Automated Accrual Clearing Process

Disbursements, automatic or manual, and two-party accounting transactions contain Service From and Service To dates for users to enter a period of time where goods or services were received. For those transactions that are manually entered, Service Date entry is strictly a user responsibility with only a Transaction Control, called Service Date Severity, for requiring data entry verses defaulting to the Record Date of the transaction. For automatic disbursements, the service dates are bought forward from the referenced transaction.

Accurate cash expenditure recording can be done on MD, IET, PRCI, and ITA transactions with users entering the portion attributable to the prior year on an accounting line with that prior fiscal year and an accounting period, while entering the portion attributable to the current year on a second accounting with the current fiscal year and accounting period. Such data entry is only feasible when there are one or two accounting lines to split. Transactions such as the AD and PRMI do not have this manual option because both are created by the application and are not editable. Use of service dates and the Automated Accrual Clearing batch process is an approach that requires less work of the user. For the AD and PRMI, use of the Automated Accrual process is the only option.

The Automated Accrual Clearing system process will select cash expenditure journal records with a Service From date prior to the start of the current accounting fiscal year and create Automated Accrual Clearing transactions using the delivered ACLA transaction code to move the appropriate cash expense amount from the current budget and fiscal years to the prior years. Selection is not restricted to just the first transaction version but subsequent modifications and even a cancellation will be selected to adjust accruals as necessary. Modifications of amounts down, changes to move the Service From date forward, and cancellations will result in cash expenditures being reduced in the prior year, which is the opposite from normal accrual clearings.

One Automated Accrual Clearing (ACLA) transaction will be created for each service date range found for a transaction. Transactions created will memo reference the cash expenditure transaction to tie the two transactions together for reporting and querying by the Accrual Inquiry (ACRI) page. The ACLA will also update the referenced accounting line with the percentage accrued into the prior year.

Two accounting lines are required to perform the accrual, one for the prior BFY and one for the current BFY. Unlike ACCA transactions, the ACLA will have the current fiscal year and accounting period on both accounting lines. The sum of the two lines will always be zero, so all ACLA transactions should sum to zero.

When the cash expenditure came from a disbursement referencing a payment request, each of the two accounting lines will have an additional debit and credit posting to reverse the previous accrual for accrued expenditures.

In all cases the prior BFY accounting line will use the current FY, so the situation of FY>BFY on this accounting line will require COA to be defined in the current FY if not budgeted for in the current BFY. Also, no COAX functionality is required with the current fiscal year on both accounting lines.

If internal cash expenditures are to be left out of the clearing process, then the input batch parameter for cash expenditures should not list any internal posting codes and only the external one(s). Another input batch parameter can be used to omit internal expenditures as well as manual disbursements that did not have a payment request. The Select Non-Referencing Transactions parameter has to be set to "Yes” in order to select such transactions.