Journal Entry and Internal Charges

SAP Authorization

In Firefly, access to the FB50 and ZPOST transaction codes is included in specific security roles. If an employee requires access to these transactions, the supervisor should use the “Submit Firefly/SAP Help Request” tile to request SAP security for the employee and indicate that the employee needs the ability to post documents in SAP.

Responsibilities

When entering any kind of journal entry (JE, IC, IB):

• The originating/billing department is responsible for obtaining the line(s) of coding from the other department(s).
• The originating/billing department is responsible for notifying the other department(s) of transactions by a mutually agreed upon method (hard copy, email, phone, etc.)
• Enter information directly into SAP and keep the form on file for audit purposes.

JE transactions must net zero

All financial transaction types, including journal entries, entered into SAP must balance before SAP will allow the posting. When an expense or credit is moved from one cost object to another through a journal entry, the total transaction must net to zero -- meaning, the debit side of the transaction must equal the credit side. There will be at least two entries per transaction (debit and credit), but a journal entry could have multiple lines as long as the total debit and total credit balance each other.

Consider these examples:

• If an expense needs to be moved from one cost object to another, a credit will post to the cost object where the expense is moving from and a debit will post where the expense is moving to. If the expense needs to be divided among multiple cost objects, then the total of all the debit lines in the transaction will equal the credit from which the expense was moved. 
• Similarly, if a credit has been posted to a cost object and needs to be credited to a different cost object, then the debit side of the transaction will move the funds out of the first cost object, and the credit side of the transaction will move the funds into the correct cost object.

When posting a journal entry, every debit must have an equal and off-setting credit.  SAP prevents errors by checking that the debit/credit balance nets to zero. If the net is not zero, SAP will not process the transaction.

These SAP transaction codes allow entry of financial transactions that internally move debits/credits and correct past transactions directly into SAP. 

Departments typically process internal charges (ICs) and journal entries (JEs) using FB50 and ZPOST transaction codes.

FB50

FB50 is SAP's transaction code that is best used when entering only a few transactions.

Follow these instructions for entering JEs and ICs directly into SAP.

ZPOST

The fastest and easiest way to post multiple transactions at one time or to post a recurring transaction that needs to be posted on a monthly or other recurring basis is to use the SAP transaction screen ZPOST.

Using ZPOST saves time and effort because keying individual lines is not necessary. Instead, the data is uploaded to SAP from an Excel template. Additionally, it is easier to enter and work with data into Excel, and to check that debits and credits balance.

The ZPOST procedure allows a maximum of 950 lines to be uploaded at one time.

Steps for using ZPOST

1. Download this Excel template from Sapphire. (The Excel template is also available in SAP after entering the ZPOST transaction code.)
2. Complete the Excel file with your department’s data and save the file to a folder of your choosing. Your data will include your debits and credits. 
3. Follow these instructions for using ZPOST in SAP and uploading the Excel file. 
   Note: Benefit GLs (519XXX) can only be posted by Accounting. Email the ZPOST Excel file and supporting documentation to accounting@unl.edu

Two types of documentation must be included in every journal entry in SAP:

1. Explanation: A clear explanation entered by the person processing the journal entry that describes why the journal entry was made.
   The explanation should include: 
   • Who requested the journal entry, date request was made, and a description of the situation that required a journal entry to resolve
   • Close the explanation with your name (as the person entering the journal entry) and the current date
2. Supporting documentation: Attachments that support the entry, such as emails from the cost object owner requesting the change, receipts, or other relevant documentation that substantiates the transaction.

Add explanation in FB50

Detailed instructions for adding an explanation are provided at the top of page 9 of these instructions: G/L Account Posting (FB50). 

In summary, the steps for adding a JE explanation in FB50 are:

1. In the limited text field of each debit/credit line, enter a short text description that matches the text of the original entry (this makes it easier to match the original transaction line with the newly entered line that reverses the original).
2. After entering all debit/credit lines for the JE and verifying that the debits and credits balance each other, then a more detailed explanation can be added.
   1. Click on Extras on the menu bar across the top of the screen, and select Document Texts from the dropdown menu. This opens a window.
   2. In the window, click on the Correspondence line, which will open an empty page (known as the Extended Document Explanation field in SAP) where you can enter a full explanation for the JE. An explanation is often copied from an email or other supporting document and then pasted into this area.
   3. To save the entry, click Back to save changes, then click Continue in the Text in Accounting dialog box to close the pop-up. 

Add explanation to ZPOST

The ZPOST template (Excel file) allows you to complete the limited text field for each debit/credit line. If a more detailed explanation is needed, it must be added after completing the ZPOST.

1. After completing the ZPOST, pull up the transaction in FB02 (Change Document).
2. Click on Extras on the menu bar across the top of the screen, then select Texts from the dropdown menu.

3. While it may seem strange to repeat these actions, again select Extras and Texts. A window will open.

4. In the window, click on the Correspondence line, which will open an empty page (known as the Extended Document Explanation field in SAP) where you can enter a full explanation for the JE. An explanation is often copied from an email or other supporting document and then pasted into this area.
5. To save the entry, click Back to save changes, then click Continue in the Text in Accounting dialog box to close the pop-up. 

Attach supporting documentation

After completing a journal entry, there are a couple of reports that will help you check your work.

Note: Even though you are able to post a journal entry to ANY valid cost object on all campuses; you will only be able to run reports for the cost objects for which you have security.

Actual Line Items Report -- KSB1

The Actual Line Items Report (Transaction code: KSB1) can be used to monitor actual postings made to a particular cost center (does not include WBS numbers); it can also assist users in searching for particular information such as a specific journal entry or invoice. Instructions for accessing and reading this report are available in Sapphire.

An internal charge (IC) is used when one area or department of the University charges another University area or department for goods or services provided. The University department that is charging for their good/service is known as the billing department and they are responsible for posting the transaction that charges the expending department's cost object for goods/services. The billing department enters the internal charge (IC) directly into SAP via FB50 or ZPOST transaction code.  

Some internal services are charged using an internal batch charge (IB).  The billing department works with UNL’s Accounting office to charge multiple departments at one time through an automated batch process. The batch is managed and posted by Accounting staff.  Internal batch charges are often used by service providers like Mail Services or Print Services who bill their services to a large number of internal clients on a regular basis.  

Responsibility

Using an IC or IB, the billing department is responsible for posting the transaction that charges the expending department's cost object.

Caution: Special G/Ls for Internal Transactions

Internal charges (ICs and IBs) move funds (payment for goods/services) out of the expending department's cost object and into the billing department's cost object. These transactions move funds inside the University and do not increase or decrease total University revenue or expenses. To prevent these internal transactions from incorrectly impacting the University's overall financial statements, ICs and IBs are recorded using specific G/L accounts. Transactions using these specific G/Ls can then be excluded from the overall University financial statements.

When posting an IC or IB, there will always be at least two entries per transaction and those entries will net to zero. Both the debit and credit transaction lines will be identified as an IC (or IB if processed in batch). 

• On the debit side of the transaction, funds are pulled from the expending department's cost object to pay for good/services they received from the billing department. The transaction represents an expense for the expending department, so the transaction is entered into SAP using an appropriate expense G/L.
• On the credit side of the transaction, the billing department's cost object receives payment for the goods/service they provided to another area of the University. Normally, one would expect the credit G/L to be selected from the G/L Account Revenues List. However, because the transaction is internal, the G/L must be carefully selected so that the transaction can be identified and eliminated from University revenues.

Auxiliary Billing Department (23 cost center)

As described in Cost Object Smart Numbering, auxiliary funds are earned by non-academic self-supporting University entities whose reason for existing is to provide their specific service to faculty, staff and students in a personal capacity. Examples of auxiliary billing departments charging for their goods/services are Housing Services charging housing fees and Parking Services charging parking fees.  

When a billing department provides goods/services to an another internal department and is receiving payment (revenue) into a cost center that starts with 23 (which indicates UNL auxiliary fund), the billing department must select an appropriate GL from the 48xxxx GL series to code the credit. The 48xxxx series GLs are reserved for "Auxiliary Operations Internal Sales." The expense is charged to the expending department's cost object using a 5xxxxx GL, indicating an expense.

Revolving Billing Department (22 cost center)

As described in Cost Object Smart Numbering, revolving funds are typically earned by an academic department whose primary mission is academic, but which incidentally earns revenue.  Examples of revolving funds include funds earned by providing a good or service to the campus or to external entities, registration fees charged by a department hosting a conference, funds received from student lab fees, or the incidental remainder of grant funds after completion of the grant-funded project. In each instance, the revenue is posted to the billing department's revolving cost center, which starts with a 22.

When a billing department provides goods/services to an another internal department and is receiving payment (revenue) into a cost center that starts with 22 (indicating a UNL revolving fund), the billing department must select an appropriate GL from the 59xxxx GL series to code the credit. The 59xxxx series GLs appear on the GL Account Expenditure List and are identified as "Expenditure Credits." 

The table below shows how to properly assign G/Ls to internal transactions in which the billing department is receiving the funds into a revolving cost center (22). In these transactions, in order for the transaction to be excluded properly from the University's revenue/expense financial statements, the billing department and the expending department's G/Ls must be selected from corresponding G/L ranges. The table below shows the corresponding G/L ranges for specific types of expenses.

Revolving billing department's process for refunding internal charge

If a revolving billing department (22 cost center) needs to process a refund for a good/service that they previously charged to an internal expending department, they (the billing department) should use the same 59xxxx G/L and 22 cost center on the billing side of the entry to record revenue.

Auditing Response

The Accounting functional office performs a post-audit review and will contact departments that have incorrectly used G/Ls for internal transactions. If a department has incorrectly used a 59xxxx G/L to post a transaction to a 23 cost center or used a 48xxxx G/L to post to a 22 cost center, the department will need to correct the posting error. 

Allocations vs. Retro Funding Changes

Payroll journal entries (PJs) move payroll charges from one cost object to another. PJs are used by Payroll Services and by Accounting in two distinct processes.

1. Payroll transfers that change salary and benefits are rare and are only entered by Payroll as part of the retro funding change process.
2. There are only two types of PJs that are handled outside of the retro funding change process and both are related to allocations of grad tuition/grad health and worker's comp/unemployment, which are processed by Accounting.

Graduate tuition and graduate health allocations

If a graduate student's payroll funding changed within the semester, the department should submit a ZPOST (using the PJ doc type) to Accounting to move all or part of the grad tuition/health allocations to match the payroll funding change. Use the ZPOST process to complete the Excel file, then email the Excel file and supporting documentation to Accounting at accounting@unl.edu for entry into SAP.

Note: Personnel number and position number must be provided when changing grad health/tuition. These numbers are necessary for reconciling the payroll system with the financial system postings by personnel number. 

Read more about grad allocations.

Worker's Comp and Unemployment on locked cost objects

Each quarter, the WC/Unemp allocation process calculates a year-to-date amount per active cost object for the current rate and then subtracts any allocations already posted for the fiscal year. This process automatically corrects for instances where payroll has moved or the rate has changed since the previous quarter.  PJs should only be posted to move allocations if a cost object will be closed or locked before the next quarter’s allocation is posted. The department should use the ZPOST process to move all or part of the WC/Unemp allocations to a different funding source. Following the ZPOST instructions, complete the Excel file (using the PJ doc type), then email the Excel file and supporting documentation to Accounting at accounting@unl.edu for entry into SAP.

Accounting's role in allocation process

Accounting staff process PJs on a weekly basis. When processing is completed, Accounting staff "Reply All" to the requestor's email and provide the SAP document number, so that all are notified that the PJ has been completed.

If Accounting receives a G/L Account Posting form to move salaries/wages or regular benefits (i.e., GLs 511000-519302 and 519400-519520), Accounting notifies the department that they are not using the correct form and procedure. The correct form and procedure is provided in the Retro Funding Change process.