Set Up General Ledger Accounts and Process Chargebacks

Chargebacks represent the inter-department account transfers of investment or service costs. A chargeback is a debit or charge to departments for their shared cost of investments or services that were delivered during a specified period. A corresponding credit is issued to departments that provide the investment or service for the work they performed.
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Chargebacks represent the inter-department account transfers of investment or service costs. A chargeback is a debit or charge to departments for their shared cost of investments or services that were delivered during a specified period. A corresponding credit is issued to departments that provide the investment or service for the work they performed.
Chargebacks assume that transactions exist in the product for the associated investments. Before you set up chargebacks and general ledger accounts, verify that the following items exist:
  • Set up a financial entity and define fiscal time periods for the entity.
  • Set up financial departments and locations.
  • Set up financial classes.
  • Set up financially-enabled investments or services.
  • Set up financially-enabled team members of investments or services including labor, equipment, material, and expense resources.
  • Verify that each user has the appropriate access rights to manage accounts and rules. See
    Access Rights Reference
    .
To process chargeback transactions, set up general ledger accounts and chargeback rules. The debit, credit, and overhead rules that you create depend on the type of chargeback processing you want to implement.
2
Set Up General Ledger Accounts
GL accounts are combinations of main account codes and subaccount codes that are used to categorize accounts. For example, the main Assets account can have a code of 100 and the Asset subaccounts can have a code of 111 for Capital and 112 for Expense.
Set up general ledger (GL) accounts to define time-based allocations that are used in chargebacks and to assign to cost plan details. If you export planning data to an external accounting system, you can use the GL accounts for mapping purposes. You can also import GL accounts from an external accounting system using XOG.
Before you set up GL accounts, verify that a financial entity exists. After you set up a GL account, you can edit the account. Your cost plans and transactions can reference the GL account.
Follow these steps:
  1. Open Administration, and from Finance, click GL Accounts.
  2. Click New.
  3. Complete the requested information. The following fields require a description:
    • Main Account ID
      Defines the first part of the natural account number.
    • Sub Account ID
      Defines the second part of the natural account number.
    • Is Active
      Indicates if this account is active and available for assigning to cost plans.
    • Overhead
      Indicates if this account is used to charge any costs to designated departments. If selected, be sure to create overhead rules.
    • Capital Expense
      Indicates if this account is used for capital expense.
    • Noncash Expense
      Indicates if this account is used for noncash expense.
  4. Click Save.
Set Up Chargeback Rules
Rules drive chargebacks and credits for investment and service costs. WIP transactions process these rules. During transaction processing, use these rules to apply charges or credits appropriately to designated departments or GL accounts. Department managers can view their charges and credits using the following tools:
  • Department invoices to view and approve charges.
  • Department recovery statements to view credits. The statements are available for departments that manage services.
The following chargeback rules are supported:
  • Investment-specific Debit Rules
    . A set of investment-specific rules that determines how to debit departments for the cost of investments or services are delivered to them during a specified period. If some costs are charged to overhead, allocations cannot always equal 100 percent. Investment or service managers set up debit rules. On the Chargebacks page for an investment or service, you can view a list of any debit rules that are defined for the investment or service.
  • Standard Debit Rules
    . A standard set of debit rules that can be used globally within an entity to charge departments for investment costs. Debit rules are investment-specific and are set up by the investment or service manager or the finance manager.
  • Credit Rules
    . A set of rules that determines which departments are credited for the cost of investments or services that are delivered during a specified period. Allocations on credit rules must equal 100 percent of the debited costs. The finance manager sets up credit rules.
  • Overhead Rules
    . A standard set of rules that determines how to charge remaining or overhead costs for a specified period. The finance manager sets up overhead rules.
As the investment manager or service manager sets up debit rules, you can base charges on standard rules or investment-specific rules. You can also configure the unique codes -- Allocation Code (for standard rules) and Resource Credit Code (for credit rules) -- to auto-populate.
Rules also determine the shared costs of investments and services. A chargeback rule is a set of unique properties that are matched to transactions when debiting and crediting departments. Chargeback rules are composed of:
  • Header containing a unique set of properties that are matched with transactions during processing.
  • General ledger (GL) account - department combinations to identify departments that are charged or credited for specified investments or services.
  • Allocations to determine the distribution of shared costs or credits to departments.
Chargeback Examples
  • Share Costs:
    The Retail Banking department commissioned the development of a mortgage application shared by Retail Self-Services and Retail Premier Accounts. Retail Banking is using the Chargeback feature to allocate costs that are incurred by IT for this development project. This project required expertise from application developers, analysis expertise from Retail IT technical operators, and technical securities expertise from Investment Banking IT. Retail Banking IT set up investment-specific debit rules and credit rules to charge back costs to departments that commissioned the work and credit those that provided the work.
  • Credit Multiple IT Departments for Work Complete
    : The Retail IT finance manager set up a credit rule to allocate 100 percent credit among three provider departments:
    • Retail Application Development is doing the bulk of the development work and is credited 50 percent for the first three months and 80 percent for the remaining three months.
    • Retail Technical Operation is providing consultation at the beginning of the project and is credited for 25 percent for the first three months, and 10 percent for the remaining three months.
    • Investment Banking IT is also providing consultation at the beginning of the project and is credited for 25 percent for the first three months and 10 percent for the remaining three months.
  • Debit Multiple Business Units for Commissioned Work
    : The Retail IT project manager for this project set up a debit rule to charge back 50 percent each quarter to the Retail Self Service department and Retail Premier Accounts department. With flexible chargeback rules, Forward Inc can allocate charge costs appropriately to the departments benefiting from the services IT is providing. The rules also enable IT departments to get credit for the work they deliver.
This image shows how to credit multiple IT departments for work completed.
This image shows how to debit multiple business units for commissioned work.
Create Standard Allocation Rule Headers
A standard rule can be globally applied to many investments or services when the same chargeback rules can be used to debit departments for costs. When setting up chargebacks, investment or service managers can apply standard-based rules (set up by a finance manager) or investment-based rule (set up by the investment or service manager).
Follow these steps:
  1. Open Administration, and from Chargebacks, click Standard Rules.
    A list of existing standard rule headers appear.
  2. Click New.
  3. Enter the following information:
    • Allocation Code
      (Required) Defines the unique code that is used to classify the chargeback (or standard debit) rule. 
    • Entity
      (Required) Defines the entity that is associated with this chargeback rule.
    • Cost Type
      Provides the cost breakdown (Capital versus Operating cost) associated with the chargeback. 
    • User Value 1, User Value 2
      Custom properties. Available for selection only if lookup values have been defined in Studio.
    • Charge Code
      Defines the charge code that is associated with the chargeback rule.
    • Input Type
      Defines the input type code that is associated with the chargeback rule.
    • Transaction Class
      Defines the transaction class that is associated with this transaction rule.
    • Charge Remainder to Overhead
      Specifies whether you want to charge any remaining costs to overhead. If you select this option, also define overhead chargeback rules.
      Default:
      Cleared
    • Status 
      (Required) Indicates if the standard rule is available for chargebacks.
      Values:
      • Active. The rule is always considered and may be matched to a transaction when generating invoices.
      • Inactive. The rule is not considered when generating invoices.
      • On Hold. The rule may be considered and matched to a transaction if no active rule can be matched.
  4. Save changes and continue adding the GL accounts and the allocation percentage to debit accounts.
To modify the standard rule header properties, click the Allocation Code link for the selected standard rule header, open the Properties menu and click Main, edit the properties, and save your changes.
Create Credit Rule Headers
Credit rules identify the departments that are credited for the cost of delivered investments or services. Departments are credited based on the attributes of the resources that are assigned to the delivered investments or services. The location and department that is assigned to a resource must match the location and department that is assigned to the department receiving the credit.
Follow these steps:
  1. Open Administration, and from Chargebacks, click Credit Rules.
  2. Click New.
  3. Enter the following information:
    • Resource Credit Code
      Defines the unique code that is used to classify the credit rule.
    • Status Code
      Indicates if the credit rule is active, inactive, or on hold.
    • Entity
      Defines the entity that is associated with the department receiving the credit.
    • Location
      Defines the location that is associated with the department receiving the credit.
    • Department
      Defines the department that is receiving the credit.
    • Resource Class
      Defines a resource class that is associated with the credit rule.
    • Transaction Class
      Defines the transaction class that is associated with the credit rule.
  4. Save changes and continue adding the GL accounts and allocation percentage credited.
Create Investment-Specific Debit Rules
Debit rule properties uniquely describe a rule and are used to match transactions during financial processing. An overhead rule must exist to charge any remaining costs to the full GL account. If a rule has not been used to process transactions, you can delete a debit rule.
Follow these steps:
  1. Open an investment or service.
  2. Open the Chargebacks menu and click Debit Rules.
  3. Click New.
  4. Enter the following information:
    • Allocation Code
      Defines the unique code that is used to classify the debit rule for this investment.
    • Cost Type
      Provides the cost breakdown (Capital versus Operating cost) associated with the chargeback. 
    • Charge Code
      Defines the charge code that is associated with the debit rule.
    • User Value 1 and User Value 2
      Defines custom properties that are associated with the debit rule. You can select custom attributes only if lookup values have been defined in
      Clarity Project and Portfolio Management (PPM)
       Studio.
    • Input Type Code
      Defines the input type code that is associated with the debit rule.
    • Transaction Class
      Defines the transaction class that is associated with the debit rule.
    • Status Code
      Indicates if the debit rule is available for chargebacks.
      Values
      :
      • Active. Indicates that the rule is always considered and can be matched to a transaction when generating invoices.
      • Inactive. Indicates that the rule is not considered when generating invoices.
      • On Hold. If no active rule can be matched, the rule can be considered and matched to a transaction.
    • Charge Remainder to Overhead
      Indicates whether to charge any remaining costs to overhead. Select this check box to charge any remaining costs to overhead.
  5. Save changes and continue adding the GL account and department combinations to charge for costs.
Define GL Allocations for Standard or Credit Rules
After you have created debit rules, define the GL allocations that determine how consumer departments are charged for costs. GL Allocations identify the GL accounts and departments that are debited (for standard rules) and credited (for credit rules). GL allocations also indicate the percentages of the cost that are charged or credited. The allocation percentage for a credit rule for any time period must always equal 100 percent. A GL allocation is composed of a full GL account and a set of allocation rules. The rules represent the percentage of the allocated cost for a specified time period. A full GL account is a combination of the natural GL account and department.
For each GL allocation, you can evenly distribute chargeback percentages across all fiscal time periods, or specify different percentages for each time period. For example, if your company sets up its fiscal time period on a quarterly basis, you can specify 100 percent allocation for the first quarter. You can then specify 50 percent in the remaining quarters. The remaining costs for the last three quarters can be charged to another department or to overhead.
Follow these steps:
  1. Open the investment or service.
  2. Open the Chargebacks menu and click Debit Rules or Credit Rules.
  3. Click the Allocation Code link for standard rules or the Resource Credit Code link for credit rules to edit the properties of the selected rule.
  4. Do one of the following steps:
    1. Click New to add an account to the rule and define allocations.
    2. Click the GL Account link to edit allocations for an account already included in the rule.
    The rule detail page appears.
  5. In the General section, complete the following fields:
    • GL Account
      Defines the GL account that is associated with the rule.
    • Department
      Defines the department that is associated with the rule. For credit rules, indicates the department that is receiving the credit. For standard rules, indicates the department being charged.
    By default, an empty row with fields for start and finish dates, and percentage appears.
  6. Enter a start and end period for the rule.
  7. Specify the percentage to debit or credit the department for the specific period.
  8. Click New Row to continue adding time periods and percentages.
  9. Click Save and Return when done.
Remove GL Allocations from Debit Rules
You can remove GL allocations from debit rules as long as they are not referenced in financial plans or chargebacks.
Follow these steps:
  1. Open the investment or service.
  2. Open the Chargebacks menu and click Debit Rules.
  3. Click the GL Allocation Code link to access the rule details.
  4. Complete these steps in the General section:
    1. Select or change the GL account.
    2. Select or change a corresponding department.
  5. In either the Start or Finish fields, use the date picker to select a period time.
    The entity fiscal time period type determines the time periods that are available for selection.
  6. Specify the percentage to allocate with charges to the GL account and department combination.
  7. Save to continue adding allocations for more time periods.
  8. Save the changes.
Create Overhead Rules
When the rules for standard or debit rules charge remaining costs to overhead, overhead rules determine which GL accounts are debited. Overhead rules can contain only one set of GL allocations. No header information is required. To charge departments for overhead costs, set up the following items:
  • GL accounts for overhead.
  • Remaining costs are charged to either standard or debit rules.
Follow these steps:
  1. Open Administration, and from Chargebacks, click Overhead Rules.
  2. Click New.
  3. Enter the following information:
    • Entity
      Defines the entity that is associated with the rule.
    • GL Account
      Defines the GL account that is associated with the rule.
    • Department
      Defines the department that is associated with the rule.
  4. Save changes. Once saved, the rule properties are display-only.
  5. Define the overhead rule details as follows:
    1. Specify the percentage to allocate to overhead for the specific period.
    2. Click New Row to continue adding time periods and percentages.
    3. Save the changes.
To edit the allocations for overhead rules, edit the properties of a selected account, select a time period, specify the percentage to set the allocation for the full GL account, and save the changes. To delete an overhead rule, select the rule and click Delete.
Set Up Resource Credits
Before you can set up resource credits for posting to the GL account, see
Access Rights Reference
and verify that each user has the Financial Maintenance - Financial Management access right.
Most IT departments charge back credits to the group for which they worked to allocate expenses and work. A resource credit indicates which department, entity, location, transaction class, or resource class receives the credit. Incidents support resource credits.
Remove GL Allocations from Chargeback Rules
Use one of the following methods to remove GL allocations from chargeback rules:
  • Remove GL allocations from standard rules or credit rules.
  • Remove GL allocation from overhead rules.
You can remove GL allocations only if they are not referenced in chargebacks and cost plans.
Remove GL Allocations from Standard or Credit Rules
Follow these steps:
  1. Click the Allocation Code link or Resource Credit Code link to edit the properties of the selected rule.
    The rule property details appear.
  2. Select the check box next to each GL allocation you want to remove from the rule, and click Delete.
Remove GL Allocations from Overhead Rules
Follow these steps:
  1. Click the GL Account link to edit the properties of the selected overhead rule.
    The rule details page appears.
  2. Select the check box next to each time period you want to remove from the rule.
  3. Click Delete.
Resolve Chargeback Errors and Warnings
Use the Messages page to view and monitor chargeback errors and warnings. You may see both errors and warnings:
  • Errors
    . If a chargeback error occurs, the transaction causing the error cannot be processed. Fix these errors to process charges and credits.
  • Warnings
    . Chargeback warnings inform you of potential problems that you can fix.
The following table includes some of the more common messages and their resolutions:
Type
Message
Possible Resolution
Not Applicable
Error disbursing debit charges (overallocation).
The allocation percentages add up to more than 100 percent in the debit rule. To find out if your debit rule has allocation percentages that add up to more than 100 percent, configure the Debits list column views for the GL Allocation Detail object to display an aggregation row. For more information, see
Clarity Project and Portfolio Management (PPM)
Studio Development.
Not Applicable
Error disbursing overhead charges (overallocation).
The allocation percentages add up to more than 100 percent in the overhead rule. To find out if your overhead rule has allocation percentages that add up to more than 100 percent, configure the Overhead Rule List list column views for the GL Allocation Detail object to display an aggregation row. For more information, see
Clarity Project and Portfolio Management (PPM)
Studio Development.
Warning
No Chargeback Type set on investment.
Set the chargeback options for the investment.
Error
No credit rule allocation details in range of transaction date.
Define a GL allocation in the credit rule for the transaction date.
Error
No debit rule allocation details in range of transaction date.
Define a GL allocation in the debit rule for the transaction date.
Error
No matching credit rule found.
Do one of the following steps:
  • If no credit rule exists, create a credit rule. Contact the finance manager.
  • If a credit rule exists, compare its criteria with the transaction, and adjust or create a rule to match the transaction. You can also adjust the transaction to match the rule. Contact the finance manager and investment manager.
Error
No matching debit rule found.
Do one of the following steps.
  • If no debit rule exists, create a debit rule. Contact the investment or service manager.
  • If a debit rule exists, compare its criteria with the transaction, and adjust or create a rule to match the transaction. You can also adjust the transaction to match the rule. Contact the finance manager and investment manager.
Error
No overhead rule found.
Do one of the following steps:
  • Create an overhead rule. Contact the finance manager.
  • Clear the option to charge remaining costs to overhead on the debit rule.
Error
The selected Department, Location combination is invalid.
Verify that the properties of the credit rule indicate a valid department and location combination.
Warning
Unable to credit full amount of charge.
Review the credit rule and verify that the GL allocation equals 100 percent for the specified transaction date. For more information, contact the finance manager.
Warning
WIP transaction expense type [Capital Expense|Depreciation] does not match investment billing expense type [Capital Expense|Depreciation].
Do one of the following steps:
  • Set the Expense Type of the WIP Transaction to match the Billing Expense Type of the investment. Contact the finance manager.
  • Set the Billing Expense Type of the investment to match the Expense Type of the WIP Transaction. Contact the investment or service manager.
When you correct an error or warning, its associated messages are removed from the Messages page.
Follow these steps:
  1. Open Administration, and from Chargebacks, click Messages.
    A list of chargeback errors and warnings appear.
  2. Review the following information:
    • Investment
      Displays the name of the investment that is used in the transaction.
    • Charge Code
      Displays the charge code type that is associated with the investment.
    • Transaction Date
      Displays the transaction date.
    • Expense Type
      Displays the type of expense.
    • Resource
      Displays the resource that incurred cost against the investment.
    • Allocation
      Displays the rule on which the error or warning occurred.
    • Allocation Type
      Indicates if this type is a credit or debit rule.
    • Allocation Subtype
      Indicates if the rule is standard or investment-based.
    • Batch Date
      Displays the date the Generate Invoice job was run.
    • Batch Ran By
      Displays the user who initiated the Generate Invoice job.
    • On Hold
      Displays that the error message is on hold.
    • Message
      Displays the error or warning.
  3. Select the check box next to each message and complete one of the following tasks:
    • Click On Hold to put the error message on hold.
    • Click Release to release the error message from hold.
  4. Correct the errors and warnings.
Rule Headers and Time-based GL Allocations
Debit and credit rules are composed of a header and a set of time-based GL allocations.
Rule Headers
A header uniquely describes the rule and is used during financial processing to match to transactions. Here are some examples:
  • A debit rule DB-800 is described as charge code Expenses and transaction code techSup. Another debit rule DB-900 is described as charge code Expenses and transaction code SysMaint.
  • A credit rule CR-000 is described as location Santa Clara and resource class ENG. Another credit rule CR-111 is described as location Bournemouth and resource class ENG.
The GL allocation code that is used to create and identify rules can be configured to auto-populate.
Time-based GL Allocations
Debit and credit rules are composed of a header and a set of time-based GL allocations. Time-based allocations determine how much departments are debited or credited for costs during a time period. Chargeback rules are based on the following:
  • Full GL Account
    . Determines the general ledger (GL) account that the cost is charged to and the department responsible for the cost.
  • Fiscal time period
    . Identifies the time period for the GL allocation.
  • Allocation percentage
    . Determines the percentage of the total cost that is debited or credited to the full GL account.
Set Investment Chargeback Options
Managing chargebacks from investments involves setting up chargeback options. You can select from the following chargeback options or types:
  • Standard debit rules
  • Investment-specific debit rules
Bill Expense identifies how costs are booked. Bill Expense is also used to match with transactions to determine whether investment costs are invoiced or not. For example, your company has a policy to charge back only investments that are considered capital expenses. You also manage e-mail servers. Companies consider servers and other mission-critical hardware to depreciate over time and handle them differently during transaction processing. Any capital expense transactions that are processed against your e-mail servers are ignored and not charged back.
Chargeback options determine how and when charges are generated during invoicing. Set up chargeback options to process chargebacks. The chargeback type determines whether an investment-defined rule or a standard debit rule is matched to transactions during financial processing.
Select a chargeback type to generate invoices for matched transactions.
Follow these steps:
  1. Open an investment or service.
  2. Open the Chargebacks menu, and click Options.
  3. Complete the following fields:
    • Chargeback Type
      Defines the chargeback type for the investment or service.
      Values:
      • Standard
      • Investment
    • Bill Expense Type
      Indicates how costs are accounted for and whether they are considered for invoicing when transactions are processed.
      Values:
      • Capital expense
        . Charges are considered for invoicing.
      • Depreciation
        . Charges are not considered for invoicing.
  4. Save the changes.
Reverse Charges on Transactions
You can review transactions that are processed for your investments or services to verify that they were posted correctly. If you find errors that require reversals, you can reverse charges on selected transactions or on all listed transactions. When you reverse charges, the allocated charge is removed from department invoices. The charges do not appear when invoices are next generated or when the department manager manually regenerates an invoice. If the invoice is locked or approved when you reverse the charges, this change is reflected in future invoices.
Run the
Update Aggregated Data
job before generating invoices to ensure that the hierarchy data is updated. See
Jobs Reference
for more information.
Follow these steps:
  1. Open the investment or service.
  2. Open the Chargebacks menu and click Transactions.
    The
    chargebacks transactions page appears.
  3. In the filter section, browse for and select the fiscal period for which you want to view or reverse charges on transactions, and click Filter.
  4. Review the transactions.
  5. If the transactions are incorrect and require reversals, do one of the following steps:
    • Select each transaction whose charges you want to reverse and click Reverse Selected Charges.
    • Click Reverse Filtered Charges to reverse the charges of all of the listed transactions.
    The selected transactions indicate that charges were reversed.
View Department Recovery Statements
A
recovery statement
tells departments how much of their incurred costs can be recovered from the departments who benefited from the services that are provided. A recovery statement is similar to a company income statement -- only for departments. Incurred costs are charged to the departments that receive services. Department managers can view their charges from an invoice. Only departments that provide services can view department recovery statements.
To view department recovery statements, verify that the following items exist:
  • Set up services and associate the services with the department.
  • At least one department must subscribe to at least one service that the provider department offers.
  • Debit rules must exist for the services. Contact your service manager to create debit rules for the service.
  • Credit rules must exist.
  • See
    Access Rights Reference
    and verify that each user has the appropriate access rights to view recovery statements.
Recovery statements are generated with invoices during scheduled runs of the Generate Invoice job.
Recovery Statement Examples
  •  IT Departments Are Not Cost Centers Anymore: Your organization wants to offer business units a variety of IT support services, including email support, desktop support, and network support. The services are vital for each business unit to maintain their lines of business. Each department is charged for those services. Each department that delivers services receives credit for work performed.
  • Approved Invoices Charge Costs to Departments that Benefit from Services: Department invoices are generated, reviewed, and approved on a quarterly basis by the departments that benefit from services that are delivered to them. Corporate Human Resources has subscribed to several IT services and has agreed to accept charges for a portion of these services. The Human Resources department has approved an invoice that totals $17,400.
  • Charged Costs Translate into Credit for Departments that Deliver: The IT Service Delivery department receives credit for services that it provides. The department manager views incurred costs and credits on the department recovery statement. The statement shows that some charges were approved and the department has already recovered $17,400. Other department managers have yet to approve their charges. The charges appear as a recovery variance.
View Recovery Statement Summaries
You can view a recovery statement that summarizes all your incurred costs, recovered costs, and credits for each investment.
Follow these steps:
  1. Open Home, and from Organization, click Departments.
  2. Click a department link to open the department.
  3. Click Recovery Statement.
  4. Filter for recovery information.
    A list of investments that are owned by the department appear.
  5. Review the recovery information using this information:
    • Investment
      Displays the name of the investment that is owned by this department and offered as a service to other departments.
    • Type
      Indicates if the investment is a service or some other type of investment.
    • Incurred Cost
      Displays the total cost that is incurred to-date by this investment that was charged to other departments. Click the value to drill down and view the transaction details.
    • Recovered Cost
      Displays the total charges that are approved to-date by departments that are charged for this investment. This amount represents the total costs recovered to-date by this department. Click the value to drill down and view the transaction details.
    • Recovery Variance
      Displays the difference to-date between the incurred costs and recovered costs. The amount represents the total amount that this department is expecting to recover.
    • Credits
      Displays the total possible credit that this department can receive. Click the value to drill down and view the transaction details.
    • Credits Variance
      Displays the difference to-date between the recovered costs (approved) and total credits (approved and unapproved).
View Recovery Statement Details
You can view the recovery statement details to view transaction details.
Follow these steps:
  1. With the department open, click Recovery Statement.
    A list of investments appears.
  2. Click any of the following links to view the transaction details:
    • Incurred Cost
    • Recovered Cost
    • Credits
    A list of the processed transactions affecting this recovery statement appears.
  3. Select the Include Sub-departments check box to view the transactions from sub departments. This check box is inactive if sub departments do not exist.
  4. View the following information:
    • Investment
      Displays the name of the investment from which costs were incurred.
    • Department
      Displays the name of the department that is charged for the costs.
    • Transaction Date
      Displays the date of the transaction.
    • Amount
      Displays the total incurred costs.
    • Percentage
      Displays the GL allocation that is defined in the credit rule by your finance manager.
    • Scaled Amount
      Displays the scaled amount that is based on the GL allocation percentage.
Submit and Approve Department Invoices
Each department that is charged for the cost of delivered investments and services receives an invoice for each time period. You can view invoices periodically to monitor charges, make corrections, approve or reject invoices, and manually regenerate invoices. The investment or service manager sets up the debit rules that identify the departments that are charged. The rules also indicate the percentage of the cost they are debited.
To receive, submit, approve, or reject an invoice, verify that the following items exist:
  • Set up the fiscal time period type for establishing the invoice cycle.
  • Set up one of the following items:
    • Investment-specific debit rules.
    • Standard debit rules
    • Credit rules
  • See
    Access Rights Reference
    and verify that each user has the appropriate access rights to view, submit, approve, or reject invoices.
Invoice Approval
Typically, the finance manager and department manager work together to approve invoices. The finance manager submits invoices for approval and the department manager approves or rejects invoices. Department invoice access rights determine the users who can perform invoice-related tasks.
Use your company policies and best practices to identify the roles that are responsible for invoices and to determine cutoff periods for submitting and approving invoices. This information describes the approval process:
  1. The invoice is generated by running the Generate Invoice job, which can be scheduled to run periodically. When the job is complete, the invoice is available with a status of
    Proforma
    . The invoice is open to receive additional transactions and is available for review. The finance manager can manually regenerate invoices as needed and capture newly added transactions or adjustments in between scheduled invoice generation runs.
  2. Your finance manager submits the invoice for approval. The status changes to
    Submitted
    and the invoice becomes locked. No further transactions can be added. If additional transactions are processed for that time period, they are added to the next time period invoice.
  3. The department manager can approve or reject the invoice.
    • If approved, the status changes to
      Approved
      . The invoice is complete and no further actions can be taken.
    • If rejected, the status changes to
      Rejected
      . The finance manager can adjust or reverse a specific transaction or the entire invoice.
Delegated Invoice Approval
Delegated invoice approval enables sub departments to view and approve their own invoices. Delegated invoice approval is determined when setting up departments. When sub departments are given delegated invoice approval, invoices are generated for each sub department and the parent department. This condition applies if debit rules exist and transactions are posted against them. Sub department charges are not rolled up to the parent.
When sub departments do not have delegated invoice approval, any charges that are posted against these sub departments are rolled up into the invoice of the parent department. Parent departments must have delegated invoice approval to delegate invoice approval to any of their sub departments. If the top-level parent department does not set delegated invoice approval, no sub department in that branch can view or approve invoices. All charges are rolled up to the top-level parent department.
The following diagram shows the organizational structure and the effect delegated invoice approval has on each department:
This image shows how delegated invoice approval enables departments to approve their own invoices.
This image shows how delegated invoice approval enables departments to approve their own invoices.
  • Retail Banking:
    Delegates invoice approval to its two sub departments, Self-service Banking and Premier Customer Accounts. An invoice for the Retail Banking business unit is generated when transactions are posted against the business unit.
  • Self-Service Banking:
    Does not delegate invoice approval to its two sub departments, Marketing and Customer Service. An invoice is generated for the Self-service Banking department when transactions are posted against it. Any charges that are posted against Marketing and Customer Service departments are rolled into the Self-service Banking invoice. The Self-service Marketing and Customer Service departments do not receive invoices.
  • Premier Customer Accounts:
    Delegates invoice approval to its two sub departments, Marketing and Customer Service. An invoice is generated for the Premier Customer Accounts department when transactions are posted against the department. The Premier Accounts Marketing and Premier Accounts Customer Service departments also receive their own invoice when transactions are posted against their department.
Invoice Aggregation
Each line item in an invoice shows the aggregate charges of the top-level parent investment or service in a hierarchy. You can drill down and view the detailed charges of the parent and any child investment that is involved in transactions during the invoice time period. To learn how to work with charges in investment or service hierarchies, see
IT Service Management
and
Project Management
.
Example: Bottom line Charges are the Tops
The Retail Self-service department at Forward Inc manages a product named Self-service Banking. This product is the top-level parent to several other child investments, such as the Online Bill Presentment (OBP) system and technical support. When viewing invoices, department managers only see the aggregated charges of the top-level parent. For example, the $4,190.00 for Self-service Banking represents total charges for any investment in the hierarchy that is involved in a transaction during the invoice period. Department managers can view detail charges on each investment in the hierarchy by clicking the amount or total amount.
Invoice Adjustments
Occasionally you can see incorrect charges that require some adjustment or reversal. You can reject the invoice and request an adjustment. Here are some examples of adjustments that you can request:
  • Change your share in the cost of the investment or service
    . Contact the investment or service manager and request an adjustment to your debit allocation percent.
  • Update the transaction
    . Contact your financial manager to create a WIP adjustment and modify the transaction as needed, such as increasing or decreasing the rate, cost, or units.
  • Reverse the charges completely
    . Contact your investment or service manager, or finance manager to reverse charges.
Adjustments or reversals to transactions or debit rules trigger adjustments to other departments sharing in the cost of the investment. For example, if your allocation percentage reduces by 5 percent, other departments pick up those additional charges. If the total cost is discounted for one transaction, then all departments sharing the costs also receive an adjustment in their charges. Any adjustments or reversal that is made to locked or approved invoices is reflected in the next unlocked invoice or future invoice.
Submit Department Invoices
Department managers can view a list of invoices that are generated for their departments. Finance managers can view all generated invoices from the financial management invoice pages. From an invoice, you can drill-down to view the following details:
  • The WIP or adjustment status of a transaction.
  • The amount of the transaction.
  • The percentage charged. For example, 100 percent indicates that only one service is using the investment and 50 percent indicates that the investment is shared between two services.
  • The scaled dollar amount that is based on the percentage that is charged to the service.
Your finance manager typically submits invoices for approval. Submitted invoices are automatically locked and have a status of
Submitted
. Submitted invoices can be recalled, approved, or rejected.
Follow these steps:
  1. Open Home, and from Organization, click Departments.
  2. Open the department and click Invoices.
    A list of invoices for your department appears.
  3. Click an Invoice Number link to open the invoice. The following fields require explanation:
    • Current Amount
      Displays the amount of the charge for the specified time period. Click this link to view transaction details.
    • Prior Period Adjustment
      Displays the amount of an adjustment that occurred during a previous time period. If the amount is zero, then no prior period adjustments were made. Click this link to view adjustment details.
    • Total Amount
      Displays the total amount of the charges less adjustments for the specified time period. Click this link to view transaction details.
    • Subscription
      Indicates whether you have subscribed to a service. If you have subscribed to a service, a check mark appears.
  4. Submit the invoice.
Lock or Unlock Department Invoices
Your finance manager typically uses the department invoice items page to lock and unlock invoices. When an invoice is submitted, it is automatically locked. When an invoice is locked, transactions cannot be added to the invoice. If you have access rights to submit invoices, you can temporarily unlock and regenerate last-minute changes.
Follow these steps:
  1. Open Home, and from Organization, click Departments.
  2. Open the department and click Invoices.
    A list of invoices for your department appears.
  3. Click the Invoice Number link to open the invoice.
  4. Do one of the following steps:
    • Click Lock to prevent updates to the invoice.
    • Click Unlock to open the invoice for updates.
Approve or Reject Department Invoices
The department manager typically approves, recalls, or rejects an invoice. You can change the status of an invoice back to its submitted state by recalling it. When an invoice is approved, you cannot recall or take any action on the invoice. Any adjustments or reversals that are made to the invoice after approval are included with the next unlocked or future invoice. When an invoice is rejected, WIP adjustments or changes to debits rules can be made to correct charges. Contact your finance manager for assistance with WIP adjustments.
Follow these steps:
  1. Open Home, and from Organization, click Departments.
  2. Open the department and click Invoices.
    A list of invoices for your department appears.
  3. Click an Invoice Number link to open the invoice.
  4. Click Approve or Reject.
Regenerate Department Invoices
Invoices are updated continually during scheduled runs of the Generate Invoice job. However, you can manually update an invoice in between scheduled runs and view recently added transactions. If a recalculation affects multiple invoices and all affected invoices are unlocked, the invoice is updated. Recalculations are ignored if any invoice affected by the change is locked. If a recalculation is not possible, a message appears.
See
Jobs Reference
,
Generate Invoices
job description for more information. 
Run the
Update Aggregated Data
job before regenerating invoices to ensure that the hierarchy data is updated. See 
Jobs Reference 
for more information.
Follow these steps:
  1. Open Home, and from Organization, click Departments.
  2. Open the department and click Invoices.
    A list of invoices for your department appears.
  3. Click an Invoice Number link to open the invoice.
  4. Click Regenerate.
    A progress bar appears during the regeneration process. When complete, the recalculated invoice appears.
  5. Click the Current Amount or Total Amount link to view transaction details and see the effects any adjustments had on the invoice.