With the University’s fiscal year-end (June 30, 2023) approaching, below are recommended guidelines for efficient and effective year-end processing of financial transactions.
Accounting for departmental expenses:
In accordance with generally accepted accounting principles, Drake is required to report transactions in the proper fiscal period. For that reason, expenses are recorded in the period when goods are received and/or services are rendered. In short, items expensed to the FY23 budget will need to be received before the ‘end of the business day’ on June 30, 2023. Factors such as budget allocation, invoice receipt, or payment issuance would not have an impact on the application of expenses within a fiscal period.
Exceptions to this general rule apply when a benefit of service or receipt of item extends into multiple fiscal years. In such cases, the following guidelines will be applied.
- Expenses less than $5,000: will be charged against the fiscal year in which the majority of the expense will be incurred. (For example, if a subscription is purchased for $3,000 and covers the period of 7/1/22 through 12/31/23, the expense would be charged to FY23 because 12 months are in FY23 and only 6 months are in FY24)
- Expenses greater than or equal to $5,000: will be split into the fiscal years according to the percentage of benefit received during each fiscal period. (For example, if a subscription is purchased for $10,000 and covers a period of 7/1/22 to 6/30/24, $5,000 would be charged to FY23 since 12 months are for FY23 and $5,000 charged to FY24 because the remaining 12 months is in the following fiscal year)
The University’s guidelines for year-end purchases are subject to external audit. As you make purchases during this period leading up to and overlapping our fiscal year-end, it is important to note when the goods or services were received so they are expensed according to reporting requirements. If the timing of receipt is not clearly noted on the invoice, it would be beneficial to help call the receipt date to the attention of accounting by clearly noting the appropriate fiscal year, based on the above guidelines, in the business description in Finance Self Service.
Please review the notice for processing year-end transactions through the new Finance Self-Service tool as well as a timeline for processing year-end transactions.
For questions, contact Jeni Baugher at jenifer.baugher@drake.edu.
— Jeni Baugher, Accounts Payable Supervisor
