Guidelines for Internal Fund Transfers and Revenue Handling
This content provides detailed guidance on handling internal fund transfers and revenue collection on behalf of other funds within an organization. It covers different transaction types, simple entries for revenue distribution, internal sales, and proper account codes to use. The instructions emphasize maintaining accurate financial records and ensuring proper fund allocation.
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These 3 transaction types are: Internal entries Internal entries No dollars are moved into or out of SOU funds -only between funds. Use the right accounts. 2
When collects revenue on behalf of When one fund collects revenue on behalf of one fund one or more other funds you must move the revenues to one or more other funds, , you must move the revenues to the fund(s) that earned it! the fund(s) that earned it! 3
This is a simple entry: Debit original entry. Credit This is a simple entry: Debit Fund distributing the revenue Use the 0xxxx account used in the original entry. Credit Fund receiving the revenue Use as above. Fund distributing the revenue Use the 0xxxx account used in the Fund receiving the revenue Use THE SAME as above. THE SAME revenue account revenue account 4
An Internal Sale is The sale from one sale of goods or services one SOU fund to another another. ------------------------------- NOT for Budgeted Operations funds. 5
Must not increase net revenues, so Use an 09xxx 09xxx account so the revenue can be eliminated by SOU for reporting purposes. 6
Use account codes that begin with 09 (partial list below) 7
Bookstore sells inventory to other funds. Print & Copy sells printing services to other funds. Housing and Dining provides catering to other departments. 8
The bookstore sells goods to other funds on campus. The bookstore sells goods to other funds on campus. The first 2 lines 70 in entry JBKS0107 on 10/31/12 Debit Credit BKSOPR, acct 09391 Miscellaneous Internal Sales. Debit funds that received goods using natural expense accounts. 9
When one fund pays for goods or services on the behalf of another fund, And then the second fund(s) must pay back the first fund. 10
There are two types of Expense Reimbursement. 1. Reimbursing clearly identifiable Goods or Services ( Direct ). 2. Reimbursing a group of expenses that cannot be easily identified ( Indirect ). Reimbursement of expense must not exceed the original total cost of the expense. 11
Type 1 Reimbursement Reimbursement of Type 1 of Direct Expenses Direct Expenses CREDIT DEBIT the fund and account that paid the original expense the fund where the expense belongs and use the SAME EXPENSE ACCOUNT. 12
EXAMPLE OF: Type 1 Reimbursement of Direct Expenses IT purchased a computer and monitor on behalf of the International Programs department and then gets reimbursed. IT purchased a computer and monitor on behalf of the International Programs department and then gets reimbursed. Same expense account Entry detail for J0070402 11/15/12 13
Type 2 Reimbursement of (aka Internal Sales Reimbursement) Type 2 Reimbursement of Indirect expenses (aka Internal Sales Reimbursement) Indirect expenses. . CREDIT DEBIT the fund with the original expenses use a 79xxx account. the fund that received the Goods or Services use the natural account that describes the expense. 14
Use account codes that begin with 79 (partial list below) (Internal Sales Reimbursements show up as a credit to other expenses.) 15
EXAMPLE OF: Type 2 Reimbursement of Indirect Expenses RVTV is reimbursed for time and materials for duplicating DVDs for the Schneider Museum. Detail from J0069897 9/17/12 RVTV is reimbursed for time and materials for duplicating DVDs for the Schneider Museum. Credit RVTGAH - account 79107 Debit SMAGEN account 24602 16
Summary Summary Revenue Distributions Internal Sales Expense Reimbursements same revenue acct for Debit and Credit Internal Sales Use 09 accts for Credit; no Bud Ops funds Expense Reimbursements Direct type - Indirect type use same expense acct for Debit and Credit use 79 79 accts for Credit 17
Revised March, 2014 For additional Information contact: Associate Director, Business Services https://inside.sou.edu/busserv/staff.html 552-8536 or Director of Business Services https://inside.sou.edu/bus-serv/staff.html 552-6594 18
