Budget management functionality that FOLIO needs to stay competitive (UXPROD-3442)

[UXPROD-3256] Allow user to process invoices against previous fiscal years Created: 27/Aug/21  Updated: 07/Feb/24  Resolved: 21/Sep/23

Status: Closed
Project: UX Product
Components: None
Affects versions: None
Fix versions: Poppy (R2 2023)
Parent: Budget management functionality that FOLIO needs to stay competitive

Type: New Feature Priority: P2
Reporter: Dennis Bridges Assignee: Joseph Reimers
Resolution: Done Votes: 0
Labels: LC-priority1, LC1, LC1a, acquisitions, galileo, invoices, loc, needs-rmsigreview, orders
Remaining Estimate: Not Specified
Time Spent: Not Specified
Original estimate: Not Specified

Issue links:
Cloners
is cloned by UXPROD-4490 Allow user to process invoices agains... Draft
Defines
is defined by MODINVOICE-474 Update the encumbrance when using a p... Closed
is defined by MODINVOICE-481 Save invoice fiscal year if it is und... Closed
is defined by UINV-419 Allow user to process invoices agains... Closed
is defined by UINV-479 Allow user to select Fund and Expense... Closed
is defined by UINV-480 Filter Invoices by Fiscal year Closed
is defined by MODFIN-312 Spike: Anayze mod-finance endpoints c... Closed
is defined by MODFISTO-405 Provide error code to restriction in ... Closed
is defined by MODINVOICE-466 Update DTO schema with adding fiscalY... Closed
is defined by MODORDERS-879 Prevent creating an order using 2 dif... Closed
is defined by MODFIN-317 Add possibility to filter expense cla... Closed
is defined by MODINVOICE-462 Skip PO and POL status update when pa... Closed
is defined by MODINVOICE-463 Provide fiscalYear field for pending ... Closed
is defined by MODINVOICE-465 Provide endpoint to retrieve fiscal y... Closed
is defined by MODINVOICE-468 Allow to use a fund with no current b... Closed
is defined by MODINVOICE-471 Restrict approving/paying an invoice ... Closed
is defined by MODINVOICE-473 Save invoice fiscal year if it is und... Closed
is defined by UINV-478 Use the invoice fiscal year to displa... Closed
Relates
relates to MODINVOSTO-174 Poppy: Fiscal year is not populated o... Open
relates to UXPROD-4395 Credit memos in a multi-FY environment Closed
Epic Link: Budget management functionality that FOLIO needs to stay competitive
Front End Estimate: Medium < 5 days
Front-End Confidence factor: 80%
Back End Estimate: XXL < 30 days
Back-End Confidence factor: 60%
Development Team: Thunderjet
PO Rank: 70.1
Rank: Cornell (Full Sum 2021): R5
Rank: Duke (Full Sum 2021): R4
Rank: MI State-Lib of MI (Sum 2021): R1

 Description   

Overview:

Allow user to select previous fiscal years when approving an invoice such that payments or credits would impact a budget from a previous fiscal year. This is important for managing financial records and balancing budgets post rollover

Use case:

  • Budgets may not balance with external system records because of rounding errors and exchange rate calculations. When this occurs the library will create Journal Voucher (JV) transactions to adjust balances

see https://folio-org.atlassian.net/wiki/x/_ARU for more detailed use cases

Questions

In-scope:

  • Allow user to specify fiscal year when creating invoice
  • By default the current fiscal year is seletected
  • Allow user to set fiscal year ONLY IF the setting is active
  • Add setting to invoice settings that activates this ability
  • Only allow users with permission to specify a current or previous fiscal year

Approach:

Out of scope:



 Comments   
Comment by Lisa Smith [ 23/Dec/21 ]

After our first fiscal close in FOLIO, we have a period of about 2 weeks to make corrections and adjustments.  Our numbers must match with the University numbers.  To do this, we must be able to adjust expenditures by debiting/crediting in the invoice app, using the previous FY ledger.  We also need to be able to adjust encumbrances in the POLs, using the previous FY ledger.

Comment by Lisa Smith [ 23/Dec/21 ]

Also, we may need to adjust appropriations if something was missed, and not noticed until fiscal close.

Comment by Dennis Bridges [ 23/Dec/21 ]

Lisa Smith by adjusting appropriations do you mean increasing or decreasing the allocated amount of a Fund? Or would you also use invoices to adjust appropriations?

I am assuming by appropriation you are referring to a pool of money (Fund/Budget) you set aside for a specific purpose. Ie. a purpose other then acquiring material, Is this correct?

Comment by Kay Granskog [ 12/Apr/22 ]

Dennis Bridges Yes, we mean increasing or decreasing the allocated amount of a fund but it would most often be increasing the amount. We would not adjust the appropriation by paying an invoice.

As for the last question, could you explain why the purpose of the money matters?  It is the materials budget so it could be either payment for material or for services deemed appropriate for the materials budget.  (Lisa Smith and Kay Granskog)

Comment by Dennis Bridges [ 12/Apr/22 ]

Thanks Kay Granskog, I am trying to determine exactly how you would expect these actions to impact the budget. So perhaps a better question is why are you updating last years budget? Do any of the following examples apply? Are there others?

Eg. 1) There was an invoice that could not be paid on time but needs to be counted against last years budget.

Eg. 2) There was a credit that was not processed in time to be counted against last years budget.

Eg. 3) The value of an invoice that was processed against last years budget was not correct (Maybe the exchange rate was wrong) and money needs to be expended from last years budget to capture the delta.

 

It seems for the first two you may actually expect to add "payments" for these invoices to last years budget. Whereas for example 3 you may just add a debit that captures a total shortfall. For example missing pennies from 100 different invoices that need to be counted.

 

Thanks for your feedback!

Comment by Lisa Smith [ 13/Apr/22 ]

Dennis Bridges Kay Granskog

The reasons you list above are good possible examples.  We also could encounter:

  • service fees that come in after we close the books
  • credit card purchases that post on the last day of June don't show up until the July ledger
  • charges from other University departments that go through purchasing at the end of June, don't show up until the July ledger
  • special funds that are not charged in our system properly in June - accounting allows for a period in July to process Distribution of Income transactions (DIs) (my credit card is tied to a particular University Acct number - if I use that to purchase an item with an endowment fund, a DI is needed to correct the expenditure from the Univ Acct to the endowment acct.)
  • appropriations for special department funds-ex: bussp, gllsb, dpdsp—sometimes are overlooked & not entered in the year; this also includes expenditures on these funds

Mainly we would pay/unpay invoices or add, adjust appropriations, or transfer funds during what we call our '2nd close' in July.

Comment by Dennis Bridges [ 13/Apr/22 ]

Very helpful use cases, thank you Lisa Smith. It does seem that this functionality will need to include processing invoices AND adjusting fund totals (Transfers and allocations). Also, thank you for adding your priority above, I'm hoping we will hear from others shortly as well.

Comment by Dung-Lan Chen [ 21/Apr/22 ]

In addition to what's been mentioned by Lisa and others, I think it's important to have this feature put in place as it provides peace of mind to those who are in charge of fiscal year rollover and Acquisitions for their institution to know that recourse is available if they need process invoices against previous fiscal years and also helps to shorten the window that we have to keep current fiscal year open for cleaning up while we are already in the new fiscal year calendar wise.  If this feature is needed, the sooner it's in place, the better off particularly for early FOLIO adopters in my opinion

Comment by Julie Brannon [ 22/Apr/22 ]

At Duke, we'll rank this feature as an R4 since our current system doesn't allow us an easy way to transact against budgets after the fiscal year ends.  Our FY ends on June 30, so from July 1 until we perform rollover (usually in mid-July) we don't submit any order or invoice transactions since the next year's budgets aren't open until rollover runs.  

During that two-week interm period, if an issue is spotted in reconciling against our university AP system there is a way to process a transaction by changing the fiscal year temporarily, but this happens very rarely and is rather complicated, so it's not usual practice.  We're double-checking with staff who manage library accounting to make sure we have an accurate understanding of this and will update here if needed.

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