A New Procedure for Credit Memos   back to top

Today's FINDINI release brings with it an upgrade to the database underlying the financial applications, and a new screen in Web Voucher to support the processing of vendor credit memos.

As described in the November 9, 2000 e-News, a credit memo is a "negative invoice" issued by a vendor: the vendor owes Harvard rather than Harvard owing them. The credit memo usually results from the local unit being dissatisfied with the goods or services provided, or the vendor being unable to deliver the ordered goods. Most importantly, the vendor has been paid and the check has cleared the bank. Harvard financial administrators should always request a refund check from the vendor rather than accept a credit memo. This is particularly true with vendors for unusual goods or services -- there may be no subsequent invoices submitted from the vendor against which Harvard could take its credit.

If the vendor does issue a credit memo, you should examine it carefully to make sure that it is valid. This step is necessary because vendors sometimes send correspondence that may look like a credit memo when it is actually a payment confirmation or a statement of your account.

Under the old procedure, users were asked to write the original web voucher number and account coding to be credited on the vendor-provided credit memo, fill out a Web Voucher Exceptions Request form checking the Credit Memo box, staple the credit memo to the form, and forward the package to Accounts Payable in Holyoke Center. No electronic voucher was created. Accounts Payable would then create the credit memo in the system, credit your account coding, and deduct it from the next payment to that vendor regardless of what Harvard department is making the payment, provided that the payment exceeds the amount of the credit memo.

Under the new procedure, web voucher preparers should choose Create Credit Memo from the Web Voucher main menu, enter the appropriate information into the system making sure to express the credit amount as a positive number, and forward it for online approval. In most cases, the account coding originally charged is the most appropriate coding for the credit, particularly in the case of sponsored funds.

The preparer should send a printout of the confirmation screen and the original vendor credit memo to their approver as well. The approver should then forward the documentation to Accounts Payable after the transaction has been approved in the system.

What Happens if the Vendor Credit Memo Cannot Be Applied?

Accounts Payable will track the aging of the credit memo. According to the University policy on credit memos, those that have been recorded in the payables system for five months and not applied will be reported to the Financial Deans. This may happen if the vendor is specialized and not used again during this time. If the credit memo is still outstanding at the end of the next 30 days (i.e., six months in total), Accounts Payable will reverse the credit memo, charging the original account coding. Local units began seeing reversals as a charge on their monthly detail listings in December of 2000. If this happens, the local unit should contact the vendor and ask for a refund check.

Ask Accounts Payable

If you have any questions concerning credit memos, please contact the UIS Helpdesk at 496-2001 or Accounts Payable Customer Service at 495-8500. You can also send questions about AP policies or procedures to askap@camail.harvard.edu. If of general interest, we will publish questions and answers in future issues of the e-News.

General Accounting News   back to top

Change in the Month-End Closing Deadlines

With the addition of new month end allocations, it is necessary to start the month-end closing process a bit earlier. While the deadline for manual and ADI journals has been 10 a.m.on the fifth working day, the new deadline will be 9 a.m. on the fifth working day. Fortunately, the deadline for General Ledger feeds is being extended. While the deadline for General Ledger feeds has been 10 a.m. on the third working day, the new deadline will be 4 p.m. on the third working day. These new deadlines will be effective with the March 2001 close.

Endowment Unit and T-bill Rates Now on ABLE

Most of the University's endowment is invested in what is called the General Investment Account (GIA), a pool of investments managed by the Harvard Management Company. The University employs a unit method of accounting for the GIA -- additions to endowment are used to purchase investment "units," much like a mutual fund. Each participating endowment fund holds a very specific number of units based upon gifts and other capital activity that takes place in the fund. To calculate the market value of an endowment fund at any point in time, the units held by the fund are multiplied by the current month's unit rate now available in the Chart of Accounts area of ABLE.

The T-bill rate shown in the CoA area of ABLE is the 90-day U.S Treasury Bill rate. This rate is used as the basis for interest paid or charged on various Harvard balances. For example, construction gifts are paid interest at T-bill plus 1% on their monthly balances.

Capital Accounting

At the beginning of FY2001, accounting for equipment, furniture, and fixtures expenditures changed. Accounting procedures now require that all items that cost $5,000 or more be capitalized. This is accomplished through the use of certain expense object codes. Object codes 6801 though 6816 should be used for purchases of equipment, furniture, and fixtures where the unit cost of an item is $5,000 or more. Here is a listing of those object codes.

Items that cost less than $5,000, even if the aggregate cost of the items exceeds $5,000, should not be charged to these codes. Any items that cost less than $5,000 may be charged to:

The only exception to this policy relates to purchases incurred to fit out space with new furnishings and equipment when they are part of a building acquisition or construction project. A complete discussion of the Capitalization and Depreciation of Property, Plant and Equipment policy can be found in ABLE at: http://able.harvard.edu/policies/acct/index.shtml#3

About the e-News   back to top

The Financial Administration publishes this semi-monthly electronic newsletter for users of Harvard University's financial systems, policies, and procedures. Generally, the e-News is published on the 12th and 26th of each month.

It contains:

• updates on projects underway to build or improve University financial systems;
• information about new University financial policies, procedures, and forms;
• reminders about upcoming deadlines and cut-over dates;
• tips and tricks for working more easily or productively.

We welcome questions and suggestions for improvement from readers. If your questions are of general interest, we will answer them in future issues.

Please send comments, questions, or suggestions for improvement by email to us at: fad_communications@harvard.edu

How to Subscribe or Unsubscribe from the e-News

The e-News, including all back issues and an index by topic, is available to anyone with internet access at: http://vpf-web.harvard.edu/training/enews.html. No subscription or password is needed.

When we publish each issue, we send out a notification email to all users of Oracle financials, STAR, the Budget Tools, and the Data Warehouse. Because there are nearly 5,000 users, we compile and maintain this "listproc" in an automated way. The Harvard Data Warehouse and the STAR security module are queried for all registered users. Twice a month, the queries are re-run to pick up new users. Disabled or terminated users automatically drop off. Duplicates between systems are eliminated. As a final step, email addresses are pulled from the HUID system, which is fed by the UIS Telecommunications Directory.

If you do not actively use Harvard University financial systems and find the semi-monthly notification email bothersome, you should ask your local security administrator or financial office to disable your financial system access. This is the only way to get off the listproc.

If you are an active user of Harvard financial systems, but do not receive the notification email, it is likely there is no email address listed for you in the UIS Telecommunications Directory. You can submit an email address, or change it, in three ways:

1. Via the directory coordinator for your department. This contact -- often, but not always, your department administrator -- is responsible for updating directory information throughout the year, whenever staff contact information changes. This info is fed into the online directory and to the telephone operators the next business day.

2. On the update directory page on the UIS web site.

3. FAS faculty and staff should update their records via the FAS Portal.