Internal Accounting - Accounting Model

The event types in this area are used in the recording of accounting between two parties, seller/provider and buyer/receiver, on the same CGI Advantage Financial application. Accounting for purchases, operating transfers, loans, payment intercept activity and reimbursements are covered in this tab. Other areas with internal accounting include debt management, inventory and payroll. Details for such internal accounting are covered separately in those tabs.

Event types in this area use specialized posting codes for expenditures and revenue so that internal activity can be easily identified for reporting purposes. One common need for such identification is to remove internal accounting activity from financial statements where it should not be included.

Many event types for internal accounting are delivered with three versions. One is for intra-fund activity where the fund and sub fund for both parties is the same. In such a case, there is no need for offset entries as they will net out. Two others are for inter-fund activity where the fund and sub fund values are different for the two parties. Here an offset entry is needed. When the bank account used by both parties is the same, the first of the two inter-fund choices is most often used to move cash between accounts within the financial application. Since both use the same bank account, there is no need to move cash outside of the financial application. When bank accounts differ, then the second of the inter-fund methods is used. This method records clearing accounts as offsets (Due To Fund and Due From Fund) so that when these accounts are cleared later, cash can be transferred between external bank accounts.

The concept of the clearing accounts (Due To and Due From Fund) being used when the bank accounts are different between the two parties is integral to keeping CGI Advantage Financial in sync with the actual banks. These clearing accounts must be cleared out periodically where they are both reduced along with the accrued revenue, expenditure, or other account used with them. When cleared, accounts for cash are updated as well as the accrued revenue or expenditure being recorded now as collected revenue or cash expenditure. This clearing activity occurs usually with the Journal Voucher transaction. At the time of clearing, an action is also taken to transfer the actual cash between the actual banks either with a wire transfer or other means.

A fourth version of many internal event types is also delivered for use with the Clearing Account Maintenance chain job functionality. When cash should not be updated after the end of a fiscal year (for example, in adjustment accounting periods), this fourth set of event types is used. BFY Staging is critical in the enforcement of the use of these event types and stopping usage of the others. This fourth set is similar to those that use clearing accounts except with the different of using cash expenditures and collected revenues instead of accruals.

The Subsequent Event Type tab has been omitted for this area because there is no such activity for any of these event types.

For applications where all funds, or more importantly all funds that perform internal accounting, use a single bank account, it is acceptable to change the Due To (A002) and Due From (A003) posting codes used on the inter fund event types with clearing accounts to the Cash posting code (A001) in order to always use cash as an offset. Another alternative for the purchasing and operational transfer event types is to take those event types off of the Allowable Event Type for Transaction Code (AETDC) page so users will not be presented that option. For intercepts, the alternative is to change all entries on the Event Type Defaults (ETDFLT) page for Transaction Type IET and change the Transaction Event Type value from one that uses clearing accounts to the corresponding event type that uses Cash as the offset.