an indirect update. Encumbrances and
encumbrance liquidations/adjustments are one-sided entries that do not affect actual amounts, but record commitments incurred by the University
for faculty and employee salaries, benefits, and goods and services purchased.
Budget Input - adjusts the budget amounts.
Bank Transfers - generally used by the Treasurer's office or the Controller's office to record wire transfers.
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Journal Entry Policy B016-page 2
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Accounting Transaction Coding
Document reference fields differ from one type of journal to another, i.e., check #, BERF #, check requisition #, Purchase Order #, etc. Please contact
the General Accounting unit of the Controller’s Office for explanations on how these fields are used or attend a Financial Record System (FRS)
training session.
Supporting Documentation
All journal entries together with adequate supporting documentation must be submitted and retained in the Controller's office. The only exceptions
are those departments authorized by the Director of General Accounting to retain the supporting documentation, or those journal entries that enter
the accounting system through a subsystem as specified in Appendix A at the end of this policy. The journal and its supporting documentation
constitute the University's official record of a transaction and must contain sufficient description or explanation to adequately describe the
transaction to an auditor or other outside party.
Format
Journal entries should be submitted in the proper format, as follows:
Use a standard form (size 8-1/2X14) provided by Materials Management or a computer reproduction.
Using an adding machine, add the amounts of the entries and produce a hash total. Staple the adding machine tape to the right hand side of the
original journal. If the form used is a computer form, ensure that the hash total includes all the rows of the journal entry.
Staple back-up documentation for the entries behind the journal form.
Each journal submitted to the Controller's Office must balance (debits equal to credits).
Journals must be approved by department heads or other authorized personnel before forwarding to the Controller's office for input or storage.
Journals are to be prepared in BLACK or BLUE ink. Whiteout and erasures should not be used. When an incorrect entry or amount is entered, it
should be crossed out, initialed and entered in the following line.
All journals must be accompanied by a Batch Control Form (see below). Blank copies can be obtained from the Controller’s web page at
http://www.miami.edu/controller and click on Forms.
Batch Control Form
The batch control form requires the insertion of a unique batch identification number and data totals to assist in the verification of the data entry
function. The batch identification consists of six alphanumeric characters which identify the individual or the subsystem originating the
transaction. The data totals consist of a batch total count representing the number of accounting transactions in the batch and a hash total on the
dollar amounts from the accounting transactions.
The originator of the batch is responsible for filling in the batch identification, the batch count total, a short description of the entry, and the hash
total. The Controller's Office is responsible for completing the data entry portions of the form to identify the data entry person, the date entered in
the accounting system, and time completed, and to verify the system batch total amount and count to the manual information entered by the
originator. The Medical Finance Office performs a similar verification function as it inputs Medical School entries.
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Summary
The presentation covered what you should know before preparing and
submitting a Journal Entry for data entry into FRS
You should know what types of transactions are found in accounts and what
fields do transactions contain
Recognize that the Batch Reference ID field helps users identify where a
transaction originated
Use the proper JE forms with appropriate explanations and supporting
documentation including approvals
Follow the guidelines found in Journal Entry Policy B016
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Thank You for
Reviewing this
Controller’s Office Presentation
Please Visit our Website:
http://www.miami.edu/finance/index.php/treasurer/areas/controllers_office/
for Additional Information
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