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For a variety of reasons, MIT departments and/or faculty
will periodically require the creation of cost objects to capture expenditures
related to an activity for which MIT will be reimbursed.
Although Central A/R will not participate in the billing
of these amounts, they are part of MIT's total Accounts Receivable. Therefore,
A/R will setup and monitor the balance of such cost objects.
Additionally, because there is inherent risk involved in
MIT's outlay of funds subject to later reimbursement, faculty must designate,
at inception, another cost object which will alleviate any possible deficit.
Procedure:
- A faculty member realizes a need to create a cost
object within the parameters above.
- The faculty member drafts a letter explaining the
need and designating another account to cover any shortfall and forwards
it the Director of Conference Services.
- The Director of Conference Services reviews the
request and forwards it to the Assistant Controller responsible for
A/R requesting creation of a new cost object.
- The Assistant Controller reviews the request and
either requests more information or approves the creation of the cost
object.
- The approved request is forwarded to A/R and an
internal order is created (order type 0010 - Accounts Receivable).
- Monthly, A/R personnel will review balances of
all type 0010 internal orders. Based on their knowledge of the particular
event (some involve significant outlay prior to reimbursement/some collect
large amounts of revenue prior to expense) balances will be noted and,
where appropriate, the Account Supervisor/Addressee will be contacted
and requested to bring the balance to zero by depositing funds against
the account at the Cashier's Office.
- All type 0010 internal orders will be settled to
GL account 101225 monthly. At month/year end, after settlement, this
balance and the balance of account 101200 - A/R General will represent
the balance of all outstanding general accounts receivable.
- When the activity which prompted the creation of
the cost object has ended (ie, the conference has been held),
- any positive balance (profit) will be transferred,
by means of a Journal Voucher, to another cost object in the same
department;
- any negative balance (loss) will either be recovered
from the sponsor of the event as final billing or transferred from
the cost object originally designated for this purpose (as noted
in step 2) by means of a Journal Voucher.
Alumni administers all reunion associated activities
and alumni related clubs. There is a need to track cost and income by reunion
class or club. This will be achieved in SAP by the use of internal orders.
The recovery of expenditures made on these internal orders
will be the responsibility of the Alumni Association. The Central A/R
will not participate in the billing of these amounts. Since these receivables
are part of MIT's total Accounts Receivable, A/R will set up and monitor
the balance of such cost objects.
Additionally, because there is inherent risk involved in
MIT's outlay of funds subject to later reimbursement, the Alumni Association
must designate, at inception, another cost object which will alleviate
any possible deficit.
As expenditures for a reunion or club are made they will
be posted to an internal order associated directly with the reunion class.
As registration fees are received for the reunion, these will be posted
to the internal order. As payments are received by the clubs, they will
be posted as income to the internal order.
When the Alumni uses an internal provider, a journal voucher
will be created to debit the appropriate Alumni customer internal order
and credit the internal providers internal order.
Procedure:
- The Alumni Association realizes a need to create
a cost object within the parameters above.
- A letter explaining the need and designating another
account to cover any shortfall is written and forwarded to the Assistant
Controller.
- The Assistant Controller reviews the request and
either requests more information or approves the creation of the cost
object.
- The approved request is forwarded to A/R and an
internal order is created (order type 0010 - Accounts Receivable).
- Monthly, A/R personnel will review balances of
all type 0010 internal orders. Based on their knowledge of the particular
event (some involve significant outlay prior to reimbursemen, some collect
large amounts of revenue prior to expense) balances will be noted and,
where appropriate, the Account Supervisor/Addressee will be contacted
and requested to bring the balance to zero by depositing funds against
the account at the Cashier's Office.
- All type 0010 internal orders will be settled to
GL account 101225 monthly. At month/year end, after settlement, this
balance and the balance of account 101200 - A/R General will represent
the balance of all outstanding general accounts receivable.
- When the activity which prompted the creation of
the cost object has ended (i.e., the reunion has been held),
- any positive balance (profit) will be transferred,
by means of a Journal Voucher, to another cost object in the same
department;
- any negative balance (loss) will either be recovered
from the sponsor of the event as final billing or transferred from
the cost object originally designated for this purpose (as noted
in step 2) by means of a Journal Voucher.
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