2 Management Accounts Workshop Objectives To Understand the relationship between General Ledger and SubledgersTo Understand the Chart of AccountsRecognise good practiceRecognise bad combinationsUnderstand Cross Validation rulesSM~111030
3 Oracle Sub Ledgers Simplified Invoices InPayments OutOrders OutPURCHASINGPAYABLESInvoices InPOSTCASH MANAGEMENTGENERAL LEDGERPOSTPOSTPROJECTSPOSTRECEIVABLESInvoices OutOrders InReceipts InInvoices OutThis is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger
4 Oracle Sub Ledgers Simplified Invoices InPayments OutOrders OutPURCHASINGPAYABLESInvoices InCASH MANAGEMENTGENERAL LEDGERPOSTPOSTPROJECTSRECEIVABLESInvoices OutOrders InReceipts InInvoices OutThis is not a complete picture, but gives a general overview of the posting of transactions between Subledgers and General Ledger
5 New Segments (accounts) GENERAL LEDGERPayrollJournal AdjustmentsFSG ReportingOpen/Close PeriodsNew Segments (accounts)Cross ValidationCombinations
6 Reliable Information for External Reporting Management AccountsStatutory AccountsFinance GroupUniversity BoardHESA returnsTransparency ReviewFreedom Of Information ActVATCorporation TaxThese reporting requirement require a robust underlying Chart of Accounts and strict rules to ensure the reliability of information to avoid penalties
7 CU-MEDIC-GENERAL-PROF_SALARY-SPARE Chart of Accounts5 Segments1. Company-2. COST CENTRE-3. ANALYSIS CODE-4. ACCOUNT-5. Sparee.g AACU-MEDIC-GENERAL-PROF_SALARY-SPAREThere are 5 segments to the CU Chart Of Accounts (COA)Each has a different function:1. Company- In case we have subsidiaries added to the system2. COST CENTRE- Reflects the management structure and provides the basis for security and approval routes3. ANALYSIS- This is for the “Activity” equivalent to the old NOMINAL code. e.g. a course, conference or development account4. ACCOUNT- Equivalent to the old SUBACCOUNT e.g MPSS FULL-TIME REGULAR (TECH), CONFERENCE EXPS UK5. Spare To be used for expansion if an unexpected accounting event occurs.
8 Combinations Once a combination is used it cannot be deleted; However we can disable itDisabled
9 Cost Centres 10-11000-AA11000100-11111-100000 Schools / Dir Cost Centre = Department11MEDIC11000MEDIC CentralGroup1111%11100MEDIC Haematology11110MEDIC Pathology11120MEDIC Medical Genetics11130MEDIC EMU UnitGroup2112%112001121015SONMS15100631FINCE63100Finance63150PurchasingEach school is allocated a number 11 to 39. All cost centres are modelled on this number. Some schools have many departments e.g. 111%, 112% and 113% in MEDIC.Cost centres are used for security / approval routes. Ensuring that each school can only access its own Analysis Codes
10 Analysis CodesAAAnalysis Codes (Activities) have 10 characters and several components.AA explains the activity type e.g Academic General.1100 tells us that the Analysis code belongs to Medic Central.1234 is the activity number.Each activity type has been allocated a two letter prefix.All analysis codes for a given activity type begin with this letter to facilitate year end and management reports.Sometimes the 7th and/or 8th characters also have meanings e.g. the “T” in KC1100T001 Indicates that the activity could be taxable.This is why Management Accounts and Corporate Financial Services set up the analysis codes.
11 Terminology 2 When we say: “A Analysis Codes” we mean anything beginning with A e.g. AA to AZ9999ZZZZ“ AA Analysis Codes” we mean anything beginning with AA e.g. AA to AA9999ZZZZ General School Codes.It is often better to communicate an analysis code by splitting it up into its components e.g. “AA_1100_1001”
12 Analysis Codes BA1234T001 £ 70350 Course Fees (17,000) To separate activities and keep the income and all related expenditure together in one place for reporting.This is important for VAT and Corporation Tax and also for Management ReportingBA1234T00170350 Course Fees(17,000)40115 Consumables3,00048175 Overheads4,250Taxable Surplus(9,750)
13 Chart of Accounts Combination Rules Income and Expendituree.g AA – 11111The first 4 characters of the Cost Centre is repeated within the Analysis CodeThese Cost Centre – Analysis Code (A% to S%) combinations must conform to strict rules to ensure security between schoolsBalance Sheet10000 – YABC123456Balance Sheet Analysis Codes have more flexibility but will rarely be used by schools or directorates
14 Analysis Code Types Each Activity has been allocated a letter. AA-AJAcademic departments TPA (AC)AK-AZAcademic departments OtherBA_BFAcademic and Administrative Courses (S)BQEducation Contracts TPABV_BZAcademic StudentshipsCAcademic ServicesDStaff & Student FacilitiesEAdmin (AD)FPremises (PR)GCSERVIIncome CENTRALKAcademic Conferences (KC)LServices Rendered/Consultancy PROJECTSMServices Rendered/ConsultancyNSalary-based rechargesRResearch Grants & Contracts PROJECTSSEuropean Structural Funds PROJECTSYBalance sheetEach Activity has been allocated a letter.All analysis codes for a given activity type begin with this letter to facilitate year end and management reports.
15 Account Ranges 1% 10000 19999 Salaries 40000 47999 Direct expenditure AA1%1000019999Salaries4000047999Direct expenditure7%7000079999External incomeEach expenditure or income type has a given range.Blue = Direct expenditure / incomeGreen = Recharges (Cross charges), Transfers or internal tradeGrey = Spare ranges for future amendments if required
16 Account Structure 1% 10000 19999 Salaries 2% 20000 29999 AA1%1000019999Salaries2%2000029999Salary recharges4000047999Direct expenditure4800049999Recharges / Overheads [internal]68000689996900069099Allocations6910069999Internal Trade7%7000079999External incomeEach expenditure or income type has a given range.Blue = Direct expenditure / incomeGreen = Recharges (Cross charges), Transfers or internal tradeGrey = Spare ranges for future amendments if required
17 Account Structure 0% 00000 09999 Brought Forward Balances 1% 10000 AA0%0000009999Brought Forward Balances1%1000019999Salaries2%2000029999Salary recharges3%3000039999Spare4000047999Direct expenditure4800049999Recharges / Overheads [internal]5%5000059999600006799968000689996900069099Allocations6910069999Internal Trade7%7000079999External income8000099999Balance sheetStaffNon StaffEach expenditure or income type has a given range.Blue = Direct expenditure / incomeGreen = Recharges (Cross charges), Transfers or internal tradeGrey = Spare ranges for future amendments if required
18 Terminology When we say: “1 Accounts” we mean anything beginning with 1 e.g to (salaries)“48 Accounts” we mean anything beginning with 48 e.g to (Debit Transfers)“690 Accounts” we mean anything beginning with 690 e.g to (Allocations)
19 Account Structure Direct Income and Expenditure 7000079999External IncomeExpenditure1000019999Salaries4000047999External (Direct) ExpenditureAll external income should be charged to to 79999All direct salaries should be charges to to 19999All direct expenditure should be charged directly to a to 47999Direct Expenditure means that an external document has been received e.g an expense invoice has been received or personal expenses form (being outside expenditure being reclaimed) (money going out)Salaries is an external payment to staff (money going out)External Income is money received from any third party (including recurrent grants, donations and contributions)
20 Account Structure Examples Recharges / Overheads [internal] DrCr48150FEC:ESTATES COSTS6815048160FEC:INDIRECT COST6816048175OVERHEADS6817548200BALANCE TRANSFERS TO CLOSE6820048500TRANSFERS OF FUNDS68500If these accounts are used with 4% (40000 to 47999) or 7% accounts the financial statements will overstate / understate income or expenditure.48% Accounts must match with 68% Accounts and net off to Nil within a journal transfer and therefore not effecting the Statutory Financial Statements.
21 Account Structure Examples Recharges / Overheads [internal] DrCr21111RCHG PROFESSOR FT PERM69010ALLOCATIONS2% Accounts (salary recharges) are used alone and net off to nil.If these accounts are used with 4% (40000 to 47999) or 7% accounts the financial statements will overstate / understate income or expenditure.690% Accounts (allocations) are used alone and net of to nil.
22 Account Structure Examples Internal Trade DrCr40115CONSUMABLES6910040130GASES (LABORATORY)43520LABOUR RECHARGES (Estates)69550Internal trade accounts – net off with expenditureThey are used with ExpensesAnd are charged to expenditure In the Financial Statements to net offEstates have their own internal trade accounts e.g – 69559CSERV also have their own internal trade accounts in the 6952% range.
23 Account Structure Re-instate balances 00000 09999 Finance Accounts Currently accounts are for Finance to Re-instate BalancesWe try to keep this account disabled whenever possible.Schools can transfer opening balances to development accounts (personal pots) by usingIt is important that schools ensure that transfers net off to NIL. Other wise there TPA reports will be misrepresented.
24 Account Structure Balance sheet 80000 80999 Fixed asset 82000 82999 Current assets8500085999Liabilities9000099999Capital & reservesSchools and Directorates should not post to these accounts
25 Account Structure – ReCap 7%7000079999External incomeDirect4000047999Direct expenditureDirect6910069999Internal TradeRecharged (net off)1%1000019999Salaries (Rhian)Direct (Cyborg)2%2000029999Salary recharges (Schools)DR & CR on 2%48%4800048999Recharges / Overheads [internal]Use 68% and 48% together68%6800068999Each expenditure or income type has a given range.Blue = Direct expenditure / incomeGreen = Recharges (Cross charges), Transfers or internal tradeGrey = Spare ranges for future amendments if required6900069099Allocations (Jo)DR & CR on 690%0%0000009999Brought Forward Balances (Jo & Steve + Schools)DR & CR on 0%8000099999Balance sheet
26 Account Structure - Salaries There is an underlying structure to Salary Accounts that facilitates the complex reporting required for external and internal purposes.Character4Character5Character3Character1Accountshave 5charactersCharacter2
27 Summary Accurate and reliable accounts are required. COA Segments are structured and can be complex.Certain combinations are not allowed.Rules can be put in place to prevent some bad combinations being created.Analysis codes can be structured into Parents and Grandparents for reporting.
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