Advanced Funding

When a grantor provides complete or partial funding in advance of spending, there is a process to automate the recognition of revenue from the deposit received. The process starts with identifying a program with the Program Allows Deposit indication. With this in place, when a cash receipt is then processed with an event type that is defined with the Customer Account Update Type of Deposit Collection, the Customer Program Deposit Information and Unearned Collected Program Deposit tracking pages are updated to track the availability of deposited funds for reimbursement. As spending occurs, activity for the program is moved through the reimbursement process to Reimbursement Output where a receivable is created. Funding lines with this type of program should have the Reimbursement Output Type of Generate Receivables Only. This is because the next step in this feature is the Automatic Revenue Recognition process. It automatically applies the advance (deposit) previously received from the grantor (customer) with a cash receipt. One vendor and accounting line pair liquidates the receivable and records reimbursement revenue. An another vendor and accounting line pair reduces the deposit received, which also updates both tracking pages. There is also an update by the process to Reimbursement History to the Revenue Recognition Amount.

Implementation Note: Using the primary Cash posting code of A001 with this process presents two issues. The cash from the deposit should likely not be used for other purposes. The pair of vendor and accounting lines on the generated cash receipt would double up cash if both event types used cash.  For this reason, it is recommended that a unique asset posting code that is not cash be setup, using the Use PSCD Default choice for Default BSA. This posting code is then used in a clone of the delivered event type for collecting deposits (AR21) instead of A001. That posting code is then used in a clone of the delivered event type for collected earned revenue (AR02). This second event type is then set as the default value for the Collected Earned Revenue without Cash Event Type parameter of the Automatic Revenue Recognition process. AR02 is the likely event type for the Collected Earned Revenue with Cash Event Type parameter.