SAP FICO Blueprinting

AcceleratedSAP - Business Blueprint
[Customer logo]
ASAP Business Blueprint

Project IRIS
Created by:
Finance Team
Date of creation:
May 25, 2000
Changed by:
Date of the last changes:
Version:
Final
Report select options:
Financial Team Business Blueprint

Q&A
CIT
_______________
______________________
______________________
Sign Off Date
Signature Customer
Signature Consulting
File location: F:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
Table of Contents
A.
Organization__________________________________________________________________________ 10
1.
Cross-application/central organizational units _____________________________________________ 10

1.1. Client ___________________________________________________________________________ 10
1.2. Company _________________________________________________________________________ 10
1.3. Company Code ____________________________________________________________________ 11
1.4. Business Area _____________________________________________________________________ 13
1.5. Functional Area ___________________________________________________________________ 15
1.6. Financial Management Area __________________________________________________________ 16
1.7. Controlling Area ___________________________________________________________________ 16
1.8. Profit Center ______________________________________________________________________ 18
1.9. Plant ____________________________________________________________________________ 20
2.
Procurement _________________________________________________________________________ 22
2.1. Purchasing Group __________________________________________________________________ 22
2.2. Purchasing Organization _____________________________________________________________ 23
3.
Sales and Distribution _________________________________________________________________ 26

3.1. Sales Area ________________________________________________________________________ 27
3.2. Sales organization __________________________________________________________________ 27
4.
Project management ___________________________________________________________________ 27

4.1. WBS Element Applicant _____________________________________________________________ 31
4.2. Person Responsible for WBS Element __________________________________________________ 31
5.
Financial Accounting __________________________________________________________________ 32

5.1. Chart of Accounts __________________________________________________________________ 32
6.
Treasury ____________________________________________________________________________ 34
6.1. Treasury _________________________________________________________________________ 34
7.
Enterprise Controlling _________________________________________________________________ 35

7.1. Dimensions _______________________________________________________________________ 35
7.2. Currencies (Consolidation) ___________________________________________________________ 35
8.
Asset Accounting______________________________________________________________________ 36
8.1. Depreciation area __________________________________________________________________ 37
8.2. Chart of Depreciation _______________________________________________________________ 37
8.3. Asset class________________________________________________________________________ 37
B.
General settings _______________________________________________________________________ 39

1.
Currencies ___________________________________________________________________________ 39
2.
Units of measurement __________________________________________________________________ 39
C.
Master data___________________________________________________________________________ 40
1.
General master records ________________________________________________________________ 40

1.1. Material Master ____________________________________________________________________ 40
1.2. Service Master ____________________________________________________________________ 46
1.3. Customer Master Record ____________________________________________________________ 47
1.4. Vendor Master Record ______________________________________________________________ 52
1.5. Bank/Bank Directory TR/FI __________________________________________________________ 57
1.6. Taxes ____________________________________________________________________________ 60
2.
Procurement _________________________________________________________________________ 60
2.1. Buyer ___________________________________________________________________________ 60
F:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
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2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
2.8.
2.9.
Purchasing info record ______________________________________________________________ 61

Conditions________________________________________________________________________ 63
Source List _______________________________________________________________________ 65
Model Service Specifications _________________________________________________________ 67
Message Conditions ________________________________________________________________ 68
Delivery Address __________________________________________________________________ 69
Release Strategy with Classification____________________________________________________ 71
Vendor Evaluation _________________________________________________________________ 72
3.
Sales and Distribution _________________________________________________________________ 74

3.1. Output ___________________________________________________________________________ 74
4.
Project management ___________________________________________________________________ 74

4.1. Standard structures _________________________________________________________________ 74
4.1.1.
Standard WBS_________________________________________________________________ 75
4.2. General __________________________________________________________________________ 76
4.2.1.
PS text _______________________________________________________________________ 76
4.3. Project structure ___________________________________________________________________ 77
4.3.1.
Responsible Cost Center _________________________________________________________ 77
4.3.2.
Requesting Cost Center__________________________________________________________ 77
5.
Financial Accounting __________________________________________________________________ 78

5.1. G/L Account ______________________________________________________________________ 78
5.2. Ledger ___________________________________________________________________________ 81
5.2.1.
Special Purpose Ledger__________________________________________________________ 82
5.3. Funds Management _________________________________________________________________ 85
5.3.1.
Funds Center __________________________________________________________________ 87
5.3.2.
Commitment Item ______________________________________________________________ 90
5.3.3.
Fund ________________________________________________________________________ 93
6.
Revenue and cost controlling ____________________________________________________________ 97

6.1. Overhead Cost Controlling ___________________________________________________________ 97
6.1.1.
Cost Element __________________________________________________________________ 97
6.1.1.1. Primary Cost Element _______________________________________________________ 100
6.1.1.2. Secondary Cost Element _____________________________________________________ 100
6.1.1.3. Cost Element Group _________________________________________________________ 101
6.1.2.
Cost Center __________________________________________________________________ 101
6.1.2.1. Cost Center________________________________________________________________ 103
6.1.2.2. Standard Hierarchy for Cost Centers ____________________________________________ 104
6.1.2.3. Cost Center Group __________________________________________________________ 104
6.2. Profit Center Accounting ___________________________________________________________ 104
6.2.1.
Assignment of Profit Centers to Master Data ________________________________________ 105
7.
Asset Accounting_____________________________________________________________________ 106
D.
Business Processes ____________________________________________________________________ 110

1.
Procurement ________________________________________________________________________ 111

1.1. Procurement of Materials and External Services _________________________________________ 111
1.1.1.
Purchase Requisition___________________________________________________________ 111
1.1.1.1. Purchase Requisition Processing _______________________________________________ 111
1.1.1.2. Purchase Requisition Assignment ______________________________________________ 114
1.1.1.3. Release Purchase Requisition _________________________________________________ 116
1.1.2.
Purchasing___________________________________________________________________ 118
1.1.2.1. Purchase Order Processing: Vendor Unknown ____________________________________ 118
1.1.2.2. Purchase Order Processing ____________________________________________________ 122
1.1.2.3. Contract Release Order ______________________________________________________ 126
1.1.2.4. Release of Purchase Orders ___________________________________________________ 128
1.1.2.5. Transmission of Purchase Orders _______________________________________________ 129
1.1.2.6. Delivery and Acknowledgment Expediter ________________________________________ 132
1.1.2.7. Processing of Shipping Notifications/Confirmations ________________________________ 134
1.1.2.8. Transmission of Shipping Notifications__________________________________________ 136
1.1.3.
Goods Receipt ________________________________________________________________ 137
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1.1.3.1. Goods Receipt Processing ____________________________________________________ 137

1.1.3.2. Goods Receipt Processing with Reference ________________________________________ 139
1.1.4.
Invoice Verification ___________________________________________________________ 142
1.1.4.1. Invoice Processing with Reference _____________________________________________ 142
1.1.4.2. Invoice Overview ___________________________________________________________ 146
1.1.4.3. Invoice Release ____________________________________________________________ 148
1.2. Internal Procurement Not in scope___________________________________________________ 150
1.2.1.
Purchase Requisition Internal Procurement not in scope _____________________________ 150
1.2.1.1. Purchase Requisition Processing _______________________________________________ 151
1.2.1.2. Purchase Requisition Assignment ______________________________________________ 152
1.2.1.3. Release Purchase Requisition _________________________________________________ 154
1.2.2.
PurchasingInternal Procurement not in scope _____________________________________ 156
1.2.2.1. Purchase Order Processing ____________________________________________________ 156
1.2.2.2. Release of Purchase Orders ___________________________________________________ 159
1.2.2.3. Transmission of Purchase Orders _______________________________________________ 161
1.2.3.
Goods ReceiptInternal Procurement not in scope __________________________________ 163
1.2.3.1. Goods Receipt Processing ____________________________________________________ 164
1.3. Source Administration _____________________________________________________________ 166
1.3.1.
RFQ/Quotation _______________________________________________________________ 166
1.3.1.1. Processing of Requests for Quotations___________________________________________ 166
1.3.1.2. Release of RFQs____________________________________________________________ 168
1.3.1.3. Transmission of RFQs _______________________________________________________ 170
1.3.1.4. Vendor Quotation Processing _________________________________________________ 172
1.3.1.5. Transmission of Rejections ___________________________________________________ 174
1.3.2.
Outline Purchase Agreements ____________________________________________________ 175
1.3.2.1. Contract Processing _________________________________________________________ 175
1.3.2.2. Release of Outline Agreements ________________________________________________ 177
1.3.2.3. Transmission of Contracts ____________________________________________________ 179
1.4. Return Deliveries _________________________________________________________________ 180
1.4.1.
Outbound Shipments ___________________________________________________________ 181
1.4.1.1. Transportation Planning and Processing _________________________________________ 181
1.4.1.2. Freight Cost Invoicing and Settlement ___________________________________________ 184
1.4.1.3. Message Transmission for Transport Documents __________________________________ 186
1.4.2.
Invoice Verification ___________________________________________________________ 187
1.4.2.1. Invoice Reversal ____________________________________________________________ 187
1.4.2.2. Manual Clearing____________________________________________________________ 189
1.4.3.
Shipping ____________________________________________________________________ 190
1.4.3.1. Message Transmission for Deliveries ___________________________________________ 190
2.
Sales and Distribution ________________________________________________________________ 192

2.1. Sales Order Processing (Standard) ____________________________________________________ 192
2.1.1.
Sales Order __________________________________________________________________ 192
2.1.1.1. Sales Order Processing_______________________________________________________ 192
2.1.2.
Billing ______________________________________________________________________ 194
2.1.2.1. Processing Billing Documents _________________________________________________ 194
2.1.2.2. Billing Document Cancellation ________________________________________________ 196
2.2. Sales Order Processing: Make/Assembly To Order _______________________________________ 196
2.2.1.
Customer Outline Agreement ____________________________________________________ 196
2.2.1.1. Value Contract Processing ____________________________________________________ 196
2.3. *Grant Billing ____________________________________________________________________ 197
2.3.1.
Cost Reimbursable Billing ______________________________________________________ 199
2.3.2.
Schedule Billing ______________________________________________________________ 204
2.3.3.
Item Billing __________________________________________________________________ 206
2.3.4.
LOC Drawdown ______________________________________________________________ 207
3.
Project Management * ________________________________________________________________ 210

3.1. Initiation ________________________________________________________________________ 216
3.1.1.
Internal Project Initiation _______________________________________________________ 218
3.1.1.1. Prepare Business Case for Project ______________________________________________ 223
3.1.1.2. Project Approval ___________________________________________________________ 225
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3.2. Planning ________________________________________________________________________ 226

3.2.1.
Structure ____________________________________________________________________ 228
3.2.1.1. Project Structuring __________________________________________________________ 233
3.2.2.
Revenue Planning _____________________________________________________________ 243
3.2.2.1. Revenue Planning in Work Breakdown Structure __________________________________ 246
3.2.3.
Cost Planning ________________________________________________________________ 249
3.2.3.1. Cost Planning in Work Breakdown Structure _____________________________________ 252
3.2.4.
Planning Dates _______________________________________________________________ 264
3.2.4.1. Manual WBS Date Planning __________________________________________________ 266
3.3. Execution _______________________________________________________________________ 269
3.3.1.
Project Release _______________________________________________________________ 269
3.3.1.1. Project Release _____________________________________________________________ 271
3.3.2.
Billing (see SD section) ________________________________________________________ 275
3.3.2.1. Billing Request Processing ___________________________________________________ 277
3.3.2.2. Resource-Related Billing _____________________________________________________ 278
3.3.3.
Period-End Closing ____________________________________________________________ 279
3.3.3.1. Actual Overhead Costing _____________________________________________________ 285
3.3.3.2. Actual Settlement ___________________________________________________________ 292
3.3.4.
Reporting Project Results _______________________________________________________ 294
3.3.4.1. Reporting Project Results_____________________________________________________ 297
3.4. Closing _________________________________________________________________________ 300
3.4.1.
Preparation for Project Closing ___________________________________________________ 303
3.4.1.1. Final Settlement ____________________________________________________________ 304
3.4.2.
Project Completion ____________________________________________________________ 306
3.4.2.1. Set Project Closed Status _____________________________________________________ 307
4.
Financial Accounting _________________________________________________________________ 308

4.1. Basic Settings ____________________________________________________________________ 308
4.1.1.
Fiscal Year and Posting Periods __________________________________________________ 309
4.1.2.
Document ___________________________________________________________________ 311
4.1.3.
Tax on Sales/Purchases in SAP System ____________________________________________ 316
4.1.4.
Posting Help _________________________________________________________________ 317
4.1.5.
Withholding Tax ______________________________________________________________ 319
4.1.6.
Schedule Manager _____________________________________________________________ 321
4.2. General Ledger Processing __________________________________________________________ 322
4.2.1.
Postings in G/L _______________________________________________________________ 322
4.2.1.1. Park G/L Account Document __________________________________________________ 322
4.2.1.2. G/L Account Posting ________________________________________________________ 324
4.2.1.3. Recurring Entry ____________________________________________________________ 326
4.2.1.4. Document Reversal _________________________________________________________ 328
4.2.1.5. Mass Reversal _____________________________________________________________ 329
4.2.1.6. Accrual/Deferral Posting _____________________________________________________ 331
4.2.1.7. Clearing __________________________________________________________________ 332
4.2.2.
General Ledger Account Analysis ________________________________________________ 334
4.2.2.1. General Ledger Line item Analysis _____________________________________________ 336
4.2.3.
Closing Operations ____________________________________________________________ 336
4.2.3.1. Reclassification Receivables/Payables ___________________________________________ 337
4.2.3.2. Profit and Loss Adjustment ___________________________________________________ 337
4.2.3.3. Financial Statement Creation __________________________________________________ 338
4.2.3.4. Periodic Reports ____________________________________________________________ 339
4.2.3.5. Carry Forward G/L Balances __________________________________________________ 340
4.3. Accounts Payable Processing ________________________________________________________ 342
4.3.1.
Vendor Down Payments ________________________________________________________ 342
4.3.1.1. Vendor Down Payment Request _______________________________________________ 342
4.3.1.2. Vendor Down Payment ______________________________________________________ 344
4.3.1.3. Vendor Down Payment Clearing _______________________________________________ 345
4.3.2.
Invoices and Credit Memos _____________________________________________________ 346
4.3.2.1. Vendor Document Parking ____________________________________________________ 347
4.3.2.2. Parked Document Posting [Vendors] ____________________________________________ 350
4.3.2.3. Invoice Receipt ____________________________________________________________ 351
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4.3.2.4. Vendor Credit Memo ________________________________________________________ 355

4.3.2.6. Mass Reversal _____________________________________________________________ 358
4.3.2.7. Recurring Entry ____________________________________________________________ 359
4.3.2.8. Internal Transfer Posting _____________________________________________________ 361
4.3.2.9. Internal Transfer Posting with Clearing __________________________________________ 363
4.3.3.
Vendor Account Analysis _______________________________________________________ 365
4.3.3.1. Vendor Line Item Analysis ___________________________________________________ 365
4.3.3.2. Balance Analysis ___________________________________________________________ 366
4.3.3.3. Vendor Account Evaluations __________________________________________________ 367
4.3.4.
Vendor Payments _____________________________________________________________ 368
4.3.4.1. Vendor Payment Request _____________________________________________________ 371
4.3.4.2. Release for Payment_________________________________________________________ 373
4.3.4.3. Manual Outgoing Payments ___________________________________________________ 375
4.3.4.4. Automatic Outgoing Payments ________________________________________________ 376
4.3.5.
Account Clearing [AP] _________________________________________________________ 380
4.3.5.1. Manual Clearing____________________________________________________________ 380
4.3.5.2. Automatic Clearing _________________________________________________________ 381
4.3.6.
Correspondence with Vendors ___________________________________________________ 383
4.3.6.1. Correspondence with Vendors _________________________________________________ 383
4.4. Accounts Receivable Processing _____________________________________________________ 385
4.4.1.
Invoices and Credit Memos _____________________________________________________ 385
4.4.1.1. Customer Document Parking __________________________________________________ 385
4.4.1.2. Parked Document Posting [Customers] __________________________________________ 387
4.4.1.3. Outgoing Invoice ___________________________________________________________ 389
4.4.1.4. Customer Credit Memo ______________________________________________________ 391
4.4.1.6. Mass Reversal _____________________________________________________________ 395
4.4.1.7. Recurring Entry ____________________________________________________________ 396
4.4.1.8. Internal Transfer Posting _____________________________________________________ 398
4.4.1.9. Internal Transfer Posting with Clearing __________________________________________ 400
4.4.2.
Account Analysis [A/R] ________________________________________________________ 401
4.4.2.1. Customer Line Item Analysis__________________________________________________ 401
4.4.2.2. Balance Analysis ___________________________________________________________ 402
4.4.2.3. Customer Account Evaluations ________________________________________________ 404
4.4.3.
Customer Payments ___________________________________________________________ 405
4.4.3.1. Payment Advice Note Processing ______________________________________________ 406
4.4.3.2. Customer Payment Request ___________________________________________________ 407
4.4.3.3. Release for Payment_________________________________________________________ 407
4.4.3.4. Manual Incoming Payments ___________________________________________________ 408
4.4.3.5. Automatic Incoming Payments ________________________________________________ 409
4.4.3.6. Payment Card Settlement _____________________________________________________ 410
4.4.4.
Account Clearing [AR] _________________________________________________________ 411
4.4.4.1. Manual Clearing____________________________________________________________ 411
4.4.4.2. Automatic Clearing _________________________________________________________ 412
4.4.5.
Dunning Notice _______________________________________________________________ 414
4.4.5.1. Automatic Dunning _________________________________________________________ 414
4.4.6.
Correspondence with Customers _________________________________________________ 417
4.4.6.1. Correspondence with Customers _______________________________________________ 417
4.5. Bank Accounting _________________________________________________________________ 419
4.5.1.
Incomings ___________________________________________________________________ 419
4.5.1.1. Cash Journal _______________________________________________________________ 419
4.5.1.2. Electronic Bank Statement ____________________________________________________ 425
4.5.1.3. Manual Account Statement ___________________________________________________ 430
4.5.1.4. Check Deposit Transaction ___________________________________________________ 433
4.5.1.5. Cashed Checks _____________________________________________________________ 436
4.5.1.6. Lockbox (USA) ____________________________________________________________ 438
4.5.2.
Outgoings ___________________________________________________________________ 441
4.5.2.1. Payment with Payment Requests _______________________________________________ 443
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4.5.2.2. Cash Journal _______________________________________________________________ 444

4.5.3.
Check Management ___________________________________________________________ 445
4.5.3.1. Manage Check Balance ______________________________________________________ 445
4.5.4.
Account Balance Interest Calculation ______________________________________________ 445
4.5.4.1. Account Balance Interest Calculation ___________________________________________ 445
4.6. Special Purpose Ledger ____________________________________________________________ 447
4.6.1.
Prepare Ledger _______________________________________________________________ 447
4.6.1.1. Set Up Ledger _____________________________________________________________ 447
4.6.2.
Table Maintenance ____________________________________________________________ 448
4.6.2.1. Table Definition and Installation _______________________________________________ 448
4.6.3.
Actual Posting ________________________________________________________________ 449
4.6.3.1. Direct Data Entry ___________________________________________________________ 449
4.6.3.2. Integration Interface _________________________________________________________ 451
4.6.3.3. Data Transfer ______________________________________________________________ 453
4.6.4.
Periodic Processing ____________________________________________________________ 453
4.6.4.1. Rollup____________________________________________________________________ 453
4.6.4.2. Balance Carried Forward [SL - Special Ledger] ___________________________________ 453
4.6.5.
Evaluations __________________________________________________________________ 455
4.6.5.1. Special Purpose Ledger Evaluations ____________________________________________ 456
4.6.6.
Tools _______________________________________________________________________ 457
4.6.6.1. Maintain Sets/Variables ______________________________________________________ 457
4.7. Funds Management ________________________________________________________________ 458
4.7.1.
Edit Basic Settings ____________________________________________________________ 465
4.7.1.1. Assigning Cost Element ______________________________________________________ 465
4.7.1.2. Preparing Revenues Increasing the Budget _______________________________________ 468
4.7.1.3. Assigning WBS Element _____________________________________________________ 471
4.7.1.4. Assigning Cost Center _______________________________________________________ 473
4.7.2.
Budget Planning ______________________________________________________________ 476
4.7.2.1. Copy CO Plan for FM Budget _________________________________________________ 482
4.7.2.2. Budget Structure Processing __________________________________________________ 483
4.7.2.3. Editing Commitment Item Group ______________________________________________ 487
4.7.2.4. Budget Version Processing ___________________________________________________ 490
4.7.2.5. Automatic Budget Processing _________________________________________________ 494
4.7.2.6. Original Budget Processing (Bottom Up through Rollup) ____________________________ 494
4.7.2.7. Original Budget Processing (Top Down/Bottom Up) _______________________________ 498
4.7.2.8. Budget Release (Top Down/Bottom Up) _________________________________________ 498
4.7.2.9. Budget Release (Bottom Up Using Rollup) _______________________________________ 499
4.7.2.10. Budget Supplement (Top Down/Bottom Up) ____________________________________ 501
4.7.2.11. Budget Supplement (Bottom Up through Rollup) _________________________________ 502
4.7.2.12. Budget Transfer ___________________________________________________________ 506
4.7.2.13. Budget Return (Outward by Rollup) ___________________________________________ 510
4.7.2.14. Budget Return (Within Budget Structure/Outward)________________________________ 515
4.7.2.15. Edit Budget Document ______________________________________________________ 516
4.7.3.
Budget Execution _____________________________________________________________ 517
4.7.3.1. Funds Reservation __________________________________________________________ 525
4.7.3.2. Funds Precommitment _______________________________________________________ 528
4.7.3.3. Funds Commitment _________________________________________________________ 531
4.7.3.4. Manual Commitment Mass Maintenance/Closing in FM ____________________________ 534
4.7.3.5. Budget Increase ____________________________________________________________ 537
4.7.4.
Information System [Funds Management] __________________________________________ 540
4.7.4.1. Reports ___________________________________________________________________ 542
4.7.5.
Fiscal Year Change Operations [Funds Management] _________________________________ 545
4.7.5.1. Preparing Fiscal Year Change Operations ________________________________________ 547
4.7.5.2. Open Commitment Document Selection _________________________________________ 548
4.7.5.3. Define Transfer Rules _______________________________________________________ 552
4.7.5.4. Commitments Documents Carryforward _________________________________________ 552
4.7.5.5. Reset Commitments Carried Forward ___________________________________________ 553
4.7.5.6. Fund Balance Carryforward ___________________________________________________ 553
4.7.5.7. Determining Budget Carryforward _____________________________________________ 553
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5.
Revenue and cost controlling ___________________________________________________________ 557

5.1. Profit and Cost Planning ____________________________________________________________ 557
5.1.1.
Cost and Activity Planning ______________________________________________________ 557
5.1.1.1. Copy Plan from Previous Year to Cost Center Planning _____________________________ 559
5.1.1.2. Copy Actual Data to Cost Center Plan ___________________________________________ 563
5.1.1.3. Redefinition of Plan Version __________________________________________________ 566
5.1.1.4. Transfer of Personnel Costs ___________________________________________________ 568
5.1.1.5. Primary Cost Planning (Full Costs) _____________________________________________ 571
5.1.1.6. Primary Cost Planning (Prop./Fixed) ____________________________________________ 573
5.1.1.7. Secondary Cost Planning (Full Costs) ___________________________________________ 575
5.1.1.8. Secondary Cost Planning (Prop./Fixed) __________________________________________ 578
5.1.1.9. Resource Planning __________________________________________________________ 580
5.1.1.10. Periodic Reposting of Plan Data ______________________________________________ 583
5.1.1.11. Plan Cost Distribution ______________________________________________________ 586
6.
Asset Accounting_____________________________________________________________________ 587

6.1. Handling Fixed Assets _____________________________________________________________ 592
6.1.1.
Asset Maintenance ____________________________________________________________ 595
6.1.1.1. Creation of Master Record for Tangible Assets ____________________________________ 595
6.1.1.2. Creation of Group Asset______________________________________________________ 596
6.1.1.3. Asset Master Record Change __________________________________________________ 596
6.1.1.4. Mass Changes _____________________________________________________________ 597
6.1.2.
Receipts_____________________________________________________________________ 597
6.1.2.1. Processing of Asset Acquisition________________________________________________ 598
6.1.2.2. Subsequent Acquisition ______________________________________________________ 600
6.1.3.
Depreciation _________________________________________________________________ 601
6.1.3.1. Reserves Carryforward_______________________________________________________ 603
6.1.3.2. Depreciation Processing ______________________________________________________ 603
6.1.3.3. Manual Depreciation Planning_________________________________________________ 604
6.1.3.4. Depreciation Posting ________________________________________________________ 604
6.1.4.
Business Transactions __________________________________________________________ 605
6.1.4.1. Settlement of Asset under Construction __________________________________________ 605
6.1.4.2. Post-capitalization __________________________________________________________ 606
6.1.4.3. Write-up __________________________________________________________________ 607
6.1.4.4. Reposting _________________________________________________________________ 607
6.1.5.
Group Requirements ___________________________________________________________ 608
6.1.5.1. Transfer Within a Client_______________________________ Error! Bookmark not defined.
6.1.6.
Retirements __________________________________________________________________ 609
6.1.6.1. Retirement ________________________________________________________________ 609
6.1.6.2. Mass Retirement ___________________________________________________________ 610
6.1.7.
Closing Operations [Asset Accounting] ____________________________________________ 610
6.1.7.1. Multiple Valuations _________________________________________________________ 613
6.1.7.2. Preparations for Year-End Closing in Asset Management____________________________ 613
6.1.7.3. Mass Changes _____________________________________________________________ 613
6.1.7.4. Depreciation posting ________________________________________________________ 614
6.1.7.5. Carry Out Year-End Closing in Asset Management ________________________________ 615
6.2. Handling of Leased Assets __________________________________________________________ 616
6.2.1.
Asset Maintenance ____________________________________________________________ 617
6.2.1.1. Asset Master Record Change __________________________________________________ 617
6.2.1.2. Mass Changes _____________________________________________________________ 617
6.2.2.
Receipts_____________________________________________________________________ 618
6.2.2.1. Acquisition of Leased Asset___________________________________________________ 618
6.2.3.
Depreciation _________________________________________________________________ 618
6.2.3.1. Depreciation Processing ______________________________________________________ 618
6.2.4.
Business Transactions __________________________________________________________ 620
6.2.4.1. Transfer Leased Asset _______________________________________________________ 620
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6.2.4.2. Change in a Leasing Agreement _______________________________________________ 620

6.2.4.3. Lease Payment _____________________________________________________________ 621
6.2.5.
Retirements __________________________________________________________________ 621
6.2.5.1. Retirement of Leased Asset ___________________________________________________ 621
6.2.6.
Closing Operations ____________________________________________________________ 622
6.2.6.1. Multiple Valuations _________________________________________________________ 622
6.2.6.2. Preparations for Year-End Closing in Asset Management____________________________ 622
6.2.6.3. Mass Changes _____________________________________________________________ 623
6.2.6.5. Carry Out Year-End Closing in Asset Management ________________________________ 624
6.3. Direct Capitalization _______________________________________________________________ 625
6.3.1.
Procurement and capitalization ___________________________________________________ 628
6.3.1.1. Creation of Master Record for Tangible Assets ____________________________________ 628
7.
Travel Management __________________________________________________________________ 631

7.1. Travel Expenses __________________________________________________________________ 631
7.1.1.
Presettings for Travel Expenses __________________________________________________ 631
7.1.2.
Process-oriented questions for Travel Expenses ______________________________________ 635
7.1.3.
Entry of a travel request ________________________________________________________ 644
7.1.3.1. Enter per diems / flat rates for travel request ______________________________________ 646
7.1.4.
Approval of travel request_______________________________________________________ 647
7.1.4.1. Check for travel request [standard] _____________________________________________ 647
7.1.4.2. Notification of rejection of travel request [standard] ________________________________ 649
7.1.4.3. Notification of approval of travel request [standard] ________________________________ 649
7.1.4.4. Notification of need to correct travel request [standard] _____________________________ 650
7.1.5.
Advance payment _____________________________________________________________ 650
7.1.5.1. Trip advance payment/transmission [standard] ____________________________________ 650
7.1.6.
Entry of trip facts _____________________________________________________________ 653
7.1.6.1. Entry of trip facts (including per diems/flat rates and expenses) _______________________ 653
7.1.6.2. Supplement trip facts [standard] _______________________________________________ 657
7.1.6.3. Correction of trip facts [standard] ______________________________________________ 657
7.1.7.
Approval of trip facts __________________________________________________________ 658
7.1.7.1. Check for trip facts [standard] _________________________________________________ 658
7.1.7.2. Notification of rejection of trip facts [standard] ____________________________________ 660
7.1.7.3. Notification of approval of trip facts [standard] ____________________________________ 660
7.1.7.4. Notification of need to correct trip facts [standard] _________________________________ 661
7.1.8.
Travel Expenses ______________________________________________________________ 661
7.1.8.1. Performance of Travel Expenses [standard] ______________________________________ 661
7.1.8.2. Transmission of Travel Expense results [standard] _________________________________ 663
7.1.8.3. Creation/transmission of Travel Expenses statement [standard] _______________________ 667
7.1.9.
Cancellation _________________________________________________________________ 668
7.1.9.1. Cancelation of Travel Expenses reimbursement [standard] ___________________________ 668
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A. Organization
1. Cross-application/central organizational units
1.1.
Client
CI Template:
1. General Explanation
All entities within the University of Tennessee system will utilize one productive client .
2. Naming Convention
1) DEV
2) TST
3) PRD
1.2.
Company
Questions:
Q:
1) Do you want to structure the company into one or more separate legal entities?
A: The University of Tennessee operates under one Employer Identification Number and
publishes one set of financial statements as a component unit of the State of Tennessee.
UHS Ventures is a related entity but has its own set of financial statements that will not be
consolidated with the University financial statements. Due to the current streamlining efforts
there may be additional related entities in the future, but they are not expected to be
consolidated within R/3. The University will have one company code.
Q:
2) Do you have foreign companies?
A: No
Q:
3) Which companies are going to work with which chart of account?
A: One operational chart of account will be utilized because one company code will
represent the legal accounting view of the organization. A single company code can only be
assigned to one chart of accounts. The University expenditure accounts need to map on a
many to one basis to the Tennessee Higher Education Commission (THEC) chart of
accounts.
Q:
4) In which currencies are the transactions posted in the companies?
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A: All transactions will be posted in US dollars.
Q:
5) Are all companies managed in FI company codes, and is FI integration used?
A: Yes
CI Template:
The University of Tennessee will have a single company created in R/3.
The University of Tennessee currently has only one company. This company will be
"UT".
3. Definition of Organizational Units
A company is an organizational unit in Accounting that represents a business
organization according to the requirements of commercial law in a particular country. In
the R/3 system, consolidation functions in financial accounting are based on companies.
A company can comprise one or more company codes.
4. Assignment of Organizational Units

All company codes for a company must work with the same operational chart of accounts
and fiscal year. The company code "UT" will be assigned to company "UT".
5. Changes to Existing Organization

None
6. Special Considerations
Although the University currently has only one company code, we need to make sure that
we do not configure the system to prohibit the creation and integration of additional
company codes in the future.
7. Project Specific CI Section

N/A
1.3.
Company Code
Questions:
Q:
1) Which legal entities (company codes) will you have and in which countries?
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A: There will be only one legal entity i.e. The University of Tennessee. (Please see
Company above).
Q:
2) What are the legal reporting requirements that these companies have to comply with?
A: The University of Tennessee must report to all its constituents under the Standards
issued by the Government Accounting Standards Board (GASB). These standards are
currently being updated and new statements 34 and 35 have to be implemented by FY 2002.
Financial accounting information is also included in the Integrated Post-secondary Education
Data System (IPED) Survey.
Q: 3) Which companies are required to use a statutory chart of accounts for reporting
purposes?
A: UT is required to report to the State of Tennessee according to the Tennessee Higher
Education Commission (THEC) Chart. The only statutory chart of accounts is the THEC
chart of accounts.
Q:
4) Do all companies use the same operating chart of accounts?
A: Yes
Q: 10) For which enterprise entities that are not independent legal entities do you require
sub ledgers (accounts payable ledger, accounts receivable ledger, asset accounting and so
on)? For example, fixed assets per strategic business unit.
A: None
CI Template:
A company code is the smallest organizational unit for which a complete self-contained
set of accounts can be drawn up for purposes of external reporting. University of
Tennessee currently operates as a single legal entity and will have a single company
code in R/3. This will not prohibit additional company codes to be added in the future.
The University of Tennessee currently has only one company code. This company code
will be "UT".

A company code is the smallest organizational unit for which a complete self-contained
set of accounts can be drawn up for purposes of external reporting.

Currently, University of Tennessee operates as a single legal entity and will have a single
company code. This company code will be assigned to the company "UT" and controlling
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area "UT".

The University of Tennessee currently operates as a single legal entity and will continue
to operate in this manner using a single company code.
None noted at this time

N/A
1.4.
Business Area
Questions:
Q: 1) For which enterprise entities do you wish to create individual internal balance sheets
and/or profit and loss statements or other internal reports? Please provide details of your
reporting requirements.
A: The University requires full internal balance sheets for each of its 21 budgeting entities by
fund groups. Please see list of entities. The fund groups are:
11 (Current Unrestricted)
13 (Auxiliary Unrestricted)
16 (Hospital Unrestricted)
21 (Current Restricted)
23 (Auxiliary Restricted)
26 (Hospital Restricted)
30 (Endowment)
40 (Life Income)
45 (Annuity)
51 (Unexpended Plant Funds)
52 (Plant Funds for Retirement of Indebtedness)
53 (Plant Funds for Renewal and Replacement)
54 (Invested in Plant Funds)
60 (Loans)
90 (Agency Funds)
Please see Code Support for a list of budgeting entities. Under the current streamlining plan
the number of entities may be reduced.
Q: 2) Are there entities within your enterprise that are not independent legal entities, but
that you treat as independent legal entities?
A: No.
Q: 4) Does the organization have to produce segmented financial statements for public
reporting (e.g. FAS-14 in the US)?
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A: Yes, however, the University is a governmental entity. Rather than FAS 14, the
University has a requirement to report at the fund group level and by budget entity/campus.
CI Template:
Business areas are units, within an institution, for which a balance sheet and income
statement can be produced. In higher education, business areas are typically used to
represent fund groups such as Current Unrestricted, Current Restricted, etc. for which
balance sheets and income statements are required. In addition to balance sheets by
fund groups, the University of Tennessee requires a separate internal balance sheet and
income statement for each budget entity such as Knoxville, Martin, Chattanooga, etc.
The University will have business areas that represent a unique combination of Fund
Group and Budget Entity. All existing fund groups and budget entities will be set up as
business areas. For asset and liability entries, these business areas will be entered by
users. For revenue and expenditure entries, these business areas will be automatically
defaulted from cost centers and WBS Elements.
The naming convention for the business area the first two characters represent the
Fund Group and the third and forth characters represent the Budget Entity. For example,
business area 1301 is Current Unrestricted Auxiliary Funds (13) for Knoxville (01).
A business area is an organizational unit within accounting that represents a separate
area of operations or responsibilities in a business organization. In higher education,
business areas are typically used to represent fund groups such as Current Unrestricted,
Current Restricted, etc. for which balance sheets and income statements are required.

You can assign all balance sheet items, such as fixed assets, receivables and payables,
as well as the entire P&L statement directly to business areas. You can only assign
banks, equity, and taxes manually to business areas if you do this indirectly. We will use
the split ledger to assign business areas across these types of accounts.
None
We will need to use the split ledger for balance sheets by business areas

N/A
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1.5.
Functional Area
Questions:
Q: 1) Do you need to structure the profit and loss statement according to functional areas
(cost of sales accounting) such as production, sales, marketing?
A: Yes
Q:
2) Which functional areas do you use for your rendering of accounts?
A: The University structures its P&L statement according to the following functional areas
established by NACUBO:
01 Instruction
02 Research
03 Public Service
04 Academic Support
05 Student Services
06 Institutional Support
07 Operation and Maintenance of Plant
08 Scholarships and Fellowships
09 Auxiliary Enterprises
10 Hospitals
11 Staff Benefits
12 Other Expenditure Functions
13 Service Centers
Q: 3) How do you determine functional areas? For example, do you derive them from the
cost centers?
A: Functional areas are determined by cost center or WBS element.
CI Template:
The Functional Area is an organizational unit in Accounting that classifies the
expenditures of an organization by function. The University will use functional areas to
enable reporting by function. These functional areas will be defaulted from cost centers
and WBS Elements.
The naming convention for the functional area: Due to the fact that R/3 does not
recommend master data begin with a zero, the first character of the functional area is "1",
the second and third characters are the University of Tennessee's Function Code and the
forth character is a "0". For example, functional area 1020 is Research (Function Code
20).

The Functional Area is an organizational unit in Accounting that classifies the
expenditures of an organization by function. The Functional Area is a 4-character field
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derived by expenditure postings to cost centers and WBS elements.

The functional area is assigned to the cost center master record. When posting to a
WBS element, the functional area will need to be derived by a substitution rule based on
the WBS master data record.

None
Functional areas will need to be derived by CO objects such as cost centers and WBS
elements. We will need to configure a substitution rule or user exit for this functionality.

N/A
1.6.
Financial Management Area
Questions:
Q:
1) Which financial management (FM) areas do you want to use?
A: The University has a single unified budget and only one company code. As such, only
one Financial Management Area is necessary.
Q: 2) Do you require financial evaluations for individual company codes or across several
company codes?
A: Financial evaluations are needed only for one company code.
Q:
3) Which leading currency should be used for financial evaluations?
A: United States Dollar (USD)
Q:
4) At which intervals do you evaluate planned and actual values (months, weeks, etc.)?
A: As needed on a real time basis
1.7.
Controlling Area
Questions:
Q: 1) Are you using one centralized controlling system or do you follow a decentralized
approach with several independent controlling systems?
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A: The University of Tennessee will be utilizing one controlling area. The controlling area
represents a closed system for cost accounting purposes. For example, internal cost
allocations cannot occur outside of a single controlling area. Additionally, a controlling area
can use only one operational chart of accounts.
Q: 2) Provided that company codes use the same chart of accounts and fiscal year variant,
which company code(s) do you want to assign to your controlling area(s)?
A: One company code will be implemented and will be assigned to the controlling area.
Q: 4) Only if you intend to use profit centers: Should your organization belong to one profit
center grouping even if you intend to use multiple controlling areas?
A: One Profit Center grouping will exist within the University of Tennessee's enterprise
controlling area.
Q: 5) If you wish to have unified Controlling, which currency or currencies are you planning
to use?
A: Only one currency will be maintained in the SAP R/3 system: US dollars.
Q:
6) On which currencies should your Controlling be based?
A: US Dollars
Q:
7) Which companies are going to work with which chart of account?
A: One operational chart of account will be utilized because one company code will
represent the legal accounting view of the organization. A single company code can only be
assigned to one chart of accounts. The University expenditure accounts need to map on a
many-to-one basis to the Tennessee Higher Education Commission (THEC) chart of
accounts.
CI Template:
A Controlling Area is the organizational unit within an institution, used to represent a
closed system for cost accounting purposes. A controlling area may include one or more
company codes that must use the same operative chart of accounts as the controlling
area. The University of Tennessee will use only one Controlling Area UT. Company
Code UT will be assigned to Controlling Area UT
The University of Tennessee will have a single controlling area. The controlling area will
be "UT".
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A controlling area is an organizational unit within a company, used to represent a closed

system for cost accounting purposes. A controlling area may include single or multiple
company codes that may use different currencies. These company codes must use the
same chart of accounts.
The University of Tennessee will have a single controlling area "UT" and will be assigned
to the chart of accounts "UT". Company code "UT" will be assigned to controlling area
"UT".

None
One controlling area with one company code assignment
N/A
1.8.
Profit Center
Questions:
Q: 1) Which criteria do you use for dividing your organization into internal areas of
responsibility?
A: The criteria are source of funding, services offered, location, and discipline.
Q: 2) Do you want to structure your profit center accounting using the cost-of-sales method
(revenue minus cost-of-sales), or using period accounting (all revenues minus all costs
incurred in the period +/- inventory changes)?
A: Period accounting
Q: 3) Can you make unique profit center assignments for the following master data:
material/plant, cost center, sales order item (validation/substitution), PSP elements, cost
objects, internal orders?
A: Cost centers and WBS elements can be assigned to unique profit centers. In addition,
profit centers may be required for income, plant, and endowment accounts by entity.
Q: 4) Besides the "true" profit centers are you using any other profit centers that render
services for various other profit centers?
A: Administrative and support departments render services to other departments.
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Q: 5) In case you need alternative internal views on your companys profits not covered yet
within the profit center standard hierarchy please specify additional groups/hierarchies for
them. (Organization Structure)
A: The standard hierarchy will be built according to the funding hierarchy. Alternative
structures will be built according to location, discipline, and services offered.
Q: 7) Are the Profit Centers (e.g. in regional classification) only charged from certain
company codes?
A: All Profit Centers are charged from one company code,
Q: 8) Do you want Consolidation (EC-CS) to be based on Profit Center Accounting

(management-oriented consolidation)?
A: We do not do Consolidation.
CI Template:
A Profit Center is an organizational unit, within which costs and revenue can be analyzed.
Costs and revenues posted to cost centers and WBS Elements can be automatically
posted to profit centers. A standard profit center hierarchy is required and is used by drilldown reports, and multiple alternative profit center hierarchies can be created for use
with drill-down reports.
The University will use Profit Centers to represent its reporting organization units in R/3
so that reports can be created across cost centers and WBS element by organizational
unit. The profit center number will be based on the department number.
The profit center number will be based on the department number preceded by "L". For
example, department 011002401 will be mapped to profit center L011002401.
A Profit Center is an organizational unit, within which costs and revenue can be analyzed.
Costs and revenues posted to cost centers and WBS Elements can be automatically
posted to profit centers. A standard profit center hierarchy is required and is used by drilldown reports, and multiple alternative profit center hierarchies can be created for use
with drill-down reports.
Profit Centers will be assigned to cost center and WBS element master records.
Therefore, costs and revenues posted to cost centers and WBS elements are
automatically posted to profit centers. Profit Centers can also be entered manually on
several types of transactions.
19 of 670

Profit Centers will be maintained centrally within the Controller's Office.
There may be a desire for Profit Centers to be set up at the Principal Investigator (PI)
level to report profit/loss on all projects associated with a PI.

N/A
1.9.
Plant
Questions:
Q:
1) Are all plants in the same country? List the plants and countries.
A: All plants are in the United States. There will be only one plant: The University of
Tennessee (UT).
Q:
2) Will negative Stocks be allowed in any plants? If yes, specify the plants.
A: No.
Q: 3) Do you need special plants for your maintenance work apart from the common
logistics plants?
A: Yes
Q:
6) Outline all facilities/locations that create, distribute, or store inventory.
A: Some possibilities are:

OFFICE SUPPLIES-KNOX
TESTING PROCESS SERV-KNOX
PHYSICAL PLANT-CENTRAL SUP
MEATS PROCESSING LAB
BOOKS-INDEPENDENT STUDY
TELEPHONE SERVICES
PHYSICAL PLANT-CHATTANOOGA
GRAPHIC SERVICES-CHATT
MAIL SERVICES
OFFICE STORES
PRINTING-MARTIN
PHYSICAL PLANT-MARTIN
MOTOR POOL
WAREHOUSE
DENTAL OPERATORY-CHS
OFFICE SUPPLIES-CHS
GENERAL STORES-UT MEMPHIS
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PHYSICAL PLANT-UT MEMPHIS

AGRICULTURE EXT PRINT SHOP
PHOTOGRAPHY CENTER
PRINTING-KNOXVILLE
UT PRESS BOOKS
MOTOR POOL
PHARMACY
UNIV BOOK & SUPPLY-KNOX
ATHL DEPT CONCESSIONS-KNOX
T-CLUB SOUVENIRS-KNOXVILLE
BOOKSTORE-UTSI
BOOKSTORE-CHATTANOOGA
CONCESSIONS CHATT
BOOKSTORE-MARTIN
COMPUTER STORE MARTIN
BOOKSTORE-UT MEMPHIS
NETWORK SERVICES
Q:
8) At which level should the balances be assigned to the organizational units?
A: At the plant level

CI Template:
The campuses of UT will be defined as plants in SAP R/3. The purchasing activities will
be performed at the campus/plant level.
The codes representing the campuses will be the plant codes in SAP R/3.

Plant code K:
Plant code H:
Plant code C:
Plant code M:
Plant code T:
Knoxville
Memphis
Chattanooga
Martin
Tullahoma

All the campuses/plants will be assigned to a single company code UT.

N/A
N/A
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N/A
2. Procurement
2.1.
Purchasing Group
Questions:
Q: 1) Shall purchasing groups represent individual buyers or groups of buyers? If groups of
buyers, provide a list of groups.
A: Purchasing groups will mainly represent individual buyers. However, the system must be
configured to accommodate groups as well as individual buyers.
.
Q:
2) Provide a list of buyer names.
A: Chattanooga:
Robert Mayes - Director
Marcene Weddington - Purchasing Agent
William Madewell- Buyer
Health Science Center (Memphis):
Steve Rowland - Director
Victor Crutchfield - Asst Director
Jo Ann Cummings - Purchasing Agent
Inez Stanfill - Purchasing Agent
Angela Patrick - Buyer
Knoxville:
Joseph Fornes - Executive Director
Dan Alexander - Assoc Exec Dir
Jerry Wade - Assoc Exec Dir
Morris Wilson - Assistant Director
Thelma Hilton - Manager
David Marks - Sr. Purchasing Agent
Lisa Pate - Buyer
Martin:
Nancy Bacon Director
Wanda Griffin - Buyer
Tullahoma:
Wilma Kane - Manager
This list is subject to change based on movement of personnel and identification of additional
non-traditional buyers not currently associated with purchasing departments.
CI Template:
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A purchasing group represents either a Buyer or Buyer Group of any purchasing

department in SAP R/3.
A purchasing group '999' will be defined and described as 'non-assigned'. The
assignment of a purchasing group will be accomplished at the Purchasing department
level based on input furnished at the campus locations.
The naming convention for purchasing groups is:
The plant code will be part of purchasing group code:
The first letter identifying the plant code followed by a 2-digit number:
K01: David Marks (Buyer in Knoxville).

A list of all identified Buyers has been provided for each campus. Each buyer at each
campus will be created as a purchasing group within R/3.

Each buyer will be associated/linked with his plant code. See above.

Instead
of creating the buyer code using the initials or name (intelligent logic) of the
buyer, the buyer's code will be defined in SAP R/3 as an alphanumeric code as specified
in the naming convention listed above.
N/A
7. Project Specific CI section

N/A
2.2.
Purchasing Organization
Questions:
Q:
1) Which purchasing departments exist in your enterprise?
A: There are established purchasing departments on the campuses that make up the
University; i.e., Knoxville, Chattanooga, Health Science Center, Martin, and the Space
Institute at Tullahoma.
Q: 2) If there is more than one department that handles all purchasing, specify which
department(s) negotiates pricing terms and conditions with your suppliers.
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A: Yes, multiple departments can negotiate terms and conditions. The departments listed
above in number 1 and below in number 3.
Q: 3) Do you have departments outside your purchasing department, which handle

purchasing? If so, list these departments and what they purchase.
A: Yes. Sub-contracts from other Universities on research contracts are monitored/issued
by the Treasurers Office. Contracts for personal services are initiated by departments and
are issued and maintained at the Treasurers Office. Construction and capital projects are
handled by the Facility Planning department. Some departments have been delegated
authority and issue purchase order without assistance or oversight from the Purchasing
department. These are: 1) the Knoxville Library for books, publications, and items unique to
the Library; and 2) the Knoxville Bookstore for re-sale items.
In general, all departments have delegated authority to make purchases up to $2,000 without
approval or oversight from the Purchasing department.
Q: 4) How do the departments share the task of procuring the goods and services required
by the organization?
A: Departments submit approved requisitions to purchasing for processing. Purchasing
departments take the necessary actions (i.e., Request for Quotes, Contract research, etc.) to
turn the requisitions into purchase orders. Departments receive products. Disputes are
handled jointly by the Purchasing department and the originating department. Departments
receive invoices and forward them to Accounts Payable for processing and payment.
Q:
5) Where do you procure materials/services in your enterprise?
A: Procurement is handled by several means:

Central purchasing departments as outlined above.
Departments have procurement authority of up to $2,000 without bidding or going
through the Purchasing department.
A separate contracting function has been established under policy statement 130
for contracted services.
The Knoxville Library has procurement authority for purchases of acquisitions;
i.e., books, periodicals, etc.
The Knoxville Bookstore does its own purchases for resale items.
The Facilities Planning section is responsible for procurement of capital items
such as buildings, major renovations, etc.
Purchases under $2,000 can be handled directly by the departments without
going through a Purchasing department.
Q:
6) Which materials/services do you procure?
A: All materials, supplies, equipment, and services that the University may require.
Q: 7) For which enterprise entities do you procure materials/services? List these

materials/services.
A: For the University of Tennessee
Q:
8) Do you have corporate and localized purchasing functions?
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A: The purchasing organization at each campus conducts purchasing functions for

purchases over $2,000. The departments place orders for items under $2,000.
Q:
9) Do you negotiate vendor pricing at a corporate or local level?
A: Currently, prices are negotiated at each campus, independent of each other. No

mechanism is in place for contract negotiations for purchases across campuses.
Q:
10) Where do you procure materials/services in your enterprise centrally?
A: Currently, there is no formal central procurement for all campuses across the system
Q:
11) Which materials/services do you procure centrally?
A: See number 10 above
Q: 12) For which enterprise areas do you procure materials/external services centrally? List
these materials/services.
A: The University does not procure centrally.
Q: 13) Where do you negotiate centrally agreed contracts for the purchase of
materials/services in your enterprise?
A: Each campus negotiates their own contracts; however, the contracts negotiated at one
campus may be used by other campuses.
Q:
14) For which materials/external services do you negotiate framework contracts?
A: Numerous, too many to list in this document. A list of contract items can be furnished.
Q:
15) Which enterprise entities can release orders against these contracts?
A: Through the use of blanket purchase order, campus departments and the Purchasing
department can issue orders against contracts.
Q: 16) Do you want to have procurement in particular enterprise areas/business areas or

product groups separated?
A: N/A
CI Template:
A central purchasing organization identified as UT will be established. Each campus
will be identified as a plant (e.g., K for Knoxville, H for Memphis, etc.). Purchasing
activities will continue to take place at the plant level.
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Purchasing Organization will be defined as "UT".
One purchasing organization as indicated above in number 2.

The purchasing organization UT will be assigned to the campuses/plants indicated
above.

The ability to centralize contracts in order to leverage the buying power of the University
will be available. Reports, information sharing, and real time processing will be another
enhancements to the present organization.
N/A
7. Project Specific CI section

N/A
3. Sales and Distribution

CI Template:
The invoicing activity at the University of Tennessee is done by the billing office on each
campus. These activities should be separated as such.

Sales Organization: This would be UT and correspond to UT's company code.
Distribution Channel: There would be one distribution channel set up for UT. It
would be 01.
Division: There would be one division for each campus billing office,
corresponding to the budget entity code that is used to build the business area;
for example, 01 would be Knoxville, 02 would be the Space Institute, and 04
would be Chattanooga.
26 of 670
3.1.
Sales Area
Questions:
Q: 1) Do you need to keep the sales activities of particular enterprise areas/business areas
or product groups completely separate?
A: Currently UT distinguishes billings between campuses. This is subject to change. There
is talk that some campuses will be consolidated with others.
Q: 4) How is billing handled on each campus? Is it centralized for UT, centralized for each
campus or something else?
A: For the most part, all billing is handled by the billing office on each campus. Some billing
is done by departments, specifically for research tests performed (primarily at the Memphis
campus).
Q:
5) How do you distinguish which projects belong to which campus?
A: Currently this is distinguished by project number. Sponsors can be shared between

campuses so you cannot tell by sponsor.
3.2.
Sales organization
Questions:
Q: 1) Who is responsible for sales-related components in the material and customer master
data?
A: The person who sets up the contract. Currently that is done in the Campus Business
Office or Controller's Office.
Q: 2) Is a customer assigned to one sales unit or can he be addressed by several sales

units?
A: Customers can be addressed on all campuses.
4. Project management
Questions:
Q: 1) Will you be using the PS module? (If yes, consider the PS organizational
requirements in the overall design of the organization.)
A: Yes. PS will be used for accounting of restricted accounts. This includes grants and
contracts, gifts, endowments, agency and loan funds. In addition, plant funds will be
accounted for in PS. In addition to grants and contracts, other restricted accounts such as
loans, agency funds, gifts and endowments, annuity and life income. Funding may be from
gifts, program revenues, and transferred excess funds, endowment income, etc.
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Life income (Hiliah) is a trust with a special clause that establishes an endowment at the time
of the contributor's death. Life funds do not go through the pre-award system (no E proposal
number).
Plant funds (Verna) are broken down for future plant expenditures of construction or renewal.
Sources of funds are bonded indebtedness, excess operating funds, state appropriations,
and gifts. Not R and B accounts. Plant funds do not go through the pre-award system (no E
proposal number). Payout principle and interest. In the future we would want to use WBS
elements to collect revenue, expense, and assets (then settle these costs to the asset each
month). Currently the following accounts exist to manage plant funds:
Plant Renewal - K account is for cash set aside for future maintenance
Plant Invested - M accounts are the assets
Plant Unexpended - J accounts are Construction in Process charges
Plant ROI - K accounts are for cash set aside for debt (this is a lump of debt for many
projects which they may not want to break out in the future.)
Loan funds (??) have disbursements, collections, interest, and some write-offs. These are
currently D accounts. Loan funds do not go through the pre-award system (no E proposal
number).
Gifts are normally perpetual accounts that collect gift funds that may or may not require
financial reporting or billing. Gifts need to be distinguished from the Grants & Contracts for
financial reporting. These are currently R & B accounts. Gift funds do not go through the preaward system (no E proposal number).
Gifts funded by endowments (F accounts): Periodic income to the account comes
from the interest distribution of endowment investments (a quarterly business
process).
Gifts funded by outside sources: Anyone can give $10,000 or $10 a month that the
University can spend as a gift, or set up an endowment and invest the principle.
Account setup is done by Development Office at the campus level.
Appropriations (Suzan Thompson)
Centers of Excellence receive funding from state appropriations. These do not go through
pre-award system. Cost sharing automatic transfer. E account (cost center account) is
linked to allocation.
Chairs of Excellence receive funding from endowments held by the State. Not in pre-award
system.
Endowments are F accounts that are permanent restricted funds to hold principle amounts. If
the amount is less than $15,000, it is not an endowment. Interest gets distributed to different
funds (B accounts) so there may not be a 1:1 relationship between F and B accounts. This
may be a CO allocation or journal entry in R/3. How does F account fit into WBS
structure?? A special endowment type is Chairs of Excellence receive funding from two
sources (state appropriation and private gifts).
Agency funds (Gail and Verna) include lead trusts where the principal remains with the
donor, contractor retainage (on the vendor side), individuals undergoing transplant operations
(deposits), Department of Transportation pass-through funds where UT is the fiscal agent,
athletic tournaments, and fraternities.
On the Treasurer's report (appendix XI) there are approximately 75 active agency funds.
Many agency funds are still open and need to be closed as part of clean up.
Gail's agency funds (about 10 active accounts a year) have similar requirements to the grants
& contracts except for financial reporting (listed as separate funds because money really
belongs to agency group). A reporting requirement is to separate agency funds from
University funds because these funds are not UT expenses (UT acts as the bank). Verna's
funds may have different requirements. These are currently N (expense) & P (balance)
accounts. Gail's agency funds DO go through the pre-award system (E proposal number).
Cyndie's agency funds (about 30 active accounts a year) act as a bank holding account.
Monies and interest are held and provided back to the agencies. Funds are transferred out of
28 of 670
the retainage portion of the amount owed to contractors. Money is distributed to the agency
fund from an expended plant fund each month. The University needs to be able to report the
balance in the fund of the principle money plus the interest earned minus any withdraws to
date. No billing; may need to settle from one fund to another; no cost planning; and no
indirect costs. (Currently P is the balance and N is the expense. Always a 1:1 relationship.)
These agency funds do not go through the pre-award system.
Hiliah's agency funds number about 10 active accounts a year.
Transplant agency funds might be managed by Memphis (about 10 active accounts a year).
Gifts, agency funds, and grants & contracts may want to have a lower level of detail for the
WBS structure (Level 3s).
Comments: help!
Q:
2) Do your projects sometimes span multiple company codes?
A: No. One company code will be used.
Q: 5) The object class is used for reconciliation purposes. Which object classes are relevant
for your projects?
A: None
Q: 6) The business area on a WBS element must be associated with the company code on
the WBS element. Do your projects/WBS elements span multiple business areas?
A: Yes but we have only one company code.
Q: 7) Projects cannot span more than one controlling area. Describe your accounting for
inter-company entries.
A: Only one controlling area will be used.
Q: 8) Do you want to track specific currencies on your project other than the controlling area
and company code currency?
A: No
Q: 9) It is only possible to reference one profit center on a WBS element. Do you have
reporting requirements for profit center accounting that will impact your project structure?
A: Sponsored projects and agency funds: These projects may be managed by Co-PIs who
reside in different profit centers (colleges/departments) therefore the WBS elements will be
broken down to the PI responsibility level.
Centers/Chairs: Same as G&C
There should only be one profit center for all of the other WBS structures.
CI Template:
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PS will be used for primarily the accounting of restricted accounts. This includes grants
and contracts, gifts, endowments, agency, plant, appropriation/chairs/centers, life
income, and loan funds. In addition, projects can be created for other project accounting
purposes if necessary.
Project definitions and WBS elements will be named the same way they are currently in
UT's legacy account system - by account number. The balance account will be the
project definition and the L1 WBS and the rev/exp accounts will be the L2.
Projects
Projects are tasks with special characteristics:
They are generally complex, unique, and involve a high degree of risk.
They have precise goals that are agreed on by the University and the ordering party.
They are limited in duration and are cost and capacity intensive.
They are subject to certain quality requirements.
They are mostly of strategic importance for the company carrying them out.
Work Breakdown Structure

One of the first steps in project planning is to break down the work into tasks and set up a
hierarchy.
The criteria you use to classify and divide tasks vary depending on the type and
complexity of the project.
In the Project System, you can plan the organization of the work and people in your
project with the work breakdown structure (WBS). A work breakdown structure (WBS)
is a model of the work to be performed in a project organized in a hierarchical structure.
The WBS is an important tool that helps you keep an overview of the project:
It forms the basis for organization and coordination in the project.
It shows the amount of work, the time required, and the costs involved in the project.
The work breakdown structure is the operative basis for the further steps in project
planning, for example, cost planning, scheduling, capacity planning as well as project
controlling.
WBS Elements
The individual elements represent activities within the work breakdown structure. The
elements are called work breakdown structure elements (WBS elements) in the
Project System.

Restricted funds ledger accounts (R, B, D, K, H, J, N, P, F, & G) at the University of
Tennessee will be created as projects in PS and tied to a matching fund in FM.
Unrestricted funds ledger accounts (A, E, I) will be managed in CO.
The maintenance of the projects (previously accounts) in R/3 will still remain be handled
by the Controller's Office and the Campus Business Offices (as approved by the
Controllers Office).
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None
Standard project (templates) will be utilized to simply the project creation process.
4.1.
WBS Element Applicant
Questions:
Q: 1) Do you assign a person to your WBS element other than the project manager? (If yes,
consider using the applicant to track assignments such as project sponsor, project
administrator or project accountant.)
A: To define the project type we may want to use: Grants & Contracts, Endowments, Loans,
Agency Funds, Gifts, Endowments, Plant Funds, Annuities, and Life Income.
We do not need to assign a priority to projects but could use that field in another way. See
current Grant Data Base listing for other fields that are important to track.
Sponsored projects and agency funds: In our current system, the PI, responsible person
(usually dept head), and Controller's Office or Campus Business Office accountant are
assigned to each project. UT would also like to assign the departmental bookkeeper and preaward administrator to each project.
Centers/Chairs: Needs will be covered by the grant database listing.
Plant funds: The project manager for most plant fund projects is the Director of Facilities
Planning. Other smaller, less complex projects could be handled by administrators, the IT
dept. etc.
Loans: Loans do not belong to an individual but to a campus. The Bursar for each campus
would be the responsible person for a loan fund.
Endowments/Life Income: These are managed by the Treasurer's Office investment group.
The funds belong to the overall University. The Treasurer would be the responsible person
for each fund.
4.2.
Person Responsible for WBS Element
Questions:
Q: 1) Do you assign responsible people (project managers) to your WBS elements? (If yes,
use the "Responsible person" field. If you use this field in the project definition, the WBS
elements inherit the value entered there.)
A: Sponsored projects and agency funds: The official responsible person(s) are usually the
Principal Investigator (project manager) and the Department Head or Dean. We would also
like to assign the departmental bookkeeper, Controller's Office or Campus Business Office
accountant, and pre-award administrator to each project (WBS element).
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Centers/Chairs: Same as sponsored project and agency funds.

Plant funds: The responsible person would be the same person who has expenditure
authority on the project (see above).
Loans: Loans do not belong to an individual but to a campus. The Bursar for each campus
would be the responsible person for a loan fund.
Endowments/Life Income: Endowments/Life Income (F and G) accounts do not belong to an
individual but to the overall University. The Treasurer would be the responsible person for
each of these accounts. The related expenditure accounts (R and B) are associated with
campuses, and colleges or departments. Thus, the responsible person for the expenditure
accounts would be the dean or department head.
5. Financial Accounting
5.1.
Chart of Accounts
Questions:
Q:
1) Which companies use the same chart of accounts?
A: University of Tennessee will use one chart of accounts for all entities. We currently have
one company code. If company codes were added, they would use the same chart of
accounts.
Q:
2) How many natural accounts will each chart of accounts contain (estimated)?
A: Approximately 500
Q:
3) What is the document numbering logic?
A: Assets will be 100000 through 199999

Liabilities will be 200000 through 299999
Fund Balance will be 300000 through 399999
Expenditures will be 400000 through 499999
Revenues will be 700000 through 799999
Q: 4) Describe how the account number is set up (for example: department, natural
account).
A: All six characters will represent a natural account. Other attributes will be handled in
business area, cost center, projects, etc.
Q:
5) Will the chart of accounts need to be approved? If so, by whom?
A: The Chart of Accounts will need to be approved by the Controller for the University.
Q:
6) Which maintenance language should be used for each chart of accounts?
A: University of Tennessee chart of accounts will be maintained in English.

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Q:
7) Which additional languages do you wish to use for your charts of accounts?
A: None
Q:
8) Please provide your current Chart of Accounts.
A: The University of Tennessee Chart of Accounts is under contraction by Bill Thompson

and Controller Ron Maples. An algorithm for current expense object has been developed. A
rough draft of income accounts is being reviewed. Our current asset accounts are being
reviewed. UT's ledger activities are being reviewed to be merged into the appropriate place.
CI Template:
The Chart of Accounts is a list of all G/L accounts used by one or several company
codes. The University of Tennessee plans for all campuses and units referred to as
"budget entities" to use the same chart of accounts. Currently, UT plans to have only one
company code for the entire university, and "budget entities" will be represented by
business areas.
For each G/L account, the chart of accounts contains the account number, account
name, and the information that controls how an account functions and how a G/L account
is created in a company code.
The University of Tennessee will use the Chart of Accounts for external financial
reporting. The chart will be derived from UTs three distinct tables for transaction codes.
Additional chart records will be derived from attributes included in legacy income account
(R/3 equivalent to cost center) master records. The activity transaction code table for
expenditures is a "natural account" and can be found in Code Support 157 in the legacy
system. The ledger activity transaction codes are allowed only for and also required on
fund balance accounts at the transaction level. They relate to income, expense, and fund
transfers and will be merged into the appropriate section of UT's R/3 chart. These codes
can be found at Code Support 171. The University reports income based on two
attributes included on the "legacy account" (R/3 cost center). The attributes are referred
to as the major and minor source of funds and are dictated by NACUBO. The
translation/validation for major and minor source of funds can be found at Code Support
161 and 162 respectively. Additional reporting detail below the General Purpose
Financial Statement (GPFS) level is provided by the revenue code that is a transaction
activity code (chart account). The translation/validation for this code can be found at
Code Support 163. The University currently permits departments to use unassigned
codes freely on income transactions. Since an unassigned code does not exist in Code
Support, there is no text translation/validation. This latter functionality will not be
supported in the University's R/3 Chart of Accounts and a different method will need to be
used. For possible alternatives see "Revenue and cost controlling".
The University of Tennessee will have one chart at this time named "UT".

The account groups within the University of Tennessee chart of accounts will be as
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follows:
Assets will be 100000 through 199999
Liabilities will be 200000 through 299999
Fund Balance will be 300000 through 399999
Expenditures will be 400000 through 499999
Revenues will be 700000 through 799999
The Tennessee Higher Education Commission Chart (THEC) of accounts to which UT
maps Expenditure objects may be provided by the R/3 functionality know as "Country
Chart".
Refer to question number 1 General Explanation.

The maintenance of the Chart of Accounts under R/3 will still remain within the
Controller's Office.
The University's legacy chart is fragmented into three tables and "cost center" attributes
for income (see General Explanation for details). The University will have to test the
impact of merging the legacy equivalent chart tables and attributes into a single table on
external and internal reporting.
The University currently permits departments to use unassigned codes freely on income
transactions. Since an unassigned code does not exist in Code Support, there is no text
translation/validation. This latter functionality will not be supported in the University's R/3
chart of Accounts and a different method will need to be used. For possible alternatives
see "Revenue and cost controlling".
The University currently permits departments to add two additional digits to expense
objects for there own purposes. This is similar to user revenue code and we will need to
determine a method to accommodate this need.
The University will need to determine if the proposed R/3 chart will comply with the
requirements of GASB statements 33, 34, and 35.
NA
6. Treasury
6.1.
Treasury
Questions:
Q:
1) Are bank statements automated, or manually processed
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A: See Bank Accounting section.
Q:
2) How is liquidity managed?
Q:
3) How are cash inflows and outflows managed?
Q:
4) Are lockboxes utilized?
Q:
5) Are checks deposited manually, or electronically?

Q: 6) Is a bill of exchange utilized as a form of short-term financing? A bill of exchange is
an instrument used for financing. A customer pays an invoice using a bill of exchange
transaction and is therefore able to extend his or her payment period. You can then discount
this bill of exchange and factor it to another party.
7. Enterprise Controlling
7.1.
Dimensions
Questions:
Q:
1) Which consolidation types do you want to set?
A: [ ] Company Consolidation
[X] Business Area Consolidation
[X] Profit Center Consolidation
[ ] Something else
Q:
2) Define the dimensions that you want in the system.
A: N/A
7.2.
Currencies (Consolidation)
Questions:
Q:
1) In which currencies do you want to the reports generated?
A: US dollars
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8. Asset Accounting
Questions:
Q:
1) For which of your legal entities will you be implementing FI-AA?
A: Equipment: one
Buildings: one
Land: one
CI Template:
Organization units in Asset Accounting are the Chart of Depreciation, Depreciation Area,
and Asset Classes (with account determination).
See number 3 below

Depreciation Area: Book Depreciation Area
Chart of Depreciation: UT (copied from the standard US Chart of Depreciation)
Asset Classes:
Asset Class 1: Land (not depreciable)
Asset Class 2: Land Improvements (16 years)
Asset Class 3: Buildings (10 to 80 years)
Asset Class 4: Assets under Construction (AuC) for Building (not depreciable)
Asset Class 5: Asset under Construction (AuC) for Equipment (not depreciable)
Asset Class 6: Sensitive Equipment (100% depreciation immediately)
Asset Class 7: Infrastructure (5-50 years)
Asset Class 8: Equipment (5+ years)
Asset Class 9: Agricultural Machinery (?)
Asset Class 10: Vehicles (4-12 years)
Asset Class 11: Library Holdings (not depreciable)
Asset Class 12: Software (amortization)
Asset Class 13: Computers & Peripherals
Asset Class 14: Works of Art & Historical Treasures (not depreciable)
Asset Class 15: Livestock (not depreciable)
Asset Class 16: Government Owned Property (not depreciable)
Asset Class 17: Leased Equipment
Organizational units above will be attached to the UT controlling area and the UT
company code.
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N/A
8.1.
Depreciation area
Questions:
Q: 1) Is there a distinction necessary between book depreciation (for external balance
sheet) and tax values (for a tax balance sheet)?
A: No
Q: 2) Do you require additional parallel valuations for your assets, e.g. for consolidated
valuation, for cost accounting purposes, or for statutory reasons? If so, please specify
A: Equipment, Buildings, and Infrastructure: Book, tax, and F&A can be the same.
Q: 5) Do you need to record depreciation for purposes other than book depreciation?
Accounting depreciation? Special reserves for special depreciation?
A: Equipment: Using book depreciation for the F&A rate proposal.
Buildings: Plan to use book depreciation
Land: N/A
Q: 6) Do you want the values for these other viewpoints to be derived from the book
depreciation area or another depreciation area (for example, the cost accounting depreciation
area can be derived from indexed book depreciation values)?
A: Equipment: The values must be the same.
Buildings: The values must be the same.
8.2.
Chart of Depreciation
Questions:
Q:
1) In which countries do you manage fixed assets?
A: Only USA
Q: 2) Are there any statutory asset valuation requirements that would involve parallel
valuation in your financial accounting?
A: All Assets: No
8.3.
Asset class
Questions:
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Q:
1) Describe how your fixed assets are structured in the balance sheet?
A: Assets are categorized in the following areas: land, buildings, improvement (other than
building), equipment, library holdings, livestock.
Q: 2) How do you classify your fixed assets at the moment? How do you intend to classify
your assets in the future?
A: Asset Class 1: Land (not depreciable)
Q:
3) Will you manage financial assets in the asset accounting system?
A: Equipment: Yes
Buildings: Yes
Land: Yes
Infrastructure: Yes
Q: 4) Do you manage low value assets (LVAs) as fixed assets, or do you post them directly
to an expense account?
A: We will have sensitive equipment items that will be expensed because they are under the
dollar threshold for capitalization. However, we will have to track them in R/3. Examples of
expensed sensitive equipment are items less than $5,000 involving computers, cameras,
guns, canoes, and other items that are likely to be lost or stolen.
The value of the asset must be captured on the asset master record for reporting. The
depreciation method will be 100% depreciation for the Sensitive Assets Asset Class so at the
end of the first period the asset will be fully depreciated.
Q: 5) Please list, or provide a list of the asset types that you intend to manage in the Asset
Accounting system (e.g. Land, Buildings, Intangibles, etc).
A: See asset types answered above.
Q: 6) For each asset category (asset class), list the default depreciation method and the
period of depreciation you would like to use.
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A: Equipment: Straight line is required - useful life by asset class. See answer 2 above.
Buildings: Straight line is required - useful life by asset class. See answer 2 above.
Land: N/ A
Infrastructure: ?
B. General settings
1. Currencies
CI Template:
1. Requirements/Expectations
The University of Tennessee will post all transactions in US Dollars. Therefore, we will
not have a current need for exchange rate calculations or maintenance.
2. General Explanations
All documents within R/3 will be posted in US Dollars.
3. System Configuration Considerations
USD will be the only currency posted in company UT.

N/A
2. Units of measurement
CI Template:
The ability to use any unit of measure that would be applicable to procurements of
various types of materials.

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Addition of the UT-specific units of measures identified by the various purchasing

activities across the University.
The use of alternative units of measure without a material master.

N/A
C. Master data
1. General master records
1.1.
Material Master
Questions:
Q: 1) Which departments/organizational units are responsible for maintaining the material
data?
A: Material Master will not maintained.
Q:
2) Is master data common across all departments (common master data)?
A: No material master data will be maintained in the system.
Q:
3) What is the default sales unit in sales processing and what are alternative sales units?
A: N/A
Q: 4) Which types of materials do you distinguish between (examples, accruals, quantity

structures)?
A: Currently do not distinguish between material types.
Q: 5) How do these types differ regarding business processes (stock management,

procurement, sales, and so on), data maintained, and persons responsible?
A: Material Master will not be maintained.
Q:
6) Do you group similar products together (for example, in divisions or material groups)?
A: No
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Q:
7) Do you maintain additional statuses for your materials (such as sales status)?
A: No
Q:
8) If you have multiple plants, is your material normally supplied by a specific plant?
A: No
Q: 9) Do you maintain additional types of grouping for other processes (for example, rebate,
statistics, commission or pricing)?
A: No
Q:
10) Is the creation of a multi-level hierarchy necessary for materials (product hierarchy)?
A: Yes
Q: 11) Do you record a minimum delivery quantity on your materials? If so, what happens
during sales order processing if a violation occurs?
A: No and do not believe that this would be applicable
Q:
12) Are there materials that must be shipped in certain multiples (delivery units)?
A: No
Q:
13) Do you record information on competitor products (sales support)?
A: No
Q: 14) Can a material have different values in one plant? What are the criteria for the
different values?
A: Do not share information across plants at this time; however, this condition could be
possible (i.e., shipping charges could differ from one location to another).
Q:
15) Do you maintain material-specific technical terms of delivery?
A: No
Q: 16) Are the technical delivery terms stored online, and will you print these terms with
each purchase order?
A: No
Q: 17) Do you require your vendors to provide quality certificates (certificates of

conformance or certificates of analysis) either prior to or with material shipments? Describe
the types of certificates you require.
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A: Yes, occasionally we do; for example, certification for coal specifications (i.e., sulfur
content, chemical analysis, pharmaceutical products. etc.).
Q: 18) Do you require your vendors to provide samples for approval prior to actual delivery?
Please describe.
A: In some cases yes; i.e., printing, items for testing, etc.
Q: 19) Do you block a vendor invoice for payment until the quality inspection has been
successfully completed?
A: Not formally. As no formal or systematic method of receiving has been implemented at
the University, vendor payment is usually withheld until acceptance by department as being
acceptable quantity and quality.
Q: 20) Will you process recurring inspections for materials? (Note: This is only possible for
batch-managed materials). Please provide an example.
A: No
Q:
21) Do you want to maintain a source list for the material types you will procure?
A: Yes
Q: 22) Do you value your materials using a standard price, a moving average price, or
different valuation methods for different materials?
A: No standard valuation used at this time
Q: 23) Each material must belong to exactly one material group. Which material groups do
you need to organize your materials?
A: Material groups have been discussed. The University might potentially use NIPG codes.
Q:
24) Will you need to run MRP?
A: No
Q:
25) How many different G/L accounts do you need for inventory?
A: Inventory not in scope at this point.
Q:
26) Will you maintain specification data for your hazardous substances?
A: Currently we do not; however, this may be necessary. The University probably will have
to work with health and safety officials.
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Q: 27) Are separate material master records (perhaps with a separate material type or
numbering system) used in the development and engineering/design processes? How and
when are they converted to operational material number and type)?
A: No
Q: 28) Do you use other systems (such as service management or costing) that need
material master records from R/3 and therefore a permanent interface?
A: Not at this time
Q: 29) Describe the structure and numbering system for material numbers
(internal/external, specific to material type, other criteria).
A: No central structure or numbering system is in place.
Q: 30) Which material types do you use (please enhance): FERT, HALB, ROH, KMAT,
HAWA, FMHI, etc.?
A: N/A
Q: 31) Do you maintain multilingual descriptions for materials? Which languages are
relevant? How and when are they translated?
A: No
Q:
32) What types of texts do you maintain for your materials?
A: None at this time
Q: 33) Please describe the process for creating and adding to material data. Include release
procedure/status, important sequences, automatic notifications (workflow), responsibilities,
authorizations, involved systems, and so on.
A: Formal process not in place
Q:
34) Describe the change process for materials.
A: No process in place
Q:
35) Which cross-plant and plant-specific material statuses are necessary?
A: As inventories are not in scope, none needed at this time.
Q: 36) Do you need to customize the appearance of or add data fields to the material
master record (additional fields, customized material master, field selection, and customerspecific field checks)?
A: Material master will not be maintained.
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Q: 37) Do you use classification for your material masters? For what reasons (storing
addition information, search functionality, or variant configuration)?
A: No material master maintained.
Q: 38) Do you classify standardized parts by loading DIN classes and characteristic data
records?
A: No
Q: 39) Do you have different valuation techniques (for example, standard versus moving
average)? If so, please explain which.
A: No
Q:
40) Do you have inventory valued in different currencies at the same facility?
A: No
Q:
41) Are your materials taxable?
A: No
Q:
42) For a material is there a main delivery location for a sales department?
A: N/A
Q: 43) PM/CS: Do you need a material master especially for plant maintenance / customer
service with reduced information (just basic data and classification data)?
A: PM not in scope.
Q: 44) PM/CS: Does your maintenance and service equipment include major components
that you want to deal with individually to compile separate histories? If so, describe these
components.
A: PM not in scope.
CI Template:
Consideration was given to the creation of master material records. At this point in time, a
material master is not in scope. All purchases are considered consumable material that
is expensed upon receipt. Given that no current procurement data exist for the number of
purchases being made; that inventory is out of the initial scope and no "stock" items will
be established; the amount of time and effort that would be needed to capture a material
master with uncertain data, when it has not been determined that it would ever be used
(thus establishing records that would not generate activity but would have to be
maintained and require storage space in R/3), the decision was made to not establish a
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material master in the initial phase of implementation of R/3. If inventory is implemented

in a future phase, a material master will be needed at that time. After the University goes
live with R/3, we will have better knowledge of our procurement pattern purchases and a
material master could be created on an as-needed basis.
N/A
3. Naming/Numbering Conventions
N/A
4. Special Organizational Considerations

N/A

The concept of material master records represents a major change to the UT
organization. Currently no material master data is maintained at UT. Therefore no
individual is currently assigned to material master maintenance. It is advisable that a
centralized group of resources will maintain the master records in the future.
The users in the Purchasing department will not have authorization to maintain the
master data.
6. Description of Improvements
N/A
7. Description of Functional Deficits

N/A
8. Approaches to Covering Functional Deficits
N/A
9. Notes on Further Improvements

N/A

N/A
11. Authorization and User Roles

N/A
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N/A
1.2.
Service Master
Questions:
Q: 1) Is it necessary for you to procure services from external suppliers? If so, do you want
to structure and manage these services? What kind of services do you procure?
A: Yes. Janitorial, personal services, etc. Also, per policy statement 130, external services
are procured.
CI Template:
Service masters: Due to the low volume of activities, purchases of services will be
accomplished through external service agreements without a service catalog. Service
master records will not be implemented.
Service master, due to the low volume of activities, will be accomplished through external
service agreements without a service catalog. Accordingly, a service master will not be
necessary as a means of establishing the service. The establishment or description of
the service will be done directly on the external service agreement with services being
entered at the agreement level. This will eliminate the maintenance of the service
catalog.
N/A

N/A

N/A
N/A

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N/A

N/A

N/A

N/A

N/A
N/A
1.3.
Customer Master Record
Questions:
Q: 1) Which types of business partners do you have? For example, sole proprietor, legal
person, employees, foreign, other?
A: UT's customers for sponsored projects include sole proprietors, legal persons, and
foreign. UT's main customers are governmental agencies. UT divides its customers into four
categories as required for financial reporting: federal government agencies, state
government agencies, local government agencies, and private companies or persons. A
large portion of the sponsored awards is actually subcontracts from a primary Federal funding
source, through another funding source, and then to UT. UT calls these awards Federal flowthrough funds, and they will be classified as Federal.
Q:
2) How many active customers do you intend to transfer to your R/3 System?
A: Approximately 500 - 1000. Currently, the grant database (a subsidiary system to UT's
current G/L) houses part of the customer information. The customers are arranged by 5-digit
alphanumeric agency code. The code is sight recognizable for source classification. For
example, the State of TN Department of Transportation is agency code 40101. The first two
digits signify a source classification of State government agency. The remaining three digits
are randomly assigned.
Q:
3) Which department(s) are responsible for the maintenance of customer data?
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A: The current UT system has customer attributes in two places - (1) on the project G/L as
attributes, and (2) on the grant database as attributes. The customer master data in R/3 will
be established and maintained centrally by the Controller's Office.
Since the Campus Business Offices, in addition to the Controller's Office, will be using the
customer master data and will be setting up project structures, they must have access to view
the customer master data.
Q:
4) If more than one department, describe the responsibilities of each?
A: The current UT system has customer attributes in two places - (1) on the project G/L as
attributes, and (2) on the grant database as attributes. The customer master data in R/3 will
be established and maintained centrally by the Controller's Office.
Since the Campus Business Offices, in addition to the Controller's Office, will be using the
customer master data and will be setting up project structures, they must have access to view
the customer master data.
Q:
5) Describe your partner functions in detail.
A: UT has several sponsors that might also have another business relationship with the
University. For example, UT-Battelle is the legal entity that manages the Oak Ridge National
Lab, a Department of Energy facility. It is UT's largest sponsor. UT also purchases research
services from UT-Battelle, which makes them a vendor to the University.
Q:
6) Which partner functions are used for the different sales documents?
A: Larry, I don't understand this question.
Q:
7) Do your customers have multiple ship-tos and payers?
A: Yes
Q:
8) Do you maintain sales prospects?
A: No
Q:
9) Do you have one-time customers?
A: No
Q:
10) Do you have vendors who are also customers?
A: Yes
Q:
11) Describe the structure of your current customer numbering scheme.
A: Currently, the grant database (a subsidiary system to UT's current G/L) houses part of
the customer information. The customers are arranged by 5-digit alphanumeric agency code.
The code is sight recognizable for source classification. For example, the State of TN
Department of Transportation is agency code 40101. The first two digits signify a source
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classification of State government agency. The remaining three digits are randomly
assigned.
Q:
12) Do you assign customers to industry sectors?
A: UT's main customers are governmental agencies. UT divides its customers into four
categories as required for financial reporting: federal government agencies, state
government agencies, local government agencies, and private companies or persons. A
large portion of the sponsored awards is actually subcontracts from a primary Federal funding
source, through another funding source, and then to UT. UT calls these awards Federal flowthrough funds, and they will be classified as Federal.
We also classify A/R by UT campus: Knoxville, Memphis, Chattanooga, etc.
Q: 13) Do you want to record any specific marketing information (for example, Nielsen IDs,
customer classification)?
A: No
Q:
14) Do you group customers according to any of the following criteria?
A: [ ] Geographical location
[ ] Profitability segment
[ ] Customer Group
[ ] Sales office
[ ] Sales Group
[X] Others
[ ] No grouping
Q:
15) Will you record contact-person information on your customers?
A: Yes
Q:
16) Does your customer allow you to combine different sales orders into one delivery?
A: No
Q:
17) Does your customer allow partial deliveries?
A: N/A
Q:
18) If you have multiple plants, is your customer normally supplied by a specific plant?
A: No
Q:
19) Define your customer delivery priority levels and explain the assignment process.
A: N/A
Q:
20) Are there special shipping conditions for your customer?
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A: N/A
Q: 21) Do you record foreign trade customers who are placed on an export control list to
possibly deny deliveries to them?
A: No
Q:
22) Do you use customer-specific calendars and/or goods receiving hours?
A: N/A
Q:
23) What are your terms of payment for your customers?
A: No terms. Unwritten expectation is "due upon receipt".
Q:
24) Are there any discounts linked to terms of payment, such as cash discounts?
A: No.
Q: 25) Do you have sales documents in foreign currencies? Describe how the exchange
rate is calculated.
A: No.
Q:
26) What kind of payments do you get from your customer?
A: [ ] Bar
[X] Credit card
[X] Check
[ ] Down payment
[X] Electronic Funds Transfer (EFT)
[ ] Others
Q:
27) Are reminders sent? How long is the waiting period?
A: Yes. When a particular invoice is 90 days old (from the date the invoice was mailed), the
invoice is eligible for UT's "90-day collection letter". A different (and more severe) reminder is
generated at 120 days and again at 150 days.
Q:
28) What Incoterms will your customers use (for example, FOB, free domicile)?
A: N/A
Q:
29) What texts do you maintain at a customer level?
A: UT would like to maintain general customer collection information, such as slow paying,
etc.
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Q:
30) Which texts are used for the different sales documents (for sales, shipping, billing)?
A: N/A - all sales documents coming from SD are invoices. The different types of invoices
are maintained in SD.
This may change in the future. UT may decide to use A/R for general receivables, too. At
that time, UT may need to have different types of sales documents. This is not in scope now.
Q:
31) Describe any other information relevant to customers.
A: UT's current A/R system is arranged (1) by customer, (2) by campus, and (3) by project
number. UT would like to see A/R information at the project level because specific collection
problems occur at this level. For example, UT has many current projects with Navy.
However, there may be a technical problem with project B01991234 that has caused Navy to
stop paying invoices. This is not a general Navy collection problem, but is specific to this
Navy project. UT would like to keep collection notes at the project level also.
Q:
32) Do you use the same structure of customer master records in all departments?
A: Yes
Q: 33) Do you ever need to block a customer for sales processing? If so, describe the
process in detail.
A: No. Any customer blocking is accomplished at the pre-award level. If a customer has
had a bad debt with UT in the past, the pre-award office should not allow award documents to
be signed that legally commit the University to perform future work.
Q:
34) How will you determine/select a customer for processing (match code)?
A: [X] By name
[X] By customer number
[ ] By postal code
[ ] By telephone number
[X] By search term
[X] Others
Q:
35) Do you maintain customer data in an external system?
A: Yes
CI Template:
UT requires an A/R system for sponsored projects only at this time. A/R and collection
notes should be maintained and aged by customer, campus, project, and invoice number.
UT would like to access A/R for reports, queries, and searches. Customer master
records are maintained centrally, but viewed and used by all campuses. UT would like
an automated dunning system to replace existing functionality. Invoices will post to A/R
through SD (from campuses) and manually for departmental billings.
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1.4.
Vendor Master Record
Questions:
Q:
1) What types of vendors do you have (domestic, foreign, payment address, etc.)?
A: Vendor DB (5 digit + alpha character): All PO's are written against Vendor DB; vendors
can also be used for non-PO transactions; "R" - Regular (recurring); Classifications: Minorityowned, woman-owned, small business, large business (vendors marks one of these
categories when bid application in sent in).
Payee DB (9 digit - sometimes starts with "T"): Used for non-PO transactions; Txxxxxxxxtemporary number intended to be used one time (see #1); Social Security numbers-used for
employee travel reimbursement and for 1099 reportable vendors; Federal ID numbers - for
1099 reportable vendors
Vendor Types: Domestic (both databases) (including trust remittances); Foreign (both
databases); Students (Payee DB); Patients (Payee DB); Employees (Payee DB);
Temporaries (Payee DB)
**NOTE: There are duplicates within and between the two databases.
Our current definition of a one-time vendor is a vendor that is expected to be used only one
time. However, currently it is not easy to determine if a vendor is a "true" one-time vendor.
While there are some "true" one-time vendors, the Payee DB has become a way to assign a
vendor number quickly. In the current Payee DB, a vendor may be assigned a temporary
number (even if it is already there with a real number), and the temporary number can then
be used many times.
Provide sample of each DB vendor master record for each type and classification of vendor
by 4/21/00.
Q:
2) How many active vendors do you want to transfer to R/3?
A: TBD after cleanup of current databases. In meeting on 4/19/00, determined the ways
that the cleanup will be handled. Current situation:
Payee DB: approximately 213,000 (includes one time/temporary vendors)
Vendor DB: approximately 70,000
Contract DB:??#(TBD); may not have to convert; used for ALL contracts for routing (for
tracking-open, WIP and completed); on file forever. Contracts will be added to the
Purchasing system; Vendor master records will be required to facilitate these contract
agreements. Will not convert, as it does not contain vendor master date-type information.
Q: 3) How do you want vendor numbers assigned in the R/3 System? Name your criteria for
manual and automatic number assignment. Describe the format of manually assigned vendor
numbers.
A: [ ] Always automatically from the R/3 System
[ ] Always manually from the user
[X] Automatic or manual
Comments: For the most part, vendor master numbers can be internally assigned. Currently,
1099-related vendors use externally assigned Vendor IDs (i.e., SSN or Tax-ID). In SAP R/3,
these 1099 vendors should follow the recommended internal vendor numbering convention
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and utilize the tax reference fields as well as the Withholding tax fields to organize 1099 &/or
1042 vendor data.
Q: 4) Do you have plants that supply materials or services to other plants in other company
codes?
A: Yes: Purchasing departments, Facility Management, Physical Plant, Bookstore,
Telephone Services, etc.
Summary: Any department can supply materials and services to any other department.
Transfer vouchers are used for these transactions.
Departments with large volumes use the electronic TV system and others use the
paper TV.
Generally, transfer vouchers must be approved by the sending department and
the receiving department prior to processing.
CONFIGURATION NOTES: Although this requirement outlines the need to transfer materials
and services from one department to another, it falls outside of R/3's traditional intercompany, interplant materials/services transfer movements. To build this process in the new
system, either a manual journal voucher procedure will need to be formulated or an
automated internal purchasing procedure will need to be configured to facilitate these internal
business transaction processes. A journal entry with a specific document type will be used
for these internal transfer vouchers.
Q:
6) Do you want to reflect the organizational structure of your vendors in the R/3 System?
A: NOW: No
R/3: Yes
The use of Vendor Account Groups could be used to build the organization structure for all
UT vendors. This approach is more flexible but provides limited control. Another approach is
to use R/3's Vendor Partner relationships; this approach is less flexible but provides more
control over the vendor master data. More information is needed from Purchasing and
Accounts Payable to determine which approach is best suited for the Univ. of Tennessee.
Q: 7) Is it necessary for you to maintain different purchasing vendor master data for
different plants?
A: Now: Possibly. Currently some departments have purchasing authority for certain
activities and are, therefore, exempt from requirements to go through purchasing for those
type items. These departments are Knoxville & Chattanooga Library (for books only),
Knoxville Bookstore (books and resale items), Memphis Medical Unit (medical supplies) and
Knoxville T-Club (resale items).
Some of these departments have their own external purchasing systems to manage this
process separate from the University system. These are the Knoxville (also uses
Procurement Card for majority of these items) and Chattanooga Libraries, the Knoxville
Bookstore (Raytex Software Package), and the Memphis Medical Unit (MediTech). We need
to determine if these will continue to be handled externally or if they will be incorporated into
R/3.
The Knoxville Bookstore keys their invoices into Raytex and submits them electronically to
the check-writing file. However, checks for all systems are written by the Treasurer's Office,
Accounts Payable section. (Are the vendors that are paid currently included in the Payee
DB; i.e. part of the 213,000 vendors? If not, they will need to be included into SAP R/3 if
checks will continue to be written from the new system.)
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CONFIGURATION NOTES: Typically (and ideally), there will only be one vendor master file.
Plant specific information can be incorporated in any individual vendor master record. When
necessary, this should be the approach to follow to meet the needs of University of
Tennessee.
Q: 8) When working with your suppliers, do you deal with people with different roles? If yes,
indicate the appropriate roles.
A: [X] Order recipient
[X] Goods supplier
[X] Invoicing party
[X] Payment recipient
[X] Other, please specify
Q:
9) Do you employ different payment terms by facility?
A: No
Q: 10) Are there any vendor-specific instructions or information that you want to include in
purchasing documents?
A: Yes
Q: 11) Do your vendors offer discounts for prompt payment (for example, 1% cash discount
within 10 days)? Provide a list of the payment terms you require.
A: Yes, 2/10/net 30 and net 30 are most common; 1/10/net 30; 2/10/prox, etc.
Most purchase orders state that invoices are to be paid within 30 days of receipt of materials.
When there are no terms given, the invoice must be paid within 45 days of date of invoice or
the date goods or services were received, whichever is later. The Prompt Pay Act of 1985
allows vendors to charge delinquent accounts at 1.5% per month on the outstanding balance.
Normally, the vendor bills the University for the interest due. See policy - Section 060, Part
02, #D. UT Goal: 90% of invoices and travel to be paid within 45 days
Q: 12) Do you specify foreign-trade-specific information in your purchasing documents
(such as CIF or FOB)?
A: Yes
Q: 13) Do you have vendors with several/different ordering addresses, payees, carriers,
and so on? If so, what do these depend on (assortment, supply region)?
A: Yes: campus location (e.g. vendor branches close to that campus), factoring payments
for specific vendors vs. directly to vendor, remittances to specific payee for bankrupts or
liens, product type, pay to "State Treasurer" - but specific department address has to be
used.
Q: 14) Do you need to maintain default data for the article master (such as planned delivery
time, purchasing group) at vendor level?
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A: No
CI Template:
A/P will be responsible for creating all vendors. However, Purchasing will input the
Purchasing view section of the record.
Ability to identify vendor terms and discounts (including credit memo terms)
Ability to maintain different contacts (i.e., invoicing party, payment, recipient, goods
supplier) and addresses (local branches, remit to addresses) with vendors (use the
vendor partner relationship)
Ability to include vendor specific information on purchasing documents where
required
Ability to maintain one vendor database for both A/P vendors and Purchasing
vendors without duplication
Facilitate 1099 reporting
Ability to set up vendor types such as employees, students, patients, one-time
vendors, domestic and foreign
Vendor numbers should be assigned internally by system
Ability to search vendors by SSN and federal id number
Ability to cut checks for vendors not in vendor DB (i.e. UTK Bookstore vendors Raytex) (? One-time vendor?)
Ability to maintain vendor classifications (i.e., minority, small business, womanowned, large business)
Ability to maintain default data for master record at vendor level would be highly
desirable, but will not be realized in the initial "go-live" since no material master
records will be set up.
Vendor Master data consists of three parts: 1) General Data which is the basic vendor
account information; 2) Purchasing Data which is the specific vendor purchasing data
that is unique to the vendor or unique to the vendor and to a specific UT plant; and 3)
Accounting (Company Code) Data which is the accounting information that A/P uses to
pay the vendor. The Vendor master records will be categorized into specific accounting
groups in order to control the activity and field records that can be used for a specific
vendor. Furthermore, large vendors who have multiple ordering/shipping and remit to
addresses can be partnered together in a hierarchical fashion so as to aid in the buying
and paying processes associated with those vendors.
Currently, there are various numbers of Vendor Master files used throughout the
University of Tennessee. Two of the primacy vendor databases are the Vendor DB (used
by Purchasing) and the Payee DB (used by Accounts Payable). Quite a bit of analysis
and review will need to take place prior to configuring the SAP R/3 system. The Payee
DB is extremely large (213,000) records; this is a good sign that there are obsolete,
redundant, and/or inaccurate vendor master records that need to be removed or re-edited
prior to being copied into SAP R/3. Furthermore, some data structure and operational
processes need to be formulated as part of any ongoing vendor maintenance processes.
For the most part, vendor master numbers can be internally assigned. Currently, 1099related vendors (Payee DB) use externally assigned vendor IDs (i.e., SSN or Tax-ID).
The Vendor DB (purchasing vendors) use internally assigned vendor Ids. In SAP R/3,
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these 1099 vendors should follow the recommended internal vendor numbering
convention and utilize the tax reference fields as well as the Withholding tax fields to
organize 1099 vendor data.
Central ownership of the Vendor master data will be in Accounts Payable. The
Purchasing Department will be responsible for creating and changing the Purchasing
data. Organizational processes need to be published which controls the creation and
ongoing maintenance of the SAP R/3 Vendor Master File.

Currently, Vendor DB is maintained by Purchasing and the Payee DB is maintained by
A/P. Purchasing can only update the Purchasing data while A/P can update the
Purchasing address and the A/P address. In the Payee DB, any campus business office
can add a vendor but only the Treasurer's Office A/P Office can update this information.
Going forward, there will be only one central DB. Accounts Payable will create vendors
centrally and Purchasing will maintain the Purchasing data.
Broader functionality of the Vendor master design and configuration allows the
University of Tennessee to better organize and maintain the Vendor master
database.
Single vendor DB will allow for reduction or elimination of duplicate vendor numbers.
The "One-Time Vendor Functionality" will reduce the number of vendors in the DB
since true one-time vendors will be set up under a single one-time vendor account.

None

N/A

None apparent at this time

Need to formulate the Vendor account groups in order to best manage the master data
usage. Need to determine if Vendor Partner Relationships is a useful approach to the
vendor maintenance schema. Need to work with the Human Resources & Materials
Management teams to ensure that all components of the Vendor Master data have been
adequately defined.
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Display functionality for users on department level (except the views for employee
vendors and any other sensitive or confidential vendor information) to include one-time
vendors set up for travel purposes.
Create and change authorization for the Accounts Payable department.
Create/change/display Purchasing data for the Purchasing department.
N/A
1.5.
Bank/Bank Directory TR/FI
Questions:
Q: 1) Do you want to create the bank directory (address and control data for banks and post
office banks) manually or copy it automatically?
A: Manually.
Q: 2) Which banks and bank accounts will you be using for incoming and outgoing
payments?
A: All outgoing payments (except petty cash) will be from First Tennessee Bank accounts.
The FTB accounts include the following:
Payroll (00-000026)
Disbursement (0260851)
Student Refund - Martin (100079498)
Student Refund - Chattanooga (100079486)
Student Refund - Memphis (100079504)
Student Refund - Knoxville (100327347)
Fed wires and ACH debits are paid from the General Account (00-00015).
Incoming funds are received in the various depository bank accounts across Tennessee.
See also Bank Accounting Questionnaires.
Q:
3) In what currencies are these accounts denominated?
A: US Dollars.
Q: 4) Are certain payments handled by more than one bank (correspondent

banks/intermediary banks)?
A: No
CI Template:
There are 3 primary accounts: Payroll, Disbursement and General for Fed Wires and
ACH Debits
UT has a primary banking relationship with First Tennessee Bank.
UT has 1 primary depository account where they initially deposit Knoxville funds.
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The primary depository account is their cash management account. UT invests

based on the balance in that account.
Other bank accounts are swept into this account.
Wires go out of that account and our ACH goes in and out.
No checks are written from this account.
Working capital investment purchases/sales are from this account.
st
Besides the primary depository account at Knoxville, there are 3 other 1 TN depository
accounts at different locations (Cookeville, Memphis, and Chattanooga).
UT has 1 main disbursements account from which only checks (DVs and BVs) are
written.
There is 1 payroll account, which is ZBA, where UT moves money to cover payroll
payments from the primary depository account.
There is 1 primary investment account. This represents cash that 1st TN investment
managers have available to them to invest for the University.
There are 4 other ZBA accounts for batch vouchers (BVs) for which checks are written
to students by the campus Bursars at Knoxville, Chattanooga, Martin, and Memphis.
There is one depository account per location of bank. All depository accounts
concentrate to 1st TN, but a minimum balance is left in these accounts. University
personnel from the various campuses call Tim Mapes and inform him the amount of daily
activity, and then Tim transfers the appropriate amount.
AmSouth Bank (Knoxville, Nashville) - 2 locations
National Bank of Commerce 1 location
City State (Martin) 1 location we don't download any checks from this account.
Union Planters (Chattanooga, Martin) - 2 locations
SunTrust (Chattanooga)
1st Farmers & Merchants National (Columbia) -1 location
BanCorp South (Jackson, Milan) - 2 locations
Greene County (Greenville)
Bank of America (Greenville, Nashville, Lewisburg) - 3 locations
Cumberland County (Crossville) 1 location
First Union National Bank (Springfield)
First State (Covington) 1 location
First National (Tullahoma)
Ag Extension County (Agency funds (cash) being held across TN Not actually a bank,
only a compilation of cash-holdings.)
UT has Direct deposit responsibilities with numerous banks.
In the R/3 system, bank master data is stored centrally in the bank directory. The bank
directory contains the bank master data. One sets up bank master data in R/3 to store
bank address data and control data, thereby eliminating repetitious data entry.
Each bank ID is unique within a company code. For each bank, enter the bank country,
and either the bank number or an appropriate country-specific key. The system uses this
information to identify the correct bank master data.
When one defines details for the payment program (this necessitates entering the bank
master data for your bank details) one needs enter only the bank ID. In addition to the
bank details, one must also define the bank accounts that one has at one's bank. One
defines these under an account ID that is unique per company code and house bank.
This account ID can incorporate attributes of the bank account. One will use this ID to be
able to refer to one's bank account both when entering specifications for the payment
program, and in G/L account master records. The account data one enters comprises the
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account number at one's bank, the currency in which the account is managed, and any
additional country-specific data.
One defines the bank details per company code by entering a three-character code for
each bank. One can enter a five-character alphanumeric key as a bank ID.
The Treasurers Office must have ownership of Cash Management to maintain all
banking activities.

None
One creates a house bank by assigning a code where one stores bank number and other
details. When referencing a particular bank account, one specifies the house bank
without having to key in account details.
Improvements: Faster posting/spreading interest earnings. Easier reconciliation and outof-balance tracking.

None

N/A

None are apparent at this time
In the R/3 system, each house bank is represented by a bank ID. Every account at a
house bank is represented by an account ID. In the R/3 system, one uses the bank ID
and the account ID to specify bank details. These specifications are used, for example,
for automatic payment transactions to determine the bank details for payment.
Need to develop appropriate disbursement accounts for checks as well as ACH
withdrawal.
Need to setup up payment company code so that it maximizes cash discount taken.
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Only the Treasurers Office can set up new bank master data therefore keeping this
process centralized. The set of new bank account sub ledger should be between the
Treasurers Office and the Controller's Office.
N/A
1.6.
Taxes
Questions:
Q: 1) Will you use an external Tax Package to determine the appropriate tax jurisdiction
and/or tax rates to apply to purchasing documents and/or vendor invoices? If yes, name the
external package.
A: No.
Q:
2) Will the tax jurisdiction codes be loaded into R/3?
A: No
CI Template:
Must create one tax exempt tax code
2. Procurement
2.1.
Buyer
CI Template:
Ability to represent buyer or buyer group in SAP R/3
The buyer will be represented by a code (plant code + 2-digit number).
The report of purchases per buyer can be evaluated.
The buyer or buyer group will be defined by a 3-digit number: the first digit representing
the campus, followed by a 2-digit number. For example, buyer David Marks in Knoxville
could be K01.
A purchasing group 999 (unassigned) will be defined for setting up requisitions at the
department level. Those unassigned requisitions will be assigned at the Purchasing
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department.

N/A

N/A
N/A

N/A
N/A

N/A

N/A

Only authorized personnel will maintain purchasing groups and buyers.

N/A
2.2.
Purchasing info record
CI Template:
Info record will be used to link material group and vendor together.
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When creating a requisition or purchase order and the vendor on the requisition/ PO is
part of an info record, all the info (such as prices and conditions of the info record) can be
inputted in the Requisition/PO.
An internal number range will be assigned to the info record; i.e., any time an info record
is created there will be an internal number assigned to that info record.

N/A

N/A
When creating a requisition or PO with vendors/material groups for which an info record
exists, the system will propose the vendor as source. Other info, such price and
conditions, will be copied into the requisition or PO.

N/A

N/A

N/A

N/A

Only designated personnel will maintain info records.

N/A
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2.3.
Conditions
Questions:
Q: 1) Which price components do you use in purchasing documents (e.g. gross price,
surcharges, discounts, freight, duty, import)?
A: Unit price, gross price, discounts, freight, escalation provision, trade-in, credit, tax,
discount payment terms, FOB, surcharge, rebate structure, import duties, liquidated
damages, etc.
Q: 2) Do prices depend on the quantity ordered (e.g. quantity discounts or price scales)? If
so, specify price components, quantity, and other factors.
A: Yes. There could be price breaks based on quantity levels, or based on time frames, or
other factors.
Q: 3) To which date does the price determination process relate (e.g. delivery date, PO
date, other)?
A: Price is determined by the purchase order or contractual agreement. Date is not a factor.
Q: 4) Is pricing information from other systems to be used for price computation purposes in
R/3?
A: No
Q: 5) Do you manually change the price at header level for the entire purchasing
document?
A: No
Q: 6) Do you allow changes to the gross price that is automatically determined by the R/3
System?
A: Yes, it is possible
Q:
7) Does the vendor's price include value-added tax?
A: No
Q:
8) Is it possible to change pricing conditions after a PO has been created?
A: Yes, with the appropriate authority and approval
Q:
9) Specifically for Brazil indexation: Which indexes and forms are necessary?
A: N/A
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CI Template:
Ability to maintain terms and conditions, base price, discounts and surcharges in SAP
R/3.
The University incorporates terms and conditions into requests for quotes (RFQ) and
purchase orders (PO). The conditions reflect regulatory requirements of the University
with regard to terms of a purchase. They also represent the University's business
practices in purchasing goods and services. These conditions must reside in R/3 for
inclusion into the body of RFQs and Purchase orders. The system must be able to
electronically assign these conditions into purchasing documents generated in R/3.
R/3 base price, discount, and surcharge codes will be adopted. R/3 to support the
requirements for terms and conditions into the body of purchase documents.
N/A

N/A
N/A

N/A

N/A

N/A

N/A
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Only designated personnel will maintain conditions.
N/A
2.4.
Source List
Questions:
Q:
1) Will you maintain specific vendor hierarchies?
A: No
Q: 2) Do you want to maintain a list of approved vendors? This means that if a material is
subject to a source list requirement, it can only be procured from the vendors included on the
source list.
A: No
Q: 3) Do you need a source list for: (1) all materials (2) all materials of a plant (3) certain
materials only? Please explain.
A: Need a source list for all materials and services procured
Q: 4) Is there a fixed vendor for some materials? (1) No. (1) Yes, in certain plants (specify)
(2) Yes, across the entire enterprise (3) Yes, everywhere except in certain plants (specify).
A: According to our contracts, there could be a fixed vendor for a particular material/service
at each plant level.
Q: 5) Do some vendors cover certain geographic regions? (1) No. (2) Yes. Warning if
vendor does not cover relevant region. (3) Yes. Prevent issue of POs in latter case.
A: Yes, based on vendor's contractual agreement with suppliers. Some vendors will only
sell to certain campuses with regards to territorial agreements.
Q: 6) Should it be possible to for purchase orders to be created automatically in the course

of material requirements planning (MRP)?
A: Yes
Q: 7) Should it be possible to for scheduling agreement schedule lines to be created

automatically in the course of material requirements planning (MRP)?
A:
[ ]Yes
[ ]No
N/A. The University is not implementing MRP.
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CI Template:
The ability to identify contract vendors for conversion of requisition to purchase orders
against established contracts. Also the ability to generate a bidders list for sources to
include in RFQs that in turn will be sent to potential bidders for quote responses.
Source of supply identification can be supported by use of info records and contracts that
will reside in R/3.
For RFQs the classification system using class type 010 will be used for maintaining
NIGP grouping codes and vendors.
N/A
N/A

N/A
N/A

N/A

N/A

N/A

N/A
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Only authorized personnel will maintain sources of supply.
N/A
2.5.
Model Service Specifications
CI Template:
Model service specification can be maintained.
Model specification will be defined and assigned to the requisition and PO with the same
specification.
A text identifying the model service specification
N/A

N/A
Ability to maintain long text to detail the services specification

N/A

N/A

N/A
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N/A
Only authorized personnel will maintain model specifications.

N/A
2.6.
Message Conditions
CI Template:
Ability to display any type of message (error, warning, etc.)
According to which criteria the system will issue an error, a warning, or no authorization.
Three types of message: error, warning, no authorization.

N/A

N/A
N/A

N/A
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N/A

N/A

N/A

Only authorized personnel will maintain message conditions.

N/A
2.7.
Delivery Address
Questions:
Q: 1) Are there addresses, over and above the plant address(es) that will be used
repeatedly on purchasing documents? If yes, provide a list of those needed.
A: Yes. Each department could potentially be a delivery address or contain multiple delivery
addresses. Information on file is located in our legacy system in ship to/invoice section. This
list is not complete and we will have to have the flexibility to add ship to addresses at all
times.
Q: 2) Do any storage locations have an address that varies from the assigned plant? If yes,
provide a list of the additional specific storage location addresses.
A: Yes. Storage locations would be the same as or similar to department addresses, as
listed above.
CI Template:
Delivery address is shown on the Purchase Order. This address should be able to show
the recipient, the location, department, and campus within the University of Tennessee
system.
It is conceivable that up to four processes could be established for Delivery Address:
1. Setting up storage locations for potential delivery points
2. Allowing the requestor to establish a personal profile that will enter default delivery
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information into the purchase requisition. The default information is also changeable as
necessary.
3. Using R/3 4.6 functionality of establishing shipping addresses in logistics/purchasing
master data.
4. Manual input of address when creating requisition
University of Tennessee department code will become storage location code if procedure
1 from above is selected. Otherwise no loading of department codes is required should
procedure 2, 3, or 4 be selected. If procedure 1 is chosen, every delivery point will be
represented in SAP R/3 by a one-character plant code (campus) followed by 3-digit
codes representing the department.

Loading of information is a consideration as well as the amount of departments that may
not be an actual storage location once inventory management is implemented.
N/A
N/A

N/A

N/A
N/A

N/A
The Buyer or Buyer Manager/Supervisor will be authorized to create delivery addresses.
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N/A
2.8.
Release Strategy with Classification
Questions:
Q: 1) Will any purchasing documents be subject to approval in R/3? If yes, describe the
criteria that will be needed to determine the appropriate approval policy for purchase
requisitions, RFQs, purchase orders, contracts, and scheduling agreements.
A: Yes. Requisitions are approved at the department level and approval will depend on the
approval process for accounts to be charged. At this point, it is believed that the department
head or individual with appropriate account authority will release requisitions (regardless of
the dollar amount).
CI Template:
Requisitions are approved at the department level based on the accounts to be charged.
The approval process for requisitions will be at the department (e.g. Cost Center) level.
An initiator and designated substitute will be able to create requisitions. Once a
requisition is created, an approval official will release the requisition to Purchasing for
processing. This is considered a one-step approval process using release strategy.
Purchasing departments will also utilize release strategies. Release strategies based on
an assignment of a dollar level interval to buyers will be in place for the RFQ and PO
release functions.
Alphanumeric coding (two digits a1, a2, etc.)

N/A

N/A
Electronic approvals and audit trail.

N/A
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N/A
N/A

Number of release strategies

Only designated personnel will maintain the classification for release strategy.
N/A
2.9.
Vendor Evaluation
Questions:
Q:
1) How do you evaluate vendors in your legacy system?
A: We do not currently evaluate vendors in the legacy system (Knoxville has a stand-alone
system for vendor evaluation, but is incomplete).
Q:
2) Which criteria do you use to evaluate your vendors?
A: Specific criteria have not been established (no formula). Consultants will provide UT with
sample criteria.
Q: 3) How do you rate the scores for these criteria? If the criteria are not weighted equally,
indicate the individual weightings.
A: No criteria established
CI Template:
Vendor
should be evaluated according to quality, delivery time.

Complaints are recorded by the user with the vendor evaluation transaction.
Criteria are maintained within customizing.
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While the ability to evaluate a vendor is desirable, the ability to evaluate a vendor will be
restricted as the use of the goods receipt will be limited and purchases under $2,000 are
not subject to processing in R/3.
N/A

N/A

N/A
N/A

N/A

N/A

N/A
N/A
Only authorized personnel will perform vendor evaluation.

N/A
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3.1.
Output
Questions:
Q:
1) What master data fields do you use to determine what output to send?
A: Specific to projects and based on billing type. See specific sections for more info.
Q:
2) What type of output do you send (e.g. Paper, Fax, EDI, Internet)?
A: Paper invoices are sent
Q:
3) When is output sent?
A: At invoice generation; after month-end close.
Q: 4) Collect print out (samples) of the required documents/messages (e.g. order

confirmation, pick list, packing list, invoice).
A: The University has collected ten sample invoice forms.
Q:
10) How are billing documents to be transmitted?
A: [X] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
4. Project management
CI Template:
See Project Management Structure CITs under Business Process.
4.1.
Standard structures
Questions:
Q: 1) As some project data (such as settlement rules) do not feature in standard structures,
consider using operative structures as a better template.
A: OK, we will. It will depend on the complexity and required defaults that UT needs. The
process for copying a standard and operative are basically the same.
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Q: 2) As standard project structures are not authorizations objects, you cannot check who is
allowed to copy them. Consider using operative structures as a better template?
A: OK, we will take this into consideration.
4.1.1.
Standard WBS
Questions:
Q:
1) Do you want to use existing project structures as templates for future projects?
A: Sponsored projects and agencies: Yes. We will use the copy function to make it easy to
create projects with standard characteristics such as the kinds below.
Other Restricted: No standard templates will be made at this time; rather, the copy function
will be utilized.
Loans: We probably could use a standard template per campus for private loans.
Plant funds: Can use standard templates for most all of our projects since we need to collect
the same data on all of them.
Endowments/Life Income: We can use a group of standard templates for most of our
projects.
Q:
2) Do you have projects that are variations of standard projects?
A: Yes. Many projects have unique characteristics so we will likely create several standard
projects to meet this need. Here is an overview of project characteristics:
Sponsored projects:
One 'B' and one 'R' (this is the most common scenario)
Some multiple projects (one 'B' and several 'R's)
For project management purposes (dividing work responsibilities)
Work done in multiple budget entities
Multiple PIs
Funding from multiple sponsors
External sponsors and internal cost centers (cost sharing settlements)
Other Restricted:
Current restricted and endowments are typical with a one-to-one relationship of one
restricted account and one balance account.
Endowments:
Endowment accounts must have an account to manage the principal (F account),
separate general ledger accounts for stocks, bonds, and other assets which are
pooled and which are individually invested, and WBS projects for the
expenditures/distributed income.
There are funding relationships for endowments where we need to report uses by
separate campuses for one endowment that funds several campuses. Some
endowments fund multiple R accounts, and this must be captured in R/3. (Note:
This will probably result in two separate project groupings. One project for each set
of F accounts and a project for each R expenditure account.)
The UC Foundation in Chattanooga has individual awards that can be used to fund
several professorships across colleges and departments.
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Trusts:
Trust structures are generally standardized and have limited types of activity being
posted to them.
Centers/Chairs:
Chairs of Excellence are special groups of projects that receive State and other
funding. Annual reporting of use of State funding is required.
We must break down our Current Fund Restricted projects (accounts) by function
both in our present system and in R/3.
Some changes (where we wish to split projects into more detail) may need to be
implemented at the beginning of a fiscal year
Loans:
Exist only at Knoxville, Chattanooga, Martin and Memphis.
We have privately sponsored loan funds, institutional loan funds, and Federal loan
funds. Within Federal we have Perkins, Nursing and Health Professions.
Plant funds:
Have few of the account attributes (function, college, dept, etc.) that are associated
with other UT accounts.
4.2.
General
4.2.1.
PS text
Questions:
Q: 1) Do you want to record general information on your projects? (If yes, consider using
the PS text feature).
A: Sponsored projects and agencies: Yes. We want to use the text feature. Examples of
information include special financial clauses included in the agreement, rationale and plans
for project structure, expected future awards, etc.
Gifts: Yes. Text could be used for general gift restriction information or special requirements.
Centers/Chairs: Yes, we would use this. Agreement restrictions for Other Restrict Accounts
(other than G&C) can be summarized as well.
Loans: We could use this functionality for matching instructions or special restriction notes.
Plant: This feature can be used to additional information such as project description, SBC#,
etc.
Endowments/Life Income: We want to use the PS text information to describe the donor
agreements and to describe the purpose, restrictions of activity and earnings usage, and
function.
Q: 2) PS Text allows you to use general office functions (for example, to mail this
information). Do you need to share this information with other people involved in the
projects?
A: Sponsored projects and agencies: Yes. We would like this feature. We need to share
this information with other interested parties including the departmental bookkeeper.
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Gifts: Yes, same as sponsored projects.

Centers/Chairs: Yes
4.3.
Project structure
4.3.1.
Responsible Cost Center
Questions:
Q: 1) Do you have departments that are responsible for each WBS element? (If yes,
consider using the responsible cost center field since it can also be used as a hierarchy in the
information system)
A: Sponsored projects and agencies: Multiple Principal Investigators may work on the same
project. These PIs may be from different departments or campuses. Each PI's department
may want to keep track of their PI's portion of the work.
Gifts: Same as above.
Loans: Bursar's Office is responsible for the Loan WBS elements.
Plant: Most projects are managed solely by Facilities Planning. Possibly would want to
designate a campus person to administer a project.
Endowments/Life Income: The investment projects (F and G accounts) are managed by the
Treasurer's Office investment group. The related R and B accounts have assigned college
and departments.
4.3.2.
Requesting Cost Center
Questions:
Q: 1) Are there departments that can request or generate requirements for a project/WBS
element? (If yes, you can use the requesting cost center field because it can be used as
hierarchy in the information system.)
A: Sponsored projects and agencies: WBS elements are requested by the academic
departments on each campus. These requests can either flow through the campus' preaward office to the Campus Business Office (1) via the award document, or (2) via an
advanced account request form. Projects will be set up at each Campus Business Office or
at the Controller's Office. The Controller's Office approves all projects before posting of
expenditures is allowed.
Gifts: Same as above, except the sources of requests are either the campus development
office or the academic department.
Loans: The campus Bursars will be responsible for requesting or setting up the accounts.
Plant: Facilities Planning, in coordination with the Plant Fund Manager, will generate the
requirements for the project. It's possible that the individual campuses might want to
generate a report detailing their projects.
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Endowments/Life Income: Accounts are set up by the Treasurer's Office Investment group
based on information sent by the Development Office.
5.1.
G/L Account
Questions:
Q:
1) What procedure do you use when you need to create new account numbers?
A: In our legacy system, a G/L account is represented by object codes, ledger activity
codes, revenue codes, major/minor source of funds, and balance sheet types (ALB types).
New items are added to comply with GAAP, regulatory, and internal policy changes. Anyone
at a campus or the Treasurer's Office may be the first to recognize a need. Once a need or
requirement is identified, Controller's Office staff holds discussions with the impacted parties
or a representative such as a business officer. For most items, this is sufficient review.
However, some changes such as a change in the capitalization threshold may require
discussions with a state official and/or our cognizant agency representative.
The specific data values for the impacted table(s) are specified by any of the Chart Section
staff members within the Controller's Office. The responsible "chart" staff member sends email with table name(s) and data values to Database Administration to update the "Code
Support" table(s).
Q: 2) Can you define groups of general ledger accounts that require similar information in
the master record?
A: In our legacy system, a G/L account is represented by object codes, ledger activity
codes, revenue codes, major/minor source of funds, and balance sheet types (ALB types).
These are each tables in UT's "Code Support" data area. They "are" in separate tables to
serve as "groups of general ledger accounts that require similar information". Each table
contains fields that could include a foreign key to a related table. The groups by table and
related tables are diagrammed below:
EXPENDITURES - natural accounts
Detail_Object_Ref: 157--> Primary_Object_Ref: 153 --> Budget_Catagory_Ref: 158
|--------------> THEC_Object_Ref: 156
|--------------> Summary_Level_Ref: 169
INCOME (High level - required - derived from NACUBO)
Minor_Source_of_Funds_Ref: 162 --> Major_Source_of_Funds_Ref: 161
INCOME (Detail used for select areas - especially auxiliaries - internally derived)
Revenue_Codes_Ref: 163
BALANCE SHEET TYPES
ALB_Types_Ref: 170
LEDGER ACTIVITY CODES represent expense, income, receipts, transfers, etc. in fund
groups where the Legacy system has only maintained balance sheet accounts: LOAN
FUNDS, ENDOWMENT FUNDS, LIFE INCOME FUNDS, RET INDET & RENWL & REPLMT
FDS, RENEWAL AND REPLACEMENT FUNDS, INVESTED IN PLANT FUNDS.
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Ledger_activity_Ref: 171
There may be additional fields associated with each recording number (Unique key which
represents cost-center, projects, etc. in the Legacy system - UT's legacy meaning of the word
"account").
Q:
3) How many retained earnings accounts do you have?
A: The University maintains thousands of fund balance accounts as required. However,

within R/3, we will have either a single Retained Earnings account or two Retained Earnings
accounts (Permanent Restricted & Unrestricted) to comply with GASB 35.
Q:
4) For which general ledger accounts do you wish to display line items?
A: We need to provide auditors detail lines for all transactions posted to the system. If some
accounts serve as summaries for detail accounts, it may be sufficient to provide transaction
detail from the detail-oriented accounts.
Q: 5) Which accounts do you wish to manage on an open item basis (for example, bank
accounts)?
A: The University will very likely use open item management in a few areas. These areas
could include cash, A/R, A/P, assets, inventory. Due to student and other non-R/3 interfaced
systems, there may be a need for example to have an A/R account which is not-open item
say for a student system, and a need to have an A/R account maintained on an open item
basis say for a grant and contract billing system. This can only be decided after a careful
review of legacy accounts.
Q: 6) Which accounts do you wish to maintain in foreign currency (for example, bank
accounts)?
A: None, all accounts will be maintained in US Dollars.
Q: 7) Describe any special requirements when posting to particular general ledger accounts
(for example, expense accounts require an associated cost center).
A: All expense account postings will require a business area and a cost center or a WBS
element. The business area determines which of the two will be required.
Q:
8) What criteria do you use to search for G/L accounts?
A: Account number, account group, account name, related accounts (linked accounts).
CI Template:
We require general ledger accounts that are University-defined that as a beginning
replicate our current expenditure object codes, major and minor revenue codes, ledger
activity codes and some of our current ALB type of accounts and define other accounts
as needed. See lists maintained by Bill Thompson. We require that these codes be
validated during data entry. We require the ability to group these codes into UniversityF:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
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defined budget categories. We require that the textual translations for these codes print
on reports and display on on-line screens. These codes must be flexible enough to allow
the University to complete standard financial reporting under GAAP as well as fulfill end
user management information needs. We expect to add additional G/L codes that will
replace our current user revenue codes and user object codes that do not appear to be
supported in R/3.
The General Ledger Accounts (G/L Accounts) are the structures that classify debit and
credit values for accounting transactions in the FI module and form the basis for creating
the balance sheets and income statements.
There are five types of General Ledger Accounts in R/3: assets, liabilities, fund balances,
revenues and expenditures. Asset, Liability and Fund Balance G/L Accounts can be
used, in combination with business areas to create internal balance sheets by business
area.
Revenue and Expenditure G/L Accounts represent the highest level at which revenues or
expenditures are recorded by the institution. They can be used in combination with
business areas and functional areas to create income statements by function and
business area. Revenue and expenditure can also be further broken down in the
Controlling module.
Asset accounts will fall in the range of 100000 to 199999. Liability accounts will fall in the
range of 200000 to 299999. Fund balance accounts will fall in the range of 300000 to
399999. Expenditure accounts will fall in the range of 400000 to 499999. Revenue
accounts will fall in the range of 700000 to 799999.

The G/L account master data will be a centralized process managed by the Controller's
Office.
None expected. The G/L account is the equivalent of the legacy object code.
N/A

R/3 does not have the ability of our current system to have user defined expense or
income codes that are a suffix of the primary account. All codes in R/3 must be defined
and validated.
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Create more G/L accounts to map to previous user codes.


Field status groups will need to be based on attribute requirements. Need to determine
attributes on accounts such as line item display, open item management, etc.

All end users will have the ability to display G/L accounts, however, create/change will be
a central function within the Controllers Office. Authorizations will be set at the
transaction level.

N/A
5.2.
Ledger
Questions:
Q:
1) Do you have to report in accordance with cost of sales accounting?
A: The Universities General Purpose financial statements where the entire University is
being reported on, would not likely report on a cost of sales basis. However, there may be
auxiliaries where reporting on them separately, cost of sales may be appropriate.
There is a need to report expenditures by function (e.g. Instruction, Research, Public Service,
etc.) as noted in the organization structure document.
Q: 2) Do you have special statutory accounting requirements that are not covered in other
R/3 applications? Example: Currency translation of a foreign subsidiary, different fiscal year
ends to the international trading partner.
A: There are a few peculiarities dictated by public university accounting. UT is a public
university currently reporting under the AICPA college guide model 1973 as ratified by GASB
15 (modifications noted in GASB 15). It is my understanding that maintaining cash balances
by fund and fund group requires special ledger accounting. Regarding differing fiscal years,
UT's AG campus reports an entire operation on the federal fiscal year (Oct - Sep) whereas
the University's fiscal year runs July - June. As a component unit of the State of Tennessee,
the University is required to report to the Tennessee Higher Education Commission (THEC)
using THEC expenditure object codes. This may be a candidate for Country chart if more
loosely defined to be governing body chart of accounts. As a recipient of federal financial aid,
the University is required to provide a report on the cash basis for receipts and expenditures
for federal grants and contracts by catalog of federal domestic assistance code under single
audit requirements. As a recipient/handler of federal student aid, the University must provide
the Federal Department of Education an IPEDs report (all encompassing) and FISAP
(specific to federal student aid). The University's overhead rate (facilities and administrative
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cost) is based on comprehensive financial reports that may require special casting. These
rates are "negotiated" with the universities cognizant agency that has authority to dictate the
methods of applying overhead and can dictate the depreciation methods allowable for the
University. These are some special statutory accounting requirements identified at this time.
Q:
3) Have you defined the necessary domains and data elements in the ABAP Dictionary?
A:
CI Template:
The University requires replication of its current monthly reporting capability with ledgers
for all accounts, monthly Treasurer's Report and on line account inquiry. We expect to
have many more management reports that are undefined at this time. The standard
monthly reports at the cost center level include:
a monthly ledger (beginning balance, activity, ending balance)
an outstanding purchase list
a financial summary by G/L account code
an outstanding encumbrance list
a management report similar to the ledger, which includes projected expenditures
5.2.1.
Special Purpose Ledger
Questions:
Q: 1) What requirements for financial accounting are not met by the standard general
ledger?
A: The University requires balance sheet reporting by Fund Group and Budget Entity.
Balance sheet reporting by individual fund is considered desirable. Since postings to
accounts receivable, accounts payable and cash accounts are not assigned to fund or fund
group in the standard general ledger, this requirement cannot be met in the standard general
ledger.
Q:
2) What element(s) do you currently create balance sheets by?
A: Balance sheets are currently created by fund group and budget entity (Business Area)
and are considered desirable by individual fund (FM Fund).
Q:
3) What is the current process for creating balance sheets by these elements?
A: 1. When postings are made to the general ledger, all postings identify an account.
Attributes in the account master allow the postings to be associated with fund groups and
budget entities (e.g. current unrestricted fund group at Knoxville).
2. Individual fund cash is maintained in an attribute in the master data of the fund balance
account related to the posted account. The posting program updates the value of cash in
this attribute. This figure is used for reporting and/or preparing journal entries to the fund
group and entity.
3. Another program in the posting process adds all the updates affecting cash for balance
accounts within the fund group and entity and makes a journal entry to the cash account
for the fund group and budget entity.
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4. Income from short-term investments is distributed to certain accounts based on the

average end-of-month cash balance over the quarter. In FY 1999 approximately $5
million was distributed in this manner to various accounts. Accounts, which have received
such income in the past, include loan funds, some restricted funds, athletic department
funds, unexpended plant funds, revolving accounts and agency funds.
Q:
4) What is the process for coding postings that do not usually carry these elements?
A: Individual restricted funds have one or more related asset, liability and fund balance
accounts, which are identified by nine-digit account numbers. The current unrestricted fund
group has one set of such accounts for each fund group and entity. All postings to
receivables and payables accounts carry the balance sheet account number for the relevant
receivable or payable account. Every entry to revenue and expenditure accounts that is not
offset by a receivable or payable, is offset by a corresponding increase or reduction in the
cash balance field in the related cash account and a posting carrying the account number for
the related cash balance sheet account.
CI Template:
Requirements:
1. Ability to automatically split asset, receivables, payables and cash reconciliation
account postings by FM Fund and Business Area.
2. Ability to balance inter-business area and inter-fund transactions through clearing
accounts.
3. Ability to create balance sheet reports by Business Area and FM Fund.
Attachments: [\\UTK_AHT2\DEPTS\UTSAP\SAPADMIN\Issues\72FN.Fund Group
Reporting.doc]
1. Balance sheets data can be posted by Business area and Fund using the special
purpose ledger.
2. All postings made in FI and CO can be posted in SPL. Postings made directly in FM
cannot be posted to SPL.
2. Although certain account postings in FI (receivables, payables and cash) do not carry
an assignment to business area and fund, this account assignment can be created
using the split-processor available in 4.6B.
3. Balance sheets by Business Area and Fund can be created in Special Purpose Ledger
Reporting.
4. Year-end carry forward can be carried out by Company Code, Business Area and
Fund in SPL.
No new master data is being created in the special purpose ledger so all numbering for
master data elements in the special purpose ledger is covered under the source
modules.

Creation of business area balance sheets reports will be a campus business office role.
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However, creation of balance sheets by fund may be decentralized to departmental

users.

None
1. Currently balance sheets are only created at the Fund Group and Budget Entity Level.
The special purpose ledger allows creation of balance sheets by individual fund.
2. Currently balance sheet reports are printed once a month and mailed to Campus
Business Offices. Special Purpose Ledger reports will be available online.

1. There is no standard functionality to create balancing (offset) entries for inter-fund
postings made in Controlling.
2. Standard Report Painter/Report writer reports do not contain authorization checks for
business area or fund.

1. An ABAP program will be developed to read CO postings in the Special Purpose
Ledger and create FI documents to balance them by Fund. This program can be run
on demand, but must be run at least monthly to post the balancing entries.
2. Two approaches are possible to cover the authorizations deficit:
2.1. Create set based authorization groups and check the authorization group
object
2.2. Copy generated report writer program and include an authorizations check.
The most appropriate approach will be selected by the ABAP team.
If future releases allow on-line balancing of CO postings the ABAP program can be
eliminated.

The split processor will be configured to split by fund and not by business area. Since
each fund is assigned to a business area, this allows business area balance sheets to be
created by summarization in reporting.

Creation of business area balance sheets reports will be a campus business office role.
However, creation of balance sheets by fund may be decentralized to departmental
users.
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5.3.
Funds Management
Questions:
Q: 1) Describe the relationship between the Financial Accounting fiscal year and the Funds
Management fiscal year (Budget year/ budget periods)
A: UT financial fiscal year is from July 1 - June 30. For August- May, each posting period is
kept open for three days into the next month. June closes approximately on July 15.
Adjusting period closes approximately August 15. July closes approximately August 21.
UT budget fiscal year is the same as the financial fiscal year. Generally, budget preparation
starts 6 months prior to when the budget year will begin, although in Knoxville, some
departments/colleges start planning in November.
Formal budget hearings start the first of February and go through mid-April, when the Budget
Committee (at the Vice Chancellor level) works out the final proposal for the campus. The
Board of Trustees votes on the final budget in June. Each year the system presents three
formal budgets to the UT Board of Trustees for approval based on July (Proposed), October
(Revised), and April (Probable) information.
Timetables/calendars can vary by campus. Deadlines given by University-Wide
Administration are standard across campuses.
Q: 2) Provide more details on the number of budget periods, special adjustment periods
and description of what is accomplished/processed in these special periods.
A: There are 12 months of budget periods and 1 adjusting period. Only transfers, journals,
and some budget adjustments are in the adjusting period, but no purchase orders, checks,
and cash receipts.
Q: 3) Are there special budgetary structures to cover interim periods / special periods (e.g. if
budget has not been approved in time: provisional budgets)? How are these structures
related to the budget structures of the adopted budget?
A: N/A
Q: 4) Please provide detail information on legal requirements within the budget

management sector (Financial regulations, internal rules, etc.)
A: The budget of The University of Tennessee is the approved formal plan for financing the
academic and support programs for the fiscal year beginning July 1 of each year. The budget
is prepared prior to the beginning of each fiscal year and is approved by the President and
the Board of Trustees in advance of its implementation. The Tennessee Higher Education
Commission and the State Department of Finance and Administration also review and
approve the University's budget.
Q: 5) Describe the current budget organizational structure (budget/master data hierarchy)

and the current nomenclature/scale. Create a list of the organizational units that are
responsible for the budget (execution).
A:
LEVEL:
EXAMPLE VALUE:
The University of Tennessee
UT
I
Budget Entity
Knoxville (01)
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I
Vice Chancellor
I
College/Division
I
Department
I
Account
I
Budget Category
I
Object
Vice Chancellor of Academics (22)

Engineering (0113)
Chemical Engineering (0113020)
McClung Museum (E011006)
Operating & Misc. (5)
Supplies (39)
Refer to Code Support Book.

A list of accounts will show the organizational unit that is responsible for the budget via
attributes in each account. Some of the major attributes for an account are:
Fund Group
Exp. Function
Account Type
Budget Entity
College
Department
Maj. Org. Unit
Vice Chancellor
Funding Source
Source of Funds (revenue)
Q:
6) Are there any legal requirements for nomenclature /structure of the master data?
A: No, there are not.
Q: 7) Is it possible to categorize the types of expenditure? Create a list of expenditure

types/categories and describe how these relate to the execution level.
A: Yes. The types of expenditure are categorized by object codes.
Budget is done at a 2-digit level called primary object code. Also, within the primary codes
are attributes called budget category, THEC code, and summary budget category. Refer to
Code Support Book - Ref.153
e.g. Code 11: Admin. & Professional Salaries
Budget execution is done at a 3-digit level called detail object codes. Refer to Code Support
Book - Ref.157
e.g. Code 111: Salaries
The primary and detail object codes roll up to a budget category. Refer to Code Support
Book - Ref.158
e.g. Code 1: Professional Salaries
2: Summer School
3: Clerical and Supporting Salaries
4: Biweekly Wages
5: Operating and Misc.
6: Equipment and Capital Outlay
The budget categories roll up to a summary budget category level. Refer to Code Support
Book - Ref.169
e.g. Code 1: Personnel
2: Operating
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3: Capital Outlay
4: Plant Funds
Q: 8) Describe the changes that may be made to the budget structure (master data) within a
year.
A: Reorganization is anticipated. Changes to the master data may be required by the
merger or separation of departments.
Q: 9) Describe the changes that may be made to the budget structure (master data) over a
period of years.
A: Reorganization is anticipated. Changes to the master data may be caused by merger or
separation of departments. Object codes are added or changed from time to time.
Q:
10) Describe the quantity and timing of changes of the budget structure
A: Changes in the structure need to be made at fiscal year boundaries. Additions may be
made any time.
Q: 11) Describe which information objects (master data) have to remain online in the
system, and for how long.
A: Accounts (e.g., E011006) remain in the system for 10 years after the last activity. Codes
that support account attributes (fund group, function, department, etc.) remain in the system
forever, even old translations for current codes, so that a report of 1998 data would use the
translations that were used in 1998.
Q:
12) Provide an overview of the volume of master data (FM).
A: 5,000 for Unrestricted Funds

27,000 for Restricted Funds
Total of 32,000
Q: 13) Explain which legacy data (historical data) needs to be transferred from the previous
system to Funds Management (level of detail, number of years, etc.).
A: N/A
5.3.1.
Funds Center
Questions:
Q: 1) Is there any special nomenclature for the naming (organization) of the funds center?
Describe the existing (planned) structure.
A: Budget Entity (including attribute called Major Organizational Unit)
Vice Chancellor Area
College or Division
Department
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Q: 2) Generate a list of all information to be stored at funds center level (list of fields, short
description, and properties of fields).
A: Budget entity is a 2-digit code that identifies a university organizational unit that is
independently funded (Ref. Code Support Book - Ref. 152 (e.g. 01- Knoxville).
There is a 1-digit attribute attached to each budget entity called major organizational unit
(Ref. Code Support Book - Ref. 150) (e.g. K - Knoxville).
College/Division is a 4-digit code defined for financial reporting purposes where the first two
digits refer to the budget entity. (Ref. Code Support Book - Ref. 154) and the next two digits
identify the major division within budget entity. (e.g. 0101 - General Admin.)
Department is a 7-digit code defined for reporting purposes within a college or division where
the first four digits refer to the reporting college or division (Ref. Code Support Book - Ref.
155). The next three digits identify the department within the college/division (e.g. 0101010 Office of Chancellor - Knoxville).
Vice-Chancellor Area is a 2-digit code that represents a reporting area within a university
major organizational unit (Ref. Codes Support Book - Ref. 180) (e.g. 33 - Provost & Sr VC
Acad Aff Support).
Responsible Person contains the name of the person responsible for the budget of the
account.
Q: 3) Which information could be changed for a funds center? Create a list of all fields/field
contents.
A: Description
Effective date
CI Template:
1) Funds Centers will be approximately our current Departments and will be responsible
for budgets.
2) Funds Centers should be organized into hierarchies of Department>College>Vice
Chancellor Area>Budget Entity.
3) Funds Centers at any level in the hierarchy can be responsible for Funds. For
example, centrally held "I" accounts/Funds can be at a higher organizational level.
4) For the first year at least, Fund Centers and Profit Centers will be related one to one.
5) A Funds Center may be responsible for multiple Funds.
Funds Center hierarchies should be defined to describe the general approval path for
budgeting, both Original Budgets and subsequent changes. The actual approval path for
a particular budget change depends on whether it is for salary or operating; and whether
it is within one fund (account) or between funds.
A fund center is the organizational unit responsible for preparing and monitoring the
budget for one or more funds. Fund centers are organized into a hierarchy along which
the budget flows. Since the budget flows along the fund center hierarchy, no alternative
hierarchies are allowed for approvals (but could exist for reporting). Funds Center
hierarchies also will be used as the default organization of reports.
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Funds Center also affects who does what tasks in budgeting (preparation of the
documents, initiating changes, approvals, etc)
As you go up in the Funds Center hierarchy, you get access authority to all the lower
Funds Centers.
When a new Funds Center is set up, a new Profit Center must be set up, either
automatically by the system or manually input.
Funds Center numbers will be based on Department numbers, which reflect the reporting
organization hierarchy of Budget Entity<College or Division<Department. For example,
Department 0110024 will have the number U0110024. Vice Chancellor Area will NOT
figure in the naming convention, although it will be in the reporting hierarchy. Where
there is a need for sub-department, an extra 2-digit number will be added to the funds
center (e.g. U011002401).

A college or division that needs a new Funds Center will fill out the Funds Center Basic
Data screen and forward it to the appropriate Vice Chancellor for approval. If approved, it
is forwarded to the campus business office for review and then to the Controller's Office
for activation.
If Profit Center is not created automatically from entry of a new Fund Center, then Profit
Center entry will be an extra step.
In original budget, revisions, execution, etc. the processes should have the same steps
as in the past.

Funds Centers will not change the existing organizational structure. Funds Center entry
will be analogous to the form that has been used to request new accounts.
Funds Centers will be functionally equivalent to what UT is doing now.

N/A

In a future phase, UT may take advantage of the greater flexibility of Funds Center
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groupings for reporting.

The fact that Funds Centers are separate elements from Profit Centers suggests that in
some circumstances, budget control and oversight could be at a higher level than and not
as detailed as spending.
FM Area must be defined in the IMG when a Funds Center is created.

The Funds Center hierarchy should define access--that is, someone who has a particular
access to a high-level Funds Center should have the same access to all the Funds
Centers "under" it.

N/A
5.3.2.
Commitment Item
Questions:
Q: 1) Is there any special nomenclature for the naming (organization) of the commitment
item? Describe the existing (planned) structure.
A: The legacy primary object codes will be used as a starting point for expense commitment
items. These are UT's 2-digit codes that are used to classify the nature of costs incurred.
The budget resides at this level.
There are attributes defined for each primary code. (Ref. Code Support Book - Ref. 153):
1. Budget Category (Ref. Code Support Book - Ref. 158)
2. THEC Expenditure Object (Ref. Code Support Book - Ref. 156)
3. Summary Level Budget Category (Ref. Code Support Book - Ref. 169)
Expenditure is recorded at a 3-digit level called the detail object code, used to classify in
more detail than the primary object codes. (Ref. Codes Support Book - Ref. 157)
http://www.utenn.edu/uwa/to/co/general/objdef.htm
Revenues codes are 2-digit objects used to classify the origin of revenue for an account.
(Ref. Codes Support Book - Ref. 163)
http://www.utenn.edu/uwa/to/co/general/userrev.htm
Q: 2) List the information to be stored at commitment item level (list of fields, short
A: Identifier (the object code itself)
Attributes (for primary codes)
Description
Effective date
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Q: 3) Which information is possibly changed for a commitment item? Generate a list of all
fields/field content.
A: Description
Effective date
Change mapping/hierarchy (attributes)
CI Template:
Commitment Items will be all the G/L accounts defined in FI, so that we can use the
security and reporting features of FM:
1)
Commitment Items for expense Funds will be the current primary (2-digit) object
codes where budgets will be entered, plus 3-digit object codes to record
encumbrances and expenditures.
2)
Revenue commitment items will be the same as the G/L revenue accounts:
current major/minor sources of funds plus the income and transfers in activity
codes plus the documented user revenue codes (in the auxiliaries) plus new
codes to record recoveries on expense accounts.
3)
Fund Balance commitment items will be the same as the G/L fund balance
accounts.
4)
Asset and liability commitment items will relate to one or more G/L accounts.
Commitment Items will be related to object code Cost Elements and Revenue Elements
in CO.
Commitment Items will be used to record:
budget and expenses at the primary object code level for all unrestricted and
restricted expense funds
budget and income for all unrestricted and restricted revenue funds
actual debits and credits for asset and liability funds
Commitment items represent budget and fund accounting classifications of G/L Accounts
and cost elements in the Funds Management Module. They are thus used to reflect the
type of revenues and expenditures being budgeted and also to detail balances for each
fund in FM.
2-digit object level for budgets:
11 - Admin. & Prof. Salaries
39 - Supplies
will become the 411000 and 439000, as defined in FI for the Chart of Accounts.
3-digit object level for expenditures:
112 - Extra Service of Admin. & Prof. Salaries
392 - Computer Software Supplies
will become the 411200 and 439200, as defined in FI for the Chart of Accounts.
A recovery object code will become, for example:
739200 - (7 for revenue, 392 for Computer Software Supplies)
In addition, all fund balance G/L accounts will be mapped to FM on a one-for-one basis
and assets and liabilities G/L accounts will be mapped to Commitment Items on a manyF:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
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to-one basis.

The Controller's Office will maintain Commitment Item master records.
Objects for Commitment Items for expense Funds are rolled up into certain budget
categories. This higher level in the commitment hierarchy must be defined when the
budget and expense objects are created.
Commitment items will not change the existing organizational structure.
Commitment item will fulfill what the University is currently using as object codes,
revenue codes, and ledger activity codes.

None are apparent at this time, with the possible exception of recoveries. Recoveries
show as a negative budget in an expenditure object code.

Revenue commitment items will be defined for expense recoveries.

FM Area must be defined in the IMG when a commitment item is created.

UT does not need authorization at the Commitment Item level.
There are certain Commitment Items that cannot be used by certain types of Funds.
Commitment Item hierarchies may be used to relate a budgeted amount, say for
supplies, to the "breakout" Commitment Items used to record encumbrance or expense.
Also a hierarchy can be use for reporting purposes, for example, to aggregate budgets or
costs into Staff and Operating.
N/A
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5.3.3.
Fund
Questions:
Q: 1) Generate a list of funds origins (funds, funds from secondary sources). Are these
funds from secondary sources budgeted and assigned separately? Should these funds be
displayed separately for budgeting and execution?
A: Unrestricted expense ("E") and unrestricted income ("I") accounts are our regular funds.
They are individually budgeted, assigned, executed, displayed, etc.
Restricted expense funds ("R" accounts) also are budgeted, assigned, and otherwise used
separately.
However, restricted income funds ("C" accounts) are not budgeted at all in the system. They
recognize revenue at the posting of the expense.
There are additional secondary sources that are called Loan Funds, Endowment Funds, Life
Income Funds, Plant Funds, and Agency Funds.
A full list of accounts can be found at http://acctbal.dii.utk.edu
Q: 2) Provide an overview of the different fund types (for example, special revenue,
donations, etc.).
A: Current Unrestricted Funds
Current Restricted Funds
Loan Funds
Endowment Funds
Annuity Funds (a subset of Endowment Funds)
Life Income Funds
Unexpended Plant Funds
Retirement of Indebtedness Plant Funds
Renewal and Replacement Plant Funds
Investment in Plant Funds
Agency Funds
http://acctbal.dii.utk.edu/fundgrp.htm
Q:
3) Provide a list and a short description of your budget sources.
A: Tuition and Fees

Federal Appropriations
State Appropriations
Local Appropriations
Federal Grants and Contracts
State Grants and Contracts
Local Grants and Contracts
Private Grants and Contracts
Private Gifts
Endowment Income
Sales and Services Education
Sales and Services Auxiliary
Sales and Services Hospital
Other Sources
Ref. Code Support Book - Ref. 161
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Q:
4) Do you receive grants? If so, provide detailed information (USA).
A: Yes. Restricted current funds are externally restricted and may be used only in
accordance with the purpose established by their source. They are reported as revenues
and expenditures when expended for current operating purposes. A restricted fund is one of
these types:
Federal Grants and Contracts
State Grants and Contracts
Local Grants and Contracts
Private Grants and Contracts
Q: 5) If you manage different funds (grants): Describe the characteristics/special

features/FM requirements for the fund (lifetime, reporting periods, special features with
regard to budget and budget execution).
A: Lifetimes vary according to the Grants/Contracts terms.
Reporting periods can vary according to different fiscal years.
Some types of expenditures can be prohibited by the terms of the grant.
Overhead is charged to grants/contracts.
Budget control totals are at the project level and sometimes at the object code levels.
Q: 6) Is it possible to group the used funds (from secondary sources)? If so, describe the
groups and the funds belonging to them.
A: Yes. Current restricted funds are:
Educational and General Funds - 121
Auxiliary Funds - 123
Hospital Funds - 126
Loan Funds - 200
Endowment Funds - 300
Life Income Funds - 400
Plant Funds:
Unexpended - 510
Retirement of Indebtedness & Renewal - 520
Invested in Plant - 530
Agency Funds - 900
In addition, they may be grouped according to several schemes of location in the
organization: budget entity> college> department or MOU>Vice Chancellor, or by function,
by agency, or a variety of other attributes.
Q: 7) Do you have special funds for internal services? How do you distribute the accrued
expenses to other funds?
A: Yes, service centers re-bill charges.
Expenses are distributed through a re-bill object code (G/L account), a 3-digit object ending in
"9".
Q: 8) Do you have to produce financial statements by funds, fund groups, or fund types?
Provide an overview of those funds. (USA)
A: The University produces a single financial statement broken out by Fund Group, budget
entity, etc.
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Q: 9) Are budget/actual reports produced for funds/fund groups/fund type levels? Provide
an overview.
A: Yes, the "Budget and Expenditure Report" (ledger), the "General Funds/Restricted
Budget Analysis", and the "Office of the Treasurer Monthly Report."
Q: 10) Is there any special nomenclature (organization) for the name of the fund? Describe
the existing (planned) structure.
A: The University refers to their funds as "accounts". Because the internal structure of the
recording account number plays no role in the reporting and analysis processing, reporting
organization attributes have been assigned to each account number to fulfill this function. The
reporting organization attributes include:
field
example value
Fund
E
Budget Entity
12
College
10
Department 15
Sub department
01 (optional)
Q: 11) List the information to be stored at application of funds/funds level (list of fields, short
A: Fields at the Fund (account) level include:
Fund
Budget Entity
College
Department
Sub department
Function
Name
Responsible Person
Related Accounts,
etc.
Q: 12) Which information could be changed for a fund? Create a list of all fields/field
contents.
A: Name
Location in the organization
End date
Q: 13) USA only: Do you have endowment funds? If so, please provide detailed
information.
A: Yes, Endowment Funds are subject to the restrictions of gift instruments requiring in
perpetuity that the principal be invested and only the income be used. Although quasiendowment funds have been established by the governing board for the same purpose as
endowment funds, any portion of quasi-endowment funds may be expended. Since these
funds are internally designated, the governing board retains the right to alter or amend such
designation.
Q:
14) USA only: Do you have grants? If so, please provide detailed information.
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A: This is the same question as #4 in this same section.

CI Template:
1) Every current account (E010101, F12221234, I07010001, etc.) will become a
separate Fund, except possibly A... and B... fund balance accounts, which may
not be brought over. Each will keep its same name, responsible person, place in
the organization, etc.
2) A Fund representing a current expense or revenue account will be related one to
one to a Cost Center or WBS Element. Asset and liability Funds will NOT have
Cost Centers or WBS Elements.
3) All Funds will be in a single Funds Management Area, UT.
4) Expense and revenue accounts/Funds will have budgets; other types will not.
5) Every Fund will be assigned to a Funds Center (Department). Some Funds,
especially revenue Funds, can be assigned to high-level Fund Centers, those
representing Dean/Director, Vice Chancellor, or Budget Entity levels.
6) Every Fund will use Commitment Items, even revenue, asset, and liability Funds.
Funds will be used like we use general ledger accounts in the old system, to record
budgets, expenses, revenues, debits, and credits. A fund represents the lowest level of
funding requiring a budget. The fund master includes an application of fund and a source
of funds. Budget rules can be specified separately for each fund.
Funds will have the same numbers as the companion Cost Center or WBS Element.
Seven-character numbers will be the same as in the legacy system; nine-character
numbers will become ten-character numbers. Please see the Cost Center CI for details.
Those Funds that do not have Cost Centers or WBS Elements (assets and liabilities) still
will keep the same nine-characters become ten-characters account numbers as in the
legacy system.
A college or division that needs a new Funds Center will fill out the Funds Center Basic
Data screen and forward it to the appropriate Vice Chancellor for approval. If approved, it
is forwarded to the campus business office for review and then to the Controller's Office
for activation.
If Cost Center and WBS Element in accounting are not created automatically from entry
of a new Fund, then their entry will be extra steps.
In Original Budget, revisions, execution, etc. the processes should have the same steps
as in the past.

Funds will not change the existing organization structure; they are being designed to
mirror it.
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Procedures for requesting new Funds are equivalent to the paper path now in place.
Funds seems functionally equivalent to what UT is doing now.

There is a need to store another master data called Function. Current release of R/3
does not have a field to meet this requirement, so we may use Classification in FM on the
Fund master record.

There is a need to store another master data called Function. Current release of R/3
does not have a field to meet this requirement, so we may use Classification in FM on the
Fund master record.
The one to one relationship of Fund to Cost Centers and WBS elements may change to
multiple to one Fund, as needed. This means multiple accounts (Cost Centers or WBS
Elements) could be spending out of one consolidated budget.

FM Area and Budget profile must be defined in the IMG when a Fund is created.

There will be access at the Fund level for Principal Investigators (PIs), Responsible
Persons, and their designees. In addition, access to a superior Fund implies access to
all "member" Funds.
N/A
6. Revenue and cost controlling

6.1.
Overhead Cost Controlling
6.1.1.
Cost Element
CI Template:
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The University charges overhead referred to by its regulatory name, "Facilities and
Administrative Expense", to projects. This F&A overhead is included on the bills sent to
the project sponsors and is charged by a variety of methods. All methods apply a
percentage rate to an expense base. The expense base is a summation of all or a subset
of original expense items charged to the project. The bases support by the legacy
system are listed below:
01
02
03
04
05
06
07
08
SALARIES AND WAGES

TOTAL DIRECT COST
OPERATIONAL COSTS
LUMP SUM
INSTITUTIONAL
OTHER METHODS
MODIFIED TOTAL DIRECT COSTS
TOTAL ALLOWABLE DIRECT COSTS
In order to calculate the base expenses, cost elements are included or excluded from the
summation. The eight methods above have predefined cost elements to be included or
excluded and these cost elements are coded in the program itself (in other words there is
not a table with these values). In addition, there are four account (WBS) attributes, 2 for
primary and 2 for detail cost elements which can be excluded from the base in addition to
those excluded by the program. The 2 detail cost elements can be filled with primary to
get a total of 4 primary and no detail additions to exclusions.
There is an attribute on each WBS that declares the percentage rate to apply to the base.
This is often the rate set by the cost rate agreement negotiated on a campus-by-campus
basis. When the specific contract does not have sufficient funding to pay the overhead,
the overhead may be reduced by using an overhead cost sharing percentage. This
amounts to a partial or complete reversal of the original overhead amount, but is posted
using a different cost element than the overhead so both amounts can be reported on.
In the legacy system, the overhead has been shown as a reduction of fund balance with
the credit side being recorded as income in the unrestricted general fund for the campus.
Overhead has been computed and posted monthly as part of period closing in the legacy
system.
Revenue elements are used to classify revenues in Controlling. They are linked to
revenue G/L accounts on a one-for-one basis and have the same number and
description. E.g. Revenue Element 701010 Tuition and Fees Resident represents G/L
Account 701010 Tuition and Fees Resident in CO.
Primary Cost Elements represent expenditure G/L Accounts in CO. They are linked to
Expenditure G/L accounts on a one-for-one basis and have the same number and
description. E.g. Cost Element 439100 Operating Supplies represents G/L Account
439100 Operating Supplies in CO.
Secondary cost elements are used for internal allocations within a controlling area such
as overhead. These cost elements are not directly linked to an Expenditure G/L account.
Ledger Activity Codes for 010 Facilities and Admin Costs and similar internally allocation
costs will be mapped to secondary cost elements.
Revenue elements are linked to revenue G/L accounts on a one-for-one basis and have
the same number and description. E.g. Revenue Element 701010 Tuition and Fees
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Resident represents G/L Account 701010 Tuition and Fees Resident in CO.
Primary Cost Elements are linked to Expenditure G/L accounts on a one-for-one basis
and have the same number and description. E.g. Cost Element 439100 Operating
Supplies represents G/L Account 439100 Operating Supplies in CO.
Secondary cost elements will be set up in the range 500000 to 599999 (e.g. 501000 Facilities and Admin Costs).
The creation and maintenance of cost/revenue elements and cost/revenue element
groups will be a central process within the Controllers Office.

None
None
R/3 does not perform the same function we require for F & A posting. We are working on
a solution.

N/A

N/A
N/A

End users will have display access to cost elements. The create/change process will be
a centralized function within the Controllers Office. This authorization will be transaction
based.

N/A
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6.1.1.1.
Primary Cost Element
Questions:
Q:
1) Define primary cost elements based on the definition of the chart of account.
A: UT's cost elements will reflect our P&L accounts in the chart of accounts. Our expense
accounts will equate to primary cost elements and our revenue accounts will equate to
revenue cost elements.
Q: 2) Reserve a number range in the chart of accounts for the definition of CO-specific
accounts/primary cost elements: which additional primary cost elements do you need (such
as for accruals)?
A: Our primary cost elements will be the same number as the corresponding G/L account.
Primary cost element will fall in the range 400000 - 499999. Revenue cost elements will fall
in the range 700000-799999. Note: the legacy system allowed users to attach a two-digit
suffix to detail elements (codes) that served without validation/translation. It is anticipated
that this functionality will have to be provided in a different structure in order not to clutter the
Chart of accounts.
CI Template:
The University requires that we create primary cost elements that at a minimum replicate
our current expenditure object codes. We expect to add additional cost elements to better
describe the way we spend our money.
Cost elements are used to classify costs in CO according to object of expenditure.
Primary Cost Elements represent expenditure G/L Accounts in CO. They are linked to
Expenditure G/L accounts on a one-for-one basis and have the same number and
description. E.g. Cost Element 439100 Operating Supplies represents G/L Account
439100 Operating Supplies in CO. Primary cost elements will be set up for all
expenditure G/L Accounts. Primary cost elements can be created automatically based
on the associated expenditure account.
Primary cost elements will have the same numbering as the associated G/L account. For
example, Cost Element 439100 Operating Supplies represents G/L Account 439100
Operating Supplies.
6.1.1.2.
Secondary Cost Element
Questions:
Q:
1) Define secondary cost elements for planning, allocation and reporting purposes.
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A: UT charges overhead (facilities and administrative cost) to grants and contracts. UT

maintains both a code for charging overhead and waiving (cost-sharing) overhead. This
allows the University to track gross (fully applicable), waived (cost-shared), and net overhead.
Rates are specific to campus and must be negotiated with the cognizant agency. There are
10 rate agreements. Entities 01, 02, 04, 05, 07, 10, 11, 12, 13, and 18.
CI Template:
The University requires that F & A costs be allocated to each restricted account as
appropriate based on the correct base and F & A percentage.
Ledger Activity Codes for 010 Facilities and Admin Costs and similar internally allocation
costs will be mapped to secondary cost elements. Secondary cost elements will be set up
in the range 500000 to 599999 (e.g. 501000 - Facilities and Admin Costs).
6.1.1.3.
Cost Element Group
Questions:
Q:
1) Define cost element groups for planning, allocation, and reporting purposes.
A: Cost elements (Legacy system object codes) are grouped in levels or a hierarchy. Detail
elements (codes - Code support ref 157) map to fewer primary elements (codes - Code
support ref 153). Primary elements (codes) map to six budget categories (Code support Ref
158) Warning, the budget category mapping is changing for FY2001. There is also an
alternative mapping to a summary category (Code support ref 169). Note: the legacy system
allowed users to attach a two-digit suffix to detail elements (codes) that served without
validation/translation. It is anticipated that this functionality will have to be provided in a
different structure in order not to clutter the Chart of accounts.
CI Template:
The University requires that cost elements be grouped into a hierarchy similar to our
current 2-digit object code. Also the cost elements need to be grouped into the 6 levels of
budget categories which are changing July 1,2000.
6.1.2.
Cost Center
CI Template:
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The University requires the ability to set up cost centers in conformity with GAAP for
colleges and universities. A cost center relates to our current account that associates with
a Budget Entity, College and Department. The cost center needs to support a list of
attributes that we will provide. The University requires our current ability to collect
expenditures and revenues by account.
The University expects to use cost centers for all current expenditure (E) and income (I)
accounts.
The University requires the current hierarchy that includes department, college, vice
chancellor code, and budget entity. We also expect to create alternative hierarchies to
reflect their changing organization.
A Cost Center is a unit within a controlling area that represents a revenue and cost
collector for permanent activities. A cost center can be linked to a company code, a
business area, a functional area, a fund, a fund center and a profit center allowing all
these codes to be automatically defaulted when a user enters a cost center in a
document. Costs and revenues posted to a cost center can thus be automatically posted
to the company code, business area, fund, fund center and profit center linked to the cost
center.
A standard hierarchy of cost centers is required for the controlling area and is used by
drill-down reports. In addition Cost Centers may optionally belong to additional alternative
hierarchies that can also be used by drill-down reports.
The University will use Cost Centers to represent its current unrestricted income and
expenditure accounts (I and E accounts) in R/3.
The standard cost center hierarchy will be used to represent the organizational groupings
to show Fund Group >Budget Entity >Function > College or Division > Department> Cost
Center (7 digit) > Cost Center (10 digit). An alternative hierarchy will be created to
represent the State Appropriation hierarchy.
expenditure accounts (I and E accounts) in R/3. All E accounts with seven-digit numbers
will be represented by cost centers with the same seven-digit number. All I and E
accounts with nine-digit numbers will be represented by cost centers with ten-digit
numbers. The ten-digit number will be created by adding a zero in the eighth position in
the ten-digit number. E.g. Account E01102401 will be represented by cost center
E011024001.

The creation and maintenance of cost centers and cost center hierarchies will be a
central process within the Controllers Office.

R/3 cost centers can be both income and expense. We expect our E and I accounts to
map directly to cost centers in R/3.
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N/A

N/A

Functional areas need to be populated within the cost center master record.
End users will be able to display cost centers. The create/change function will be
centralized at first at the Controllers Office and CBO level. The authorization will be
transaction based.

N/A
6.1.2.1.
Cost Center
Questions:
Q: 1) Define cost centers as the lowest level in your organizational structure at which you
hold one person responsible for the expenses incurred (check whether you have covered the
whole organization).
A: Departments are the lowest level of our organization that one person is responsible for
the expenses incurred.
CI Template:
A Cost Center is a unit within a controlling area that represents a revenue and cost
collector for permanent activities. A cost center can be linked to a company code, a
business area, a functional area, a fund, a fund center and a profit center allowing all
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these codes to be automatically defaulted when a user enters a cost center in a

document. Costs and revenues posted to a cost center can thus be automatically posted
to the company code, business area, fund, fund center and profit center linked to the cost
center.
expenditure accounts (I and E accounts) in R/3. All E accounts with seven-digit numbers
will be represented by cost centers with the same seven-digit number. All I and E
accounts with nine-digit numbers will be represented by cost centers with ten-digit
numbers. The ten-digit number will be created by adding a zero in the eighth position in
the ten-digit number. E.g. Account E01102401 will be represented by cost center
E011024001.
6.1.2.2.
Standard Hierarchy for Cost Centers
Questions:
Q: 1) Take your corporate organizational structure and build a hierarchy according to levels
of responsibilities, with cost centers as the lowest level.
A: "The standard cost center hierarch will be used to represent the organizational groupings
to show Fund Group>budget Entity>Function>College or Division>Department>Cost Center
(7 digit) > Cost Center (10 digit). An Alternative hierarchy will be created to represent the
State Appropriation hierarchy." See "Enterprise Structure and Master Data" document.
CI Template:
A standard hierarchy of cost centers is required for the controlling area and is used by
drill-down reports. In addition Cost Centers may optionally belong to additional alternative
hierarchies that can also be used by drill-down reports.
6.1.2.3.
Cost Center Group
Questions:
Q: 1) Besides the standard hierarchy, do you need other alternative structure (groups) of
cost centers (for planning, allocation, and reporting purposes)?
A: "An Alternative hierarchy will be created to represent the State Appropriation hierarchy",
discussed in "Enterprise Structure and Master Data. Other alternative hierarchy's will vary by
business area (campus) and will include vice-chancellor and dean/director.
6.2.
Profit Center Accounting
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6.2.1.
Assignment of Profit Centers to Master Data
CI Template:
The University requires the ability to create departments that have associated E accounts
and associated R accounts. These happen at the department level currently. We expect
to be able to group all of a department's accounts in a report.
The University requires the current hierarchy that includes department, college, vice
chancellor code, and budget entity. We also expect to create alternative hierarchies to
reflect their changing organization.
A Profit Center is an organizational unit in R/3, within which costs and revenue can be
analyzed. Costs and revenues posted to cost centers and WBS Elements can be
automatically posted to profit centers.
A standard profit center hierarchy is required and is used by drill-down reports, and
multiple alternative profit center hierarchies can be created to be used by drill-down
reports.
The University will use Profit Centers to represent its reporting organization units in R/3
so that reports can be created across cost centers and WBS element by organizational
unit.
The standard profit center hierarchy will be used to represent the reporting organizational
groupings to show Budget Entity >College or Division > Department.
The profit center number will be based on the department number. For example,
department 011002401 will be mapped to profit center L011002401.

The creation and assignment of profit centers to co objects will be a centralized function
within the Controllers Office.

None
We may be able to use this functionality to create revenue and expenditure statements
for our auxiliaries and self-supporting departments.

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N/A
N/A

Profit centers will be assigned to WBS elements and cost centers for UT.

End users will be able to display profit center master data. The create/change function
will be centralized in the Controllers Office.
N/A
7. Asset Accounting
Questions:
Q: 1) How many fixed assets and how many assets under construction do you currently
have?
A: Equipment: UT has about 100,000 active assets (equipment only) in the AS400 system
worth approximately 2 billion USD grouped into 70 G/L accounts. (These accounts will be
consolidated by fiscal year-end 06/30/2000 down to the individual budget entity level.)
These will need to be depreciated due to new GASB requirements. There is a new policy to
define an asset at $5,000 instead of $1,000. This could decrease the number of assets but
there is another policy to track 'sensitive equipment that are items such as cameras valued
from $1000 - $4999. Due to the 2 policies and asset clean up (which needs to occur prior to
conversion to R/3) the total number of assets to be put into AM are estimated to be 80,000.
Buildings: There are approximately 1500 entries in the facilities database valued at
$1,098,932,262 grouped into 29 G/L accounts. There are approximately 500 major buildings.
There are approximately 100 assets under construction mostly for improvements all funded
from plant funds.
Land: There are approximately 1030 individual land records recorded on 3 x 5 cards. These
records are grouped by 26 account numbers and 28 TN and other counties valued at
$37,951,133. In addition there are 227 more land cards associated with other fund groups
valued at $769,849. These records are adjusted once per year at year-end on our financial
statements
Infrastructure: We have ? numbers of infrastructure (we have a lot of work to do in this area).
The value currently on our books is Improvements other than buildings at $ 82,896,413
grouped into 24 G/L accounts.
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Library holdings: We adjust library holdings once per year based on inventory amounts
received from each library. These holdings include books and all other media. The value at
6/30/99 was $249,544,291 grouped into 6 G/L accounts.
Livestock: We have one G/L account for livestock. We adjust this account once per year
based on inventory records received from the Institute of Agriculture. At 6/30/ 99 the value
was $1,884,764.
Q:
2) Which organizational units do you manage in the asset master record?
A: Equipment: There will only be one controlling area and one company code. Business
area and cost center will need to be mapped.
All other assets: There will be one controlling area and one company code. Business area
will need to be mapped.
Q:
3) Do you want asset master record numbering to be internally or externally assigned?
A: Equipment: Currently equipment is also given an internally assigned, sequential number

that acts like the asset master record. R/3 will internally assign the number starting from the
last UT sequential number. Externally assigned tag numbers are given as inventory numbers
and will be captured as a field on the asset record. UT wants to be able to search from the
tag number in case someone remotely calls in for info on an asset with tag number 123....
Buildings: An externally assigned building number is given (as an inventory number). An
internally assigned, sequential number is given to a field that acts like the asset master
record.
Land: We will probably want an external number.
Infrastructure: We will probably want an external number.
Library holdings and livestock: No individual inventories will be maintained in R 3.
Q: 4) Do you see a business need to use both internal and external number assignment,
depending on the asset class? If so, please specify.
A: Equipment: Internally assigned number and use an existing field for the equipment tag
number.
Buildings: Internally assigned number and use an existing field for the building number.
Land and Infrastructure: Same as buildings.
Library and livestock: N/A
Q: 5) If you use external number assignment, do you want to allow the assignment of
alphanumeric numbers?
A: No
Q: 6) Do you want to represent asset components using asset sub-numbers? If so, for what
purposes do you plan to use asset sub-numbers?
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A: Equipment: UT will use sub assets to compartmentalize an asset into a number of

smaller items as well as to distinguish fed Vs UT funding sources. Sub asset numbers will be
an extension of the parent asset number.
Buildings: We may want to use asset sub-numbers for items such as roofs, and other
improvements that may have a different useful life. In addition, we have to send in reports of
assets in construction by source of funds. Thus, we may want to set up sub-assets by
funding source. Currently we do not break down assets into sub-numbers.
Infrastructure: Same as buildings
Land, library and livestock: No.
Q: 7) Are cost centers (business areas) to be defined in the asset master record on a timedependent basis?
A: Equipment: This may be used for assets which are originally owned by one department
but after a period of time may be owned by another. This functionality will be available if this
is a desired requirement.
All other assets: We need business area only.
Q: 8) Do you see a business need to create multiple similar asset master records in one
step?
A: Equipment: Yes - for a fleet of cars or one lot of assets such as 50 computers.
Buildings: Possibly. However, the volume is not that large to be critical.
Infrastructure: possibly
Land: possible but unlikely
Library and livestock: No
Q:
9) Do you have assets that require increased depreciation due to multiple shift use?
A: No
Q: 10) In your enterprise, is there a requirement to shut down an asset (discontinue

depreciation) for a period of time?
A: Buildings: This may be needed if the building is under major improvement and out of
service. A shut down flag can be on the asset so it is not depreciated during the run.
Equipment: Unlikely
Other assets: no
Q:
11) How do you archive your asset master records at the present time?
A: Equipment & Buildings: Currently no archiving is done. We keep all equipment in our
present system so that we may go back and see the history behind it. For instance, an item
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might have been purchased 10 years ago that was over the threshold for equipment and thus
was given a UT tag number. However, currently it would be under the threshold and
removed from the annual equipment inventory listing, but no one removed the tag number.
We still want to be able to track the item when someone calls and wants to know if this
tagged item is still considered equipment.
Other assets: N/A in current system.
Q: 12) How long do you intend to continue to manage assets, which are no longer on hand
physically, in the system?
A: Equipment and Buildings: Our state record retention law requires 7 years of data after
audit.
R/3 will allow you to store assets in the system forever, however if there is zero net book
value and/or asset is retired you can determine if no activity after x years then it will archive
when archival processing is run. Database space (processing time) vs. use of data will need
to be defined later and managed in conjunction with the other modules.
CI Template:
The master record contains information about the fixed asset. The following field groups
exist:
General information (description, quantity, etc.)
Account assignment
Posting information (for example, capitalization date)
Time-dependent assignments (for example, cost center)
Information on real estate
Leasing conditions
Information on the origins of the asset
Physical inventory data
User fields/evaluation groups (currently UT hasn't identified needs for these fields
but during mapping and configuration this may be needed for additional
information)
Depreciation keys
In addition, you can create long texts for the individual field groups belonging to the
general data part of the asset master record. You can simplify the creation of long texts
by using freely definable long text templates. You define these templates in FI-AA
Customizing under Define long text templates. UT will need long text for detail
descriptive information on the Land assets.
Depreciation keys used by UT will be 0000 for non-depreciable assets and LINS for
depreciable assets.
Creation of the asset master record will be done by the Campus Business Offices and the
Controller's Office. Users whom are creating purchase requisitions for assets will create
the asset master record and record the asset number in the account assignments in the
purchase requisition. This will trigger the asset to be automatically capitalized upon
goods receipt. When creating the asset master record the user will enter only the basic
data and after the asset is received the record will need to be updated with additional
information.
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The asset master record is the only master data created in asset management.
The asset master record will contain master data from other modules such as the cost
center, WBS element, and business area.
Screen layouts need to be configured for each asset class. The screen layout determines
what fields the user sees when creating an asset master record.
UT will let R/3 assign the number to the Asset master record.
The asset number range and length needs to be determined. Suggest using at least a 6digit asset number.

UT's legacy systems sequentially number the asset records. Upon data conversion how
will this data be retained in R/3, is it relevant to UT to keep this numbering? There are
several fields available that this information can be converted into if desired.
Land records are all manual so UT will need to create an upload spreadsheet that can be
used by the basis team to load the assets.
Equipment and Building systems are automated so UT's IT folks can obtain flat files for
conversion.

The most significant change for UT is that the asset record will be created prior to the
asset being purchased. This means that the user will not have all the asset master
record information at time of creation. The user will need to maintain the asset master
record after goods receipt to complete information such as Tag Number, Serial Number,
Inventory Number, Location Code, etc.

N/A at this time
D. Business Processes
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1. Procurement
Questions:
Q:
1) How does material move between plants?
A: In general, material is not shared between plants. However, if this were to take place, it
would be internal documentation to include product and dollar transfer documentations.
1.1.
Procurement of Materials and External Services
1.1.1.
Purchase Requisition
1.1.1.1.
Purchase Requisition Processing
Questions:
Q: 1) How are purchase requisitions created in the case of stock material, material for direct
consumption, external services?
A: [X] Manually
[ ] MRP
[ ] Sales order
[ ] Replenishment
[X] Store order
[X] Outside R/3
Q: 2) Will you use a purchase requisition to trigger creation of for a contract or scheduling
agreement (Outline Agreement Request)?
A: Yes, in most cases, but purchasing departments will also have the ability to create an
outline agreement without a requisition.
Q: 3) How many days does it take, typically, before a purchase requisition becomes
demand in a purchasing document given to a supplier? Please indicate processing time per
plant.
A: It depends. Requisitions are generally generated for requirements over $2,000. By
University policy, if the items(s) to be purchased are not sole source or are not contract
sources, the requirements have to be placed for public bid for a prescribed time period. The
time periods listed below are assume to be from the time the requisition is received in the
purchasing department and does not include the time it takes to generate the requisition and
gain the required approvals by the requisitioning department.
If the requirement forwarded to purchasing is a sole source purchase, approvals have to be
gained before the requisition can be processed. The approval process could take two or
more business days depending on the approval officials presence. In additions, the buyer
must contact the sole source vendor for price and condition verifications. Assuming that
approval is granted in a timely fashion and prices and conditions are acceptable to the
University, the process for a sole source requisition to be turned into a purchase order and
ready for mailing or faxing to the supplier could be approximately up to five business days.
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Requisitions received for contract items can generally be turned into purchase orders in three
business days or less that are then mailed or faxed to the supplier.
Requisitions that require bidding depend on the estimated value of the requisition. For a
requisition with an estimated value of less than $10,000, informal bid procedures could be
utilized which could take from one day up to two weeks depending on the formality of the
RFQ bid document. Once the bids are received and tabulated, the bids are forwarded to the
department via campus mail or fax for review and approval. Once purchasing has approval to
proceed from the department, the purchase order is prepared and mailed or faxed to the
supplier. The time process to create the PO could vary from two business days to three
business weeks depending on the complexity of the bid process and the review and approval
process at the department.
For a requisition in excess of $10,000, formal bid procedures are utilized. The bid period for
formal bids at a minimum is usually two business weeks and can take as long as six business
weeks - or longer, depending on the complexity of the bid requirements and necessary
meetings during the bid process i.e., bidders conferences, site inspections etc. On the
closing date of the RFQ, the bids are subject to a public opening. Once the bids received are
tabulated and reviewed, the bids are forwarded to the department for review and approval.
Once the Purchasing department to proceed receives approval, the purchase order can be
created and mailed or faxed to the successful bidder. The time period from receipt of
requisition until creation of a purchase is usually a minimum of three business weeks and
could be considerably longer, depending on the complexity and dollar value of the requisition.
Q: 4) Will purchase requisitions generated via material/article requirements planning be

manually post-processed?
A: No
CI Template:
Transformation of current requisitioning process (paper based or by phone) into a
paperless, fully-R/3 supported process with that ability to transmit requirements form
departments to the Purchasing department via electronic methods.
A requisitioner at the department level will create a purchase requisition in the R/3
system. Once created, an approval official will review the requisition and approve the
requisition in R/3 if desired. Upon approval, the purchase requisition will be released to
purchasing for processing. A possible limitation to the University could be the inability of
R/3 to have a requisition printed which may conflict with organizational requirements for
archival.
3. Explanations of Functions and Events

The requisition will be created and approved anytime in SAP R/3. Based on department
approval, the purchase order is released to purchasing for processing. It is expected that
the department will be able to electronically attach documents to the requisitions, i.e. data
files that are created in word processing and spread sheet applications, along with data
scanned into data files from any source such as paper, internet, etc. The Purchasing
Department will review released requisitions on a regular basis and convert the
requisitions into a purchase order in R/3 after the appropriate purchasing procedures
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have been followed.

.
4. Business Model
Requirement of less than $2, 000 have the option of not being processed in R/3 and
could be purchased through the use of a Procurement Card or other non-purchase order
methods. All non-contract requirements over $2,000 will require a requisition that will be
generated in R/3 and approved by the appropriate department approval official for
processing in the Purchasing Department.

After the creation of the requisition it will be the responsibility of the Approval official at
the Department level to review the requisition at regular intervals (Department Internal
Procedure) and to approve the requisition. Potential procedures that could be used for
notification of approval by the initiator could be by phone call, fax, or e-mail or workflow.
Also, the requisition will not be printed. This could conflict with organizational
archival/retention policy statements.
No fundamental changes to the existing organization: The organization units:
Department and Purchasing will perform the process as it is today except that the
requisitioning and approval process will be electronic. However, without workflow, the
departments and purchasing departments will have to establish a method of monitoring
requisitions that have been created. There is no standard automatic notification in R/3
that a requisition has been created and methods such as e-mail, phone, and periodic
searches in R/3 will have to be established in processing requisitions.
The requisition and approval process will be fully electronic and paper free. The current
approval process is manual.

None is apparent at that point

N/A

Workflow

If a release strategy is to be used, a release strategy has to be defined in the
configuration to require requisition to be subject to approval. Approval points have to be
at a manageable number.
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Only authorized personnel will be able to create requisitions that will be in turn approved
by the authorized approval official for release to the Purchasing Department. Once a
requisition is assigned to a buyer in purchasing, the buyer can perform appropriate
changes if necessary, for example, source and description. The buyer should not have
the authority to amend any related funding or accounting activities.

N/A
1.1.1.2.
Purchase Requisition Assignment
Questions:
Q: 1) On the basis of which criteria are purchase requisitions assigned to a source of
supply?
A: Main criteria are to check for contracts. If contract is available, contract source is
assigned. If no contract is available applicable bidders for commodity or service are
established and bids taken. Sources will be bid.
Q:
2) On the basis of which criteria are purchase requisitions grouped together?
A: In general, purchase requisitions are not grouped together. But if used it would be
grouped by commodity, service or vendor
Q: 3) What support (e.g. price simulation) does the buyer need in order to assign the
purchase requisition?
A: Previous history, knowledge of applicable contracts, material groups, department's
recommendation, and estimates.
Q:
4) Are purchase requisitions converted into requests for quotations?
A: Yes
Q: 5) Which sources of supply will you use for purchase requisitions? Are these sources of
supply internal and/or external to your company?
A: Previous purchases, bidders list maintained at the purchasing department, buyer
knowledge and experience - all are internal sources. External sources include sourcing
documentation such as Thomas registers, Catalogs Buyer's Guides vendor furnished
information and the internet, state and university contracts.
CI Template:
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In general, a buyer will assign the final source of supply to the requisition. If requisitioned
items are on contracts, sourcing will be based on contract and the contract vendor will be
assigned as a source of supply whenever possible and practical. When items are not on
contract, a source of supply will be generated using other MM info records.
If
requisitioned item is on contract, the source of supply should be the contract vendor
whenever possible and practical.
If the requisitioned item is on many contracts, R/3 will provide a list of potential contract
sources for the buyer to choose from.
If no contract exists, R/3 will assist the buyer in the formulation of a bidder list based on
vendor info record (that indicates that the same or similar item has been previously
purchased) or based on NIGP codes. (A vendor profile using classification system will be
set-up and link NIGP codes to vendors.) The Buyer will choose the appropriate bidders
from the list for inclusion into a RFQ.

Department creates requisition. An appropriate official approves the requisition. Once the
requisition is approved, the purchasing department can perform all the follow-up functions
and ensure that the requisition is processed in accordance with the University's
procurement policies.
4. Business Model
Purchasing department may assign contract vendor as the source of the requisition if
contract(s) exists for the requisitioned item.
If no contract exists but a vendor info record exists for that requisitioning item, the info
record source could be used as a source for a bidder list. If no contract and no vendor
info record exist, through buyer research the source for bidding will be identified and a
bidders list will be manually created.

No special organization consideration at that point.
No changes to the existing organization: The organization units: Department and
Purchasing will perform the process as it is today except that the procurement process
will be electronic and as paper free as possible within the policy of the University.
System proposal of sources of supply, if sources of supply exist.

N/A
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N/A
N/A

No system configuration required. Only master data maintenance such vendor master
records, contracts will have to be performed.

Only authorized personnel will be able to assign source of supply.

N/A
1.1.1.3.
Release Purchase Requisition
Questions:
Q: 1) Should requisitions be subject to approval by someone (or possibly several people)
before the requisition can be processed into an RFQ and/or purchase order?
A: Yes. Budget authority and account responsibility reside at the requisitioning level, in the
current organization, the requisitioning department must gain approval before a requisition
can be processed into a RFQ and purchase order.
Q:
2) Are the purchase requisitions subject to a release strategy? If so, which criteria apply?
A: There is no standard for release of a requisition across the University at this time. The
release strategy is dependent on the departments internal procedures.
Q:
3) How is the person responsible for releasing the purchase requisition to be notified?
A: [X] Via workflow

[X] Other procedure
[X] Approver regularly checks R/3
[X] By telephone
[X] By e-mail
CI Template:
Ability to electronically approve requisitions via workflow for release to purchasing
departments.
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Once a requisition has been created, the requisition will be approved by an approval
official through the use of authorization. Approval requirements across campuses will be
standardized to the extent possible.

Requisition is created by Department and electronically approved at the department.
Approval official will release the requisition to the Purchasing Department.
4. Business Model
Requisition creation---> Requisition release to purchasing for processing by approval
official ---> Conversion of purchase requisition into purchase order.
Notifications will be done via phone or e-mail. If in place, the approval official will be
notified via workflow.
Approval officials will be required on a regular basis (procedures should be established)
to check the requisitions awaiting approval. In case a requisition is declined by the
approver, the requisitioner has to be notified by mail or phone. SAPMail may be used. If a
requisition has been approved by the department official but is rejected by Purchasing,
Purchasing will have to notify the user department by mail or phone. SAPMail may be
used. Alternatively the user in the department may check the status of the requisition. If
the department changes a requisition after it was released a new approval process may
be required due to the type of changes. Purchasing department has to monitor
requisitions to adopt changed requirements. If workflow is implemented, the processes
listed above will be subject to change.

No change at that point.
Electronic Requisitioning. Release of Requisition will be electronic.

N/A

N/A
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N/A

Standardized Release strategy will be set-up for all the campuses.

Only department officials with authorization can approve requisition electronically.

N/A
1.1.2.
1.1.2.1.
Purchasing
Purchase Order Processing: Vendor Unknown
Questions:
Q:
1) How will purchase orders be created in your system?
A: [X] Manually
[X] From purchase requisitions (manual or automatic)
[ ] From store order
[ ] From replenishment
[ ] From allocation table
[ ] From load-building run
[ ] From SAP Retail Store
[X] For stock material
[X] For consumable material
[X] For external services
Q: 2) Do you want the system to check whether the purchase price is within a predefined
tolerance in your system, compared with the material valuation price?
A: No, (Not at this time) But after the accumulation of data it would be of a considerable
advantage to compare prices of previous purchase of the same or similar materials.
Q: 3) Describe how the source of supply is determined for manually created purchase
requisitions!
A: The source of supply is through buyer research that consist of: Buyer knowledge based
on experience; review of previous purchase orders; industrial sources; stand alone, non
legacy system bid list (NIGP Codes); industrial sources - Thomas registers, catalogs and
buyer's guides, industrial literature on previous purchases; and knowledge of internal
University and Sate contracts
Q: 4) Specify the consumption categories for which you will procure external services and
material directly: Asset, cost center, production order, project, sales order, other (please
specify).
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A: Project, Asset, Cost Center, (Sales Order - Not S/D Sales Orders)
Q:
5) How do you transmit purchase orders to your vendors?
A: [X] via mail

[X] via fax
[ ] by EDI
[X] other
Q: 6) Do you order material in a unit of measure that differs from the one used for stock
keeping purposes?
A: Yes
Q: 7) Do you pay for material in a different unit of measure than the one that is shown in the
PO/and or used for stock put away?
A: Yes
Q: 8) Is it necessary to track certificates of origin and/or customs reference numbers for
materials produced in foreign countries?
A: Yes
Q:
9) Will you be purchasing material imported from foreign vendors?
A: Yes
Q:
10) Are purchasing info records to be updated automatically with every purchase order?
A: Yes
Q: 11) Do you wish to analyze/evaluate purchase transactions according to the reasons for
ordering?
A: Yes
Q: 12) Do you plan and enter freight costs in the PO? If yes, describe the basis of the costs.
Also indicate if any types of costs can be determined automatically (for example, freight costs
per piece, per unit of weight, as a percentage of the value).
A: Yes. Basis of cost is freight quote/bid from bidder/vendor.
Q: 13) Do you want to prevent users from changing the account assignment of items in
purchasing documents for which they have no authorizations? If so, for which purchasing
documents?
A: [X] Purchase requisitions
[X] Purchase orders
[X] Contracts
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[X] Scheduling agreements
Q: 14) Do you sometimes order stock material directly for a cost center or another
consumption category?
A: Yes
Q:
15) Do you have to declare your ordering activities to the authorities? If so, describe.
A: Yes, reports are generated for the State of Tennessee for sole source, other than low bid,
only bid received, and emergency non-biddable. Reports are also generated for purge
reports, payment to vendors for printing services (printing authorization numbers), confirming
orders over $2,000, purchase orders $50,000 and over for capital assets, purchase orders
change report/amendments, purchases to small/minority/women owned vendors, audit trails,
and purchase orders over $10,000 based on other than low bid or only bid received. Report
samples will be supplied by each campus.
Q: 16) Do you allow over deliveries? If so, specify the percentage variance for the individual
materials/material types. If yes, what percentage would you allow? Should this default
percentage threshold vary for different locations?
A: Yes, for printing and other items that are processed in a batch process up to 5% to 10%
over the purchase order stated quantity. If other than batch processes, tolerance is zero (0).
Material Group tolerances will be supplied by each campus. To be revisited
Q: 17) On the occasion that a vendor sent you less than the quantity ordered, would you
ever want this shortfall to be considered an under delivery, with no further deliveries
expected? Please list the values for each material/material group.
A: Yes
Q: 18) Can the materials you purchase be subject to different tax types? (For example,
based upon the material purchased, based upon the plant for which the material is
purchased, etc)?
A: The University is a tax-exempt entity, however we pay some Federal Excise Taxes, and
other taxes as well. As long as materials/services are delivered in the state of Tennessee, no
taxes are incurred. Per our existing bid conditions, the vendor/bidder is responsible for all
taxes associated with the purchase order and must account for any taxes in their bid. There
have been situations where the University is responsible for taxes for products delivered to
University personnel residing out-of-state.
Q: 19) Do your POs issued to vendors contain specific transport or packing instructions? Is
vendors' compliance with the transport and packing instructions when the goods are
received?
A: In general, no. However, there could be situations that specific instructions could be
included in the purchase order or request for quotation document.
Q: 20) Is it to be possible for purchase orders to be generated automatically following a

goods receipt? Specify the criteria for this.
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A: No
CI Template:
Purchase order and contract release order will be created in SAP R/3. R/3 will suggest a
source of supply if no source is designated.
Once the requisition is released to purchasing, the authorized purchasing department
personnel will convert the requisition into a purchase order using the appropriate
procurement methods. If the vendor is unknown, R/3 will assist in sourcing the
requisition. Using this R/3 functionality, an authorized individual will be able to source a
Purchase order. The sourcing functionality exist that will suggest a source of supply
based on contract sources maintained in the system, info records, and any other MM info
records.

Purchase Requisition for requirements over $ 2000 will be created and approved at the
department level. After the requisition is released by approval official, the purchasing
manager assigns the requisition to the appropriate buyer. If the source is unknown, the
buyer will utilize the source functionality of R/3. The buyer than follows all of the
appropriate procurement functions to convert the requisition into a PO. Upon release of
the PO, the buyer will also have the ability to perform changes /modifications of purchase
orders if necessary. Buyer will be able to expedite orders and generate status information
if necessary.
4. Business Model
The Purchasing Department will convert released requisitions into Purchase Orders. A
purchasing official will approve the purchase order .If elected by the department; a goods
receipt by the department will be performed. The department will receive and enter the
invoice.

N/A

Electronic approval of PO.
From manual approval to electronic approval of purchase order (paper free process).
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N/A

N/A

Notification of approval officials for purchase orders via workflow could be implemented
at a later date.

Number of approval levels for purchase orders.

Authorized purchasing personnel will have the authority to utilize the sourcing function
and to create and release purchase orders.

N/A
1.1.2.2.
Purchase Order Processing
Questions:
Q:
A: [X] Manually
[X] From purchase requisitions (manual or automatic)
[X] For stock material
[X] For consumable material
[X] For external services
A: same as PO processing vendor unknown
requisitions!
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specify).
Q:
5) Which types of purchase order will you use?
A: [X] Standard
[ ] Consignment
[ ] Subcontracting
[ ] Stock transfer
Q:
A: [X] via mail

[X] via fax
[ ] By EDI
[X] Other
Q: 7) Do you order material in a unit of measure that differs from the one used for stock
keeping purposes?
A: Yes
PO/and or used for stock put away?
A: Yes

Q:
10) Will you be purchasing material imported from foreign vendors?
A: Yes
Q:
A: Yes
ordering?
A: Yes
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documents?
A: [X] Purchase requisitions
[X] Purchase orders
[X] Contracts
[X] Scheduling agreements
A: Yes
Q:
A: Yes. There are activities such as sole source, other than low bid at prescribed dollar
amounts, emergency purchase with not bids taken that are required by the state.
materials/material types.
A: Same as vendor unknown See 1.1.2.1 question 16.
A: Yes, depending on the department requirements and desires.
purchased, etc)?
Q: 20) Do your POs issued to vendors contain specific transport or packing instructions? Is
vendors' compliance with the transport and packing instructions when the goods are
received?

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A: No
CI Template:
UT will have many options for purchasing goods and services. The particular purchasing
procedure to utilize will depend on factors such as: the dollar amount: if the requirement
is furnished by a contract source; and the type of items and services being purchased. It
is expected that purchase orders will be able to be processed by: assigning a source
directly against a contract; by taking bids and sourcing the purchase order against the
most favorable bid received; directly converting the requisition into a purchase order with
no other actions taken i.e.: sole source requirements.
Once created, it is expected that the PO will: convey all of the Universitys requirements;
be able to have electronic document attached to the purchase order; that the purchase
order will contain standard purchase order terms and conditions currently used and
issued by the University with each Purchase Order.
Purchase order for non-contract purchases and for personal service contracts will be
performed in SAP R/3 using established procedures such as request for quotes, sole
source, etc. For contract sources two methods will be utilized, either purchases against a
blanket order established against a contract or a direct purchase order released against a
contract will be utilized within SAP R/3. For items under $2,000 - purchases will be made
with procurement cards or other non-purchase order methods that will not utilize R/3
functionality. If Fiscal Policy section 130 personal services contracts are included, they
will be processed using either purchase order or service contract functionality.

Released requisitions will be assigned to the buyers in the Purchasing department.
Buyers will assign a source if necessary and convert requisition into purchase order after
following established purchasing procedures.
In case of a sole source purchase the buyer will document the justification for a noncompetitive purchase order. (Transaction OMF4 -> Field Selection -> ME21N ->
Administrative Data, Item -> Reason for ordering => activate field for input)
Purchase order will be released depending on the release strategy defined within each
purchasing department.
4. Business Model

Number of approval levels

Electronic approval versus current approval
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Paper free approval process: the approval official has to execute a transaction to release
the purchase order.
The purchase order form (printed PO) will need editing within SAPScript to meet client
layout and content requirements.

Design purchase order layout and content and create SAPScript work order.

N/A
Number of approval levels

The appropriate designated personnel will have the authority to create and release
purchase orders depending on release strategy and type of procurement processing
procedure to be used.

N/A
1.1.2.3.
Contract Release Order
Questions:
Q: 1) Will contract release orders be created in R/3 manually, with reference to purchase
requisitions, and/or automatically (for more details, refer to the Source Administration
Scenario)?
A: Yes
CI Template:
Ability to issue release orders against a contract.
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A purchase order (release order) will be able to be created with reference to a contract.

Authorized personnel will have the ability to issue a release purchase order in referencing
a contract. The department will perform a goods receipt if elected.
4. Business Model
Issue a PO in reference to a contract, receive goods if the function is elected by the
department, departments and AP receive and enter invoice depending on the type of
procurement methods used. Account Payable pays the invoice

Different Level of contracts: UT wide contract, contracts at campus and departmental
level
Ability for a campus to issue contract release orders for a contract that has been
established UT wide.
Departments will be able to make direct release orders against contracts without going
through purchasing.

N/A

N/A

N/A

N/A

Only authorized personnel will release purchase orders against contracts.
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N/A
1.1.2.4.
Release of Purchase Orders
Questions:
Q: 1) Are purchase documents to be approved by someone before being issued to
vendors? Describe the approval procedure....
A: Yes, currently purchase orders up to $10,000 are approved by buyers, orders between
$10,000 and $15,000 are approved by buyer supervisors. Orders in excess of $15,000 are
signed by the business services/purchasing director.
Q: 2) How is the person responsible for approval to be notified? - Approver checks R/3
regularly, by phone, by e-mail, by workflow, other.
A: In phase one, the approver will have to check R/3 regularly or be notified by phone or email. As R/3 grows it is anticipated notification will be through workflow.
Q:
3) Will you use an electronic signature to release purchasing documents?
A: Yes
CI Template:
The ability to release purchase document to suppliers. A release strategy shall exist for
all purchase documents based on a preset approval process.
Purchase orders will be released based on a defined release strategy.
The purchase orders will be released according to defined dollar intervals detailed below:
1.Non-Exempt Buter
2.Purchasing Agent in Training
3.Purchasing Agent
4.Associate/Assistant Director
5.Director
$0 - 2,000
$0 - 5,000
$0 - 20,000
$0 - 50,000
Unlimited
The individual campuses will determine the dollar level of approval for their buyers.
4. Business Model
All purchase orders within SAP R/3 could be subject to one or many release levels
depending on the value of the purchase order.
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N/A
Electronic approval of purchase order in the R/3 system.
Monitoring of purchase order approval status by requestors.
Paper free approval process.

N/A
N/A

Workflow should be a later enhance to the above process.

Level or number of release levels.

Only authorized personnel will have the ability to release purchase orders.

N/A
1.1.2.5.
Transmission of Purchase Orders
Questions:
Q:
1) How will you transmit your purchasing documents to your vendors?
A: [ ] Other, please describe

[X] By telephone
[X] By e-mail
[X] By fax
[ ] By EDI
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[ ] By post (in written form)
Q:
2) How are scheduling agreement releases to be transmitted?
A: [X] Paper
[X] Telephone
[X] Fax
[ ] E-mail
[ ] EDI
Q: 3) Do you wish to adopt vendors' own nomenclature for characteristics (color codes etc.)
on your order form?
A: To the extent possible, yes (e.g., vendor material number in details per line in PO and in
contract).
Q:
4) How are purchase orders to be transmitted?
A: [X] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
Q: 5) How long after ordering and before the time of delivery should a shipping notification
have been received?
A: Two to Three business days.
Q:
6) How do your vendors transmit shipping notifications?
A: [X] Paper
[X] Telephone
[X] Fax
[ ] E-mail
[ ] EDI
Q:
7) What information does the shipping notification contain?
A: Varies by vendor - no established criteria for information established by the University.
Q:
8) Are there differences per vendor and/or site? If so, which?
A: No established standard criteria

CI Template:
Ability to issue a PO to a vendor via a fax, e-mail, phone etc.
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At UT the purchase order will be transmitted to the vendor via mail/fax/phone
Purchase orders will be transmitted to vendor based on the vendor's preferred
communication method. If a purchase order or contract is changed there will be no
automatic print out or fax transmission of the changed purchase order / contract. The
print out or fax transmission have to be triggered manually by the user in order to avoid
transmission of non-relevant changes to the vendor.
4. Business Model
After the purchase is created and approved, it will be issued to the vendor via fax/mail.

Hardware availability or software such as Fax capability.

N/A
Transmission of PO via fax from SAP R/3. This is with the understanding that the vendor
has the capability to receive fax.

N/A
N/A

In the initial roll out, purchase orders will be transmitted via phone, fax, e-mail, or mail. In
the future, the ability to transmit purchase order via the Internet will be necessary.

N/A
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For release orders against contracts, authorized department users and authorized
purchasing users will transmit release orders. For specific purchase orders generated
against requisitions forwarded by departments, only authorized purchasing personnel will
transmit the purchase orders.
N/A
1.1.2.6.
Delivery and Acknowledgment Expediter
Questions:
Q: 1) How many days after the due delivery date will you send messages to your vendors
urging delivery of the overdue goods?
A: Two business day as a targeted standard default and if determined to be necessary by
the buyer.
Q: 2) Should this deadline monitoring vary for different materials or articles? If so, please
explain.
A: There should be a degree of flexibility that would allow a buyer to determine an
appropriate time period.
Q: 3) Will you send out reminders regarding outstanding vendor confirmations if the due
date is exceeded?
A: Yes
Q: 4) Which kinds of purchasing document do you want to send to vendors? 1) The

complete purchasing document 2) Information re changes 3) Reminders (prior to due date 4)
Urging letters/expediters (after due date) 5) Scheduling agreement delivery schedules.
A: All purchase documents, by fax, mail etc.
Q: 5) Will you send urging messages (expediters) to your vendors in the case of overdue
deliveries? If so, how many days after the due date will you do this?
A: Two business days if message option is chosen by buyer.
Q:
6) How are reminders and urging letters (expediters) to be sent to your vendors?
A: [X] By post
[X] By fax
[ ] By EDI
[X] By e-mail
[ ] Other, please describe
CI Template:
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Ability to print automatically reminders at the predefined intervals for overdue delivery if
required by authorized users.
Purchase Order Follow-Up
The system checks the reminder periods that have been specified and - if necessary automatically prints reminders for expediters at the predefined intervals. It also provides
an up-to-date status of all purchase requisitions, quotations, and purchase orders. This
process would be considered optional and any defaults would be to not have this type of
transaction automatically created.

After the due date for the delivery of ordered goods, an urging letter (after that due date
depending on the set-up interval for urging letters) can be sent to vendor.
4. Business Model
See above

The appropriate infrastructure is in place.

N/A
Ability to monitor overdue PO's
N/A

N/A

N/A

N/A
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Authorized personnel will be able to issue letters of reminders to the vendors.
N/A
1.1.2.7.
Processing of Shipping Notifications/Confirmations
Questions:
Q:
1) Will you process shipping notifications with the R/3 System?
A: Yes
Q: 2) Once you have issued a purchasing document to a vendor, do you want to track
"confirmations" your vendor may return to you regarding the order?
A: Yes, order acknowledgement w/confirmation and shipping notifications, if required by
buyer.
Q: 3) What do you do if the order acknowledgment contains quantity and/or delivery date
variances from the purchase order or a previous acknowledgment?
A: Contact the vendor directly for reconciliation.
Q: 4) Which type of vendor confirmation do you need and at which time intervals? Which
events should trigger a confirmation?
A: Purchase Order and shipping confirmation. P.O. confirmation upon vendor receipt and
shipping confirmation two business days prior to shipping.
CI Template:
Ability to receive order confirmation and shipping notification.
Vendor Confirmations at UT will include: Order acknowledgments: The vendor receives
the purchase order and can deliver the ordered/amended quantity. Shipping notification:
the vendor sends shipping notification prior to the delivery of the ordered goods.
This functionality should be considered optional and any defaults should be to not create
this transaction automatically.
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Purchase Order and shipping confirmation. P.O. confirmation upon vendor receipt and
shipping confirmation two business days prior to shipping.
4. Business Model
Vendor receives order. Shipper issues advanced notification of shipping 2 days prior to
shipment.
UT receives notification, enters information to R/3 system and monitors delivery against
notification.

Department process the shipping notification

N/A
Better monitoring of outstanding deliveries.

N/A

N/A

N/A
N/A

Shipping notification: The ordering department personnel will be the appropriate
personnel to contact with regards to notices of shipment. If the department cannot be
contacted, notification will be forwarded to the appropriate buyer in the Purchasing
Department.

N/A
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1.1.2.8.
Transmission of Shipping Notifications
Questions:
Q:
1) Which department or person is to be informed of the shipping notifications?
A: The ordering department, the individual to contact will be part of the order.
CI Template:
Receiving of shipping notification per fax/phone.
The vendor notifies UT department per fax/phone prior to delivery. This function should
be at the University authorized user level and should be optional and used on a case-percase method.
A number of days (for example 2) prior to the delivery, the department will be receiving a
shipping notification.
4. Business Model
Vendor receives PO. Issues shipping notification a few days prior to shipment.

N/A
Ability to run a report to monitor the overdue deliveries for PO's for which Goods receipt
will be performed.
Monitoring the overdue deliveries for PO's for which Goods receipt will be performed.

N/A

N/A
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N/A
N/A

Authorized users will be authorized to enter shipment information submitted by the
vendor into R/3.

N/A
1.1.3.
1.1.3.1.
Goods Receipt
Goods Receipt Processing
Questions:
Q: 1) The material stock balances shown in your legacy system are to be transferred to the
R/3 System. Will the stocks be valuated at the prices specified in the R/3?
A: At this point, inventories are not in scope; however, when inventories are incorporated
into our scope, the information would be migrated.
Q: 2) If you do not use the R/3 Purchasing functionality, describe the process of receiving
goods from a vendor.
A: Goods are shipped directly to the address indicated on the purchase order. The delivery
is usually to a department where the good is received. No formal receiving report is issued
and no accounting actions take place at this point.
Q: 3) If you do not use production orders of the R/3 System, describe the process of
receiving goods from production.
A: N/A. UT is not producing materials neither with R/3 module PP (Production Planning) nor
outside the R/3 system.
Q: 4) Should the person who posts a goods receipt be able to use a different account
assignment than the one specified via the automatic account determination process?
A: Yes
CI Template:
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The ability to generate a goods receipt if elected by the department. The goods receipt
process will not be mandatory and will only be utilized on a per purchase order basis.
The goods receipt is performed when formal receipt of goods and is elected by
department.

The Purchasing department will indicate in the PO whether a goods receipt is required by
department. If elected by the department, the department will perform the goods receipt
in SAP R/3.
4. Business Model
Standard Process in SAP R/3: The Purchasing department will issue the PO to the
vendor in SAP R/3. If elected, the Department will receive and perform the Goods
Receipt in SAP R/3.

It is anticipated that goods receipt will be limited. Formalized receipt of goods will be a
new function for the University and training and change management issues will have to
be addressed. Also, care will have to be taken to assign goods receipt roles to other than
requisitioners for internal control purposes (separation of duties) when possible.

Perform Goods Receipt for consumables by the Department
Adding a level of control and tracking capability in the procurement process

N/A

N/A

The Goods Receipt would help to identify discrepancies between quantity ordered and
quantity delivered, by the vendor evaluation.
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The default setting for goods receipt flag will be "NO". By exception, the buyer will have
the ability to manually flag the "YES" setting of the goods receipt .
Authorized personnel will perform these functions.

N/A
1.1.3.2.
Goods Receipt Processing with Reference
Questions:
Q:
1) Describe the process for receiving goods with reference to a purchase order.
A: When the purchase order is processed, a copy is forwarded to the department. Once
goods are received, the department will match the goods received to the purchase order. If
all is accountable, the department will reference the purchase order on the invoice and send
the approved invoice for payment.
Q:
2) Name the storage locations to which vendors deliver the goods.
A: Goods are usually delivered to the department that orders the products. The storage
location is usually the department.
Q:
3) How do you inform the Purchasing Department that goods have been received?
A: Currently, there is no direct information furnished to the purchasing department when

goods are received.
Q: 4) Do you receive quantities less than the ordered quantity? If yes, is the purchase order
considered complete then or do you receive the missing quantities later?
A: Not usually, but this does happen from time to time and partial payments can be made for
quantities less than the ordered quantity. The order, however, is not considered complete.
The ordering department usually contacts the vendor directly about making up the remaining
items. There have been situations where the vendor did not deliver all products and did not
make up the difference. This situation allows for the purchase order to remain open for an
indefinite period without any notification to the purchasing department. The outstanding
balance must ultimately be closed out or cancelled to purge the order from the system.
Q: 5) Do you physically store the goods you have received into "stock in quality inspection"
at a different location than those posted to normal stock?
A: No
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Q:
6) Do you allow every material to be stored at all storage locations? Please describe!
A: No. No stock material and no inventory are maintained currently. Out of scope.
Q: 7) Do you use a unit of measure for the pricing of the goods other than the unit you order
in? If yes, you can define the variances in customizing.
A: Yes
Q: 8) Do the materials you receive have to be stored for a certain time before they can be
used or do they have an expiration date that you want to keep in the system?
A: It depends. As inventories are not in scope at this time question is not applicable.
However, there are inventories around the campus that have time sensitive properties such
as pharmaceuticals etc.
Q: 9) Do you refuse to accept deliveries if the vendor has not complied with the shipping
instructions? (Can be used to evaluate vendors.)
A: No
Q:
10) Which documents are generated with the goods receipt?
A: [ ] Goods receipt slip

[ ] Bar code sticker
[ ] Other
[X] None
Q:
11) Which documents are generated in connection with a goods receipt?
A: None
Q: 12) If a goods receipt quantity is assigned to a goods issue, do you want the person who
enters the goods receipt to receive a corresponding message?
A: Yes
Q: 13) Will you inspect the material/article at the time of goods receipt? If so, do you enter
the goods receipt and the inspection result or do you only enter the goods receipt after the
inspection has been carried out?
A: Yes
Q: 14) If you are using batch management, how is the batch number determined at the time
of goods receipt?
A: Batch management not used at this time
Q:
15) Do you classify the batches at the time of goods receipt? Please specify the criteria.
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A: Not applicable
Q: 16) Is the automatic account determination process defined by Financial Accounting? If

not, who is responsible within Logistics?
A: Do not know the answer to this question
Q: 17) Do you wish to print out the material document as evidence of a goods movement?
Which information should be included in the printout?
A: If in scope, Yes
CI Template:
Ability to perform a Goods Receipt in reference to a purchase order or release order. If
Goods Receipt is performed, it will only be accomplished in reference to purchase order.
When elected, the goods receipt is performed when formal receipt of goods is required.

The Vendor will send an invoice to the department or accounts payable based on the
procurement type. When release orders or purchase orders are used, goods receipts
may be performed by the department and accounts payable will process the invoice
based on a three-way match. The match is Invoice with receiving document and
purchase order.
4. Business Model
Standard Process in SAP R/3: The Purchasing department will issue the PO to the
vendor in SAP R/3. The Department will receive and perform the Goods Receipt in SAP
R/3.

Goods receipt is done at the department level. Formalized receipt of goods will be a new
function for the University and training and change management issues will have to be
addressed. Also, care will have to be taken to assign goods receipt roles to other than
requisitioners for internal control purposes (separation of duties) when possible.

Perform Goods Receipt at the Department level.
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Adding a level of control and tracking capability in the procurement process

N/A

N/A

The Goods Receipt will help to identify discrepancies between quantity ordered and
quantity delivered, by the vendor evaluation.

The default setting for goods receipt flag will be "NO". By exception, the buyer will have
the ability to manually flag the "YES" setting of the goods receipt.
Authorized personnel will perform these functions.

N/A
1.1.4.
Invoice Verification
CI Template:
1.1.4.1.
Invoice Processing with Reference
Questions:
Q: 1) Do you reduce the amount of your vendors' invoices automatically in the event of
variances?
A: Automatically - No, however, we do have occasion to reduce the invoice for non-receipt
of items or charges not allowed for in the purchase order (i.e. shipping, handling, taxes, etc).
Q:
2) Name the types of tax that might appear on a vendor's invoice.
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A: No tax should appear, as the University is tax exempt.

CONFIGURATION NOTE: Tax Code I0 (Sales tax exempt) should be configured/activated
so that it can be used for all required tax fields.
Discussions should take place with Univ. of Tennessee tax controllers to ensure that no
reporting of tax exemption or possible tax self-assessment is required.
Q: 3) List the types of tax that are generally applicable and should therefore be
automatically suggested in the standard system when an invoice is entered.
A: The University is a tax-exempt entity for personal property/purchases; other taxes might
be applicable i.e. Federal excises taxes, surcharges etc.
Q:
6) How do you treat unplanned delivery costs included in an invoice?
A: On an exception basis. If other than the cost accounted for in the PO, purchasing
approves any overages, or writes a change order to include requirements not originally
ordered if previously approved by ordering department.
Q: 7) Do you sometimes have to change the account assignment for a certain purchase
order at the time of invoice verification?
A: Yes
CONFIGURATION NOTE: For security profile purposes, will the account assignment change
to take place at invoice verification be performed by someone in Accounts Payable (only),
Purchasing (only), the department (only), or by any of the above?
Q:
8) Should down payments also be cleared?
A: Currently, no allowance for pre payment of goods
Q: 9) Which other messages do you want to send to your vendors or to people within your
organization with respect to the invoice receipt?
A: Not known at this time
Q: 10) Is a goods receipt always necessary for invoice verification purposes? If so, do you
allow reversal of the goods issue after the invoice has been posted?
A: No
Q: 11) Is the automatic account determination process only defined by Financial

Accounting? If not, who is responsible within Logistics?
A: N/A
Q: 12) Do you wish to notify Purchasing if the invoice price exceeds the purchase order
price?
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A: Yes
Q:
14) Do you use tax jurisdiction codes? Specify the codes used.
A: No
Q: 15) Will you have invoices with mass amounts of data for which no item check is
required?
A: No
Q: 16) Do you receive invoices relating to transactions that are not administered in the
system?
A: Yes
CI Template:
Ability to process any type of invoice in referencing to a purchase order

Ability to have line item check on 2 way match
Ability to notify Purchasing if invoice price is outside tolerance
Need ability to change account assignment in invoice verification (cost
center/object code, WBS element, etc)
Need ability to handle retainage - two types: UT holds the money and the bank
holds the money
Ability to process electronic invoicing (EDI) for blanket purchase orders
Ability to set tolerance for different types of PO purchases
Discounts should be applied to underlying expense account/cost center
Post discounts at time of invoice posting
System should reject invoices with unplanned freight
Allow for 0% tolerance amount for invoices against a purchase order - allow
Purchasing to amend the purchase order
Invoice entry will be a shared responsibility of Accounts Payable and the requesting
departments. Responsibility for each group is outlined in the Business Model section.
PROS: Workload will be distributed throughout the organization.
CONS: Security profile maintenance will increase and access restrictions to transactional
data could be compromised; End User training for Accounts Payable and Invoice
Verification will go beyond the usual system participants (i.e., Accounts Payable,
Financial Accounting) in order to include the various department personnel who will also
be responsible for invoice entry--requires additional project time and money.
PO is issued by the Purchasing department. The Department will receive and enter the
invoice in reference to a PO.
For items purchased w/o PO such as P-card or non-PO Purchases invoice will be
received and approved and processed by the department without purchasing
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participation. See business model below for additional information.
4. Business Model
P-card purchases: Invoice receipt and entry completed by Account Payable
reconciliation accomplished by departments.
Non-PO purchases: Invoice receipt and entry completed by Department.
Purchases using Contract/ Blanket order: Invoice receipt and entry done by Account
Payable if a consolidated invoice has been negotiated and the department will reconcile
invoice. If the process does not include a consolidated invoice, the Department will
receive and enter the invoice for payment.
Purchases using release against a contract: The department will receive and process
the invoice.
Normal PO: Invoice receipt and entry done by Department
PO for services: For formal section 130 contracts, Invoice receipt at department and
entry of invoice completed by Account Payable. For other than formal contacts, invoice is
entered by the Department.
Broad Accounts Payable (invoice verification) training initiative is necessary in order to
incorporate all key personnel at the departments and at Accounts Payable.
N/A for purchasing. However, the role of Accounts Payable personnel could change.
The elimination of multiple oversight and approval of invoices. Once the material is
received the invoice is referenced to the material receipt and PO on those activities with
receipts. Multiple entry of line items in several systems or screens is not required. On
those purchases without goods receipts the invoice will reference the PO and the line
item(s) without reentry.

Non-referencing invoice approval strategy needs to be developed at a department level.
Use of Invoice Release strategies/capabilities.
Utilize Purchase Order release strategies to conform/direct invoice verification approval.

Inventory Management is outside of this project phase; as a result, Goods Receipt is not
an essential process for this phase. Future improvements for invoice verification could
occur when Goods Receipt and Goods Receipt-based Invoice Verification are included in
the project's scope. Further, Evaluated Receipt Settlement (ERS) could be incorporated
later into the system in order to automatically process interplant material and service
transfer transactions.
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System configuration considerations have been incorporated in the various individual
question and answer notes.
For procurement activities involving formal purchase orders created in R/3, the ordering
department will be responsible for processing the invoice via Logistics Invoice
Verification. For invoices generated against blanket orders established with consolidated
billing, Accounts Payable will process invoices. In instances where discrepancies arise
with regards to prices, quantities, etc, the Purchasing Department will research
discrepancies and make necessary corrections to the purchase order.

N/A
1.1.4.2.
Invoice Overview
Questions:
Q:
1) Who is responsible for processing incorrect invoices in your firm?
A: Usually it is the ordering department. Purchasing will assist upon request.
Q: 2) Describe the information flow between Purchasing and Invoice Verification when an
error occurs?
A: If the department reconciles/verifies the invoice, Purchasing will usually not be involved in
the information flow but could amend the purchase order based on request of the ordering
department.
CI Template:
Invoice discrepancy resolution and entry will be at the Department level or Accounts
Payable.
Purchasing will amend purchase order as requested and approved by department
Invoice verification will be a shared responsibility of Accounts Payable and the individual
departments. Responsibility for resolving vendor invoice problems is handled by the
party that encounters the specific problem. Vendors who seek resolution to invoice
issues must determine the appropriate party to contact in order to do so; this could put a
strain on UT's long-term vendor relationships.
PROS: Both Accounts Payable and the departments are equally empowered to resolve
invoice problems.
CONS: Vendor customer service may become an inconvenience to both the vendors
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and to UT unless an appropriate invoice resolution process is in place and adequate to

support the needs of the vendor customer calls.

Invoice discrepancy resolution and entry will be at the department level for Low
Volume/High Value (PO) and low volume/low value (non p-card). Other activities
involving high volume/low value (P-card, blanket order/contract) will be done through
Accounts Payable.
4. Business Model
For procurement cards, central orders such as blanket orders against contracts with
consolidated billing, processing will be by Accounts Payable. On those activities requiring
individual purchase orders (low volume / high value) and non-purchase orders other than
procurement cards, the processing will be by the department. For purchase orders
releases against contracts, the department will process the invoice. Please see business
model listed in Invoice Processing for additional information.
An appropriate Vendor/Supplier Customer Service plan needs to be developed that best
meets the needs of UT and its suppliers.
Broad Accounts Payable (invoice verification) user training is needed to ensure that all
key personnel at department level and AP personnel is trained with the new system.

No impact on purchasing. There could be impact on the role of Accounts Payable.
N/A
N/A

N/A

N/A

Configuration of tolerance variances can control the appropriate resolution requirements
for invoices that reference a PO.
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The department, Accounts Payable, and Purchasing will share this role depending on the
circumstances described in item #12 of previous CIT. If required and necessary,
purchasing departments will assist in any resolution of invoice discrepancies.

N/A
1.1.4.3.
Invoice Release
Questions:
Q:
1) Which invoice blocking reasons will you use?
A: [X] Price variance

[X] Quantity variance
[ ] Stochastical block
[X] Quality reasons
Q: 2) Do you want to block invoices for late delivery of goods? If so, block the invoice when
the number of days late times the value of the late items is greater than X. Specify a value for
X.
A: No
Q: 3) Invoices can be entered in the system but may be automatically blocked due to
variances. Specify the maximum quantity and price variances that are allowed.
A: 0% as a default variance.
Q: 4) Do you want to block invoice items whose value exceeds a certain amount? What is
the threshold value for invoice items 1) with reference to a purchase order 2) without
reference to a purchase order?
A: No
Q: 5) Who is to be notified in the event of variances between the purchase order price and
the invoice price? How is this person to be notified?
A: Purchasing departments and/or department approval authority. Notified by e-mail and
hard copy.
Q: 6) Do you wish to block invoices randomly (stochastically) or only if a certain value is

exceeded?
A: Neither
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Q: 7) Who (e.g. buyer, accounts payable clerk) checks blocked invoices and releases them
for payment? How is this person to be notified?
A: This should be a function of AP.
CI Template:
Ability to block invoices due to price variance, quantity variances, and quality
variances
Ability to allow Purchasing to set P.O. tolerance at 0% but also override on a
case by case basis
Allow A/P to release invoices blocked due to price variance, quantity variances,
stochastical, and quality reasons.
Ability to notify Purchasing if invoice blocked because of price and quantity
variance
Invoices that are blocked can be released by processing this transaction whenever the
invoice is ready to be paid.

Invoices can be blocked manually or automatically based on conditions associated with
purchase orders or goods receipts. Once it is determined that an invoice is ready to be
released for payment, this transaction will perform the necessary process.
4. Business Model
At time of invoice receipt the invoice entered into the system will note variances (price,
quantity); this excludes blanket orders. Should no variance exist, the system will post the
invoice without blocking. However, should variances above the tolerances exist the
system will require an authorization from the buyer.

Broad Accounts Payable (invoice verification) training initiative is necessary in order to
incorporate all key personnel at department level and A/P personnel who will be
responsible for invoice release procedures.
N/A
N/A

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Further requirements analysis needs to take place to match the capabilities of SAP R/3's
Invoice Release to the business rules/policies that UT will impose.
N/A

N/A

Invoice tolerance shall be standard throughout the U. of Tennessee system at 0%.
Invoice Release Strategies will need to be developed and configured for all user profile
groups/departments that will handle invoice entry & invoice approval/release.
Authorization of invoice processing will be at the department level with Accounts Payable
having authorization to process for all departments.

N/A
1.2.
Internal Procurement Not in scope
CI Template:
1.2.1.
Purchase Requisition Internal Procurement not in scope
CI Template:
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1.2.1.1.
Purchase Requisition Processing
Questions:
Q: 1) How are purchase requisitions created in the case of stock material, material for direct
consumption, external services?
A: [ ] Manually
[ ] MRP
[ ] Sales order
[ ] Replenishment
[ ] Store order
[ ] Outside R/3
Q: 2) Will you use a purchase requisition to trigger creation of for a contract or scheduling
agreement (Outline Agreement Request)?
A: Sponsored projects and agency funds: No
Gifts: No
Q: 3) How many days does it take, typically, before a purchase requisition becomes
demand in a purchasing document given to a supplier? Please indicate processing time per
plant.
A:
Q: 4) Will purchase requisitions generated via material/article requirements planning be

manually post-processed?
A:
Q:
A:
[ ]Yes
[ ]No
5) Will you manually create purchase requisitions?

[ ]Yes
[ ]No
CI Template:
General Ledger transfers will be made to handle internal procurement.
N/A

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See above
4. Business Model
See above

N/A

N/A
N/A
N/A

N/A

N/A

N/A

N/A

N/A
1.2.1.2.
Purchase Requisition Assignment
Questions:
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Q: 1) On the basis of which criteria are purchase requisitions assigned to a source of

supply?
A:
Q:
2) On the basis of which criteria are purchase requisitions grouped together?
A:
Q: 3) What support (e.g. price simulation) does the buyer need in order to assign the
purchase requisition?
A:
Q:
A:
4) Are purchase requisitions converted into requests for quotations?

[ ]Yes
[ ]No
Q: 5) Which sources of supply will you use for purchase requisitions? Are these sources of
supply internal and/or external to your company?
A:
CI Template:
General Ledger transfer will be done for internal order.
N/A
N/A
4. Business Model
N/A

N/A

N/A
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N/A
N/A

N/A

N/A
N/A

N/A

N/A
1.2.1.3.
Release Purchase Requisition
Questions:
Q: 1) Should requisitions be subject to approval by someone (or possibly several people)
before the requisition can be processed into an RFQ and/or purchase order?
A:
Q:
2) Are the purchase requisitions subject to a release strategy? If so, which criteria apply?
A:
Q:
3) How is the person responsible for releasing the purchase requisition to be notified?
A: [ ] Via workflow
[ ] Other procedure
[ ] Approver regularly checks R/3
[ ] By telephone
[ ] By e-mail
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CI Template:
N/A
N/A

N/A
4. Business Model
N/A
N/A

N/A
N/A

N/A

N/A

N/A

N/A
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N/A
N/A
1.2.2.
PurchasingInternal Procurement not in scope
1.2.2.1.
Purchase Order Processing
Questions:
Q:
A: [ ] Manually
[ ] From purchase requisitions (manual or automatic)
[ ] For stock material
[ ] For consumable material
[ ] For external services
A:
requisitions!
A:
specify).
A:
Q:
5) Which types of purchase order will you use?
A: [ ] Standard
[ ] Consignment
[ ] Subcontracting
[ ] Stock transfer
Q:
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A: [ ] via mail
[ ] via fax
[ ] By EDI
[ ] Other
Q: 7) Do you order material in a unit of measure that differs from the one used for
stockkeeping purposes?
A:
[ ]Yes
[ ]No
PO/and or used for stock putaway?
A:
[ ]Yes
[ ]No

A:
Q:
A:
Q:
A:
10) Will you be purchasing material imported from foreign vendors ?

[ ]Yes
[ ]No
[ ]Yes
[ ]No
ordering?
A:
[ ]Yes
[ ]No
A:
documents?
A: [ ] Purchase requisitions
[ ] Purchase orders
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[ ] Contracts
[ ] Scheduling agreements
A:
Q:
[ ]Yes
[ ]No
A:
materials/material types.
A:
A:
purchased, etc)?
A:
Q:
20) Do your POs issued to vendors contain specific transport or packing instructions?
A:
A:
CI Template:
General Ledger transfers will be made for internal UT orders.
N/A
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N/A
4. Business Model
N/A

N/A

N/A
N/A

N/A

N/A

N/A
N/A

N/A

N/A
1.2.2.2.
Release of Purchase Orders
Questions:
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A:
A:
Q:
A:

[ ]Yes
[ ]No
CI Template:
General Ledger transfers will made for internal orders (see Ron Maples- FI).
N/A

N/A
4. Business Model
N/A
N/A

N/A
N/A

N/A
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N/A
N/A

N/A

N/A

N/A
1.2.2.3.
Transmission of Purchase Orders
Questions:
Q:

[ ] By telephone
[ ] By e-mail
[ ] By fax
[ ] By EDI
[ ] By post (in written form)
Q:
2) How are scheduling agreement releases to be transmitted?
A: [ ] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
Q: 3) Do you wish to adopt vendors' own nomenclature for characteristics (color codes etc.)
on your order form?
A:
Q:
4) How are purchase orders to be transmitted?
A: [ ] Paper
[ ] Telephone
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[ ] Fax
[ ] E-mail
[ ] EDI
Q: 5) How long after ordering and before the time of delivery should a shipping notification
have been received?
A:
Q:
6) How do your vendors transmit shipping notifications?
A: [ ] Paper
[ ] Telephone
[ ] Fax
[ ] E-mail
[ ] EDI
Q:
7) What information does the shipping notification contain?
A:
Q:
A:
CI Template:
General Ledger transfers will be made for internal orders.
N/A
N/A
4. Business Model
N/A

N/A
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N/A
N/A

N/A

N/A

N/A
N/A

N/A

N/A
1.2.3.
Goods ReceiptInternal Procurement not in scope
CI Template:
4. Business Model

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1.2.3.1.
Goods Receipt Processing
Questions:
Q: 1) The material stock balances shown in your legacy system are to be transferred to the
R/3 System. Will the stocks be valuated at the prices specified in R/3?
A:
Q: 2) If you do not use the R/3 Purchasing functionality, describe the process of receiving
goods from a vendor.
A:
Q: 3) If you do not use production orders of the R/3 System, describe the process of
receiving goods from production.
A:
Q: 4) Should the person who posts a goods receipt be able to use a different account
assignment than the one specified via the automatic account determination process?
assignment?
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A:
CI Template:
General Ledger transfers will be made for internal orders.
N/A

N/A
4. Business Model
N/A

N/A

N/A
N/A
N/A

N/A

N/A

N/A
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N/A
N/A
1.3.
Source Administration
1.3.1.
RFQ/Quotation
CI Template:
1.3.1.1.
Processing of Requests for Quotations
Questions:
Q: 1) Do you generally request several vendors to submit prices, terms and conditions in
the form of a tender/bid/quotation?
A: Yes
Q: 2) Do you want to assign a collective number to the different quotations submitted by

several vendors?
A: Yes
Q: 3) Can an article be procured from several vendors? If so, is this the rule or an
exception? (Or specify percentage.)
A: Yes, non-contract requirements over $2,000 are bid and according to the results, the
same material could be purchase from multiple bidders.
Q:
4) Do you carry out requirements planning for structured articles (e.g. pre-pack, display)?
A: No
Q: 5) How do you determine the requirement quantities at header level in the case of
structured articles?
A: No. No requirement planning. Not considered at this point of time.
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Q: 6) Do you exclude articles from requirements planning? If so, which (e.g. import,
seasonal, promotion, etc.)?
A: No. No requirement planning. Not considered at this point of time.
CI Template:
Ability to issue a solicitation to multiple vendors and group by collective number. Using
reporting functionality it must be possible to create a bidders list for inclusion into a RFQ.
Response to the solicitation must able to be converted into a purchase order after having
been reviewed by multiple users. Attachments as prepared by the requisitioner have to
be attachable to the RFQ. The RFQ must be able to access and incorporate University
bid conditions that will become part of the RFQ and forwarded to bidder as part of the
RFQ. Any bids received will be loaded into R/3 for electronic evaluation. As part of the
evaluation function/form, the reason for award must be documented. The reason for
award must be able to be maintained in R/3 and be readily available for use in reporting.
A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing
organization to submit a quotation (bid) for the supply of materials or performance of
services. UT will submit RFQ to vendors using SAP R/3 functionality. The responses of
the vendors will be entered in the system in form of quotes. The quotes will be evaluated
electronically according to criteria such as prices. As part of the RFQ, the reason for
award will also be maintained in R/3.
In general, RFQs will be processed for non-contract items that are in excess of $2,000
and can be generated based on requisitions received by departments or by requirements
identified by the Purchasing department. During the RFQ process, the buyer will: assign
bidders that are provided within the R/3 information records to the RFQ; assign bid
conditions that are maintained in R/3 that will serve as the basis of the condition of
purchase; conduct research and insure the accuracy of the specifications; receive and
evaluate bids; document the reasons of award within R/3. The RFQ will be reviewed and
approved on a pre-defined release strategy and released. Once released, the RFQ is
transmitted by mail or fax.
4. Business Model
An organization will be able to issue a RFQ to multiple potential suppliers, the suppliers
will submit quotes, the quotes will be evaluated, and the selected quote will be converted
into a purchase order.

N/A

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N/A
Central source lists and tabulation or evaluation of respondees.

N/A

N/A

N/A
Bidders lists shall be determined from info records that will identify vendors by plant and
material group. NIGP codes will be another source determination within the vendor
master. These codes will be recorded within classification within SAP R/3.

Only authorized personnel will perform this function.

N/A
1.3.1.2.
Release of RFQs
Questions:
A: Yes. POs up to $10,000 approved by buyer. POs from $10,000 to $15,000 approved by
buyer supervisor. POs over $15,000 approved by purchasing director. Same procedure is in
place for RFQ formulation and submission.
A: Approver will have to check R/3 regularly by phone, e-mail, etc., and in the future,
through workflow.
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Q:
A: Yes
Q: 4) In automatic load building, are (promotion) purchase orders to be consolidated in
addition to requisitions?
A: No
CI Template:
Ability to require approvals for RFQ and to review RFQ prior to release.
At UT release strategy will be set-up for RFQ. The criteria for PO release will be the
same for RFQ.

RFQs will be approved based on the below levels of release:
1.Non Exempt Buyer
$0- 2,000
2.Purchasing Agent in Training 0- 5,000
3.Purchasing Agent
0 -20,000
4.Associate/Assistant Director 0 - 50,000.
5.Director
Unlimited
Notification will take place outside of SAP R/3 via phone or E-Mail. Business procedures
will need to be established when approvers are to be notified on the status for orders
waiting for their approval.
Campuses will determine individually the dollar level range at which a RFQ has to be
reviewed prior to being issued.
4. Business Model
RFQ is created by Purchasing. Review and approval by purchasing manager, if
applicable. RFQ is sent to the vendor per fax or mail.

N/A

N/A
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N/A
N/A

N/A

N/A

N/A

Authorized personnel will release RFQs.

N/A
1.3.1.3.
Transmission of RFQs
Questions:
Q:

[X] By telephone
[X] By e-mail
[X] By fax
[ ] By EDI
[X] By post (in written form)
Q: 2) Will you send rejection letters to unsuccessful bidders? Indicate how such letters are
to be transmitted to the vendor.
A: [ ] By post (in written form)
[ ] By fax
[ ] By EDI
[ ] By e-mail
[ ] Other (please specify)
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CI Template:
Ability to transmit via mail or fax
The RFQ document will be sent to vendor per fax/mail.

After the RFQ is reviewed and approved by approval official, the RFQ is sent to the
vendors.
4. Business Model
RFQs are generated by Purchasing based on the requirements transmitted via a
requisition from departments or requirements identified by purchasing. The buyer takes
the appropriate steps to source, assign conditions and insure accuracy of specifications
in the creation of the RFQ. Once the RFQ is prepared, it will flow through the appropriate
release functions and created. Transmission will be in accordance with the vendor
transmission preference recorded in the vendor record.

N/A

N/A
Electronic approval versus manual RFQ

N/A

N/A

N/A
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N/A

Authorized personnel will transmit the RFQ.

N/A
1.3.1.4.
Vendor Quotation Processing
Questions:
Q: 1) Do you wish to have the system automatically analyze/evaluate quotations submitted
by vendors?
A: Yes
Q:
2) How do you receive the quotations?

[X] By telephone
[X] By e-mail
[X] By fax
[ ] By EDI
Q: 3) Are the quotations submitted by vendors to be automatically compared by the

system?
A: Yes
CI Template:
Ability to enter quote received from vendor and convert into PO.
A quotation is an offer by a vendor to a purchasing organization regarding the supply of
materials or performance of services subject to specified conditions. The vendor
responses (quotes) will be entered and evaluated electronically.
Purchasing will receive and enter the quotes sent by vendors. Purchasing will perform a
price comparison to determine the vendor with the best price. The RFQ will be reviewed
by the original requester along with Purchasing to determine the appropriate award. The
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basis of award will be documented. The basis of award will have to be recorded and
maintained in R/3. Once the award is determined the RFQ can be converted into a
purchase order or into a contract. A signature sheet to protocol attendance during bid
opening will not be covered within R/3.
The statement of award is maintained within R/3 and will have to be part of the evaluation
tabulation. The statement of award will be based on a reason field that is maintained with
the quotation.
4. Business Model
Creation of RFQ will be by Purchasing. RFQ will be reviewed and approved by
Purchasing Manager if applicable. RFQ will be sent to vendors. Quotes will be sent to the
Purchasing department. Purchasing Department along with original requester will
determine the award. Conversion of the RFQ into PO by Purchasing Department.

N/A
N/A
Electronic Approval of RFQ and electronic price comparison.

N/A

N/A

N/A

N/A

Authorized personnel will perform this function.
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N/A
1.3.1.5.
Transmission of Rejections
Questions:
Q:

[X] By telephone
[X] By e-mail
[X] By fax
[X] By EDI
Q: 2) Will you send rejection letters to unsuccessful bidders? Indicate how such letters are
to be transmitted to the vendor.
A: [ ] By post (in written form)
[ ] By fax
[ ] By EDI
[ ] By e-mail
[ ] Other (please specify)
CI Template:
No requirements to send rejection notification to the vendors (bidders)
N/A
N/A
4. Business Model
N/A

N/A

N/A
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N/A
N/A

N/A

N/A

N/A

N/A

N/A
1.3.2.
Outline Purchase Agreements
1.3.2.1.
Contract Processing
Questions:
Q: 1) Will you use contracts in R/3? If so, what will you use contracts for (e.g. stock
materials, consumable materials, external services)?
A: Yes, consumable materials, external services, no substitute/sole source requirements.
Q:
2) Which types of contract do you need (e.g. value contracts, quantity contracts)?
A: Value and quantity.

Q: 3) Are the contracts to be valid for: - more than one plant - more than one company
code?
A: Yes, more than one plant but not more than one company.
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Q:
4) Do you also allow a consumption account in the case of contracts for stock materials?
A: No
CI Template:
Ability to create value and quantity contracts for consumable materials and external
services.
In SAP R/3, a contract is a type of outline purchase agreement against which release
orders (releases) can be issued for materials or services on an as needed basis over an
agreed to period of time. At UT blanket orders combined with value contracts functionality
will be used.
Creation of contracts can be based on requirements generated by Departments or
requirements identified by the purchasing department based on research. For material
subject to competition, RFQs are generated by buyers and forwarded to the appropriate
sources. Upon receipt of bids, the bids are evaluated and the most favorable bid is
selected. The bid selected is converted into a contract. There will be two options in
ordering against contracts. Either a blanket order will be established against a contract
and departments will order (verbally) or formal release orders will be generated and will
go through the appropriate goods receipt and invoice verification processes if elected.
For material subject to non-competition, the appropriate approval process will be initiated
and upon approval, either a RFQ will be forwarded to the specific vendor, or verbal
negotiations between the University and the vendor will be conducted. In the event that a
RFQ is generated, the bid will be converted into a contract and the ordering procedures
as outlined above will be utilized. If no RFQ is created and a requisition does exist, the
requisition will be converted into a contract. If no requisition or RFQ is created, the
contract will be created without reference to a RFQ.
For material that is available from sources outside of the University system such as State
of Tennessee contracts, the University may establish contracts with State of Tennessee
contract vendors without competition and based on the prices and conditions of the state
contract.
The function of creating contracts will be performed by purchasing department personnel.
4. Business Model
Contracts can be created for specific campuses or created for the entire University
system. The campus will coordinate with each other in the establishment of contracts.

Contracts for personal services will be issued by Treasurers Office.
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N/A
Contract maintenance in one place.

N/A

N/A

N/A

N/A

Authorized personnel will issue contracts.

N/A
1.3.2.2.
Release of Outline Agreements
Questions:
A: The approval process would be the same as with the PO approval process.
A: By telephone, e-mail, personal notification, workflow if available.
Q:
A: Yes
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CI Template:
Ability to do blanket orders with referencing to the outline agreement and to create
release purchase orders against outline agreements.
The purchase order against contract is called a release order in SAP R/3.

The release strategy will be the same as Purchase Orders and RFQs.
4. Business Model
The outline agreement will be established by the purchasing department. Contracts can
be created with reference. Framework orders (Doc. type FO) will reference the outline
agreement in most cases but no goods receipt will be required. However, some instances
may have release orders (doc. type NB) referencing the Outline Agreement and could
require goods receipt. Funds availability will not occur at the time of Framework Order
creation but will occur at the time of Release Order creation.

N/A

N/A
N/A

N/A

N/A

N/A
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N/A
Only authorized purchasing department personnel will release outline agreements.

N/A
1.3.2.3.
Transmission of Contracts
Questions:
Q: 1) Which departments/organizational units are responsible for maintaining the material
data?
A: Material Master not maintained
Q:
2) Is master data common across all departments (common master data)?
A: No material master data maintained in system
Q:
4) How do you wish to transmit your contracts to your vendors?
A: [X] Paper
[ ] Telephone
[X] Fax
[ ] E-mail
[ ] EDI
Q:
A: Potentially. As it is anticipated that numerous agreements with multiple sources would be

established, there will be differences in transmission. Transmission to be in accordance with
vendor-preferred method established in info records.
CI Template:
Ability to transmit contracts (outline agreements) via mail, or fax.
The release order document will be transmitted to the vendor via mail or fax.
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Once the contract is created it will be transmitted to the contract vendor.
4. Business Model
Transmission of the contract (outline agreement) will be via mail or fax.

N/A

N/A
N/A

N/A

N/A

N/A
N/A

Only authorized purchasing department personnel will transmit contracts.

N/A
1.4.
Return Deliveries
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CI Template:
1.4.1.
Outbound Shipments
CI Template:
1.4.1.1.
Transportation Planning and Processing
Questions:
Q:
1) Do you plan transportation yourself?
A: No. Vendor has to pick up material. Department obtains return authorization and
contacts vendor for pick up on his behalf and his cost.
Q:
2) Do you use any third-party transportation systems?
A: No
Q:
3) Describe your transportation handling in detail.
A: N/A because vendor takes care of transportation for return delivery.

Q:
4) What carriers do you use to transport goods?
A: N/A
Q:
5) How do you select your carriers?
A: N/A
Q:
6) How do you create shipments?
A: N/A
Q:
7) Do you have Individual and/or Collective Shipments?
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A: N/A
Q: 8) Do you use one mode of transport per route or a combination of modes per route, e.g.
road, rail, sea?
A: N/A
Q:
9) Do you need leg determination?
A: N/A
Q:
10) List all documents required to complete the transportation process.
A: N/A
Q:
11) Do you record the progress of the shipment?
A: N/A
Q:
12) If so, which ones?
A: N/A
Q:
13) Is freight charged to the customers or is it absorbed by the company?
A: N/A
Q: 14) Do you need to be able to enter your actual transportation data at a later point in
time (for example, time taken, distance traveled)?
A: N/A
Q:
15) How do you determine shipment costs (for example, kilometers, volume)?
A: N/A
Q:
16) How do you carry out settlement accounting with the external carrier?
A: N/A
Q:
17) Do you charge stores for the costs of using your own vehicles?
A: N/A
Q:
18) Do you handle several deliveries for different ship-to parties in one single shipment?
A: N/A
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Q:
19) According to which criteria do you group deliveries for one shipment?
A: N/A
Q:
20) Do you have your own vehicles or do you use external carriers?
A: N/A
Q: 21) What do you use as a basis for scheduling your vehicles or the vehicles of your
external carrier?
A: N/A
Q:
22) How do you respond to capacity constraints? Describe the contractual conditions.
A: N/A
Q:
23) What information do these documents contain?
A: N/A
CI Template:
Transportation is the responsibility of the vendor.
N/A

N/A
4. Business Model
N/A

N/A

N/A
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N/A
N/A

N/A

N/A

N/A

N/A

N/A
1.4.1.2.
Freight Cost Invoicing and Settlement
Questions:
Q:
1) Is freight charged to the customer or does the company absorb the cost?
A: Vendor has to take charges for return delivery.
Q:
2) How do you calculate your freight costs (freight pricing procedure)?
A: N/A
Q:
3) Are you using multi-dimensional scales for freight calculation?
A: N/A
Q:
4) How do you post your freight costs to accounting?
A: N/A
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Q:
5) Do you verify invoices for your forwarding agents? If so, which rules do you use?
A: N/A
CI Template:
Vendor has to take charges for return delivery.
N/A

N/A
4. Business Model
N/A

N/A

N/A
N/A
N/A

N/A

N/A
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N/A

N/A

N/A
1.4.1.3.
Message Transmission for Transport Documents
Questions:
Q: 1) Do you require shipment documents for physically transporting the merchandise? If
so, what form of document (e.g. paper, EDI)?
A: Any vendor provided document. No specific UT documentation is prepared to go with
return delivery.
Q:
A: As prepared by vendor
Q:
3) How are shipping documents to be transmitted?
A: [ ] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
CI Template:
Any vendor provided document and Return authorization form to go with the return
shipment.
N/A

N/A
4. Business Model
After obtaining the return authorization from vendor, a return authorization form from the
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department accompanied the goods to the vendor.

N/A

N/A
N/A

N/A
N/A

N/A

N/A

The ordering department with the assistance of the purchasing department if necessary
will transmit messages. For all Returns due to quality issue or non-performance the
department will notify Purchasing but may use mail outside of R/3 to do so.

N/A
1.4.2.
Invoice Verification
1.4.2.1.
Invoice Reversal
CI Template:
Ability to generate a credit memo for returned item after invoice payment.
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A reversal shall take place prior to invoice payment.

REWORD/REDO
Reverse Invoice prior to completing payment release process within R/3.

In the case that the invoice is not paid the invoice document is reversed for the returned
items.
4. Business Model
The invoice is received and entered for item, which is for an item that is later determined
to be returned. At the point it is returned the invoice is reversed without payment. Should
payment occur, a credit memo would be entered for the returned items.

N/A

N/A
N/A
N/A

N/A

N/A
N/A
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Account Payable and in some case Department will be able to process invoice (reverse)

N/A
1.4.2.2.
Manual Clearing
CI Template:
Ability to do manual and automatic clearing of invoices.
N/A
In the case of expedited payments a manual clearing of invoices may occur. For
standard invoice clearing an automatic clearing procedure will occur.
4. Business Model
Invoice is individually identified for manual clearing based on special circumstances.

N/A

N/A
N/A

N/A

N/A
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N/A

N/A

Account Payable will perform this function

N/A
1.4.3.
Shipping
1.4.3.1.
Message Transmission for Deliveries
Questions:
Q:
A: Return authorization codes, and any appropriate documentation as requested by the

vendor.
Q:
2) How are deliveries to be transmitted?
A: [ ] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
Q:
3) How are shipping documents to be transmitted?
A: [X] Paper
[X] Telephone
[X] Fax
[X] E-mail
[ ] EDI
CI Template:
Return authorization form with the return shipment to the vendor.
UT will inform the vendor per phone that goods have to be returned and obtain a return
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authorization

Goods have to be returned. The department will ask the vendor for return authorization.
The vendor will pick the goods on a greed date.
4. Business Model
Material received but Invoice not receivedThe department will notify the vendor and negotiate the return. A return authorization
number or reference will be obtained from the vendor for return purposes.
If the purchase requires replacement of returned material the Purchase Order shall
remain open. If there is no additional requirements or replacement of material the
purchase order will be marked as closed. The department will notify purchasing of the
returning of the goods and the status of the order. Based on this input Purchasing will
make the determination as to whether an order is closed or not.
If the material is subject to receiving within the SAP R/3 system the good receipt is
reversed and the reason for the returning of goods is made in the system.
Material received and Invoice is receivedThe process is essentially the same as above however the invoice is cancelled
(reversed).
Material received and Invoice is received and paidThe process is essentially the same as above however the invoice is adjusted using a
credit memo. A credit memo is done by Accounts Payable or the department, depending
of the type of procurement.

N/A
N/A
N/A

N/A

N/A

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N/A

N/A

The department with assistance of purchasing personnel if necessary.

N/A

2.1.
Sales Order Processing (Standard)
2.1.1.
Sales Order
2.1.1.1.
Sales Order Processing
Questions:
Q: 1) Does your organization have specialists who only process specific types of customer
orders (for example government, international, OEM, reseller) or products (for example,
specific product lines)?
A: Certain customers (sponsors) are assigned to specific staff members in the campus preaward offices and campus business offices.
Q: 2) Do you presently separate your standard orders by any variables (for example,
document type, sales organization, sales representative, customer type) for ease of
processing or reporting purposes?
A: Awards are separated by campus and also by sponsor within campus pre-award and
business offices.
Q: 3) What information do you capture on a sales order? List your current sales order types
(including returns and credit/debit memo requests).
A: None. There is no such object in the legacy system. In R/3 they will be placeholders to
facilitate billing. Information to be stored on the sales order will be identified later.
Q:
4) How do you receive orders?
A: [ ] Telephone
[ ] FAX
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[ ] EDI
[ ] Internet
[X] Others
Q: 5) Do you convert other sales document types (such as inquiries, quotations) into sales
documents?
A: The sales order is usually created pursuant to the project proposal and award
documents. However currently this is done initially in the campus pre-award system and then
is manually re-entered in the accounting system at the campus business office or Controller's
Office. This process will continue until the pre-award system is replaced.
Q:
7) List the reasons for creating a sales order.
A: Sales order is created for every award requiring invoicing. Usually cost reimbursement
and quantity billing projects require sales orders.
Q:
8) For what reasons would an order or line item be rejected?
A: Incorrectly entered. It is not usually entered until the award has been accepted.
However, some projects are established and invoices are created before the award
document has been accepted. Upon receipt of a signed "Advance Account Request" form
(and proposal number and budget), the campus business office or Controller's Office will
establish a project. Charges are made and the project is billed. However, the sponsor may
not pay the invoices until the award document is fully executed. A sales order may be
rejected if the award falls through.
Q: 14) What types of text do you require on your sales documents? Are they required on
output?
A: There are various required texts on invoices. If possible these texts should be stored on
the order to be copied to the invoice.
Q: 15) What information from a sales document do you consider obligatory and would like
to appear on an incompletion log if missing? Do you want it to be possible to save the
document as incomplete if any of this information is missing?
A: Customer, WBS element and material. Incomplete orders should not be permitted.
Q: 16) Do you have company-standard codes to track the status of a sales document? If so,
what are they?
A: No
Q:
17) Do you send order confirmations? If yes, how?
A: No
Q: 21) Does each item have different detailed information? For example, do they have
different ship-to parties?
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A: No, we would create one sales order for each project. If a project had two billing
elements we would create two sales orders.
Q: 31) Do you have special requirements (e.g. promotions) for different account postings
(e.g. cost center, profit center)?
A: No
Q: 32) When listing sales orders on the screen for further processing, what information do
you need to show?
A: WBS Element, customer
Q:
35) Do you want to personalize your sales order entry screens?
A: Yes
2.1.2.
2.1.2.1.
Billing
Processing Billing Documents
Questions:
Q:
1) Do you centralize or decentralize your settlement processing?
A: It is decentralized to billing offices on each campus.
Q: 2) Are billing documents created individually (one billing document per sales order or
delivery) or collectively (one or more billing document for several orders or deliveries)?
A: Usually, individually. The expectation is that the project structure will enable UT to
produce an invoice for any foreseeable situation. However, if R/3 is capable of combining
sales orders for billing purposes, UT would possibly be interested in this. This isn't a
capability that we would want to exclude.
Q: 3) On which documents are your billing documents based (e.g. order, delivery)? Please
describe in detail.
A: Billing documents are based on the award document requirements.
Q: 4) Are billing documents processed online or in batch? Describe the process for
reviewing exception messages/error logs.
A: Billing Documents will be processed in batch. For resource related billing, the billing
requisition will be reviewed prior to creating the invoices. The billing log will be reviewed after
each billing run.
Q:
6) Do customers have a predefined time when they receive invoices (billing schedules)?
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A: Yes. Many sponsors have predefined billing schedules (scheduled billing). Also, many
sponsors who are billed via other methods, such as resource-related billing, have
expectations regarding expected dates of invoicing. Usually, the most important expectation
is that billing will occur, at the latest, soon after the project ending date.
Q: 8) What type of billing documents is created (e.g. invoice, pro forma invoice, credit notes,
debit notes, export invoice)?
A: Invoice, billing requisition.
Q: 10) Periodic billing allows a specified amount to be billed over a certain time period. Do
you utilize periodic billing (e.g. for rental contract type documents)?
A: Yes
Q:
11) Do you use down payments?
A: No
Q: 12) Milestone billing allows you to bill once a certain work level has been reached. Do
you use milestone billing (e.g. for make-to-order type documents)?
A: Yes
Q: 17) What types of text are required in your billing documents? Are they required on
output?
A: There are several requirements for text. Most of these are project related and will be
stored there. These texts will be accessed at print time.
Q:
18) What information is required in your lists of deliveries due for billing (billing due list)?
A: If we use a "billing due list", we would need the project number, customer information,
due date, amount.
Q:
19) What information do you require in your billing document lists?
A: Not sure what this list is. We would probably require project number, customer
information, and amount.
Q: 20) When do you want to post accounting for your sales invoices (e.g. immediately, after
review)?
A: Immediately.
Q: 21) Which information is required for the accounting document (for example, reference
number)?
A: [ ] Purchase order no.
[ ] Order number
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[ ] Delivery number
[ ] External delivery number
[X] Current invoice number
[ ] Others
Q:
22) What kind of payments do you receive from the customer?
A: [ ] Cash
[X] Credit Card
[X] Check
[ ] Down payment
[X] Electronic Funds Transfer (EFT)
[ ] Others
Q:
23) Describe your payments processes in detail.
A: Payments are received and deposited at the campus business office level. Information is
sent to the central cashier on the Knoxville campus for posting to the general ledger
(matched to A/R). Unmatched receipts are posted to a clearing account for further
investigation.
2.1.2.2.
Billing Document Cancellation
Questions:
Q:
1) Under which circumstances and why would you cancel a billing document?
A: Cancellation could occur for several reasons. Normally, it would be cancelled because of
an error in setup or to allow correcting journal entries to post to correct an accounting error.
For example, if the invoice had the wrong settlement rules attached, the wrong F&A rate
(costing sheet), etc. Also, if a project did not allow expenditures per cost element to vary by
more than 10%, but excess charges had been incorrectly posted to the project, a correcting
entry would be needed to remove some charges before billing could occur.
Q:
2) Do any activities follow cancellation, for example, credit releases?
A: If an invoice were cancelled, any related journal entries would need to be reversed or
corrected.
2.2.
Sales Order Processing: Make/Assembly To Order
2.2.1.
2.2.1.1.
Customer Outline Agreement

Value Contract Processing
Questions:
Q:
1) What kind of contract do you use?
A: [X] Quantity contract

[ ] Value contract
[ ] Rental Contract
[X] Service contract
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Q:
2) Do you negotiate contracts to use as a basis for sales orders?
A: Yes
Q: 3) Do you use a certain order type to indicate that the sales order references a contract?
If so, then for what reasons?
A: We do not currently have this capability. However, I'm not sure that we need it. We need
for the sales order to reference the project number. The project attributes include the award
type, which can be grant, contract, gift, etc.
Q: 4) Are there any time agreements that are relevant to contracts (for example, delivery
times, commitment dates, validity periods)?
A: Yes. All contracts have specified dates in the award. Start date, end date, dates for
financial and technical deliverables / reports, milestones, billing dates, etc.
Q:
5) Are your contracts valid for a set time period or do you offer renewals?
A: Contracts have a specified start date and end date. Many times, sponsors will modify
contracts to extend the time period.
Q:
11) Do these contracts contain dates and quantities to which the customer must adhere?
A: No
Q: 13) What are the requirements for completing a contract (for example, full value, quantity
contracts)?
A: Completion depends upon contract specifications. The contract normally will specify
expected deliverables: technical reports, financial reports, milestones, billings, etc.
Q: 15) Do you utilize resource-related billing for contracts? Describe in which cases do you
use this functionality (for example, make-to-order production, specific services (consulting),
service management)?
A: Yes. Contracts can require any one of several types of invoicing (resource-related, billing
schedule, item invoicing) and / or financial reporting. We have identified about 10 standard
invoices and about 3 standard financial reports that may be required.
2.3.
*Grant Billing
Questions:
Q:
1) Do you get down payments from sponsors?
A: UT does not request down payments from their sponsors. Occasionally they may receive
a down payment from a sponsor. This is handled as an exception.
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Q:
2) Are un-allowed costs charged to a project that cannot be billed?
A: No.
Q:
3) Describe payments process in detail.
A: Payments come in to different campuses and departments. These payments are

deposited by the bursar's office or business office on that campus and sent to Knoxville for
posting to the G/L. The Central cashier in Knoxville enters all payments to the B account.
Q:
4) Describe retainage in detail. What billing types does it affect?
A: Retainage happens for cost reimbursable projects only. It is a process, dictated by the
sponsor, where the sponsor withholds payment of a contractual percentage of all invoices to
UT. UT knows ahead of time that this will happen. It is important that the invoice to the
sponsor contain all the expenses and that retainage not be taken out of the total. The
sponsor will then calculate the amount of the retainage and send a payment for the
remainder. UT could note the retainage on the invoice and note the payment due from the
sponsor after deducting retainage. For example you may see the following items on an
invoice:
Total:
Less Retainage
100,000
10,000
Total now due
90,000
In this example, an invoice must be created in A/R for 90,000. This invoice is subject to
aging and collection. Another document must be posted to A/R. This document would be for
10,000 and not be subject to aging. At the end of the project, the sponsor would receive an
invoice for all retainage. The entry to be made when the invoice is created would be:
A/R - Sponsor 1
90,000
A/R - Sponsor 1 retainage 10,000
Project Revenue
100,000
Reporting of this information would look as follows:
AR - Sponsor 1
Project 1
Q:
>30
30-60
60-90
90,000
Retainage
10,000
Total
100,000
5) How many copies are printed for each invoice?
A: This varies from project to project. We need to provide flexibility in the number of
projects. We would like the name of the recipient to be printed on each copy. We would
expect an instruction sheet to be printed before the copies that identifies who each copy
should go to. Some projects require as many as seven copies to be printed. We always print
a copy for the Controller's Office, a copy for the PI, and a copy for the department
bookkeeper.
Q:
6) Describe the UT invoice numbering scheme and what it is used for.
A: The invoice number consists of the project "B" number, a hyphen, and a sequence
number that represents the number of invoices created and sent prior to this invoice. This is
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used by the sponsor to make sure that they have received all invoices to date. Some
sponsors will not pay invoices out of sequence.
This is also used by UT to view their receivables. It allows them to sort sponsor receivables
by project.
In R/3, we would not need to replicate the functionality of the sequence numbers. We do
need to provide the ability to view the receivables by project.
CI Template:
The UT invoice numbers currently contain a lot of information that allows UT staff to
identify information like which project the invoice belongs to and how many invoices
have been created prior to this invoice. R/3 invoice numbers are sequential numbers
with no built in logic.
Ability to view A/R by project number. Since UT's invoice numbers have always had
the project number imbedded in them, they have been able to easily view the A/R by
project. This functionality will have to be replicated in R/3.
Retainage. This is where sponsors "hold back" money from UT until certain
milestones are met.
Report A/R by project.
The functionality built into the current UT invoice numbers will be accommodated with
attributes in the Project System.
The ability to accommodate the requirement to view A/R by project can be
accommodated by writing an ABAP report that combines project system and A/R
data or to create a report on the special ledger being collected to report the fund
groups.
We are looking at account determination during the invoice creation to split retainage
out of normal A/R. More research needs to be done.
2.3.1.
Cost Reimbursable Billing
Questions:
Q:
1) Which department(s) is responsible for billing the customer?
A: The grant office within the Controllers Office and the Campus Business Offices.
Q: 2) Is the billing process centralized or decentralized? Please describe the

responsibilities of all departments involved.
A: Each campus has its own grant billing office.
Q:
3) Is there an approval process before invoices are sent out? Please describe.
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A: Projects are grouped by sponsor. Sponsors are assigned to accountants in the

Controller's Office. This person is responsible for reviewing the pre-billing and deciding
whether to create the invoice. Once the invoice is created, it is signed by the manager of the
grant billing office and sent out. It is very rare that this manager would decide not to send the
invoice out. These instances would be handled as the exception.
Q:
4) When are invoices created?
A: Generally invoices are created as part of the month end close. Some sponsors require
that invoices be sent quarterly. These quarters could be based on UT fiscal year, Sponsor
fiscal year or project year.
Q:
5) Are invoices checked prior to being sent out?
A: Yes, invoices are reviewed for accuracy prior to being sent.
Q:
6) Do you need cost element (object code) detail or are summarized totals OK?
A: Cost elements (object codes) are summarized to the two-digit level.

Q:
8) Are cost and materials marked up in price for billing?
A: No.
Q:
9) Do you have caps on expenses that can be billed?
A: Yes
Q: 10) If so, please describe the way caps are applied e.g. on the total or on specific
expenses etc.
A: The cap is defined by the sponsor. UT can only bill up to that cap. In general, once that
cap is reached, billing must stop until the cap is revised. The exception is that for a few
sponsors, the next increment of funding is not authorized until it is billed. Therefore, UT must
be able to override this and bill over the cap.
Q:
11) How many billing forms do you use?
A: 10
Q:
12) Is there flexibility in the form or is it mandated by the sponsor?
A: Generally no. The sponsor dictates which form to use and what information to include on
the form.
Q:
13) How is the form determined when creating an invoice?
A: The form is determined by project. It cannot be determined by the customer because

some sponsors require different forms for different projects.
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Q:
14) Is detailed information required on the form? Please describe.
A: Yes. There is master data from the project required on the form. There is the authorized
amount from FM and there is the cumulative total of expenses charged to the project, by
expense category, from the beginning of the project.
Q: 15) Are there any back-up schedules required to justify items on the invoice? Please
describe.
A: Some sponsors require reports to justify costs. Some examples are labor and travel.
The sponsor would like to see specific people charged to the project with amounts and
specific trips taken with project funds.
Q:
16) How are these back up schedules created?
A: They are generally done manually.
Q:
17) How is it determined whether to send a back-up schedule?
A: This is determined by project. Again, it cannot be determined by sponsor, some

sponsors require different schedules for different projects.
Q: 18) If detailed payroll information is provided, does this increase the level of
confidentiality for this process?
A: No, Tennessee is a sunshine state and all salaries are public record.
Q: 19) For labor costs, do you break out the components (salary and EB)? If so, where
does EB come from?
A: Actual EB is part of the payroll posting and can be distinguished on the posting
document.
CI Template:
Perform all processing for cost reimbursable billing. Key items in this will be:
This process will use R/3's resource related billing to put project charges on the
invoices.
A check of the authorized amount will be done and no invoicing will exceed that.
Project master data and cumulative charges to the project will be included on the
invoice.
Invoices will be printed in the form required by the sponsor. Sub schedules will be
included with the invoice, where R/3 data exists.

Cost reimbursement billing will be implemented using R/3's resource related billing. The
following items make up this process:
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A project is set up. The billing type for cost reimbursable billing is chosen. A WBS
element is flagged as the billing element.
A sales order is created using a service material created for billing. Assignment for
this item is made to the billing element defined in previous step.
Costs are posted to this project.
Overhead is calculated; cost sharing settlements are performed.
Resource related billing requisitions are created. This is done using an ABAP
program which performs the following tasks:
1) Projects for billing are selected by checking that the status of the project is
acceptable.
2) A check is made to ensure that this invoice does not force the project over its
authorized amount.
3) If this invoice is over the authorized amount, a CO transfer posting is created
transferring the amount over the authorized to a dummy cost center.
4) Resource related billing is executed for this project creating a billing
requisition.
5) If a CO transfer posting was performed, this posting is now reversed so these
charges are back on the project.
6) If the project is now over its authorized amount, this project is put into a no
billing status that signifies it is over its authorized amount.
Billing requisitions are reviewed by the grant office. This is done using an ABAP
report that will be written. This program will sort these requests as specified by the
billing office. The requisition is accepted, adjusted or rejected. At this point items can
be removed from a bill. For example, if you wanted to bill over the total, you would
remove the reduction here and process the bill.
If the billing requisition is not accepted, it is either cancelled so the charges can be
billed later or it is rejected so these charges will not be billed later. If it is cancelled,
the project should be put in a no-bill status identifying the problem. This is to prevent
another billing requisition from being created until the problem is fixed. If the
requisition is rejected, and won't be billed again, it should be noted in the text of the
project.
If there are adjustments to be made they are made to the billing requisition.
The acceptable billing requisitions are released for billing.
R/3 Invoices are created for each billing requisition. Accounting entries are made
and revenue is posted to the project.
The billing log is reviewed. Any problems are cleared.
Invoices are printed on the form required by the sponsor. Some of these forms
require back-up schedule to justify some costs (E.G. labor costs or travel costs) these
back-up schedules are generated at this time. When payment is received, the
cashiers office matches the payment to the invoice.
Currently, approximately 700 invoices are generated each month and only 300 are
used. The major reason for this is projects that are over their authorized amounts. In
this process those invoices will not be created. Reducing this amount will result in
the invoices going out much quicker during the month.
Currently, back-up schedules are produced separate of invoice creation and are
included with the invoice afterwards. Often times this current process is manual. In
R/3 this will be done automatically.
We would anticipate that the amount of time required would be reduced significantly.
No it takes a large portion of the month to get the invoices out once they are created.
Past experience indicates that this could be done in a week or less once all the
improvements are in.
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The requirement that we do not invoice over the authorized amount requires that we
write an ABAP program to process the billing. This program is described in a
previous section
The users will require the billing requisitions to be listed with project system
information to facilitate review of the requisitions. This information includes
authorized total, cumulative expenditures, start date and end date of the project and
other information to be defined.
The requirement of the sponsor to print very specific project information and project
charges on the invoice as well as to include back-up schedules with the invoice.
An ABAP program will be written to process the cost reimbursable invoices. This
program will check the postings on the project to ensure that it is not over the
authorized total. If it is over the total, the program will make a posting to bring the
charges down to the authorized total. The program will call transaction VA90 to
process the resource related billing for the project. If a posting had been made to
reduce the expenses on the project, this posting would be reversed here and the
project would be put into a user status designating that a bill should not be created.
An ABAP report will be written to display the billing requests with information from the
project. This information will include such data as authorized total from FM and
cumulative expenditures on the project since the project started.
SAPScript forms will be customized

This process will not be distributed to the department. Any inquiries into this area by the
departments will be through PS report drill down. The following roles would be set up to
support this process:
Billing Office Manager - Ability to process all transactions associated with the
process. This includes the ability to run the cost reimbursement-billing program
that creates the invoice, the ability to release a billing requisition, and the ability
to create invoices from the billing requisitions (billing due list).
Billing Office Accountant - This role would include the ability to edit, release, or
reject billing requisitions. It would not include the ability to run the cost
reimbursement billing program or the ability to create and invoice from the billing
request.
Billing Office Processor - This person would be designated by the billing office
manager and would be able to most of the things she can do.
Cashier. Process payments.
Items that need to be done in this process:

1) Run program that creates billing requisitions (This includes the ability to make
and reverse a CO transfer posting KB11/KB14, the ability to change the user
status on a project and the ability to run resource related billing for the order
VA90.).
2) Release Billing Requests to billing due list (V.23).
3) Process Billing Due List (VF04). This creates the A/R entries.
4) Map G/L accounts for billing roll up (OKI2). This rolls the three-digit object code
to two digits
5) Add unit of measure for material (MM02). This maps all active units of measure
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into a consistent measure for billing.

6) Clear invoice via fast payment (F-26)
7) Cancel sponsor research bill (VF11).
8) View billing log.
2.3.2.
Schedule Billing
Questions:
Q: 1) Periodic billing allows a specified amount to be billed over a certain time period. Do
you utilize periodic billing?
A: Yes
Q: 2) Describe the billing process for these types of bills. Are they reviewed or approved by
project managers (or anyone else) prior to being issued?
A: Once the billing schedule is set, this process has the same steps as cost reimbursable.
A pre-bill step happens to make sure the proper bills are generated. Once approved, the
invoices are created and A/R postings are made.
Q: 3) Do you bill sponsors based on a schedule such as monthly, quarterly or some other
specified timing? (If yes, consider running the billing due list for projects according to this
schedule.)
A: Yes
Q:
4) How many forms are used for this type billing?
A: There is one form. There may be project specific notes on the form.
Q:
5) How is it determined which forms are used?
A: Information on the project determines if this form and billing type are to be used.
Q:
6) Is there detailed information on the invoice? Where does it come from?
A: Yes, there is detailed project information on the invoice. Also, a billing period is derived
from dates on the sales contract.
Q: 7) Is this process centralized? Please describe the responsibilities of the people

involved in this process.
A: These invoices are processed by the billing office of each campus.
CI Template:
This type of billing is for projects that will bill specific amounts on a schedule. The billing
is independent of the postings on the project. Revenue will be posted to the project as
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the invoice is created.

Project specific messages for the invoice will be kept in Project Texts.
The following Items make up the schedule billing process:
A project is set up. The billing type for schedule billing is chosen. A WBS element is
flagged as the billing element.
A sales contract is created with account assignment to the billing element on the
project. A billing schedule is entered with the dates and amounts to be billed.
A pre-bill report (to be defined) is processed to review whether all scheduled invoices
should be created.
The billing due list is executed for these projects. An invoice will be created for the
date in the billing schedule.
The billing log is reviewed. Any issues are cleared.
When the payment comes in, the cashiers office will match the payment to the
invoice in A/R.
A pre-bill report will be required for this billing type. It must combine information from
the sales contract in SD, the project in PS and the budget in FM.
The SAPScripts will be very specific and many of the displayed fields such as billing
period will be complex
An ABAP program will be developed to support the pre-billing requirement.

SAPScript forms will be customized to support this process.

This process will not be distributed to the department. Any inquiries by the department
would be through PS drill down. It may be useful to allow a department to view the
contract for billing schedule information. The following roles would be set up in the billing
offices to support this process.
Billing Office Manager - Ability to process all transactions associated with this role.
Would include the ability to process the billing due list.
Billing Office Accountant - Ability to edit sales contract to change billing schedule if
required. Would not include the ability to process billing due list.
Billing office Processor - This person would be designated by the billing office
manager and would have the same authorizations.
Cashier - Process payments
Items that need to be done to support this process are:

1) Run pre-billing for scheduled bills.
2) Process billing due list (VF04).
3) Change billing document (VF02)
4) View billing log.
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2.3.3.
Item Billing
Questions:
Q:
1) Please describe this type of billing?
A: This type of billing happens when UT signs a contract to test something. For example,
UT tests helmets. They get a fixed fee for each helmet entered. As they test helmets, they
invoice the sponsor. This type of billing is also used for medical tests. As certain tests are
performed, UT invoices the sponsor for a fixed fee for each of those tests.
Q:
2) Is anything posted on the project that would indicate the amount to be billed?
A: No.
Q:
3) Is this process centralized or decentralized? Please describe.
A: This process is a combination of both. Some departments will call the Controllers Office
and ask that the sponsor be invoiced for a number of items. Other departments will create
the invoices themselves.
Q:
4) How many forms are used in this billing type?
A: This process could be supported by one form. The department could customize it and
provide whatever backup is needed with the invoice.
Q:
5) Is there detailed information included on these forms? Please describe.
A: The standard for this form would have to be defined. Variations would have to be
handled by the department as an exception. We would expect that there would be project
information on this form.
Q: 6) How is the cost of the test determined? Is there one price for a test or are there more
pricing options -- quantity discounts etc.
A: This is contained in the contract with the sponsor.
Q:
7) How is it determined when to send a bill? Is it known in advance?
A: The department determines when to create the bill. There is no way to predict ahead of
time when this will happen.
Q:
8) Who performs this billing? Is there an approval process?
A: Currently, this process is either billed by the department or centrally. In the case of
departmental billing, the approval would happen there. It is not known if there is one. In the
case of central, the person who takes the call would have the authority to enter these:
therefore, no approval is necessary.
CI Template:
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This billing type is for projects that get billed based on the number of a specific
occurrence. For example, one project gets billed per helmet tested in a given time
period. This will be implemented by having the user enter an invoice in A/R for the
appropriate amount. Revenue would be posted on the project at the time of invoice
creation. This process would be distributed to the departments.

The steps in this process are:
A project is set up. The billing type for item billing is chosen. A WBS element is
flagged as the billing element on the project.
An invoice is created in A/R at the discretion of the department for the amounts
based on tests. Revenue is posted to the project.
If the department enters the invoice, it would be entered as a parked document.
The Controllers Office would evaluate and release parked documents.
When payment is received, the cashiers office matches the payment to the
invoice in AR.
This would enable departments to enter their receivables into R/3. Currently many of
these types of bills are not tracked in the system.
This process will require a custom form

SAPScript forms will be customized and a program will be written to print them

This process will be distributed to the department, therefore departmental profiles will
have to be created. The following roles would be set up to support this process:
2.3.4.
Billing Office Personnel - All billing office personnel would have access to this
process. This means they would have the ability to post an A/R invoice and
release an A/R invoice.
Departmental Users - Departmental users would be given authorization to park
an A/R invoice.
LOC Drawdown
Questions:
Q:
1) Which department(s) is responsible for LOC drawdowns?
A: Grant section of the Controllers Office handles all but three LOC. The Memphis billing
office handles the other three.
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Q:
2) Is this function performed by one office or is it decentralized? Please describe.
A: The draw down is determined and executed by the grant office in the controller's in
Knoxville for all but three LOC agreements. Those three are done by the Memphis billing
office. The postings to cash and the projects are made by the cashiers office.
Q:
3) When are drawdowns executed? Please describe the process.
A: Drawdowns can be done at any time. They are almost always executed after the month
is closed and overhead has been calculated and charged to the project. At times they are
done throughout the month. This is usually tied to an unusually large cash outlay that UT
wants to collect without waiting. It is also usually done towards the end of June so the cash
is collected while the fiscal year is still open. The end of June draw down is based on an
estimate made by the Controller's Office. All mid-month drawdowns would be corrected to
balance after the month is closed.
Q:
4) How is the amount of the drawdown determined?
A: The amount to be drawn down is the amount of expenditures posted to the project that
since the last drawdown for the project. The drawdown is done up to and not over the
authorized grant amount.
Q:
5) Are there caps on the amount of the drawdown for each project?
A: Yes, this is determined by the authorized amount on the contract.
Q:
6) Are drawdowns done for expenses that have not been posted to the project yet?
A: Not normally. At times (e.g. financial aid) a draw down is made when the payment is
made but before the expense hits the G/L. This is done when those payments are significant.
Q: 7) Are any costs posted to the project excluded from drawdown (e.g. if an invoice has
been posted to the project but not yet paid, is it included in the drawdown)?
A: No, if the expense is on the project and not drawn down, it is eligible.
Q:
8) Are invoices ever printed for these projects?
A: No.
Q:
9) How do you distinguish between LOC agreements?
A: Currently there is a cash account for each letter of credit agreement. As drawdowns
come in they are posted to these accounts. As payments are made, they are posted against
these cash accounts.
In R/3 we will have an A/R customer for each LOC agreement. We do not see a need for
these separate cash accounts. Postings made against LOC objects will be reflected in the
A/R account via resource related billings. This should give a balance in the account.
Therefore, we would not need individual cash accounts in R/3.
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CI Template:
The letter of credit drawdown process has requirements that are very similar to the cost
reimbursable process. For the most part, all drawdowns are based on expenditures that
have been posted to the project. You cannot draw down more than the authorized
amount for any specific project. The differences are that no invoice gets sent out and
payments are funds transfers between the sponsor bank and the UT bank.

The following steps are included in the LOC drawdown process:
A project is set up. The billing type for LOC draw down is chosen. A WBS
element is flagged as the billing element.
A sales order is created using a service material created for billing. Assignment
for this item is made to the billing element defined in the previous step.
Costs are posted to the project.
Overhead is calculated, and cost sharing settlements are performed.
Billing requisitions are created. This is done in the same manner as for cost
reimbursement billing. It uses the same ABAP program. The program performs
the following tasks:
1) Projects for billing are selected by checking that the status is
acceptable.
2) A check is performed to ensure that the project is not over its
authorized amount.
3) If the project is over its authorized amount, a CO transfer posting is
created transferring the amount over the authorized amount to a
dummy cost center.
4) Resource related billing is executed for this project creating a billing
requisition.
5) If a CO transfer posting had been made, it is reversed here.
6) If the project is over its authorized amount, it is placed in a no bill
status that specifies this.
Billing requisitions are reviewed by the grant office. This is done using the same
ABAP report as in cost reimbursable billing. The requisition is accepted,
adjusted, or rejected.
If the billing requisition is not accepted, it is either cancelled so the charges can
be billed later or it is rejected so these charges will not be billed later.
If there are adjustments to be made, they are made on the billing requisition.
The acceptable billing requisitions are released for billing.
R/3 Invoices are created for each billing requisition. Accounting entries are made
and revenue is posted to the project.
The billing log is reviewed and any issues are cleared.
No invoices are printed. An ABAP report is run to aid the grant office in
processing the draw down.
At this point a report identifying the USDA drawdown is executed. These are
added to the drawdown. These are handled separately because the costs are
collected on a cost center.
The drawdown is executed.
Once the funds are received, the grant office gets the cashier to make the
appropriate entries in R/3.
This process is repeated each time the LOC processing is required.
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Allows for better recording of project revenue and makes these entries consistent with
other billing types.
The functional deficits that exist for cost reimbursable billing also exist for LOC
drawdown. See that section for a description of those.

This process will not be distributed to departments. The following roles would be set up
to support this process.
Billing office manager - Ability to process all transactions associated with the
process. This includes the ability to run the cost-reimbursement billing program
that creates the invoice, the ability to release a billing requisition, and the ability
to create invoices from the billing requisitions (billing due list).
Billing office accountant - This role would include the ability to edit, release or
reject billing requisitions. It would not include the ability to run the cost
reimbursement billing program or the ability to create and invoice from the billing
request.
Billing office processor - This person would be designated by the billing office
manager and would be able to do most of the things she can do.
Cashier - process payments.
Items that need to be done in this process:

1) Run the program that creates billing requisitions (this includes the ability to make and
reverse a CO transfer posting KB11/KB14, the ability to change user status on a
project and the ability to run resource related billing for the order VA90.)
2) Release billing requests to billing due list (V.23)
3) Process billing due list (VF04). This creates the A/R entries.
4) Map G/L accounts for billing roll up (OKI2). This rolls up the three-digit object code to
two digits.
5) Add unit of measure for material (MM02). This maps all active units of measure into a
consistent measure for billing.
6) Cancel sponsor research bill (VF11).
7) Clear Invoice via fast payment (F-26).
3. Project Management *
Questions:
Q:
2) Describe how your project processing should look, divided into phases.
A: Sponsored projects and agency funds: Phases include (1) pre-award, (2) project
accounting establishment, (3) budget transmission, (4) post-award administration, (5) postaward billing, (6) post-award collections, (7) post-award financial reporting, (8) technical
reporting, (9) submission of closing documents, and (10) internal project closing.
Centers/Chairs: Same as G&C except no pre-award and no closing docs
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Gift funds: Phases include (1) project accounting establishment, (2) budget transmission, (3)
cash receipts, and (4) internal project closing. In rare circumstances, there could be billing
and financial and technical reporting.
Loan Funds: Phases may include:(1) Project accounting establishment, (2) loans to students
or institutional match, (3) cash receipts, (4) re-loan money.
Plant funds: Phases may include: (1) Capital budgeting, (2) SBC and BOT approval, (3)
Account establishment, (4) Architect's design phase, (5) Construction documents phase, (6)
Bid phase, (7) Contract award phase, (8) Substantial completion phase, (9) Project
completion phase, and (10) Account closing.
Endowments/Trusts: Phases may include:(1) Project accounting establishment, (2) trade
activity (3) account close (Closing only for trusts and endowments less than $15,000.).
Q: 3) Which tool do you currently use for project management? How and in which phases
are they used?
A: Sponsored projects and agency funds: We use a custom-built pre-award system
(Sponsored Projects) on the AS400 for phases 1, 3, and 8. The general ledger system and
the Grant Database are custom-built systems, also for the other phases listed above.
Centers/Chairs: Same as G&C except no pre-award system
Endowments and Life Income: An internally developed investment database system that
resides on the mainframe tracks the investment activity performed by money managers at
First Tennessee. The investment system provides the entry into the General Ledger to
record earned dividends, to distribute dividend income from an Endowment Pool to the
individual endowments that participate in the pool (The distribution has different amounts
than the dividend amount earned.)
Life Income: A purchased trust management system, ETA, uses the same information
provided to the internal investment system by the bank. ETA accumulates data by donor,
and prepares annual tax reports to the donor, and prepares and P&L for each donor's funds.
No information from ETA is fed into the G/L. Trust information is fed from the internal
investment system (thus; there is double-tracking of detail in both the investment system and
ETA).
Loans: Are managed at each campus with a subsidiary collection system. Except for this, all
transactions occur in the general ledger.
Plant funds: Facilities Planning maintains their own internal system on the AS/400. This is
mainly information critical to the management of the project that is not contained in the G/L.
The Controller's Office maintains all the official documents, contracts, etc.
Q: 4) Do the orders from your customers include engineering, production and delivery? (If
yes, consider using the Project System to control and organize the process.)
A: Sponsored projects and agency funds: No.
Centers/Chairs: No
Gifts: No.
Endowments/Life Income: No.
Loans: No
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Plant: Yes
Q: 5) Does your customer specify the schedule, resources, and material to be used for their
order? (If yes, consider using the Project System to handle scheduling requirements.)
A: Sponsored project and agency funds: The sponsor specifies the schedule. This normally
is a time period for project execution (i.e. beginning and ending dates), and due dates for
certain technical and financial deliverables / reports.
Gifts: Mainly, the sponsor does not specify the schedule. Occasionally, the sponsor may
specify the schedule (i.e. beginning and ending dates).
The University and contractor work together on the schedule. Bids are opened on a specified
date; contracts awarded on a specific date; project schedule contains multiple dates.
Loans: No. Loans are made to students at the beginning of each term. Capital contributions
from donors may occur at any time and are not scheduled.
Endowments/Trusts: Donors can specify how the earned income may be used by the
University.
Q: 6) Does your process include maintenance and overhaul of existing equipment? (If yes,
consider using the Project System in conjunction with Customer Service and Customer
Relationship Management.)
A: Sponsored projects and agency funds: No.
Centers/Chairs: No
Gift accounts: No.
Loans: No
Plant: Not equipment. Yes, however, or maintenance and overhaul of existing BUILDINGS>
Plant funds: Yes
Endowment/Trusts: No. There may be a few endowments that are funded by real estate that
has maintenance involved in the real estate upkeep.
Q: 7) Do you capitalize your engineering effort? (If yes, please consider using the Asset
Management Complex Investment Measure scenario.)
A: Sponsored projects and agency funds: Rarely, sponsors give us awards to build or
construct a capital asset. Costs are accumulated by type in the sponsored project or agency
fund. At completion, a journal entry is made to reclassify the expenditures from
miscellaneous expenses to a capital asset. For example, we may have salary & benefits,
supplies, etc. expenses that are capitalized when a piece of equipment or a building
renovation is completed.
Centers/Chairs: It is possible
Plant funds: Yes, depending on the nature of the engineering efforts.
Endowment/Life Income: N/A
Gifts: No.
Loans: No
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CI Template:
Restricted funds ledger accounts at the University of Tennessee (UT) will be mapped to
Project Systems (PS) for project accounting purposes. Unrestricted funds ledger
accounts will be managed in CO. Networks in PS are not a requirement at this time.
Below is a summary of functionality requirements by type of restricted fund.
Summary of PS Requirements for Gifts & Contracts and Restricted Funds

UT Specifications: Account Structure
SAP Transactions:
Billing
Indirect
Settlement cost plan
Created by:
Fund Types & Key Owner

*Grants & contracts - Gail
R&B
WBS
Yes
Yes
Yes
Yes
Controller (G&C) for K, Tull, UWA,
Gift - endowment / trust - Gail
R&B
WBS
No
No
Maybe
Yes
Controller (CoA set up) and Mp, Ma
Gift - outside sources - Gail
R&B
WBS
alittle
No
Maybe
Yes
Controller (CoA set up) and Mp, Ma
Approps / Chairs & Centers - Gail
R&B
WBS
No
No
Yes
Yes
Controller (CoA set up)
Loan - Ron
WBS
No
No
No
No
Plant Renewal - Verna
WBS
No
No
Maybe
No
Controller (Plant Group) - Verna / C
Plant Invested -Verna
GL
n/a
n/a
n/a
n/a
Plant ROI --Verna
WBS
No
No
Maybe
No
Plant Unexpended -Verna/George
H&J
WBS
No***
No
yes (AM)
Maybe
Agency/ Plant -- Verna
N&P
WBS
No
No
Maybe
No
*Agency / G&C - Gail
N&P
WBS
yes
No
Maybe
yes
Controller (G&C) - Same as G&C
Agency/ Trust -- Melissa
WBS
No
No
No
No
Treasurers Office / Investment Gro
Life income -- Butch
WBS
No
No
No
No
Endowments - Butch
WBS
No
No
No
No
Mem, Ag, and Mart Business Offic
* Interface to PreAward Sys

*** could be future requirement
A project is a hierarchical outline as described in the project definition. The work
breakdown structure forms the basis for the organization and coordination of a project. A
work breakdown structure (WBS) consists of various WBS elements.
Within PS we can plan and monitor dates, costs and resources. For UT we will use PS
for project accounting only.
The five stages within PS are structuring, planning, budgeting (which will be done in FM
not PS), execution, & closing.
PS is used in universities to collect and bill out costs relating to projects.
The structures used to represent projects within PS are the Work Breakdown Structure
(WBS) and Network.

Project structures functionality will be primarily be for accounting requirements of
restricted funds:
map to CO and FM objects
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interface to pre award system for grant and contract attributes

plan revenues and expense
plan dates on the WBS elements
maintain the status to control posting
used for all sponsor billing
calculate F&A (overhead)
cost share direct and indirect/F&A costs (settlement)
In addition, projects may manually be created for additional requirements such as

managing an internal project for unrestricted funds and not just as "ledger accounts". For
example, the theatre department may have 10 productions they want to set up as
individual projects to collect costs on. These costs collected can be settled periodically
back to the cost center (department responsible) yet a copy of these costs will remain on
the project for project management purposes. At the end of the production final
settlement will occur then the project can be closed.
4. Business Model
The following Scheduled PS Workshops for Restricted Funds were held in the
blueprint phase to determine the AS IS and the TO BE design documented in
ASAP:
Grants & Contract, Gifts, and Appropriations/Chairs/Centers March 6, 2000
Endowments and other restricted funds March 7, 2000
Agency / Plant Funds Session (PS/AM) - March 15, 2000
Day at the Grants and Contracts office with Gail March 21, 2000
Loan Session April 18, 2000
Endowments & Life Income April 24, 2000
Agency/Trusts April 24, 2000
UT fund attribute mapping session April 19, 2000 & May 9, 2000
Plant Funds Session May 10, 2000

1. The concept of Controlling and FI will be a learning curve for end users.
2. The concept of planning vs. budgeting is challenging.
3. In DMS UT has been able to create sub accounts as desired by the end user. These
will not be automatically converted, but the functionality will exist to manually recreate these as needed. There will need to be significant training to end users on
how to create projects in PS.

1. Revenues and expenses will hit project WBS elements instead of a ledger account.
2. WBS elements can be grouped for reporting purposes.
1. PS will offer powerful project accounting functionality combined with the scalability of
WBS structures.
2. Lower levels of detail can be added if necessary to track costs because projects are
scalable.
3. Structures of projects will enable different campus' working on the same project but
want to track costs independently.
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PS has not been designed specifically for public sector or college and university
accounting (in fact SAP is creating a public sector module currently). An enhancement
will be made to meet UT's requirements in PS.

In order to maintain data on the project in PS from the pre award system, additional fields
will be created in PS. The attributes will be mapped and converted to these new fields in
PS from the pre award legacy system. The first cut mapping of existing UT fields was
defined in two attributes sessions (April 19 and May 9, 2000) with Gail, Bill Thompson,
Ron Maples, Nancy, Michelle, Shyam, Mary, Sheri, etc.... As a group, we reviewed the
current attributes and determined if it was needed in R/3. If yes, then we attempted to
map it to a module (PS, FI, CO, SD, FM). If a place (enterprise structure, field) did not
already existed in R/3 for this type of attribute then it was identified that a new field needs
to be created in PS. A spreadsheet has been created with this information.
In the Realization Phase we will continue to work on attributes/mapping as follows:
1. Identify *new* attributes/fields UT needs in R/3 for Grants & Contracts
2. Review field requirements for all other restricted funds. (Some funds will need
some of the same attributes but not necessarily.)
3. Consultant team needs to review the mapping in more detail.
4. Tim Keohan will work with the UT ABAP team to define the specifications for this
requirement.

In the future, SAP will offer a module specific to public sector grants and contract
management that should offer more functionality and eliminate the need for
enhancements.

Project profiles will be created to enable defaults and functionality. Several project
profiles will be created (maybe by fund type?). However, if all funds will use the same
cost plan profile and settlement profiles the number of project profiles could be very few.
The benefits/ maintenance of the PS configuration design will be reviewed and defined in
phase 3 (Realization).
Maintain Project Profiles
The project profile contains default values and other control parameters such as the
planning method for dates and costs.
The data that you enter in the project profile will be copied into a project in its project
definition or in the elements, which can later be overwritten.
Examples
To call up the graphic, you must first have specified various graphic profiles in
the project profile.
To carry out cost planning you must specify a planning profile.
To carry out financial budgeting you must specify a financial planning profile.
You can maintain the various profiles, which must be present in the project profile, in
Customizing for the Project System and also in Customizing for Cross-Applications.
Notes
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The values in the project profile determine the functionality of certain areas of the Project
System and cannot be changed without careful thought. Do not change profiles and key
from related functions that are defined in the project profile, such as the costing sheet or
the results analysis key. These changes could affect existing objects.
You must maintain the following sections for the project profile:
Basic data
Time scheduling
Costs/revenues/payments
Organizational data
Standard settings
In the standard R/3 System, R/3 has predefined a project profile containing the most
important control parameters.
Activities
1. Determine the organizational and control criteria for you company.
2. Create the project profiles reflecting these criteria and enter the relevant data.

The authorization protection in the SAP R/3 System is based on authorization objects
defined by the system. Using these objects, the user can define authorizations. These
authorizations can be grouped in profiles and assigned to individual users. Authorization
objects are represented in the system by particular fields (for example, company code).
You define an authorization by specifying the allowed entries for the particular fields in
the authorization object (* = all). You assign the authorizations to users by means of
authorization profiles.
In the lower levels of this blueprint design the security levels required have been defined
by: 1) FI posting transactions 2) Create /Change /Display master data and planning, and
3) Reporting.
3.1.
Initiation
Questions:
Q:
1) What triggers creation of a project?
A: Sponsored projects and agency funds: We receive an award from a sponsor or an

"Advance Account Request Form". Projects can be created either at the campus business
office level or centrally at the UWA Controller's Office level. UWA Controller's Office will have
authority to release all projects for posting. Projects must have a budget before the project is
opened for posting. Ideally, project setup information is received from the pre-award system.
The existing pre-award system will be discontinued soon. The new pre-award system,
COEUS, should interface with R/3. Business opportunity is to have projects created in the
pre-award system then data is transferred to R/3. This eliminates double entry of numerous
project attributes. Campus Business Officers who create projects:
Ag
2
Controllers
9
Chattanooga
3
Memphis
3
Martin
2
UTSI
2
Knoxville (see Controllers)
Users include Principal Investigators/support staff (PIs and bookkeepers)
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Ag
Controllers
Chattanooga
Memphis
Martin
UTSI
Knoxville
100s
100s
100s
100s
100s
100s
100s
What is UT's policy in relation to activating a project for posting?

UT policy states that a project with an instruction, research, or public service function
will only be activated for posting if a budget has posted to the general ledger.
Budgets can be received electronically from the pre-award system or manually (with
applicable approvals) from Campus Business Officers.
At the Knoxville campus, an account will only be activated if a proposal number exists
in the pre-award system (or if cash has been received). The enforcement for this
procedure rests with the Campus Business Officer and the UWA Controller's Office.
Other Restricted: We receive a gift or award
- Account set-up for the principal (F accounts), plant funds and loans is done centrally. The
current restricted and agency funds are set up by each campus. Release is made centrally
by the Controller's Office.
Centers/Chairs: Same as other restricted
Users are same as grants and contracts.
Loans: A new gift designated for loans is received or the government starts a new program.
Accounts are set up centrally.
Plant: A new plant fund account is created when we receive notification of approval from
either the SBC or Board of Trustees. Occasionally, a maintenance or IT-type project will be
created without this approval.
Endowment/Trusts: Development triggers the creation of a project by sending the Treasurer's
Office Investment group a contract (Memorandum of Agreement) signed by the donor. The
three individuals performing creation and accounting duties for endowments and trusts are:
Pam James- Financial Specialist, accounting for the Consolidated Investment Pool (CIP), and
internal investment system for pooled endowment funds
Melissa Johnson- Trust Officer, accounting for trusts (life income)
Hiliah Corbin - Investment Officer, accounting on the current internal investment system
(equivalent to transactions in the Investment/Treasury module data)
Q:
2) Who is the sponsor for projects?
A: Sponsored projects and agency funds: Sponsors are divided by type into four basic
divisions for financial statement purposes: (1) Federal, (2) State, (3) Local government, and
(4) Private companies. There are approximately 500 different sponsors at any point in time.
Approximately 50% of the sponsors are only sponsoring one current project with UT. The
other 50% of sponsors have multiple projects. UT's largest sponsor is UT-Battelle (formerly
Lockheed Martin), which manages the Oak Ridge National Laboratory for the U. S. Dept. of
Energy (approximately 300 current projects).
Some projects come to UT from Private company sources but are actually Federal flowthrough funds. UT is a sub award to the prime Federal award. Although these are classified
as Private in UT's records, we must also report these funds to the State in the CFDA report
as Federal funds.
Centers/Chairs: The State of Tennessee
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Gift accounts: Sponsors are individuals and private companies primarily. Gift accounts can
be funded by cash receipts, employee payroll deductions, and endowment income.
Endowments/Life income: Donors have given cash, stock, bonds, land, and other items to
the University. In the case of Life income, income is provided to the donors at a fixed amount
or certain percentage of earnings.
Loans: The federal government sponsors the Perkins, Nursing and Health Professions loan
funds. The University provides the institutional loan funds that are matching dollars and
private donors sponsor the private loan funds.
Plant: Does not have a sponsor.
3.1.1.
Internal Project Initiation
Questions:
Q: 2) Do you plan and control your projects in the information technology area? (If yes,
consider using the Project System as your project management tool.)
A: Sponsored projects and agency funds: We have occasional sponsored projects in the IT
area. These are treated just like any other sponsored project.
Centers/Chairs: N/A
Loans: N/A
Plant funds: Occasionally have IT projects, particularly if they're funded from outside
sources.
Endowments/Trusts: No
CI Template:
Grants & Contracts: Interface with legacy pre-award system. Maintain attributes from
the pre-award system into PS. Be able to report on these attributes by project/fund.
Need additional info on requirement here.
All: Use standard templates if applies.
Organizational Assignments in the Project System:
The WBS elements belonging to a project definition and must be assigned to the
controlling area for the project definition. The company code(s) and business area in the
WBS elements must be in the controlling area for the project definition.
Project Definition
The values for the project definition are copied from the template or project profile when
you create a work breakdown structure. If you create a work breakdown structure using a
template but enter a project profile different from the one in the template, you can choose
whether to adopt the default values from the template or those from the project profile.
If you make later changes to the project profile, the changes have no effect on the values
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taken from the project profile and inserted into existing project definitions.
Controlling Area
Type of field
Default value
Can be changed?
(Object) Currency
Type of field
Default value
Can be changed?
Company Code
Type of field
Business area
Type of field
Required
Inherited by any new elements your create or insert into the
WBS.
Yes, but only when you are creating the project definition. Once
you have saved, you cannot change the controlling area
(exception: standard WBS).
Required
Default value for new WBS elements. If you do not fill this field,
the system copies the company code into it.
Only if the controlling area does not allow different company
code currencies.
Required
Required field, if business area balances are managed in the

company code.
Profit Center
Type of field
Optional
Plant
Type of field
Optional
WBS Element
When you create new WBS elements or incorporate them into a WBS, the values from
the project definition are copied into the WBS elements.
If you change the project definition later, the changes have no effect on the values taken
from the project definition and inserted into existing WBS elements.
Controlling Area
Type of field
Can be changed?
(Object) Currency
Type of field
Default value
Can be changed?
Display
No
Required
When you create or incorporate new WBS elements, the value is
taken from the project definition or derived from the company
code in the WBS elements.
Only if the controlling area does not allow different company
code currencies and if no plan/actual values, commitments, or
budget exist for the WBS element.
Company Code
Type of field
Required
Operating conditions/check The company code must belong to the assigned controlling
area.
Can be changed?
Different WBS elements can be assigned to different company
codes. You cannot change the company code if plan/actual
values, commitments, or budget exist.
Business Area
Type of field
Required, if business area balances are managed in the
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Can be changed?
Profit Center
Type of field
company code.
You cannot change the business area if plan/actual values,
commitments, or budget exist.
Optional
Plant
Type of field
Optional
Operating conditions/check
The plant must belong to the assigned company code.
Sponsored projects and agency funds: A project account is established by the campus
business office or centrally by the UWA Controller's Office when (1) an award document
is received from the pre-award office, or (2) an approved (by Department Head or Dean)
Advance Account Request Form is received from the academic department. The UTK
campus business officer approves the establishment of all new projects by signing. A
budget is usually entered in the pre award system before activating a project for posting
of charges for those projects with an instruction, research, or public service function. The
UWA Controller's Office has final authority to release a project to become active (ready
for posting). The budget is electronically transmitted from the pre-award office or entered
manually. A notification letter is sent to interested users - this is usually the Principal
Investigator, Responsible Person (usually the Department Head), departmental business
manager, and campus business manager when the project is established in the General
Ledger.
This process will remain similar in the future since R/3 does not currently offer a "pre
award" module. We will build an interface with the pre award system.
Gift accounts: After a gift is received, a gift account is established either at a campus
business office or at the UWA Controller's Office through an approved request form by
the Development Office at UTK or a campus business officer. A notification letter is sent
to interested users - this is usually the Principal Investigator, Responsible Person (usually
the Department Head), departmental business manager, and campus business manager
when the account is established in the General Ledger.
Loans: When a new program is initiated by the Federal Government or a gift to establish
a loan fund is received, the campus business office or Controller's Office begins the
setup of the new accounts.
Plant funds (unexpended): According to George, we have approximately 150 active
projects (George will check on this number). According to CHART, we have
approximately 950 active accounts. UT has a legacy budget system that is used to
complete a budget request in a certain format. DB70 Project Budget data is contained in
the Facilities Planning AS/400 System but only the Total Project Cost field is used. This
data is required by the State, but no one is required to follow this budget. When the State
approves the project, an SBC No. is assigned (format example: 540/01-01-010). This
field can be carried on the WBS (Work Breakdown Structure) as contract # (per Mary). In
the past this is the point when the J account would have been created.
4. Business Model

Grants & Contracts
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1. project entered in pre award system - proposal stage (not approved)

2. project approved or advance account request received
3. project interfaced with R/3:
PS: attributes (and if COEUS maybe structure)
FM: transfer of budget
Issue #103: Which legacy pre award system will we interface with: COEUS or existing?
Neal Wormsley has agreed to resolve this issue for the PS team by 5/19/00 else we will
assume the interface will be to the current legacy system.
Currently the process in the pre award system is:
1. proposal or signature with free form budget
2. award budget or signature
3. manual transfer of proposal or pre award budget into UT object codes
With COEUS the project can be created in the pre award system - do we create this in
COEUS and interface the structure to R/3? Or - does Gail's group initially create the
project directly in R/3?
Note:
The goals of the OR (Office of Research) are: proposal management and award
management.
The goals of the Controllers Office are: set up structure, accounting (billing), financial
reporting, and project closure.

Historically UT would create many projects by campus' department to manage and report
on their 'pieces' of the project. Then the costs would need to be
transferred/consolidated/summarized together. In PS the project will be created as a
hierarchy allowing natural summarization and cost roll up as well as management and
reporting on the WBS element level. For example, project X could be worked on by the
physics department and the chemistry department. The project X will have a WBS
element bucket (historically R accounts) for each of these buckets.
Project Definition / Title: Project X
Level 1 WBS: Project X
Level 2's WBS: project X campus Y (was R070510xx), project X campus Z (was
R011025xx)
See changes to existing organization. The change, while it will be a training issue, is also
an improvement for management and reporting purposes. In addition with the hierarchy
the correct people responsible (dept heads, PIs, prime book keepers, etc.) can be linked
to the proper WBS element.
Currently people responsible are linked manually or there are multiple balance accounts
(linked by base grant number). In the future we hope to store this information on the WBS
elements.
R/3 currently doesn't have fields required to maintain attributes from the pre-award
system. This info needs to be with the project in PS and reported on.
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In order to meet the requirements for the University, PS needs to be enhanced to
accommodate the mapping of fund attributes into the project. A detailed spreadsheet
exists later on in this CIT showing the mapping of existing UT attributes into R/3 and the
need for the creation of additional fields.

In the future UT can create projects for other project accounting initiatives (IT project
management, unrestricted projects, etc). For example, the Continuing Education cost
center, which is an E account, may have a budget and several initiatives. Projects can be
used to track costs and potentially revenues for the individual continuing education mini
projects. Then the project can be closed and the costs settled back to the E account cost
center for Continuing Education. Currently these projects are managed as sub accounts
in the DMS system and do not reconcile back to the account ledger.

Need to explore impact of newly defined fields on maintaining field status (required,
hidden, display, open) by project type.
Documents
In the following steps you can make the appropriate settings for the PS texts in the
Project System.
In addition to the PS texts, you can use the functionality of document management within
the Project System.
Documents can be assigned directly from document management to WBS elements and
displayed in the work breakdown structure.
If you want to make use of the document management functionality in the Project
System, you must first make the appropriate settings using the Implementation Guide:
Document Management.
Define Text Types for PS Texts
You can enter as many texts as you need for activities or WBS elements using PS texts.
PS texts are organized according to text types. You can define the text types to meet
your needs.
Examples
Notes
Action lists
Logs
Default Settings
Text types for PS texts are created in the standard SAP R/3 System.
Actions
1. Specify which text types you want to use for your projects.
2. Create the text types.
PS Authorization Recommendation:
Secure FI Postings: PS projects will be created for funds. Each fund has an individual
fund and fund center so FI postings to projects can be restricted thru FM. This should be
straightforward.
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Create / Change / Display master data: The UT offices listed below will all have the
ability to create and change all projects for each type of restricted fund. Access will be
given (or not) for transactions CJ01 and CJ02. This decision was made because it
reflects the current centralized security. In the future, security can be decentralized so
that end users can create their own sub accounts (lower level WBS elements). To
control on a decentralized level in the future, project (fund) type could be used. Everyone
can have access to displaying master data CJ03.
Current UT departments that create & change restricted funds:
Grants & contracts Gail
Controller (G&C) for Knoxville, Tullahoma, UWA, and
GSM.
Controller (CoA) for Chattanooga, and IPS.
Memphis, Ag, and Martin Business Offices do their own
G&C accounts.
Gift - endowment / trust
Controller (CoA set up) and Mp, Martin, & Ag Bus.
Offices*
Gift - outside sources
Controller (CoA set up) and Mp, Martin, & Ag Bus.
Offices
Appropriations/Chairs/Centers Controller (CoA set up)
Loan - Ron
Agency / G&C - Gail
Controller (G&C) - Same as G&C
Agency/ Plant - Verna
Controller (Plant Group) - Verna / Cyndie
Agency/ Trust - Melissa
Treasurers Office / Investment Group
Plant Renewal - Verna
Plant Invested -Verna
Plant Unexpended -Verna
Plant ROI -Verna
Endowments - Butch
Life income - Butch
3.1.1.1.
Prepare Business Case for Project
Questions:
Q:
1) Describe the procedure you use to justify and approve starting a new project.
A: Sponsored projects and agency funds: A project account is established by the campus
business office or centrally by the UWA Controller's Office when (1) an award document is
received from the pre-award office, or (2) an approved (by Department Head or Dean)
campus business officer approves the establishment of all new projects by signing. A budget
is required for activating a project for posting of charges for those projects with an instruction,
research, or public service function. The UWA Controller's Office has final authority to
release a project to become active (ready for posting). The budget is electronically
transmitted from the pre-award office. A notification letter is sent to interested users - this is
usually the Principal Investigator, Responsible Person (usually the Department Head),
departmental business manager, and campus business manager when the project is
established in the General Ledger.
Centers/Chairs: Same as G&C except we know we must set up new projects each year. No
tie to pre-award system
Gift accounts: After a gift is received, a gift account is established either at a campus
business office or at the UWA Controller's Office through an approved request form by the
Development Office at UTK or a campus business officer. A notification letter is sent to
interested users - this is usually the Principal Investigator, Responsible Person (usually the
Department Head), departmental business manager, and campus business manager when
the account is established in the General Ledger.
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Loans: When a new program is initiated by the Federal Government or a gift to establish a
loan fund is received, the campus business office or Controller's Office begins the setup of
the new accounts.
Plant funds: Describe capital budget process here.
Endowments/Trusts: The signed MOA justifies the starting of a new project.
Endowment Processes:
The Development Office creates a Memorandum of Agreement (MOA) document to formalize
the donor agreement. They also deposit gift funds received from donor. The gift funds are
generally deposited into the UTK Restricted Gifts Suspense Fund, but there are times when
they are deposited into other B accounts. Development has the donor sign the MOA and
sends it through the contract review process. Pam reviews and approves the MOA and
sends the MOA back through the contract review process. The Vice President's signature is
then obtained and the completed MOA is returned to Pam for processing.
Pam sets up the endowment F accounts based on the MOA information. If the funding is
greater than $15,000, Pam requests the Controller's Office to create an R and B account to
be used for expenditures and for crediting income. If the funding is less than $15,000, any
earnings will be reinvested in the endowment F account until balance of endowment reaches
$15,000. Once the balance of the endowment reaches $15,000 (or other specified amount),
B and R accounts are requested. Pam also prepares a Journal entry to move the funds out
of the UTK Restricted Gift Suspense Fund, or specified B Account, into the endowment
account.
Pam also enters accounts onto the CIP subsystem. This tells the system what account to
credit income to, what percentage of income to credit to each account, etc. This subsystem
also allows Pam to make any changes to accounts credited (example - when account
reaches $15,000 balances, credit accounts must be changed)
If accounts do not meet the minimum endowment of $15,000 within a specified period, a
journal voucher is processed to close the endowment account and move the principal to a
restricted account that is designated for use based on the original MOA. Gains/losses are
recognized at this time.
Upon a donor's request, a new, separate and distinct endowment may be created from an
existing endowment.
A process has been established to pool cash in the Consolidated Pool, as indicated below:
1. On a monthly basis, a report (outbound interface file) is generated from the Controller's
Office that shows the amount of each new gift and/or reinvested funds that were received
that month and deposited to the endowment accounts. (The information for this report
comes from CV's or JV's)
2. An internal investment program run that sweeps this cash into the Pooled Asset
accounts. This program generates a journal file to post to the 29 accounts (asset
accounts).
(Steps 3-6 below are done in the CIP internal system)
3. Hiliah calculates the total market value of the pool, and Pam balances this market value
back to the bank. Based on this market value and amount of cash pooled in item 2, and
total number of shares in the Pool, a market value per share is calculated. The formula
for this calculation is total market value less cash pooled for month divided total number
of shares as of previous month (includes additions/deletions during month).
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4. A program is run to distribute shares purchased to the pooled asset accounts. The
number of shares purchased is determined by amount of gift to endowment divided by
market value per share determined in item 3.
5. A program is run to post the shares purchased to the pooled asset accounts.
6. A report is run to show each endowment's Book Value based on the Pool BV unit price,
Number of Shares and Equivalent Shares (i.e., weighted average number of shares due
to adjustments for funds that were held only for a partial quarter).
Income Distribution
1. On a quarterly basis, income is distributed based on the equivalent number of shares that
each endowment owns. The amount distributed is 5% of a 3-year moving average of
pool market values as of December 31.
2. The Pool subsystem creates a Journal Entry that distributes the income based on the
number of equivalent shares each endowment owns.
3. An interface is run to post the Journal Entry distribution created in Step 2 to each
designated B, I, or P account and each reinvested F account. The income is taken out of
the Undistributed Income on Invest Pool account. In addition, a manual report is supplied
to the Treasurer each quarter to show the activity in the Undistributed Income on Invest
Pool account.
Trusts (Life Income)
Each trust is generally treated as a separate fund (see exception of Pooled Income Fund A),
and each fund is set up as a group of G accounts. The fourth and fifth digit of the current
account number indicates the types of assets such as stocks (20), bonds (22), CDs (04) real
estate (48), and fund balance (99).
To participate in the Trust Pooled Income Fund A, a minimum of $10,000 must be given, and
the funds are invested as a pool. When the amount given is at least $50,000, then the funds
are invested separately.
There are approximately 300 trusts. The types of trusts include:
Unitrust - where x% of market value is paid out
Unitrust with net income - where x% of market value is paid out subject to net income
Unitrust, net income with make-up - where x% of market value is paid subject to net income,
and where any past shortages due to net income restrictions are made up when the current
net income for that period allows.
Annuity trusts - a percentage or set dollar amount is paid out over a set term.
Lead trusts - where UT has rights to the generated interest income, but the remaining
principal reverts back to the donor or designated beneficiaries upon termination of the trust.
(Note: Lead trusts are set up using the Agency P account.)
Remainder trusts - where UT has rights to the remaining principal but not the income (unless
specified in the trust document that UT is a beneficiary during the life of the trust).
Life Income - where UT pays out earnings to the donor/designated beneficiaries throughout
his/their life.
Q: 2) Do you simulate different project alternatives in support of the decision on executing a

project? (If yes, consider using the project simulation.)
A: No.
3.1.1.2.
Project Approval
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Questions:
Q: 1) How is a project approved? Who takes the decision to approve and who must be
informed of the decision?
A: Sponsored projects and agency funds: A project account is established by the campus
business office or centrally by UWA Controller's Office when (1) an award document is
received from the pre-award office, or (2) an approved (by Department Head or Dean)
campus business officer approves the establishment of all new accounts by signing. A
budget is required for those accounts with an instruction, research, or public service function
for activating an account for posting of charges. The UWA Controller's Office has final
authority for releasing an account for active posting. The budget is electronically transmitted
from the UTK pre-award office. A notification letter is sent to interested users - this is usually
the Principal Investigator, Responsible Person (usually the Department Head), departmental
business manager, and campus business manager when the account is established in the
General Ledger.
Centers/Chairs: Same as G&C except no tie to pre-award system
Gift accounts: A gift account is established by the campus business office or the UWA
Controller's Office through an approved request form by the Development Office at UTK or
the campus business officer. A notification letter is sent to interested users - this is usually
the Principal Investigator, Responsible Person (usually the Department Head), departmental
business manager, and campus business manager when the account is established in the
General Ledger.
Loans: After we receive a gift for the establishment of a loan fund, the campus business
officer and Controller's Office staff decide if the funds will be loaned or matched. After an
account is established, the bursar and chief business officer is notified.
Plant funds:
Endowments/Trusts: The Development Office and the Treasurer's Office approve the
projects. These two offices must approve and be informed.
Q: 2) How is project approval documented? (Consider assigning approval documents that

are available in electronic form to the WBS in the project structure.)
A: Sponsored projects and agency funds: See question one above.
Gifts: See question one above.
Loans: See question one above.
Endowments/Trusts: the contractual agreement (MOA)
3.2.
Planning
Questions:
Q: 1) How detailed is your project planning? (Remember that there are different levels of
planning detail.)
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A: Sponsored projects and agency funds: Currently, UT's systems do not have this
capability. All we have now is a final, approved budget. Any planning or scenarios are done
manually by the PI and departmental business manager.
Gifts: Same as sponsored projects.
Loans: No planning capability.
Endowments/Trusts: No planning done.
Q: 2) Who carries out planning for your projects? (Mention anyone involved in and
responsible for each stage of the planning process.)
A: Sponsored projects and agency funds: Any planning that takes place is done manually at
the departmental level. This would normally be the PI, departmental business manager, or
department head.
Gifts: Same as sponsored projects above with the exception that college or campus-level
personnel might be involved depending on the UT ownership of the gift.
Loans: Any planning done concerning loan funds has to do with which funds and how much
to match and how much money to lend the next year. The matching decisions are made in
the Controller's Office. The spending decisions are made by each campus' financial aid
office.
Q: 3) How often are your project plans updated? (Consider the effects on the project
baseline calculation.)
A: Sponsored projects and agency funds: This is unknown at this time. UT does not
currently have this capability automated. Any planning and planning updates are done
manually.
Gifts: Same as sponsored projects above.
Loans: N/A
Q: 4) How is planning communicated? (Consider the effects on reporting, electronic

communication, and so on.)
A: Sponsored projects and agency funds: This is not occurring in the system at this time
since UT's system does not have this capability.
Gifts: Same as sponsored projects above.
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Loans: N/A
3.2.1.
Structure
Questions:
Q: 1) What triggers the creation of the project and when in the business process do you
start to structure your project?
A: Sponsored projects and agency funds: Current: The campus business office or the
Controller's Office creates accounts when an award document is received or an approved
Advance Account Request Form is received. The Controller's Office requires an approved
budget for accounts with an instruction, research, or public service function in order to
activate the account for posting charges to the general ledger. The Campus Business Office
approves all new account establishments. Future: Depending on the implementation of the
COEUS pre-award system, the project setup attributes may be entered in the pre-award
office instead of the Campus Business Office or Controller's Office. These attributes would
then be transferred electronically to R/3 for review and approval by the campus business
office or Controller's Office.
Loans: The award of a new federal loan program contribution or the receipt of a gift triggers
the creation of a loan fund.
Endowments/Trusts: The signed Memorandum of Agreement (contract agreement with the
donor) triggers the creation of the project and the accounts are set up at the time that the
Treasurer's Office Investment Group receives the signed MOA.
Q: 2) Do you have different types of projects? (If yes, consider having different project
processes for each major type.)
A: Sponsored projects:
Types: grants, contracts, task order agreements (funding at task order agreement
level), cooperative agreements, consortia, governmental appropriations
Sponsors: federal, private, state, local government; foundations, industry; other
universities; foreign
Billing: cost reimbursement billing, fixed price, billing schedules, milestone or periodic
billing, completion of major task, patient enrollment basis, clinical research trials,
letter of credit electronic drawdown of funds
Financial reporting is sometimes required in addition to billing
Outcomes: research, training grants, conference, public service, education,
instruction, fellowships, equipment purchase, construction. Tangible outcomes
include technical reports, patents, and products (e.g. manuals, course curriculum,
conference, newsletter, equipment, process design, blueprints, etc.).
Centers/Chairs: Same as G&C but the money comes through requests to the State, not
invoicing
Gifts: Gifts differ in the level of restriction that the donor applies to the money. For
example, a gift could be restricted for chemistry research. This is a fairly broad restriction.
Or, a gift could specifically state the PI and or exact type of research to be supported by the
contribution. Gifts also differ in the way that the project is funded (i.e. endowment, cash
receipt, etc.).
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Other Restricted: In addition to grants and contracts, other restricted accounts such as loans,
agency funds, gifts and endowments, annuity and life income. Funding may be from gifts,
program revenues, and transferred excess funds, endowment income, etc.
Life income is a trust with a special clause that establishes an endowment at the time of the
contributor's death.
Plant funds are broken down for future plant expenditures of construction or renewal. Source
of funds is bonded indebtedness, excess operating funds, state appropriations, and gifts.
Loan funds have disbursements, collections, interest, and some write-offs.
Agency funds include lead trusts where the principal remains with the donor, contractor
retainage (on the vendor side), individuals undergoing transplant operations (deposits),
Department of Transportation pass-through funds where UT is the fiscal agent, and athletic
tournaments and fraternities.
Sponsored projects:
10,000 - 20,000
New awards per year by budget entity:
UTSI
100
Chattanooga
200
Memphis
550
Ag
330
Knoxville
700
Martin
40
New proposals per year by budget entity:
UTSI
200
Chattanooga
400
Memphis
1100
Ag
1100
Knoxville
1400
Martin
100
Other Restricted Accounts:
Endowments: approximately 3000
Trusts: approximately 300
Charitable Lead Trusts: 5 Agency Trusts where UT gets only the income and not the
principal of the trust.
Q: 3) Do you have different phases in your projects? (If yes, consider structuring your
project according to phases. If no, consider structuring your project according to function or
product groups.)
A: Sponsored projects and agency funds:
We do not necessarily have phases, but may need to structure our projects as follows:
50% 1 level 1 WBS, 1 level 2 (current)
25% 1 level 1 WBS, multiple level 2's
20% 1 level 1 WBS, 1 or multiple level 2's, and 1 or multiple level 3's (future - more detail)
5% 1 level 1 WBS, 1 or multiple level 2's, and 1 or multiple level 3's, and level 4's
Centers/Chairs: Approx 100 new accounts each year
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Sponsored projects, agency funds, and gifts will need a total of 10,000 - 20,000 projects/WBS
elements/'B' accounts, but this number will increase as UT meets President's goal to double
Federal research dollars!
Endowments/Life income: There is generally only one phase that is designated in the
accounting system. Phases could be constructed in some instances. For instance, trust
accounts become endowments upon the death of the final surviving beneficiary. Currently
the process is to close the trust and create a new endowment. Also, endowments may be
initially funded at an amount less than the minimum $15,000 required to be an endowment.
The income is funneled back into the principal and additional gifts are received within a
specified timeframe until the $15,000 is achieved. If the $15,000 is not achieved within a
given timeframe, the endowment is closed and the funds are transferred to an expense
account per the MOA agreement terms.
Loans: N/A
Q: 4) Do you create the entire project structure at one time? (If yes, consider creating the
structure with network activities in one step If no, consider gradually building the structure by
adding sub trees, networks or standard structures over time.)
A: Sponsored projects and agency funds: In the majority of cases, the project structure can
be correctly determined at project inception. However, we need the ability to modify the
structure and add tiers if / when the occasion arises. When COEUS is implemented as the
pre-award system, the initial project structure may be entered by pre-award staff. The project
structure will be passed electronically to R/3 and reviewed (and possibly altered) by the
campus business office and UWA Controller's Office.
Gifts: The project structure will be initiated by the Campus Business Office and the
Controller's Office. This will most likely use a standard (and relatively simple) project
structure. Currently, project structure for a new project is copied from a similar, existing
project. Input will be manual based on information provided by the UTK Development Office
or the campus business office. Is there any way to automate this structure? (Yes - you can
copy structures.)
Loans: Yes
Endowments/Trusts: Yes
Q: 5) Costs, dates, resources, material, and finance can be drivers for how customers
structure their projects. What are the critical success factors for your projects?
A: Sponsored projects and agency funds: Structure of projects is dependent upon two
primary factors: (1) award document requirements, and (2) PI's project management goals.
The award document requirements which could impact project structure include (1) financial
reporting dates, (2) F&A rates, (3) F&A cost sharing, (4) direct cost sharing, (5) statement of
work, and (6) sources of funding. The PI's project management goals which could impact
project structure include (1) technical reporting requirements, (2) technical milestones or
phases, (3) division of work between a number of co-PI's, (4) sources of funding.
Centers/Chairs: Same as G&C except F&A is not a factor
Gifts: The only critical factors regarding the structure of a gift would be division between
several UT owners, the restrictions placed upon the funds by the donors, and any specified
ending dates.
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Loans: Loaning and collecting the money are out of scope for R/3.
Endowments/Trusts: The drivers are the stipulations in the MOAs as to how the income will
be distributed and how the income may be spent. Critical success factors include the
profitable investment of funds (which is out of scope of R/3 at this time).
Q: 7) How do you distribute costs and dates in the project structure? (Remember, it is
possible to plan costs and dates top-down or bottom-up.)
A: Sponsored projects and agency funds: Currently, the dates are assigned to the R
account (project expenditure account). Direct costs are assigned to the R account. F&A
attributes are assigned to the R account, but are posted to the B account. In the future, it is
desirable to have only one project account where all costs and attributes are present. All
costs should be accumulated from the bottom up. Dates and basic attributes may need to be
from the top down.
Loans: Each loan fund is a balance sheet. They have cash, notes receivable, matching and a
balance. When a loan fund is created the University receives cash and has a fund balance.
As funds are loaned, cash decreases and notes receivable are created. When loans are
collected, cash increases and notes receivable decreases.
Endowments/Trusts: Costs and Dates are not distributed. Income is distributed from the
Consolidated Investment Pools. Endowments are perpetual and trusts end at the death of
the last beneficiary (which cannot be predicted).
Q: 8) Do you often have similar projects or are they completely different? (If you often have
similar projects, consider using templates or copying existing projects when creating new
projects.)
A: Sponsored projects and agency funds: The majority of projects are similar to existing
projects. Templates or copying existing projects should be a good starting place for setting
up a new project. However, several templates may be needed. Also, the ability to set up a
project independently of templates is desirable.
Centers/Chairs: Same as G&C, many are the same from year to year
Loans: Private loans per campus are very similar.
Plant: According to George, we have approximately 150 active projects (George will check
on this number). According to CHART, we have approximately 950 active accounts. All H's
and J's.
Endowments are very similar in structure. The assets involved may have some differences.
Trusts: The differences in trusts include lead, life income, charitable remainder, pooled
funds, and Unitrusts, with fixed payout, net Income w/makeup, or net Income. The structure
in the G/L, however, is very similar. Five trusts where UT only can use the income, but not
the principal, are set up as agency funds. Endowments are set up as F accounts. The fourth
and fifth digit of the current account numbers designates the type of account such as assets
{stocks (20), bonds (22), CDs (04), real estate (48)} and fund balance (99).
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Ninety percent, or approximately 2500, of the endowments are pooled. The Land-Grant
endowment is one of approximately 250 separately invested endowments. The Endowment
Pool is treated as a single separately invested fund.
Endowment assets include the Consolidated Investment Pool assets, separately invested
assets, and un-invested real estate. When donors give us real estate or securities, UT
records the book value of the assets on the books. However, UT usually quickly sells them
and reinvests the proceeds. Cash is separately identified if donated cash has not yet been
initially invested. In addition, there is separately identified Cash in the Consolidated Pool.
Assets also include receivables. At year-end, receivables and payables are recorded for the
unsettled investment trades. When donated assets are business enterprises, there are also
receivables and payables related to real estate.
The assets are shown on the General Ledger at Book Value.
The Sale Price invested asset - BV endowment = the Booked Investment Gain.
Only at year-end is the Fair Market Value recorded. Thus, at year-end unrealized
gains/losses are booked.
Additions include new gifts and reinvested income. Deductions include board-approved sale
of assets and the transfer of cash to expenditure accounts.
Required reporting includes reports to donors on what transactions have occurred with their
endowed funds. Also, University personnel request reports on the expected income
distributions on all of the endowed funds in particular colleges or divisions. Pam currently
maintains a list of Endowments that have not reached minimum balance of $15,000 or
specified balance manually. It was mentioned that with the R/3 system a report with this
information could be run.
Special classifications will be created in FM. The Master Data will capture detail related to
the endowment. This information includes:
1. Text to indicate the purpose of the endowment
2. Text to indicate a restriction to the department allowed to create/post activity.
3. Text to indicate a restriction as to the authorized use of funds (scholarships, etc.)
4. Classification as to type of overall usage (Student, Library)
5. Function
6. Number of Units
7. Unit Price
8. Identity field to note whether separate or pooled investment.
9. Pool Code
The unit and unit price field must interface with the legacy investment pool (CIP) system.
Q: 9) Do you create your projects in an external system first and then copy them to R/3) (If
yes, consider using Open PS.)
A: Sponsored projects and agency funds: Currently, accounts are established in the
existing G/L system. Some attributes are available in the external pre-award system. There
is currently no system interface for attribute transfer. For the future, UT is in the process of
implementing COEUS, a new pre-award system that has project attributes like the existing
system, but also has the project structure. UT would like to interface R/3 with COEUS for
project structure and attribute transfer.
Centers/Chairs: Same as G&C except not currently in the pre-award system
Gifts: There is no external system for gifts. Accounts are established manually by the
Campus Business Office or Controller's Office with final release for posting by the Controller's
Office.
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Loans: No. They are all created in the G/L.

Endowments/Life Income: Are set up in the G/L. Will be set up directly into R/3.
Q: 10) Do you need reports on project structures and other types of R/3 orders (such as
CRM, SM, and PP)?
A: Sponsored projects and agency funds: We need reports of expenditures, etc. based on
the project structure (i.e., at the detailed WBS element level and accumulated to higher level).
Also, interested parties need to be able to see the existing project structure to evaluate
potential changes to the project.
Centers/Chairs: Some centers are divided into many projects, need some report to pull them
back together. We also need the ability to query the system to find out the existing project
structure to evaluate potential changes.
Endowment/Life Income: Monthly treasurer's reports and attribute sheets.
CI Template:
3.2.1.1.
Project Structuring
Questions:
Q: 10) Do you need to model your project before making it operational? (If yes, consider
using project simulation.)
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A: No
Q: 12) Do you evaluate projects based on best case, worst case, and most likely? (If yes,
consider using project simulation.)
A: No
Q: 14) Do you need a baseline for the project costs, schedule, or other structural elements?
(If yes, consider using project snapshot versions or simulation versions to do baselining.)
A: versions of cost planning
Sponsored projects and agency funds: We don't really need a "baseline". We need one
approved budget that everyone knows is the "official" budget. It is OK to have various plans
outstanding. If there is reporting of plan vs. actual, then we would need for one of the plans
to match the "official" budget. We should standardize which plan version is equal to the
budget in all cases. Perhaps plan #1 always matches the budget for reporting purposes.
Centers/Chairs: Same as sponsored projects.
Loans: No.
Q: 17) Are parts of the projects similar? (If yes, consider referencing existing WBS sub trees
or templates when creating new subprojects.)
A: Sponsored projects and agency funds: Yes, parts of the projects, and entire projects are
similar to existing projects. We plan to copy or use standard templates when establishing
new projects. However, we need the ability to later change the initial project structure as the
project develops.
Centers and chairs: Same as sponsored projects.
Q: 19) Do your projects go through different phases that you must control? (If yes, consider
using user statuses to control each phase.)
A: Sponsored projects and agency funds: Yes. The primary controls that we need for
project phases (which I assume would be separate WBS elements) are posting controls
based on date, expenditure type, and expenditure total. For example, we don't want
expenditures to post to a project after 60 days past the ending date of the project. We don't
want expenditures to post to travel line items if travel is not allowed by the award. We don't
want expenditures to post to a project in excess of the total award amount.
Gifts: Same as sponsored projects. Less likely to have phases, expenditure restrictions, or
ending dates.
Q: 20) Do you want to include documentation throughout the project structure? (If yes,
consider using DMS or PS texts.)
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A: Sponsored projects and agency funds: Yes, we would like the ability to have as much
documentation as possible. We would like to be able to document notes, important sponsor
requirements, attach documents, etc.
Gifts: Same as sponsored projects, although it is not as critical.
Centers / Chairs: Same as sponsored projects, although it is not as critical.
Q:
21) Do you allocate overhead to your projects?
A: Sponsored projects: Yes, UT has a matrix of applicable Federal, audited F&A rates that
are applied to all sponsored projects. The rate to be used from the matrix is dependent upon
(1) campus where work is to be performed, (2) function (instruction, research, other
sponsored projects), and (3) whether or not the majority of the work is to be performed on or
off campus.
Gifts: F&A does not apply.
Centers/Chairs: F&A does not apply.
Agency funds: No, F&A does not apply.
Endowments & Life Income: No. F&A does not apply
Gifts: No, F&A does not apply.
Loans: No
Q: 22) Do you calculate project-specific overhead? (If yes, you can stipulate an overhead
structure for each project type.)
A: Sponsored projects: Planned F&A is based on the planned distribution of expenditures in
certain cost categories. If the actual project expenditures are in different cost categories than
planned, the F&A may be affected so that the actual is either more or less than planned. For
example, if the project plan included $2,000 for equipment expenditures, but the PI actually
spent the funds in supplies, actual F&A would be more than planned F&A. This is because
one of UT's F&A bases is Modified Total Direct Costs (MTDC), which is total direct costs less
certain modifying cost categories. Equipment is a modifier and is excluded from the F&A
calculation, but supplies are included in the F&A allocation.
Some projects require project-specific F&A calculation, instead of one of the standards
included in the F&A matrix. For example, the US Dept of Education requires that student
support costs be excluded from the base on certain awards. I think that we should charge
the regular F&A rate and show the exclusion calculation as F&A cost sharing via settlement
rules. The rationale for this is that student support costs are not excluded from the base in
our official agreement with the Federal government. Therefore, any that we cannot charge to
a sponsor is required cost sharing.
Memphis must exclude "patient care" costs from the base per the F&A rate agreement with
the government. We should discuss this procedure with Gerri Bussell to determine how this
is being accomplished currently. There is not an existing cost type (object code) for "patient
care".
Centers/Chairs: F&A does not apply
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Endowments/Life Income: No, F&A does not apply.
Loans: No.
Q: 23) Do you calculate overhead on materials/labor? (Consider the implications this has for
determining cost objects and overhead cost rates.)
A: See questions 21 and 22
Q: 24) Do you calculate percentage overhead? (Overhead can be specified as values or

percentages.)
A: see questions 21 and 22
Q:
25) Is the basis for planned overhead the same as for actual overhead?

Loans: No.
Endowments/Trusts: No. F&A does not apply.
Q:
26) What is the formula/schema for applying overhead costs?
A: Sponsored projects: UT has several Federally-approve F&A calculation bases. One of

UT's F&A bases is Modified Total Direct Costs (MTDC), which are total direct costs less
certain modifying cost categories. Equipment, student fees, and subcontracts greater than
$25,000 are examples of modifiers and are excluded from the F&A calculation, but salaries,
benefits, supplies, etc. are included in the F&A allocation. Other F&A calculation bases in
use include: (1) TDC - total direct costs, (2) Salaries & wages, and (3) custom bases for
certain sponsors. For example, the US Dept of Education requires total direct costs less
student support expenditures that may be in 5 different cost categories.
Loans: No.
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Endowments/Trusts: No, F&A does not apply.
Q:
27) How often do you calculate overhead costs?
A: Sponsored projects: Monthly. F&A and the related F&A cost sharing are run in the last
job of the month-end accounting close.
Loans: Do not calculate.
Q:
28) Does the basis for the overhead costs change during the lifecycle of the project?
A: Sponsored projects: It is rare, but it can happen. A more common occurrence is that the
base remains the same, but either the F&A rate, the F&A cost sharing, or the net F&A
allowable changes during the life of the project. When this has happened in the past, we
have established a new R account. In the future, perhaps we could establish another WBS
element.
Loans: No.
Q:
29) Who is responsible for overhead costs?
A: Sponsored projects: The F&A rates are determined by a proposal prepared by either the
UWA Controller's Office or the campus business office in conjunction with the UWA
Controller's Office. This proposal is submitted to the Federal cognizant audit agency, DHHS,
for review, negotiation, and approval. Once the rates and bases are established, the
appropriate combination of the two is applied to the project at its inception based on certain
attribute fields by the campus business office and / or the UWA Controller's Office. The
monthly calculation based on actual expenditures for the month is performed automatically
during the month-end closing process.
F&A cost sharing approval is the responsibility of either the campus business or research
office. Once approved, the cost sharing attributes are applied to the project in setup.
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Loans: N/A
Q: 30) How do you compare target and actual overhead? (Requirements in reporting affect
the type of overhead settlement.)
A: Sponsored projects: For individual projects, planned F&A is based on the planned
distribution of expenditures in certain cost categories. If the actual project expenditures are in
different cost categories than planned, the F&A may be affected so that the actual is either
more or less than planned. For example, if the project plan included $2,000 for equipment
expenditures, but the PI actually spent the funds in supplies, actual F&A would be more than
planned F&A. This is because one of UT's F&A bases is Modified Total Direct Costs
(MTDC), which is total direct costs less certain modifying cost categories. Equipment is a
modifier and is excluded from the F&A calculation, but supplies are included in the F&A
allocation.
Overall, the actual F&A is compared to the planned F&A by campus business and research
officers. This is done through a spreadsheet, which gathers applicable data into custom
formats. The information for F&A, F&A cost sharing, and net F&A recoveries is required in
several formats by the following fields: (1) Sponsor type, (2) By specific sponsor, (3) by
campus.
Loans: N/A
Q: 31) For how many project structures do you calculate overhead rates? (Consider the
performance implications.)
A: Sponsored projects: There are a set number of F&A rates based upon a matrix of project
location (campus), project function (instruction, research, other sponsored programs), and on
or off campus. There can be a set number of bases (MTDC, TDC, Salaries & wages, certain
agency-specific bases). However, the F&A cost sharing, and net F&A rate could be almost
totally project-specific. For example, an award document could specify UTK, research, oncampus with an MTDC base. The F&A cost sharing could be 50% for a net F&A recovery of
50% MTDC. The next project could be exactly the first except the F&A cost sharing could be
29.4528% for a net F&A recovery of 70.4472% MTDC.
There could be some standard templates where F&A cost sharing is zero or where there is a
common sponsor F&A cost sharing requirement. For example, NSF requires a mandatory
1% cost share on all projects.
Loans: N/A
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CI Template:
Map existing ledger accounts to projects (WBS element structures) and attach to related
fund.
Project Definition
The project definition is the binding framework for all organizational elements within a
project. You can also define non-binding start and finish dates for the project.
When you create a work breakdown structure, the corresponding project definition is
created automatically.
In the project definition, you can maintain default values for a project such as the
settlement rule. The default values are copied for new WBS elements that you create for
this project
Work Breakdown Structure
One of the first steps in project planning is to break down the work into tasks and set up a
hierarchy.
The criteria you use to classify and divide tasks vary depending on the type and
complexity of the project.
In the Project System, you can plan the organization of the work and people in your
project with the work breakdown structure (WBS).
A work breakdown structure (WBS) is a model of the work to be performed in a project
organized in a hierarchical structure. The WBS is an important tool that helps you keep
an overview of the project:
It forms the basis for organization and coordination in the project.
It shows the amount of work, the time required, and the costs involved in the
project.
The work breakdown structure is the operative basis for the further steps in project
planning, for example, cost planning, scheduling, capacity planning as well as project
controlling.
The project structure can be represented according to different criteria:
Phases (logic-oriented)
By function (function-oriented)
By object (object-oriented)
In a work breakdown structure, you describe the individual tasks and activities in the
project as individual elements in a hierarchy.
Depending on the phase of your project, you continue to break down the tasks and
activities in your project, step-by-step, until you reach the level of detail necessary to
carry it out.
WBS Elements
The individual elements represent activities within the work breakdown structure. The
elements are called work breakdown structure elements (WBS elements) in the
Project System. WBS elements can be:
Tasks
Partial tasks which are subdivided further
Work packages
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Initially structures will be created /mapped only from existing restricted accounts. A, I, &
E ledger accounts will be mapped to cost centers in CO (current unrestricted funds). In
the future structures can be defined as needed. The current UT ledger accounts for
restricted funds types (R, B, D, K, H, J, K, N, P, F, G) in PS as follows:
Grants & Contracts, Gift, and Appropriation/Chairs: Currently R&B ledger accounts. In PS
the B (balance) will be the project definition and level 1 WBS element, the R's (expense)
will be the level 2's and in the future can be broken down into more detail - example L3's.
The project definition and the Level 1 WBS element will be the B account number. After
the conversion the level 1 will be blocked from posting (no acct assignment). The Rs will
be level 2's below. For 95% of these funds there is only 1 B for many R's. In 5% of the
cases (about 20 projects?), there are several B's (tied together by the base grant # on
each B). For conversion, the project structure will be determined initially by the base
grant number. This number reveals the number of B's for a given fund. 95% of the time
there will be only one B account. Under each B the respective R accounts will be linked.
75% of the time a B account only has one R associated with it. A typical structure for a
121 fund (restricted) will be:
SAP
project definition
project definition description
WBS L1
WBS L2
UT
B01999694
NPS 1443CA54609800-AQUA-SMOOT
B01999694
R01133436
Note: The B, P, and H accounts are the balance accounts (99) and act as parents to the
R, N, J accounts.
When there is more than 1 B the structure will be as follows:
L1: dummy
L2: multiple B's
L3: respective R's for each B
Agency: Currently N&P ledger accounts. In PS the P will be the project definition and
level 1 WBS element, the Ns will be the level 2's.
Plant (invested): Currently M ledger accounts. In PS these accounts will be just G/L
accounts not projects since there are no revenues or expenses although they are a
restricted fund.
Plant (renewal, ROI): Currently K ledger accounts. In PS these will have a very simple
structure - just 1 WBS element with the project definition of the same name.
Plant (unexpended): Currently H ledger accounts. In PS the H will be the project
definition and level 1 WBS element, the Js will be the level 2's. We will start with a simple
WBS, i.e. one project, one asset under construction (AUC). Possible more detailed
structures will develop, or we can always have a manual settlement monthly.
Life income: Currently G ledger accounts. In PS these will have a very simple structure just 1 WBS element with the project definition of the same name.
Endowments: Currently F ledger accounts. In PS these will have a very simple structure just 1 WBS element with the project definition of the same name.
Loan funds: Current multiple D accounts for revenues and expenses will go to 1 D WBS
element in R/3. For example, the project definition could be D01000053, which will be the
same name as the only level 1 WBS element for scalability purposes.
Note: only the '99' life income, endowment, and loan accounts will be converted to
projects. For example, the life income account G99990024 William Bowld Trust will
become a project of the same name. However G99040058 Pooled Income Fund will
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become an asset account on the balance sheet (these are stocks, bonds, etc). Only the
99 accounts have the revenues and expenses.
4. Business Model
Project Definition in Green (top)
WBS Structure in Purple
B01999694
L1 WBS
B01999694
Level 2
WBS
L 2 WBS
R01133436
Level 2
WBS

For initial data load, values from the balance accounts will be posted to the L1 WBS
elements. After Go Live (and month end close) the Balance accounts will not be posted
to since the revenues and expenses will occur on the L2 R account (under the
appropriate B account).

PS has not been designed specifically for public sector (in fact SAP is creating a public
sector module currently). In order to meet the requirements for the University PS needs
to be enhanced to accommodate the mapping of fund attributes into the project. Below,
in 'Approaches to Covering Functional Deficits' is a summary of where these attributes
will map to in PS.
Two all day workshops were held to map UT's existing fund attributes into R/3. Below is a
summary of where these attributes will map to in PS - primarily on the WBS elements. In
addition, approximately 15 new fields will need to be created to accommodate the
requirement. Another meeting is scheduled to review the need for any *new* (non
existing) UT attributes. This information will be available on the project structure and may
be included in some customize reports UT ABAPers can create.
PS
FM
SD
Revisit
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EXISTING UT ATTRIBUTE
SFNLACCT-RECORDING-ACCOUNT-NO
SFNLACCT-ACCOUNT-NAME
SFNLACCT-CAT-FED-DOM-ASST
SFNLACCT-ACCT-ACTIV-FLAG
SFNLACCT-POST-CONTROL
SFNLACCT-RELATED-BAL-ACCT
SFNLACCT-EXPEND-FUNCTION
SFNLACCT-STAFF-BENEFITS-FLAG
SFNLACCT-STUDENT-AID
SFNLACCT-LONG-ACCOUNT-NAME
SFNLACCT-LOAN-FUND-CATEGORY
SFNLACCT-AGENCY
SFNLACCT-COSTSHAR-EXP-ACCT
SFNLACCT-INDIR-COST-INC-ACCT
SFNGRANT-PRINC-INVESTIGATOR-ID.
SFNGRANT-PRINC-INVESTIGATOR
SFNGRANT-FISCAL-PERIOD-BEG.
SFNGRANT-FISCAL-PERIOD-END.
04 SFNGRANT-EXCLUDED-OBJ-CODE1
SFNGRANT-OFF-CAMPUS-PERCENT
SFNGRANT-MONTHLY-IND-COST-AMT
SFNGRANT-MONTHLY-COSTSHAR-AMT
SFNGRANT-PROP-REV-ID.
SFNGRANT-ADVANCE-ACCOUNT
SFNGRANT-OVERHEAD-PERCENT
SFNGRANT-IC-CS-PERCENT
SFNGRANT-UT-COSTSHAR-PERCENT
SFNGRANT-OVERHEAD-CALC
05 SFNGRANT-SUPPORT-TYPE
05 SFNGRANT-EQUIPMENT-TITLE
SFNGRANT-WORK-LOCATION
SFNGRANT-UT-COSTSHAR-AMOUNT
SFNGPGNT-GRANT-ENDING-DATE.
04 SFNGPGNT-AGENCY-NAME
04 SFNGPGNT-AGENCY-OFFICE
SFNGREXP-PROJECT-TITLE
unrestricted or restricted fund
SFNGISET-INVOICE-REPORT-TYPE
SFNLACCT-AG-FUNDING-SOURCE
SFNGISET-AWARD-NO
REQ'D R3? MODULE NEW PS Field?
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS
PS / CO
PS / SD
MAP TO IN R/3

In addition, if necessary we can group WBS elements (not necessarily from the same
structures) for reporting purposes.
1. Consider not having only one root clicked on in the project profile. Consider Loan: D
(multiple D accounts for revenues and expenses will go to 1 D WBS element: PD will be
D123456 which will be the same as the only level 1 WBS element). What if there is a
need in the future to create another D account for this project? This structure is not very
scalable:
PD: D12345
L1: D12345
No
WBS EL2: R, N, D, J
B, D, H,
No
PD & WBS short Description fields (36 ch
Yes
WBS EL2 fields & below
Size of f
No
status field - all WBS levels
No
status field - all WBS levels
No
maps to wbs structure (this tells which B g
TBD
Use priority field in PS for 13 functional ar
Yes
New field in PS on WBS elementsYes /no
Yes
New field in PS (grant type) - UserEx:
Defined
emp
TBD
50 characters goes to TBD text field (long
TBD
Need field for 'funding category' (ex institu
Yes
reporting sponsor type (fed, state, loc, priv
No
settlement cost center
No
On costing sheet
credit sid
Yes
new field in PS called PI
use ssn
No
name will be next to employee id. Same n
No
project start date
No
project end date
No
indirect cost process TBD (transfer betwe
Yes
new field to inform project creator which c
No
use long text to capture cost sharing requ
No
use long text to capture cost sharing requ
Yes
new field on lowest level wbs element for
Yes (radio UDF?)
Use FM start date and PS field forauthority
info pu
No
Map rate to overhead key in cost sheet
No
indirect
No
use long text to capture cost sharing
Direct
requ
C
Yes
map to base to select costing sheet
F&A Bas
No
Award type: grant, cooperative agreement
Yes
ASK VERNA needed for asset master rec
Yes
doesn't map to overhead key easily
on camp
No
cost sharing amount maps to settlement
descript
No
maps to ending date wbs
Yes
new field on wbs which maps to customer
Yes
new field on wbs which maps to customer
No
map to WBS long text
40 char
Yes
Yes
I or R plus new ones to indicate which fina
No
Conversion: group WBS accountsex: smith
No
long description on WBS element or SO?
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L2: DBut if I allow more than one root then:

PD: D12345
L1: D12345
L1: D-
2. Consider using PS user defined fields for the most common new attributes (PI,
accountant, campus, etc) so that structure reports can be easily utilized. What is the
impact with new fields to standard reports -- can Michelle add them to the report table?

See project initiation section above.
3.2.2.
Revenue Planning
Questions:
Q: 1) Do you have revenues assigned to your project? (If yes, remember that WBS
elements are the only project objects to which revenues can be assigned.)
A: PS-WBS Planning - Revenue basic info.
Do you want to do revenue planning on WBS elements?
Yes, for program income only. Recoveries will be planned under expenditures
Do you want to do structure level revenue planning on WBS elements?
No
Centers/Chairs: No
Some of the other types of restricted accounts may use revenue planning.
Do you want to use several versions for revenue planning?
Yes, possibly 16 (12 +4) but we'll start with one for now.
Do you want to do revenue element planning on WBS elements?
Yes
How many revenue elements will we have?
Approximately 15 CE revenue elements (grants & contract state, local, federal.)
Sponsored projects: Some sponsored projects may be interested in doing revenue planning.
For example, in the Institute for Public Service, a large percentage of their sponsored projects
include program income.
Agency funds: Yes, agency funds have revenues. No, agency funds probably do not need
revenue planning.
Other Restricted: We may want revenue planning on WBS elements for some types of other
restricted. We need actual scenarios and examples to work through the system to analyze
how and if structure level revenue planning will be done. However, we believe we do
revenue planning; we will want to use several versions.
We want to do revenue element planning on WBS elements and we believe we will have 50
revenue elements.
Loans: probably not.
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Endowments/Trusts: We post revenues, but we do no planning of revenue.
Q: 2) Do you plan on using Sales & Distribution (SD) to track customer quotations, orders,
and invoices related to projects? (If yes, consider revenue plan integration between Project
System and SD.)
A: Sponsored projects and agency funds: Yes, we plan to use SD to generate invoices
related to projects and post to A/R. There may be some projects that are not billed through
SD, but where invoices are generated manually by departments and posted directly to A/R.
Gifts: Same as sponsored projects. Billing is rare, but possible, with gift accounts.
Centers/Chairs: No
Endowments & Life Income: No
Loans: No.
Q: 3) Do you determine the revenues for your project without using sales documents? (If
yes, consider using hierarchical planning.)
A: Sponsored projects and agency funds: Yes, fairly frequently. We have many sponsors
that we do not ever have to send a bill. They either pay us up front or on a payment
schedule.
ISSUE: Revenue recognition will need to be made for these payments. How will we do that?
My understanding is that R/3 recognizes revenue in the G/L when billing occurs. No billing
will occur, but we need to recognize revenue. UT currently recognizes revenue as
expenditures are made. We will need to have a year-end report which shows us how much
revenue we have recognized in advance and how much we need to recognize additionally.
This will be required to make a journal entry for financial statement purposes.
Perhaps every project should have an attribute of revenue recognition rule and billing type.
With these two attributes, a year-end query could be made to quantify the required journal
entries. For example, where billing type = cost reimbursement and the revenue recognition
rule = by expenditure, then UT has understated revenue at year-end. If billing type =
payment schedule and the revenue recognition rule = by expenditure, then UT has overstated
revenue at year-end.
Gifts: For gifts, UT currently recognizes revenue at the time of expenditure. No billing
usually occurs. Instead, cash receipts or internal distributions are made. How will R/3
recognize revenues on these projects? Also, the GASB rules for revenue recognition of gifts
are changing. UT may be required to recognize revenue on some gifts at the time of the
pledge. How will we handle all of these revenue recognition scenarios?
Centers/Chairs: Yes
Loans: Additions to loan funds are gifts, interest on notes, endowment income, investment
income and transfers.
Endowments/Trusts: Do not use sales documents.
Q: 4) Do you plan revenues when analyzing the profit margin for a project? (If yes, consider
settling the plan values to Profitability Analysis (CO-PA) to analyze profits and profit margins
there.)
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A: Sponsored projects: It is possible. As noted in other questions, UT IPS (i.e. Becky

Peterson) has projects with extensive program income and revenues generated from other
sources. Sometimes these revenues are 3 times the amount received from the sponsor. It
seems likely that revenue planning could be an important function for these project
managers.
Agency funds: No
Centers/Chairs: No
Loans: N/A
CI Template:
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3.2.2.1.
Revenue Planning in Work Breakdown Structure
Questions:
Q: 1) Do the revenues from SD represent all revenues for the project? (If no, consider doing
detailed revenue planning by billing plan assigned to WBS-element.)
A: Sponsored projects and agency funds: As noted in previous questions, SD does NOT
represent all revenues for the project. Some projects will have a combination of revenues
from various sources - some from SD and some not. For example, a sponsor may send us
the first quarterly payment with the signed award without waiting for an invoice to be sent.
However, the next 3 quarterly payments might require invoicing by UT.
For Helmet testing and many other projects, revenues will go directly thru AR not SD.
Gifts: SD will not normally be used.
Centers/Chairs: SD will not be used.
Loans: No
Endowments/Trusts: N/A Endowments and Trusts do not plan.
Q: 2) Do you manage the revenue for projects at a summary level on the projects? (If yes,
consider making the top WBS element a billing element.)
A: Sponsored projects and agency funds: Revenue and billing may occur at detailed WBS
element levels or at a summarized level. We need the flexibility to do various methods and
alternatives.
Centers/Chairs: Yes
Loans: For loans, revenues are additions to the fund. They are dependent on the loans
repaid (interest), gifts received, and income earned. This is accumulated for each loan fund.
Endowments/Trusts: Revenues are collected individually on each endowment and trust. In
addition, funds are invested in a Consolidated Pool account. There are no billing elements
for Endowments/Trusts.
Q: 3) How do you plan revenues? (Consider planning yearly, by period, by revenue

element, hierarchically by WBS element, billing plan, and so on.)
A: [X] By account/cost element
[X] By WBS
[X] Overall values
[X] Annual
[X] By period
[X] By billing plan
Q: 4) Do you plan revenues as of particular dates and do you plan down payments at the
same time? (If yes, use the billing plan assigned to the WBS element, particular if SD is not
linked to the project)
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A: Sponsored projects and agency funds: It seems likely that we would need to plan
revenues as of particular dates. We aren't planning to have "down payments". Again, cash
receipts may or may not result from an SD billing.
Centers/Chairs: N/A
Loans: N/A
Endowments/Trusts: N/A
Q: 5) How must you make reports on the revenue plans (Consider using CO-PA or the
standard information system in PS.)?
A: Sponsored projects and agency funds: Since UT currently doesn't have planning
capability, any planning is done manually or using DMS. I do not know what kind of reports
might be needed. R/3 basic reports may be sufficient.
Centers/Chairs: N/A
Loans: N/A
CI Template:
Ability to plan revenue on revenue cost elements for projects.
Eliminate the need for DMS revenue planning system.
Revenue planning deals with the revenues you expect to receive in connection with your
project as it is executed.
In the Project System, you can use the following planning methods:
Manual revenue planning
By work breakdown structure
By revenue element
Automatic update of revenue plan values from the billing plan:
In WBS elements
In sales orders
WBS elements in which you want to plan revenues must be flagged as billing elements
(Operative Indicators)
You plan revenues in hierarchical planning, by revenue element, with a plus sign ("+").
All the functions of manual cost planning are also available for manual revenue planning.
For more information on planning technique, see Cost Planning.
Belinda Carter (Business Manager) explained a need to plan revenues for some of her
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accounts (Not G&C). Currently a few folks are planning revenue in DMS planning by
ledger activity codes and could plan in R/3 in the future. She said she actually uses
codes for her own descriptions since DMS does not flow into our current system. For
instance, she may plan for different sources of revenue in a gift account. She may be
getting gifts at different times of the year. For instance, she might get a donation for 5
years in the month of January from one company, and another donation at a different
time and then money from third, fourth, etc. different source (such as the E account??
that she will receive at other times of the year).
The ledger activity codes listed below (in the cost planning section) include the current
revenue cost elements. There is only a small list of revenue cost elements and most
planning of revenue would be the stated award amounts. It would only be a small
number of accounts such as gifts that would have odd amounts of revenue planning.

The organization could have a standard process to plan revenue if this functionality is
necessary.
It will be an improvement to plan revenue on the true accounts rather than by DMS sub
accounts or manual spreadsheets.

A deficit of revenue planning is not being able to control revenue planning reports by
profit center, which is how we will control cost plans. See authorization and user roles
(#12 below). If access is given to a PS cost report, Planned Revenues Vs. Actual info
can be seen for ANY project if a user has access to a given report. Since profit center is
not an authorization object another solution will need to be determined since UT's
requirement is to not allow one PI to see another PI's planned revenue vs. actuals.
MARY, IS THIS TRUE??
Shelia McNeal is looking into possible ways to secure PS cost planning reports.

Revenue planning can now be standardized into R/3 in the future.

Revenue Elements need to be reviewed and determined by UT.
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Create / Change / Display revenue plans in PS: If UT decides to do revenue planning

(currently less than 10% of restricted funds are revenue planned in DMS) the process will
be decentralized. Authorization will be controlled by transaction and profit center.
Currently 98% of the bookkeepers can see another bookkeepers projects but in some
cases it is not acceptable for bookkeepers to be able to see another bookkeepers plans.
In this situation, security will be tightened by creating profit centers down to the PI level
(sub department level).
3.2.3.
Cost Planning
Questions:
Q: 1) Do you track costs for your projects? (If yes, consider using WBS elements and/or
networks.)
A: Costs are tracked. For example some of the largest projects are:
Grants & Contracts:
Ag:
$4 million for 1 year over 95 counties
Ag:
$8 million for 1 year, cooperative agreements
Memphis: $13 million over 6 years
UTSI:
$1 million for 1 year
Sponsored projects and agency funds: Yes, we must track costs for all WBS element levels.
Centers/Chairs: Yes. Some of the smallest G&C projects are approx $1,000. How many??
Other Restricted: We track costs and we want to plan costs for some of the other restricted
accounts.
Gifts: Yes we track all activity.
Loans: Yes we track all activity. Deductions from loan funds are collection expense, bad debt
expense (which include some cancellations) and other deductions (which include some
cancellations).
Endowments/Trusts: We track costs but do not want to plan costs.
Q: 3) Do you plan costs by period and distribute these costs according to the project
schedule? (If yes, consider using networks for planning.)
A: Sponsored projects and agency funds: We plan project costs based on the project
schedule. Normally, the project time period equals the project cost plan time period.
For some projects that are incrementally funded by the sponsor, we may have a five-year
project approved for $1 million per year (total of $5 million). However, the sponsor may only
actually give us legal funding authorization for the first year. So we would only plan cost and
incur costs for the first year that is all that is legally committed. When we receive the funding
authorization document to release the second year increment, we would then plan costs and
incur costs for that period.
Centers/Chairs: same as G&C
Loans: N/A
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Q: 4) Do you do carry out integrated cost planning with cost centers? (If yes, consider using
WBS elements for planning.)
A: Sponsored projects and agency funds: Perhaps. This would be done at the
departmental level by bookkeepers and de-centralized business offices.
ISSUE: Currently, departments have the capability, through DMS sub accounts and 5-digit
object code extensions, to segregate certain E account unrestricted cost center activities.
For example, Don Reed's transportation center E account has approximately 125 sub
accounts for various training seminars that are conducted throughout the year. The
departments may use part of their E account funding and receive outside revenues to support
the sub-account activities. The departments want to be able to evaluate the sub account
activity by segregating the revenues and expenses from the rest of the cost center's activities.
These seminars are normally short-term: from 2 weeks to 12 months.
The issue is how to handle unrestricted projects in R/3. If we use the project system, we
need a good method of segregating these projects from restricted projects (Project Type
attribute?). Also, the department needs a good method of including these projects in
reporting for the cost center.
Centers/Chairs: Yes
Loans: N/A
Q:
5) Describe how you plan costs currently.
A: Sponsored projects and agency funds: UT does not currently have electronic planning
capability. Any planning is done manually or on shadow systems.
Centers/Chairs: Planning is done through budgets and in the DMS system.
Loans: N/A
Q:
6) Who is responsible for each step in cost planning today?
A: Sponsored projects and agency funds: The PI or departmental business officer is most
likely to be responsible for planning, if it is done.
Centers/Chairs: The PI or Business Officer
Loans: N/A
Q:
7) Do you plan costs in an external system?
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A: Sponsored projects and agency funds: UT does not currently have electronic planning
capability. Any planning is done manually or on shadow systems.
Centers/Chairs: Yes, the DMS system
Loans: No
Q: 8) Do you plan in the same objects where you expect actual costs and in the same
degree of detail in which you expect actual costs?
A: Sponsored projects and agency funds: yes
Gifts: yes
Centers/Chairs: Yes
Loans: N/A
CI Template:
4. Business Model
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3.2.3.1.
Cost Planning in Work Breakdown Structure
Questions:
Q: 1) How do you plan costs? (Consider whether you plan by cost element, WBS, overall,
annually, by period, and so on.)
A: Grants & Contracts: Typical cost planning is a departmental process, done at the object
code level or the position level. It is done on a monthly basis to determine how much money
is available. Currently this is done in departmental systems. The people involved in it are the
bookkeepers and PIs. Cost Element planning by period will be used. The cost element
groups will be based on the two-digit object code (47), the three-digit object code (approx
150), and the six budget categories. Activity input planning may be a requirement but initially
the demand is for less than 10 work centers. All cost planning will be both annually and
overall period for the life of the fund.
Other Restricted: Enter particular amounts per year by object code or total and by period so
cost element planning will be used. The option to also plan at the structure level will be
allowed. CE planning will be at the 3-digit object code level, but it may be a "summary" 3digit object code that is the same as our now 2-digit object code level. CE groups need to be
defined. Unit cost planning is not an initial requirement. All cost planning will be both
annually and overall period for the life of the fund.
Loans: N/A
We may want structure level planning if applicable, and we want cost element planning as
indicated above.
We do not expect to do unit cost planning on the WBS or do standard costing using internal
services, but further study will be made.
Endowments/Trusts: N/A Endowments and Trusts do not have Budgets or Plans.
Q: 2) Do you do top-down or bottom-up cost planning? (Top down: Consider using the WBS
only for cost planning. Bottom up: Consider using network activities only for cost planning.)
A: Grants & Contracts: Cost planning will be done both top down and bottom up.
Other Restricted: If applicable, cost planning will be done both top down and bottom up.
Loans: N/A
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Q: 4) Do you keep monthly versions of your cost plans? (If yes, consider using project
snapshot versions to allow for comparative reporting.)
A: Grants & Contracts: Initial discussion was to have 16 (12 regular periods + 4 special
periods) for each year of the grant life) for bookkeepers but initially we will have one or two to
compare a baseline version to current plan. If necessary the system will allow the
bookkeepers to create and maintain many more versions (999) if needed.
Other Restricted: Likely one or two to compare a baseline version to current plan, but the
system will allow more versions (999) if needed. Should be the same number of versions as
grants & contracts.
Loans: N/A
Q: 5) Do you keep different versions or snapshots of your plans? (If yes, consider using
different CO versions for tracking the different plan versions.)
A: See answer above. Depending on volume either snapshot or CO plan versions will be
used. There should be one plan that is always equal to the official budget if users will have
access to any plan to actual reports.
Q: 7) Do you estimate a project based on standard estimates and do you need to separate
cost planning from time scheduling? (If yes, consider using base object costing in conjunction
with CO versions.)
A: Sponsored projects and agency funds: I don't think we need this.
Centers/Chairs: N/A
Loans: A
Q: 8) Do you track changes to plans? (If yes, consider configuring change documents for
your plan line items.)
A: Sponsored projects and agency funds: As noted in previous questions, one version of
the plan should equal the approved budget if users will have access to plan vs. actual
reports.
Centers/Chairs: N/A
Loans: N/A
253 of 670
Q: 9) Do you need to do detailed analysis of the plan (plan line items)? (If yes, consider
using plan line item reporting in the information system.)
A: Standard CE reports will be utilized in the PS system.
Centers/Chairs: standard reports
Loans: N/A
CI Template:
Allow PS cost planning for projects to eliminate current DMS shadow system for cost
planning:
Cost planning functionality may be used by Grants and Contracts,
appropriations/chairs/centers, and agency (Gail).
Cost planning is not required for: Loans, agency (Verna), plant, endowments, or
life income.
Cost planning would be at the cost element level (historically the 3 digit object
code level ex: 121 longevity pay, 122 extra service pay) but some clean up of the
codes is required (ex: stores for resale). The CE group is one that can be
centrally used by all funds. These object codes (about 150) can be summarized
at the 2 digit level (ex: 12 salary)
To plan for F&A a value will be keyed in for this CE. We will not be planning
period end processes (for example indirect costs) with a special plan type with
rates etc.at this time.
Need to see costs planned periodically (by month).
Purpose of Cost Planning
You use this component if cost planning and controlling are the elements of project
processing which are most important to you.
You enter cost, activities, and business processes which you expect to occur as the
project is executed. You can use cost planning to compare plan and actual costs and
analyze variances.
Planning in More Than One Plan Version
The information available on a project changes as the planning phase progresses. This
sometimes makes cost planning in more than one version a good idea. This is also how
planning usually proceeds in everyday business. You can plan CO versions as you wish
in the system.
Cost Element Planning
Cost planning by cost element (detailed planning) is used when you have detailed
information available. In most cases, this is only possible when the project has reached
an advanced stage. Detailed planning is carried out yearly and covers cost-elementbased planning of Primary costs
Currently cost planning occurs in the DMS system (or manually) and is done for less than
10% of the restricted funds - gifts, agency (G&C), and grants & contracts). Current cost
planners are the College of Business, Aquatic Center, Chemistry Department, and
University-Wide Computing. A few of the grants and contracts cost plan currently.
254 of 670
Plant (unexpended only) - George could use cost planning for plant unexpended funds to
determine the impact of cost proposals changes before they are approved, etc. The
other types of plant funds will not require cost planning.
Endowments & Life Income, loan funds, and agency funds (Melissa, Verna) do not
currently require cost planning nor do they need to cost plan in the future.
Note that R/3 revenue elements map to UT's revenue ledger activity codes (003, 009,
010, 045 - indirect F&A for example) on the balance account and R/3 cost elements map
to UT's object codes on the expenditure accounts! Cost element and revenue element
groups will be created based on the list below by restricted fund type.
GRANTS AND CONTRACTS, GIFTS, AND AGENCY - UNIVERSITY DETAIL OBJECT
CODES (to be converted into Cost Elements)
This is a University defined code used to classify in more detail than the University
primary object code the nature of costs incurred.
11 - ADMIN & PROFESSIONAL SALARIES
111 SALARIES
112 EXTRA SERVICE
114 LONGEVITY PAY
119 SALARY RECOVERIES
12 - ACADEMIC SALARIES
121 ACADEMIC SALARIES
122 ACADEMIC EXTRA SERVICE
124 LONGEVITY PAY
129 ACADEMIC RECOVERIES
13 - GTA, GA, GRA SALARIES
131 GTA, GA, GRA SALARIES
139 GTA, GA, GRA RECOVERIES
14 - STUDENT EMPLOYEES-SALARIED
141 STUDENT SALARIES
142 STUDENT SALARIES-OVERTIME
149 STUDENT SALARIES-RECOVERIES
15 - SUMMER SCHOOL
151 SUMMER SCHOOL SALARIES
159 SUMMER SCHOOL RECOVERIES
16 - CLERICAL & SUPPORTING-SALARIED
161 SALARIES
162 OVERTIME
164 LONGEVITY PAY
169 SALARY RECOVERIES
17 - CLERICAL & SUPPORTING-HOURLY
171 WAGES-HOURLY
172 OVERTIME-HOURLY
174 LONGEVITY PAY
179 RECOVERIES-HOURLY
18 - STUDENT EMPLOYEES - HOURLY
181 STUDENT WAGES-HOURLY
189 STUDENT WAGES-HRLY-RECOVERIES
19 - NON-WAGE & CONTRACTUAL PAY
192 OTHER NON-WAGE PAYMENTS
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193 EMPLOYEES MEAL AND LODGING

195 CONTRACTUAL PAY
199 NON-WAGE PAYMENT RECOVERIES
21 - STAFF BENEFITS-REQUIRED
31 - TRAVEL
311 TRAVEL IN STATE
312 TRAVEL OUT OF STATE
313 MTR VEH OPER-TRAVEL IN STATE
314 MTR VEH OPER-TRAVEL OUT STATE
319 TRAVEL RECOVERIES
32 - MOTOR VEHICLE OPERATIONS
321 MTR VEH OPER-LOCAL & TRUCKS
329 MTR VEH OPER RECOVERIES
33 - PRINTING, DUPLICATING, BINDING
331 PRINTING
332 DUPLICATING
333 BINDING
334 PUBLICATIONS AND REPORTS
339 PRNT, DUP, BINDING RECOVERIES
34 - UTILITIES AND FUEL
341 FUEL OIL
342 COAL
343 ELECTRICITY
344 GAS
345 WATER
346 GASOLINE & DIESEL
347 OTHER UTILITIES & FUEL
348 SEWAGE AND GARBAGE
349 UTILITY RECOVERIES
35 - COMMUNICATION
351 POSTAGE
352 FREIGHT
353 TELEPHONE
354 TELEGRAMS
355 TELECOMMUNICATIONS
359 COMMUNICATIONS RECOVERIES
36 - MAINTENANCE AND REPAIRS
361 MAINTENANCE & REPAIRS
362 SPECIALLY APROV DEFERRED MAINT
369 MAINT & REPAIRS RECOVERIES
37 - PROF SERV & MEMBERSHIPS
372 PUBLICITY
373 SUBSCRIPTIONS
374 INSTIT MEMBERSHIP FEES & DUES
375 LEGAL & PROFESSIONAL FEES
379 PROFESSIONAL SERV RECOVERIES
38 - COMPUTER SERVICES
381 COMPUTER SVCS-INTERNAL TO UNIV
382 COMPUTER SVCS-EXTERNAL TO UNIV
389 COMPUTER SERVICE RECOVERIES
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39 - SUPPLIES
391 OPERATING SUPPLIES
392 COMPUTER SOFTWARE
393 LABORATORY SUPPLIES
399 SUPPLY RECOVERIES
41 - RENTALS
411 RENTALS-COPYING MACHINES
412 RENTALS-COMPUTER EQUIPMENT
413 RENTALS-REAL PROPERTY
414 RENTALS-OTHER
419 RENTAL RECOVERIES
42 - INSURANCE, INTEREST & BAD DEBT
421 INSURANCE
422 INTEREST-INSTAL/LEASE PURCHASE
423 INTEREST-PROMPT PAY ACT
424 AUTOMOBILE LOSS LIABILITY
425 WORKERS COMPENSATION LIABILITY
426 BAD DEBT EXPENSE
429 INSURANCE & INTEREST RECOVERIES
43 - AWARDS
431 AWARDS-STUDENT AID & STIPENDS
432 AWARDS-FACULTY & OTHER
439 AWARDS RECOVERIES
44 - GRANTS AND SUBSIDIES
441 STUDENT FEES
442 HOSPITALIZATIONS (GRANTS ONLY)
443 ALTERATIONS (GRANTS ONLY)
444 COST SHARING
449 GRANTS & SUBSIDIES RECOVERIES
45 - MANDATORY TRANSFERS
451 INTEREST
452 DEBT RETIREMENT
46 - CONTRACTUAL & SPECIAL SERVICES
461 CASUAL LABOR
462 GROUP ARRANGED FOOD & LODGING
463 CULTURAL OR ENTERTAINMENT FEES
464 OTHER EDUC OR GOV AGENCIES
465 SPECIAL COMMERCIAL SERVICES
466 OTHER UNIVERSITY DEPARTMENTS
467 OTHER PERSONAL SERVICES
468 SEMINAR & CONF REGISTRA FEES
469 CONTRACTUAL SER RECOVERIES
49 - OTHER EXPENDITURES
491 OTHER EXPENDITURES
499 OTHER RECOVERIES
50 - STORES FOR RESALE
501 STORES FOR RESALE 01
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509 STORES FOR RESALE 09-RECOVERY
61 - EQUIPMENT
611 FURNITURE & OFFICE EQUIPMENT
612 EDUC & SCIENTIFIC EQUIPMENT
613 MACHINERY
618 EQUIPMENT INSTALLMENT PURCHASES
619 EQUIPMENT RECOVERIES
62 - MINOR EQUIPMENT
621 MINOR EQUIPMENT (NON-CAPITAL)
629 MINOR EQUIPMENT RECOVERIES
63 - LIBRARY ACQUISITIONS
631 LIBRARY ACQUISITIONS
632 LIBRARY BINDINGS
639 LIBRARY BOOKS RECOVERIES
64 - LIVESTOCK
641 LIVESTOCK
649 LIVESTOCK RECOVERIES
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74 - DEPRECIATION
741 DEPRECIATION EXPENSE
742 ALLOWANCE FOR DEPRECIATION
81 - SUBGRT & SUBCNT TO $25,000
811 SUBGRT & SUBCNT TO $25,000
82 - SUBGRT & SUBCNT OVER $25,000
821 SUBGRT & SUBCNT OVER $25,000
83 - SALES TAX
831 SALES TAX
FOR USE BY RESTRICTED ACCOUNTS ONLY
NOTE: THERE IS A QUESTION ON HOW MANY OF THE STORES FOR RESALE
OBJECT CODES WILL BE USED. CLEAN UP REQUIRED.
Plant Renewal & Plant ROI ONLY (H & K ACCOUNTS) - LEDGER ACTIVITY CODES
Since planning is not as detailed for plant funds the following cost elements will be used
and grouped for cost planning on plant funds. LEDGER ACTIVITY CODES ARE USED
TO CLASSIFY THE TYPE OF DEBIT OR CREDIT ACTIVITY OCCURRING ON A
BALANCE ACCOUNT.
003
006
007
011
012
013
014
015
016
017
019
020
021
051
052
053
054
056
057
061
099
GIFTS, GRANTS & BEQUESTS-RECEIPTS

INCOME ON INVESTED FUNDS
GAINS (LOSSES) ON INVESTMENTS
TRANSFERS CURRENT GENERAL FDS
STATE APPROPRIATIONS
FEDERAL APPROPRIATIONS
AUTHORIZED BOND & NOTE ISSUES
AUXILIARY ENTERPRISE OPER
PRINCIPAL PAYMENTS
INTEREST PAYMENTS
APPROPRIATIONS-PLANT FUNDS
INTEREST ON RESERVE FUNDS
TRANSFERS UNEXPENDED PLANT FDS
TRANSFERS CURRENT AUX FUNDS
TRANSFERS CURRENT HOSP FUNDS
TRANSFERS LOAN FUNDS
TRANSFERS ENDOWMENT FUNDS
TRANSFERS INDEBTEDNESS FUNDS
TRANSFERS CURRENT RESTR E & G
TRANSFERS RENEWAL-REPLACEMENT
OTHER LEDGER ACTIVITIES
Plant Unexpended Expenditure (J Accounts ONLY) - UNIVERSITY DETAIL OBJECT

CODES
This is a University defined code used to classify in more detail than the University
primary object code the nature of costs incurred. These accounts will become cost
elements in R/3.
91 - LAND-PLANT FUNDS
911 LAND-PLANT FUNDS
92 - BUILDINGS-PLANT FUNDS
921 CONSTRUCTION CONTRACT-PRIME
922 ARCHITECT FEES
923 ENGINEERING & INSPECTION FEES
924 SPECIAL CONTRACTUAL WORK
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925 FIXED EQUIPMENT

926 MISC EXPENSE (ADV, INSUR, TAXES)
927 ALLOCATED COST PURCH PROPERTY
93 - EQUIPMENT-PLANT FUNDS
931 FURN & MOVEABLE EQUIP-TAGGED
932 FURN & MOVEABLE EQUIP-MINOR
94 - OTHER CAPITAL IMPROVEMENTS
941 OTHER CAPITAL IMPROVEMENTS
942 SOFTWARE
95 - NON-CAPITAL OUTLAY ITEMS
951 NON-CAPITAL OUTLAY ITEMS
96 - OTHER PLANT FUND EXPENDITURES
961 OTHER PLANT FUND EXPENDITURES
962 UNALLOCATED BUDGET
Life Income and Agency/Trust (G's and some P Accounts ONLY) -LEDGER
ACTIVITY CODES
LEDGER ACTIVITY CODES ARE USED TO CLASSIFY THE TYPE OF DEBIT OR
CREDIT ACTIVITY OCCURRING ON A BALANCE ACCOUNT.
001 ENDOW INCOME-UT ENDOWMENTS (used for life income)
003 GIFTS, GRANTS & BEQUESTS-RECEIPTS
006 INCOME ON INVESTED FUNDS (used for agency funds)
007 GAINS (LOSSES) ON INVESTMENTS
018 PAYMENTS FROM TRUSTS (these are the beneficiary payments)
099 OTHER LEDGER ACTIVITIES (these are miscellaneous chares, and real
estate estimated income for agency funds)
ARE USED TO CLASSIFY THE TYPE OF DEBIT OR CREDIT ACTIVITY OCCURRING
ON A BALANCE ACCOUNT.
ENDOWMENTS (F ACCOUNTS)
LEDGER ACTIVITY CODES ARE USED TO CLASSIFY THE TYPE OF DEBIT OR
CREDIT ACTIVITY OCCURRING ON A BALANCE ACCOUNT.
001
002
003
004
006
007
011
021
051
052
053
054
055
056
057
058
059
060
061
ENDOW INCOME-UT ENDOWMENTS

ENDOW INCOME-OUTSIDE TRUSTEES
GIFTS, GRANTS & BEQUESTS-RECEIPTS
GIFTS, GRANTS & BEQUESTS-REFUNDS
INCOME ON INVESTED FUNDS
GAINS (LOSSES) ON INVESTMENTS
TRANSFERS CURRENT GENERAL FDS
TRANSFERS UNEXPENDED PLANT FDS
TRANSFERS CURRENT AUX FUNDS
TRANSFERS CURRENT HOSP FUNDS
TRANSFERS LOAN FUNDS
TRANSFERS ENDOWMENT FUNDS
TRANSFERS LIFE INCOME FUNDS
TRANSFERS INDEBTEDNESS FUNDS
TRANSFERS CURRENT RESTR E & G
TRANSFERS CURRENT RESTR AUX
TRANSFERS CURRENT RESTR HOSP
TRANSFERS AGENCY FUNDS
TRANSFERS RENEWAL-REPLACEMENT
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99
OTHER LEDGER ACTIVITIES
NOTE: BOLD indicates used on a monthly basis.

Italics indicate used at year-end.
4. Business Model
Grants & Contracts: An interface will be written from the pre-award system into FM but
we will not write an interface from the pre award system into planning in PS.

Note that cost planning is a current process, which is decentralized and not standard
across the board. Securing cost planning at a book keeper level will need to be
determined. See section on authorizations in cost planning (below).

Since the concept of cost planning (as opposed to budget) is new for UT this functionality
will need to be managed to ensure proper training. This may be functionality that UT
grows into using.
It is important to distinguish cost planning and revenue planning. Revenue planning is for
how you expect (or plan) to RECEIVE revenues and cost planning is how you will
SPEND the revenues (thus cost planning).
standardize the cost planning process (currently PIs all have different planning
processes)
eliminate the shadow system

A deficit of cost planning is not being able to control cost planning reports by profit center,
which is how we will control cost plans. See authorization and user roles (#12 below). If
access is given to a PS cost report, plan vs. actual information can be seen for ANY
project if a user has access to a given report. Since profit center is not an authorization
object another solution will need to be determined since UT's requirement is to not allow
one PI to see another PIs plan vs. actuals. MARY, IS THIS TRUE??

Shelia McNeil is looking into possible ways to secure PS cost planning reports.

There are approximately 50 sponsored funds primarily IPS (Institute for Public Service)
which have program income (excluding Memphis, which may have more). Cost planning
could be used to plan how monies can be spent. For example, a fund could start with
100k in funding and gain 10k in conference registration fees. Depending on the
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sponsors restrictions, the fund could now have $100,000 to plan spending for or, if you
are able to keep this income, then $110,000. Therefore, UT can plan cost spending for
different scenarios ($90,000, $100,000, $110,000). Planning is a non-binding tool that
allows you to play out possible scenarios for spending. It is not the same as a budget
that is binding.
Manual Cost Planning in WBS Notes:
Cost element level planning required. Cost Elements need to be reviewed and
cost element groups determined by UT.
Annual and overall planning will be allowed.
5 years in the past and 5 years into the future.
Configuration: Create/Change Plan Profile
In this step, you create new plan profiles or change existing plan profiles.
To be able to carry out project cost planning, you must create a plan profile or use an
existing one.
The following settings are relevant to project cost planning:
Planning in all WBS elements or only in planning elements
Bottom-up planning within structure-oriented planning
The indicator determines whether the bottom-up procedure is used in planning.
If you set the indicator, the system automatically carries out the "Total" function in
cost structure planning each time a save with check function is performed. The
superior WBS element receives the total of all the plan values in the WBS
elements below it as its plan value.
Time horizon
Here, you define the following:
Period into the past, from the start year, for which you can plan
Period into the future, from the start year, for which you can plan
Cost planning start year
Planning of overall and/or annual values
Value representation
Standard view displayed as well as the planned value when you access the
function
Decimal places and scaling factor as default values
Detail planning and unit costing
Here, you define default values for cost element planning, activity input planning,
and unit costing.
Create cost element groups
Primary costs
Revenues
For planning activity input:
Define cost center group
Create CO activities and activity groups
Create statistical key figures and key figure groups
For unit costing:
"Create costing variant"
Automatic revenue planning
Here, you stipulate whether plan revenues and, if required, plan payments from
sales and distribution documents assigned to the project are recorded in the
relevant billing element.
Action
1. Use "Detail" to check the plan profiles delivered as standard in the R/3 System.
2. Change the details as necessary in the plan profiles, or create new ones as
appropriate.
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Additional information
You have the following alternative ways of assigning a plan profile to a project:
As a default value in the Project System configuration menu
In the project profile for a project definition (Operative structures)
In the project profile for a standard project definition (Basic data)
In the Project System application menu
In the project definition control data, if you have not stored a plan profile in the
project profile. (In the area menu, choose Operative structures -> Work
breakdown structure -> Change -> Detail -> Control -> Plan profile).
Create / Change / Display cost plans in PS: If UT decides to do cost planning
(currently less than 10% of restricted funds are cost planned in DMS) the process will be
decentralized. Authorization will be controlled by transaction (CJ40 to create a cost plan
for example) and profit center. Currently 98% of the bookkeepers can see another
bookkeepers projects but in some cases it is not acceptable for bookkeepers to be able
to see another bookkeepers plans. In this situation, security will be tightened by creating
profit centers down to the PI level (sub department level). This design is beneficial
because professors will be able to see a summary of projects including E and I accounts
(cost centers). Below are the authorization objects R/3 checks for these transactions:
No check
No check
No check
No check
No check
No check
No check
Check/maintain
No check
Check/maintain
Check/maintain
Check/maintain
Check/maintain
Check/maintain
Check/maintain
Check
Check
Check
Check
Check
Check/maintain
C_AFKO_ACT Activities on network header level

C_AFKO_AWK CIM: Plant for order type of order
C_AFKO_DIS Network: MRP Group (Plant) and
Transaction Type
C_AFVG_APL PS: Work Center for Network Activities
and Activity Elements
C_AFVG_TYP PS: Activity types for network actual and
activity elements
C_PROJ_KOK PS: Controlling Area for Project
Definition
C_PROJ_PRC PS: Profit center for project definition
C_PROJ_TCD PS: Transaction-Specific Authorizations
in Project System
C_PROJ_VNR PS: Project Manager for Project
Definition
C_PRPS_ART PS: Project type authorization for WBS
elements
C_PRPS_KOK PS: Controlling Area Authorization for
WBS elements
C_PRPS_KST PS: Cost Center Authorization for
WBS elements
C_PRPS_PRC PS: Profit Center Authorization for
WBS elements
C_PRPS_USR PS: Model for User Field Authorization
for WBS elements
C_PRPS_VNR PS: Project Manager Authorization for
WBS elements (PI is a moving list)
F_BKPF_KOA Accounting Document: Authorization for
Account Types
K_CCA CO-CCA: Gen. Authorization Object for Cost
Center Accounting
K_CKBS CO-PC: Base Planning Objects
K_CSKB_PLA CO-CCA: Cost Element Planning
K_CSKS_SET CO-CCA: Cost Center Groups
K_KA09_KVS CO: Version
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Check
Check
Check
Check
Check
Check
Check
Check
Check
Check
Check
Check
3.2.4.
K_KEKO CO-PC: Product Costing

K_TKA50 CO: Planner Profiles???
S_CTS_ADMI Administration Functions in the Change
and Transport System
S_DATASET Authorization for File Access
S_DEVELOP ABAP Workbench
S_IMG_ACTV IMG: Authorization to Perform Functions
in IMG
S_OLE_CALL OLE Calls from ABAP Programs
S_PROGRAM ABAP: Program run checks
S_SCRP_TXT SAPScript: Standard text
S_SPO_DEV Spool: Device Authorizations
S_TABU_DIS Table Maintenance (via standard tools
such as SM30)
S_TCODE Authorization Check for Transaction Start
Planning Dates
Questions:
Q: 1) Do your projects involve extensive scheduling? (If yes, consider using network,
because WBS elements are not schedule.)
A: No, we are not using networks (or therefore scheduling). However the start and finish
date will be captured for reporting purposes on the project and maybe the WBS elements?
Sponsored projects and agency funds: No, there is not extensive scheduling for the technical
work of the projects. This will be handled manually, outside the system, by the PI or project
director. We will need to schedule start and end dates for each individual WBS element.
There is scheduling required for invoicing, financial reporting, and closeout.
Centers/Chairs: Only informally
The calendar required is:
University fiscal year calendar: 7/1 - 6/30, 16 periods (12 months and 4 for
adjustments)
'Factory' calendar - defer for HR integration workshop.
Loans: N/A
Endowments/Trusts: N/A. Ending date shown as 99/99
Q: 2) Is your project time limited? (If yes, consider using activity constraints to control this
during date planning.)
A: Sponsored projects and agency funds: Many projects are for a period of one-year.
However, the period of performance for projects is also often multi-year and may be as much
as 10 years or longer. Projects with multiple tasks may have tasks with very short time
frames (2 weeks to 2 months). Project periods are in no way related to UT's fiscal year
periods.
Gifts: Same as sponsored projects. Some gifts are not restricted by an ending date from the
sponsor. UT has started giving arbitrary ending dates (e.g. five years) that can be extended
over and over again. This was started to satisfy an internal audit finding that we shouldn't
use indefinite or open end-dates.
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Centers/Chairs: Project changes each fiscal year (7/1-6/30)

Other Restricted: Gift and endowment accounts are often perpetual. Other accounts are
limited to a specific timeframe from a few months to a number of years.
Loans: N/A
Q:
6) What is the average duration of your project?
A: Sponsored projects and agency funds: Many projects are for a period of one-year.
However, the period of performance for projects is also often multi-year and may be as much
as 10 years or longer. Projects with multiple tasks may have tasks with very short time
frames (2 weeks to 2 months). Project periods are in no way related to UT's fiscal year
periods.
Gifts: Same as sponsored projects. Some gifts are not restricted by an ending date from the
sponsor. UT has started giving arbitrary ending dates (e.g. five years) that can be extended
over and over again. This was started to satisfy an internal audit finding that we shouldn't
use indefinite or open end-dates.
Centers/Chairs: 1 year
Loans: N/A
Endowments/Trusts: Endowments are perpetual. Trust durations vary, but last for several
years.
CI Template:
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3.2.4.1.
Manual WBS Date Planning
Questions:
Q:
1) How do you plan dates at each stage of the project life cycle?
A: Sponsored projects and agency funds: We want to capture the start- and end-date for the
project. Dates will be entered for individual WBS from the bottom up but in some cases top
down. We can use open planning for the greatest flexibility.
Other Restricted: We want capture the start and end-dates of the project. We will plan the
dates at the set-up of the WBS elements. Dates will most likely be bottom up.
UC Foundation does short-range funding. F accounts are typically perpetual. Set-up of
some endowment accounts would be set up with a fixed date in order to verify that sufficient
funds were received to continue as a true endowment. Dates would most likely be bottomup from the WBS elements.
Loans: Usually are perpetual.
Endowments/Trusts: N/A. Endowments are usually perpetual. Trusts have no known enddate.
Q: 2) Do you do only summary level date planning on your project? (If yes, consider WBS
time scheduling.)
A: Sponsored projects and agency funds: No, only display or reporting information.
Centers/Chairs: Yes
Other Restricted: Yes
Loans: Yes, if at all.
Endowments/Trusts: N/A - No Planning
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Q: 6) Which reports do project managers use to monitor dates? (Remember that the
information system offers a wide range of schedule reports.)
A: Sponsored projects and agency funds: Structure reports and/or Business Warehouse will
allow simple date reports.
For project management, we need reports that show all projects for a given PI, department
head, departmental bookkeeper, Controller's Office accountant in descending date order.
We have a standard process in place now whereby we send written notices to all PIs of
sponsored projects and gifts when there is 45 days until project end date. This notification
letter prompts the PI to either start working on a project extension with the sponsor or
account closeout procedures. Is there a way to do this in R/3?
Centers/Chairs: Same as sponsored projects, except no 45-day project closeout reminder
letter is sent.
Other Restricted: Structure reports and/or Business Warehouse will allow simple date
reports.
Loans: N/A
Endowments/Trusts: Reports on endowments less than $15,000 to monitor length of time
until $15,000 is reached so that endowment account is closed if $15,000 is not met.
Q: 7) Do you currently track date revisions? (If yes, consider using project snapshot
versions and simulation versions to track schedule baselines.)
A: Sponsored projects and agency funds: The critical tracking is for costs, not dates.
Restricted Funds: The critical tracking is for costs, not dates.
Loans: N/A
CI Template:
For G&C and Agency dates need to be planned on the project definition and the WBS
elements for informational purposes only. There may be a need to set up validation rules
in FI based on the dates else control from the date on the fund (binding date). All
projects will have the functionality to plan dates.
Dates in the Work Breakdown Structure (WBS)
As soon as you create WBS elements, you can start planning dates for them. In roughcut planning, you specify dates that are binding for more detailed planning. You can use
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this rough-cut planning as a starting point for more detailed planning. In the Project
System, there are various functions with which you can adjust, reconcile or extrapolate
dates in the work breakdown structure.
Network scheduling does not apply at UT since we are not using networks but dates will
be planned on the WBS elements.

When the project is created the start and finish dates will be entered on the project
definition and WBS elements.

This process will remain centralized.

None identified at this time
Since projects can be scalable (WBS elements can go down to various levels of detail)
then the flexibility to date plan can be offered depending on the project structure.


N/A
The primary benefit of date planning in PS on the project is to be used in conjunction with
network scheduling. Since networks are not in scope at this time, full date planning
functionality will be limited to offering basic start/end date reporting.

Enable both bottom up and top down planning for greater flexibility.

Date planning can be done on the WBS elements when the project is created (CJ01) in
which case the authorization will be the same as described above for master data set up
(central process). However, planning of dates can also be done in another area of PS
and authorization/ access will likely be defined centrally for the Controller's Office and
Campus Business Offices only. In the realization phase Sabrina will demonstrate where
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date planning can be done and then a decision can be made.
3.3.
Execution
3.3.1.
Project Release
Questions:
Q:
1) Describe the current lifecycle(s) for your most important project types.
A: Grants & Contracts:

Number of projects do you have open in a year:
New awards per year by budget entity:
UTSI
100
Chattanooga
200
Memphis
550
Ag
330
Knoxville
700
Martin
40
New proposals per year by budget entity:
UTSI
200
Chattanooga
400
Memphis
1100
Ag
1100
Knoxville
1400
Martin
100
Sponsored projects and agency funds: Phases include (1) pre-award, (2) project accounting
establishment, (3) budget transmission, (4) post-award administration, (5) post-award billing,
(6) post-award collections, (7) post-award financial reporting, (8) technical reporting, (9)
submission of closing documents, and (10) internal project closing.
Centers/Chairs: Same as G&C except no pre-award and no closing docs
Gift funds: Phases include (1) project accounting establishment, (2) budget transmission, (3)
cash receipts, (4) internal project closing. In rare circumstances, there could be billing and
financial and technical reporting.
Centers/Chairs: numbers are included in the G&C numbers
Loans: Loan funds begin when the Feds give us money or a person gives a gift to be used as
a loan for students. Loan funds typically last forever with the exception that the University has
ended its participation in the Federal Nursing Loan program at all campuses except for
Memphis. There are the following loan funds:
Knoxville Private
45
Space Institute Private
1
Chattanooga Private
6
Martin Private
5
Memphis Private
90
Knoxville Institutional
3
Chattanooga Institutional
2
Martin Institutional
2
Mamphis Institutional
10
Knoxville Fed Nursing
1 (will close 6/30/00)
Chattanooga Fed Nursing
1
Martin Fed Nursing
1
Memphis Fed Nursing
3
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Memphis Fed Health Professions

College of Vet Med Fed Health Prof
Knoxville Fed Perkins
Chattanooga Fed Perkins
Martin Fed Perkins
Memphis Fed Perkins
8
1
2
2
2
2
Endowments and Trusts:

Endowments: Approximately 3000. Most have a pooling of their funds for investment
purposes (Consolidated investment pool). Some are individually invested. Life is perpetual
unless the funding does not reach $15,000) within a specified period.
Trusts: Approximately 300. Includes 5 Charitable Lead Trusts which are agency funds, and
the rests are various kinds of Charitable Remainder Trusts. Trusts end when last surviving
beneficiary dies or at the end of the stated term.
Q:
2) How do you separate the planning and the execution phase of your project?
A: Sponsored projects and agency funds: We do not currently have automated planning
capabilities. Planning could occur before a proposal is submitted, after the award is received,
or any other time during the completion of the project. We should have one of the plans
equal to the official project budget if users will have access to any plan to actual reporting.
Endowments/Trusts: There is no planning.
Q:
3) Who is responsible for releasing/accepting work done on the project?
A: Sponsored projects and gifts: The PI is responsible for releasing the technical work
provided to the sponsor. At the Knoxville campus, the pre-award office has authority over all
post-award, non-accounting progress. That office monitors the submission of required
technical and progress reports.
The sponsor is responsible for accepting the technical work performed on the project.
Acceptance is usually not formal. Payment of invoices generally means acceptance of
technical work. Some sponsors will actually send UT a letter at the conclusion of the project
that formally states project and reporting acceptance and closeout.
Gifts: The PI is responsible for ensuring that funds are spent in accordance with donor's
restrictions. Most gifts do not require technical or financial reporting to the donor.
Endowments/Trusts: The Treasurer's Office Investment group is responsible for releasing
projects (F&G accounts) and for posting to the projects. The related R&B accounts are
released by the Controller's Office, and the departments are responsible for the expenditure
postings. The Treasurer's Office Investment group posts the earned income to the B
accounts.
CI Template:
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3.3.1.1.
Project Release
Questions:
Q: 1) Do you release your whole project at once or in stages - for example, project object by
project object?
A: Sponsored projects and agency funds: Normally UT's Controller's Office opens a project
for cost posting when (1) a proposal exists in the pre-award system, and (2) either the award
document or a signed "Advance Account Request Form is received, and (3) a budget is
received.
Some sponsors fund projects incrementally. A sponsor might give UT a 5-year award at $1
million per year for a total award of $5 million. However, the sponsor may only commit to
funding the first year of the 5-year award. Therefore, only $1 million is available for the PI to
spend. At the beginning of year 2, we usually receive a funding letter from the sponsor
authorizing UT to spend the second year's award of $1 million, for a project-to-date award of
$2 million.
Ideally, UT's project system should store all of this important funding information, but it should
be clear to users how much has been legally committed by the sponsor.
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Gifts: Whole projects at once.

Centers/Chairs: Whole projects at once
Loans: N/A
Endowments & Trusts: Set up and released at once.
Q:
2) What are the criteria for releasing your projects?
A: Sponsored projects and agency funds: Normally, UT's Controller's Office or a campus
business office opens a project for cost posting when (1) a proposal exists in the pre-award
system, and (2) either the award document or a signed "Advance Account Request Form is
received, and (3) a budget is received. The Controller's Office has final authority to open
projects.
Gifts: Normally, UT's Controller's Office or the campus business office opens a gift for cost
posting when (1) a request is received from the development office or a campus business
office, and (2) a budget is received. The Controller's Office has final authority to open
projects.
Centers/Chairs: Each new fiscal year new projects are released based on needs
Loans: N/A
Endowments & Trusts: MOA completion
Q:
3) Does the release of the project have an effect on procurement?
A: Sponsored projects: No
Agency funds: No
Gifts: No
Centers/Chairs: No
Loans: N/A
Endowments & Trusts: No
Q:
4) Do you need a signature or paper backup to release a project?
A: Sponsored projects and agency funds: Yes, approvals required are noted in previous
questions.
Gifts: Yes. Answered in previous questions.
Centers/Chairs: Currently yes
Loans: N/A
Endowments & Trusts: Copy of the signed MOA contract agreement with the donor
Q:
5) Do you want to save a version of your project when you release your project?
Agency funds: No
Gifts: No
Centers/Chairs: No
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Loans: N/A
Endowments & Trusts: N/A
Q: 6) Do you have several stages for releasing a project? (If yes, consider the use of user
statuses.)
A: Sponsored projects and agency funds: Normally UT's Controller's Office opens a project
for cost posting when (1) a proposal exists in the pre-award system, and (2) either the award
document or a signed "Advance Account Request Form is received, and (3) a budget is
received.
Some sponsors fund projects incrementally. A sponsor might give UT a 5-year award at $1
million per year for a total award of $5 million. However, the sponsor may only commit to
funding the first year of the 5-year award. Therefore, only $1 million is available for the PI to
spend. At the beginning of year 2, we usually receive a funding letter from the sponsor
authorizing UT to spend the second year's award of $1 million, for a project-to-date award of
$2 million.
Ideally, UT's project system should store all of this important funding information, but it should
be clear to users how much has been legally committed by the sponsor.
Gifts: Whole projects at once
Centers/Chairs: Yes
Loans: N/A
Endowments & Trusts: No
CI Template:
The Controller's Office and Campus Business Offices will use the project system status to
release (open) a project for posting.
The current status of a project or an object in a project determines which business
transactions can be executed. Statuses document the current processing stage of an
object. Status management in R/3 differentiates between system statuses and user
statuses.
A project is not a static object. It has it own life cycle that begins when it is created and
continues till completion. During this period various business transactions change the
project. For instance you plan tasks, post costs and perform settlements.
Each project passes through various system statuses. One of which is always set. For
example,
Created
In this status you cannot, for instance, make actual postings.
Released
In this status virtually all business transactions are permitted.
If you want to decide when certain business transactions are permissible, define user
statuses. These enhance existing system statuses.
Created (CRTD)
This is the initial system status for new WBS elements. In this status you structure the
plan dates, costs and revenues. The system set the status automatically, when you
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create a new WBS element.

Features
In Created status, you can create new WBS elements and change the work breakdown
structure.
The status
Allows you to assign networks, which do not yet have Released status
Allows you to plan costs and revenues
Allows budgeting
Released (REL)
In this status you can assign costs and revenues to WBS elements.
Prerequisites
The Created status is set.
Features
In Released status you can create new WBS elements and change the hierarchy. The
status is passed on to subordinate WBS elements.
The status
Allows you to assign networks, production orders or CO orders to the WBS
element.
Allows you to post actual costs
Allows you to transfer actual costs
You cannot change the status from Released to Created, since actual values from, for
instance, purchase orders or confirmations may have been posted.
For 20% of G&C, gifts, and agency a new WBS element will need to be created and
released each grant year. Thus the WBS status for year 2000 will need to be closed and
the WBS for grant year 2001 will need to be created and released. To manage the 60day period, the two WBS elements will overlap and both will be open at once. The
bookkeeper will decide which charges belong in each during the 60-day period. Then at
the end of the 60-day period the WBS for the year 2000 will be closed. For the remaining
80% of G&C, gifts, and agency one WBS will be used and closed at the end of the project
life. Plant projects, loan, and Life Income projects will close. The life span of these
projects can range from 1 year to 20 years and they could remain solely in the released
status for the duration.
Total of open loan funds 203

None identified at this time. Currently account set up is done centrally by the Controller's
Office and Campus Business Offices and it will remain centralized in R/3.
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If there is a need for the Controller's Office to review project status a standard structure
report can be run in PS.
N/A


If necessary, user status' can be defined and tied to system status' to further restrict what
transactions are allowed by status. This will be defined in the realization phase.
R/3 does not provide an additional authorization check for setting system statuses once
you are in the 'create' and 'change' project transactions. CJ01/CJ02 (create and change
projects) will be the transactions given to the Controller's Office and campus business
offices (centralized). Therefore, these are the only users who will be able to maintain
project status.
3.3.2.
Billing (see SD section)
Questions:
Q:
1) Do you do interim billing or only bill at the end of the project?
A:
Q:
2) Do you get down payments from customers?
A:
Q:
3) Do you do time and materials billing?
A:
Q: 4) Within the framework of a project, do you have fixed price agreements, according to
which a group makes deliveries based on a predefined revenue/cost agreement? (If yes,
consider using transfer pricing for projects.)
A:
CI Template:
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[CIT TO-BE DESIGN IS IN THE SD SECTION.]
Restricted revenue recognition: R/3 does not have the ability to recognize restricted
revenue the way that the University is required. In R/3, revenue is recognized at billing.
UT is required to recognize restricted revenue as expenditures are made.
UT has many restricted projects that are never billed. This is the majority and includes all
gifts and some sponsored projects. In this case in R/3, revenue will be overstated
because a revenue entry is made when the cash is received. Also, UT has some
projects that are billed in advance. Again, revenue is overstated.
Most sponsored projects are billed on a cost-reimbursement basis. UT spends the
money first and then bills the sponsor for reimbursement. All unbilled expenditures are
not recognized as revenue by R/3 for month-end financial statements because billing has
not yet occurred. In this case, revenue is understated.
To solve this problem, the following solution was determined to be an easy, invisible way
to accomplish proper revenue recognition. All cash receipts to projects will be recognized
as revenue at the time of receipt. At month-end, a report will be run of project balances.
Those with a debit balance represent understated revenue while those with a credit
balance represent overstated revenue. A journal entry will be made during the monthend close based on this report. The journal entry will correct the revenue recognition for
the monthly financial statements and will then be reversed at the beginning of the next
month.
UT will need this monthly report and journal entry to be automated because of the
thousands of project accounts that must be queried. Also, revenue must be adjusted for
Federal, State, Local and private revenue categories.
T-accounts for these transactions follow.
Example 1 Projects with billing:
R01251421
Direct charges
F&A
100
40
100
40
I account
F&A Federal
Ag
2
40 R01251421
A/P
Revenue
Revenue
A/R
100 R01251421
I account
Ag Campus Recovery
140
2 R01251421
Example 2 projects without billing:

P1
P2
100 rev
direct 70
balance 30
120 rev
direct
130
balance 10
Revenue
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JV P1
3.3.2.1.
100
120
30
10
200
P1
P2
JV P2
corrected month-end revenue
Billing Request Processing
Questions:
Q: 1) Which department is responsible for billing the customer (for example, service
department, accounting department)?
A:
Q: 2) Do you already carry out resource-related billing? Do you use transaction VA90 in the
process?
A:
Q: 3) If you only invoice the customer once, what other criteria do you use to decide when
an invoice is sent to the customer (for example, operating time of equipment)?
A:
Q: 4) When do you create the invoices for the customer (for example, at the end of each
period, or on specific dates defined by the customer)?
A:
Q:
A:
5) Is the invoice checked before being sent to the customer?

[ ]Yes
[ ]No
Q: 6) Do you need the detailed information from the CO line items or is it enough to bill
summarized CO totals records?)
A:
Q:
A:
7) Which sales documents do you want to be generated in resource-related billing?

[ ] Debit-Memo Request Only
[ ] Debit and Credit Memo Request
Q: 8) Do you want further summarization of dynamic items during SD document

generation? If yes, what characteristics should be used for the summarization?
A:
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Q:
9) What characteristics should be used to determine the material?
A:
Q:
10) From what sources can expenses originate?
A:
Q: 11) Do you want to define a particular default rate (in %) for particular sources of
expense requiring billing? If yes, define the sources and the relevant percentages.
A:
Q: 12) Do you use specific accounting indicators when confirming expenses (examples:
guarantees or grace periods)? If yes, which?
A:
Q:
13) What do the calculation motives affect?
A: [ ] The scope of the expenditure item

[ ] The price of the expenditure item
3.3.2.2.
Resource-Related Billing
Questions:
Q: 1) Do you bill customers on a time and material basis? (If yes, consider using resourcerelated billing.)
A:
Q: 2) Do you bill internal labor at an hourly, daily rate etc? (If yes, you need to enter the
activity types in Customizing for expense-related billing.)
A:
Q: 3) Describe the different ways that labor and expense are billed for your projects e.g. is
labor billed at fixed billing rates, or as a straight cost plus a markup, or a combination of both,
etc.
A:
Q:
4) Describe your billing process. How often are time and material invoices issued?
A:
Q: 5) It is important to consider which items appear in a billing document and the

accounting treatment for them. Describe the accounting processes used for time and
material-related billing in your projects.
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A:
Q: 6) What is the relationship between activities reported against a project and activities
billed to the customer?
A:
Q:
7) If subcontractors are used, are they billed as an expense or as internal labor?
A:
Q: 8) Do you use time and material-related billing? Do you exclude some expenses from
projects from billing?
A:
Q:
9) Are time and materials costs marked up in price for billing?
A:
Q:
10) Do you have caps on time and material billed?
A:
Q: 11) If so, describe the way caps are applied e.g. on the total of labor and expense, on
specific expenses etc.
A:
Q: 12) Is there an approval process for these project invoices? (If yes, consider using
workflow and involving the project manager in the process.)
A:
Q: 13) Do you show detailed info in the invoice for time and material-related billing?
Provide us with examples. (If yes, consider using project reports to support the detail
required.)
A:
Q: 14) Do you post actual revenues, discounts, or allowances to your project? (If yes,
consider the accounts and the implications for value categories in project reporting.)
A:
3.3.3.
Period-End Closing
Questions:
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Q:
1) Do your projects last for more than one month?
A: Sponsored projects and agency fund: Projects can last for virtually any time period - 2
weeks to 10 years.
Gifts: Yes
Centers/Chairs: Yes
Loans funds do not typically end.
Endowments/Trusts: Endowments typically do not end; Trusts last for more than a month until the last beneficiary dies or the stated term ends.
Plant: Yes
Q:
2) Do you have periodic postings in your company?
A: Sponsored projects and agency funds: Yes

Gifts: Yes
Centers/Chairs: Yes
Loans: Yes
Endowments/Trusts: Yes
Plant: Yes
Q:
3) Do you calculate actual WIP, COS and/or revenues?

Gifts: No
Centers/Chairs: No
Loans: N/ A
Endowments/Trusts: We calculate distributed income that is posted to individual
endowments and trusts from the Consolidated Investment Pool.
Plant: ?
Q:
4) Do you settle projects monthly?

Gifts: Yes
Centers/Chairs: Yes
Loans: N/ A
Plant: Currently no. But that would be nice to have in the future.
Q:
5) Do your company policies require you to calculate overhead on projects?
A: Sponsored projects: Yes

Agency funds: No
Gifts: No
Centers/Chairs: N/A
Loans: N /A
Q:
6) Do your company policies require you to calculate actual interest on projects?
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Gifts: No
Centers/Chairs: N/A
Loans: N/A
Endowments/Trusts: Distributed income is calculated. Actual earned interest is calculated in
the internal Investment legacy system.
Plant: Only to the extent of contractor's retainage that is held in agency funds. A statement
is generated quarterly and mailed to the contractor.
Q:
7) Who is responsible for ensuring that all month end processes have been completed?
A: Sponsored projects and agency funds: Controller's Office

Gifts: Controller's Office
Centers/Chairs: Controller's Office
Loans: Controller's Office
Endowments/Trusts: Controller's Office and Treasurer's Office Investment Group
Q:
8) What is the processing sequence for month-end closing?
A: DVs, BVs, CVs, and TVs are closed the last day of the month.
DVs and BVs are posted to the new month.
CVs are posted to the new month.
TVs are posted to the new month.
JVs are posted to the old month for two days. Programs are run for the automated entries
(F&A, F&A cost sharing, and direct cost sharing) after all manual entries are finished.
Endowments/Life Income:
Life Income - A JV to invest free cash must be given to Controllers Office by the 2nd working
day of month.
CI Template:
Restricted funds will use the PS functionality of overhead, settlement, and SD
functionality of billing to meet period end requirements as follows:
Grants & Contracts Only:
1. Calculate F&A / indirect cost on projects - Overhead
2. Calculate cost sharing on projects - Settlement from the WBS elements
Sponsored Projects Only (G&C, Agency, Gift):
3. Bill all sponsored reimbursable projects (G&C, gifts, agency/G&C). Costs incurred will
be collected on the projects in PS and then billing will be done out of SD. Please see the
SD section for the AS IS and TO BE design for billing processes.
G&C, Gifts, Appropriations, Chairs & Centers (R accounts):
4. Revenue recognition at month end (for P&L reporting) showing expenses and
revenues (for all restricted projects??) - Month end settlement from the project definition
to a WIP account then reverse settlement after month end.
All projects:
5. Full or partial allocation of costs from one cost object (likely from WBS to WBS or
WBS to cost center, or WBS to AuC) - Settlement. For example plant (unexpended)
projects will need to settle to the AuC.
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OVERHEAD:
Controlling (CO)
Costs that cannot be traced directly to a particular allocation base (such as a product).
These include costs that could conceivably be traced directly to cost objects or cost
centers, but are allocated by means of overhead keys instead because it is not
economically feasible to trace such costs (for example, the costs for screws and other
small parts).
Overhead Key
Product Cost Controlling (CO-PC)
Allows you to calculate a percentage overhead rate for specific orders or materials.
Costing Sheets
Defines how values posted in the R/3 System are calculated.
A costing sheet consists of one or more of the following lines:
Base lines
These contain the amount or quantity on which the overhead is calculated.
Calculation lines
These contain the percentage rate to be applied to one or more base lines.
Totals lines
These contain the sum of the base amount and calculated amounts.
Costing sheets are used in the following components:
Overhead Orders (CO-OM-OPA) and Product Cost Controlling (CO-PC), where
they are used to calculate overhead
Profitability Analysis (CO-PA), where they are used to calculate anticipated
values
Overhead Cost Controlling (CO-OM), where they are used to calculate resource
prices
SETTLEMENT:
Costs and revenues are collected in projects only temporarily. They are settled to one or
more receivers as part of period-end processing.
You use settlement to:
Capitalized the balance from results analysis, which is capable of capitalization in
the balance sheet.
Obtain detailed data in results analysis for enterprise controlling.
In capital-investment measures, to settle the charge to assets under construction
which can or must be capitalized.
See also Settlement Functions for capital investment.
Include actual costs from the project in actual price calculation in Cost Center
Accounting.
Integration
You cannot transfer settlement rules to simulation versions or maintain them
there.
Depending on the settings in the settlement profile, you must settle the costs of
an object in full before you can archive it.
You use the settlement profile to define the following for actual costs:
Must be settled in full
Can be settled
Must not be settled
Features
Settlement is the process where the actual costs incurred for a WBS element, network, or
activity are allocated, in whole or in part, to one or more receivers. In the process, offset
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entries crediting the project are generated automatically.

The debit postings remain in the receivers, where you can display them. The settled
costs are recorded in the relevant receiver, and you can evaluate them in reporting.
You define the settlement criteria in the project master data.
Settlement profile
You store the settlement profile in the project profile or in the network type. It
then acts as a default value for the individual objects. You can change the profile
settings in the settlement rule parameters for an object.
Results analysis key
Settlement rule
You must enter a settlement rule for each object you want to settle.
A prerequisite for settlement is that the relevant objects should have system
status "Released".
Projects have a hierarchical structure. You must take account of this when
maintaining the settlement rule.
See Project Settlement Recommendations
As settlement rule maintenance can be very time consuming if the project
hierarchy structure is complex, we offer the following support:
Automatically Generated Settlement Rules in WBS elements
Strategy for generating settlement rules in networks
Consistency Check on Master Data/Settlement Rule
You can use this report profile to check, among other things, the settlement rule
in the billing element according to particular criteria.
The settlement logic is the same throughout the various R/3 applications.
For more information on settlement, read CO - Settlement.
Process for overhead and cost sharing at UT:
Costing sheets and overhead keys on the PS projects will be used in R/3 to manage
Indirect costs / Overhead / F&A (facilities & administration). Standard overhead rates
are based on the cost of doing research and are based on agreements with the federal
government. The most common overhead rate at UT is 43% of MTDC. Overhead rates
may change for all or individual campus' annually at UT. The one page list shows the
rates by FY and associated bases by campus (for research or instruction, on or off
campus).
In the majority of the cases the costing sheet and overhead keys will meet the
requirements for overhead calculation. For cost sharing, settlement rules will be
maintained on the WBS elements (not costing sheets). Cost sharing is the amount that
UT reduces the standard overhead rate by. Ideally for UT it would be great to have 0%
cost sharing and the sponsor to pay 100% of overhead. Cost sharing is the difference
between the standard rate and what the sponsor agrees to pay. If the sponsor doesn't
pay then UT must cost share among themselves 100% of the overhead.
Example of the process in R/3: Overhead rate is 40% - customer agrees to pay for 30%
and settlement rule (cost sharing) is 25% (and would not settle back to account where the
original overhead clearing account.) On the invoice in AR line items will be seen for
indirect cost (+$400) and cost sharing (-$150) and what the sponsor is paying 30%
($250).
Ex: If the sponsor of 100,000 does NOT agree to help with the overhead burden, and
overhead is 40% then UT will need to cost share the 40,000.
In cases where cost elements need to be withheld from overhead due to sponsor
requirements (for example: out of state travel or a persons salary) then when the project
is created another WBS element needs to be set up to capture these costs in a separate
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bucket. This way we can meet the sponsor requirements and the costs will not have to
be broken out for overhead / non-overhead as it is currently done. This case should be
the exception not the rule.
Process for revenue recognition for month end P&L for G&C, Gifts,
Appropriations/Chairs & Centers (R&B accounts):
UT's requirement is when an expense occurs the offset to revenue must be shown for
month end reporting for Restricted Current Funds, which includes (Grants and Contracts,
Gift funds, and Appropriations/ Chairs & Centers). This functionality currently exists at
UT and will be required in R/3. In order to meet the requirement, there are two possible
solutions:
Likely solution: A program can be written showing a report. UT has a need to see
revenue and expense on the restricted funds P&L at month end. A report needs to be
written to shows the net of the revenue and expense. Note: In R/3 revenue is normally
recognized when AR/SD invoicing occurs (which will not happen by the end of the month
and will not happened for all the funds which need this requirement since only G&C will
invoice). This program has been speced as per blueprint RICES requirements.
Another possible option: At the month end UT can run settlement from the project
definition to a WIP resulting in the difference in the revenue and expense (debits and
credits net out). Settlement will reduce the revenue account then reverse settlement after
month end. Billing process is independent and will occur only for G&C.

The period end process is the sequence of R/3 transactions usually done at month end
close. For UT, the process will need to be defined in detail. The final process for period
4 may resemble: G/L entries post -> payroll posts -> overhead is run from PS projects
and CO cost centers (must run prior to billing) -> cost allocations -> run settlements for
period 4 -> run month end P&L -> run billing for sponsor reimbursable projects in SD
(independent of period) -> reverse settlements to period 5 -> close monthly posting
period in FI).

Currently cost sharing is a challenge for UT. Collecting costs in the correct bucket and
having settlement rules on the WBS elements will allow a better process for cost sharing
if standard scenarios can be developed.
Currently indirect cost/ overhead hits the B account now and in the future it will hit the Rs.

Currently cost sharing is very detailed (take %5 of professor Y's salary, exclude this) so
how do we manage in R/3? This is in the ASAP issue database as #106. Need to define
any standards that may exist.

TBD - consider settlement, special program, other?
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Revenue increasing budgets in FM?

R/3's grants management module may have a better solution for managing overhead and
cost sharing. UT is currently providing input to this new module and can offer their
learning experience from using PS with FM to manage grants.

12 Costing Sheets (base):
Initial R/3 set up will be to create a costing sheet for each base (MTDC, TDC, and S&W)
for each source of funding (federal, state, local, private) which is a total of 12 costing
sheets. MTDC is most common and does not include equipment & subcontracts greater
than $25,000. TDC includes all costs (including equipment). S&W stands for salary and
wages. The exception would be to calculate MTDC (any base) excluding travel (any cost
element).
28 Overhead Keys (rate):
Initial R/3 set up will be to create overhead keys for the different standard rates (ex: FY99
for Knox instruction on campus is 45%) so approximately 28 new rates added each year
because the rate is grandfathered at the year the project was created. Therefore, the
rate the project is using will be the rate set in the year the project was proposed.
Settlement profile (to manage cost sharing):
amount settlement
% settlement
The base and rate are attributes that will be on the project master and therefore can be
maintained correctly on the project. Those that have access to creating and changing the
project will also be the ones maintaining the overhead and settlement rules. At this point,
no additional authorization is required.
3.3.3.1.
Actual Overhead Costing
Questions:
Q: 1) What costs is the cost estimate based on when you compute overhead for internal
orders?
A: Sponsored projects: I don't think we are using internal orders.
Agency funds: N/A
Gifts: N/A
Centers/Chairs: N/A
Loans: N/A
Endowments/Trusts: N/A for all overhead questions. Therefore, none of the subsequent 48
questions answered. There is no overhead charged to Endowments or Trusts.
Q:
2) Specify the overhead rates.
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off campus.
Centers/Chairs: N/A
Q: 3) Will you perform automatic recovery of overheads on specific types of
costs/expenses?
A: Yes
Q: 4) List the different groups of costs/expenses (for example, applying a fixed percentage
rate for recovery of overhead to material issues).
A: Sponsored projects: See question #2 above
Q: 5) For each assignment type, do you distribute overhead as a fixed percentage or based
on the actual total costs?
Q: 6) Describe in detail how each of these assignments is performed today in your

organization.
Q:
7) What postings do the assignments create?
A: Sponsored projects: The project account is debited and the appropriate income account
is credited. UT has four income accounts per entity for F&A - Federal, state, local, and
private.
Q: 8) Describe in detail how each of these allocations is performed today in your

organization.
A: Sponsored projects: UT has several Federally-approve F&A calculation bases. One of
UT's F&A bases is Modified Total Direct Costs (MTDC), which is total direct costs less certain
modifying cost categories. Equipment, student fees, and subcontracts greater than $25,000
are examples of modifiers and are excluded from the F&A calculation, but salaries, benefits,
supplies, etc. are included in the F&A allocation. Other F&A calculation bases in use include:
(1) TDC - total direct costs, (2) Salaries & wages, and (3) custom bases for certain sponsors.
For example, the US Dept of Education requires total direct costs less student support
expenditures, which may be in 5 different cost categories.
Q:
9) Do you assign overhead expenses to projects?
Q: 10) For each allocation category, do you distribute overhead as a fixed percentage or
based on the actual total costs?
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Q: 11) If you use fixed percentages for assignments, how do you handle remaining
variances?
A: Sponsored projects: We do not expect to have any variances. There are no variances in
our current system.
Q: 12) For each of these assignments, what causes the overhead (for example, direct labor
expense, labor hours, total WBS expense, others)?
Q:
13) What postings do the assignments create?
is credited. UT has four income accounts for F&A - Federal, state, local, and private.
Q:
14) Define overhead rates.
A: Our rates are our F & A rates that are negotiated with DHHS for a specified time period.
We currently have 10 rate agreements for entities 01,02,04,05,07, 10, 11,12,13,and 18.
These agreements contain multiple rates such as on and off campus for instruction, research,
and other sponsored programs.
Q: 15) Will you perform automatic recovery of overheads on specific types of

costs/expenses?
A: Yes
Q:
16) Do you want to define a percentage for the overhead rate in the cost object?
A: Sponsored projects: No, F&A should be a separate cost object

Q: 17) Do you want to define automatic allocation using overhead rates for a certain type of
costs/expenses on orders?
Q:
18) Do you want to add a percentage for overhead to the production cost collector?
Q:
19) Define overhead rates.

Q:
20) Do you perform automatic overhead allocation for specific types of costs/expenses?
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Q: 21) Do you want to define automatic allocation using overhead rates for a certain type of
costs/expenses on orders?
Q: 22) List the different groups of costs/expenses (for example, applying a fixed percentage
rate for recovery of overhead to material issues).
Q: 23) Do you plan to allocate a certain type of costs/expenses to cost centers

automatically using overhead rates?
Q:
24) What costs are the overhead rates based on?
Q: 25) Are there any overhead expenses that are not calculated with reference to the
production order but are to be assigned directly to the sales order?
A: Sponsored projects: N/A - no production order
Q:
26) How often do you calculate your planned overhead?
Q: 27) Who is responsible for reconciling the run? (This person will be responsible for
running/monitoring planned overhead.)
A: Sponsored projects: The Controller's Office, if any reconciliation is required. We do not
expect this because we do not currently have any reconciliation.
Q: 28) Do you calculate overhead for all objects at once or individually for each object.
(Detailed calculation can affect system performance.)
UT has several Federally-approve F&A calculation bases. One of UT's F&A bases is
Modified Total Direct Costs (MTDC), which is total direct costs less certain modifying cost
categories. Equipment, student fees, and subcontracts greater than $25,000 are examples of
modifiers and are excluded from the F&A calculation, but salaries, benefits, supplies, etc. are
included in the F&A allocation. Other F&A calculation bases in use include: (1) TDC - total
direct costs, (2) Salaries & wages, and (3) custom bases for certain sponsors. For example,
the US Dept of Education requires total direct costs less student support expenditures that
may be in 5 different cost categories.
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Q:
29) Do you have a specific plan version when you calculate overhead?

Q:
30) Is overhead calculated for your projects?
Q:
31) Is the planned overhead the same as the actual overhead?

calculation, but Supplies is included in the F&A allocation.
Q: 32) Describe how you calculate overhead for (1) direct costs (2) indirect costs (3) fixed
costs (4) variable costs).
Q: 33) Do you include sales and marketing and general and administrative costs in your
overhead calculation?
A: The F&A rate has facilities and administrative components. The costs to be included in
the rate are specified in our rate agreement with the Federal government. UT does not
specifically have sales and marketing expenses, but specified percentages of general and
administrative costs are included.
Q:
34) Do you reconcile planned and actual overhead?

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Q:
35) Do you process actual overhead on a project-by-project basis or overall?

Q:
36) Do you have project-type-specific overhead calculations?
Q:
37) Do you have different overhead costs for each business unit?
Q:
38) Do you calculate overhead on materials/labor?
A: Yes
Q:
39) At what level of detail do you plan for overhead?

Q:
40) Do you calculate percentage overhead?
A: Yes
Q:
41) Is the calculation dependent on time periods?
A: Yes
Q:
42) What is the basis for the overhead costs?
A: The F&A rate has facilities and administrative components. The costs to be included in
the rate are specified in our rate agreement with the Federal government. UT has several
Federally-approve F&A calculation bases. One of UT's F&A bases is Modified Total Direct
Costs (MTDC), which is total direct costs less certain modifying cost categories. Equipment,
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student fees, and subcontracts greater than $25,000 are examples of modifiers and are
excluded from the F&A calculation, but salaries, benefits, supplies, etc. are included in the
F&A allocation. Other F&A calculation bases in use include: (1) TDC - total direct costs, (2)
Salaries & wages, and (3) custom bases for certain sponsors. For example, the US Dept of
Education requires total direct costs less student support expenditures that may be in 5
different cost categories.
Q: 43) Is the basis for overhead planned costs the same as the basis for actual overhead
costs?
Q:
44) What is the formula/schema for applying overhead costs?
off campus.
Q:
45) How often do you calculate overhead costs?
A: Monthly
Q:
46) To which accounts/cost elements are the overhead costs posted?
is credited. UT has four income accounts for F&A - Federal, state, local, and private
Q:
47) Does the basis for the overhead costs change during the lifecycle of the project?
A: Sponsored projects: It is rare, but it can happen. A more common occurrence is that the
base remains the same, but either the F&A rate, the F&A cost sharing, or the net F&A
allowable changes during the life of the project. When this has happened in the past, we
have established a new R account. In the future, perhaps we could establish another WBS
element.
Q: 48) Who is responsible for overhead costs? (This person is responsible for running the
overhead calculation.)
A: Sponsored projects: The Controller's Office
Q:
49) Do you evaluate interest charges throughout the project hierarchy?
A: No
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CI Template:
The University requires the ability to record F & A postings and revenues as it currently
processes F&A. We expect to run a monthly program after all direct costs are posted to
restricted accounts. We expect the program to generate JV's to post the F & A and the
resulting revenues.
3.3.3.2.
Actual Settlement
Questions:
Q: 1) What are the dependencies between your project actuals and your cost center
actuals?
A: Sponsored projects and agency funds: There is no dependency. Projects carry
attributes that assign them to a particular cost center hierarchy. Also, settlement rules might
tie a project to a cost center.
Centers/chairs: Same as sponsored projects.
Loans: N/A
Q: 2) It is possible to settle actual values between projects and cost centers. What is the
relationship between work performed by cost centers on projects and non-project work?
A: Sponsored projects: Costs for a particular cost center, e.g. Chemistry, are assigned to
either the general departmental cost center or to one of many projects. Costs that are
incorrectly allocated must be corrected to the proper cost center / project.
Some projects require direct cost sharing. For example, an NSF grant in the chemistry
department might require the donation of a chemistry professor's time and a physics
professor's time. In the project settlement rules or in the WBS structure, UT is required to
show the cost of these two professor's time on the project, and show the eventual settlement
of the costs back to the chemistry departmental cost center and the physics departmental
cost center.
Other Restricted: We may have settlements from Endowment and Grants and Contracts
project costs to cost centers. In addition, there will be settlements from one WBS element to
other WBS elements.
Centers/Chairs: Same as other restricted
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Q:
4) How often do you evaluate your actual values?
A: Sponsored projects: Automated, group settlement will occur at the end of each month.
Centers/chairs: Same as sponsored projects
Q: 5) Do you evaluate actual figures in multiple dimensions such as product line,
geography, and project? (If yes, consider doing settlement in Profitability analysis (CO-PA).)
A: no
Q:
6) Do you settle line items?
A: Sponsored projects: Yes, we will sometimes settle line items.

Centers/chairs: We do not currently settle line items.
Q:
7) Do you settle within your project hierarchy?
A: Sponsored projects: We may need this functionality.

Centers/chairs: probably not
Q:
8) Do you settle WBS and networks directly?
A: Networks: N/A
Sponsored projects: Yes, we intend to settle WBS elements directly to cost centers or other
WBS elements.
Centers/chairs: Same as sponsored projects.
Q:
10) * Which cost object receivers do you intend to settle project costs to?
A: Sponsored projects: UT currently has a cost element that is called "direct cost sharing"
(object code 444). We need similar functionality.
Centers/chairs: Same as sponsored projects
Plant: Assets and possibly WBS.
Q: 11) * Who enters settlement rule for projects? Or would you rather use the IM feature of
the automatic creation of AuCs?
A: Sponsored projects: The Controller's Office or Campus Business Office that initially
establish the project would establish the settlement rule. In the future, we might receive this
information through an interface with COEUS.
Centers/chairs: Same as above, except no COEUS.
Plant: Controller's Office would enter settlement rules, along with guidance from Facilities
Planning.
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Q:
12) * Will projects be settled individually or collectively?
A: Sponsored projects: Collectively at month-end

Centers/chairs: Collectively at month-end
Other Restricted: Generally there is no overhead or automatic settlement to other restricted
accounts except for chairs of excellence.
Centers/Chairs: Both
Plant: Probably individually.
3.3.4.
Reporting Project Results
Questions:
Q:
1) What information from existing reports do you need in the new project reports?
A: Sponsored projects, agency, and gift funds: Too much to list here. Gail will need to
supply separately.
Centers/Chairs: Budget, Expenditures, and Remaining Balance
Loans: additions and deductions and fund balances and assets by loan fund.
Plant: Additions (revenues) by type of revenue. Deductions (expenditures) based on type of
expenditure: i.e. building, land, equipment, improvement, and expense.
Endowment/Life Income: Activity reports of additions and deletions. Attribute information.
Monthly Treasurer's Report schedules. (Life Income: Monthly - Schedule A, Schedule J, and
P ledgers are used to reconcile balances of trust accounts in the UT trust accounting
software; Yearend - Schedule 6 to which trust officer format and adds notes for inclusion on
year-end Treasurer Report.)
A new report needed if FM collects the Pool Unit Market Price is a report for each pooled
endowment account that lists by month the number of shares purchased, the unit price per
share, and the book value of shares purchased. Also, the report would include Year-To-Date
totals that accumulate the number of shares purchased and the book value of new shares
purchased.
Q:
2) Who is responsible for project analysis?
A: Sponsored projects and agency funds: The PI, departmental bookkeeper, Controller's
Office accountant, and Campus Business Office.
Gifts: The PI, departmental bookkeeper, Controllers Office accountant, campus business
office.
Centers/Chairs: The PI, departmental Business Officer, campus business officer.
Endowments/Life Income: The only individuals who are involved in the project accounting
including analysis are the Treasurer's Office Investment group. (Life Income: Trust Officer &
assistant) Endowments (Investment Officer and Financial Specialist)
Loans: N/ A
Plant: Treasurer's office and Facilities Planning.
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Q:
3) For whom do you run project analyses and reports?
A: Sponsored projects and agency funds: The PI, departmental bookkeeper, Controller's
Office accountant, and Campus Business Office.
Gifts: The PI, departmental bookkeeper, Controllers Office accountant, campus business
office.
Centers/Chairs: The PI, departmental Business Officer, campus business officer.
Endowment/Life Income: Treasurer's Office Investment Group reports on all of College's
endowments and reports on single endowments for bookkeepers or other individuals.
Loans: N/ A
Plant: Treasurer's office and Facilities Planning.
Q: 4) Workflow, downloads, embedding reports in e-mails are all possible distribution

methods for reports. How do you distribute project reports?
A: Sponsored projects and agency funds: We currently distribute all reports manually.
Endowments/Life Income: manual distributions of printed reports; over the phone for onscreen query data. In additions, there is a Web Site that contains some of the Pooled
Endowment information such as Market price per unit.
CI Template:
Reporting will be limited in PS. PS reports will primarily be used for cost planning and
comparing plan to actuals.
UT's reporting requirement is to sort and report on PS attributes combined with FM
budget/actuals/balances.
Project Summarization using Classification Characteristics
In this section you learn about the preconditions for managing projects using the
classification system. The classification of your projects is necessary if you want to
summarize projects using classification.
In the classification system you specify characteristics, which you use to classify your
projects.
If classification has been activated for a project, the project will automatically be classified
during basic data maintenance. The characteristics are evaluated using the values in the
project basic data (for example name of person creating project, controlling area).
You can define additional characteristics that do not refer to fields in basic data
maintenance. You maintain these characteristics during basic data maintenance.
You can summarize data along freely definable hierarchy structures using values
assigned to characteristics.
Proceed in the following manner to classify projects:
1. Display a list of classification data delivered by R/3 and choose the data you want
to use. Generate the selected characteristics in the relevant client.
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During the generation process, the system creates classification characteristics that
reference fields in the project master record. You must generate these characteristics in
every client where you want to select a project using classification or define
summarization hierarchy structures using classification.
1. Create user-defined characteristics.
In this step, you branch to the classification system and create the characteristics that
you want to evaluate.
To be able to use classification to summarize projects, you create hierarchy IDs that
define the setup of the summarization hierarchies in your client. Enter one characteristic
per hierarchy level.
During the summarization run, projects are selected using these characteristics, and the
individual values are added together. In the information system, you can access a report
for every hierarchy node.
A project may arise in more than one summarization hierarchy.
After the summarization run, you can display the summarization run online in the
cost/revenue/payment information system. To this end, you must first define an
appropriate data view and a database profile.
Further notes
As of Release 4.5A, the new facility for summarizing using master data characteristics is
available. Summarization using classification remains available for compatibility reasons
only; support will be withdrawn in the medium term.
We recommend that you do not use summarization using classification any longer.
For the projects summarized using classification, convert the user- defined characteristics
into the additional fields for the new summarization. Summarization using master data
characteristics is activated after the conversion.

Laurie is collecting current UT reports in a binder. Gail is drafting a list of true reporting
requirements in R/3. We will need to have a team meeting (FM/PS, etc.) to discuss
which types of reports are necessary. * Attach Gail's draft list of report requests here.*

Reporting now has the potential to be done more decentralized than currently.
End users will be able to view data relevant to their projects/funds in a real time
integrated system.

A. UT's reporting requirement is to sort and report on PS attributes combined with FM
budget/actuals/balances. Only Standard reports in R/3 are in scope. However, there are
several options and design consideration to help UT to meet this requirement.
B. Standard PS reports (if there is much use for them) do not have authorization objects
(for example profit center) in which to tie user access. See authorization and user roles
below.
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A1. PS attributes will be maintained in newly created field in PS. Every effort will be
made to keep attributes in FM first, then PS because the majority of reporting will come
from FM.
A2. Sorting and query of data could be set up for project reports with classification. But this would only apply to PS standard reports (ex: cost planning vs. actuals). And - using
classification in PS reports will NOT be sufficient to meet the need.
A3. Custom reports can be created combining PS attributes and FM data or any other
data as required/defined. UT ABAPers would develop these reports.
A4. Once BW (Business Warehouse) is running we can explore creating info cubes for
the new PS fields along with an FM info cube. To be explored in realization phase.
B1. See authorization and user roles below.

In the future, as UT ABAPers have the skill set and has the experience creating custom
reports the Controller's Office will have the ability to define any reporting needs and have
them met.

See approaches to covering functional deficits above. Likely BW info cubes or
customized reports will need to be created in the realization phase.

Authorization for PS Reports:
The PS report type reports are created in drill down reporting which doesn't allow for
many restrictions. Reports are not tied to fund so you either have access to a standard
report or you do not. And, if you are in the report you can call up any project. For
example if authorization is given to the report transaction (T code) then once in the report
there is no additional control like a profit center check to control which projects can be
queried. However, since we are creating new attributes (new fields we are creating to
collect data on the project) this data will likely need to be shown in customized reports.
Authorization restriction on customized reports is manageable in ABAP.
For standard PS cost reports below are a few ideas to restrict access:
1. Create a copy of the standard PS report in report painter, modify, change name then
tie authorization by fund.
2. Create a node with Variants and restrict.
3. Report groups by cost center (30 different reports by cost center hard coded) then
you get access to your specific report.
3.3.4.1.
Reporting Project Results
Questions:
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Q: 1) Project summarization hierarchies WBS element groups, and level of drilldown detail
can all impact performance. Do you analyze your project on a single project basis or across
projects?
A: Sponsored projects: Projects are analyzed individually at the WBS element level, at the
project level, PI level, department level, sponsor level, college level, campus level, etc.
(Probably more that I'm not thinking of right now.)
Agency funds: Mostly at the WBS element, project, department, PI level, I think. Need to ask
Don.
Gifts: Mostly at the WBS element, project, department, PI level, I think.
Endowments/Life Income: Analyze across projects and on single project basis. Endowments
- Treasurer Report schedule run and then manual footnotes are added. Life Income Schedule J is used to reconcile balances on an account-by-account basis. Schedule A is
used to look at asset totals (sock, bond, etc.) by trust category (life income, agency).
Q:
2) What are the key figures you need to evaluate?
A: Sponsored projects and agency funds: The key figure for PI's is "How much money do I
have left to spend" at any point in time. Other key information includes billed and collectedto-date, specific transaction postings, line item budget-to-actual, and project budget-to-actual.
There is a lot more probably that I haven't thought of yet.
Gifts: same as sponsored projects
Endowment/Life Income: balances, ledger activity on income for the CIP and for separately
invested endowments, gifts (F accts), and transfers (F to F, B to F, and F to B). Life Income Asset totals, fund balances, cash balances
Q:
3) Do you compare plan and actual data?
A: Sponsored projects and agency funds: Yes (To us, plan has traditionally meant budget).
Gifts: Yes
Centers/Chairs: Yes
Q:
4) Do you do gross margin analysis on your projects?
A: Sponsored projects: This is normally not available; however, it may be applicable on

certain types of awards such as clinical trials.
Gifts: N/A
Agency funds: N/A
Centers/Chairs: N/A
Q: 5) Do you use progress measurement tools such as milestone trend analysis (MTA) or
earned value management methods (EVMS)?
A: Sponsored projects: N/A
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Agency funds: N/A

Gifts: N/A
Centers/Chairs: N/A
Q:
6) Do you do profitability analysis on your projects?
A: Sponsored projects: Same as answer to question #4 above.

Agency funds: N/A
Gifts: N/A
Centers/Chairs: N/A
Q:
7) Which tools do you have available for reporting?
A: Sponsored projects and agency funds: We have no reporting tools available to most
users. We have standard reports generated from our mainframe accounting system. Some
use shadow accounting systems such as DMS. Others use Excel spreadsheets.
Endowment/Life Income: Uses internal investment accounting software for most of the
reporting. The Consolidated Investment Pool (CIP) internal software for reporting of pooled
endowment funds. Life Income - Schedule 6 information is downloaded from the general
ledger system to excel. The on-screen inquiry capabilities of the legacy account system.
Q:
8) Do you have external reporting requirements?
A: Sponsored projects and agency funds: External reporting of funds stewardship is the
primary reason for implementing project systems. Yes, we have multiple external reporting
requirements. We have multiple invoicing arrangements and forms. We have multiple
financial reporting arrangements and forms.
Gifts: Not usually.
Endowment/Life Income:
Endowments: Pooled endowment information is posted on a web site.
Life Income: Tax returns to IRS and donor statements prepared from ETA or tax preparation
software.
Q:
9) Do you have graphical reporting requirements?

Gifts: No
Q:
10) Do you have alternative hierarchies for reporting?
A: Sponsored projects and agency funds: We need to produce reports organized in multiple
ways by multiple project attributes (cost center, PI, etc.). I think that we probably need this
capability, but cannot think of a specific example.
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Endowment/Life Income: Schedules are sorted by ALB sequencer. Reports may be sorted
by entity or by college and department. There are some endowments that are coded as
Knoxville that are actually for more than one campus (or entity).
3.4.
Closing
CI Template:
Just as the UT Controller's Office / Campus Business Offices will use the project system
status to release (open) a project, they will also manage the closing of a project. In
general, the project status will control whether or not FI postings to the project are
permitted.
The active system status determines which business transactions you can perform with
work breakdown structures and WBS elements. System statuses are passed from the
definition to the WBS elements and from the WBS elements to the subordinate WBS
elements. The system statuses Locked and Final billing are exceptions to this.
You can cancel certain statuses, for instance Technically completed, and Deletion Flag.
When you do so, the previous status is set. You cancel system statuses one by one, until
you arrive at a status that cannot be canceled. You cannot cancel system statuses that
are set automatically (in the background by the system); for example, Partially released.
If you cancel the statuses Technically completed or, the system automatically cancels
this status in the superior WBS element. However, the system does not cancel the
status in subordinate WBS elements.
The Deletion Flag status is not set automatically in superior WBS elements.
Project Status: Technically completed (TECO)
You use this status for WBS elements that are completed from a technical point of view,
but where you still expect costs to accrue.
Prerequisites
The Created or Released status must have been set.
Features
In the Technically completed status, you can create new subordinate WBS elements
(with a warning). The status is passed on to subordinate WBS elements.
The status:
allows you to assign networks, production orders or CO orders to the WBS
element
allows you to post actual costs
allows you to transfer actual costs
You can cancel the Technically completed status. In this case the system sets the
Released status.
You can prevent the Technically completed status from being canceled. Create a user
status that prohibits the Revoke technical completion business transaction.
Project Status: CLOSED (CLSD)
You use this status for a work breakdown structure or WBS element that has been
completed from both a logistic and an accounting point of view.
Prerequisites
You can only set the status, if:
The definition or the WBS element has either the Released or the technically
completed status.
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The actual costs have been balanced for the WBS element
Features
In the status you can no longer make any changes to the hierarchy. The status is passed
on to subordinate WBS elements.
The status:
Allows you to post actual costs to orders and networks that are assigned to the
WBS element, as long as their status permit this
Prohibits you from assigning networks, production orders or CO orders to the
WBS element.
Prohibits you from posting actual costs to the WBS element.
The status deactivates assets in construction that are assigned to the WBS element.
You can cancel the status. In this case the system sets the Technically completed status.
Project Status: Deletion flag (DLFL)
Use
The Deletion flag status designates work breakdown structures or WBS elements that
have been flagged for deletion. This means that the objects are deleted logically, but not
physically.
Prerequisites
You can set the Deletion flag if
The WBS element has been settled completely or is not relevant for settlement.
If you set the Must not be settled indicator in the settlement profile in Customizing for
Product Cost Controlling, you can still set the Deletion flag status even if the actual costs
are not balanced.
Assigned orders and activities also have Deletion flag status.
There are no commitments for the WBS element
There are no reservations or purchase requisitions that are account assigned to
the WBS element.
Features
The status is passed on to subordinate WBS elements. It prohibits all business
transactions.
The status deactivates assets in construction that are assigned to the WBS element.
As long you have not set a deletion indicator, you can cancel the Deletion flag status.
Final Billing (FNBL)
With this status you can prevent further billing for this WBS element. However, you can
still post costs (for instance, due to warranty claims).
You can set the Final Billing status in addition to every other status except Deletion flag.
The Final Billing status is not passed on to subordinate WBS elements.
Prerequisites
The WBS element is a billing element.
Features
The status prohibits
Creation of a billing document
Creation of a quotation
Creation of an inquiry
You can cancel the status.
Locked
Use
You can either lock individual business transactions or all the data in a work breakdown
structure or WBS element. You can set the following statuses:
Date definition locked (DDLK)
Planning locked (PLLK)
Budget management locked (BMLK)
Account assignment locked (AALK)
Master data locked (MDLK )
You can set these statuses in addition to every other status except Deletion flag. The
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statuses are not passed on to subordinate WBS elements.

Features
The Master data locked (MDLK) status prohibits
Setting of another system status
Changing and extending the hierarchy
You can cancel these statuses.

For 20% of G&C, gifts, and agency a new WBS element will need to be created and
released each grant year. Thus the WBS status for year 2000 will need to be closed and
the WBS for grant year 2001 will need to be created and released. To manage the 60day period the two WBS elements will overlap and both will be open at once. The
bookkeeper will decide which charges belong in each during the 60-day period. Then at
the end of the 60-day period the WBS for the year 2000 will be closed. For the remaining
80% of G&C, gifts, and agency one WBS will be used and closed at the end of the project
life. Plant projects, loan, and Life Income projects will close. The life span of these
projects can range from 1 year to 20 years.
Endowments are perpetual and do not usually close.

This process remains centralized in R/3.

None identified at this time. Currently account set up is done centrally by the Controller's
Office and Campus Business Offices. This can stay the same in R/3 if desired.
UT will be able to control the status easily and report (PS structure) on the status of
projects if needed.


N/A

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R/3 does not provide an additional authorization check for setting system statuses once
you are in the 'create' and 'change' project transactions. CJ01/CJ02 (create and change
projects) will be the transactions given to the Controller's Office and campus business
offices (centralized). Therefore, these are the only users who will be able to maintain
project status.
3.4.1.
Preparation for Project Closing
Questions:
Q:
1) When in your project life cycle can you decide to close a project?
A: Sponsored projects and agency funds: A project can be closed at any time. Normally,
projects are run "full-term" to the project ending date as stated in the award document.
Sponsors or UT can terminate project early.
UT's fiscal policy (currently not enforced) states that all charges should be posted to the
project account within 60 days of the project ending date. This is so that the project can be
closed and final financial reporting sent.
Gifts: When the money has been spent.
Centers/Chairs: When the project is over
Loans are rarely closed unless the University decides to leave a program.
Endowments/Trusts: Endowments rarely close. Trusts close upon the death of the
beneficiary or the end of the state term. Endowments are generally perpetual accounts, and
trusts terminate upon the death of the beneficiary or the end of the stated term. Closure is
based on the MOA.
Plant: At the completion of the project
Q:
2) Who authorizes the final invoice?
A: Sponsored projects and agency funds: For the Knoxville campus, the Controller's Office
G&C Manager approves the final invoice prepared by the Controller's Office accountant. The
figures used in the final invoice normally have the verbal or written approval of the PI or
departmental bookkeeper. We use a "Schedule of Final Charges" form to ensure that all
charges in process are reflected on the final invoice.
At other campuses, the final invoice is similarly prepared, but final approval is with the
campus business office.
Centers/Chairs: N/A
Loans: N/ A
Plant: the University Architect.
Q:
3) Do you have requirements from a company guideline when closing a project?
A: Sponsored projects and agency funds: Yes, UT and most sponsors have project
closeout guidelines.
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Gifts: UT guidelines.
Centers/Chairs: N/A
Loans: N/A
Life Income: Account is closed based on an event as identified in the trust document (such
as death of last surviving beneficiary or end of term).
Q:
4) What legal requirements do you have to follow when closing a project?
A: Sponsored projects and agency funds: There are legal requirements for most project
closeout. UT is contractually obligated to deliver technical results as specified in the award
document that is a legally binding document. Also, UT is required by this legal document to
submit required financial reports and invoices. The requirements usually specify the format,
timing, etc. for financial reports. Some sponsors require signed, notarized closeout
documents by a certain date after award ending date. There are legal requirements
regarding project record retention.
UT is legally required by A-21 to have effort certification forms completed by all PI's. We will
need to either write and effort certification system or an interface to UT's current system.
Gifts: N/A
Life Income - trust document is legal document that identifies the donor's instructions as to
how the trust assets are to be used upon termination of the trust.
Q:
5) Has the project team been dispersed?
A: Sponsored projects and agency funds: N/A

Gifts: N/A
Centers/Chairs: N/A
Plant: N/A
CI Template:
3.4.1.1.
Final Settlement
Questions:
Q:
1) How do you ensure that your contractual obligations have been completed?
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A: Sponsored projects and agency funds: Fulfillment of technical obligations is the

responsibility of the PI with oversight from the pre-award office. If we have been paid in full,
we assume that our contractual obligations have been completed. For closeout
requirements, we rely on manual tickler systems either in our project file or on personal
calendars. Also, most sponsors who require formal closeout documents will send us
reminder letters.
Gifts: Fulfilling contractual obligations is the responsibility of the PI.
Centers/Chairs: Responsibility of PI
Loans: N/A
Endowments - By reviewing the Memorandum of Agreement (MOA) document
Life Income - By reviewing the trust document.
Q:
2) How do you ensure that all project costs have been received and paid?
A: Sponsored projects and gifts: UT fiscal policy allows 60 days after project end date to
post all applicable project charges. In reality, this policy is not enforced. When it is time to
send a final invoice on a project, we have two methods of ensuring that all charges have
posted: (1) call the bookkeeper and get verbal assurance that all charges have posted, and
(2) send a Schedule of Final Charges form to the bookkeeper which lists all charges to come
and all transfers off that will be posted in the future. Based on this response, the final invoice
is filed.
We ensure that all project costs have been paid by invoicing up to the cumulative award
expenditures with the award amount as the cap. We monitor the collection of invoices
through our accounts receivable system.
Gifts: It is the responsibility of the PI not to spend more than gifts received. An annual
review of these accounts is made by the campus business offices.
Q:
3) To which object to you settle your final costs?
A: Sponsored projects and agency funds: If there are final costs that cannot be billed to the
sponsor, these costs are normally either (1) transferred to another cost center or WBS by the
bookkeeper, or (2) settled to a cost center or WBS element by the campus business office
using a specific object code for cost sharing, 444.
Gifts: N/A
Plant: Asset. Could be WBS.
Q:
4) Who is responsible for final settlement?
Ultimately, the responsible cost center listed on the WBS element is responsible for costs.
Gifts: N/A
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Q:
5) How do you handle debits to the project if the project has been closed?
Ultimately, the responsible cost center listed on the WBS element is responsible for costs.
We would like for late charges not to be posted to closed project accounts.
Gifts: N/A
Plant: If costs continue to trickle in (i.e. funds are still available in the account) we would
continue to settle those costs back to the asset. Probably are immaterial, however.
Endowment/Life Income: A cost/revenue transfer by Journal Entry is made by the
Treasurer's Office Investment Group to zero out the account, and then a post-control is
placed on the accounts so that no other charges can hit the project. For endowments, this
happens approximately 2-5 times during a fiscal year.
3.4.2.
Project Completion
Questions:
Q:
1) Do you have requirements from a company guideline when closing a project?
A: Sponsored projects, agency funds, and gifts: Yes, the UT fiscal policy requires that all
project-related expenditures be posted to the project within 60 days of the project end date.
This policy is currently not enforced.
Centers/Chairs: N/A
Loans: N/A
Plant: No. Only that the work must be accepted by the University.
Q:
2) What legal requirements do you have to follow when closing a project?
A: Sponsored projects and agency funds: There are legal requirements for most project
closeout. UT is contractually obligated to deliver technical results as specified in the award
document that is a legally binding document. Also, UT is required by this legal document to
submit required financial reports and invoices. The requirements usually specify the format,
timing, etc. for financial reports. Some sponsors require signed, notarized closeout
documents by a certain date after award ending date. There are legal requirements
regarding project record retention.
UT is legally required by A-21 to have effort certification forms completed by all PI's. We will
need to either write and effort certification system or an interface to UT's current system.
Gifts: N/A
Q:
3) Who is responsible for officially closing the project?
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A: Sponsored projects, agency funds, and gifts: The campus business office or Controller's
Office is responsible for actual closing; however, the PI and bookkeeper are responsible for
getting the project ready to close.
Life Income - The trust officer request the Controller's Office to post-close the account.
Endowments - Financial Specialist or Investment Officer requests the Controller's Office to
post-close the account.
Q:
4) Do you use a checklist to verify whether a project has been completed?
A: Sponsored projects and agency funds: No, but we do use notes of contract requirements
manually transferred from the award document to a project file.
Gifts: No.
Endowments/Life Income: No
3.4.2.1.
Set Project Closed Status
Questions:
Q:
1) How do you assess whether all of the project requirements have been fulfilled?

reminder letters.
Centers/Chairs: Responsibility of PI
Loans: N/A
Plant: Responsibility of either the University Architect, or the architectural firm hired by the
University.
Endowment - Based on balance of gift (such as minimum gift balance has not been reached.
Also old endowments with little activity are sometimes requested by Development or the
College to be closed into another endowment or to a gift account. The Treasurer reviews and
approves these requests.
Life Income - Review of the trust document; notices from Development or newspaper
obituaries that beneficiaries have died.
Q:
2) How do you recognize if the project has been completed financially?

reminder letters.
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Plant: Final payment has been made to contractor and architect. However, sometimes
invoices continue to come in sporadically as long as money is left in the account.
Endowment/Life Income: The transfer of the balance is captured on the accounting records,
and the account is post-closed. This monthly activity is captured on the monthly Treasurer's
Report schedules.
Q:
3) How do you technically complete a project?

reminder letters.
Q:
4) How do you ensure that all the purchase orders are completed?
A: Sponsored projects, agency funds, and gifts: Projects cannot be closed if there are any
outstanding PO's. The PO balance must be zero.
Plant: They have been paid in full and there are no outstanding change orders in process.
Q:
5) How do you ensure that all the work dispatched is cleared?
A: Sponsored projects and agency funds: Dispatched work is to us the equivalent of

subcontracting? The bookkeeper and PI are responsible for ensuring that there are no
outstanding charges for subcontracted work.
Gifts: N/A
Q: 6) Do you need to be able to reset the status from "Technically complete" or
"Completed"? (If yes, there is an "undo" function.)
Gifts: Yes
Plant: yes
Endowments/Life Income: N/A
4.1.
Basic Settings
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4.1.1.
Fiscal Year and Posting Periods
Questions:
Q:
1) Is your fiscal year identical with the calendar year?
A: No, Our fiscal year begins July 1 and ends June 30.
Q:
2) How many accounting periods do you define in a fiscal year?
A: Thirteen: one period for each calendar month to record basic transactions and a
thirteenth period for special accrual, deferral, special allocation, and other closing entries.
Q: 3) If your fiscal year is not identical with the calendar year, please provide a schedule of
period closing for the past, current and next year.
A: Every regular period officially contains items that occurred through the last calendar day
of the month. For August through May, we take 3 business days to collect and post regular
and closing entries, then the month is closed the night of the third business day. June is
allowed approximately 2 weeks instead of 3 days before closing. June is followed by period
13, when reconciling, adjusting, and closing entries are captured; it is closed approximately
August 15. Then July is closed approximately August 22.
Q: 4) Do all your company codes have the same fiscal year/fiscal year variant? Provide
details if this is not the case.
A: Yes
Q:
5) When do you close your fiscal year?
A: June 30 is the official dating, but closing occurs about August 15.
Q: 6) Who is responsible for opening and closing accounting periods (including for materials
management)?
A: The Controller's Office. All accounts and areas closed together.
CI Template:
The University's fiscal year is July 1 through June 30.
1. UT requires 12 posting periods based on the calendar months.
2. UT requires a special posting period for closing and adjustments.
A fiscal year is divided into posting periods. Each posting period is defined by a start and
a finish date. Before you can post documents, you must define posting periods, which in
turn define the fiscal year. In addition to the posting periods, you can also define special
periods for year-end closing.
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In the general ledger, the system saves the transaction figures for all accounts for each
posting period and each special period separately according to debits and credits
A fiscal year consists of several posting periods and if necessary, special periods that
can be posted to after a temporary year-end. You define how the fiscal year is set up in
R/3 by creating a fiscal year variant. Each company code is assigned a fiscal year
variant.
The fiscal year variant defines the number of posting periods, special periods and dates
that fall within the posting periods. Every transaction that is posted in the system is
assigned to a particular posting period. The transaction figures are then updated for this
period.
Posting periods can be configured to reflect a calendar month end or specific days within
a month (i.e. last Friday of month). The posting periods can be configured to address
UT's fiscal year of July 1 June 30.

Create the fiscal year variant and define the number of posting periods and special
periods, identify if the fiscal year is calendar based (for example January is period 1,
February is period 2, etc.). Assign the posting periods to the calendar dates (for example
July 1 July 31 is period 1).
4. Business Model
N/A

University of Tennessee's fiscal year is not calendar based. It is from July 1 - June 30
and has 13 posting periods, 12 calendar periods and one special period.

None
R/3 has the ability to have up to four special periods, if determined necessary by UT.

None

N/A
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N/A

UT's posting periods are based on calendar dates (i.e. July 31, Aug 31, Sept 30, etc.).
And UT has only one special posting period for closing.

N/A
4.1.2.
Document
Questions:
Q:
1) How do you classify your documents?
A: BV - Batch Voucher - Excess financial aid check, refund check or other non - DV / PV
CV - Cash Receipts Voucher - Cash received by the university
DV - Disbursement voucher - Check paid to vendor for goods or services
JV - Journal Voucher - Centrally prepared entry or adjustment
LB - Budget Revision- Budget change to unrestricted account
PE - Payroll Encumbrance - Initial or change to salary encumbrance
PO - Purchase Order - Order for goods or services placed through Purchasing Office
PV - Payroll Voucher - Check paid for employee services
RB - Restricted Budget - Budget change to restricted account (form T-1 or direct interface
from sponsored Pg)
TV - Transfer Voucher - Departmentally prepared charge/credit or adjustment
Accounts Payable:
Documents Used: vendor invoice, credit memo, T-29 (Special Remittance and Order Form),
T-27 (Request for Special Payment), T-4 & T-44 (Petty Cash), refund of expenditure, voucher
authorization, T-3 (Travel reimbursement), travel advance form, direct bill for airfare, TV (T16, transfer voucher), BV (batch voucher) and a list of disbursements from any campus.
Unique number ranges: None used, vendor # is the prime key - the system does not assign
a document number.
It will be decided whether or not we wish to have the numbers assigned by the system.
Q: 2) For which types of documents are the document numbers assigned

internally/externally?
A: BV - external
CV - external
DV - Next available number is assigned from a table.
JV - external
LB - external
PE - external
PO - external
PV - external
RB - external
TV - external
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Q:
3) What is the document numbering logic?
A: Entries into the legacy University general ledger are identified by a transaction type and
8-digit reference number. Every transaction type is free to assign reference numbers without
regard to any other transaction type. This means that reference numbers are not unique
between transaction types. For instance, it is possible to have at the same time a BV # 1, CV
# 1, DV # 1, JV # 1, etc. There are also instances where the legacy posting job or feeder
module will assign the number "99999999" to a ledger entry. The use of duplicate numbers
does not impact the integrity of the legacy ledger database.
With each transaction type, numbering conventions and ranges have been devised to meet a
variety of needs. In cases where there is more than one processing office, ranges are
established to avoid duplicate number assignment and just as importantly, to identify the
particular processing office. A processing office is not just an initiator of a transaction, but
has authority to control document use and numbering and in some cases may encode
transactions and submit them to the legacy system for processing. Since the legacy ledger
entries do not contain fields to identify the processing office or operator-id, the transaction
number range serves that purpose. This is the case for DVs, JVs, POs, RBs, and TVs.
In the payroll area, the reference number assignment convention is used to categorize
payrolls by types.
PV 0-99 "Regular" or original payrolls: monthly, biweekly, supplement, longevity, and evening
school.
PV 101-112 approx.: Check cancellations
PE 200-212 approx.: Payroll encumbrance adjustments used to bring the ledger into balance
with HR.
PV 301-324 approx.: Salary transfers (retroactive cost re-distributions to cost centers and
projects)
PV 401-452 approx.: Small misc. weekly payrolls mostly to pay unincorporated contractors
(object 195).
All LBs are routed to the Controller's Office for keying and a single number range reset to 1
each fiscal year is used. The Original (approved) budget is posted as LB # 1. Subsequent
revisions are sequentially assigned.
Although Martin, Chattanooga, and Memphis submit CVs by electronic interface, they must
be merged with the daily CV prepared by the Knoxville Campus Bursar's Office. There is one
CV number assigned for the day, which is encoded on all CV transactions for that day. The
first CV of the fiscal year begins with 1.
All BV batches are summarized by date, batch, account, and object for recording to the
ledger. All BV ledger entries have "99,999,999" for the reference number. The original check
numbers (which do not post to the ledger) are divided into ranges to avoid duplicates and to
signify the processing office.
CHECK NUMBERING RANGES (only DVs post in detail rather than summary form and the
reference number is the same as the check number).
Range
Assignment
100,001-999,999
Regular DVs
400,001-499,999
UWA typed DVs emergency checks
* Note there is a collision with the range above.
201-1200+
Chattanooga-typed DVs to quick pay for event/performances and

to State of Tennessee for related taxes.
PV checks Note: PVs post in summary form (see separate discussion of PV number ranges).
Note: payroll also pays employees by direct deposit, which has a separate numbering range.
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000,001 to 999,999
BVs: These numbers do not appear on the ledger. All BV

batches are summarized by date, batch, account, and object for
recording to the ledger. All BVs carry the transaction number
99,999,999. Check number logic follows.
9,000,001-9,899,999
Regular BVs centrally printed.
Checks remotely prepared and printed but presented to the financial system as pre-written
BVs for summarization and ledger posting, microfiching, and other electronic storage to
facilitate other processes:
9,900,001-9,999,999
CSA BVs
5,000,000-5,999,999
Martin BVs
4,000,001-4,999,999
Chattanooga BVs
7,000,001-7,999,999
Memphis BVs
Q:
4) Are the document numbers assigned on a yearly basis?
A: Some are, some aren't as follows:

BV: (summary ledger entries, not the check itself) all are ref # "99,999,999"
CV: restart with 1 each fiscal year
DV: (ledger uses check number as reference) not reset for fiscal year
JV: restart with 1 each fiscal year (primary range)
LB: restart with 1 each fiscal year
PE: restart with 200 each fiscal year
PO: not sure, believe they do not reset for fiscal year
PV: each of the five ranges is reset: 001, 101, (200s are PEs), 301, 401
RB: do not reset for fiscal year
TV: restart with 1 each fiscal year (primary range) other ranges may not be handled
consistently.
CHECK NUMBERS:
Check numbers (BV, DV, and payroll) are not reset for the fiscal year, they run through an
assigned range and start over at the beginning of the range when the last check number in
the range is used.
CI Template:
The legacy system utilizes the document types listed below known in the legacy system
as transactions types. Our expectations about how these would be implemented in R/3
follows the list.
BV - Batch Voucher - Excess financial aid check, refund check or other non - DV / PV
CV - Cash Receipts Voucher - Cash received by the university
DV - Disbursement voucher - Check paid to vendor for goods or services
JV - Journal Voucher - Centrally prepared entry or adjustment
LB - Budget Revision- Budget change to unrestricted account
PE - Payroll Encumbrance - Initial or change to salary encumbrance
PO - Purchase Order - Order for goods or services placed through Purchasing Office
PV - Payroll Voucher - Check paid for employee services
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RB - Restricted Budget - Budget change to restricted account (form T-1 or direct interface
from sponsored Pg)
TV - Transfer Voucher - Departmentally prepared charge/credit or adjustment
Expectations in General: Document type may be a distinction we want to use for security
as indicated in certain documents. All documents need to collect the data required to
support fund accounting in the special ledger or a process exist to fulfill a known gap.
BV - Three years ago the University changed BV processing to allow student bursar
systems to issue their own pre-written BVs and export the transactions to the financial
system for posting with an indicator to designate pre-written. These "pre-written" BVs
skip the check writing process, but follow the other procedures the same as BV requests
to write checks. This process includes a process to save the BV detail transactions,
produce microfiche in two orders, send check numbers to the bank daily so the bank can
reconcile the account, hold the detail transactions for approx. 24 months so checks can
be cancelled or written off by reference to the check number alone, summarize the BVs
prior to ledger posting on certain keys (I believe this is legacy account, object, batch, and
date).
R/3 will also need to distinguish between "to be written" which will go to payables and
"pre-written" which will be a journal entry of some kind. We still may want to summarize
before posting so that we do not clutter the ledger sheets with detail. We will need to
evaluate very carefully if we are not able to continue to cancel or write-off checks by
number alone, create a microfiche of facsimile. We may want to use a different R/3
document type to distinguish "to be written" and "pre-written".
CV - In the legacy system the CV is used to record all cash receipts, although there have
been limited occasions at a closing deadline that a one sided JV has been used. In the
legacy system, Chattanooga and Memphis bursar systems generate CV transactions,
which are brought in as interfaced transactions. In R/3, we may want to distinguish
bursar system interfaced transactions from transactions directly keyed into R/3. We may
also want to distinguish investment system interfaced transactions. These distinctions
may facilitate the transaction and data level (where needed) security or authorization
processes.
In the legacy system, CVs are entered as one-sided transactions. The posting program
performs a table lookup to create an offsetting entry to a fund group entity cash account.
This function will have to be performed, but may be done periodically rather than in realtime. However, R/3's normal offset would be a G/L account that represents an account at
a commercial bank. This is information is posted to an auxiliary file in the legacy system.
However, CV transactions carry a "bank code" field that identifies the account at a
commercial bank. R/3 may need the interface program to generate a cash offset entry
based on the bank code.
Certain cash receipts such as receipts that apply to grant and contract invoices, may
need to be entered directly through R/3 rather than coming through an interface.
In the legacy system, cash receipts are reconciled outside of the financial system. UT
will probably want to use R/3's capability to reconcile inside the system for certain high
volume bank accounts for which a download can be obtained. This would affect the
nature of the cash account established in R/3 and the associated configuration and the
behavior of cash receipt processing.
DVs are an A/P transaction.
JVs are centrally prepared journal vouchers. We may wish to maintain this distinction to
facilitate authorization processes and to assist departments in recognizing the type of
transfer. See also TV.
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PE - Payroll encumbrances are an interface transaction impacting FM in R/3.

PO - Purchase orders are an MM transaction impacting FM in R/3.
PV - Payroll vouchers are actual salary and benefit costs which will post to G/L and
dependent ledgers. HR is developing the interface.
RB - Restricted budgets impact FM. It may be desirable to distinguish interfaced RBs
such as sponsoring program budgets or Memphis grant and contract budgets from
budgets entered directly in R/3. It may also be desirable to distinguish between restricted
budgets, which are cumulative in nature, and span fiscal years from unrestricted budgets,
which are limited to a fiscal year. These distinctions may facilitate the transaction and
data level (where needed) security or authorization processes.
TV - Transfer Vouchers are implemented in R/3 as journals. It may be beneficial to
distinguish not only between centrally prepared transfers (JVs) and others (TVs), but also
to distinguish between types of TVs. This distinction could help departments in their
reconciliation/review process to verify the appropriateness of charges. For instances,
transfer documents which are created by departments/units and are self contained within
a department or accountability unit, do not need the same level of scrutiny (at the
departmental level) as those transactions which were posted outside of the departments
control. A different transaction type would allow departments to filter transactions and
focus their review on "things that were done to them". It may be useful to differentiate
between the service center TV "billing" and the interdepartmental transfer of expense.
Also, it we may want to distinguish external interface transfers. It may also be useful to
distinguish transfers for the purpose of correcting errors. All of these distinctions may
facilitate the transaction and data level (where needed) security or authorization
processes.
Documents are the link between the business transaction and the posting in accounting.
An accounting document is the result of a posting in Financial Accounting either directly
or indirectly via integration points (i.e. payroll postings). The document types are
assigned to document number ranges. A unique document number within the assigned
range is assigned to the document at the time of posting.
Only complete documents can be posted. A document is complete when its debit and
credit items balance to zero. You must enter the minimum account assignments
designated by the system: For example, document date, posting date, document type,
posting key, account number, and amount. Data must also be entered in all other fields
that were defined as required fields when making system settings.
There are several types of documents with R/3 such as asset postings, journal entry,
vendor invoice, customer credit memo, etc. Each document type is defined within the
system and assigned to a document number range. This will allow you to assign a
particular number ranges to individual document types. Documents numbers will be
assigned internally by the system based on the assigned number range for that
document type.
4. Business Model
N/A
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The creation of document types and assignment of document number ranges will be
maintained centrally. The posting of documents will be shared throughout the University.
Currently, most document numbers are assigned outside the legacy system. In the
future, document numbers will be assigned automatically by R/3.
Each document will have a unique document number/fiscal year combination.

None
N/A


Need to identify the document types and determine the appropriate document number
range to assign. Need to identify what document types will share a document number
range.
The authorization for posting of documents will be secured by transaction and fund/fund
center/commitment item. The viewing of financial documents will be secured by
fund/fund center/commitment item. The University needs to restrict access to of certain
users to certain document types.

N/A
4.1.3.
Tax on Sales/Purchases in SAP System
Questions:
Q:
6) What are the tax reporting requirements?
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A: Generally, the University is tax exempt from sales tax for goods that it purchases.
The motor pool may pay taxes on gas purchased and subsequently request refunds. No tax
amount is calculated by the financial system.
The University pays occupancy tax on direct billing for lodging. The tax amount is noted on
the bill and is paid to the hotel that must remit and report.
The University pays tax related to out of state conferences. The amount is calculated outside
of the financial system (probably noted on the bill sent to the University).
In a recent determination, the University must collect sales tax on certain contract projects. A
new expense object code "831" was added for this purpose.
Some University departments sell products for which sales must be collected. Tax amounts
are calculated outside the Financial system by the department's own system. DVs are
processed to remit these tax payments to the State of Tennessee.
Some University departments event tickets (ex: football) for which amusement tax must be
collected. Tax amounts are calculated outside the Financial system by the department's own
system. DVs are processed to remit these tax payments to the City or County.
Q:
8) To which G/L accounts will taxes be posted?
A: Selling departments usually record total sales including sales tax to the cost center
income account. A DV is processed to remit a check to the State of Tennessee, the City, or
the County as appropriate and the cost center income account is debited.
A department making a purchase subject to sales tax would include the tax amount in the
charge to the cost center and the natural object of the item being acquired.
CI Template:
The University does not have a requirement to calculate tax on purchases.
4.1.4.
Posting Help
Questions:
Q: 1) Which help for posting do you need (such as account assignment models, sample
documents, control totals, and user parameters)?
A: We need account assignment models, sample documents and user parameters for all
single value fields.
CI Template:
The legacy system has features that simplify the input of documents. The features
related to journal entries and the limited departmental journal (TV) follows:
Create a storable template journal with line item detail that can be copied as a
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starting point and modified when inputting a new JV.

Selectively duplicate field contents from the line above on a field-by-field basis.
Automatically duplicate a description field on all JV lines.
Default a bank account.
Designate that a journal is to be reversed at some future time (see document
reversal section 1.2.1.4).
R/3 specific settings:

default client (if this makes sense)
default company code
default controlling area
default funds management area
other required fields where UT's implementation allows for only one value
An account assignment model is a reference for document entry and can contain any
number of G/L account items that may be left incomplete. During document entry you
can change, add to, or delete the proposed data. This is similar to the current pattern
journal voucher.
User parameters supply defaults to R/3 fields. When a field is displayed, the system
automatically fills in the default value. Depending on the field definition, the entry can also
be replaced with a value entered by the user. This can be used for single value data
elements (only one valid UT value) such as company code or controlling area.
Control total function can be used to check whether amounts have been entered correctly
or not. You can choose whether the system adds all posting amounts. When you have
posted a document, you compare the total you calculated with the control total in the
system. You can choose whether the system deducts the posted amounts from a given
amount. After posting, the control total in the system should be zero. Or you can choose
whether the system adds the posted amounts to a predefined amount (opening balance).
After posting, the control total in the system must correspond to the closing balance of
the account.
Account assignment models are created within the system at a transaction level. The
models are entered and saved in the system to be used during journal entry process.
The end user will enter a journal entry with reference to an account assignment model;
make any adjustments to the line items and post.
The user parameters are entered either by the system administrator or the end user. The
parameters default the designated values (such as company code or controlling area) to
the appropriate fields when processing transactions.
Control totals are used to check whether the data has been entered correctly. You enter
the total to be posted and the system then displays the difference after the amounts have
been posted. Another option is to enter an opening balance, post the amounts and the
system then displays the closing balance.
4. Business Model
N/A
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The use of posting help will be decentralized, however, the initial creation or set up of
these various help functions may be at the system administrator level or centralized at
the Controller's Office or Campus Business Office.
None expected
None noted

None noted
N/A

N/A

N/A

Anyone with transaction security.
N/A
4.1.5.
Withholding Tax
Questions:
Q: 1) What are the reporting requirements for contractors, self-employed etc. in your
country?
A: Any cumulative totals for a vendor over $600 require a 1099 to be issued. A T-5 form
must be completed for moving type expenses. These amounts show up in the employee's W 2.
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Q:
2) How do you transmit this information to the tax authorities and your vendors?
A: There is a separate info system. All entries are either automatically picked up from IMS or
keyed into the system. For any totals over $600/calendar year, a 1099 is issued and sent to
the vendor. This information is transmitted by the Payroll department to the IRS. Some items
that are taxable to employees are keyed by A/P but show up in their W - 2.
Q:
3) Do you withhold any amounts at the time of payment?
A: No.
CI Template:
Any cumulative totals for a vendor over $600 require a 1099 to be issued.
Univ. of Tennessee is required by law to perform tax withholding on certain tax-liable
vendors whenever payments for services are processed.

Any cumulative totals for a vendor over $600 require a 1099 to be issued. A T-5 form
must be completed for moving type expenses. These amounts show up in the
employee's W-2.
4. Business Model
None

Vendor master data records must be maintained to include the details associated with
Withholding tax.

None
Provides comprehensive details associated with Withholding tax allowances and vendor
liabilities.

None
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None
None

Withholding tax configuration needs to be setup based on whether UT needs to use
standard Withholding tax or Extended Withholding tax.
Need to maintain the appropriate Government 1099 SAPScript forms whenever the time
comes to release vendor tax forms.

Typically an Accounts Payable profile would be used to process the annual Withholding
tax reports.
Invoice entry for a Withholding tax vendor will be a shared responsibility of either
Accounts Payable or the individual departments. (Care should be taken to ensure that
the vendor is correctly setup with the proper withholding tax information.)

N/A
4.1.6.
Schedule Manager
Questions:
Q: 1) Are the processes that you run on a regular basis (such as period-end closing,
payment run, dunning run) scheduled and monitored using a Scheduler?
A: Yes
CI Template:
The University requires tools for the management of multi-step processes and expects
that those tools will interact in an integrated way. Currently, the University uses:
o
o
o
o
o
job threads with conditional execution

Zeke scheduler
collects job logs for review
paper lists
diagrams for processes which can run parallel
R/3 scheduler should provide us a single location to execute and control comprehensive
multi-step processes. Not only are the tasks listed in one place, but they can be
scheduled or lauched, progress monitored, and operational procedures (documentation)
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attached.

In the financial area, this tool should at a minimum be available to approximately five
people involved in the period or annual close. Modification of a given schedule should be
limited to those with responsibilities for the scheduled process. The tool could be
extended to certain other users provided schedules are secured and there is no
degradation to performance of the tool or R/3.

There will not be any changes to the existing organization with one possible exception.
The accountants in charge of closing the books may need less assistance from "data
control" staff to carry out the execution of day time job streams.
4.2.
General Ledger Processing
4.2.1.
4.2.1.1.
Postings in G/L
Park G/L Account Document
Questions:
Q:
1) What is your procedure for parking and releasing documents?
A: BV, CV, DV, JV, LB, PE, PO, PV, RB, TV

CI Template:
In the University's legacy system, documents (journal vouchers and departmental transfer
vouchers) are parked until the batch is balanced, and released and/or submitted for
processing. For a given batch of documents, a given user can either perform all
functions: input/park, release/submit, or one user could input/park while another user with
the same or greater authorizations could modify/complete and/or release/submit
subsequently. The central business office has authorization to review/modify all batches.
This feature is customarily used to change posting periods on non-released/nonsubmitted batches on the final day or two of closing to avoid retroactively changing the
expenditure base which is used for calculating overhead and staff benefit allocations.
You can use document parking to enter and store (park) incomplete documents in the
R/3 System without carrying out extensive entry checks. Parked documents can be
completed, checked and then posted at a later date if necessary by a different user.
When documents are parked, data (for example, transaction figures) is not updated. The
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only exception to this is in Cash Management.

The advantage of parking documents is that you can evaluate the data in the documents
online for reporting purposes from the moment they are parked, rather than having to wait
until they have been completed and posted. For example using payment requests,
parked invoices can be paid punctually and without loss of discount.
Substitution is not supported in document parking. Substitution takes place via the
posting transaction after you generate an accounting document from the parked
document.
Within the system, you can park a document. When you save a parked document,
transaction figures, asset values and control totals are NOT updated, and the system
does not generate any automatic postings. No balance checks are made, but the balance
is displayed in the parked documents document overview.
After a document is parked, a user can display the parked document for review or
approval. If the parked document is complete, the user can post the parked document.
At this time, transaction figures are updated.
If the parked document is not complete or incorrect, a user can change a parked
document. Once the changes are made, the user can post the document or park the
document for review or approval.
Parked documents are assigned a document number at the time of parking.
4. Business Model
N/A

Document parking will be a decentralized process. Documents can be parked at the
department level and approved and posted by their supervisors or department managers.
None
Parking in R/3 is perceived to behave the same way across all documents where parking
in the legacy system would be particular to the document being entered.
None

N/A
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Authorizations should allow one person to park a document and another person with
equal or greater authorization to complete and post a document. It is desirable that the
system captures the ID of both the person entering and the person posting a parked
document when the two are not the same. The central office should be able to modify
the posting period of a parked document to avoid concurrent posting of new entries which
impact an allocation base while month-end allocation processes are being run. These
allocations need to run after all costs have been accumulated to cost bases but before
the period is completely closed so the allocation itself can post to the period being closed.
N/A
4.2.1.2.
G/L Account Posting
Questions:
Q:
1) What types of general ledger transactions do you process?
A: [X] Down payment

[ ] Bill of exchange
[X] General ledger
[X] Document journals
[X] Accrued/prepaid expenses
[ ] Cross-company code transactions
[X] Incoming payments
[ ] Outgoing payment
Q:
2) Which internal documents do you need to print?
A: BV, CV, DV, JV, LB, PE, PO, PV, RB, TV

CI Template:
Postings should meet the following criteria:
o G/L account posting should trigger appropriate postings in CO, FM, SPL, etc.
o Sufficient access authority or line item approvals should be checked before
posting transactions.
o Posting cannot occur to a closed posting period.
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o
o
o
Posting cannot occur to a closed account.

Posting of documents should generate entries to maintain cash balances by fund
and the ledger of record for such postings is probably SPL
Posting of a document cannot occur unless the document contains valid values
for all fields required for any given ledger (including special ledger).
Periodic (probably daily) reporting of posting results should be available to insure that the
system is performing properly. In the legacy system, logs of incoming and outgoing
payments are compared with posting results for each originating subsystem (or check
range for manual payments) capable of creating payments. An independent offline record
of bank balances is maintained to validate the corresponding ledger values on a daily
basis. This is a control to insure that the system is performing properly and that all
transactions are being recorded. Other control checks will be needed appropriate to
insure the integrity of the ledgers based on the way R/3 works and the inherent risks.
G/L account posting is how detail accounting transactions will get into R/3 and
corresponding ledgers. Fields in documents must meet edit requirements and be posted
by an operator with authorization to all cost centers, WBS, Funds, and accounts.
Documents between parties without authorizations must either route through workflow for
approval by all parties or be posted by a third party with authorization to all posting
targets. If workflow is not used, (therefore central third party posting) it is desirable to tag
document lines so that "inter-authorization" postings can be identified.

To create a G/L posting, enter the required header data (usually: Document date,
document type, company code, posting date, and currency). Enter the posting key and
the G/L account number of the first line item.
The posting key and the field status group for the G/L account determine which fields are
displayed on the next screen. Enter the data for the first line item. The posting key and
the account number at the end of each screen determine which fields are displayed on
the next screen for entering a line item. At least two G/L account line items are required.
When the debits equal the credits, and the data is complete, post the document. The
system updates the document file and the G/L account balances.
4. Business Model
N/A

G/L Account posting will be decentralized at the department level.

The legacy system used a batch update process run under direction of data control
customarily once a night and in the afternoon on the day of close or infrequently, as
required to meet a reporting deadline. R/3 posts in real time at the discretion of the
transaction originator at the departmental level. The posting batch process data control
function should be replaced with help desk assistance and trouble shooting for problems
and difficulties encountered by users attempting to post.
We also expect different kinds of transactions than are currently supported.
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On line real-time posting for transactions.

N/A

Document types, document change rules, document number ranges, etc. must be
created prior to posting.

Those with proper transaction and departmental security.

N/A
4.2.1.3.
Recurring Entry
Questions:
Q: 1) Do you have documents that occur on a regular basis (monthly or quarterly, for
example)?
A: YES
CI Template:
The University requires the ability to create and store for later retrieval an entry to serve
as the basis for entering common transactions repeatedly, with minimal additional typing.
We would want this ability both for the Controller's Office and with different security at the
department level.
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Postings which recur time and time again can be made using the recurring entry
program. To do this, you enter a recurring entry document, and then execute the
recurring entry program at certain intervals or schedule it for execution.
You can specify when an accounting document is created from a recurring entry
document as follows (choose from the alternatives below):
You enter the interval in the recurring entry document by specifying a date for the first run
and a date for the last run. You also enter the run intervals in months. By specifying a
calendar day, you can determine the day on which the program is executed. This is
useful if the postings are to be made at monthly intervals (calendar months).
You can define a run schedule in the system and specify in the recurring entry document
which schedule the system uses for the document. This procedure is useful if the
postings cannot be made at monthly intervals. Postings that are to be carried out in 13
periods or every other week, for example, can only be made by scheduling the run. In this
activity, you define the run schedules by specifying a key and a description. In a second
activity, you enter the required dates for each schedule.
4. Business Model
N/A

The journal entry process is at the department level. Recurring entries may be entered at
the department level but executed centrally.

The posting of recurring documents will remain within the Controllers Office.
With recurring entries, you are able to schedule and post a document multiple times.


N/A

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The posting of recurring entries will be a centralized function within the Controllers Office
and will be secured by transaction.

N/A
4.2.1.4.
Document Reversal
Questions:
Q:
1) How should a document reversal update the balances of the relevant accounts?
A: It should reverse the previous entry.
Q:
2) Do you want do define a specific document type for reverse documents?
A: Probably
CI Template:
The university requires the ability to automatically generate reversing entries after month
end close and year-end close. We also require the ability to reverse single entries as
needed.
If you have entered an incorrect document, you can reverse it, thereby also clearing the
open items. A document can only be reversed if the following criteria are met:
1 - It contains no cleared items
2 - It contains only customer, vendor, and G/L account items
3 - It was posted with Financial Accounting
4 - All entered values (such as business area, cost center, and tax code) are still valid
The document and the reverse document increase the account transaction debit and
credit figures by the same amount. This will provide an audit trail.

To reverse a document, enter the original document number, the company code, and the
fiscal year. If the reversal document cannot be posted to the same period as the original
document, enter the posting date and the posting period of the reversal document and
post. The system generates a reverse document, creating debit and credit amounts.
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4. Business Model
N/A
Initially, the reversal of documents will be a centralized function at the Controllers Office.

None noted.

N/A


The proposal is for document reversal to be secured by transaction. Initially, document
reversal will be a central function within the Controllers Office.

N/A
4.2.1.5.
Mass Reversal
CI Template:
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The University requires the ability to reverse multiple G/L accounts at one time. We
require the ability to reverse all payables, accruals and deferrals in mass. We expect this
to happen at the beginning of each fiscal year and at the beginning of each month.
Mass reversal allows you to reverse multiple documents at one time. All of the
documents to be reversed must meet the following criteria:
It contains no cleared items
It contains only customer, vendor, and G/L account items
It was posted with Financial Accounting
All entered values (such as business area, cost center, and tax code) are still valid

To reverse a document, enter the original document numbers, the company code, and
the fiscal year. You also have the option of selecting criteria to limit the documents to be
reversed. The system will display a list of documents to be reversed. Select post
reversal and the system generates a reverse document for each original document.
4. Business Model
N/A

Although journal entry processing is at a department level, mass reversal of documents
will be centralized to limit the possibility of reversing mass documents in error.

None noted
Instead of having to reverse documents one at a time, you now have the ability to reverse
several documents at once with an audit trail.


N/A

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The mass reversal of documents will be a centralized function within the Controllers
Office and will be secured by transaction.

N/A
4.2.1.6.
Accrual/Deferral Posting
Questions:
Q:
1) How do you handle accruals?
A: Each year-end, we accrue deferred charges, deferred revenue, salaries and benefits, and
general payables. We receive this information from the various campus business offices and
manually create these entries. These entries are reversed in the new year.
CI Template:
The University requires the ability to accrue and defer certain expenditures and revenues.
We expect this to be accomplished in certain G/L accounts.
Accruals/Deferrals are the assignment of an organization's receipts and expenditure to
particular periods, for purposes of calculating the net income for a given period. An
accrual is any expenditure before the closing key date, which represents an expense for
any period after this date. Deferred income is any receipts before the closing key date
that represent revenue for any period after this date.
Accruals and deferrals are entered in the system similar to a journal entry, however you
will enter the reversal date/period on each transaction.

Enter the accrual document with the required data - G/L accounts, dollar amount, cost
object, document date, reversal date/period, etc. Accruals can be entered individually or
can be entered as a recurring document or an account assignment model. Post the
accrual document once it is completed. The accrual document is reversed in a future
period as entered as the reversal date/period. Accruals can be reversed individually or
by mass reversal.
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4. Business Model
N/A
Accrual and deferral postings will remain a centralized function within the Controllers
Office.

None noted.
Accrual/deferral postings are entered with a reversal date.


N/A

N/A

Need to create or assign accrual document type in system. Need to run program for
reversals based on reversal date.
The posting of accruals/deferrals will be a centralized function within the Controllers
Office secured by transaction.

N/A
4.2.1.7.
Clearing
CI Template:
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We require the system to match and relieve pre-encumbrances, encumbrances,

purchase orders, invoices, and payments by their antecedent transaction. We also
require that payments to the University clear invoices that we have sent to customers.
In the clearing procedure, you select open items that balance to zero from an account.
These items are marked as cleared by the system. The system enters a clearing
document number and the clearing date in the document items. Open items on an
account can be cleared manually using the Account clearing function, or they can be
cleared automatically by the system.

In the clearing procedure, you select open items that balance to zero from an account.
These items are marked as cleared by the system. The system enters a clearing
document number and the clearing date in the document items. The clearing date can be
the current date or a date that you enter manually. The clearing document number is the
number of the most recent document involved in the clearing transaction.
Since postings do not have to be made during account clearing, documents are usually
not created. However, the system might have to make clearing entries if line items from
different business areas are part of the clearing transaction. In this case, a document is
created. The number of this clearing document is entered in all cleared items.
Open items on an account can be cleared manually using the Account clearing function,
or they can be cleared automatically by the system.
During clearing, the program enters a clearing document number and a clearing date in
the line items. It uses the document number and posting date from the most recent
document with the highest document number that is part of the clearing process.
The program groups together those items from an account that have the same:
Business Area, Currency, Reconciliation Account and up to four customized criteria set
by UT.
You can specify criteria for each account type based on a single account or an interval of
accounts. You use these criteria to restrict the number of items that are considered
together. This ensures that only those items that are based on a specific business
transaction are cleared together.
4. Business Model
N/A

The clearing of G/L items will initially be a centralized function within the Controllers
Office. This function can be distributed a decentralized level if departments will have a
need to clear G/L account items (this does not refer to A/P or A/R).

We do not perform clearing at this time, except outside the general ledger so we would
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have to assign someone the responsibility to perform these duties.
With clearing, you are able to manage accounts on an open item basis. With the open
item management, only uncleared or open items are displayed. This will limit the line
items to review for the clearing accounts.


N/A


In order for you to clear items from an account, the account must be managed on an
open item basis. This allows you to monitor your outstanding receivables and payables
at any time. The open item management option, however, must be defined for general
ledger accounts. You would set this option, for example, clearing accounts in order to be
able to track whether the business transactions posted to these accounts are closed yet.
Open item management ensures that all items that have not yet been cleared are
available in the system.

Clearing of G/L line items will initially be a centralized function within the Controllers
Office secured by transaction.

N/A
4.2.2.
General Ledger Account Analysis
CI Template:
The University requires the system to display and/or report the same line item detail and
balances that are available in our current system. These include detail transactions for
each G/L account. The University expects to be able to see beginning and ending
balances and debits and credits. We also expect to be able to drill down to the individual
transactions.
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When you post documents to an account, the system automatically updates the account
balance. In addition, for G/L accounts that are managed with line item display, the system
notes which items from the document were posted to the account. It is therefore possible
to view the account balances and (depending on the specifications in the master record)
the line items for every G/L account.
The account balance displays the opening balance (carry forward balance from the
previous year), the total of all transactions for each posting period, broken down into debit
and credit postings (transaction figures) and the accumulated balance of the account.
For those accounts that are managed on an open item basis, you can choose to display
open and/or cleared items. You can choose to display G/L account line items based on
selected criteria such as period posted, date posted, open items versus cleared items,
etc.

For accounts managed with open item display (specification in the master record), you
can display the line items that make up the account balance in a certain posting period.
Depending on which line items you wish to display, place the cursor on an entry in the
balance display and double-click or select the Line items pushbutton. You can display
line items by line items from previous year, line items from a period, debit or credit line
items from a period, all debit or credit line items or line items from a period in document
4. Business Model
N/A

General ledger analysis will be a decentralized process at the department level. The
accounts balance display can be limited by business area for security reasons.
We will be adding G/L accounts that we currently do not have.


N/A
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N/A
To display line items, the G/L account master record must be marked with line item
display.

G/L Analysis will be a centralized function within the Controllers Office secured by
transaction.

N/A
4.2.2.1.
General Ledger Line item Analysis
Questions:
Q: 1) Is there certain information that you wish to be able to display when you view items
online?
A: Yes. We would like to be able to view the things we can currently view about an account
which include activity and balances. We can provide screen prints.
4.2.3.
Closing Operations
Questions:
Q:
1) Which internal and external evaluations belong to month-end closing?
A: We have a month-end schedule that we follow very closely to determine that all
processes are complete and that the computer jobs are run in the correct order. See Aldena's
schedule.
Q:
2) Which processes do you have in addition to the month-end closing?
A: We write and post DVs and BVs every day, we post TVs and JVs everyday. We post
PEs and PVs when they occur. We post POs daily. We post LBs and RBs whenever they
occur. We post CV's every day. We run edit checks with the postings to ensure our account
numbers are correct.
Q:
3) Describe your current process and time frame for year-end closing.
A: We close the year from the middle of June until August 15. We have a very detailed plan
that is coordinated between the Controller's Office and the UCS Staff. Each staff has a
lengthy schedule of dates and instructions as when to perform certain tasks, create
transactions, and close certain parts of the University's books. For instance, we post all old
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CVs for several days into the new year. We write and post DVs and BVs for ten working days
into the new year. We close accounting period 12 on the 10th working day of July. After that
date only TV's' and JV 's are posted. See instructions for more detail.
Q:
5) What are your reconciliation procedures?
A: Several persons in the Controller's Office and Treasurer's Office reconcile different fund
groups all during the closing process. The Controller reconciles Current Unrestricted Fund
balances, including E & G, Auxiliary and Hospitals. The Controller's General Account
Manager reconciles Restricted Funds, Loan Funds and Agency Funds. The Treasurers
accountants reconcile Endowments and Life Income Funds. Controller' Office Plant Fund
accountants reconcile all Plant Funds (which includes Unexpended Plant, Retirement of
Indebtedness, Renewals and Replacements and Investment in Plant).
The procedures are to reconcile from beginning fund balance to ending fund balance using
various Excel spreadsheets and monthly reports.
4.2.3.1.
Reclassification Receivables/Payables
Questions:
Q: 1) Do you classify open vendor/customer items in the financial statements according to
short, medium, or long term receivables/payables? Describe your procedure.
A: No.
Receivables are adjusted to actual for each account as appropriate.
Payables are created based on departmental request and Controller's Office review. All
invoices over $1,000 paid in July are reviewed to determine if the receipt date is prior to June
30. If so and they were not previously recorded, these amounts are set up as payables.
Q:
2) Do you have departments in your sites?
A: Yes, Each department owns receivables and payables.

4.2.3.2.
Profit and Loss Adjustment
Questions:
Q: 1) Do you need to produce an internal balance sheet on business area or profit center
level?
A: Yes
CI Template:
The University requires that we produce financial statements at the entity and fund level
(business area). We may not need profit and loss adjustment capability as explained in
the next statement.
The profit and loss adjustment distributes cash discounts paid, cash discounts received,
lost cash discounts, exchange rate difference and backdated tax calculation based on
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cash discounts. This function will be carried out in the special ledger.
4.2.3.3.
Financial Statement Creation
Questions:
Q:
1) Do you create financial statements on a monthly, quarterly or yearly basis?
A: Our current system produces reports that are a monthly balance sheet by entity and fund
group. We produce university wide financial statements on an annual basis.
CI Template:
The University requires the ability to create financial statements as a whole and by fund
and entity. These statements include a balance sheet, statement of changes in fund
balances and statement of current fund revenues, expenditures and other changes as
required by GAAP.
A financial statement within FI is the standard Balance Sheet and P&L Statement. The
program for creating the financial statements determines the values for the annual net
profit or loss as well as the net profit or loss carried forward. Please note that the UT
Balance Sheet and P&L Statement by Business Area and/or Fund will be in the Split
Ledger. Therefore, the financial statement will not be created in FI.

To create a financial statement (Balance Sheet and P&L Statement) within FI, you first
need to create a financial statement version (a listing or grouping of G/L accounts in the
order to be displayed on the financial statement). You can define multiple financial
statement versions. This is the case if you want to create financial statements using
various structures.
Once the financial statement version is created, run the report to display the Balance
Sheet/ P&L Statement. Note that the Balance Sheet and P&L Statement by Business
Area and/or Fund will be in the Split Ledger.
4. Business Model
N/A

The financial statement will be configured in the Special Ledger for balance sheets by
fund/business area.

Balance sheets by fund/business area will be available within the Special Ledger.
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None
Functional deficits in the FI financial statement are handled in the financial statements
within the split ledger.

Use the split ledger for financial statements by business area/fund

The Financial Statement will be configured in Special Ledger

The financial statement will be configured in the special ledger by the IRIS project team.

N/A
4.2.3.4.
Periodic Reports
Questions:
Q:
1) What type of information flow do you have for the results of periodic asset reporting?
A: The Controller's Office receives a listing of equipment on a monthly basis that has been
added to the system. This report is used to reconcile to the checks written on the equipment
expenditure object code. Change reports are generated and mailed to departments when an
asset was added, changed, or deleted. An annual report of equipment additions and
deletions is generated that is used to prepare a journal entry to the asset accounts.
Q: 2) What are the critical monthly, quarterly and annual reports that you need for Asset
Accounting?
A: See the answer to #1, above
Q: 3) Which kind of reports do you use to reconcile asset accounting with the general
ledger?
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A: The monthly reports are used to reconcile to the equipment expenditure object code.
The annual reports capitalize to the G/L.
Q:
4) Are there any particular reports you would like for low value assets?
A: We will need reports on low value assets, much the same reports as what we'll need for
the regular assets.
Q:
5) Are there any particular reports you run for leased assets?
A: None different from any other asset.
Q:
6) How do you create your inventory lists? Do you use barcodes?
A: Currently, we run inventory lists from our equipment database. We don't have barcodes.
Q: 7) By which organizational units (or combinations of units) are asset reporting functions
structured (for example, company, cost center, etc)?
A: Equipment: Each asset is associated with a university departmental expenditure account.
Groups of accounts can be combined at a higher level under a "distribution code." The
distribution code is used to distribute reports or notifications of a change in accounting for
assets.
Other assets: are reported at a campus or university level only.
CI Template:
The University requires reports from the AM system that are equal to or better than
current reporting.
Financial periodic reports will be out of the special ledger. Please see special ledger
section for details.
4.2.3.5.
Carry Forward G/L Balances
Questions:
Q:
1) How many retained earnings accounts do you have?
A: We do not have retained earnings accounts. We are told that one would work for us.
CI Template:
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We require the ability to carry forward balances from one fiscal year to another.
You can carry forward account balances as often as you require. If the program has not
yet been run, you can still make postings to the new fiscal year. When the first posting is
made, the accounts are opened with a carry forward balance of 0. Postings made to the
previous year do increase the balance carried forward, but the total of the items posted in
the prior year remain in that year.

The balance to be carried forward is shown in the account balance display. There are
three programs in the system for carrying forward balances. You start any one of these
programs at the required date. The carry-forward is not performed automatically by the
system, even if you have already posted data in the new fiscal year. The customer,
vendor, and balance sheet accounts are simply carried forward into the next fiscal year.
The P&L statement accounts are carried forward into one or more retained earnings
accounts.
For G/L accounts you must make sure that the balances on the P&L statement accounts
are carried forward into the retained earnings accounts. To do so, you must have fulfilled
the following prerequisites: specify a P&L statement account type in the master record of
every P&L statement account. This is a key, under which you define a retained earnings
account for each chart of accounts; and create the retained earnings accounts.
4. Business Model
N/A

The closing process will remain a centralized function within the Controllers Office.

N/A
N/A


N/A
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Create and assign retained earning accounts to expenditure and revenue G/L accounts.

The G/L balance carried forward will be a centralized function within the Controllers
Office and secured by transaction.

N/A
4.3.
Accounts Payable Processing
4.3.1.
Vendor Down Payments
Questions:
Q: 1) In which cases do your vendors require you to make a payment prior to the
processing of an order or shipment?
A: Usually this happens with the purchase of a specialty item, large construction project,
personal service contracts, etc.
Q: 2) Please describe the complete process currently in place for down payments, including
the postings that are generated.
A: If the request is issued against a purchase order, the purchase order is reviewed to make
sure the down payment/progress payment is required (usually a separate line item on the
purchase order). If the request is against a contract, the contract is reviewed to see if the
down payment/progress payment is in compliance with the contract. When the check is
issued, the account and object code are charged. If a down payment/progress payment is
made, the next invoice will be received from the vendor with that payment showing as a
deduction.
Q:
3) Do you plan on paying down payments with the automatic payment program?
A: Yes
4.3.1.1.
Vendor Down Payment Request
CI Template:
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The University of Tennessee seldom requires that a vendor be paid an initial down
payment for products or services.
On rare occasions, the University of Tennessee requires that a vendor be paid an initial
down payment for products or services. When this occurs, the Down Payment module
may serve as a useful tool for UT's Accounts Payable department so that a concise
process can be put in place that manages the down payment transaction.

A down payment invoice for products or services will be received from a vendor. In order
to track this payment and any subsequent credit amounts associated with that payment,
the Down Payment module will be used for those invoices.
4. Business Model
There is the possibility that down payments will be used in coordination with ongoing
Sponsor's Projects. Further analysis is necessary to determine the processes devoted to
down payment usage and to match the requirements of UT with R/3's functionality.

Special A/P training is needed to ensure that the invoice is properly paid and credited.

None
When configured and used, the Down Payment module will assist UT with the proper
process to handle vendor down payments.
None

None

None
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The Down Payment component in the FI module must be configured in the IMG prior to
usage.

Varies based on the needs of UT. However, due to the relative differences and
complexities of down payments, it is strongly recommended that down payment
transactions be limited to Accounts Payable personnel only.

N/A
4.3.1.2.
Vendor Down Payment
CI Template:
4. Business Model
Standard SAP Business Model applies


None
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None
None

None

The Down Payment module must be configured in the IMG prior to usage.


N/A
4.3.1.3.
Vendor Down Payment Clearing
CI Template:

A subsequent invoice for products or services already assigned with vendor down
payment will be entered. In order to track this payment and any subsequent credit
amounts associated with that payment, the Down Payment module will be used for those
invoices.
4. Business Model
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None

None

None

None

The Down Payment module must be configured in the IMG prior to usage.


N/A
4.3.2.
Invoices and Credit Memos
Questions:
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Q: 1) What are your internal procedures and controls from the point of invoice receipt to
payment?
A: Without PO: The invoice (including advance payments) is received in the department
where purchase was made. They verify information, write on invoice the account number
and object code to be charged, and have approved as per policy. Invoice is sent to
appropriate A/P office (based on department location). Invoice is audited per policy and then
entered into a batch in the IMS system. Batch numbers are manually assigned by campus
(starts with a letter, followed by 4 digits; i.e. Mxxxx). In the Treasurer's A/P Office, a
percentage of invoices (selected by system) within each batch are audited and then the batch
is balanced (i.e., released for checks to be written). Currently all checks entered are released
for payment immediately. Written policy of processing flow is in place (located on web).
Travel reimbursements ("Txxxx", "TAxxx", "TCxxx", etc) batches and petty cash
reimbursements from other A/P offices are audited 100% at the campus business office and
again by the Treasurer's A/P Office.
Contract/Honorarium payment is compared with contract to make sure terms are adhered to
(both at department and campus business office). Treasurer's A/P office also audits against
the contract and keys request into IMS.
Specialty items (i.e., Payroll items, insurance payments, etc) are audited and entered in
Treasurer's A/P office and do not go through the random sampling audit.
Some types of payment requests are sent through Entrex where they are keyed in without
using vendor numbers. These are batched as DV batches (where a disbursement check is
issued - 6 digits) or BV batches (where a batch check is issued - 7 digits).
With PO: Same as above. The University does not have central receiving. However, at the
departmental level, the delivery ticket and invoice should be matched against the purchase
order to insure that all items were received and billed correctly. Delivery information is kept
at the departmental level and is not reviewed by A/P. When entered into IMSP by A/P, the
invoice is compared on-line to the purchase order for accuracy.
Contract payments: Same as above. Payment is compared with contract to make sure
terms are adhered to (both at department and A/P office). Treasurer's A/P office keys
request into IMS.
A purchase order is generally required when the amount of the purchase is $2,000 or greater.
Some exceptions to this would be entertainment, contracts, travel, memberships,
subscriptions, etc
If the amount is under $2,000, no purchase order is required.
There is a written policy on the web for processing invoices, travel, etc. (Section 060, Part
02; Section 070; Section 130, Parts 1 & 2) and for when a purchase order is required
(Section 050, Part 03, 06, 08; Section 070; Section 130, Parts 1 & 2).
4.3.2.1.
Vendor Document Parking
Questions:
Q:
1) What is your procedure for parking and releasing invoices and or/credit memos?
A: No current system capability. Currently, credit memos without a corresponding invoice

are held by the system until sufficient invoices are processed to issue a check. If no invoices
are entered, the credit memo must be deleted (manually) from the system. Likewise, an
invoice can be deleted from a batch if it should not be processed.
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CI Template:
Ability to input incomplete document that will be completed at later date

Need ability for certain departmental employees to input invoices without posting
Need ability for departmental approval by authorized employees (post a parked
document)
Require additional approval for certain transactions: entertainment (VP,
Chancellor or designee), subscription/memberships >$2000 (President or Exec
VP for Bus and Fin), newspaper clipping services (Chancellor or VP),
subscriptions to airline flight guides (President, Chancellor or VP)
Invoice entry will take place using the vendor invoice entry screen. However, instead of
actually posting the document to the SAP R/3 system, the user will park the document,
which in essence will place the document in a Hold status. To release the parked
document, subsequent transactions will take place to release the parked documents to
the appropriate posting stages.

Vendor invoice is received which is incomplete; needs further research or needs to be
approved for posting.
4. Business Model
Invoices that need to be updated/researched: A/P clerks &/or department personnel will
enter invoices as fully as possible and then will park the document.
Invoices that require approvals: Department personnel (mostly) &/or A/P clerks will enter
invoices in their entirety; Invoice Release strategy will manage approval workflow
A document is first parked by an invoice entry clerk, and then sent to the person
responsible for authorizing payment amounts to vendors. Next the document may be
returned to the clerk for completion of data entry. Finally, the document is passed on to
the person responsible for account assignment approval. He releases the account
assignment and this in turn triggers the posting

Special A/P training is needed to ensure that invoices are properly parked. Since both
Accounts Payable and key departmental personnel will be responsible for invoice entry,
training will be a broad initiative.

Going from a centralized process to a decentralized process.
Currently, all approvals/signatures are made on the original invoice by the required,
authorized approver. Approved invoices are then forwarded to the appropriate business
office for processing. In the future, departmental approvals will be made via park/post
functionality in the R/3 system.
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until they have been completed and posted. Using payment requests, parked invoices
can be paid punctually and without loss of discount


None

None

Before you can use the document release function, you must first make the appropriate
settings in the configuration menu. The following sections describe how to do this.
Within document release, we distinguish between amount release and account
assignment approval. You can define from which amount a document should be
released.
If you have defined a special release procedure within the workflow function to govern
how the account assignment approval should take place, you can define this procedure
for each workflow variant you use. You can also specify the minimum amount necessary
to trigger a release. If a document is to be released, the appropriate person with release
authorization receives a message in his/her inbox to this effect and can then display the
document and subsequently release it or refuse release.
The release authorization procedure used can be defined in Customizing, based on the
workflow variant, document type, and the amount in question. The amount of a parked
document is the largest line item for customers or vendors or the debit or credit balance.
You must define the users authorized to release amounts. To assist you in this process,
you can create release groups, which can then be entered in the customer and vendor
master records. In Customizing, you can allocate different levels of release authorization
based on organizational objects (job, position, organizational unit) depending on
authorization groups, document type, amount, and release approval level. You can also
use "user exits" to determine and allocate other release authorizations

Varies from department to department. Organizational meetings will need to be
conducted to develop a general solution that best meets all departments needs as well
as the requirements of the University of Tennessee's internal audit control policies.
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N/A
4.3.2.2.
Parked Document Posting [Vendors]
CI Template:
Parking of vendor documents is performed when invoices or credit memos are entered
which do not have all of the required details necessary to actually post the documents or
the information being entered needs to be researched further prior to document posting.
Parking of vendor documents allows the clerk to perform the initial document entry and
then hold the document until such time that it is necessary to process the document.
Invoice Release strategies also utilize Vendor Document Parking in order to manage the
process of approving and releasing vendor invoices for payment.

Posting of parked documents will take place whenever an invoice is ready to be released
for approval &/or for vendor payment. If errors in the parked document still exist, the
document is not posted and remains in a Parked (or Hold) status.
4. Business Model
Invoices that needs to be updated/researched: A/P clerks &/or department personnel will
enter invoices as fully as possible and then will park the document.
Invoices that require approvals: Department personnel (mostly) &/or A/P clerks will enter
invoices in their entirety; Invoice Release strategy will manage approval workflow
A document is first parked by an invoice entry clerk, and then sent to the person
responsible for authorizing payment amounts to vendors. Next the document may be
returned to the clerk for completion of data entry. Finally, the document is passed on to

Special A/P training is needed to ensure that parked invoices are properly posted. Since
both Accounts Payable and key departmental personnel will be responsible for invoice
entry, training will be a broad initiative.

None
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until they have been completed and posted. Using payment requests, parked invoices
can be paid punctually and without loss of discount

None

None

Several Workflow models are provided in the system for document parking: a Workflow
framework (WS10000051) and five sub-workflows. In the Financial Accounting
Configuration menu, whichever sub-workflow model is needed should be used by the
workflow framework at the time of the program run. Other sub-workflows can be defined
while in this menu, providing that they send and receive the same data from the workflow
framework as the sub-workflow models do.
To use the standard sub-workflow models for multi-level amount release (WS10000052,
WS10000053, WS10000054), you can define between one and three levels for amount
release in the R/3 system. Should more than three release levels are needed, copy the
workflow models for amount release and then expand them. The fourth standard subworkflow (WS10000055) can be used for account assignment approval.
To be able to use the workflow models in your active client, they must first be copied to
the SAP system using the workflow workbench tools provided for this purpose.


N/A
4.3.2.3.
Invoice Receipt
Questions:
Q:
1) Which invoices that are not related to a purchase order do you typically post?
A: Purchases < $2,000: vendor invoices (credit purchases from vendors who do not require
a PO); travel reimbursements (T-3); cash advances (see policy, Section 070);
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Prepayments/Advance Payments (T-29) (see policy, Section 050, Part 06); petty
cash/departmental purchases with personal funds (T-4 & T-44); honorariums/contracts (T-27)
(up to $2,000 for vendors or $1,000 for individuals - otherwise, a contract is needed); UT
credit card purchases.
Purchases any amount: Subscriptions; memberships; some types of advertising;
entertainment; utilities; refunds; scholarships; stipends; awards; insurance payments for
international students; payroll related activities (i.e., garnishments, annuities, etc); sales
tax/amusement tax/city & county tax
Q:
2) Can you use templates for some of these invoices?
A: Sure - investigate
Q:
3) How do you handle transactions in foreign currencies?
A: Majority are direct purchases, not on PO. Approved invoice is received from department.
In Treasurer's A/P Office, a letter is written to First Tennessee Bank requesting that foreign
drafts be issued for all invoices listed (some are converted to US $, others are issued in a
foreign currency). The drafts are prepared by First Tennessee Bank and returned to
Treasurer's A/P Office. The drafts are then mailed out (along with a copy of the payment
request). Each payment request is then entered into IMS (using First Tennessee's vendor
number) for the converted US$ amount (plus the bank service charge) and a check is issued
to First Tennessee Bank. The amount shows up on the department's ledger as a payment to
First Tennessee Bank instead of the vendor.
The majority of these transactions are for European countries (including Euro Dollars).
There are approximately 10 (+/-) per month.
Q:
4) Describe any taxes that must be calculated on vendor transactions.
A: Exempt from sales tax on personal property. If out of state, do pay sales tax, but it is
imbedded in amount to pay (not separate $).
Occupancy tax is sometimes paid based on listing from State Attorney General (county/city
specific) on direct-billed hotel/motel invoices (no calculation done by system).
Federal excise tax is paid (no calculation done by system).
Transportation (fuel, tire, etc) where Federal and State taxes apply (no calculation done by
system).
Q:
5) How do you handle cash discounts?
A: On most purchase order invoices, the cash discount is automatically calculated by the
system. Sometimes the calculation is done by the department (especially on non-PO
transactions). At the time of entry, the cash discount is shown as a negative amount on the
cash discount field.
Currently, if an invoice comes in with a discount taken by the department, the A/P office will
take the credit on the invoice (regardless if it's past the terms). If the vendor bills back for this
discount, that invoice is processed through regular procedures. The department gives the
check number where the cash discount was taken and the amount is charged back to the
original account number and object code the discount was taken on. However, if there is a
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cash discount date given on the invoice and the payment date will be after that date, the
discount is not taken.
Want to maximize discounts. We will look at the possible use of Discounts Earned and
Discounts Lost by Campus accounting.
CI Template:
Ability to enter non-PO related invoices including purchases < $2000 where
vendor requires PO, travel reimbursements (direct interface from travel),
short/long term travel advances, prepayments, petty cash/departmental
purchases, honorariums, UT credit card purchases, etc
Ability to post net of discount
Ability to maximize discount (possible use of Discounts Earned and Discounts
Lost)
Ability to hold retainage (2 types)
Ability to process foreign currency invoices in the Treasurer's A/P Office
Ability to process procurement card transactions
Non-PO related vendor invoices are entered via the Accounts Payable module by the
department for decentralized activity. Centralized invoice activity will be entered by the
Treasurer's Office Accounts Payable.

Vendor invoice entry when there are no referencing purchase orders.
Typical invoices are:
Purchases < $2,000: Vendor invoices (credit purchases from vendors who do
not require a PO)
Travel reimbursements (T-3)
Cash advances (see policy, Section 070); Prepayments/Advance Payments (T29) (see policy, Section 050, Part 06)
Petty Cash/Departmental Purchases with Personal Funds (T-4 & T-44)
Honorariums/Contracts (T-27) (up to $2,000 for vendors or $1,000 for individuals
- otherwise, a contract is needed)
UT Credit Card purchases
4. Business Model
Invoice Receipt is used to enter incoming or outgoing invoices or credit memos. The
Invoice/Credit Memo Entry Enjoy transaction is a single-screen transaction. This means
that an invoice can be entered, parked, and held on one screen without loss of context.
The entry screen remains the central reference screen, respective of the document
status.
The Enjoy transactions are included in the area menus for Accounts Receivable and
Accounts Payable according to the business transaction.

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Accounts Payable training is needed to ensure that invoices and credit memos are
properly posted. Since both Accounts Payable and key departmental personnel will be
responsible for invoice/credit memo entry, training will be a broad initiative.
None
The Accounts Payable application component records and administers accounting data
for all vendors. It is also an integral part of sales management: Deliveries and invoices
are managed according to vendors. The system automatically makes postings in
response to the operative transactions. In the same way, the system supplies the Cash
Management application component with figures from invoices in order to optimize
liquidity planning.


None

None

Integration meetings need to take place with the HR team to ensure that Payroll-related
invoices (i.e., garnishments, 401K, insurance, etc.) are properly organized.
The following settings in Customizing for Financial Accounting under Accounts
Receivable and Accounts Payable -> Business Transactions -> Incoming
Invoices/Credit Memos or Outgoing Invoices/Credit Memos -> Incoming Invoices/Credit
Memos - Enjoy or Outgoing Invoices/Credit Memos - Enjoy:
* Define Document Types for Enjoy Transaction
* Define Tax Code per Transaction
* Define Posting Key for Incoming Invoices/Credit Memos or Outgoing Invoices/Credit
* Memos
Account assignment table columns can be saved as screen variants, or frequently
recurring G/L account assignments can be saved as account assignment templates.
These are then available for selection in the tree.
To create screen variants or account assignment templates, choose Edit -> Create
screen variant/account assignment template
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N/A
4.3.2.4.
Vendor Credit Memo
Questions:
Q:
1) How do you process vendor credit memos?
A: Credit Memos: If against a PO, then entered in a "credit batch". If not against a PO, then
keyed as a credit in a regular batch along with invoices.
Retainage: 1. If UT holds funds: increase obligation against the PO. Manually do a monthly
JV to agency fund. In general fund, retainage, etc is not recorded as an outstanding liability
when net payment is made. 2. If bank holds funds: a separate check is cut for retainage
and sent to bank with payment for non-retainage. Primary occurrences are in construction,
not services.
CI Template:
Ability to post a credit memo and apply to next payment
Non-PO related vendor credit memos are entered via the Accounts Payable module by
the department for decentralized activity. Centralized credit memo activity will be entered
by the Treasurer's Office Accounts Payable.
Vendor credit memo entry when there is no referencing purchase order assignment.
4. Business Model
Invoice receipt is used to enter incoming or outgoing invoices or credit memos. The
status.
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properly posted. Since both Accounts Payable and key departmental personnel will be
None
The Accounts Payable application component records and administers accounting data
for all vendors. The system automatically makes postings in response to the operative
transactions. In the same way, the system supplies the Cash Management application
component with figures from invoices in order to optimize liquidity planning.

None

None

See Invoice Receipt configuration information in section above


N/A
4.3.2.5.
Document Reversal
Questions:
Q:
A: TBD (Probably through standard reversal procedures, not "negative postings".
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Q:
A: TBD - probably
CI Template:
Ability to have reversal of invoices and credit memo

Ability to have reversal of check (payment) document posting
If an incorrect document has been entered, it can be reversed, thereby also clearing the
1 - It contains no cleared items
2 - It contains only customer, vendor, and G/L account items
3 - It was posted with Financial Accounting
4 - All entered values (such as business area, cost center, and tax code) are still valid

4. Business Model

properly reversed. Since both Accounts Payable and key departmental personnel will be

None
Provides audit trail process associated with correcting incorrect invoice or credit memo
documents.

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None

None

Configuration settings associated with posting keys and reversal of A/P document types
will need to be handled in the Financial Accounting Documents section of IMG.


N/A
4.3.2.6.
Mass Reversal
CI Template:
To reverse a large number of transactional documents, the recommended solution is to
use the Mass Reversal program.
Mass reversal allows multiple documents to be reversed at one time. All of the
* It contains no cleared items
* It contains only customer, vendor, and G/L account items
* It was posted with Financial Accounting
* All entered values (such as business area, cost center, and tax code) are still valid

To reverse a document, enter the original document numbers, the company code, and
the fiscal year. You also have the option of selecting criteria to limit the documents to be
reversed. The system will display a list of documents to be reversed. Select post
reversal and the system generates a reverse document for each original document.
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4. Business Model
Although A/P document processing is at a department level, mass reversal of documents
will be centralized in A/P to limit the possibility of reversing mass documents in error.

None

None

None


Only Financial supervisory personnel should have the capability to perform Mass
Reversal. In Accounts Payable, only the A/P supervisor or above should be able to
process a mass reversal of vendor-related documents.

N/A
4.3.2.7.
Recurring Entry
Questions:
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example)?
A: Yes - rents/leases, contract payments, maintenance, utilities
CI Template:
Ability to set up recurring entries if needed
Recurring documents can be setup to handle recurring vendor invoices. Typically these
are invoices for rent/leases, contractual obligations, fixed-priced utilities/services, etc.
Vendor-related transaction postings that recur time and time again can be made using
the recurring entry program. To do this, you enter a recurring entry document, and then
execute the recurring entry program at certain intervals or schedule it for execution.
You can define a run schedule in the system, and specify in the recurring entry document
postings cannot be made at monthly intervals. Postings that are to be carried out in
thirteen periods or every other week, for example, can only be made by scheduling the
run. In this activity, you define the run schedules by specifying a key and a description. In
a second activity, you enter the required dates for each schedule.
4. Business Model

The invoice entry process is at the department level. Recurring entries will be entered at
the department level but executed centrally in A/P.

None
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None

None

To post with recurring entry documents, you have to set up a separate number range for
the company codes that use them. You have to use key X1 for the number range. The
system takes numbers for the recurring entry document from this number range.
Program SAPF120 creates accounting documents using the recurring entry documents.
You have to run the program at regular intervals. It checks each recurring entry document
to see if a document should be created.


N/A
4.3.2.8.
Internal Transfer Posting
CI Template:
Internal accounting processes to debit or credit vendor accounts can be performed with
this transaction without creating an actual invoice document.
Using the Internal Transfer Posting function, you enter document line items and then
select the open items that are to be cleared. Once the total amount of selected open
items equals the amount of entered line items, the system clears the open items by
creating one or more offsetting entries.
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When you post an incoming vendor payment, the system requires a posting key to
generate the offsetting entry for open items selected. To generate this offsetting entry, it
uses the vendor debit-posting key that is specified for the clearing entry. All the other
posting keys are used for special situations that may occur when posting an incoming
payment:
* Vendor posting keys are required so that offsetting entries can be made to the vendor
account when open items are cleared between a customer and vendor.
* Posting keys are required for special G/L transactions if you want to clear, for
example, an invoice and a down payment in a single clearing transaction.
4. Business Model

Although A/P document processing is at a department level, Internal Transfer Posting of
documents will be centralized in A/P to limit the possibility of documents errors.

None
Internal Transfer Posting function provides an internal process to clear open vendor items
without processing an actual payment.

None

None

The posting keys you specify for the Transfer posting with clearing transaction are used
for the general clearing function and, if the system has to make internal transfer postings,
for the account clearing function as well.
The payment program and the special functions for outgoing and incoming payments use
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the posting keys defined for the incoming payment and outgoing payment transactions.
You cannot delete these transactions.
Posting keys for the invoice and credit memo fast entry function are defined separately in
the system.

Only Financial supervisory personnel should have the capability to perform Internal
Transfer Posting. In Accounts Payable, only the A/P supervisor or above should be able
to perform an internal transfer posting of vendor-related documents.

N/A
4.3.2.9.
Internal Transfer Posting with Clearing
CI Template:
Posting with clearing function provides an internal process to clear open vendor items
without processing an actual payment.
Using the posting with clearing function, you enter document line items and then select
the open items that are to be cleared. Once the total amount of selected open items
equals the amount of entered line items, the system clears the open items by creating
one or more offsetting entries.

When you post an incoming vendor payment, the system requires a posting key to
uses the vendor debit posting key that is specified for the clearing entry. All the other
posting keys are used for special situations that may occur when posting an incoming
payment:
* Vendor posting keys are required so that offsetting entries can be made to the vendor
account when open items are cleared between a customer and vendor.
4. Business Model
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Although A/P document processing is at a department level, Internal Transfer Posting

with Clearing of documents will be centralized in A/P to limit the possibility of documents
errors.
None
Internal Transfer Posting with clearing function provides an internal process to clear open
vendor items without processing an actual payment.

None

None

the system.

Transfer Posting with Clearing. In Accounts Payable, only the A/P supervisor or above
should be able to perform an internal transfer posting (with clearing) of vendor-related
documents.

N/A
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4.3.3.
Vendor Account Analysis
4.3.3.1.
Vendor Line Item Analysis
CI Template:
Ability to query and report on vendor line items
Within the Accounts Payable module, you can analyze individual operational areas as
often as you require. You can evaluate, among other things, payment history, cash
discount history, currency exposure among customers and vendors, or aging reports.
Query screens/report that provide vendor-related line item detail data associated with
vendor documents

Routine reporting tools
4. Business Model
N/A

None
None
N/A

None
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None

Screen variants can be developed during configuration to assist the end user.

N/A

N/A
4.3.3.2.
Balance Analysis
CI Template:
Query screens/report that provide vendor balance totals associated with vendor
documents

4. Business Model
N/A

None

None
N/A
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None

None


N/A

N/A
4.3.3.3.
Vendor Account Evaluations
Questions:
Q:
1) Which evaluations do you need for vendors?
A: Due date breakdowns, overdue items, etc

Others to be determined
Tim Mapes, Treasurer's Office, makes vendor evaluations. (?)
CI Template:
Query screens/report that provide vendor account evaluations associated with vendor
documents
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4. Business Model
N/A

None

None
N/A


None

None

N/A

N/A
4.3.4.
Vendor Payments
Questions:
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Q: 1) Which payment methods do you use (check, bank transfers, bills of exchange, direct
debit, etc.)?
A: Checks
Electronic transactions (bank wires and ACH) with bank
Examples of these transaction types include supplemental retirement benefits, concert
settlements, payments to foreign banks, and trust remittances.
Q:
2) How do you pay your domestic vendors (by check, bank transfer etc.)?
A: Checks, bank wires, ACH (see number 1 above)
Q:
3) How do you pay your foreign vendors (by check, bank transfer, etc.)
A: Checks, bank wires (see number 1 above)
Q:
4) How do you pay your employees (e.g. travel expenses)?
A: By check through Treasurer's A/P Office (see question #1 under Invoices and Credits
section). However, awards for employees are handled through the Payroll Office.
Q:
5) How do you handle partial payments to vendors?
A: Currently, if an invoice is incorrect it is returned to the department and the department

must either obtain a corrected invoice or obtain the name of someone from the vendor that
authorizes them to pay an amount different than the original invoice amount. We do not pay
for an item until it has been received and therefore, should not be billed or process an invoice
for items unless they have been received.
Q: 6) Do you always issue a single payment for multiple invoices to the same vendor? If not
please specify the exceptions.
A: The majority of payments are for multiple invoices to a single vendor, except for T-29 and
travel payments. However, we have the option of using the "Not Combined" batching
capability.
Q:
7) How do you handle payables to vendors that are also customers?
A: Gross method: collections and payments separately.
Q:
8) How do you handle credit memos?
A: If the credit memo is against a PO, then it is entered in a "credit batch". If it is not against
a PO, then it is keyed as a credit in a regular batch along with invoices.
Credit memos without a corresponding invoice are held by the system until sufficient invoices
are processed to issue a check. If no invoices are entered, the credit memo must be deleted
(manually) from the system.
Q:
9) How do you handle cash discounts?
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A: On most purchase order invoices, the cash discount is automatically calculated by the
system. Sometimes the calculation is done by the department (especially on non-PO
transactions). At the time of entry, the cash discount is shown as a negative amount on the
cash discount field.
Currently, if an invoice comes in with a discount taken by the department, the A/P office will
take the credit on the invoice (regardless if it's past the terms). If the vendor bills back for this
discount, that invoice is processed through regular procedures. The department gives the
check number where the cash discount was taken and the amount is charged back to the
original account number and object code the discount was taken on. However, if there is a
cash discount date given on the invoice and the payment date will be after that date, the
discount is not taken.
Q:
10) How do you handle exchange rate differences in foreign currency payments?
A: Majority are direct purchases, not on PO. Approved invoice is received from department.
In Treasurer's A/P Office, a letter is written to First Tennessee Bank requesting that foreign
drafts be issued for all invoices listed (some are converted to US$, others are issued in a
foreign currency). The drafts are prepared by First Tennessee Bank and returned to
Treasurer's A/P office. The drafts are then mailed out (along with a copy of the payment
request). Each payment request is then entered into IMS (using First TN Bank's vendor
number) for the converted US$ amount (plus the bank service charge) and a check is issued
to First TN Bank. The amount shows up on the department's ledger as a payment to First TN
Bank instead of the vendor.
All conversions are handled through First Tennessee Bank and not done by the current
system.
The majority of these transactions are for European countries (including Euro Dollars). There
are approximately 10 (+/-) per month.
Q: 11) How do you create the payment media (payment forms, remittance advices or
electronic files) for these payment methods?
A: Checks: The payment run is done nightly and the checks are printed the next morning.
At this time, all the information is printed on the check (including the check number). The
remittance advice is automatically created by the system. Currently it includes the invoice
date, invoice number, amount, purchase order number (if applicable), University account
number, object code and amount to be charged to each acct/object code.
If the invoice quantity exceeds the lines on the remittance advice, a separate sheet is printed
listing all invoices paid on that check.
Wire Transfers: A settlement sheet (from concerts, arena events, etc) or invoice is received
from Treasurer's A/P office. Tim Mapes goes to his pc and logs into Prime Connection (First
Tennessee Bank's pc banking program). He goes into the wire transfer module and enters
the name and address of the bank the funds are being wired to, routing number for that bank,
account name and number to which funds are being deposited, amount and a description of
why funds are being deposited. This is transmitted to the bank. The bank accepts the
transmission and sends a confirmation code to the Treasurer's Office. The confirmation code
sheet is attached to the payment request and taken to the Controller's Office where a JV is
processed. 99% of the wires are handled this way. Some wires (i.e. international wires,
wires with excessive information, etc) are handled the same way except that the information
is called into the bank instead of being transmitted.
Wire transfers are same day transactions.
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ACH: A cash concentration ACH is processed (pull money from all the banks that have
taken in money). Tim Mapes logs into the pc and enters the same information as required for
a wire transfer but also includes an effective date for the ACH. An ACH file is created and
transmitted to the bank. A confirmation is received from the bank and goes to the University's
central cashier who processes a CV. ACH are not same day transactions - they are next day
transactions at the earliest and can be later.
Information Required:
Remittance Advice: Invoice date; invoice number or description; PO #; invoice amount; UT
account number and object code being charged by dollar amount (determine if this is needed
going forward). PROBLEM: Vendors are misapplying amounts by looking at UT account
number and object code (even though this area is darker than other parts of remittance
advice and states "For University Use Only". VENDOR WANTS: Their customer number
shown for each invoice or transaction listed. For multiple transactions, they want to know
which campus the transaction is for (although if their customer number is on the remittance
advice, this should give the vendor the information they need).
Wire Transfers: Name and address of bank the funds are being wired to, routing number for
that bank, account name and number to which funds are being deposited, amount and a
description of why funds are being deposited.
ACH: All the same information needed for a wire transfer but also an effective date for the
transfer (money is not received on the same date of the transaction, so an effective date is
needed.)
Q:
12) Do you use pre-numbered checks?
A: No
Q:
13) How do you reconcile your check register (cleared checks)?
A: Everyday a check register is run showing the check number, payee, amount, account
number and object code charged for each check written (both DV and BV). This register is
gone through to make sure no check numbers are missing (gaps, etc). They are then logged
in to a cash account log.
Transmit issue tape to the bank. When a check is presented at the bank, the check comes
off the issue tape.
Anything left over after 1 year is written off. They are credited to unclaimed property. Checks
are issued when a payee calls regarding a check.
Q:
14) How do you transfer your electronic payment file to the bank?
A: First Tennessee Prime Connection is used for ACH transactions. See #11. Federal
wages are paid using "Tax Link". Fedwire is backup in case of computer failure (obtain
details from Tim Mapes, Treasurer's Office).
4.3.4.1.
Vendor Payment Request
CI Template:
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A payment request is a vendor document that triggers a payment by the payment

program.
A payment request is a noted item and it triggers a payment by the payment program.
You can enter payment requests both for invoices that have already been posted and
invoices that have been parked. Payment requests enable you to use a partial payment
for an invoice that has already been posted. If you do this, the invoice is blocked for
payment and a payment request is entered for the partial amount.

To enter a payment request, proceed as follows:
From the Accounts Payable menu, choose Document entry -> Payment request.
4. Business Model
Although A/P document processing is at a department level, Payment Requests will be
centralized in A/P to limit the possibility of documents errors.

None
Payment requests are particularly useful for paying parked invoices on time and with
maximum cash discount, even when the invoice is not actually posted until after the
payment.

None

None
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Only Financial supervisory personnel should have the capability to perform Payment
Requests. In Accounts Payable, only the A/P supervisor or above should be able to
create Payment Requests vendor documents.

N/A
4.3.4.2.
Release for Payment
Questions:
Q:
1) How do you release invoices that have been blocked for payment?
A: Currently there is no automatic system blocking (i.e. for price variance, quality check,
etc). Invoices and credit memos are entered at the campus business office (or Treasurer's
A/P office for Knoxville campus) and sent to the Treasurer's A/P office. After batch is audited
and reviewed, it is "balanced" (batch number, operator initials, $ amount and number of
invoices). This audit, review and balance procedure is only done by the Treasurer's A/P
office. The edit run is done at night and the checks are written the next morning. Pull and
release is 100% manual.
CI Template:
Ability to release blocked invoices either automatically (by system) or manually

(whoever blocks invoice would be the one to release)
Ability to release invoices blocked due to price variance, quantity variances,
stochastical and quality reasons. Purchasing will release all but stochastical - A/P
will release these
Department should have ability to release any invoice they block
A payment release can be triggered based on a specified amount detailed in each
workflow variant.
The release program can differentiate between one, two and three-level release. This
enables between one and three people to be involved in the release procedure, thus
supporting both dual and triple control.
A payment block can be set for any accounting line items. This sets off a payment
release procedure in which individual items can be reviewed by various employees
before any payment is made. If this procedure is successfully completed, the payment
block is canceled and the line item can be paid.
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The payment release procedure uses the Workflow application component.
4. Business Model
Since UT is interested in allowing decentralized invoice entry at the department level,
using the Payment Release strategy could afford the Accounts Payable department the
ability to control vendor payments prior to the payment program process. By setting
certain criteria, vendor payments that exceed targeted amounts or are being assigned to
specific accounts can be reviewed prior to payment.

Although A/P document processing is at a department level, Payment Release
procedures will be centralized in A/P to limit the possibility of documents errors as well as
to maintain control of vendor payments.

None
Using the Payment Release strategy could afford the Accounts Payable department the
ability to control vendor payments prior to the payment program process.


None
None

To use the payment release function, you have to make the appropriate settings in
Customizing.
The system can be configured so that the choice of release procedure is dependent on
the workflow variant, document type and amount. Release authorizations for your
employees can also be allocated in Customizing. In order to do this, release approval
groups must first be created which can be entered in the customer and vendor master
records. Depending on these criteria and the release level, release authorization can be
assigned to different employees in the form of organization objects (job, position,
organizational unit) in Customizing. If no criteria are defined (such as release approval
groups), the system takes the initial value of these criteria when the payment program is
run.
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Only Financial supervisory personnel should have the capability to perform Payment
Releases. In Accounts Payable, only the A/P supervisor or above should be authorized
to process Payment Release of vendor invoice/credit memo documents.

N/A
4.3.4.3.
Manual Outgoing Payments
Questions:
Q:
1) Which procedure do you use to process manual payments to vendors?
A: Treasurer's A/P office maintains control over all manual vendor payments. At the
discretion of A/P, and with proper documentation, checks are typed as needed. The check
number is recorded in two logbooks and sent through Entrex for entry into the system. At this
point, the account number and object code is charged.
Q:
2) Do you print or hand-write the payment media (for example, checks, transfer forms)?
A: These are typed on typewriter and manually signature stamped. These are "emergency"
transactions. There are approximately 5-10 transactions/month.
Excess financial aid checks are written at other campus Bursar's Offices on a different
system. These requests and checks are handled completely at the other campuses.
CI Template:
Ability to print "on-demand" checks through the system
Clearing vendor invoices is done at the time of payment. Accrual accounting is not used.
A/P can produce a listing of open invoices and credit memos if a check has not been
generated. SAP R/3 provides the same functionality; in addition, vendor invoices and
credit memos for all cleared items will also be provided along with the payment
documents that generated the vendor checks.

At the discretion of Accounts Payable, and with proper documentation, manual checks
are processed as needed.
4. Business Model
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UT Treasurer's A/P office maintains control over all manual vendor payments.

None
None

None

None


Only the UT Treasurer's A/P area should be authorized to process Manual Outgoing
Payments.

N/A
4.3.4.4.
Automatic Outgoing Payments
Questions:
Q: 1) How do you post payments? Which G/L accounts are used? Which additional account
assignments (for example, cost centers) do you need for bank postings, bank charges
accounts, cash discount accounts, and exchange rate differences?
A: Bank Postings: Dr
Cr
Expense to department
Cash
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Cash Discounts: Dr
Cr
Bank Charges: Dr
Cr
XXXX
No postings, discounts are keyed as reduction to payable amount at
time of entry: netted on invoice
Expense to department
Cash
Q: 2) Do you wish to clear vendor invoices at the time of payment or at the time the bank
statement is posted?
A: Currently, this is done at the time of payment. Accrual accounting is not used. A/P
systems can produce a listing of open invoices and credit memos if check has not been
generated.
Q: 3) Do you apply payments automatically based on an electronic statement of account or

a lockbox file? Describe in detail how these payments are processed.
A: Currently, this is not done.
Q:
4) How often do you make automatic payments?
A: Currently no automatic payments are made.
Q: 5) From which bank account(s) do you make payments? List the bank accounts by
payment method, by foreign currency, or any other criteria relevant for bank selection.
A: We have one primary depository account where we initially deposit Knoxville funds:
other account funds are swept into this account
our wires go out of that account and our ACH goes in and out
no checks are written from this account
We have 1 main disbursements account from which only checks (DVs and BVs) are written.
This is a controlled disbursement account. Disbursement Vouchers (DVs) are payments to
vendors, and Batch Vouchers (BVs) are typically refunds to students written in batch because
we do not need to keep the detail of these payments on our G/L.
There is 1 payroll account, which is ZBA. We move money to cover payroll payments from
our primary depository account. The bank handles the draw, and this is done daily. Outflows
include direct deposits and checks. Payroll transmits this information to the bank. The direct
deposit information is fed through a phone modem via FedLine II (a means for banks to
interact with the federal reserve bank, but UT has been allowed to use it). Currently, we have
150 payroll runs a year, and these include monthly, biweekly, longevity, supplemental (on the
10th of each month), and special payrolls.
Note: In R/3, a directory must be set up for all the banks that are used by UT employees for
direct deposit of payroll. Benson can assist in this. If 1st TN can share its quarterly CD from
Thomson Financial, it would be helpful to get the directory setup. Alternatively, the
information can be extracted from the legacy system.
There are 4 other ZBA accounts for batch vouchers (BVs) for which checks are written by the
campus Bursars at Knoxville, Chattanooga, Martin and Memphis. These are for on -demand
student aid refunds. The Chattanooga ZBA account uses this account to make lender
refunds through ACH. The exception is that Knoxville refunds the lender through the primary
depository account.
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See Cash Management Workshop for complete details.

There are 117 petty cash accounts - some have individual bank accounts and others have
cash boxes. (Follow-up Question: Are any vendor invoices paid from the petty cash bank
accounts?)
Q: 6) How does your actual cash position influence the way you assign funds to the
different banks in the payment program?
A: Not currently (based on Cash Management Workshop).
See Cash Management Workshop for complete details.
Q:
7) How do you handle bank charges?
A: Foreign drafts: The bank charge is included with the amount of the invoice and is
charged to the same account number and object code.
Wire Transfer: The bank charge is charged back to the department requesting the wire. It is
also charged to the same account number and object code as the original invoice.
CI Template:
Ability to select vendors or other criteria to set up payment run

Ability to pay by check
Maximize discounts (avoid paying vendors until due based on terms)
Ability to clear vendor invoices (accounts) at time of payment
Maximize cash flow
Ability to control payment run
Ability to select bank account to pay from
Clearing vendor invoices is done at the time of payment. Accrual accounting is not used.
A/P can produce a listing of open invoices and credit memos if a check has not been
generated. SAP R/3 provides the same functionality; in addition, vendor invoices and
credit memos for all cleared items will also be provided along with the payment
documents that generated the vendor checks.

UT has 1 main disbursements account from which only checks (DVs and BVs) are
written. This is a controlled disbursement account. Disbursement Vouchers (DVs) are
payments to vendors, and Batch Vouchers (BVs) are typically refunds to students written
in batch because no detail of these payments on our G/L is needed.
4. Business Model
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Currently no automatic payments are made. However, once instituted, the UT
Treasurer's A/P office should maintain control over the R/3 Automatic Outgoing
Payments program.

None
Payables are paid with the payment program. Outstanding payables are settled by the
payment program, which supports all standard payment methods (such as checks and
transfers) in printed form as well as in electronic form (data medium exchange on disk
and electronic data interchange). Country-specific payment methods are also covered by
this program.

None

None

Before you can use the payment program, you need to:
define your house banks and the accounts at your banks
define the required payment methods
define the necessary payment forms
The standard system has predefined payment methods and payment forms that you can
adapt to meet your own requirements.
Payment program configuration involves determining:
what is to be paid. To do this, you specify rules according to which the open
items to be paid are selected and grouped for payment.
when payment is carried out. Basically, the due date of the open items
determines when payment is carried out. However, you can specify the payment
deadline in more detail via configuration.
to whom the payment is made (by specifying the payee).
how the payment is made. You determine rules that are used to select a payment
method.
from where the payment is made. You determine rules that are used to select a
bank and a bank account for the payment.
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The above rules and conditions must be defined if the payment program is to determine
the above-mentioned information automatically. However, you can also specify this
information manually.
In Accounts Payable, only the A/P supervisor or above should be able to process the
Payment Program.

N/A
4.3.5.
Account Clearing [AP]
Questions:
Q:
1) In which cases are open items cleared other than through payment receipts?
A: Currently, since items are entered into the system and paid almost immediately, there are
no true "open" items. In R/3 we can foresee having an item paid to a wrong vendor and the
correct vendor being still open. In that case, we would have an "open" item.
Currently, once a department receives an invoice, they have the option to pay against the
procurement card instead of processing invoice for payment. This sometimes creates a
duplicate payment (both procurement card and invoice). This is a control issue.
4.3.5.1.
Manual Clearing
CI Template:
Ability to clear open items which are not cleared automatically
You can clear only items that are posted to accounts that are kept on an open item basis.
Open item management is automatically set for customer and vendor accounts. For G/L
accounts, however, you have to set the open item management option in their master
record yourself.

When clearing open items, you must assign items on the debit side to items on the credit
side. The system then checks whether the debit and credit amounts clear each other.
The system indicates the items as cleared only when the balance of the allocated items is
zero. The clearing date and the clearing document number are stored in each line item
4. Business Model
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Although A/P document processing is at a department level, Manual clearing of
documents will be centralized in A/P to limit the possibility of clearing document errors.

None
None

None

None

With the exception of the Customer and Vendor accounts, all other G/L accounts that will
require clearing of open items will have to be configured as such in the Open Items
Management G/L master field.
Payment Program.

N/A
4.3.5.2.
Automatic Clearing
CI Template:
Ability to clear open items automatically
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record yourself.
or they can be cleared automatically by the system. Automatic clearing is specially
designed for clearing accounts such as the Checks Receivable Clearing, Goods
Receipt/Invoice Receipt Clearing, Vendor/Customer accounts in the general ledger.
Other system processes can be configured to perform similar automatic clearing
activities.

When clearing open items, the system can automatically post (clear):
* Cash discounts paid or received
* Gains or losses from under- or overpayment
* Input and output tax and withholding tax
* Bank charges
* Gains or losses from exchange rate differences
* Entries to clear the account for cash discount clearing in the net method of posting
In clearing open items, the system automatically generates the necessary clearing
entries. These postings contain all information required to update transaction figures,
commitments and account balances. Separate clearing entries can be generated for each
of the different company codes, business areas, accounts, or trading partners.
4. Business Model

Although A/P document processing is at a department level, Automatic clearing of
documents will be centralized in A/P to limit the possibility of clearing document errors.

None
Customer and vendor accounts are always kept on an open item basis. This lets you
monitor your outstanding receivables and payables at any time.
available in the system. Only after every open item in a document is cleared can a
document be archived.
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None

None

With the exception of the Customer and Vendor accounts, all other G/L accounts which
will require clearing of open items will have to be configures as such in the Open Items

Payment Program.

N/A
4.3.6.
Correspondence with Vendors
4.3.6.1.
Correspondence with Vendors
Questions:
Q: 1) What correspondence (such as balance confirmation) and internal evaluations (such
as internal documents) do you create for your vendors?
A: Correspondence to vendors: (1) Attachment list when number of invoices paid is greater
than remittance advice allows. (2) Letter for short pay of sales tax and deduction of freight
charges. (3) Fax copies of checks to help vendor understand payment.
Correspondence to Initiating University Department: (1) Report of Errors for Key Operators
and for Prompt Pay Violations. (2) Outstanding Purchase Orders (QTR) (3) On-line form for
return of or adjustments to travel reimbursements where errors are made.
CI Template:
Check to vendors
-0- Balance Remittance letter
Remittance advice including multi-page overflow attachment
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Any desired correspondence can be requested either automatically or manually.
The automatic procedure is possible for the following correspondence types:
* The system can create payment notices automatically by making an entry in the
master record of the vendor, or by making this dependent on the company code.
* Account statements are automatically printed periodically, without a request having
been made, if the vender has a corresponding key for this in the master record.
Correspondence is usually printed automatically. To this end, the request program
SAPF140 is run in the background (without any entered parameters for it), for example
once every day, to print the correspondence. The report prints all the correspondence
types requested but not yet printed.

Correspondence to vendors: (1) Attachment list when number of invoices paid is greater
than remittance advice allows. (2) Letter for short pay of sales tax and deduction of
freight charges. (3) Fax copies of checks to help vendor understand payment.
Correspondence to Initiating University Department: (1) Report of Errors for Key
Operators and for Prompt Pay Violations. (2) Outstanding Purchase Orders (QTR) (3)
On-line form for return of or adjustments to travel reimbursements where errors are
made.
4. Business Model


None
Correspondences can be automatically generated as opposed as only manually
processed.


None
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None


N/A
4.4.
Accounts Receivable Processing
4.4.1.
Invoices and Credit Memos
CI Template:
UT intends to use A/R invoicing for decentralized sponsored project invoicing at the
departmental level. These invoices will be entered and parked by departments. The
Controller's Office or campus business office will approve parked invoices for release.
This is primarily intended for agreements requiring departmental input of information,
such as clinical trials.
Ability to query and report on customer line items
Within the Accounts Receivable module, you can analyze individual operational areas as
often as you require. You can evaluate, among other things, payment history, currency
exposure among customers and vendors, or aging reports.
4.4.1.1.
Customer Document Parking
Questions:
Q:
1) Do customer invoices require any type of approval before they are posted?
A: Yes. Departments may generate invoices outside SD and park them in A/R. Before the
parked documents are released, they require approval by the campus business office.
Q:
2) What is your procedure for parking and releasing invoices and or/credit memos?
A: UT currently does not have this capability.

CI Template:
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Customer Invoice entry will take place using the customer invoice entry screen.
However, instead of actually posting the document to the SAP R/3 system, the user will
park the document, which in essence will place the document in a Hold status. To
release the parked document, subsequent transactions will take place to release the
parked documents to the appropriate posting stages.

Customer invoice is generated which is incomplete and needs further research &/or
which needs to be approved for posting.
4. Business Model
Customer bills that need to be updated/researched: A/R clerks &/or department
personnel will enter customer invoices as fully as possible and then will park the
document.
Customer invoices that require approvals: Department personnel (mostly) &/or A/R
clerks will enter customer invoices in their entirety; Invoice Release strategy will manage
approval workflow
A document is first parked by an A/R entry or department clerk, then sent to the person
responsible for authorizing billing amounts to customers. The document is passed on to

Special A/R training is needed to ensure that customer invoices are properly parked.
Since both Accounts Receivable and key departmental personnel will be responsible for
customer invoice entry, training will be a broad initiative.
None
until they have been completed and posted.

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None
None

Before you can use the document release function, you must first make the appropriate
settings in the configuration menu. The following sections describe how to do this.
Within document release, we distinguish between amount release and account
assignment approval. You can define from which amount a document should be
released.
If you have defined a special release procedure within the workflow function to govern
how the account assignment approval should take place, you can define this procedure
for each workflow variant you use. You can also specify the minimum amount necessary
to trigger a release. If a document is to be released, the appropriate person with release
authorization receives a message in his/her inbox to this effect and can then display the
document and subsequently release it or refuse release.
The release authorization procedure used can be defined in Customizing, based on the
workflow variant, document type, and the amount in question. The amount of a parked
document is the largest line item for customers or vendors or the debit or credit balance.
You must define the users authorized to release amounts. To assist you in this process,
you can create release groups that can then be entered in the customer and vendor
master records. In Customizing, you can allocate different levels of release authorization
based on organizational objects (job, position, organizational unit) depending on
authorization groups, document type, amount, release approval level. You can also use
"user exits" to determine and allocate other release authorizations


N/A
4.4.1.2.
Parked Document Posting [Customers]
CI Template:
Parking of customer documents is performed when invoices or credit memos are entered
which do not have all of the required details necessary to actually post the documents or
the information being entered needs to be researched further prior to document posting.
Parking of customer documents allows the clerk to perform the initial document entry and
then hold the document until such time that it is necessary to process the document.
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Invoice Release strategies also utilize Customer Document Parking in order to manage
the process of approving and releasing customer invoices for billing.
You can post parked documents either individually or via a list. If you post several parked
documents via a list, the system issues a list when you have finished which details which
documents were successfully posted.
From this list, you can then carry out any necessary post-processing to parked
documents that could not be posted due to missing information such as a cost accounting
assignment. You can also create a batch input session to post the parked documents.
The data in parked documents is deleted when they are posted, a document is written to
the document database and the appropriate data (transaction figures etc.) is updated.
The number of the parked document is transferred to the posted document.

Posting of parked documents will take place whenever a customer invoice is ready to be
released for approval. If errors in the parked document still exist, the document is not
posted and remains in a Parked (or Hold) status.
4. Business Model
Customer bills that need to be updated/researched: A/R clerks &/or department
personnel will enter customer invoices as fully as possible and then will park the
document.
Customer invoices that require approvals: Department personnel (mostly) &/or A/R
clerks will enter customer invoices in their entirety; Invoice Release strategy will manage
approval workflow
A document is first parked by an A/R entry or department clerk, then sent to the person
responsible for authorizing billing amounts to customers. The document is passed on to
Special A/R training is needed to ensure that customer invoices are properly parked.
Since both Accounts Receivable and key departmental personnel will be responsible for
customer invoice entry, training will be a broad initiative.

None
until they have been completed and posted.
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None

None

Several Workflow models are provided in the system for document parking: a Workflow
framework (WS10000051) and five sub-workflows. In the Financial Accounting
Configuration menu, whichever sub-workflow model is needed should be used by the
workflow framework at the time of the program run. Other sub-workflows can be defined
while in this menu, providing that they send and receive the same data from the workflow
framework as the sub-workflow models do.
To use the standard sub-workflow models for multi-level amount release (WS10000052,
WS10000053, WS10000054), you can define between one and three levels for amount
release in the R/3 system. Should more than three release levels are needed, copy the
workflow models for amount release and then expand them. The fourth standard subworkflow (WS10000055) can be used for account assignment approval.
To be able to use the workflow models in your active client, they must first be copied to
the R/3 system using the workflow workbench tools provided for this purpose.

N/A
4.4.1.3.
Outgoing Invoice
Questions:
Q:
1) Which document types and document number ranges do you use?
A: Only part of these invoices is currently being captured in A/R. All invoices are the same
document type - sponsor invoices. Document numbers are manually assigned by
decentralized departments and do not need to be replicated by R/3.
Q:
2) Can you use templates for some of these invoices?
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A: Yes.
Q:
3) How do you handle transactions in foreign currencies?
A: No
CI Template:
UT would like to capture all sponsored project billing in A/R: either through SD or
manual posting to A/R.
UT currently allows some decentralized billing by departments that would be eligible
for manual posting to A/R.
One or two standard invoice templates (customized for UT) would be useful for users.
A primary, expected user of this functionality is expected to be clinical trials billing.
Customer invoices are entered in Accounts Receivable when there is not a referencing
Sales Order to match the customer billing invoice.

Customer invoice entry when there is no referencing sales order.
4. Business Model
Invoice Receipt is used to enter incoming or outgoing invoices as well as credit memos.
The Invoice/Credit Memo Entry Enjoy transaction is a single-screen transaction. This
means that an invoice can be entered, parked, and held on one screen without loss of
context. The entry screen remains the central reference screen, respective of the
document status.

Accounts Receivable training is needed to ensure that customer invoices and credit
memos are properly posted. Since both Accounts Receivable and key departmental
personnel will be responsible for invoice/credit memo entry, training will be a broad
initiative.

None
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The Accounts Receivable application component records and administers accounting

data for all customers. The system automatically makes postings in response to the
operative transactions. In the same way, the system supplies the Cash Management
application component with figures from invoices in order to optimize liquidity planning.

None

None

The following settings in Customizing for Financial Accounting under Accounts
Receivable and Accounts Payable -> Business Transactions -> Incoming
Invoices/Credit Memos or Outgoing Invoices/Credit Memos -> Incoming Invoices/Credit
Memos - Enjoy or Outgoing Invoices/Credit Memos - Enjoy:
* Define Document Types for Enjoy Transaction
* Define Tax Code per Transaction
* Define Posting Key for Incoming Invoices/Credit Memos or Outgoing Invoices/Credit
* Memos

N/A
4.4.1.4.
Customer Credit Memo
Questions:
Q:
1) How do you process customer credit memos?
A: UT does not currently have this functionality, but would like to use it.
CI Template:
UT would like to use the R/3 functionality for credit memos. Currently, UT makes manual
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adjustments to current invoices for credit memos.
Customer credit memos are entered in Accounts Receivable when there is not a
referencing Sales Order to match to the credit memo.

Customer credit memo entry is used when there is no referencing sales order
assignment.
4. Business Model
Invoice receipt is used to enter incoming or outgoing invoices or credit memos. The
status.

memos are properly posted. Since both Accounts Receivable and key departmental
initiative.

None
The Accounts Receivable application component records and administers accounting
data for all customers. The system automatically makes postings in response to the
operative transactions. In the same way, the system supplies the Cash Management
application component with figures from invoices in order to optimize liquidity planning.


None
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None

See Outgoing Invoice configuration information in section above


N/A
4.4.1.5.
Document Reversal
Questions:
Q:
A: UT would like to have a good audit trail for document reversals. Reversals should not be
netted against the original entry; instead, an opposing entry should be made so that both
activities can be seen in the balance.
Q:
A: Probably not. We may change our mind later on.

CI Template:
UT does not want to use "negative postings" for document reversals.

UT wants to see the original and reversing entries as opposites and in the balance.
If an incorrect document has been entered, it can be reversed, thereby also clearing the
1. It contains no cleared items
2. It contains only customer, vendor, and G/L account items
3. It was posted with Financial Accounting
4. All entered values (such as business area, cost center, and tax code) are still
valid
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4. Business Model

memos are properly reversed. Since both Accounts Receivable and key departmental
initiative.

None
Provides audit trail process associated with correcting incorrect invoice or credit memo
documents.


None
None

Configuration settings associated with posting keys and reversal of A/R document types

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N/A
4.4.1.6.
Mass Reversal
CI Template:
To reverse a large number of transactional documents, the recommended solution is to
use the Mass Reversal program.
Mass reversal allows multiple documents to be reversed at one time. All of the
* It contains no cleared items
* It contains only customer, vendor, and G/L account items
* It was posted with Financial Accounting
* All entered values (such as business area, cost center, and tax code) are still valid

To mass reverse documents, enter the original document numbers (or a range of
numbers), the company code, and the fiscal year. You also have the option of selecting
criteria to limit the documents to be reversed. The system will display a list of documents
to be reversed. Select post reversal and the system generates a reverse document for
each original document.
4. Business Model
Although A/R document processing is at a department level, mass reversal of documents
will be centralized in A/R or A/P to limit the possibility of reversing mass documents in
error.

None
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None

None


Only Financial supervisory personnel should have the capability to perform Mass
Reversal. In Accounts Receivable, only the A/R supervisor, or if possible only an A/P
supervisor or above, should be able to process a mass reversal of customer-related
documents.

N/A
4.4.1.7.
Recurring Entry
Questions:
example)?
A: Yes, some of these sponsor agreements may call for regular invoicing.
CI Template:
Ability to set up recurring entries if needed
Recurring documents can be setup to handle recurring customer invoices. Typically for
UT, these are Sponsor invoices for continuing project research.
Customer-related transactional postings, which recur time and time again, can be made
using the recurring entry program. To do this, you enter a recurring entry document, and
then execute the recurring entry program at certain intervals or schedule it for execution.
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You can define a run schedule in the system and specify in the recurring entry document
postings cannot be made at monthly intervals. Postings that are to be carried out in
thirteen periods or every other week, for example, can only be made by scheduling the
run. In this activity, you define the run schedules by specifying a key and a description. In
a second activity, you enter the required dates for each schedule.
4. Business Model
The invoice entry process is at the department level. Recurring entries will be entered at
the department level but executed centrally in A/R (UT Controller's Office).

None


None

None

To post with recurring entry documents, you have to set up a separate number range for
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the company codes that use them. You have to use key X1 for the number range. The
system takes numbers for the recurring entry document from this number range.
Program SAPF120 creates accounting documents using the recurring entry documents.
You have to run the program at regular intervals. It checks each recurring entry document
to see if a document should be created.


N/A
4.4.1.8.
Internal Transfer Posting
CI Template:
Internal accounting processes to debit or credit vendor accounts can be performed with
this transaction without creating an actual invoice document.
Using the Internal Transfer Posting function, you enter document line items and then
select the open items that are to be cleared. Once the total amount of selected open
items equals the amount of entered line items, the system clears the open items by
creating one or more offsetting entries.

When you post an outgoing customer payment, the system requires a posting key to
uses the customer credit posting key that is specified for the clearing entry. All the other
posting keys are used for special situations that may occur when posting an outgoing
payment:
* Customer posting keys are required so that offsetting entries can be made to the
customer account when open items are cleared for a customer.
4. Business Model
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Although A/R document processing is at a department level, Internal Transfer Posting of

documents will be centralized in A/R (or possibly A/P) to limit the possibility of documents
errors.
None
Internal Transfer Posting function provides an internal process to clear open customer
items without processing an actual billing invoice.

None

None

the system.

Transfer Posting. In Accounts Receivable, only the A/R supervisor, or if possible only an
A/P supervisor or above, should be able to process an internal transfer posting of
customer-related documents.

N/A
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4.4.1.9.
Internal Transfer Posting with Clearing
CI Template:
Posting with clearing function provides an internal process to clear open customer items
without processing an actual billing invoice.
Using the posting with clearing function, you enter document line items and then select
the open items that are to be cleared. Once the total amount of selected open items
equals the amount of entered line items, the system clears the open items by creating
one or more offsetting entries.

When you post an outgoing customer payment, the system requires a posting key to
uses the customer credit posting key that is specified for the clearing entry. All the other
posting keys are used for special situations that may occur when posting an outgoing
payment:
* Customer posting keys are required so that offsetting entries can be made to the
customer account when open items are cleared for a customer.
4. Business Model

Although A/R document processing is at a department level, Internal Transfer Posting of
documents will be centralized in A/R (or possibly A/P) to limit the possibility of documents
errors.

None
Internal Transfer Posting with clearing function provides an internal process to clear open
customer items without processing an actual billing invoice.
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None

None

the system.

Transfer Posting. In Accounts Receivable, only the A/R supervisor, or if possible only an
A/P supervisor or above, should be able to process an internal transfer posting of
customer-related documents.

N/A
4.4.2.
4.4.2.1.
Account Analysis [A/R]

Customer Line Item Analysis
CI Template:
Query screens/report that provide customer-related line item detail data associated with
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customer documents.

4. Business Model
N/A

None

None
N/A


None

None


N/A

N/A
4.4.2.2.
Balance Analysis
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CI Template:
customer documents.

4. Business Model
N/A

None

None
N/A


None

None
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N/A

N/A
4.4.2.3.
Customer Account Evaluations
CI Template:
customer documents.

4. Business Model
N/A

None

None
N/A
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None

None


N/A
N/A
4.4.3.
Customer Payments
Questions:
Q:
1) Which procedure do you use to enter customer payments?
A: Customer payments are deposited at each campus. Paperwork is sent to the Knoxville
campus, central cashier, for general ledger posting. Payments are matched to outstanding
A/R manually based on sponsor name, payment amount, and invoice number (if referenced
by the sponsor). Unknown payments are posted to a central clearing account for
investigation.
Q:
2) How do you handle payment differences?
A: If a sponsor underpays, the remaining balance remains due and payable for the invoice.
UT then pursues collection of the unpaid amount.
If a sponsor overpays, the overpayment is investigated. If it is truly an overpayment, it is
applied to future invoices or refunded to the sponsor. Sometimes, sponsors pay us interest,
even though we do not charge it. UT transfers the interest payment to an interest income
account.
Q:
3) Are payment differences posted automatically?
A: No.
Q:
4) Do your customers provide reason codes for discrepancies in payments?
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A: No.
CI Template:
Customer payments are deposited at each campus. Paperwork is sent to the Knoxville
campus, central cashier, for general ledger posting. Payments are matched to
outstanding A/R manually based on sponsor name, payment amount, and invoice
number (if referenced by the sponsor). Unknown payments are posted to a central
clearing account for investigation.
4.4.3.1.
Payment Advice Note Processing
Questions:
Q:
1) Do you receive payment advices from your customers?
A: Yes
Q:
2) Do you enter payment advices manually prior to applying the payments?
A: Yes
CI Template:
UT receives payment advices along with customer payments. The Cashier manually
posts the payment by using information on the payment advice.

None

None

None
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N/A
4.4.3.2.
Customer Payment Request
CI Template:
A customer payment request is a customer document that triggers a customer accounts
receivable by the payment program.
A payment request is a noted item and it triggers a dunning notice through the dunning
program. You can enter payment requests both for invoices that have already been
posted and invoices that have been parked.

To enter a payment request, proceed as follows:
From the Accounts Receivable menu, choose Document entry -> Payment request.
The payment program creates payment orders automatically. Payment orders are
deleted once the open items they contain are cleared (when the account statement is
posted).

None

None

None

N/A
4.4.3.3.
Release for Payment
Questions:
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Q:
1) How do you release invoices that have been blocked for payment?
A: We do not block payments. N/A

CI Template:
None


None
None

N/A
4.4.3.4.
Manual Incoming Payments
Questions:
Q:
1) Which procedure do you use to enter customer payments?
investigation.
Q:
2) Which procedure do you use to process manual payments to vendors?
investigation.
Q:
3) Do you print or hand-write the payment media (for example, checks, transfer forms)?
A: N/A
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CI Template:
Customer payments are deposited at each campus. Paperwork is sent to the Knoxville
campus, central cashier, for general ledger posting. Payments are matched to
outstanding A/R manually based on sponsor name, payment amount, and invoice
number (if referenced by the sponsor). Unknown payments are posted to a central
clearing account for investigation.

None


None

None

N/A
4.4.3.5.
Automatic Incoming Payments
Questions:
Q: 1) How do you post payments? Which G/L accounts are used? Which additional account
assignments (for example, cost centers) do you need for bank postings, bank charges
accounts, cash discount accounts, and exchange rate differences?
investigation.
Q: 2) Do you process automatic payments for your customers, such as direct debits and
bills of exchange? Please describe in detail how these payments are processed.
A: No
Q: 3) Do you apply payments automatically based on an electronic statement of account or
a lockbox file? Describe in detail how these payments are processed.
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A: No
CI Template:
UT posts all payments manually. We do not expect to do automatic posting.

None


None

None

N/A
4.4.3.6.
Payment Card Settlement
CI Template:
None


None

None
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N/A
4.4.4.
Account Clearing [AR]
Questions:
Q:
1) In which cases are open items cleared other than through payment receipts?
A: In the rare instances where a receivable is deemed unable to be collected, a journal entry
is manually prepared to transfer costs to a departmental cost center to cover the uncollected
amount.
Q:
2) How do you handle credit memos?
A: We currently do not have this capability, but would like to.

CI Template:
UT needs capability to manually clear A/R by journal entry.
4.4.4.1.
Manual Clearing
CI Template:
Ability to clear open items which are not cleared automatically
record yourself.

When clearing open items, you must assign items on the debit side to items on the credit
side. The system then checks whether the debit and credit amounts clear each other.
The system indicates the items as cleared only when the balance of the allocated items is
zero. The clearing date and the clearing document number are stored in each line item
4. Business Model
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Although A/R document processing is at a department level, Manual clearing of
documents will be centralized in A/R (or possibly A/P) to limit the possibility of clearing
document errors.
None
None

None

None

With the exception of the Customer and Vendor accounts, all other G/L accounts that will
require clearing of open items will have to be configured as such in the Open Items

In Accounts Receivable, only the A/R supervisor or above should be able to process the
Payment Program.

N/A
4.4.4.2.
Automatic Clearing
CI Template:
Ability to clear open items automatically
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record yourself.
or they can be cleared automatically by the system. Automatic clearing is specially
designed for clearing accounts such as the Checks Receivable Clearing, Goods
Receipt/Invoice Receipt Clearing, Vendor/Customer accounts in the general ledger.
Other system processes can be configured to perform similar automatic clearing
activities.

When clearing open items, the system can automatically post (clear):
* Cash discounts paid or received
* Gains or losses from under- or overpayment
* Input and output tax and withholding tax
* Bank charges
* Gains or losses from exchange rate differences
* Entries to clear the account for cash discount clearing in the net method of posting
In clearing open items, the system automatically generates the necessary clearing
entries. These postings contain all information required to update transaction figures,
commitments and account balances. Separate clearing entries can be generated for each
of the different company codes, business areas, accounts, or trading partners.
4. Business Model

Although A/R document processing is at a department level, Automatic clearing of
documents will be centralized in A/R (or possibly A/P) to limit the possibility of clearing
document errors.

None
Customer and vendor accounts are always kept on an open item basis. This lets you
monitor your outstanding receivables and payables at any time.
available in the system. Only after every open item in a document is cleared can a
document be archived.
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None

None

None

With the exception of the Customer and Vendor accounts, all other G/L accounts which
will require clearing of open items will have to be configures as such in the Open Items

In Accounts Receivable, only the A/R supervisor or above should be able to process the
Payment Program.

N/A
4.4.5.
Dunning Notice
CI Template:
UT currently has automatic dunning capability. UT has the option of sending late letters
for invoices at 90, 120, and 150 days old. The standard letters are three formats of
increasing severity.
4.4.5.1.
Automatic Dunning
Questions:
Q:
1) After how many days do you intend to issue a dunning notice?
A: Invoices are aged from the date mailed. When an invoice becomes 90 days old, it is
eligible for a late letter. UT needs the capability of not sending a late letter if we know of
circumstances where it would not be appropriate.
Q:
2) What is the dunning frequency?
A: UT sends collection letters monthly, at 90, 120, 150 days old. After 2 or 3 letters, UT
starts calling the sponsor.
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Q:
3) Do you dun various customer groups at different intervals?
A: No.
Q:
4) Which types of dunning do you use?
A: The three collection letters are of increasing severity.
Q:
5) How many dunning levels do you have?
A: Three.
Q: 6) Which organizational units are responsible for dunning (for example, company code,
division)?
A: This should be handled at the campus business office or Controller's Office level.
Q:
7) Do you calculate dunning interest or charge a dunning fee?
A: No.
CI Template:
UT currently has automatic dunning capability. UT has the option of sending late letters
for invoices at 90, 120, and 150 days old. The standard letters are three formats of
increasing severity.
The dunning process consists of the following stages:
1. Creating the dunning proposal: You start the dunning program and enter the
company codes for the dunning run. You can only run the program for certain
accounts. The dunning program determines the accounts and items that are to
be dunned, the dunning level and all other details necessary for dunning. The
dunning program produces a dunning proposal list. The dunning proposal list can
be created as often as required since the dunning data for the item and in the
account is not updated until the dunning notices have been printed.
2. Editing the dunning proposal list: You edit the dunning proposal list by raising
or lowering the dunning level of some line items, blocking some line items from
being dunned, or removing dunning blocks.
3. Printing the dunning notices The print program prints the dunning notices. It
updates the fields Dunning level and Dunning date in each line item, and dunning
date and level in the master records.
The dunning program duns open items in customer and vendor accounts if the overdue
items result in a debit balance.
When configuring the dunning program, you can specify further criteria by which
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accounts or their open items are to be dunned.

Most of the important specifications are made via the dunning procedure, which is
defined under a four-digit alphanumeric key, and determines:
The dunning frequency and/or the dunning interval with which accounts are
dunned.
The grace days and the minimum numbers of days in arrears for the
purposes of determining whether the open items and accounts in question should
be dunned. This data is used only to determine the due date of the open items
and whether an account should be dunned.
The number of dunning levels. For each dunning level you determine the
number of days a line item must be in arrears to be assigned to a particular
dunning level. This dunning level then determines the wording of the dunning
notice.
The transactions to be dunned. You can select whether standard and/or
special G/L transactions are dunned with the same procedure. Examples of
special G/L transactions are payment requests, down payments and down
payment requests.
You can set up one or more dunning procedures. Several procedures are necessary if
you want to dun accounts differently according to the above-mentioned criteria.
4. Business Model

Responsibility for dunning should be handled at the campus business office or
Controller's Office level.

None
The R/3 System allows you to dun business partners automatically. The system duns the
open items from business partner accounts in which the overdue items create a debit
balance. The dunning program selects the overdue open items, determines the dunning
level of the account in question, and creates a dunning notice. It then saves the dunning
data created for the items and accounts affected.

None
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None

During dunning program configuration you determine the following:
The dunning procedure to be used. The dunning procedure determines the
dunning interval, the grace days for due date determination and the number of
dunning levels. Note that it is not company code-specific.
The company codes and accounts that are always to be included in the dunning
procedure. Only those company codes that you specify in the configuration of the
dunning program are taken into account. Only those accounts to which you
allocated a dunning procedure via the master record are dunned.
The type of dunning notice to be sent to the customer. You determine the
appearance of the dunning notices by specifying their layout, which parts are
highlighted and the fonts used. You can tailor the dunning texts to your own
requirements, formulating them differently per dunning level.

Responsibility for dunning should be handled at the campus business office or
Controller's Office level. Those users should be allocated the appropriate authorization
privileges.

N/A
4.4.6.
Correspondence with Customers
CI Template:
Currently, UT only has two types of correspondence with sponsors - invoices and late
letters. UT would like to be able to use credit memos, statement of account, and other
types of standard correspondence.
UT needs a way to officially document collection efforts with a customer. We currently
write this down manually in our project file. This documentation should be at the invoice
level. This documentation substantiates our verbal correspondence. This is usually
notes from conversations with various customer personnel, our PI, etc.
4.4.6.1.
Correspondence with Customers
Questions:
Q: 1) What correspondence (such as balance confirmation) and internal evaluations (such
as internal documents) do you create for your vendors?
A: Currently, UT only has two types of correspondence with sponsors - invoices and late
letters. UT would like to be able to use credit memos, statement of account, and other types
of standard correspondence.
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UT needs a way to officially document collection efforts with a customer. We currently write
this down manually in our project file. This documentation should be at the invoice level.
This documentation substantiates our verbal correspondence. This is usually notes from
conversations with various customer personnel, our PI, etc.
CI Template:
Currently, UT only has two types of correspondence with sponsors - invoices and late
letters. UT would like to be able to use credit memos, statement of account, and other
types of standard correspondence.
UT needs a way to officially document collection efforts with a customer. We currently
write this down manually in our project file. This documentation should be at the invoice
level. This documentation substantiates our verbal correspondence. This is usually
notes from conversations with various customer personnel, our PI, etc.
Any desired correspondence can be requested either automatically or manually.
The automatic procedure is possible for the following correspondence types:
* The system can create payment notices automatically by making an entry in the master
record of the vendor, or by making this dependent on the company code.
* Account statements are automatically printed periodically, without a request having
been made, if the vender has a corresponding key for this in the master record.
Correspondence is usually printed automatically. To this end, the request program
SAPF140 is run in the background (without any entered parameters for it), for example
once every day, to print the correspondence. The report prints all the correspondence
types requested but not yet printed.

Correspondence to customers: billing invoices, dunning notices
4. Business Model

None

None
Correspondences can be automatically generated as opposed as only manually
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processed.


None

None


N/A
4.5.
Bank Accounting
4.5.1.
4.5.1.1.
Incomings
Cash Journal
Questions:
Q:
1) How do you manage incoming cash?
A: Any department in the University may receive or disburse cash. The Treasurer's office is
responsible for managing all university cash through the main bank account at the First
Tennessee bank and several other depository banks located all over the state.
The Treasurer's Office (Tim Mapes) manages the Cash Accounts. The individual campus
Bursar Offices (or primary depositor, if there is no Bursar's Office) must provide the total daily
cash deposits in their respective depository accounts to Tim Mapes so that he may make
investment decisions. Departments deposit cash with the Bursar's Office and prepare a T-33,
Report of Collections, that details the amounts and the accounts to which the cash should be
credited.
Tim Mapes' role is to manage the overall cash position and to invest excess funds. Each
morning, Tim looks on Prime Connection for primary depository account balance (i.e. Acct
15) Tim gets the UT-maintained spreadsheet of the UT investment portfolio for that day's
investment maturities. The excess/deficit is determined, and appropriate investment activity
is done based on the daily liquidity analysis.
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Daily Liquidity Analysis of Primary Depository Account Worksheet:

BEGINNING BALANCE (previous day's closing balance)
PLUS:
Securities maturing that day (from portfolio spreadsheet)
Semi-annual coupon additions (from portfolio spreadsheet)
Net ACH debits/credits activity postings that will post on current day (from Prime Connection)
Lockbox additions (through Prime Connections) There are 3 lockboxes. Day 1-deposited/
Day 2-moved to primary depository account
Overnight Repos (from the portfolio spreadsheet)
LESS:
Funds required to cover the controlled disbursements clearings (A/P checks - DVs and BVs)
Direct Deposit portion of the Payroll that will clear that day.
Estimated amount of payroll checks that will clear that day.
Outgoing wire transfers (e.g. Debt service payments, retirement payments)
Outgoing ACH payments (e.g. Payroll taxes)
EQUALS:
Amount of Excess Cash to Invest or Deficit to Cover through Sale of Investments
The Controller's Office does the reconciliation and the G/L functions.
We have 1 primary depository account where we initially deposit Knoxville funds. The
primary depository account is our cash management account. We invest based on the
balance in that account.
o Other account funds are swept into this account.
o Our wires go out of that account and our ACH goes in and out
o No checks are written from this account.
o Working capital investment purchases/sales are from this account
Besides the primary depository account at Knoxville, there are
3 other 1st TN depository accounts at different locations (Cookeville, Memphis, and
Chattanooga). Activities in these depository accounts are tied to certain G/L accounts. Cash
is concentrated out of them. We get a daily download on the Memphis account. The
Controller's Office (Sharon Lee) faxes a copy of the daily download to Memphis so that the
Memphis Bursar knows what ACH and wires (such as grant & contract payments) were
received.
There are 30 accounts at 22 banks.
We do not keep information on vendor banks.
OTHER BANKS
There is one depository account per location of bank. All depository accounts concentrate to
1st TN, but a minimum balance is left in these accounts. University personnel from the
various campuses call Tim Mapes and inform him the amount of daily activity, and then Tim
transfers the appropriate amount.
AmSouth Bank (Knoxville, Nashville) - 2 locations
National Bank of Commerce - 1location
City State (Martin) - 1 location we don't download any checks from this account.
Bank of America (Greenville, Nashville, Lewisburg)-3
Cumberland County (Crossville) - 1 location
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First State (Covington) - 1 location
Ag Extension County (Agency funds (cash) being held across TN - Not actually a bank, only
a compilation of cash-holdings)
Q:
2) For which business transactions are incoming cash journal postings made?
A: Cash and Checks

Fed Wire
ACH
Credit Cards (Mainly from students or ticket purchasers)
Bank credits (interest earnings and other adjustments)
Our 95 UT Agriculture Extension accounts have agency funds that University personnel
manage. This amount is reported only at the end of the year for Financial Statement
purposes.
Student payments may be paid over the counter at each campus Bursar's Office and also in
the Evening School. Payments for current payments may also be done through lockbox.
There are approximate 10 locations that receive student payments.
Food service is contracted out; however, payments for food services are received during the
initial semester registration/fee payment. The Bookstores and libraries also receive
payments from students.
Loan payments are collected through an ACH auto-loan program, collected directly at the
Bursar's Office, and collected through lockbox.
Monies are received for gifts through Development. Grants & Contracts payments may be
received by checks, ACH and wire transfers.
Auxiliaries generate cash. The Athletic Department and the Arenas sell tickets. The Hospital
at Memphis generates cash as well.
Other miscellaneous cash receipts occur at times throughout the year.
Q:
3) How are these business transactions posted?
A: Deposit activity is primarily recorded/posted through the CV (Cash Voucher system). The
CV is managed/operated by the Central Cashier located in the Bursars Office on the
Knoxville Campus. Numerous accounts are debited/credited including income, expenditure,
agency, loan funds, etc.
CI Template:
Any department in the University may receive or disburse cash. The Treasurer's office is
responsible for managing all University cash through the main bank account at the First
Tennessee bank and several other depository banks located all over the state. The
Treasurer's Office (Tim Mapes) manages the Cash Accounts. The individual campus
Bursar Offices (or primary depositor, if there is no Bursar's Office) must provide the total
daily cash deposits in their respective depository accounts to Tim Mapes so that he may
make investment decisions. Departments deposit cash with the Bursar's Office and
prepare a T-33, Report of Collections, that details the amounts and the accounts to which
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the cash should be credited. Tim Mapes' role is to manage the overall cash position and
to invest excess funds. Each morning, Tim looks on Prime Connection for primary
depository account balance (i.e. Acct 15) Tim gets the UT-maintained spreadsheet of the
UT investment portfolio for that day's investment maturities. The excess/deficit is
determined, and appropriate investment activity is done based on the daily liquidity
analysis.
Daily Liquidity Analysis of Primary Depository Account Worksheet:
BEGINNING BALANCE (previous day's closing balance)
PLUS:
Securities maturing that day (from portfolio spreadsheet)
Semi-annual coupon additions (from portfolio spreadsheet)
Net ACH debits/credits activity postings that will post on current day (from Prime
Connection)
Lockbox additions (through Prime Connections) There are 3 lockboxes. Day 1deposited/ Day 2-moved to primary
depository account
Overnight Repos (from the portfolio spreadsheet)
LESS:
Funds required to cover the controlled disbursements clearings (A/P checks DVs
and BVs)
Direct Deposit portion of the Payroll that will clear that day.
Estimated amount of payroll checks that will clear that day.
Outgoing wire transfers (e.g. Debt service payments, retirement payments)
Outgoing ACH payments (e.g. Payroll taxes)
EQUALS:
Amount of Excess Cash to Invest or Deficit to Cover through Sale of Investments
The Controller's Office does the reconciliation and the G/L functions.
UT has 1 primary depository account where they initially deposit Knoxville funds. The
primary depository account is their cash management account. UT invests based on the
balance in that account.
Other account funds are swept into this account.
Wires go out of that account and our ACH goes in and out
No checks are written from this account.
Working capital investment purchases/sales are from this account
st
Besides the primary depository account at Knoxville, there are 3 other 1 TN depository
accounts at different locations (Cookeville, Memphis, and Chattanooga). Activities in
these depository accounts are tied to certain G/L accounts. Cash is concentrated out of
them. UT gets a daily download on the Memphis account. The Controller's Office
(Sharon Lee) faxes a copy of the daily download to Memphis so that the Memphis Bursar
knows what ACH and wires (such as grant & contract payments) were received.
There are 30 accounts at 22 banks.
We do not keep information on vendor banks.
OTHER BANKS
There is one depository account per location of bank. All depository accounts
st
concentrate to 1 TN, but a minimum balance is left in these accounts. University
personnel from the various campuses call Tim Mapes and inform him the amount of daily
activity, and then Tim transfers the appropriate amount.
AmSouth Bank (Knoxville, Nashville) 2 locations
National Bank of Commerce 1 location
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City State (Martin) 1 location [we don't download any checks from this account]
Bank of America (Greenville, Nashville, Lewisburg) - 3 locations
Cumberland County (Crossville) 1 location
First State (Covington) 1 location
Ag Extension County (Agency funds (cash) being held across TN Not actually a bank,
only a compilation of cash-holdings)
The types of incoming cash are:
Cash and Checks
Fed Wire
ACH
Credit Cards (Mainly from students or ticket purchasers)
Bank credits (interest earnings and other adjustments)
Our 95 UT Agriculture Extension accounts have agency funds that University personnel
manage. This amount is reported only at the end of the year for Financial Statement
purposes.
Student payments may be paid over the counter at each campus Bursar's Office and also
in the Evening School. Payments for current payments may also be done through
lockbox. There are approximate 10 locations that receive student payments.
Food service is contracted out; however, payments for food services are received during
the initial semester registration/fee payment. The Bookstores and libraries also receive
payments from students.
Loan payments are collected through an ACH auto-loan program, collected directly at the
Bursar's Office, and collected through lockbox.
Monies are received for gifts through Development. Grants & Contracts payments may
be received by checks, ACH and wire transfers.
Auxiliaries generate cash. The Athletic Department and the Arenas sell tickets. The
Hospital at Memphis generates cash as well.
Miscellaneous cash receipts occur at times throughout the year.
Deposit activity is primarily recorded/posted through the CV (Cash Voucher system,
Entrex). The CV is managed/operated by the Central Cashier located in the Bursars
Office on the Knoxville Campus. Numerous accounts are debited/credited including
income, expenditure, agency, loan funds, etc.
The cash journal is a sub ledger of Bank Accounting. It is used to manage a company's
cash transactions. The system automatically calculates and displays the opening and
closing balances, and the receipts and payments totals. One can run several cash
journals for each company code. One can also carry out postings to G/L accounts, as
well as vendor and customer accounts.
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The cash journal is a single-screen transaction. This means that one can enter, display,
and change cash journal documents on one screen.
The system offers the following options:
Entering, saving, and posting cash journal entries
Displaying follow-on documents
Defining cash journal business transactions
Printing the cash journal
Printing receipts
Deleting cash journal entries saved
Displaying all cash journal documents that have been deleted
Changing the cash journal
4. Business Model
None

Currently, individual departments fill out a T-33 where it is entered by the Bursar's Office
into Entrex. The only two campuses that directly interface with Entrex are Chattanooga
and Memphis. They are under a separate subsystem called Banner where they enter
their cash receipts.
It needs to be decided if UT will keep Entrex and will it be replaced by R/3. If it is still
maintained, interfaces need to be spec out.

No changes to existing organization.
If Entrex is replaced, all users will enter their cash receipts to one integrated system
therefore eliminating all interfaces.

None

N/A

None
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Each house bank of a company code is represented by a bank ID in the R/3 system must
be defined, every account at a house bank by an account ID. In the R/3 system, one
uses the bank ID and the account ID to specify bank details. These specifications are
used, for example, for automatic payment transactions to determine the bank details for
payment.
Only authorized users that have the responsibility to make bank deposits.

N/A
4.5.1.2.
Electronic Bank Statement
Questions:
Q: 1) For which house banks would it make sense to use electronic bank statements? Do
these banks have the required technical capability?
A: The First Tennessee bank. There are 11 accounts at First Tennessee.
SunTrust - Chattanooga would also be useful.
Q:
2) In which format is the electronic bank statement available?
A: Daily download-file information is accessed by Bill Thompson for the primary depository
account (in Knoxville) and the Memphis and Chattanooga depository accounts. Information
that is included is the BAI code, the description that shows up on statement information, and
any internally assigned reference number (i.e. deposit ticket number).
Lockbox information provided is the total cash in (deposits) and cash out (transfers).
We have look-up capabilities through Prime Connection for check clearing detail, some
deposit detail (outgoing wire detail and individual deposit totals) and balances. We can also
use Prime Connection to create wire transfers, and create/release stop payments.
UT uses "positive pay": We send the bank a daily electronic file so the bank knows what
checks UT has written. The bank performs daily review of the presented checks against the
UT daily electronic file to ensure that checks are genuine. The bank performs the matching
process for the 1st TN disbursement and payroll accounts. Non-matching presentments are
faxed to UT for approval to pay daily.
The bank sends a monthly reconciliation statement. The Controller's Office does further
reconciliation. Dates and total amounts are used for UT's reconciliation of individual deposits.
Bankcard deposits are identified and reconciled by merchant number.
OTHER BANKS
City State bank provides display capabilities on the UT Martin depository account through the
Internet. Tim Mapes relies on the UT Martin personnel who actually look on the Internet at
their account. All banks provide monthly, hard copy statements.
Comments: Banking software and hardware used for cash management processing:
o Prime Connection - 1st TN only; this may be discontinued. Plans to go to an Internetbased system as of June 2001.
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o
o
o
o
o
o
o
o
o
o
DTC terminal (for investment management)

E-mail - to get bank pricing at month-end
ProComm/FedLine 2 (the FedLine 2 is resident at the Bank, and we use ProComm
dialogue to transfer the file to the bank)
Prime Connection ACH - stand-alone pc software to process ACH (Used for cash
concentration, remittance to trust beneficiaries, return excess financial aid (Stafford
Loans) to lending institutions, etc.)
MCI Mailbox -Transfer procedure for disk storage (mailbox) on an external server.
Accessed by dial-up.
CDs - Optical imagery of cancelled checks
BAI2 - For bank reconciliation. BAI is obtained via MCI Mailbox and up-loaded daily
onto the mainframe for matching. In-house developed reconciliation program is
maintained on AS400. Reconciliation is done monthly. In R/3, BAI will be pulled in
directly; thus, in-house program should not be needed.
Positive pay software- custom-built, daily extract of G/L accounts payable data
(every check that we write, including from ZBA accounts)
FTP Server - We have it (internet server). Will be in the future.
Student System Check Writer - Bursar's Office uses to write large numbers of checks
through a batch (noted as pre-written). In addition, on-demand checks are written to
individual students.
Investment Software - In-house system that maintains details of investment activities

ETA - a trust management system that collects and reports activities by individual donor
funds and provides donors annual tax forms. Also maintains details of bank activities for
trusts.
Q: 3) What specific information do the bank statements contain (e.g. invoice numbers)? If
you wish to use the information for the payee to allocate items, you need to select a suitable
interpretation algorithm.
A: Via download we receive BAI2 formatted info, which includes amount, description, and
reference numbers (deposit ticket #, check #, merchant #, other payee #s).
Q: 4) Does you house bank transfer business transaction codes with the bank statements to
help you classify the postings?
A: Yes.
Q:
5) Sketch the posting steps for typical bank statement postings.
A: Description
Cash Offset
Generated Transaction
Q:
Account
A01020001
A99059901
Debit
Credit
26,146.13
26,146.13
6) Which payment methods do you process using the FI payment program?
A: None
Q:
7) Do you process these payment methods via separate clearing accounts?
A: N/A
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Q: 8) Do you want to distinguish between posting documents for manual and electronic
bank statements for accounting and reporting purposes?
A: Yes, but the distinction should be for central office use only.
Q: 9) Do your house banks transfer business transaction codes with the bank statements to
A: Yes.
CI Template:
Daily, download-file information is accessed by Bill Thompson for the 1st TN primary
depository account (in Knoxville) and the Memphis and Chattanooga depository
accounts. Information that is included is the BAI code, the description that shows up on
statement information, and any internally assigned reference number (i.e. deposit ticket
number).
Lockbox information provided is the total cash in (deposits) and cash out (transfers).
UT has look-up capabilities through Prime Connection for check clearing detail, some
deposit detail (outgoing wire detail and individual deposit totals) and balances. UT can
also use Prime Connection to create wire transfers, and create/release stop payments.
UT uses "positive pay": UT sends the bank a daily electronic file so the bank knows what
checks UT has written. The bank performs daily review of the presented checks against
the UT daily electronic file to ensure that checks are genuine. The bank performs the
matching process for the 1 st TN disbursement and payroll accounts. Non-matching
presentments are faxed to UT for approval to pay daily.
The bank sends a monthly reconciliation statement. The Controller's Office does further
reconciliation. Dates and total amounts are used for UT's reconciliation of individual
deposits. Bankcard deposits are identified and reconciled by merchant number.
OTHER BANKS
City State bank provides display capabilities on the UT Martin depository account through
the Internet. Tim Mapes relies on the UT Martin personnel who actually look on the
Internet at their account. All banks provide monthly, hard copy statements.
Comments: Banking software and hardware used for cash management processing.
Prime Connection 1st TN only; this may be discontinued. Plans to go to an Internetbased system as of June 2001.
DTC terminal (for investment management)
E-mail to get bank pricing at month-end
ProComm/FedLine 2 (the FedLine 2 is resident at the Bank, and we use ProComm
dialogue to transfer the file to the bank)
Prime Connection ACH stand-alone pc software to process ACH (Used for cash
concentration, remittance to trust beneficiaries, return excess financial aid (Stafford
Loans) to lending institutions, etc.)
MCI Mailbox Transfer procedure for disk storage (mailbox) on an external server.
Accessed by dial-up.
CDs Optical imagery of cancelled checks
BAI2 For bank reconciliation. BAI is obtained via MCI Mailbox and up-loaded daily onto
the mainframe for matching. In-house developed reconciliation program is maintained on
AS400. Reconciliation is done monthly. In R/3, BAI will be pulled in directly; thus, inF:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
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house program should not be needed.

Positive pay software- custom-built, daily extract of G/L accounts payable data (every
check that we write, including from ZBA accounts)
FTP Server We have it (internet server). Expected in the future.
Student System Check Writer Bursar's Office uses to write large numbers of checks
through a batch (noted as pre-written). In addition, on-demand checks are written to
individual students.
The bank statement includes, via download receive BAI2 formatted info, amount,
description, and reference numbers (deposit ticket #, check #, merchant #, other payee
#s).
The types of business transaction that are on the bank statement are:
cash
checks
point of sales (credit card/merchant #)
wires
ACH
debit memos
investment
investment interest
lockbox
Bank statement data can be electronically retrieved from banks. To transmit data from
bank to customer, a transfer program that recognizes BCS is necessary. During
conversion, data in these files is supplied with R/3-specific information, such as the chart
of accounts and company code, for further processing. After the import transaction is
completed, the data in the bank data memory is analyzed. The system tries to identify the
individual business transactions and filter out the information necessary for posting, for
example document numbers, from the note to payee fields on the bank statement
(interpretation of the note to payee). If the necessary information can be interpreted, the
system will automatically post the transactions (using batch input or a call transaction). All
line items are usually posted automatically. By making configuration settings, one
ensures that all business transactions of which bank informs you using the electronic
bank statement are posted correctly in the system.
The new system is expected to interface directly with the bank by formatting records for
stops pays, checks issued, and ACH transactions for direct daily transmission the bank
via Prime Connection. The check should update the checks issued data each day with
the checks paid data download from the bank. In addition, the system might reconcile
ACH transfers, outgoing and incoming wires, and deposits from the downloaded bank
data.

The following sections describe the procedure for entering data contained in electronic
bank statements. Processing always takes place in three stages.
1. Each file is transferred (in the relevant bank statement format) to the bank data
storage.
2. The data that is used to filter out the clearing information is then interpreted. This
clearing information is stored in bank data storage.
3. Batch input sessions are then created, or the bank statements are posted directly.
To ensure statements are posted properly, certain requirements must be fulfilled.
- An internal posting rule must be defined for all posting transactions. This
posting rule represents the business transactions relevant to bank statement
entry and controls postings to G/L and sub ledger accounts.
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External transactions must be defined for those keys (business transaction

code, text key, posting text) that may be used differently by each bank.
External transactions must be allocated to a posting rule so that the system
can post them.
4. Business Model
N/A
None

R/3 provides the following functionality:
All disbursement bank account checks issued are extracted into an electronic file
and sent to the bank for "positive pay" confirmation against items presented for
payment.
R/3's online Check Register displays the status of a check, e.g. paid, stopped,
voided etc, which can also be accessed directly by the vendor.
Stop payments are initiated by Accounts Payable (or other authorized personnel)
and the updated status is immediately reflected on the register. This voided
check can be extracted similar to issued checks and sent to the bank to process
the stop payment request.
With the automatic posting feature, reconciliation process is faster and can be
done daily.
The cumbersome process of confirming paid checks to payees who question whether
they got the check will be greatly enhanced. Potential fraud will be identified sooner with
the "positive pay" process. Stop pay transactions will require less paperwork and the
possibility of error will be reduced.


N/A
None
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One should carry out the configuration of the electronic account statement in the
following order:
1. Define transaction types. One should group together all banks that use the same
external transaction code for certain business transactions under the same
transaction type.
2. Allocate banks to each transaction type using the bank key and bank account
number.
3. Create posting rules. The system needs these to find the posting specifications.
4. Allocate the external transactions to the posting rules.
5. Define posting rules and/or posting specifications.
Bank account file.
G/L balances per fund.

Electronic bank reconciliation should be authorized to users who do the bank
reconciliation in the Controller's Office.
Stop Pay Security:
1. Accounts Payable
2. Payroll
3. Insurance
4. Treasury
Reconciliation Data Adjustments:
1. Controller's Office
2. Treasury

N/A
4.5.1.3.
Manual Account Statement
Questions:
Q: 1) What specific information do your bank statements contain (for example, invoice
numbers)?
A: Monthly, hard copy statements are issued for each account. Information that is included
is the BAI code, the description that shows up on statement information, and any internally
assigned reference number. On our G/L, we keep cash by fund and entity (Cash in Bank).
Actual bank information is maintained in a bank file. As we post to the ledger we post to the
bank file without transaction detail (only bank balances of the house banks). There is an
attribute on the G/L transaction that shows what bank was debited/credited.
Q: 2) Does you house bank transfer business transaction codes with the bank statements to
A: Yes
Q:
3) Sketch the posting steps for typical bank statement postings.
A: Description
Account
Debit
Credit
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Cash Offset
Generated Transaction
Q:
A01020001
A99059901
26,146.13
26,146.13
4) Which payment methods do you process using the FI payment program?
A: None
Q:
5) Do you process these payment methods via separate clearing accounts?
A: N/A
Q: 6) Do you want to distinguish between posting documents for manual and electronic
bank statements for accounting and reporting purposes?
A: Yes - but the distinction should be for central office use only.
CI Template:
Monthly, hard copy statements are issued for each account. Information that is included
is the BAI code, the description that shows up on statement information, and any
internally assigned reference number. On the G/L, UT keeps cash by fund and entity
(Cash in Bank). Actual bank information is maintained in a bank file. As they post to the
ledger they post to the bank file without transaction detail (only bank balances of the
house banks). There is an attribute on the G/L transaction that shows what bank was
debited/credited.
One can manually enter bank account statements once received. Statement entry is
usually a two-step process:
First, one enters the account line items in the system. One can vary the row
format for this.
In addition, the system supports individual account determination and checks
data consistency.
Then one posts the line items once it has been entered.
In the manual bank statement function, one can create up to two postings for each line
item.
A bank account posting (for example, debit bank account and credit bank
clearing account)
A sub ledger posting (for example, debit bank clearing account and credit
customer account with clearing)
To process the bank statement, proceed from the Cash Management menu, as follows:
1. Choose Input Manual bank statement.
2. On the next screen, enter the following basic data.
o Bank key and/or bank data
o Statement number and statement date
o Beginning balance and ending balance
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3.
4.
5.
6.
7.
8.
Selection criteria for transferring the payment advices (for example,

planning type, planning date)
o Specifications for the postings
Confirm the entries. On the next screen, you can process the bank statement data.
Compare the memo records automatically transferred by the system with the data on
your bank account statement. To delete the memo records that are not required,
choose
.
Enter a transaction key for each memo record.
To make other account assignments, choose
. If you
have used additional account assignment fields and then work with the standard
variant again, an arrow marker (>) displayed next to a line indicates that further
entries exist.
To enter several values in an account assignment field (for example, document no.,
invoice amount), choose
. The system displays a dialog box in
which you can enter further values.
Choose
.
4. Business Model
N/A
None

R/3 can process hardcopy statement with minimal line items with the same benefits as
electronic bank statement processing. The difference is instead of downloading an
electronic file from the bank, manual input is required.
None

N/A

None

New G/L for each Bank sub accounts.
Map individual transaction type on bank statement to R/3 code.
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Manual bank reconciliation should be authorized to users who do the bank reconciliation
in the Controller's Office.
Stop Pay Security:
1. Accounts Payable
2. Payroll
3. Insurance
4. Treasury
Reconciliation Data Adjustments:
1. Controller's Office
2. Treasury

N/A
4.5.1.4.
Check Deposit Transaction
Questions:
Q:
1) How many checks do you present to your house banks per day?
A: 3000+
Q:
2) Do you enter checks from customers manually or electronically?
A: We send in deposit information manually on a hard-copy list of deposits. We list the date
and amount of each deposit in total and the amount of each check within the deposit. This
deposit ticket number is noted on the electronic file provided by the Bank.
Departments collect checks and cash, and make daily deposits when cash has been
received. Sealed departmental deposits are taken to the Bursar's Office with a Report of
Collections (T-33), which shows the cost center or WBS element that should be credited.
The actual deposits are not counted but are taken to the Bank by Police. The Bank is
responsible for counting the deposit as it processes the deposit. This process was set up to
reduce the number of University personnel who handle cash.
Q: 3) What information given by the check issuer can be used to allocate items (check
number, invoice number)?
A: Student ID #, grant & contract invoice number.
Q: 4) Sketch the posting steps for check deposits (are checks posted directly to customer
accounts or via clearing accounts)?
A: Both - checks are posted directly to accounts and to clearing accounts. Those posted to
clearing accounts are typically posted to individual student/customer accounts via a
subsidiary A/R system.
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Q: 5) Do you want to separate check postings for general ledger accounting and sub ledger
accounting?
A: Yes
CI Template:
The current process of making actual deposits are done differently depends on the
location of the individual.
For local departments (Knoxville) making deposits, they will fill out a form, T-33, with all
the required information and account and the deposit ticket. Then the paperwork will be
submitted to the Bursar's Office where it is entered in Entrex and the actual deposit are
made to the bank.
For out-of-town departments (e.g. Memphis, Martin, Chattanooga, etc.), they will also fill
out the form, T-33, with all the required information and account and the deposit ticket
which will be deposited to their local banks. After the deposit is complete, they will send
the form, T-33, and a copy of the deposit slip to the Bursar's Office in Knoxville. The
Bursar's Office will enter the deposit information into Entrex with the exception to
Chattanooga and Memphis. These two campuses enter the deposit information in a
separate system called Banner, which is then loaded into Entrex.
UT sends in deposit information manually on a hard-copy list of deposits. They list the
date and amount of each deposit in total and the amount of each check within the
deposit. This deposit ticket number is noted on the electronic file provided by the Bank.
UT presents over 3,000 checks to their house bank.
Departments collect checks and cash, and make daily deposits when cash has been
received. Sealed departmental deposits are taken to the Bursar's Office with a Report of
Collections (T-33), which shows the cost center or WBS element that should be credited.
The actual deposits are not counted but are taken to the Bank by Police. The Bank is
responsible for counting the deposit as it processes the deposit. This process was set up
to reduce the number of University personnel who handle cash.
The information given by the check issuer can be used to allocate items by student ID #,
grant & contract invoice number.
Both checks are posted directly to accounts and to clearing accounts. Those posted to
clearing accounts are typically posted to individual student/customer accounts via a
subsidiary A/R system.
UT would like to separate check postings for general ledger accounting and sub ledger
accounting.
R/3 Cash Management provides two types of check deposit functions. There is an
electronic check deposit which enables one to process data supplied by an external entry
system (check reader). One can use electronic check deposit as an entry function, and
then complete and post individual data with the manual check deposit. If data is
complete, the electronic check deposit can also create the batch input session directly.
For manual check deposit, this function is used to enter checks one receives.
On the entry screen, the system will display different fields for each account assignment
variant one chooses. Depending on the number of account assignment fields in a variant,
up to three lines are available for entering a memo record.
One can change the account assignment variant at any time during processing. If one
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has used more account assignment fields than are available in the current variant, the
system will display this information in an additional field.
One can, for example, enter several document numbers and different invoice amounts for
one memo record. This is useful if a customer pays several invoices with one check. The
system highlights the account assignment field when one has entered several values in it.
Electronic Check Deposit:
1.Choose Input Electronic check deposit Import.
The system displays the selection screen.
2. Enter the path name and file name for the statement file and the line item file.
3. Select Upload file from PC if required.
4. Specify whether or not both sessions should be created. As an alternative method,
the sub ledger session can be generated in a second run.
5. Specify the import options.
6. Specify the output options.
7. Add any data not supplied by the external system via the appropriate parameters.
8. Choose Program Execute.
Manual check deposit:
1. Enter the specifications.
2. On the next screen, enter the following basic data.
Company code and/or bank data
Specifications necessary for differentiating check deposit lists
Transaction indicator
Date and currency
Specifications for the postings
4. Business Model
None

The requirements for the separation of duties and receipting must be in placed.

When the deposit ticket is saved, an automatic journal entry is generated to post to the
appropriate bank account and G/L.

None
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N/A

None

Types of deposits and Revenue (or Expenditure) account to be posted.

Required separation of duties.
Receipting/preparing deposit ticket is a required security level.
1.
Employee A receipts and identifies appropriate bank account/ revenue G/L
code.
2.
Employee B prepares deposit ticket and receipts.
Posting the deposit is a required security level.
1.
Employee C verifies return confirmation from bank and enters into banking
records.
2.
Employee A enters revenue into journal (G/L) and ledger files.

N/A
4.5.1.5.
Cashed Checks
Questions:
Q: 1) Do you wish to have an overview of the average period outstanding, quantity, and
total amount of outstanding (cashed and open) checks?
A: No
Q: 2) Do you wish to have an overview per vendor of the outstanding checks for the G/L
accounts managed on an open item basis?
A: No
CI Template:
UT uses "positive pay": They send the bank a daily electronic file so the bank knows what
checks UT has written. The bank performs daily review of the presented checks against
the UT daily electronic file to ensure that checks are genuine. The bank performs the
matching process for the 1st TN disbursement and payroll accounts. Non-matching
presentments are faxed to UT for approval to pay daily.
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UT uses pre-numbered checks that are assigned in lots. They are kept in sequence and
can be identified by the digit assignment. For example, for disbursement and payroll
vouchers are 6 digits long. The batch voucher number is seven digits.
In R/3 cash management, a program, RFEBCK00, imports the information on cashed
checks delivered by the bank and generates the clearing entries (debit outgoing checks
account, credit bank account). It also indicates as "paid" the checks in the check register
that could be posted. The clearing entries can be placed in a batch input session (batch
input mode) or be posted immediately (call transaction mode).
Since there is no standard for data on cashed checks in the USA and most other
countries, a preprocessing program is needed to convert the bank format to the entry
format of this program.
R/3 cash management can distinguish different types of checks by lots.

To do this, proceed as follows:
Choose Input
You reach the initial screen.
Specify the path and file name of the statement file. When importing from a PC, you must
also specify the drive (for example, A:).
Specify the import options.
Choose
4. Business Model
None

None
Cashed check is a subset of electronic bank statement. In the event that reconciliation
cannot be done on a daily basis, this cash checked functionality could be invoked.
Similar to account statement processing, upon reading the downloaded transactions from
the bank, R/3 generate an automatic journal to post to the cash account and update the
check register.

None
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N/A
None

Bank account file
G/L

Reconciliation data adjustments:
1. Controller's Office - All accounts
2. Treasury - View only on all accounts.
N/A
4.5.1.6.
Lockbox (USA)
Questions:
Q:
1) Do you use the lockbox procedure?
A: Yes
Q:
2) Please describe your lockbox procedures.
A: Lockboxes speed up the deposit processing and eliminate UT manpower to prepare

deposits and credit account receivable accounts. UT will send invoices to students/former
students. The invoice's remittance address is a post-office address (Lockbox) that the bank
has access to. The bank picks up the payments from the post office and makes the deposits.
Then the bank sends a file of the deposits that it made for the University. Electronic file from
bank contains student account number, amount of payment and date of payment.
There are 3 lockboxes, all at 1st Tennessee:
1) UT Memphis Student Loans: this will be outsourced as of 4/30/00.
2) UT Knoxville Student Loans
3) UT Knoxville Student Fees
There is a unique bank account for each lockbox. (These bank accounts are not set up on
our G/L.) The lockbox deposits hit their respective unique bank account on Day 1. On Day 2,
the deposits from Day 1 are transferred to the primary depository account. The detail for
these deposits is posted to the MCI mailbox through a file each day. Lockbox is usually
available about 1 PM. The file includes the amount, the date, and the social security number.
The file is picked up by a Bursar's Office personnel from the MCI mailbox and is loaded into
the Bursar's Office Student Information System loan or fee file. Lockbox (as it is used now)
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won't really hit R/3 until it has passed through CSA and the Student Loan office and then
feeds back to the Financial system.
CI Template:
Lockboxes speed up the deposit processing and eliminate UT manpower to prepare
deposits and credit account receivable accounts. UT will send invoices to
students/former students. The invoice's remittance address is a post-office address
(Lockbox) that the bank has access to. The bank picks up the payments from the post
office and makes the deposits. Then the bank sends a file of the deposits that it made for
the University. Electronic file from bank contains student account number, amount of
payment and date of payment.
There are 3 lockboxes, all at 1 st Tennessee:
1) UT Memphis Student Loans: this will be outsourced as of 4/30/00.
2) UT Knoxville Student Loans
3) UT Knoxville Student Fees
There is a unique bank account for each lockbox. (These bank accounts are not set up
on our G/L.) The lockbox deposits hit their respective unique bank account on Day 1. On
Day 2, the deposits from Day 1 are transferred to the primary depository account. The
detail for these deposits is posted to the MCI mailbox through a file each day. Lockbox is
usually available about 1 PM. The file includes the amount, the date, and the social
security number. The file is picked up by a Bursar's Office personnel from the MCI
mailbox and is loaded into the Bursar's Office Student Information System loan or fee file.
Lockbox (as it is used now) won't really hit R/3 until it has passed through CSA and the
Student Loan office and then feeds back to the Financial system. The CSA (Central
Services Accounting) system identifies the student fee and loan. Cindy from the Bursar's
Office gets a copy from the Loan Dept. in which she will enter into Entrex. She matches
total by day.
One uses this component to collect and process incoming payments using the lockbox
procedure. This is a service offered by banks in the USA. Instead of sending one's
payments and payment advice notes to the bank's office, one sends them to a central
bank (normally a P.O. Box). Once the payments have been received, the bank creates a
data file from the payment advice data and payment amounts of the customer. The check
amounts are credited to your bank account. The file itself is sent to you at regular
intervals to enable you to update your ledgers.

The record layout in the lockbox file must correspond to the standard BAI or BAI2
formats. The program will process the incoming payment information.
To import lockbox data, proceed as follows:
1. From the Cash Management menu, choose
The selection screen will display.
2. Specify the UNIX path and file name of the lockbox file. This can also be uploaded
from the PC work directory by selecting the "PC upload" box. If using PC upload,
the full path must be entered, i.e. C:\directory\filename. By selecting to import into
bank data storage, you choose to create payment advices which will be used for
clearing the sub ledger. Import into bank data storage will generally always be 'on'
for Lockbox processing.
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3. Specify the processing parameters. Enter the procedure LOCKBOX as well as the
file format BAI or BAI2.
4. Select the type of document number being supplied on the file (financial
accounting document number for AR invoice; financial accounting reference
document number for SD billing document number or number from an external
system).
5. Select enhanced invoice check if using centralized customer accounts (using
Alternate Payer structure).
6. Finally, choose the algorithm for clearing (generally 001).
7. Enter account assignments. Enter whether the value date from the file should be
transferred to the bank general ledger posting. Also enter a default business area
and profit center if required (new for 3.0F).
8. Choose Program
.
4. Business Model
None

None


None
N/A

None

Bank account file
G/L
Define control parameters
Define posting data
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Lockbox process should remain at the Controller's Office.

N/A
4.5.2.
Outgoings
CI Template:
Most outgoing payments are made through the Treasurer's Office. Vendor payments are
made from Treasurer's Office and A/P. The Payroll department is part of the Treasurer's
Office. Investment payments and trust distributions are made from the Treasurer's
Office.
Individual campuses have zero-balance accounts and write some checks directly from
their Bursar's Office. The Controller's Office reconciles these accounts. This is just for
refund of Student financial aid money to students.
There are 117 main petty cash accounts in our Financial Statements that are held by
individual departments across all campuses. Imprest amounts are posted to the G/L..
Some of the 117 that are located at other campuses are subdivided.
Each department is responsible for sending in a formal reconciliation at the end of the
fiscal year to Internal Audit.
We have 1 main disbursements account from which only checks (DVs and BVs) are
written. This is a controlled disbursement account. Disbursement Vouchers (DVs) are
payments to vendors, and Batch Vouchers (BVs) are typically refunds to students written
in batch because we do not need to keep the detail of these payments on our G/L.
There is 1 payroll account, which is ZBA. We move money to cover payroll payments
from our primary depository account. The bank handles the draw, and this is done daily.
Outflows include direct deposits and checks. Payroll transmits this information to the
bank. The direct deposit information is fed through a phone modem via FedLine II (a
means for banks to interact with the federal reserve bank, but UT has been allowed to
use it). Currently, we have 150 payroll runs a year, and these include monthly, biweekly,
th
longevity, supplemental (on the 10 of each month), and special payrolls.
Note: In R/3, a directory must be set up for all the banks that are used by UT employees
for direct deposit of payroll. Benson can assist in this. If 1st TN can share its quarterly
CD from Thomson Financial, it would be helpful to get the directory setup. Alternatively,
the information can be extracted from the legacy system.
st
There is 1 primary investment account. This represents cash that the 1 TN

investment managers have available to them to invest for the University. Each manager
has a sub-account to reflect his or her position. These sub-accounts are only maintained
st
by 1 TN and in the UT investment system. Buy and sell activities flow through this
account. UT retrieves the investment managers' transactions information through DTC
(Depository Trust Company). Journal entries are made daily to reflect all payments and
receipts. It is important at the end of the month to post a journal entry for the balances on
the last day of the month.
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There are 4 other ZBA accounts for batch vouchers (BVs) for which checks are written
by the campus Bursars at Knoxville, Chattanooga, Martin and Memphis. These are for
on-demand student aid refunds. The Chattanooga ZBA account uses this account to
make lender refunds through ACH. The exception is that Knoxville refunds the lender
through the primary depository account.
The types of outgoing transactions:
Cash (Petty Cash)
Checks
Procurement Card Program
Fed Wire
ACH (Payroll and other)
International Wires
Automatic debits by State
Bank debits
Typically posted as checks (DVs, BVs and PVs) are written. Other transactions are
posted via journals (JVs) and through the CV system. Thousands of accounts are
debited with this type of activity.
The cash journal is a sub ledger of Bank Accounting. It is used to manage a company's
cash transactions. The system automatically calculates and displays the opening and
closing balances, and the receipts and payments totals. One can run several cash
journals for each company code. One can also carry out postings to G/L accounts, as
well as vendor and customer accounts.
The payment program for payment requests contains an enhancement for automatic
payment in the SAP R/3 System. This program can be used to settle payments to and/or
by vendors and customers as well as between G/L accounts. Unlike the standard
payment program, it is not the open items (FI documents) but the payment requests that
form the basis for payment.

The cash journal is a single-screen transaction. This means that one can enter, display,
and change cash journal documents on one screen.
The system offers the following options:
Entering, saving, and posting cash journal entries
Displaying follow-on documents
Defining cash journal business transactions
Printing the cash journal
Printing receipts
Deleting cash journal entries saved
Displaying all cash journal documents that have been deleted
Changing the cash journal

The payment program offers the following functions amongst others:
Settlement of payments
From the selection of payment requests via posting and clearing of the relevant
documents in the SAP R/3 System up to creation of the payment medium.
Payment in third currency
Update of payment data in Cash management
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4. Business Model
None
None

None

None

N/A


Bank account file
G/L
Standard Payment Program
This should be centralized at the Controller's Office.

N/A
4.5.2.1.
Payment with Payment Requests
Questions:
Q: 1) In addition to payments to or from customers and vendors, should payments between
G/L accounts also be dealt with using the payment program?
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A: No
4.5.2.2.
Cash Journal
Questions:
Q:
1) How do you manage incoming cash?
A: Most outgoing payments are made through the Treasurer's Office. Vendor payments are
made from Treasurer's Office and A/P. The Payroll department is part of the Treasurer's
Office. Investment payments and trust distributions are made from the Treasurer's Office.
Individual campuses have zero-balance accounts and write some checks directly from their
Bursar's Office. The Controller's Office reconciles these accounts. This is just for refund of
Student financial aid money to students.
There are 117 main petty cash accounts in our Financial Statements that are held by
individual departments across all campuses. Interest amounts are posted to the G/L. Some
of the 117 that are located at other campuses are subdivided.
Each department is responsible for sending in a formal reconciliation at the end of the fiscal
year to Internal Audit.
We have 1 main disbursements account from which only checks (DVs and BVs) are written.
This is a controlled disbursement account. Disbursement Vouchers (DVs) are payments to
vendors, and Batch Vouchers (BVs) are typically refunds to students written in batch because
we do not need to keep the detail of these payments on our G/L.
There is 1 payroll account, which is ZBA. We move money to cover payroll payments from
our primary depository account. The bank handles the draw, and this is done daily. Outflows
include direct deposits and checks. Payroll transmits this information to the bank. The direct
deposit information is fed through a phone modem via FedLine II (a means for banks to
interact with the federal reserve bank, but UT has been allowed to use it). Currently, we have
150 payroll runs a year, and these include monthly, biweekly, longevity, supplemental (on the
10th of each month), and special payrolls.
Note: In R/3, a directory must be set up for all the banks that are used by UT employees for
direct deposit of payroll. Benson can assist in this. If 1st TN can share its quarterly CD from
Thomson Financial, it would be helpful to get the directory setup. Alternatively, the
information can be extracted from the legacy system.
There is 1 primary investment account. This represents cash that the 1st TN investment
managers have available to them to invest for the University. Each manager has a subaccount to reflect his or her position. These sub-accounts are only maintained by 1st TN and
in the UT investment system. Buy and sell activities flow through this account. UT retrieves
the investment managers' transactions information through DTC (Depository Trust
Company). Journal entries are made daily to reflect all payments and receipts. It is
important at the end of the month to post a journal entry for the balances on the last day of
the month.
There are 4 other ZBA accounts for batch vouchers (BVs) for which checks are written by the
campus Bursars at Knoxville, Chattanooga, Martin and Memphis. These are for on -demand
student aid refunds. The Chattanooga ZBA account uses this account to make lender
refunds through ACH. The exception is that Knoxville refunds the lender through the primary
depository account.
Q:
2) For which business transactions are incoming cash journal postings made?
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A: Cash (Petty Cash)

Checks
Procurement Card Program
Fed Wire
ACH - (Payroll and other)
International Wires
Automatic debits by State
Bank debits
Q:
3) How are these business transactions posted?
A: Typically posted as checks (DVs, BVs and PVs) are written. Other transactions are
posted via journals (JVs) and through the CV system. Thousands of accounts are debited
with this type of activity.
4.5.3.
4.5.3.1.
Check Management
Manage Check Balance
Questions:
Q: 1) Do you use pre-numbered checks, or do you assign your checks numbers from selfdefined number ranges?
A: Yes
CI Template:
See CITs for "Check Deposit Transaction" and "Cashed Checks".
4.5.4.
4.5.4.1.
Account Balance Interest Calculation

Account Balance Interest Calculation
Questions:
Q: 1) For which G/L accounts do you calculate interest on balances? Give a brief
description.
A: Restricted accounts, loan funds, unexpended plant funds, athletic department funds,
retirement of indebtedness funds, agency funds.
Q:
2) Which interest rates do you use?
A: Internally calculated cost of funds rate and LGIP rate (Local Government Investment
Pool).
Q:
3) How do you post interest charges?
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A: According to Sharon, Tim uses a program that calculates the investment interest
automatically.
Q: 4) Do you combine the debit and credit balances of different accounts for interest
calculation?
A: Yes
CI Template:
UT calculates interest on restricted accounts, loan funds, unexpended plant funds,
athletic department funds, retirement of indebtedness funds, agency funds. It is internally
calculated by cost of funds rate and LGIP rate (Local Government Investment Pool). UT
does combine the debit and credit balances of different accounts for interest calculation.
In cash flows, it is critical that interest accruals be adjusted out for an accurate cash flow.

Program RFSZIS00 generates an interest scale (account balance interest calculation) for
G/L accounts, and outputs a list. One can control how detailed this list is. The program
ignores any business area breakdown, but one can limit the program to certain business
areas (all business areas you select are grouped together).
4. Business Model
None
None

This change will reflect proper accounting procedures for accrual of interest.
R/3 cash management planning module provides a powerful tool to plan cash flow with
planned interest that is integrated with actual interest earned.
None

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N/A

None

Planning levels for interest accrual items.

Authorization should be extended to the Treasury department.

N/A
4.6.
Special Purpose Ledger
Questions:
Q: 1) Do you want to use the cost of sales accounting method of reporting, and implement
the Special Purpose Ledger for this purpose?
A: Yes
Q: 2) Is the coding block adequate for your reporting requirements, or do you plan to make
changes to the coding block?
A: The coding block is adequate. UT will use the following dimensions: Fund, G/L Account,
Cost Element, Commitment Item, Business Area, Functional Area, Cost Center, WBS
Element, Fund Center, Profit Center, and Plant.
4.6.1.
4.6.1.1.
Prepare Ledger
Set Up Ledger
Questions:
Q:
1) For what purpose do you wish to implement a Special Purpose Ledger?
A: The University requires balance sheet reporting by Fund Group and Budget Entity.
Balance sheet reporting by individual fund is also considered desirable. In the standard
general ledger, postings to accounts receivable, accounts payable and cash accounts are not
assigned to a fund or fund group. Therefore this requirement cannot be met in the standard
general ledger.
Q:
2) What reporting requirements should be met by this Special Purpose Ledger?
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A: The special purpose ledger can be used in conjunction with the split processor to post
receivables, payables and cash line items by fund to enable balance sheet reports by fund.
Q:
3) Are postings to be made in this ledger?
A: No
Q:
4) From what source is the data to be taken, and how will it be transferred?
A: Data is taken from financial accounting, materials management, sales and distribution,
controlling and project accounting.
Q:
5) What criteria should be used to check/summarize data?
A: Data must be summarized by Fund Group and Business Entity and Fund.
4.6.2.
Table Maintenance
4.6.2.1.
Table Definition and Installation
CI Template:
1. UT would like to create a balance sheet for each fund and also for each business area.
2. UT would like to create a statement of revenues, expenditures and changes in net
assets by fund, functional area and business area.
Before you install and set up your FI-SL System, you must carefully design your system
structure. It is very important that you take time to design your system and data
structures. A well-organized system structure leads to efficient running of your production
system and improves system performance. Depending on your reporting requirements,
you must determine which dimensions and field movements you want to use in your
ledgers. (A dimension represents specific criteria in business processes. Technically, a
dimension is a single field or column of a database table.)

We will use transaction GCIQ to create the special purpose ledger tables required by UT.
4. Business Model
None

None
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None
None
None
N/A

None
UT will use the following dimensions: Fund, G/L Account, Cost Element, Commitment
Item, Business Area, Functional Area, Cost Center, WBS Element, Fund Center, Profit
Center, and Plant. There is only one company code UT (local), Only one currency USD
and the posting type is immediate (when the original document is posted). Balance and
carry forward values will be created for funds and business areas and split processor will
be used to split by fund.
Only the configurer assigned to set up the special purpose ledger will be able to make
changes to the SPL tables.
4.6.3.
Actual Posting
Questions:
Q: 1) Do you need to maintain controls on the accounting periods for posting into your
special ledger?
A: Yes
4.6.3.1.
Direct Data Entry
Questions:
Q: 1) Will you have entries that have to be carried out in the special purpose ledger and not
in the rest of the R/3 System?
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A: No
CI Template:
No requirements have been defined for direct data entry
NA

NA
4. Business Model
NA

NA

NA
NA
NA

NA

NA

NA
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NA
NA
4.6.3.2.
Integration Interface
Questions:
Q: 1) What will be the source of R/3 transactions that you wish to have posted to your
special purpose ledger?
A: [X] Financial Accounting
[X] Cost Accounting
[X] Materials Management
[X] Sales and Distribution
[ ] Special purpose ledger (direct data entry)
Q: 2) Are allocations being carried out within cost accounting that you wish to reflect in the
special purpose ledger?
A: Yes. Overhead entries being made in PS and CO need to be reflected in SPL.
CI Template:
1. UT requires data in the SPL to match data in other systems. Actual postings (FI, CO,
PS, MM and SD) will be made once in the feeder system and automatically posted to
SPL.
2. All original postings in SPL are required to be on line and real time.
3. All postings must be split and balanced by fund and business area.
4. All expenditure postings must be split and balanced by functional area.
Data can enter the FI-SL System via three different mediums:
From other R/3 application components, such as Financial Accounting (FI),
Materials Management (MM), Controlling (CO), and Sales and Distribution (SD)
Directly, using FI-SL's document entry function (for example, when posting
correction documents)
From external systems (for non-FI-SL data)
All R/3 Systems operate under the philosophy that business transactions should only
enter the system once. These transactions are then available to all other R/3 Systems
real-time. The FI-SL System collects data at the original entry point and validates it
immediately during entry. Update into FI-SL from other R/3 applications is real-time.

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1. Data will be posted automatically into SPL from FI, CO, MM and SD. No data will be
entered directly into SPL.
2. The split processor will be configured to split FI data and balance it by fund. Since
Fund Group and Budget Entity (Business Areas) are a roll-up of fund, this will
automatically allow balance sheets by Fund Group and Budget Entity. (Public Sector
Special Customer Requirements department has been notified and has approved the
use of the split-processor).
3. Since functional area is also a roll-up of fund, this will allow Revenue and Expenditure
statements to be created by fund.
4. No plan data will be created in SPL.
4. Business Model
None

None
None
None

1. There are no field movements defined for CO transactions to populate the fields Fund, Fund Centers, G/L Accounts and Commitment Items.
2. CO transactions bypass the split processor when moved to the SPL. As a result there
is no balancing by fund for CO transactions.
1. The G/L Account, Fund, Fund Center and Commitment Item fields will be populated
using variable field movement user exits to
a. Populate the G/L Account field based on cost element number
b. Populate the Commitment Item field based on cost element using the commitment
item assignment from table FMZUKA
c. Populate the Fund and Fund Center fields based on the Cost center or WBS
Element using the Fund and Fund Center assignment from table FMZUOB.
d. Translate the WBS Element field to its external number
2. A program will be written to post balancing entries by fund to a clearing G/L account for
CO entries. This program will post to FI-G/L and SPL.

None
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1. A special purpose ledger will be created to post all entries.
2. The split processor will be configured to split and balance entries by fund.
3. The FI/CO Reconciliation ledger will not be used.

Only the assigned SPL configurer will be allowed to make changes to SPL configuration.
4.6.3.3.
Data Transfer
Questions:
Q: 1) Does the new special ledger require data that was posted in the R/3 System prior to
the ledger being created? (Customizing)
A: No
Q:
2) Do you wish to fill the special ledger with data when required?
A: No
4.6.4.
Periodic Processing
Questions:
Q: 1) Are there additional allocations that you want to carry out only in the Special Purpose
Ledger?
A: No.
4.6.4.1.
Rollup
Questions:
Q:
1) Do the balances in the special ledger need to be summarized?
A: No
4.6.4.2.
Balance Carried Forward [SL - Special Ledger]
Questions:
Q:
1) Do the balance sheet accounts exist in the special purpose ledger?
A: Yes
Q:
2) Do you require initial values for your new P&L accounts?
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A: No
CI Template:
1. UT requires the ability to carry forward balances in balance sheet accounts to the
opening balance by fund.
2. UT also needs the ability to close out balances of P&L type accounts to multiple fund
balance accounts (retained earning account).
You use the Balance carry forward function to carry forward the balances of accounts
from the previous fiscal year to the beginning balance of the new fiscal year. You can
carry forward Balance sheet account balances and profit and loss account balances to a
retained earnings account
Balance Sheet Accounts
At the end of the fiscal year, you can carry forward the balances of your balance sheet
accounts to the beginning balance of the new fiscal year. All account assignments are
transferred for balance sheet accounts when the balance is carried forward. You can also
define your system so that specific dimension information is not carried forward. Using
the Customizing function, you can change the field movements so that specific dimension
information defined in the standard balance carry forward (such as the Business Area) is
not taken over into the new fiscal year.
Profit and Loss Accounts/Retained Earnings Accounts
You can also carry forward the balance of your profit and loss accounts to a retained
earnings account for the new fiscal year. No account assignments are transferred for
profit and loss accounts. You can also define your system so that additional dimension
information (such as the Business Area) is carried forward for the profit and loss
accounts.

The standard carry forward program allows balances to be carried forward in the special
purpose ledger. Balances in the feeder systems are not affected by this program.
In order to run this program:
1. Configuration must be completed.
2. Postings to the period must be complete. (If adjustments are made after running carry
forward, the program must be run again).
3. Periods must be closed in FI and CO to prevent postings to the year being carried
forward.
The program can be run in test mode to produce a report without update.
The program should always be run in background mode to conserve system resources.
4. Business Model
None
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The carry forward function will be performed by the Controller's Office.
None
Carry forward function can be run on demand to account for adjustments.

None

N/A

None

The following configuration will be completed:
Set up balance c/f indicator in the ledger definition will be set.
One or more retained earnings accounts will be specified and assigned to chart of
accounts UT for local ledgers.
The field movements for the transfer of account data into the next fiscal year will be
defined. The field movement determines the account data that is transferred to the new
fiscal year and must contain all dimensions that you want to carry forward. If the
standard field movement definition does not meet your requirements and you create your
own field movements, you have to assign a field grouping code for each ledger for which
you want to carry forward balances. You can define separate field movements for
balance sheet and profit and loss accounts. The standard system is delivered with a field
grouping code (0001) for profit and loss accounts, which is assigned to the ledger
containing the account transaction figures for the general ledger. This field grouping code
contains an additional field movement for the dimension Business Area, because the
business area has to be carried forward to the new fiscal year in addition to the
dimension Account. If you want to create your own field movement for the balance carry
forward, you can use the field grouping code 0001 as a reference.

This transaction (GVTR) will be limited to the General Ledger Accountant in the
4.6.5.
Evaluations
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4.6.5.1.
Special Purpose Ledger Evaluations
CI Template:
1. UT requires a balance sheet report by fund and by business area.
2. UT requires a revenue and expenditure statement by fund and business area in which
functional areas appear as rows under expenditure.
3. UT requires an authorization check to prevent users running the reports for funds or
business areas other than those they are authorized for.
You use the Report Writer and Report Painter to create reports from data in Special
Purpose Ledger (FI-SL) and other R/3 application components.

All reports will be executed through the reporting tree SART.
Report writer reports will be available showing:
Revenues and expenditure by fund
Balance Sheet by fund
Revenues and expenditures by business area and functional area
Balance sheet by business area
4. Business Model
None

Reports by fund will be used by bookkeepers in individual departments.
Reports by business area will be used by accountants in Campus Business Offices.
None
A balance sheet report by fund will be available.

Standard report writer reports do not check authorizations by fund or business area.

Two approaches are possible to cover the authorizations deficit:
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1. Create set based authorization groups and check the authorization group object
2. Copy generated report writer program and include an authorizations check.
The most appropriate approach will be selected by the ABAP team.
None

None

Reports by fund will be used by bookkeepers in individual departments.
Reports by business area will be used by accountants in Campus Business offices.
UT requires an authorization check to prevent users running the reports for funds or
business areas other than those they are authorized for.
4.6.6.
Tools
4.6.6.1.
Maintain Sets/Variables
CI Template:
UT requires complex revenue and expenditure reports in which the expenditures appear
in rows corresponding to business areas but revenues appear by natural account.
The Report Writer uses sets to structure and select report data. Report structure and
contents are defined according to the sets that are used for rows, columns, and selection
criteria. These sets include basic, key figure, single-dimension, and multi-dimension sets.
You can use sets as:
A row block: The row block contains the characteristics that you want to include in the
rows of your report (for example, cost center and account numbers)
A column block: The column block contains the characteristics that you want to include in
the columns of your report (for example, periods, currencies, and amounts).
General selection criteria: The selection criteria contain the characteristics that you want
to use to select the report data (for example, year, period, company, and ledger).

Sets must be created in configuration prior to creating a report writer report.
4. Business Model
None
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None
None
None

None
None

None

None

None
4.7.
Funds Management
Questions:
Q: 1) At which level/for which organizational unit do financial statements have to be
generated?
A: The University prepares a single financial statement with breakouts for fund, budget
entity, etc.
Q: 2) At which level/for which organizational unit do you implement budget

management/controls?
A: At the account level.
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Q: 3) At which level/for which organizational unit do you use cost accounting (Controlling)?
Where are the overlaps between Controlling, Funds Management, and Financial Accounting?
A: At the account level.
Q:
4) Describe the legal framework conditions for/in funds management in your enterprise.
A: Legal authority is from The University of Tennessee Board of Trustees, delegating

through:
Budget Entity
I
Vice Chancellor
I
College/Division
I
Department
I
Account
The primary requirement is that the budget be balanced through a combination of revenues
and fund transfers equaling expenditures.
Q:
5) How do you think this budget structure will change in the future?
A: Unknown.
Q: 6) Which accounting method for your funds management do you use (accrual, modified
accrual, etc.)? Please give a detailed description of the current situation.
A: UT is on a cash basis during the year and accrual at year-end. UT accrues payroll and
defers expenses and revenues at year-end.
Q: 7) Do you use different accounting approaches (GAAP, budgetary accounting, etc.)?

Please give a detailed description.
A: No. The University uses GASB standards throughout.
Q: 8) How do you manage the current handling of additional documents that are needed in
budget preparation and budget execution?
A: Shadow systems, for example the Martin budget system, are used to record any
additional data in the budget preparation and budget execution. In the restricted funds, a
contract tracking system and a sponsored programs system contain proposal/contract
documents.
Campus systems:
Knoxville
AS400 system monitors current and base budget.
Web based system is used to enter budget requests.
Chattanooga
Access database.
Includes salary and operating budgets.
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Used for entering budget requests and PAFs.

Martin
File maker pro system, centrally maintained.
Used by entering budget requests and PAFs.
System office and IPS use Excel files for position tracking.
Space Institute
Quatro pro spreadsheets.
Q: 9) How long are the amount fields (number of places before and after decimal point) that
you currently use for handling budget and assigned values?
A: The fields are of the format 9.2 with overflow in Plant Funds.
Q: 10) Do you use Internet applications within funds management? Describe the existing
scenarios.
A: Yes. UT has developed an Internet application using Interdev to collect data and
communicate control numbers with departments for the preparation of the new year budget.
Currently, employees are being trained on the application that will be implemented for the
2001budget proposal.
Q: 11) Describe the current/future role of the Internet and how it affects your funds
management.
A: It is expected that R/3 will replace InterDev.
Q: 12) Provide an overview of the current IT landscape. Which applications are used in
Funds Management?
A: Classic systems are mostly in IMS databases, with a few DB2 databases. The online
screens operate under the IMS monitor.
Departmental Budget System, budgets by object code.
Proposed Salary Budget (PSB) system
Human Resource System
Financial Accounting System
Shadow systems maintained by individual campuses contain additional budget data.
Agricultural Experiment Station has a system they use for Federal reporting of actual data
only on a federal fiscal year basis.
Attached is a map of how other systems affect the accounting system.
Q: 13) How is the budget generation process currently supported in your organization? Who
uses the system (budget department, etc.)? How is budget planning information consolidated
in the budget?
A: Unrestricted Funds:
Requests are solicited in January, six months prior to when the budget year will begin. Data
entry is decentralized where departments/colleges use shadow systems to develop their
budget. There is one version of numbers that is the base. Then departmental requests for
one-time expenditures are entered to change the base. Version 2 can be the request.
Version 3 can be recommended, version 4 can be approved. Versions are approved at
different points in time. No more base changes are accepted after a base version is selected
for use in the budget process.
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Hearings are held at campus levels. After campus level approval, the budget request is sent
to the systems level.
Salary Budget:
The Proposed Salary Budget (PSB) system is loaded in late April from payroll data, including
employees, distribution accounts, and amounts, but not including vacant positions or lump
sum positions, which have to be added manually. The system projects benefit costs using
defaults and employee attributes. The PSB is available for 3-4 weeks for users to make
changes, and for reporting through June 30.
When the PSB is finalized, it is reconciled to the Departmental Budget (object code line
totals) centrally during May - June. In late June PSB figures are fed back to the payroll
system. Changes that would affect the proposed budget made to current year payroll files
during the time from load of PSB to year-end must be reconciled with PSB and entered
manually to the new year payroll.
Benefits are budgeted at the function /budget entity level for E & G accounts. Benefits for
auxiliary and restricted accounts are budgeted and expended at the account level.
Budget for Revenues and Recoveries:
Revenue is budgeted centrally, at the campus level, or occasionally at the college or
department level.
SYSTEM-WIDE
Investment/endowment income: forecast next year based on past performance
CAMPUS LEVEL
State appropriation
o Formula linked. Formula information is not in the UT planning system.
Tuition and fees
o Gross level determined based on forecasted enrollment and rates.
o Financial aid is budgeted separately.
o Memphis budgets graduate assistantships at the dept. level.
Indirect costs (F & A)
o Forecasting varies by campus; UTSI, Chat, Knoxville: last year
performance/ next year expectations.
o By source: fed, state, local, private
Federal appropriation
o Institute of Agriculture only
Local appropriations
o Institute of Agriculture and IPS only (city & county money)
Departmental revenue
o Chat: radio station, student health center, university center
Gifts
o Forecast based on past performance
COLLEGE/DEPARTMENT LEVEL
Gifts: forecast based on past performance plus plans (e.g., capital campaign)
Auxiliaries
Service centers
Conferences
Athletics
Sales and services
Course and lab fees
Recoveries
Separate budget figures are entered for gross and recovery. Net amount is shown as budget
on account statements. Justification may be required for recovery budget amounts.
Service center type recoveries
External agency recoveries
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Q: 14) Will there be external systems feeding commitments or actual charges; if so, in
which area?
A: Yes
Accounts Payable:
Procurement Card system will create actual expenses to be posted.
Investment System:
Infovisa - ETA system (for charitable trusts) will create actual revenues and expenses to
be posted.
Endowments system creates actual revenues and transfers between accounts
Bookstore, Telephone, Computer Center:
Maintain their own computer files of departmental charges for supplies and service. At
the end of the month, each sends a file to UCS to load into the accounting system.
Each main campus has a student financial aid system that will send activity of actual
disbursements for "excess financial aid" (total loan or scholarship less tuition and fees).
Q: 15) How will transactions from external systems into the funds management exceeding
the available budget be treated?
A: The legacy system does not provide funds availability checking.
For Procurement Cards, parked document functionality will be used. Charges not transferred
to other cost centers by the end of the month default to the cost centers responsible for the
cards. Either way, this posting could result in an account exceeding its budget.
Q: 16) Describe the current procedure for internal checks and security relating to budget
preparation, budget modification, and budget execution.
A: Proposed Salary Budget (PSB) and Departmental Budget systems have individual logon
ID and password. Each ID is restricted to ranges of accounts.
Budget modification/execution has the same procedures.
Q: 17) Describe the existing approval procedure (workflow) at organizational level. Provide
an overview of the participants and their roles.
A: Everyday transactions:
Requestor initiates the process -> A person with signature authority to budget will approve
the request. Differing levels of approval within a Vice Chancellor Area exist for budget
changes. Ultimately, the change is sent to the campus business office for approval and entry
to the financial system.
Changes within accounts and within departments require minimal approval. Changes
between departments are probably initiated and approved at a higher level department (e.g.,
the dean's office).
Approval for expenditures occurs at the department level. Large amounts or certain types of
goods need additional approval.
Fiscal Policies and Procedures details specific categories of amounts and types of goods or
services and the appropriate approvals.
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Q: 18) Describe the existing approval procedure (workflow) at the level of the systems
involved. Provide an overview of the participants and their roles.
A: The Procurement Card system has built-in approval procedures:
1. Each cardholder has access to his/her own card statement data and is supposed to
verify the correctness of the charges each month.
2. Each cardholder, or perhaps a bookkeeper on behalf of the cardholder, may send the
statement electronically to the department head, principal investigator or other person
responsible for any account that is identified to be charged.
3. The approver has until the end of the month to approve (or not).
4. Procurement Card charges are always posted, either when approved or at the end of
the month for unapproved statements. But a record for Procurement Card usage
audits is kept of which statements were never reviewed/approved.
The Travel system has built-in approval procedures:
1). The traveler (or someone on their behalf) enters details of a proposed trip and sends
the "itinerary" electronically their boss.
2). That individual receives notification and can view the trip details. He/she approves
(or not).
3) After the trip, the traveler enters expense information and sends the resulting
"invoice" to the person responsible for the account(s) to be charged.
4). The responsible person receives notification and can view the expense details.
He/she approves (or not).
Q: 19) Describe the existing approval procedure (workflow) within the budgeting process.
Provide an overview of the participants and their roles.
A: Approval in the budgeting process is all offline. It starts at the department -> to the
college/division level -> to Vice Chancellor -> to Budget Committee for approval.
Q: 20) Describe your existing/future requirements for access control and system security
(smart cards, etc.).
A: Access to university financial records requires a User ID and password that is associated
with specific transactions and data ranges. Requirements will be the same in the future.
Q:
21) Describe the confidentiality restrictions (if any) for funds, budgets, transactions etc.
A: As a state university, UT's finances are a matter of public record.
Q: 22) What applications are currently integrated into funds management and need to be
integrated in the future?
A: Departmental Budget system
Proposed Salary Budget system
Payroll system
Procurement Card system
Web Budget System (to be decided)
Sponsored Programs system
Grants/Contracts system
Q: 23) For integrated functions, what data resides in the budgetary part (is this limited to
financial data or also information on quantities etc.)
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A: UT does not budget on quantities. The additional data (i.e. headcounts, FTE, etc.) are
kept in the shadow systems. Budget is done at the account level not at the department level,
but it will roll up to the department level based on the account attributes.
Q: 24) Do the sales system and funds management need to be integrated? Describe the
current integration.
A: Yes. The Grants/Contracts System tracks receivables and receipts for most billed grants
and contracts. A program reads the G/L once a month to post cost reimbursable expenses
to A/R.
There is also a Proposal system that is part of the Sponsored Programs system. It has a
detailed description of a grant, including a proposed project budget. When a grant is
awarded, a UT account number is assigned and its budget is input to the G/L system in the
form of ordinary budget revisions (T-1s). Subsequent supplements or extensions may be
either added to the same account or established as new accounts.
Q: 25) Do controlling and funds management need to be integrated? Describe the current
integration.
A: Yes. The budget resides in the G/L. Current reporting is mostly budget versus actuals,
rather than revenue versus actuals.
Q: 26) Do asset accounting and funds management need to be integrated? Describe the
current integration.
A: Yes. Plant Funds accounts are in the G/L. There are several databases that are used to
track UT assets.
The equipment database contains tagged/untagged items. This database generates reports
that are used to update G/L.
The Facility database is used for the registry of buildings.
The Land database is to record properties other than buildings.
Q: 27) Do controlling and purchasing need to be integrated? Describe the current

integration.
A: Yes.
Purchasing system: Purchase Orders are entered to the database daily and transmitted as
encumbrances to the G/L nightly.
A/P system: Payments against purchase orders, non-PO payments (e.g., hot dog vendors'
services at a football game), and travel expense reimbursements are entered to A/P daily and
collected nightly for check writing and posting by account/object to G/L.
Q:
28) Purchasing integration: Do you use the functions of a warehouse funds center?
A: No. Inventory is not budgeted.
Q: 29) Integration between purchasing and warehouse funds center: Describe the impact
on funds management (what impact will goods receipt and goods issue have?).
A: N/A
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Q: 30) Plant maintenance integration: Do plant maintenance and funds management need
to be integrated? Describe the current integration.
A: Yes. The G/L has a separate account for repairs and renovations. Also, there is a
separate system for plant maintenance.
Q: 31) Describe the logic currently used when posting tax on sales/purchases (accounts
affected, posting examples).
A: During invoice entry, tax is removed, recorded as a deduction to the gross amount.
Payment is made for the net amount. Therefore, it is netted off at the front end.
Q: 32) If a special handling of Sales Tax is currently applied in funds management please
describe the impact on the budget (availability check, budget consumption)
A: N/A
Q: 33) Describe your current funds management environment: At which level is the budget
data entered, the assigned funds entered, and the availability check carried out? Are changes
planned? If so, what are the changes, and where will they be made?
A: Expense budget numbers are stored by account and primary (2-digit) object. Actual
expenses are recorded by account and detail (3-digit) object. The person in charge of the
account is responsible for checking that there are enough funds in the account as a whole to
cover obligations and expenses. If an account exceeds its budget, that is corrected by
transferring budget in from another account or transferring the expense out to another
account.
We expect this to be the policy generally in the future.
Income accounts are budgeted at the whole account level and are realized at the account or,
less often, at the account/user revenue level.
Q: 34) What legacy data do you need to implement the R/3 System live (current year
budget, funds balances, etc.?
A: Snapshot of budget, encumbrances, expenses/revenues, and fund balance at April 2,
2001.
Q: 35) Describe how legacy data should be included in your new system (which data,
degree of detail, time period, etc.).
A: Same as above, also maybe aggregate $ per month at each account/object.
4.7.1.
4.7.1.1.
Edit Basic Settings

Assigning Cost Element
Questions:
Q: 1) Is there a relationship between accounts in Accounting (expense, revenue, etc.) and
FM?
A: Yes
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Q: 2) Are FM expenditure categories the same as G/L accounts in Accounting? If not, how
are G/L accounts mapped to the budget categories?
A: No. G/L accounts aggregate to FM budget categories.
Q: 3) Describe in detail the relationship between expenditure categories in the budget and
the FI accounts.
A: Budget is at a 2-digit level. G/L (expenditures) is at a 3-digit level.
CI Template:
Detail commitment Items (those corresponding to 3-digit object codes, minor sources of
funds, and balance transfer codes) will be related to Cost Elements one to one.
Summarization items, essentially a roll-up of detail items, will correspond to cost element
Groups, but there will not be a formal assignment between these higher level things.
Commitment Items are of two types:
1) Those assigned to Cost/Revenue Elements because they are posting objects
and contain encumbrances and expenses or revenues. They include the 3 digit
objects codes, the minor sources of funds, user revenue codes, and the balance
account transfer codes (in and out).
2) Those not assigned to Cost/Revenue Elements because they are
summarization items or nodes. They are budget objects and contain budgets as
well as the summary of encumbrance, expense, or revenue postings at the node
level. They include the 2 digit object codes, the major sources of funds, and the
balance account transfer codes (in and out).

After you create a new cost element and commitment item, you assign the commitment
item to the cost element.
To assign commitment items to cost elements, proceed as follows:
Choose Master data -->Assignments -->Controlling --> Cost elements.
Enter a controlling area and a cost element or cost element group.
Choose Continue.
The Maintain Cost Element - FM Account Assignment screen appears.
Enter a commitment item.
If you have entered a cost element group on the initial screen, this commitment item is
automatically assigned to all the cost elements in that group. You cannot then assign a
different commitment item to any of the cost elements in the group.
If you have already assigned a commitment item to any of the elements in this group, you
must first delete this assignment or remove the cost element from this group.
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Save your input.

-----------------------If you not only want to use assignment of FM objects to CO objects as an input facility
when making postings in other integrated components, but also want to copy the CO
postings into Funds Management, you have the option of entering just a CO account
assignment in the other component postings.
4. Business Model
As s e ts GL Account
As s e ts C
Ite m
Liabilitie s GL
Account
Liabili
Com m it
Fund Balance GL
Account
Fund Ba
Com m it
Re ve nue s GL
Account
Re ve nue Ele m e nt
Re ve n
Com m it
Expe nditure s GL
Account
Prim ary Cos t

Ele m e nt
Prim ary
Com m it
Se condary Cos t
Ele m e nt
Se conda
Com m it

The Controller has always regulated the commitment item/cost element (object) and
similar codes for the whole University.

The Controller will assign Commitment Items to Cost Elements for the whole University.
More options are available to budget and control costs. For example, the "3 digit" level
can be used for budgeting and posting in R/3.


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N/A

None

CO and FM Areas must be defined in IMG.

Assignment of commitment items to cost elements will remain under the authority of the

N/A
4.7.1.2.
Preparing Revenues Increasing the Budget
Questions:
Q:
1) What funds receive revenue increasing budget?
A: There are currently no funds that use revenue increasing budgets. However, there are
some revenue accounts linked directly to expenditure accounts. The revenues are dedicated
only to those expenditure accounts. The situation that that may warrant looking at this option
in R/3 would be the Service Centers - self-supporting departments that provide services to
other departments that are funded through user charges. Currently Service Centers use
negative expenditure accounts to balance.
Mark will provide a list.
Q: 2) Does the budget increase manually (manual entry) or automatically (programmatically
done) when revenue is received?
A: Budget adjustments are not tied to accounting transactions. UT currently has the
flexibility to adjust both revenue and expenditures budgets as needed via a manual process.
In the current UT system, there are no warnings - accounts can overspend as needed with
follow-up budget revisions.
Q: 3) Is a budget increase permitted as soon as the customer invoice is issued or only when
payment is received?
A: A budget increase is allowed whenever the estimated/budgeted revenue needs
changing.
Q: 4) What is the percentage to which revenue can be distributed to the expenditure
account to whose budget is increased?
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A: Expenditure budgets can be increased via increased revenues, use of fund balance,
and/or the movement of funds among expenditure accounts. Correspondingly, increased
revenues do not automatically result in increases to expenditure accounts. 100% of an
increase due to more revenue can be distributed to an expenditure account.
Q: 5) Is there an interval (minimum revenue and upper limit) to stipulate the range of
amounts for revenues posted to the revenue account and the expenditure account whose
budget is increased?
A: For dedicated revenue accounts, if the revenue budget is increased, all of the increase
has to be reflected in the linked expenditure account.
Q: 6) For residual revenues that do not increase the budget in the expenditure account,
what account should the "surplus" go?
A: N/A
Q:
7) Is there a minimum amount by which revenue should increase budget?
A: No.
Q: 8) Can the budget-increase rule stipulated be changed when documents are entered or
whether it is only for checking purposes?
A: Only for checking purposes.
CI Template:
There are currently no funds that use revenue increasing budgets. However, there are
some revenue accounts linked directly to expenditure accounts. The revenues are
dedicated only to those expenditure accounts. The situation that that may warrant
looking at this option in R/3 would be the Service Centers - self-supporting departments
that provide services to other departments that are funded through user charges.
Currently Service Centers use negative expenditure accounts to balance. Some revenue
accounts are linked directly to expenditure accounts, where the revenues are dedicated
only to those expenditure accounts. If revenues exceed the estimate in such an account,
that increase should be available in the related expenditure account. An increase to a
revenue account budget generally has an offsetting entry to an expense account budget
or a decrease to another revenue account. (The only other option is to increase a fund
balance account.) For example, increased food service revenues could be reflected in an
increase to the appropriate revenue account budget offset by an increase to the budget
of a food service expense account. Or it could be split between the expense account and
a related fund balance account (to reserve for future).
In restricted funds, increased gifts, for example, would be posted to the fund balance
account and recognized as revenue when expenses on the related expense ("R")
accounts occur. The increase may be shown as a budget increase to the "R" account,
but often is not.
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Those revenue accounts that fund a particular expenditure account will be updated with
the rule for making this distribution. At the end of each month, the program for evaluating
these revenues and calculating the expenditure budget increases will be run.
Since the active availability control works only against elements that already have their
"own" budget, these elements must carry budget independently of the revenues
increasing the budget.

A fund must be identified to receive revenues increasing budget. A distribution rule
defines the percentage of revenues, which can increase that budget. UT probably will
use 100%, but it is possible to put in a lower percentage along with a surplus FM account
assignment (who gets the remaining percentage).
4. Business Model
N/A
Initially, the Controller will define the revenue/expense account assignment relationships.

Someone will have to be in charge of running the revenue evaluation/budgeting program.
Expense budgets will be adjusted monthly in line with revenue without manual review.


N/A

None

Following must be configured for revenues increasing the budget:
maintain budget memos
enter setting for the revenues increasing the budget

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distribution process
default rule

The Controller or designees will be authorized to the revenue-increasing-budget
maintenance screen.
Selected users must be authorized to run the monthly budget run.

N/A
4.7.1.3.
Assigning WBS Element
Questions:
Q:
1) Integration PS: Is integration between a project system and FM necessary?
A: Yes
Q:
2) Integration PS: Describe the current integration between your project system and FM.
A: Budget originates in the Sponsored Programs system via "T-1"s sent to the general
ledger system.
Budget and expenses are tracked in our general ledger system.
The Grants/Contracts system tracks A/R and billings.
CI Template:
Restricted Funds WBS Element will be set up for projects (e.g. grants/contracts) based
on the terms and conditions of the project. A fund will be set up and assigned to each
WBS Element.
A WBS element is an element in a project work breakdown structure (WBS) and is used
as a revenue and cost collector for activities with discrete start and end dates. At least
one WBS element must exist in a project. A WBS element can be linked to a company
code, a business area, a functional area (through substitution), a fund, a fund center and
a profit center allowing all these codes to be defaulted when a user enters a WBS
Element in a document. Costs and revenues posted to a WBS Element can be
automatically posted to the company code, business area, fund, fund center and profit
center linked to the WBS Element. Therefore University will use WBS Elements to collect
revenues and costs associated with cost-reimbursable grants, and all other funds other
than current unrestricted funds. Thus WBS elements will be used to collect revenues and
costs for current restricted funds, endowment, annuity and life income funds (or will
special ledgers be used?), plant funds, loan funds and agency funds.
Restricted Funds are represented in R/3 by projects in the Project Systems (PS),
including a Project Definition and at least one Work Breakdown Structure Element (WBS
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Element).
There are several WBS Element types (called project types) within a restricted fund. The
appropriate project type must be selected for each WBS Element to maintain the integrity
of the research base for F & A cost studies and proposals.
Most Restricted Funds require significant budget monitoring. As a result, each WBS
elements must be linked to a fund and a fund center in R/3 Funds Management.

Assigning Funds Centers to WBS Elements
To assign funds centers to WBS elements, proceed as follows:
Choose
.
Enter a controlling area and a WBS element or WBS element group.
Confirm.
The Maintain WBS Element - FM Account Assignment screen appears.
Make your assignments as described in Assigning Funds Centers to Cost Centers.
Save your input.
4. Business Model
Company Code UT
Functional Area Research
Prof it Center L011002401

Chemistry
WBS Element
B01001024
Fund
B01001024
WBS Element
R011024010
Fund
R011024010
Business Area
Cur Rest E&G Knoxv ille
Fund Center U011002401

Chemistry
see diagram above

Once a WBS element has been created, centrally it must be assigned to a Fund in FM.

WBS element will not change the existing organizational structure.
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N/A
The Sponsored Proposal system will not be integrated with the G/L because R/3 does not
have the functionality to hold detail information that the current system is designed to.

None apparent at this time. The Sponsor Proposal system will still be in used to develop
new grants/contracts.

None
CO and FM areas must be defined in IMG.
The Sponsored Program system is a feeder system because it has considerable detail of
sponsored proposals. It will need an interface to load initial budgets of new projects into
R/3 FM.

The primary owner of a grant or contract may have the authorization.

N/A
4.7.1.4.
Assigning Cost Center
Questions:
Q:
1) Is it possible to establish a direct link between cost centers and the budget?
A: Yes
Q:
2) Describe in detail the relationship/link between cost centers and the budget (FM).
A: There will be a one to one relationship between cost centers and fund sources.
Commitment items will aggregate G/L accounts at the 2-digit level.
Q: 3) At which level of your organization is budget data implemented? Is this the same
level as cost center cost planning, or is it a higher level?
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A: At the account (fund source) level, the same level for cost center planning.
CI Template:
1) Cost Centers will be approximately the current General Ledger Expense and
Revenue Accounts.
2) Cost Centers should be organized into hierarchies of Department -> College -> Vice
Chancellor Area -> Budget Entity.
3) Cost Center will equal a fund.
4.) Cost Centers will be assigned to Profit Centers.
5.) Cost Centers will likewise.
Cost Center data should include the ID and description of the cost center that is part of
the account attribute. For example: Account E011006 belongs to Budget Entity
01(Knoxville), Vice Chancellor 33 (Provost & Sr. VC Acad. Aff.), College 01 (General
Administration), Department 043 (McClung Museum). The cost centers are always valid;
there is no expiration date. There are no special requirements for categories, though it
might be useful to categorize the cost centers by Budget Entity for reporting. Cost
When a new cost center is needed, the responsible Campus Business Office will enter
the data and route it through the approved organizational structure/workflow. If it is
approved, the Controllers Office will enter the remaining data and establish the cost
center. A fund will be set up either manually or automatically at the same time for each
cost center.

Assigning Funds to Cost Centers
Choose
.
Enter a controlling area and a cost center or cost center group.
Confirm.
The Maintain Cost Center - FM Account Assignment screen appears.
You can make the assignments in various ways.
Assignment without cost element or cost element group
You enter one fund. This entry then applies to all cost elements posted to in connection
with the specified cost center or the cost center that belongs to the specified group.
If you have entered a cost center group on the initial screen, this fund is automatically
assigned to all the cost centers in that group. You cannot then assign a different fund to
any of the cost centers in the group.
If you have already assigned an FM account assignment to a cost center from this group,
you must first delete this assignment or take the cost center out of the group.
Assignment with cost element or cost element group
Enter a fund for the cost element or cost element group. This entry then applies only to
this cost element or cost element group posted to in connection with the specified cost
center or a cost center that belongs to the specified group.
You can also enter a commitment item for them. This commitment item then overrides
the commitment item you entered in the commitment item - cost element assignment.
Combine the above procedures
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Save your input.

If you not only want to use assignment of FM objects to CO objects as an input facility
when making postings in other integrated components, but also want to copy the CO
postings into Funds Management, you have the option of entering just a CO account
assignment in the other component postings.
Result
When you post, the system first checks whether there is an entry with a cost element or
cost element group, so that it can use this entry to determine the FM account
assignment. If it does not find an entry, the system determines the FM account
assignment from the entry without a cost element.
4. Business Model
See
above
Company Code UT
Cost Center
E011024001
Functional Area Instruction
Prof it Center L011002401

Chemistry
Fund E011024001
Business Area
Cur Unrest E&G Knoxv ille
Fund Center U011002401

Chemistry

The main entry is decentralized but the final approval and activation is centralized in the
Controllers Office.

Most departments do not currently enter in basic Cost Center (account) data when a
request is made.
Cost Centers will functionally be equivalent to the current G/L accounts. A more accurate
and streamlined request process will be improvements.
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N/A

None

CO and FM areas must be defined in IMG.

As you go up in the Cost Center hierarchy, you get access authority to all the lower Cost
Centers.
N/A
4.7.2.
Budget Planning
Questions:
Q:
1) Describe in detail the relationship/link between the profit center and the budget (FM).
A: Yes
Q:
2) Please describe the budget timeframe and the relation to the fiscal / budgetary year.
A: The University's fiscal year is July through June. A budget's lifespan is:
1. Proposed or "requested" budget--is the approved budget proposed to the Board of
Trustees.
2. Original budget--is the Board-approved budget recorded for July 1. It generally is
the same as the Proposed, but doesn't have to be.
3. Revised budget--is a snapshot of the current budget as of October 31. The state
requires these figures.
4. Probable budget--is a snapshot of the current budget as of April 30. The state
requires these figures.
5. Final budget--is the budget with all revisions applied during the year.
6. Current budget--is the dynamic budge, including revisions to date.
Q: 3) Do you have special budget structures for the interim period / special periods (e.g. if a
budget has not been authorized on time: temporary budgets)?
A: No special structures
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Q: 4) Are there different types of budget (commitment, payment, etc.)? What is the
difference between those types?
A: N/A
Q: 5) Describe how the budget is processed within a year and over a period of years
(supplements, returns, transfers, etc.).
A: Unrestricted Funds: Annual budget. July 1 original budget is created. Revisions are
made during the year. The types of revisions are transfers, supplements (appropriation
increases), and returns (appropriation decreases). There is no automatic carry forward to the
next fiscal year.
Restricted Funds: Based on the award date of the grant. At the beginning of the grant period,
total direct costs are budgeted. Revisions may be made during the year. If the grant spans a
fiscal year, the budget and expenses to date are NOT reset at the start of the fiscal year.
Q:
6) Please provide a list / description of the types of expenditure.
A: Type of Expenditure:
salaries
summer school
clerical/supporting
biweekly wages
operating
equipment & capital outlay
Q:
Instrument for Disbursement:

paychecks
"
"
"
invoices, service contracts, proc.card statements,
employee reimbursement
invoices, contracts, procurement card statements
7) Please provide a list / description of the types and sources of revenue.
A: Revenue sources are appropriations (state, federal, local), tuition and fees, gifts, grants &
contracts (state, federal, local, and private), endowment income, sales & services, and other
sources. Revenue comes in as drawdown on appropriations and letters of credit, checks,
cash, charge cards, or ACH.
Q: 8) Describe the budget preparation process: Dates, process, etc. Describe the hierarchy
(hierarchy of the system within the organization; sequence of the different steps in budget
preparation, revisions, approvals, etc.).
A: Fiscal year = July to June
Budget timeframe:
November to April
- plan for next FY budget: conferences, negotiations, trial
spreadsheets, etc.
April - early May
- load payroll data into salary budget system; modify for new FY
figures. Results reviewed by Department Heads and Deans,
early May
- enter account/object code detail into Campus business office
system. Includes salary objects as well as operating.
Reviewed, corrected, balanced to control figures at
campus level.
mid-May
- Schedule 3 data transmitted or entered into UT budget planning
system.
late May - June
- Schedule 3 data reviewed, corrected, balanced to control
figures at UT leve
mid June
- Board of Trustees reviews, approves budget.
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late June
- load salary budget figures to Payroll system & capture

proposed figures into new FY Original Budget by account/object
Q: 9) Describe the approval procedure required when creating and changing the budget.
Describe the participants and their roles for the budget process.
A: Creating:
Department chair prepares a request to the Dean.
Dean compiles list of departmental requests to the Vice Chancellor.
Vice Chancellors negotiate within the Budget Committee to distribute the campus control
amount.
The decisions made in the Budget Committee are then communicated back down the
organizational structure.
For restricted expense accounts, the budget is submitted by the Principal Investigator
according to the terms of the contract. It is then entered to the system. The Research Office
may review these budgets.
Changing:
Person responsible for an account originates a "T-15 Budget Revision", sending it to the
Department Head, who approves and forwards to Dean or to the campus business office,
depending on the policies of the college or division.
For restricted expense accounts, the principal investigator submits a "T-1 Budget Revision" to
the Grants and Contracts office for review and entry to the system.
Q: 10) Describe the different types of changes/adjustments to the budget if the approved
budget is changed.
A: Unrestricted: Original, Supplements, Transfers, Returns
Restricted: Supplements, Transfers, Returns
Q: 11) Please describe the methodology/budget approach used within budgeting (top-down,
bottom-up). How do you check correct budget distribution - is there a storage of the
distributed values at database level?
A: Unrestricted:
Bottom-Up - Budget requests are done at the account level that will roll up to the department
level and above.
Top-Down - Budget approval at the UT system level that trickles down to the account level.
Proposed budget figures are stored in the database at the account and object code level, for
expense accounts, and at the account level for income accounts. The Detail Budget
Schedule, containing proposed budget figures by account and object, is distributed during
budget preparation for responsible persons to check. This schedule also prints summary
pages for deans, chancellors, etc to check totals at their levels. They compare to shadow
system, spreadsheet, control numbers, etc.
Another program compares the account/object code totals in the Departmental Budget
system to a sum by object code from the Proposed Salary Budget system.
During the year, standard monthly reports, such as ledger, expenditure analysis, and monthly
treasurer's reports showing actuals against budget are distributed to responsible persons.
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Q:
12) Do you use a bottom-up budget method?
A: Yes. Starting at the account level during the budget request process.
Q:
13) Do you use a top-down budget method?
A: Yes, from total university to account level during the entry of the proposed budget.
Q: 14) Are there any special / other budget requests such as grants, trusts, special funds,
asset accounting, investment planning, etc.?
A: Grants/contracts: total direct costs by account/object are entered via T-1 Budget
Revision forms.
Plant Funds: are initially budgeted for the full project cost, then the remaining available
balance is calculated and recorded as the beginning budget for all subsequent fiscal years.
Q:
15) Describe the general approach to budgeting in your organization. (USA)
A: See Questions #2 and 8, above.

Q: 16) If several budget estimates exist, provide a comparison of the fund and the budget
estimate used.
A: Unrestricted Funds:
There are two concurrent versions.
1. Current budget, including base and one-time items
2. Base budget
The time-based versions of the budget were described in Budget Planning question 2.
Restricted Funds:
There is only one budget estimate for an account at any point in time, describing the budget
agreed upon with the sponsor.
Q: 17) How many currencies exist in the budget: are there special funds that use currencies
different from the normal budget?
A: One
Q: 18) Are there any special budget or authorization restrictions alongside the normal
budget changes, which are triggered centrally or from specific agents, such as central budget
cuts or blocks?
A: In unrestricted funds there may be state funding rollbacks.
For restricted funds, certain object codes are disallowed, depending on the terms of the
grant.
Q: 19) Describe the level at which: - a budget is entered - assigned funds are entered budget assignments are updated - the availability check is carried out.
A: Budget and Assigned Funds are entered at the account/two-digit object level.
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Budget Assignment is updated at the account/3-digit object level.

There is no automatic budget availability check. The responsible person must not exceed the
budget for the account as a whole.
Q: 20) Describe the information (field, field content) that is contained in the budget
document.
A: Schedule 3 in the main input document for Departmental Budget system
(Proposed/original). It includes:
Account Number
Object
Proposed Amount
Gross or Recovery
recurring or one-time
Date
and derived from object:
Budget Category
The supplement document (T-1) serves also as the original budget document for restricted
expense accounts:
Account Number
Object
Proposed Amount
and derived from the account:
Sponsor Organization
Sponsor's Grant/Contract Number
Title of Project
Project Director
Performance Period Budgeted
Sponsor Funds
Total Direct Costs
Allowable Facilities and Administrative Costs
Total Costs to Sponsoring Agency
For revenue accounts:
Account Number
Proposed Amount
Date
On all forms, derived from the account:
Campus or Unit
Function
College or Division
Department
Q:
21) Describe the headcount planning process (HR).
A: Headcount is not used in the planning process.
Q:
22) Describe the budgeting process for personnel planning (HR).
A: Personnel are budgeted by FTE and amount at the distribution account level. Object
code to be charged is derived from the title and account characteristics.
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Q: 23) Beside the above stated "normal" budgeting features, are there any long-term
requirements for forecasting in the budget area?
A: For long-term forecasting of expenses or revenues, we need to record in the database
recurring versus non-recurring amounts.
Q:
24) Describe the rules applied to calculate the budget that is available for execution.
A: Original Budget (+-) Revisions - Encumbrances - Expenditures = Available Budget
Q:
25) Describe the current availability checking procedure.
A: None. It is currently done by a visual check using a generated report.
Q:
26) Describe the procedure followed when a transaction exceeds available budget
A: A budget revision to transfer budget from another account or a JV to transfer expenses

out to another account is entered to cover deficits.
Q: 27) Are there any differences / special features in terms of calculation of available
budget and availability control for the various funds (grants, third-party funds, etc.)?
A: Available budget and availability control are the same for all funds.
Q:
28) Can expenditure draw from other budget lines (coverage)?
A: Yes, within an account/fund.
Q: 29) Describe the relationship between the budget and the warehouse (warehouse funds
center) (GR, GI -> impact on budget: Debit and credit).
A: N/A
Q: 30) Historic data conversion / take over: which data / detail for budget data needs to be
taken into account (which detail level, how many years, etc.)?
A: Current year-to-date data must be brought in for all funds.
Q:
31) Archiving: Which objects have to remain online in the system for how long?
A: List of accounts with attributes.

o 3 or 4 months of current budget, encumbrances, and expenditures
o 24 months of transaction detail/posting activities
o 3 years of budget data (benchmark budgets)
o 3 years of end of month balances
o 18 years of accounts & attributes and end of year balances
o 20 years of posting activities
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Q: 32) Specify the volume of master data (number of funds centers, funds, expenditure
categories, etc.).
A: Unrestricted Funds: 5,000
Restricted Funds: 27,000
4.7.2.1.
Copy CO Plan for FM Budget
Questions:
Q: 1) Plan integration controlling and funds management: is there a link existing between
any plan figure used in internal costing and the budget.
A: Shadow systems holding the base (recurring changes) are equivalent to R/3 CO
planning. For R/3, CO planning will be used to track the base for FM Budget.
CI Template:
Plan 0 will be maintained throughout the year as the proposed budget for the next fiscal
year. Therefore, when the plan is approved in June, it is copied to FM budget as version
0 of the intended fiscal year.
Plan version 0 will be maintained as the maintained throughout the year as the proposed
budget for the next fiscal year. Once the version is approved, the central UT Budget
Office will copy it in its entirety to FM budget version 0. Budget version 0 will be
maintained independently from then on, with no mid-year copies from CO planning to FM
budget.

Plan Data Transfer from Controlling
Use
Using the program RFFMCOPI you can copy the data of plan version 0 from Controlling
(CO) to budget version 0 in Funds Management.
For more information on executing the program, see the documentation on the program.
Activities
In order to transfer the plan data from Controlling choose Accounting Financial
accounting Funds management Budgeting Tools Plan data transfer from CO.
4. Business Model
None

None. The UT Budget Office currently declares that the planning is finished and accepts
a prepared version. The R/3 process will only be a new technique.
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No changes to existing organization
None readily apparent at this time; it appears to be the same process with a different
technique.


N/A


Controlling area must be defined and a format of how plan data is to be entered. FM
area must also be defined and the type budget that will be used. Budget profiles must be
created for the fund master data.

The actual transfer of CO plan data must be centralized at a high level (e.g. Office of the
Vice President of Business and Finance).

N/A
4.7.2.2.
Budget Structure Processing
Questions:
Q: 1) For budget generation/management: Do you define which combinations of areas of
responsibility and expense category can receive budget or permit assigned funds? Do such
definitions exist for funds?
A: Total University
|
Budget Entity
|
Vice Chancellor
|
College/Division
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|
Department
|
Account
|
Budget Category
|
Object Code
General and Plant Funds: certain object codes are set to be used exclusively.
Restricted Funds: certain object codes can be disallowed.
Auxiliaries: additional user-defined objects are available for resale items, and also revenue
categories.
CI Template:
Structure
You must define budget objects and posting objects for the definition of a Budget
Structure from a number of Budget Structure elements of a fund.
The budget structure for all unrestricted accounts will most likely be the same when R/3
is started.
Budget structures may vary among restricted accounts depending on the terms of the
contracts.
--------Initial answer------The UT's organizational structure is defined as:
Total University
|
Budget Entity
|
Vice Chancellor
|
College/Division
|
Department
|
Account
|
Budget Category
|
Object Code
This structure must be followed in all budget and financial reports at any given levels (e.g.
Budget Entity).
R/3 will follow UT's organizational structure defined as a budget structure in Funds
Management.
FM Area -> Funds Center -> Fund -> Commitment Item
Therefore for each fund, the budget structure represents all the funds centers and
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commitment items where you can budget or make postings, in hierarchical form. Only
the funds center and commitment item will have its own hierarchy.

Defining Budget Structures Using Individual Objects
Prerequisites
You have opted for the definition of BS individual objects and on the initial screen
Change budget structure: have not set the indicator Group assignments.
Procedure
In the initial SAP R/3 screen, choose Accounting Financial accounting Funds
management Master data Budget structure Change.
Enter an FM area and the required data:
Annual budget structure:
If you are working with annual values in budgeting and want to edit or change an annual
budget structure, enter a fiscal year.
Overall BS:
If you are working with overall values in budgeting and want to edit or change an overall
budget structure, enter a fund but not a fiscal year.
Even if you have defined a budget profile for a fund enabling you to use overall values
and annual values, you can only define the budget structure for this fund as overall
budget structure.
Editing sub hierarchies
If you do not want to edit the whole funds center and commitment item hierarchy, you can
enter a funds center and commitment item from which the hierarchy is to be built up. In
addition, you can Restrict the Levels.
Choose Continue.
An overview of the funds center hierarchy is displayed according to the entry point you
have chosen. Double-click to obtain an overview of the funds centers combined with the
top commitment items. You can further expand the commitment item hierarchy by
double-clicking again.
Defining budget objects and posting objects
Budget objects
You can define budget objects in the following ways:
You define a certain combination of funds center and commitment item
individually as budget objects by setting the Budget indicator.
You define the budget object generically. You set the Budget indicator for a funds
center with commitment item "*". All commitment items within this funds center
are then budget objects.
Posting objects
The procedure is the same as for defining budget objects. To do so, choose the Posting
indicator.
If you do not define any posting objects, then all assignable BS elements are
automatically posting objects.
Execute a BS Consistency Check by choosing Check.
Save the budget structure definition.
Result
The system sets up the budget hierarchy according to the budget structure so as to
allocate budget.
If budget values already exist, you must carry out the following steps after defining the
budget structure:
Reconstructing Distributed Values
Reconstructing Assigned Values
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Changing Budget Structures:

The budget structure can be displayed or changed once the budget and/or posting
objects are defined for the FM account assignment. An FM account assignment is
combination of funds center, commitment item, and fund.
One has to reconstruct distributed values in the following cases:
Changes to the master data hierarchy posted to or budgeted
Budget structure changed, deleted, or regenerated
<Reconstruct distributed values> will ensure that already distributed budget is
recalculated according to the changes you have made.
A reconstruction of assigned values is necessary in the system following these actions:
Changed the master data hierarchy which has postings and budget and have
reconstructed the distributed values or totaled up the budget values
Availability control was deactivated and then reactivated
The company code/FM area assignment was deactivated and then reactivated
The budget profile assignment was changed
The generic search sequence was changed
A budget structure was either regenerated, changed, or deleted a budget
structure, and distributed values reconstructed.
Changes were made in your budget profile (such as releases/budget) for
availability control.
The actual data for Funds Management was reconstructed.
Within the framework of closing operations, Open Commitments Documents
were carried forward into the new fiscal year.
Reconstructing the assigned values ensures that availability control can recognize an
excessive funds assignment in the new hierarchy or in a Budget Structure Element, in
accordance with the changes you have made. If you do not reconstruct the assigned
values, availability control makes its checks based on the "old" dataset.
4. Business Model
None

Budget structure processing will be done centrally. It is suggested that the two processes
(e.g. Reconstruct Distributed Vales and Reconstruct Assigned Values) are to be
executed nightly as a background job where users are not on the system.

One of the main improvements will be for the Restricted Funds where certain FM account
assignments have limited budget and/or posting capability. The maintenance of the
budget structure will provide greater budget and/or posting control over certain funds.
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None

N/A


FM area and budget profiles for funds must be defined.

Authorization must be limited to a few experienced central users. A required
understanding of the budget structure and its functionality will reduce the chance of any
budget structure components being defined in error.
-------Part of original, does it belong?----One can use authorization objects to define complex authorizations. An authorization
object comprises up to 10 authorization fields that complement each other. The system
uses them to determine whether a user may carry out a particular action.

N/A
4.7.2.3.
Editing Commitment Item Group
Questions:
Q: 1) Is there a sample that can be used for the generation of the budget structure plan
(budget elements, account assignment elements)? Does this sample apply equally for all
funds?
A: The budget structure for planning expense accounts would be equivalent to our current
list of 2-digit object codes for recording budgets and 3-digit object codes for recording
expenses that roll up to the 2-digit and then to the account. Plant funds use a range of the
object codes that are not available to other funds; otherwise, all accounts use the same list of
objects.
For income accounts, budget planning occurs at the account level; realized income may be
recorded by user-defined revenue codes which roll up to the account, typically for auxiliary
funds, but technically may be used by any income account.
Q: 2) Describe the sample (budget structure) in detail: Year-dependency: One year, several
years/across years, number of samples, special features, etc.
A: Unrestricted Funds: one year.
Restricted Funds: the term of the contract, which can span fiscal years.
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CI Template:
UT records budgets at a 2-digit object level and expenses at a 3-digit level that roll up to
the 2-digit and then to the account. Depending on the type of funds, certain object codes
are allowed and disallowed. For example, the Plant Funds use a range of object codes
that are not available to other funds. For the Restricted Funds, only certain object codes
may be permitted to be spent due to the nature of the grant/contract.
Commitment Item Group
Definition
Grouping of commitment items from an FM area for processing together.
Use
Commitment item groups are an aid to defining budget structures.
You can define a commitment item group either as year-dependent or as non-yeardependent. You use the year-dependent groups to define a year-dependent budget
structure (annual BS). You use the non-year-dependent groups to define a non-yeardependent budget structure (overall BS) if you work with funds and overall values.
When defining a group, you specify the object function (budget object/posting object) of
the commitment items contained in them. When defining a budget structure with group
assignment, you assign the commitment item groups to the funds centers. When
generating the budget structure, the system then automatically defines the objects for all
the commitment items contained in the commitment item group in the respective funds
center.
The two-digit level will be defined as budget objects. Three-digit level will be posting and
budget objects; use of three digits as budget objects will be optional.
-------original answer----Grouping of commitment items from an FM area for processing together. Commitment
item groups are an aid to defining budget structures. One can define a commitment item
group either as year-dependent or as non-year-dependent. One uses the year-dependent
groups to define a year-dependent budget structure (annual BS). One uses the non-yeardependent groups to define a non-year-dependent budget structure (overall BS) if one
works with funds and overall values. When defining a group, one specifies the object
function (budget object/posting object) of the commitment items contained in them. When
defining a budget structure with group assignment, you assign the commitment item
groups to the funds centers. When generating the budget structure, the system then
automatically defines the objects for all the commitment items contained in the
commitment item group in the respective funds center.

Maintaining Commitment Item Groups
Prerequisites
You must only create commitment item groups if you want to define a budget
structure using group assignments.
You can only combine commitment items into groups, which you have created
previously in master data maintenance.
Procedure
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Creating Commitment Item Groups

In the initial SAP R/3 screen choose Accounting
and
make the require entries.
Year-dependent commitment item groups
Enter an FM area, commitment item group, and fiscal year.
Year-independent commitment item groups
Enter an FM area and a commitment item group.
You can limit selection to a commitment item sub hierarchy by entering a commitment
item.
You can specify a commitment item group as a template. The system then automatically
takes over all commitment items from this group with the corresponding object indicators
into the new group.
Choose Continue.
Enter a name and a description for the group in the dialog box and choose Continue.
You reach an overview of the commitment item hierarchy in accordance with the entry
point you have chosen.
Select the commitment items that you want to combine into a group and choose Insert
into group.
Using Remove from group you can remove the commitment items selected from the
group.
Choose Object indicator.
You reach an overview of the object indicators.
Set the Budget object and/or Posting object indicators for the commitment items
contained in the group.
To set an indicator for all commitment items displayed, choose Select column.
To delete an indicator for all commitment items displayed, choose Deselect column.
Save the commitment item group.
Changing Commitment Item Groups
To change commitment item groups, choose
m
in
the initial SAP R/3 screen.
To change commitment item groups, proceed as described in creating commitment
item groups.
If you are already working with a budget structure which was defined using group
assignment and make subsequent changes to the object function (budget object/posting
object) in a commitment item group, this has an effect on all the funds centers to which
you have assigned this group in the budget structure.
For the change to take effect in the budget structure, you must Generate the Budget
Structure from Group Assignments.
Displaying Commitment Item Groups
In the Funds Management menu, choose Master data Budget structure Commitment
item group Display.
Enter data as required and choose Continue.
See also:
Delete Commitment Items Group
--------Original answer----The use of commitment item group will help define the budget structure where one can
carry out budgeting in a simple and quick way; and also it will provide a greater control on
how the money can be spent.
For example, a grant is awarded to a funds center (sponsor) where supplies are only
allowable to be spent under the rules of the grant. The commitment group will be created
to contain all commitment items relating to supplies. Using the functionality in FM, the
budget structure is generated based on the commitment item group.
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4. Business Model
None
The maintenance and generation of commitment item groups is controlled centrally.
Commitment item groups could provide greater flexibility in monitoring and control of
budgets by providing more system configuration options at the current object code level.

None

N/A


FM area and budget profiles for funds must be defined.
Authorization must be limited to a few experienced central users. A required
understanding of the budget structure and its functionality will reduce the chance of any
budget and/or posting objects being defined in error.

N/A
4.7.2.4.
Budget Version Processing
Questions:
Q:
1) Are there different budget versions (values) for the existing FM master data structure?
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A: Yes
Q: 2) Describe the information to be stored at the budget version level (list of fields, short
description, properties of fields).
A: The University records six official time-based versions of its unrestricted budget:
1. Proposed ("requested" in database)
Final administrative budget that is proposed to the trustees.
2. Original
Start of the year, trustee approved budget (generally the same as the proposed
budget but doesn't have to be).
3. Revised
October month-end snapshot. Some manual changes can be made at the system
level. Presented to the Board and reported to the state.
4. Probable
April month-end snapshot. Some manual changes can be made at the system level.
Approved by the board Presented to the Board and reported to the state.
5. Final
Snapshot at fiscal year close (currently Aug. 15)
6. Current
There are two concurrent versions
base budgets (recurring figures)
non-recurring
The information we store for each version includes:
Account Number
Object
Amount
Gross or Recovery
Date
Campus or Unit
Function
College or Division
Department
Budget Category
Q: 3) For budget generation/management: Do you define which combinations of areas of
responsibility and expense category can receive budget or permit assigned funds? Do such
definitions exist for funds?
A: No different from one version to another. Rules are applied equally to all versions.
Q: 4) If you use different budget versions (amount versions): Do you need to block a version
for certain transactions?
A: Yes
CI Template:
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Unrestricted Funds:
There are two concurrent versions.
1. Current budget, including original budget and subsequent current year changes.
2. Base budget (next year's proposed budget: Original budget + annualized recurring
changes + one time funding for the next year.)
The University records six official time-based versions of its unrestricted budget:
1. Proposed ("requested" in database)
Final administrative budget that is proposed to the trustees.
2. Original
Start of the year, trustee approved budget (generally the same as the proposed
budget but doesn't have to be).
3. Revised
Ocober. month-end snapshot. Some manual changes can be made at the system
level after regular month end processing. Presented to the Board and reported to
the state.
4. Probable
April month-end snapshot. Some manual changes can be made at the system
level after regular month end processing. Presented to the Board and reported to
the state.
5. Final
Snapshot at fiscal year close (currently Aug. 15)
6. Current
Restricted Funds:
There is only one budget estimate for an account at any point in time, describing the
budget agreed upon with the sponsor.
In Funds Management, one can have up to 999 budget versions. Therefore, one can
manage more than one budget version in Funds Management. However, note that
availability control is only carried out in version 0.
Five of the six official time based versions described in question #1 above (Original,
Revised, Probable, Final, and Current) can be represented by R/3 budget versions, with
Current Budget always being represented by version 0.
The proposed budget will be carried in CO Planning and copied to FM version 0 when it
is approved by the Board of Trustees.
Copying Budget Versions
Use
This function supports you in budget planning. You can use this function to, for example,
copy budget data from the old year as the first version of the new budget for the new
year. You can adjust the data to take account inflation and other factors in the new year.
Prerequisites
You must create the new budget version first.
You can create new versions either in the Funds Management IMG, by choosing
Budgeting and Availability Control Budgeting Define budget versions, or in
the Funds Management application menu; choose Budgeting Versions
Create.
The budget version you want to copy must have passed the consistency checks.
For more information on budget consistency, refer to Checking the Budget
Allocation.
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To improve system performance further, only copy the budget versions in

background processing.
Features
When copying budget versions, you can choose:
Which budget values (annual and/or overall values) are to be copied from the
reference version into the target version Annual and/or overall values
Which funds are to be copied
If the budget values of the Commitment Budget or the Payment Budget are to be
copied.
Which budgets are to be copied: Current budget, releases, individual budget
types (original budget, supplement, return, transfer)
Whether different budget types from the current budget are to be combined in the
target version original budget
How existing budget values in the target version are to be treated.
With large hierarchies, system performance is significantly better if you copy the current
budget or releases using the following settings:
Target version <> 0
not select Line items (budget line item documents)
These settings do not speed up the copying process for individual budget types (such as
supplements).
When you copy budget versions, the Budget Texts are not copied with them.
4. Business Model
None

The creation and maintenance of budget versions should remain at the Office of the Vice
President of Business and Finance. The departments can view their own budget version
if needed based on their user authorization.

None
The replacement of shadow systems and the use of one central system by all UT entities
will be an improvement.

The link between budget base (CO planning) and recurring changes to the current budget
in FM is not established yet. Changes to the current budget that affect the next year's
proposed budget being carried in CO planning will need to be identified and somehow
entered in both CO and FM.
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Perhaps the short text field of Budget Transfers can be used to identify recurring changes
in the current budget for entry into CO Planning.


FM area and budget profiles for funds must be defined. Also, the appropriate update
profile must be assigned to the FM area.

One can allocate authorizations for access to particular versions. For example, one can
use authorization objects to define complex authorizations. An authorization object
comprises up to 10 authorization fields that complement each other. The system uses
them to determine whether a user may carry out a particular action.
N/A
4.7.2.5.
Automatic Budget Processing
CI Template:
Refer to "Budget Structure Processing" CIT where this section will also be covered.
4.7.2.6.
Original Budget Processing (Bottom Up through Rollup)
Questions:
Q: 1) Describe in detail the information to be stored on the budget document (list of fields,
short description, properties of fields, etc.).
A: The information we store on the original budget document includes:
Account Number
Object
Original Amount
Gross or Recovery
Date
Budget Category
expense accounts:
Account Number
Object
Original Amount
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Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Original Amount
Date
Campus or Unit
Function
College or Division
Department
CI Template:
Unrestricted Funds:
Budget requests are done at the fund (account level), which roll up to the department
level and above. Budget approval is at the entity level, which trickles down to the
account level. Proposed budget figures are stored in the database at the fund (account)
and object code level, for expense accounts, and at the account level for income
accounts. Once the budget is approved by the Trustees, it will be copied into a new
version as original budget.
Restricted Funds:
For restricted expense accounts, the budget is submitted by the Principal Investigator
according to the terms of the contract, and it is entered to the Sponsored Research
Budget System. The Research Office may review these budgets. Therefore there is a
daily (at 4:40 pm) interface between the Financial System and the Sponsored Research
Budget System. This interface contains two input files to the Financial System - 1) Input
to the main Financial Edit for the entry of Restricted Budget information, and 2) Chart
Maintenance to initialize the total budget fields on the Grants and Contracts segment.
The budget is assigned in Funds Management by distributing the budget directly to the
individual funds center and commitment items manually or by copying the CO plan into
FM (see "Copy CO Plan for FM Budget" CIT) .One can assign a budget both top-down
and bottom-up.
With top-down distribution you always assign a budget from superior funds
center and commitment items to subordinate ones. You can, for example,
budget the top commitment items within the top funds center first. Afterwards,
you break down gradually to the top items of the subordinate funds center.
With bottom-up distribution you always assign a budget to subordinate funds and
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commitment items. Only as much budget as is available in the superior item can
be assigned to a subordinate item. Using the Total Up function, you can total the
budgeted values from the subordinate funds and commitment items to the
superior level. Using the Roll Up function, you can enter a budget for specific
individual combinations of fund, funds center and commitment items and roll up
automatically to the top node.
It is strongly recommended that UT use the bottom-up distribution approach using the
Roll Up function when entering original budget.

Use
You allocate your budget in Funds Management by distributing the budget directly to the
individual funds centers and commitment items manually. Budgeting can be top-down or
bottom-up. The system supports both procedures with convenient functions
Bottom-Up Budgeting
With bottom-up budgeting, you enter budget values to subordinate funds centers and
commitment items. This automatically makes the budget consistent.
We recommend this procedure if, for example, budget values exist for the individual subareas of your organization.
Prerequisites
Master Data Hierarchies
You must first create a funds center hierarchy and commitment items, usually comprising
more than one hierarchy. The funds center hierarchy represents your organizational
structure; the commitment item hierarchies represent the functional split of revenues and
expenditures in your organization.
In Funds Management budgeting, the system combines the two hierarchies. This means
that every funds center contains all the available commitment item sub hierarchies. The
Graphic illustrates this combination principle:
Budget profile
The budget profile contains the combined control parameters for budgeting. You define it
in the Funds Management IMG. You must create at least one profile before you can
budget, or you must use an existing profile under Budgeting and availability control
Set budget profiles. For more information on the budget profile, see the
Funds Management IMG in the section Set Up Budget Profiles.
Number Ranges
The system creates a numbered document for each budget value you post in Funds
Management. This means that all changes are documented and can be identified quickly.
The system takes the number from number range interval 05, which is delivered with the
standard.
You can extend this number range in the Funds Management Customizing under
Budgeting and availability control
Features
Allocate original budget (payment budget and commitment budget).
You can allocate the budget top-down or bottom up in the hierarchies. For more
information on the tools available in hierarchy maintenance, refer to Budget Entry Aids.
Allocate original budget (payment budget and commitment budget).
Bottom-up budgeting can also be executed by entering documents for individual Budget
Structure Elements For information on the functions available in the roll-up, read Rolling
Up Budget Values.
------------------The original budget is the budget originally allocated - that is, before any updates. The
original budget corresponds to the maximum funds available. One can allocate the
budget on an overall basis or on an annual basis. When a CO plan is copied into FM as
a budget, each budget line is stamped with a budget type in FM as "Original" to separate
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from other budget transactions. Therefore, one document is posted for each budget
object.
In FM, there are two processes to enter budget. They are Commitment Budget and
Payment Budget.
Commitment Budget is a normative framework within a particular area of responsibility for
entering commitments which will lead to expenditures or costs in the current year or in
subsequent years.
Payment Budget is a normative framework for the forecasted expenditures and revenues
or the costs, revenues and investments that can be expected within a fiscal year and
area of responsibility.
UT will only be using Payment Budget process to enter all budget types (e.g. Original,
Supplement, Return, Release, Transfer).
4. Business Model
None

Original Budget will be functionally equivalent to what UT is doing now through the six
different time-based versions. See also CIT for "Copy CO Plan for FM Budget".

None

The current system allows recoveries to be entered as a negative entry. R/3 does not
allow negative budget entries.
Separate commitment items will be created for recoveries as revenue accounts.


FM area and budget profiles for funds must be defined as to whether they are annual
budget (Unrestricted Funds) or overall budget (Restricted Funds). Also, the appropriate
update profile must be assigned to the FM area.
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Only authorized users (e.g. Office of the Vice President of Business and Finance) are
allowed to make any changes to the original budget. Using authorization objects will help
define the roles for each user.
4.7.2.7.
Original Budget Processing (Top Down/Bottom Up)
Questions:
Q: 1) Describe in detail the information to be stored on the budget document (list of fields,
short description, properties of fields, etc.).
A: The information we store on the original budget document includes:
Account Number
Object
Original Amount
Gross or Recovery
Date
Budget Category
expense accounts:
Account Number
Object
Original Amount
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Original Amount
Date
Campus or Unit
Function
College or Division
Department
4.7.2.8.
Budget Release (Top Down/Bottom Up)
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Questions:
Q: 1) Describe in detail which information should be stored in the budget release document
(list of fields, short description, field attributes and so on).
A: At UT, the entire budget is available from the first; we have not used the concept of
releasing a portion of the budget for use and holding a portion in reserve.
For Restricted Funds, certain grants can specify that only the authorized amount can be
spent during a given period.
Q: 2) Is the budget directly available, or is there a "release of funds" before the budget is
available?
A: No
4.7.2.9.
Budget Release (Bottom Up Using Rollup)
Questions:
Q: 1) Describe in detail which information should be stored in the budget release document
(list of fields, short description, field attributes and so on).
A: At UT, the entire budget is available from the first; we have not used the concept of
releasing a portion of the budget for use and holding a portion in reserve.
For Restricted Funds, certain grants can specify that only the authorized amount can be
spent during a given period.
Q: 2) Is the budget directly available, or is there a "release of funds" before the budget is
available?
A: No
CI Template:
For Unrestricted Funds, the entire budget is available once approved.
For Restricted Funds, certain grants can specify that only the authorized amount be
spent for a given period. Therefore, the total budget is entered for the total amount
awarded but will be released in authorized or "funded" increments. To identify which
grant has this provision, each account contains an attribute called "Award-Data" where
this provision is stored. This is an informational field where Controller's Office or campus
business office enters the whole total budget amount awarded. The actual released
amount of the budget amount is determined by the Pre-award Office or the award
document. A budget revision based on the authorized amount will be transmitted to the
accounting system. Since the whole budget is entered in a text field and the authorized
amount is entered into the accounting system, the use of budget release in FM may not
be used.
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Funds Management includes a budget release option, which can be used to release the
budget bit by bit. Releases can be expressed in percent or as absolute amounts. A
release can relate to annual values and/or overall values. If you have released the whole
budget or only part of it for an FM account assignment, you must also gradually release
the budget for all other FM account assignments. The release is based on the current
budget - that is, the original budget as amended by supplements, returns, and transfers.
Roll Up function when releasing budget.

Based on the budget profile, each fund will be identified whether it has a budget release
requirement. The process to enter original budgets into FM (see CIT for "Copy CO Plan
for FM Budget) is the same for all funds, but the actual releases of budget of the total
budget per fund is done manually.
The active availability control can be set at
* Against annual/overall budgets; or budgets
* Against annual/overall releases.
The "Overall" and "Releases" flags combined have the following effect:
"Overall" flag "Releases" flag
Availability control checks against...
X
Overall budget budget
Annual budget budget
X
X
Rel
Released Overall budgetudget
X
eased Released Annual budget
One document is posted for each budget object using a different budget type to identify it
as a release budget. Same as Original Budget, Budget Release will be entered as a
Payment Budget.
Releases
In many organizations, distributing a budget is not the same as releasing the funds. For
this reason, Funds Management includes a release option, which you can use to release
the budget bit by bit. Releases can be expressed in percent or as absolute amounts. A
release can relate to annual values and/or overall values.
You must decide whether you want to use releases or not. If you have released the whole
budget or only part of it for an FM account assignment, you must also gradually release
the budget for all other FM account assignments.
The release is based on the current budget - that is, the original budget as amended by
supplements, returns, and transfers.
Budget types
See also:
Budget Closing Operations
Revenues Increasing the Budget Distribution Procedures
4. Business Model
None

The Controller's Office and pre-award office identify which awards require a budget
release so the budget profile can be correctly set up for the identified awards. Once the
required budget data and the total approved budget are entered, the authorized amount
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can be manually released as in accordance of the award. There must be flow of

information between the pre-award Office and the Controller's Office or campus business
office from the time of project establishment to the initial budget data required in FM.
The major improvement is that the user sees the total amount awarded and the
authorized amount released as "live data" compared to the current system where the
total amount awarded is entered as a text field. Therefore, Funds Management can be
set to have funds availability checking at the released budget.

None
N/A


FM area and budget profiles for funds must be defined whether it is an annual budget
(Unrestricted Funds) or an overall budget (Restricted Funds). The appropriate update
profile must be assigned to the FM area.
Only authorized users (e.g. Research Office, Controller's Office) should be allowed to do
budget releases. Using authorization objects will help define the roles for each user.

N/A
4.7.2.10.
Budget Supplement (Top Down/Bottom Up)
Questions:
Q: 1) Describe in detail which information is to be stored on the budget document (list of
fields, short description, and properties of fields).
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A: UT would never use a one-sided transaction for budget changes; they always are
transfers among expenses, revenues, and fund balances.
The information on a supplement document (T-15) for unrestricted expense accounts is:
Account Number
Object
Increase or decrease Amount
Gross or Recovery
Date
Budget Category
The information on a supplement document (T-1) for restricted expense accounts is:
Account Number
Object
Increase/decrease Amount
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Decrease/Increase Amount
Date
Campus or Unit
Function
College or Division
Department
4.7.2.11.
Budget Supplement (Bottom Up through Rollup)
Questions:
Account Number
Object
Gross or Recovery
Date
Budget Category
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Account Number
Object
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
Function
College or Division
Department
CI Template:
The types of budget supplements UT incurs are state funding increases and increases in
revenues.
UT would never use a one-sided transaction for budget supplements or returns; they
always are transfers among expenses, revenues, and fund balances.
It is not anticipated at this time that UT will use the budget supplement transaction, a one
sided transaction to increase budget amounts.
The Budget Transfer will be used for all adjustments after Original Budget is entered in
the system.
Account Number
Object
Gross or Recovery
Date
Budget Category
Account Number
Object
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Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
Function
College or Division
Department
(from Budget Updates - Supplements, in the SAP Library):
Use
If the available funds are not sufficient, you can top up the budget in a funds center or
commitment item by means of a supplement.
Features
There are two forms of supplement:
You allocate supplements top-down within your hierarchy
Here, you distribute the supplement within the funds center and commitment item
hierarchy from superior funds centers and commitment items to subordinate
ones. The budget supplement must not exceed the amount in the superior level.
The amount of supplement depends on the distributable value and assigned
value in the superior level.
Supplements posted from outside to particular combinations of funds
center and commitment item
In such cases, you are allocating additional budget from outside to a particular
combination of funds centers and commitment items, regardless of how much
budget is still available for the superior funds centers and commitment items. The
distributable value for this combination increases by the amount of the
supplement.
You can pass the additional budget on to funds centers and commitment items
higher up in the hierarchy by choosing Total up and Roll up. The distributable
value in the superior levels is not affected by the change; the distributed value
and any existing supplement are increased by the amount of this supplement.
All the budget entry functions are available for you to enter, change, and display
returns. For more information, read Budget Entry Aids.
Roll Up function if a budget supplement is ever entered. It is anticipated that Budget
Transfer will be the only transaction used to adjust budget amounts.
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the system.
-------------------------If the Budget Supplement were to be used:
Same as Original Budget, Budget Supplement will be entered as a Payment Budget
using the Roll Up function. The required data to enter a Budget Supplement are:
Document Date
FM Area
Budget version. If you do not enter one, the system automatically uses version 0
where funds checking is done.
Fund
Timeframe. Year/Period
Funds Center
Commitment Item
Amount
In order to allocate overall values, one proceeds as described above. However, enter a
fund in the initial screen and select the field Overall.
If a budget profile is assigned to the fund, that allows you to enter overall values and
annual values, you can also allocate annual values for this fund by selecting the field
Overall and entering the appropriate fiscal year.
The result is that the system automatically rolls the budget allocation for a single funds
center and commitment item, or for several Budget Objects on a lower hierarchy level
and is automatically rolled up to the highest node.
Once the transaction is saved, one document is posted for each budget object using a
different budget type to identify it as a budget supplement.
4. Business Model
None

the system.
It is anticipated that budget transfers will be decentralized as much as possible.
Authorization will probably be done through funds that a user access to.

None
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None
N/A


(Unrestricted Funds) or an overall budget (Restricted Funds). Also, the appropriate
Only authorized users (e.g. Office of the Vice President of Business and Finance,
Department - Campus Business Office) are allowed to make any changes to the total
budget. Using authorization objects will help define the roles for each user.

None
4.7.2.12.
Budget Transfer
Questions:
A: For each "side" of the transaction-The information on a budget transfer document (T-15) for unrestricted expense accounts is:
Account Number
Object
Gross or Recovery
Date
Budget Category
The information on a budget transfer document (T-1) for restricted expense accounts is:
Account Number
Object
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Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
Function
College or Division
Department
CI Template:
The University anticipates using budget transfers for all budget transactions after CO plan
is copied to FM budget version 0.
Transfers between business areas (fund/entity combination) will not be allowed.
Unrestricted:
E & G - transfers among expenses, revenues, and fund balances.
Auxiliary- transfers among expenses, revenues, and fund balances.
Restricted:
Transfers offset between revenue and expense commitment items within the same
project. It is anticipated that restricted budget transfers will be entered through an
interface with the Sponsored Projects (Pre-awared) system.
It is anticipated that budget transfers will only be down within the same fiscal and
business area.
From the SAP Library:
Budget Activities
Definition
You use the "Budget activity" characteristic to subdivide the "Budget" characteristic value.
Structure
If you want to specify the "budget" characteristic value more precisely, you can use the
following characteristics for the budget activity:
KBUS Transfers (sender)
KBUE Transfers (receiver)
You can use these characteristic values to have the system list budget transfers from one
funds center to another, if they take place within one fiscal year.
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KBW1 Year-end closing budget transfer (sender)

KBW2 Year-end closing budget transfer (receiver)
KBU1 Transfers carry forward (sender)
KBU2 Transfers carry forward (receiver)
You use these characteristic values to have the system list budget transfers from one
funds center to another (or to the same funds center) between this fiscal year and the
next one.
KBU3 Transfers - advance (sender)
KBU4 Transfers - advance (receiver)
You use these characteristic values to have the system list budget transfers from one
funds center to another (or to the same funds center) between this fiscal year and the
next one.
KBI0 Revenues (manual)
KBI1 Revenues (automatic)
You use this characteristic value to display the budget that is available due to revenues
You do not have to specify a characteristic value for the characteristic "Value type 46"
(budget releases) and the characteristic "Value type 44" (assigned budget) since only
one characteristic value ever exists for these characteristics ("KBFR" = Budget releases
and "KBFC" = Assigned budget).
Budget Updates
Use
These functions are designed to support you when you have to adjust the original budget
in your organization during a fiscal year to reflect developments. The correction
measures are named Budget Updates. You can make budget updates for the Payment
Budget (PB) and for the Commitment Budget (CB).
Prerequisites
You determine the type of budget update entry in the Funds Management Customizing
under Budgeting and Availability Control
Budgeting Carry out Settings for the
Budgeting.
If you set the Additive indicator there, data already stored is not displayed when you enter
more data in hierarchy maintenance. When you save the new data, it is added to the
existing data.
If you do not save this indicator, existing data is displayed. When you save the new data,
it overwrites the existing data.
You can overwrite the settings entered in the IMG when processing your budget updates.
If you set the Additive indicator, you must always choose Add change values if you later
use the Total Up function.
Features
There are three types of budget update:
Supplement (Budget increase)
Return (Budget cut)
Transfer (Budget shift)
Activities
Processing of budget updates can take place within the hierarchy maintenance or in the
form of a document entry (rolling up).
To
Choose
and then.
Change supplements Supplements Commitments for the CB or payments for the PB
Roll up supplements
Supplements
Commitments for the CB or payments for the PB

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Display supplements
Supplements
Change returns Returns

Roll up returns Returns
Display returns Returns
Enter transfers Transfer

ange
You can also make budget updates using the change function of the original budget.
You should regulate your budgeting in such a way that the original budget is frozen and
budget changes are made in the form or supplements, returns, and transfers. This makes
the changes easier to identify later.
The "current budget" is the total of that year's original budget, as amended by
supplements, returns, and transfers. Besides this, the budget carry forward from the yearend closing and the budget from revenues increasing the budget are considered.
See also:
Budget Types in Funds Management
Allocating the Original Budget
Rolling Up Budget Values
Transfers
Use
It may happen that one funds center is running short of funds while another still has
plenty. Transfers are a tool in Funds Management, which you can use to place budget
from one Budget Structure Plan Element at the disposal of another. You can make
transfers for the commitment budget (CB) and the payment budget (PB).
Prerequisites
You cannot enter transfers for funds releases, but only for the current budget in a
particular version.
Features
Transfers between different funds centers and commitment items in the same
fiscal year (balance carried forward or advance)
Transfers between fiscal years in the same funds center and commitment item
(balance carried forward or advance)
Transfers between different funds centers and commitment items in different
fiscal years
Transfers between different funds, also across fiscal years
Short and long texts
Budget Consistency Checks when transferring
For transfers in which expenditures account assignments are addressed, the budget is
reduced for the sender and increased for the receiver.
For transfers addressing a revenues account assignment, either as sender or as receiver,
the budget is reduced for the sender and the receiver.
Activities
In the entry screen for the transfers, you must enter at least one sender and one receiver,
and the amount of the transfer. You can apportion the amount from the sender to more
than one receiver.
Choose Accounting Financial accounting Funds management Budgeting
Transfers Commitments for the (CB) and payments for the (PB).
See also:
Budget Types in Funds Management
4. Business Model
None
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A person who is responsible for the budget will execute a budget transfer. Responsible
people for all affected accounts will have to be included in the approval workflow.

Since this is a real-time integrated system, budgets are immediately updated when a
budget transfer is executed by an authorized user. Also as in all budget updates, a user
will be able to know when a budget document was created and by whom.

The screen layout may not facilitate increases to many accounts from one account.

Further study of the system is needed


Authorization must be given to a person responsible for the budget using authorization
objects that will help define the roles for each user. Also there must be an authorization
to prevent users from using the wrong fund, funds center, and/or commitment item.

N/A
4.7.2.13.
Budget Return (Outward by Rollup)
Questions:
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The information on a return document (T-15) for unrestricted expense accounts is:
Account Number
Object
Gross or Recovery
Date
Budget Category
The information on a return document (T-1) for restricted expense accounts is:
Account Number
Object
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
Function
College or Division
Department
CI Template:
The types of budget returns UT incurs are state funding rollback and reduction in
revenues.
UT would never use a one-sided transaction for budget returns or supplements; they
always are transfers among expenses, revenues, and fund balances.
the system.
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Account Number
Object
Gross or Recovery
Date
Budget Category
Account Number
Object
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
Function
College or Division
Department
When there is a reduction in the total budget, there must be a means to reduce the
budget and should be distinguishable from other budget activities (e.g. original,
supplement, transfer). FM provides this means called a Budget Return. It is a one-sided
entry that only affects FM.
The University anticipates using budget transfers for all budget transactions after CO plan
is copied to FM budget version 0.
Transfers between business areas (fund/entity combination) will not be allowed.
Unrestricted:
E & G - transfers among expenses, revenues, and fund balances.
Auxiliary- transfers among expenses, revenues, and fund balances.
Restricted- transfers offset between revenue and expense commitment items within the
same project. It is anticipated that restricted budget transfers will be entered through an
interface with the Sponsored Projects (Pre-awared) system.
--------------------------------------There are two forms of return:
Returns within a hierarchy (budget structure)
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Budget is returned within the funds center and commitment item hierarchy, from
a subordinate funds center/commitment item to a superior one. You can only
return as much budget as is still available in the subordinate level. The overall
budget is not affected by the return, but the available value in the superior level is
increased by the amount returned from the subordinate level.
Returns from particular combinations of funds centers and commitment items to
external parties (such as sponsors) - Roll Up
Here, you are returning distributable or available budget from a particular fund
center/commitment item combination in your hierarchy to the superior funds
center or commitment item. This means that the overall budget decreases by the
amount returned.
Roll Up function when entering budget return.

Returns
Use
If you have funds to spare, this function enables you to reduce the budget. Returns
usually take place bottom-up.
Prerequisites
For a budget return to be possible, the relevant Budget Structure Elements must have
enough current budget. For more information on the current budget, refer to Budget
Types in Funds Management.
Features
There are two forms of return:
Returns within a hierarchy
Budget is returned within the funds center and commitment item hierarchy, from
a subordinate funds center/commitment item to a superior one. You can only
return as much budget as is still available in the subordinate level. The overall
budget is not affected by the return, but the available value in the superior level is
increased by the amount returned from the subordinate level.
Returns from particular combinations of funds centers and commitment
items to external parties (such as sponsors)
Here, you are returning distributable or available budget from a particular fund
center/commitment item combination in your hierarchy to the superior funds
center or commitment item. This means that the overall budget decreases by the
amount returned.
If the budget entry functions are available for you to enter, change, and display returns.
For more information, read Budget Entry Aids.
Activities
The procedure for entering returns is similar to that for allocating original budget or rolling
up budget values. For more information on the procedure, refer to Allocating Budget and
Rolling Up Budget Values
See also:
Budget Updates
==================================
Same as Budget Supplement, Budget Return will be entered as a Payment Budget using
the Roll Up function. The required data to enter a Budget Return are:
Document Date
FM Area
Budget version. If you do not enter one, the system automatically uses version 0
where funds checking is done.
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Fund
Timeframe. Year/Period
Funds Center
Commitment Item
Amount
In order to allocate overall values, one proceeds as described above. However, enter a
fund in the initial screen and select the field Overall.
If a budget profile is assigned to the fund, that allows you to enter overall values and
annual values, you can also allocate annual values for this fund by selecting the field
Overall and entering the appropriate fiscal year.
The result is that the system automatically rolls the budget allocation for a single funds
center and commitment item, or for several Budget Objects on a lower hierarchy level
and is automatically rolled up to the highest node.
Once the transaction is saved, one document is posted for each budget object using a
different budget type to identify it as a budget return.
4. Business Model
None

For Unrestricted Funds, any changes to the Total Budget must be authorized through the
Office of the Vice President for Business and Finance. Restricted Funds, the Research
Office will enter reductions through the Sponsored Research (pre award) system.

None
None

N/A

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FM area and budget profiles for funds must be defined for annual budget (Unrestricted
Funds) and overall budget (Restricted Funds). Also, the appropriate update profile must
be assigned to the FM area.
Department - Campus Business Office) are allowed to make any changes to the total
budget. Using authorization objects will help define the roles for each user.

N/A
4.7.2.14.
Budget Return (Within Budget Structure/Outward)
Questions:
Account Number
Object
Gross or Recovery
Date
Budget Category
Account Number
Object
Title of Project
Project Director
Sponsor Funds
Total Direct Costs
Account Number
Date
Campus or Unit
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Function
College or Division
Department
4.7.2.15.
Edit Budget Document
Questions:
Q: 1) Budget document change: Which fields/information can be changed in a budget
document that already exists?
A: Cannot change after form has been submitted. Must fill out another form to reflect the
changes.
CI Template:
A document (e.g. T-15, T-1) cannot be changed after it has been submitted. The
requestor must fill out another form to reflect the changes.
Once a budget document has been created by a budget transaction (e.g. original,
supplement, return, transfer), the only fields that can be changed are the short and long
text. Within the budgeting transactions, one can edit a 50-character short text and a
corresponding long text for the budget values so as to store explanations regarding the
budget values or changes to them. The budget texts are assigned to a totals record. So
one can enter budget texts for combinations of the following:
Funds center
Commitment item
Fund
Fiscal year
Budget transaction
In the change document transaction, a user can only enter a short text and, if required, a
long text. Other data fields are blocked from any changes. Within the document, there is
information about:
When the text was created
Who created it
When it was changed
Who changed it
4. Business Model
None
A person who is responsible for the budget can edit the budget document.
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None

None

N/A


None

objects that will help define the roles for each user.

N/A
4.7.3.
Budget Execution
Questions:
Q:
1) Give a detailed list of legal requirements existing for the execution of the budget.
A: The primary legal requirement is that the budget be balanced (revenues & fund transfers
= expenditures).
There are internal policies and guidelines that assist in implementing legislated directives.
For example, the legislature may appropriate funds for a salary increase and the University
develops guidelines for implementation in accordance with the language contained in the
appropriations bill.
Unrestricted Funds: Line item appropriations where expenditures of funds must meet
requirement of the legislature.
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Restricted Funds: Terms of the grant/contract must be observed in spending from its budget.
Q: 2) Provide an overview of the budget assignment process: funds reservations,

payments, revenue collection, and posting. What procedures do you use for expenditure and
revenue? How is budgetary control exercised?
A: Expenditures
Unrestricted Funds:
Encumbrances of salary and operating expenditures, actual expenses.
Restricted:
Encumbrances of POs only; actual expenses.
Revenues
Unrestricted Funds:
I accounts can be either dedicated to a specific E account, or used to support E accounts in
general. Collection of revenue is managed in various subsystems, such as campus student
fees systems, and forwarded to the general ledger for posting.
Restricted Funds:
Each restricted expense account uses one of the restricted revenue accounts, where revenue
is posted whenever an expense occurs. Collection of this revenue is managed through billing
in the Grants/Contracts system. Some campuses use their own billing systems.
Investment Interest/Income:
Income collected and posted in the Investment System is transmitted to the general ledger for
posting also.
Q: 3) Do you use a multi-level funds reservation chain? (Such as: earmarked funds to
consume budget directly, reference and reduce funds reservation or earmarked funds).
A: JVs can be used to encumber obligations that are not automatically encumbered.
Salaries on unrestricted accounts and purchase orders are encumbered.
Q: 4) Are there are any "funds assignment chains" for expenditure and revenue? Describe
these chains in detail.
A: Expenditure: Requisition -> PO (G/L updated) -> Invoice -> Check (G/L updated)
<---------------Release----------->
Revenue: A/R -> Cash Receipts
Q: 5) Describe the current/foreseen budget structure. At which level does the budget
assignment take place?
A: Total University
|
Budget Entity
|
Vice Chancellor
|
College/Division
|
Department
|
Account
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|
Budget Category
|
Object Code
Budget assignment (encumbrances and expenses) is at the 3-digit object level.
Q: 6) Describe the special requirements concerning currency/currency handling in relation

to expenditure and revenue. Which limitations/relationships exist for the currencies used?
A: None
Q: 7) Is it possible to execute now for any future-/past years (budgets?). If so, please give a
detailed description of the processing currently in place.
A: At year-end (July), old and new year budgets are open for posting of disbursements,
transfers, cash receipts, and JV's.
Q: 8) Describe how down payments (such as trip advances) are posted, and how they
affect Funds Management.
A: Down payments are entered with a T-29 Form (Special Remittance and Order) and
posted just like ordinary expenditures against budget.
Q:
9) Create a list of all sources of revenue.
A: Revenue sources are appropriations (state, federal, local), tuition and fees, gifts, grants &
contracts (state, federal, local, and private), endowment income, sales & services, and other
sources. Revenue comes in as drawdown on appropriations and letters of credit, or checks,
cash, charge cards, or ACH.
Q:
10) Describe the process for allocating expenditures/revenues within the organization.
A: EXPENDITURES
Unrestricted: A program allocates benefit costs at the end of the month by function and
budget entity.
Restricted: Allowable expenses are read by a program at the end of each month to calculate
F&A (indirect costs) according to the terms of each grant or contract.
REVENUES
There are no automatic allocations of revenue for either unrestricted or restricted.
Q: 11) How do you handle revenue/expenditure that cannot be assigned to a specific

budget address?
A: All are assigned to an account.
Q:
12) Describe in detail the impact that tax on sales/purchases posting has on the budget.
A: N/A
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Q: 13) Describe the processes for calculating interest on arrears and dunning, and how they
affect the budget/Funds Management.
A: N/A
Q: 14) Provide an overview of the purchasing process. Which part of the process is linked
to the budget and what sort of link is it (budget approval, at the time of open item posting, at
the time of actual costs creation, etc.)?
A:
Requisition ----> PO ---------> Invoice ---------> Check
(1)
(2)
(3)
(4)
(1) Requisitions are entered to purchasing; no posting to general ledger.
(2) Purchase orders generate encumbrances to the general ledger.
(3) Invoices may refer to a purchase order or, for small dollar amounts, be the initial entry to
the Payables system; there is no posting to the general ledger.
(4) Checks are written for one or more invoices; they generate expenses to the general
ledger.
Q: 15) Do you have to follow certain public procurement rules ("RFP's"), please provide a
description of the rules to be applied.
A: Yes. State Law provides for Procurement and Bidding (Larger $ items) procedures.
Q: 16) Is there an integration needed between material management and budget

management?
A: Yes
Q: 17) Do you sell services/products (internal/external)? Describe the existing procedures

and their impact on the budget/budget assignment.
A: Yes
Unrestricted Fund Sales/Services include:
Conferences
Hearing Tests
Library Fees
Athletic Tickets & Merchandise
Summer Camps
Dining/Lodging
Veterinary Services
Hospitals
Bookstores
Impact: Dedicated accounts, where I accounts support specific E accounts.
In Restricted Funds:
Sponsored Research
Public Service (State Testing)
In the restricted funds, there are issues of billing and collecting reimbursable costs.
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Q: 18) You use an integrated sales system. Is it necessary to estimate sales revenue on the
income side, or is this expected income not recognized in FM until the incoming cash is
posted (or an invoice is sent)?
A: Estimated income is recorded in revenue budgets, both "I" and "C" accounts.
In unrestricted funds, income is recognized at cash receipt.
In restricted funds, income is recognized at time of expense.
Q:
19) Is there an integration needed between sales and budget management?
A: Yes
Q: 20) If there is a controlling system existing to determine and cross-charge internal
costs. Please describe the current logic applied and the relation / impact to the budget /
budget execution.
A: Inter-departmental charge actuals are coded with a 3-digit object ending in 9 to signify a
recovery. Expense budgets record both gross and recovery amounts by 2-digit object code.
Income accounts are not affected by internal re-allocations.
Q:
21) How is overhead cost (if any) treated for budget to actual comparison?
A: N/A
Q:
22) Is there also an availability control for postings to balance sheet accounts?
A: N/A
Q:
23) Is there an integration needed between controlling and budget management?
A: Yes
Q: 24) Describe the payroll integration into Finance and Budget. Please include the
handling of benefits too.
A: Salary budget system extracts data from payroll into an online system available for
update for a limited time, 3-4 weeks starting in late April. The Proposed Salary Budget
(PSB) system includes:
o breakdown by person and distribution accounts
o vacant positions, lump sum positions, or position history added manually
o benefit costs projected using defaults and employee attributes.
o high level reporting from April though June
The PSB is reconciled to department object code budgets May - June. After the budget is
finalized, PSB data is fed back to payroll to record salary changes. Changes to current year
positions (PAFs) from the start of budget process thru year-end are entered to payroll
manually (May - June 30).
Benefits are budgeted at the function/budget entity level for current unrestricted accounts.
They are charged to benefit type pool accounts and then are distributed at month-end to
budget entity/function pool accounts based on % of salary.
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Benefits for auxiliary and restricted accounts are budgeted and expended at the account
level.
Every payroll has an interface to Financial to charge the labor and benefits to the distribution
accounts and appropriate object codes. Financial interrogates the distribution account, and if
it does not bear its own staff benefits, that part of the cost is switched to the benefit-type pool
account.
Most salaries and wages in the unrestricted funds are encumbered at the beginning of the
year. Each payroll deobligates by the amount of pay and makes adjustments for rate of pay
changes for the remainder of the fiscal year.
Q: 25) Is there an integration needed between human resource/payroll and budget

management?
A: Yes
Q: 26) Describe in detail how the inventory process is carried out, and which postings are
made in this context (represented in Funds Management). Are there any local, state, or
national requirements (USA)?
A: Actual postings are like any other types of expenditures on the G/L account. Inventories
are tracked through offline systems.
Q: 27) Do you use asset accounting? Describe how assets are posted (capitalization,
depreciation, retirement, etc.) and their impact on funds management. Are there any
differences for special funds?
A: ENCUMBRANCES AND OBLIGATIONS
The encumbrance of obligations against Unexpended Plant Fund projects occurs when
formal contracts, purchase orders, and change orders are issued as follows:
Contracts. Agreements with architects, principal contractors and, at times, engineering and
inspecting firms must be by formal contract. These contracts must be approved by the Board
of Trustees, signed by the President or a Vice President, and forwarded to the Treasurer's
Office. The amount of each contract then will be recorded as an encumbrance against the
project account, and the uncommitted balance of the project will be reduced.
Purchase Orders. A second method for encumbering plant funds is through purchase orders.
Normally, purchase orders will be issued for movable equipment purchases and for other
obligations of small amounts. Requisitions may be prepared either by the campus
representative or the Director of Facilities Planning. The Director will forward the requisitions
to the appropriate campus/unit Purchasing Department.
For certain large projects at campuses or units other than Knoxville, the Director may arrange
to use the Knoxville campus Purchasing Department. Normal Purchasing Department
procedures will be followed for plant fund projects. When the Treasurer's Office receives a
copy of the purchase order, this amount will be recorded as an encumbrance against the
project account, and the uncommitted balance will be reduced.
Change Orders. During a construction project, sometimes the amount specified in the
contract or purchase order may need to be increased or decreased. This is done with change
orders, which may be prepared by a project architect and must be approved by the Director
of Facilities Planning (after consultation with appropriate campus officials) and Vice President
for Business and Finance. Programmatic change orders requested by building users should
be approved by the appropriate campus officials and forwarded to the Director of Facilities
Planning.
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Because a change order modifies the original contract, it must be submitted through the
normal contract review process and executed by a Vice President. The original change order
then will be transmitted to the Treasurer's Office for recording. A copy of the change order
should be sent to the appropriate campus official. The Treasurer's Office is responsible for
following the current State Building Commission policy on change orders.
In rare circumstances, the Director of Facilities Planning may need to approve an emergency
change. This emergency approval normally will involve a small change in the contract
amount. The Director of Facilities Planning will notify the Vice President for Business and
Finance as soon as possible in writing, with copies to the Treasurer's Office and the
appropriate campus official. A formal change order will be executed at the earliest possible
date.
Q: 28) If there are different treatments with funds in the context of asset handling: in which
funds do you book your assets, how are those depreciated (e.g. for enterprise and
governmental funds).
A: Buildings: Expensed in Plant Funds "J" accounts for budgetary purposes. Later they are
capitalized in Invested in Plant "M" accounts for financial statements.
Equipment: Expensed in the appropriate expense account for budgetary purposes, and later
capitalized in Invested in Plant "M" accounts for financial statements. The rules are the same
for all types of funds.
The University has never had to depreciate before, but will be using straight-line depreciation,
beginning in FY2001.
Q:
29) Please describe the impact of asset maintenance efforts on the budget.
A: If this means building renovation: projects > $100,000 are established in University-Wide
Administration "J" expense accounts. < $100,000 projects are charged initially to "E"
expense accounts, then reclassified to "J" accounts. Both types of accounts are budgeted for
the entire project cost.
If this means equipment service contracts:
Q: 30) Is there an integration needed between human asset accounting and budget
management?
A: Yes
Q:
31) Describe your accounts receivable accounting system.
A: The grant and contract system prepares bills for sponsored projects using:
- the general ledger to determine eligible expenses,
- one of several possible billing bases (e.g.,. cost reimbursement),
- one of several possible billing cycles (monthly, quarterly, etc.),
- a related accounts receivable account to post the billed amount.
Cash receipts are matched with outstanding A/R to liquidate them.
Unpaid bills appear on a dunning and aging report after 45 days.
Q:
32) Describe your accounts payable accounting system.
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A: Accounts Payable is used to enter payments against purchases orders and travel
itineraries, and also to initiate payments from invoices with no preceding documents. It uses
two vendor files: (1) the Vendor data base is shared with purchasing, and (2) the Payee data
base is used by AP alone, for employees due travel re-imbursements, temporary vendors,
and small-dollar payments to vendors not on the Vendor data base.
Payments are entered, spot-checked, and released in batches. Payments are processed five
nights a week, with a program combining all payments to the same vendor, unless the
payment has been marked to keep separate. Each check has a remittance advice itemizing
the invoices being paid and documenting the University accounts and objects being charged.
The check number and date are recorded on each invoice paid.
Credit memos are entered like invoices, and combined with payments to the same vendor.
"Emergency" checks are allowed; they are entered to the system like invoices, except the
check number is known at entry time.
Q: 33) Integration with Purchasing: Which documents/transactions exist and at what point
are budget assignments made (for example, purchase requisitions, purchase orders, contract
release, etc.)?
A: Purchases of $2000 or more must be initiated with a requisition sent to Purchasing.
There is no corresponding posting to the general ledger. $2000 is also the threshold for
purchases that should be bid, with some exceptions for proprietary products, etc. Purchasing
sends out an RFQ, and handles the bidding and vendor selection.
A successful bid on a requisition becomes a purchase order. At this point, an interface with
the general ledger creates an encumbrance for regular POs. Blanket POs are not
encumbered at UT.
Invoices against a regular purchase order de-obligate the encumbrance and create an
expense posting; on blanket POs, there is only the expense. The expense may be distributed
to multiple accounts and accounts different from the original obligation.
Note: In our system design of UT's account structure, the cost center in CO will be mapped
one-for-one to a fund and funds center in FM. With this in mind, in R/3 when a user decides
to change a cost center once a requisition has been saved, the fund and funds center will not
change based on the new cost center. According to Shyam, we will implement a "user exit"
to make sure that the correct fund and funds center will be reflected when a cost center is
changed.
Q:
34) Is there any integration between your travel management and funds management?
A: Yes
Q:
35) Provide an overview of volume of data per document type.
A: Total of 2.5 million per year.

In order of volume:
Transfers of expenses
Check disbursements
Payroll checks
Journal vouchers
Cash receipts
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Purchase Orders/encumbrances
Budget revisions
BV checks
Payroll encumbrances
Q: 36) Archiving: Which objects (transaction data) have to remain for how long in the
system?
A: 3 or 4 months of current budget, encumbrances, and expenditures
24 months of transaction detail/posting activities
3 years of budget data (benchmark budgets)
3 years of end of month balances
In tape archives, we have:
18 years of accounts with attributes and end of year balances.
20 years of posting activities.
Q: 37) Are there any interfaces to other applications at execution time? Please provide a
detailed interface description and present the data to be handed over.
A: Campus bookstores, computer centers, student information systems, and telephone
services provide tapes of charges (TVs) by account and object at every month end.
Trust Processor/Investment system provides files of cash receipts several times weekly; a
journal entry file monthly for transfers of funds to the Consolidated Investment Pool; and a
journal entry file quarterly to record distribution of Pool income to member accounts.
Q: 38) Describe which information that is currently available in your system also needs to
be present in the future.
A: We will continue to need end-of-month and current balances for each account by object
(or other appropriate) breakout code. We will want to view detailed transactions that support
budget, encumbrance, and actual figures.
We record four point-in-time budgets per year (Original, Revised, Probable, and Final).
4.7.3.1.
Funds Reservation
Questions:
Q: 1) Describe in detail the information to be stored on the funds reservation document (list
of fields, short description, properties of fields, etc.).
A: The University can use a JV to encumber obligations, but this is not practiced by the
departments. The document should identify:
o Account
o Object
o Short Description
o Amount
o Unique identifying number for subsequent liquidating transaction
o Entry Date
o Due Date
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Q: 2) Which information is possibly changed for the funds reservation document? Generate
a list of all fields/field contents.
A: A change to an essential field, such as account, should be reflected in a new
transaction(s) documenting the change; a change in the description, on the other hand, could
be made directly to the document with a minimal audit trail.
CI Template:
Earmarked Funds Document
Definition
Business transactions in Funds Management that claim already allocated budget for
expected revenues or expenditures.
The following business transactions are grouped together under the term Earmarked
Funds:
Funds reservations
Funds precommitments
Funds commitments
Funds blocking
Forecast of revenue
Use
Differentiation criteria for using these types can have the following aspects:
Budget-based commitment character
Application of funds by functional specification
External legal commitment
Funds reservations
Using funds reservations you can make an early claim for parts of the budget e.g. for a
project, without needing to know the exact application of funds. The funds reservation is
considered a preliminary step of funds precommitments and funds commitments in which
the user can refer to the funds reservation. So the funds reservation provides a
framework for future budget usage, within which all subsequent activities take place.
A funds precommitment can refer to a funds reservation. With a funds precommitment
the user is more familiar with the application of funds without having already entered into
a concrete contractual agreement with external parties.
Funds commitments
For funds commitments the legal commitment plays a role in addition to the application of
funds. Such legal commitments can for example be purchase orders with a supplier or
other contractual agreements. Using the funds commitment you can go back to funds
that were provided by a funds reservation or a funds pre-commitment.
=====================================
The equivalent of Funds Reservation in the current system is in DMS, a reservation of
funds by commitment item without a requisition or purchase order having been
processed.
Funds Reservation in R/3 will maintain some of DMS's functionality in earmarking
portions of a budget.
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Using funds reservations one can make an early claim for parts of the budget e.g. for a
project, without needing to know the exact application of funds. It allows the ability to
encumber costs for specific transactions that would normally not require a purchase
order.
Funds reservation does not go through the normal procurement process (i.e. from a
purchase requisition to a purchase order). Once created, it is an encumbrance to the
budget. Funds reservations entered in Funds Management are automatically reduced
when you enter corresponding postings (such as down payments, invoices, payments) in
Financial Accounting with the additional account assignment "Funds Reservation".
Creating Earmarked Funds
Prerequisites
Take into account that the current field selection when processing earmarked funds is
dependent on the respective document type and the specifications made for the
document type in the Funds Management Customizing. For further information on the
field control, see Field Control Earmarked Funds and in the Funds Management IMG
under
Earmarked funds and funds transfers.
For the processing of earmarked funds you require the authorization for authorization
object F_FUNDSRES per document type.
Procedures
Choose
the desired financial transaction Create.
Enter the header data on the initial screen:
You can process earmarked funds both on the overview screen and on the detail screen.
You can only enter account assignments, an amount or a reference to other earmarked
funds on the overview screen. On the detail screen you can use all functions that are
available to you for processing a document item. For more information, see Document
Entry Functions: Document Item.
Choose Quick entry to reach the overview screen.
Choose Detail line item to reach the detail screen.
Enter data as required.
If you enter a CO account assignment a commitment is generated in Controlling if the
commitments management in Controlling is active. This only takes place when posting
funds reservations, funds pre-commitments and funds commitments.
Save your input.
4. Business Model
None

Accounts payable and procurement personnel may need to be cross-trained if funds
reservation transaction in the Funds Management module is used.

No changes to the exisiting organization.
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Any financial obligations can be encumbered without flowing through the normal business
processes (e.g. PO, salaries).
None

N/A


A document type and company code must be defined per FM Area. Also, budget profiles
for funds must be defined as to whether the budget to be earmarked is an annual budget

objects that will define the roles for each user.

N/A
4.7.3.2.
Funds Pre-commitment
Questions:
Q: 1) Describe in detail the information to be included on the "funds pre-commitment"
document (field list, short description, field attributes, etc.).
A: The University has had nothing equivalent to funds pre-commitment, but we may use it in
the future. Such an item should identify:
o Account
o Object
o Short Description
o Amount
o Unique identifying number for subsequent liquidating transaction
o Entry Date
o Due Date
Q: 2) Which information could be changed for the "Funds pre-commitment" document?
Make a list of all fields/field contents.
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A: Changes should be entered in the originating system, payroll, but even then a change to
an essential field, such as account, should be reflected in a new transaction(s) documenting
the change.
CI Template:
Definition
Funds:
Funds reservations
Funds commitments
Funds blocking
Forecast of revenue
Use
Funds reservations
considered a preliminary step of funds precommitments and funds commitments in which
the user can refer to the funds reservation. So the funds reservation provides a
A funds precommitment can refer to a funds reservation. With a funds precommitment
Funds commitments
===============================
The University has nothing equivalent to funds pre-commitment. They will be used to
earmark funds reserved by vacant positions in the HR module.
Such an item should identify:
Account
Object
Short Description
Amount
Unique identifying number for subsequent liquidating transaction
Entry Date
Due Date
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Funds precommitments are FM funds reservations originated in the HR module when a
vacant position is created.
When a HR personnel creates a new position, an encumbrance will automatically be
created in the HR Funds and Position Management (HR-FPM) modules based on its pay
scale classification. The pay scale classification corresponds to a monetary value. This
monetary value determines the required funds of a position.
4. Business Model
None

Although the creation of new positions is done in HR, FI personnel responsible for the
budget must know how this will affect their funding.
Also, to achieve budget integration if the FM master data and HR-FPM master data are to
be linked, the creation of Budget Structure elements must be triggered in FM. Therefore,
a decision must be made whether HR or Finance will execute and maintain this
transaction.

Although changes will mostly be from HR side from HR-FPM, finance personnel must be
able to understand how the position system (HR-FPM) affects their budget.
Currently, UT does not have a position tracking/control system under HR. Funds precommitment will provide UT the capability to encumber funds for vacant positions.
None

N/A

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A document type and company code must be defined per FM Area. Budget profiles for
funds must be defined for annual budget (Unrestricted Funds) and an overall budget
(Restricted Funds) funds. The appropriate update profile must be assigned to the FM
area.
objects that will help define the roles for each user. The actual creation of positions will
occur in the HR Funds and Position Management module.

N/A
4.7.3.3.
Funds Commitment
Questions:
A: At the University, salary encumbrances are equivalent to funds commitment. We identify:
o Account
o Object
o Short Description
o Amount
o Unique identifying number (possibly purchase order number) for subsequent
liquidating transaction
o Entry Date
o Effective date (maybe PO date)
Q: 2) Which information (fields) is possibly changed for the funds commitment document?
Please provide a list of all fields/field contents.
A: Changes should be entered in the originating systems, payroll or materials management,
but even then a change to an essential field, such as account, should be reflected in a new
transaction(s) documenting the change.
CI Template:
At the University, encumbrances are equivalent to fund commitments. They identify:
Account
Object
Short Description
Amount
Unique identifying number (possibly purchase order number) for subsequent
liquidating transaction
Entry Date
Effective date (maybe PO date)
At the end of the month, a payroll run sets up encumbrances based on the actuals.
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Operating encumbrances are set up as requisitions and purchase orders are created.
=====================================
Definition
Funds:
Funds reservations
Funds commitments
Funds blocking
Forecast of revenue
Use
Funds reservations
considered a preliminary step of funds pre-commitments and funds commitments in
which the user can refer to the funds reservation. So the funds reservation provides a
Funds pre-commitments
A funds pre-commitment can refer to a funds reservation. With a funds pre-commitment
Funds commitments
It is expected that requisitions, purchase orders, and HR activity in R/3 will continue to
create commitments (encumbrances).
===============================
The funds that are reserved in the R/3 Funds Management component when a person is
financed via a position (filled position).

other contractual agreements. Using the funds commitment you can go back to funds that
were provided by a funds reservation or a funds pre-commitment.
When a HR personnel fills a position, in the HR Funds and Position Management (HRFPM) module, it will automatically liquidate the funds pre-commitment and create an
encumbrance based on either the pay scale classification of the person being financed or
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the required funds of a person are based on a simulation of the payroll.
4. Business Model

Although the creation of filled positions is done in HR, FI personnel responsible for the
budget must know how this will affect their funding.
FM master data and HR-FPM master data are to be linked to achieve budget integration.
The creation of Budget Structure elements must be triggered in FM. Therefore, a
decision must be made as to which department must execute and maintain this
transaction. HR or Finance?

No changes are anticipated to the existing organization.
=============
Although changes will mostly be from HR / HR-FPM and MM, finance personnel must be
able to understand how the other modules affects their budget.
The salary encumbrances can be tracked back to when the positions was created with all
historical data.

None

N/A

A document type and company code must be defined for the FM Area. Also, budget
profiles for funds must be defined whether it is an annual budget (Unrestricted Funds) or
an overall budget (Restricted Funds). Also, the appropriate update profile must be
assigned to the FM area.

objects that will help define the roles for each user. The actual creation of filled positions
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will remain with the HR personnel, through the HR Funds and Position Management
module.

N/A
4.7.3.4.
Manual Commitment Mass Maintenance/Closing in FM
Questions:
Q: 1) Is it necessary to automatically flag the FM commitments documents (such as funds
reservation, funds pre-commitment, funds commitment, etc.) as "completed"?
A: Commitments documents should be so marked when they are fully liquidated.
CI Template:
Commitments documents should be so marked when they are fully liquidated.
Closing Operations on Commitments
Use
You can carry forward commitments posted in the current fiscal year (e.g. purchase
requisitions, purchase orders, Earmarked Funds) into the following fiscal year and these
are not reduced until the following fiscal year. The commitments carried forward then
debit the budget in the new year.
Prerequisites
The closing operations in the Funds Management feeder components should be
closed because changes to original documents made by the system are not
automatically supported in Funds Management.
Parked financial accounting documents (FI documents) should be reversed
because these may have already used budget but are not taken into account in
the commitments carry forward.
Note that you can only execute a commitment carry forward if it is specified in the
Funds Management Customizing (in the default settings for the year-end
operations) that the commitment carry forward is allowed. For more information
see Funds Management IMG, section Enter Default Settings. Using program
RFFMCFM1 you can get an overview of the current Customizing settings.
If you are working on a payment basis you must convert the line items from the
"invoice" status to the "payment" status using the program RFFMS200. You find
further information under Payment Transfer as well as in the program
documentation.
You set an Earmarked Funds (e.g. funds reservation, funds precommitment, funds
commitment) or a document item to complete if you want to return unused amounts of
earmarked funds to the budget. You reset the complete indicator if unused amounts of
earmarked funds are to claim budget again.
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If you set the whole document or individual document items to "complete", this has the
following effects:
The document is no longer changeable
This document can no longer be referred to during the posting procedure.
If all the document items have not yet been entirely exhausted by follow-on
documents (for example funds commitment, invoice), the assigned funds are
taken back. The assigned value of the respective FM account assignment is
reduced accordingly.
Closing Operations on Commitments
Use
You can carry forward commitments posted in the current fiscal year (e.g. purchase
requisitions, purchase orders, Earmarked Funds) into the following fiscal year and these
are not reduced until the following fiscal year. The commitments carried forward then
debits the budget in the new year.
Prerequisites
The closing operations in the Funds Management feeder components should be
closed because changes to original documents made by the system are not
automatically supported in Funds Management.
Parked financial accounting documents (FI documents) should be reversed
because these may have already used budget but are not taken into account in
the commitments carry forward.
Note that you can only execute a commitment carry forward if it is specified in the
Funds Management Customizing, in the default settings for the year-end
operations, that the commitment carry forward is allowed. For more information
see Funds Management IMG, section Enter Default Settings. Using program
RFFMCFM1 you can get an overview of the current Customizing settings.
If you are working on a payment basis you must convert the line items from the
"invoice" status to the "payment" status using the program RFFMS200. You find
further information under Payment Transfer as well as in the program
documentation.
Process Flow
The carry forward of open commitment documents takes place in several steps
Maintain Carry forward Rules
You must subsequently assign these to the desired value types in Funds Management
Customizing under Additional functions
Assign Carry forward Parameters for Commitments Carry forward.
Maintain Carry forward Rules
Select Documents (RFFMC001).
With this program you select the documents to be carried forward according to particular
selection criteria. After the program run the selected documents in the line item table
(FCABP) are marked as "earmarked for carry forward". Subsequently you can only carry
forward these documents into the new year.
Carry Forward Documents (RFFMC010).
Reconstruct assigned values for the old and the new fiscal year.
For more information on this, refer to Restructuring Assigned Values.
You should only execute steps 1-2 if you want to work with carry forward parameters.
For small document volumes (up to approx. 100 documents) you can adjust assigned
values during carry forward of the open commitment documents. In this case you must
not execute the reconstruction of the assigned values separately.
Result
You can display the commitment documents carried forward in the new information
system in the new year in the period 000. The documents can no longer be displayed for
the old fiscal year.
Budget already assigned in the old fiscal year is released again by the commitment carry
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forward. If the commitment carried forward does not debit the budget of the new fiscal
year you can carry forward the released Budget for the Commitments into the new fiscal
year.
Reversing the commitments carry forward
If open commitment documents were carried forward to the new fiscal year by mistake
when carrying forward the commitments, you can move these documents back to the old
fiscal year using program RFFMC040.
Changes to the original document
If an invoice which was already carried forward to the new year by the commitments carry
forward is reversed in Financial Accounting, the reversal document in Funds
Management receives the posting date of the FI document.
4. Business Model
None

Responsible individual(s) who is(are) involved in the creation of Earmarked Funds must
be the same individual(s) to maintain and close so that FM commitments documents are
not closed in error.

None

None
N/A

None

If one wants to set an earmarked fund to complete in the reducing Financial Accounting
document (invoice or parked document), the field Complete in the coding block must be
ready for input. One enters the required settings in the Financial Accounting Customizing
in step Maintain field status variants.
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objects that will help define the roles for each user.
N/A
4.7.3.5.
Budget Increase
Questions:
Q: 1) Describe the relation between income budget and expense budget; are there
revenues that no common, once collected could give rise to expense?
A: An increase to a revenue account budget generally has an offsetting entry to an expense
account budget or a decrease to another revenue account. (The only other option is to
increase a fund balance account.) For example, increased food service revenues could be
reflected in an increase to the appropriate revenue account budget offset by an increase to
the budget of a food service expense account. Or it could be split between the expense
account and a related fund balance account (to reserve for future).
In restricted funds, increased gifts, for example, would be posted to the fund balance account
and recognized as revenue when expenses on the related expense ("R") accounts occur.
The increase may be shown as a budget increase to the "R" account, but often is not.
Q:
2) Do you have re-usable revenue/revenues that increase the budget?
A: Yes
CI Template:
There are currently no funds that use revenue-increasing budgets. It is anticipated that
revenues increasing budget will not be used initially. However, there are some revenue
accounts linked directly to expenditure accounts. The revenues are dedicated only to
those expenditure accounts. A situation that may warrant looking at this option in R/3
would be the Service Centers - self-supporting departments that provide services to other
departments that are funded through user charges. Currently Service Centers use
negative expenditure accounts to balance. Some revenue accounts are linked directly to
expenditure accounts, where the revenues are dedicated only to those expenditure
accounts. If revenues exceed the estimate in such an account, that increase should be
available in the related expenditure account. An increase to a revenue account budget
generally has an offsetting entry to an expense account budget or a decrease to another
revenue account. (The only other option is to increase a fund balance account.) For
example, increased food service revenues could be reflected in an increase to the
appropriate revenue account budget offset by an increase to the budget of a food service
expense account. Or it could be split between the expense account and a related fund
balance account (to reserve for future).
In restricted funds, increased gifts, for example, would be posted to the fund balance
account and recognized as revenue when expenses on the related expense ("R")
accounts occur. The increase may be shown as a budget increase to the "R" account,
but often is not.
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Those revenue accounts that fund a particular expenditure account could be updated
with the rule for making this distribution. At the end of each month, the program for
evaluating these revenues and calculating the expenditure budget increases will be run.
Since the active availability control works only against elements that already have their
"own" budget, these elements must carry budget independently of the revenues

A fund must be identified to receive revenues increasing budget. A distribution rule
defines the percentage of revenues that can increase that budget. UT probably could
use 100%, but it is possible to put in a lower percentage along with a surplus FM account
assignment (who gets the remaining percentage).
Distribution rules
Definition
Definition for each revenues FM account assignment for which expenditures FM account
assignment(s) and at which level revenues increase the budget.
The rule also determines the FM account assignment, the so-called surplus FM account
assignment, into which residual revenues flow, which are not budget increasing for the
expenditure FM account assignments.
Use
Distribution rules form the basis for increasing existing expenditure budget for particular
functional areas due to Additional Revenues
In the Funds Management Customizing you define in a proposal rule at which level a
revenue increases the budget (definition or additional revenue). Besides this you define a
surplus FM account assignment in the proposal rule. The definitions appear within the
Rule Maintenance as a default value and can be overwritten per revenues FM account
assignments. You must define per revenues FM account assignment within the rule
maintenance for which expenditures FM account assignment(s) the expenditure budget
can be increased.
Structure
A distribution rule consists of:
Budget memo
You can control by defining a budget memo for the revenues FM account
assignment and expenditures FM account assignments, whether the budget
increase is executed automatically or manually.
Assigning expenditures FM account assignment(s) to a revenues FM
account assignment
You can define per expenditures FM account assignment what percentage of the
budget-increasing amount of revenue is allotted to these.
Definition of additional revenues
The system calculates the respective revenue amount that can increase the
budget of the expenditures FM account assignments or flows into the surplus FM
account assignment, from the following values:
Percentage rate
By specifying a percentage rate you determine which share of revenue can be
distributed to the expenditures FM account assignments.
Minimum revenue and upper limit
Fixed amounts
You can determine by specifying an interval from which amount (minimum
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revenue) and to which level (upper limit) revenues, which are posted to the
revenues FM account assignment, increase the budget of the expenditures FM
account assignments.
Percentage of the budget
If you have budgeted for revenues you can define the minimum revenue and
upper limit in relation to the current revenues budget, instead of a fixed amount.
For instance, you define by entering a percentage rate of 100% for the minimum
revenue, that only revenue which go beyond the budgeted revenues are budget
increasing.
If you do not define a minimum revenue and an upper limit each respective
revenue in accordance with the percentage rate described above is budget
increasing. Otherwise revenues are not budget increasing on the expenditures
FM account assignments until after reaching the minimum revenue and only up
to reaching the upper limit.
Surplus FM account assignment
The residual revenues flow into the surplus FM account assignment which should
not be budget increasing on the expenditures FM account assignments assigned
to the revenues FM account assignment. This includes:
Revenues that are under the minimum revenue or over the upper limit. If you
have defined in Customizing that the minimum revenue is not budget
increasing then this does not function as budget increasing on the surplus FM
account assignment, but remains on the revenues FM account assignment.
Residual revenues that do not increase the budget of the expenditure FM
account assignments due to an appropriate definition of the percentage values (<
100).
You can transfer the revenues collected on the surplus FM account assignment
to other FM account assignments.
For examples of distributing revenues to expenditures FM account assignments
and the surplus FM account assignment, see Distribution of the Additional
Revenues.
Integration
Budgeting and Availability Control
The active availability control can only check the assigned funds against the budget for
the elements with budget, which already have their "own" budget and so carry budget
independently of the revenues increasing the budget. Elements that only have budget
from revenues increasing the budget are not taken into account in the check.
You must therefore ensure that the expenditures FM account assignments, which you
assign to the revenues FM account assignments as receiver, are budgeted for. This also
applies to the surplus FM account assignment(s).
If you are working with Budget Objects the account assignments must be marked as
budget objects. If you have defined in Customizing, under Budgeting and availability
Define behavior of the availability control within the
hierarchy that the availability control should run against the first budget object, then these
budget objects must likewise have their "own budget".
For further information on determining the elements with budget, see Determining the
Elements with Budget: Procedure Without Budget Objects and Procedure With Budget
Objects
4. Business Model
None
The Controller will define the revenue/expense account assignment relationships.
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Someone will have to be in charge of running the revenue evaluation/budgeting program.
Expense budgets could be adjusted monthly in line with revenue without manual review.

None

N/A

None

Following must be configured for revenues increasing the budget:
maintain budget memos
enter setting for the revenues increasing the budget
distribution process
default rule
The Controller or designees will be authorized to the revenue-increasing-budget
maintenance screen.
Selected users must be authorized to run the monthly budget run.

N/A
4.7.4.
Information System [Funds Management]
CI Template:
Here are the following reports for budget and budget execution used by UT.
Budget Reports:
Schedule 2, Historical Budget
Income Summary
Detail Budget Schedule by Budget Entity
Budget Summary
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THEC Budget Reports

Budget document reports and files
comparison of Departmental Budget and Salary Budget
Expenses by Function
Income by Source
Budget Execution:
- Departmental Budget and Expense Report (Ledger)
- Grants/Contracts Budget and Expense Report (Ledger)
- General and Subsidiary and Income Report (Ledger)
- General Funds Budget Analysis
- Restricted Budget Analysis
- Office of the Treasurer Monthly Report
One can use the information system to analyze the business transactions relevant to
Funds Management. This means it is possible, for example, to generate overviews of the
budgets (such as approved and released budget), budget usage (actual and commitment
values), and the residual budget (that is, budget still available) in your organization.
One can carry out both recurring standard evaluations and also create reports for any
specific questions and tasks. One can analyze all data interactively and directly after
entering it into the R/3 System, and trace its origin up to document level. One can also
run all reports available online in the background. This is particularly useful with very
comprehensive datasets.

In the FM report tree, there are components needed for the information system. These
features include:
Master Data Indexes

- obtain an overview of the master data created
- display the assignment of the Funds Management master data objects to
master data objects from other components
Totals Record Reports

- reports to provide an overview about the cumulated status of the data
- look at the line items belonging to each totals record report
Line Item Reports

- obtain a more detailed representation of the postings executed
- display the respective original document directly from the list of line items found
- contain information on the FM account assignment, the amount posted, the
posting date, and the user who made the posting.
Year-end Closing
- obtain an overview of the closing operations carried out when the fiscal year
changes
- display the commitments carried forward, the budget assigned to these
commitments and the other carry forward budget
Analyses
- compare different types of data, for example line items and totals records in
Funds Management
4. Business Model
None
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Drill-down reports can be created and maintained only by experienced authorized users
who have access to the IMG. All customized reports will be developed in coordination
with the ABAP team.
None

Some required reports (e.g. Office of the Treasurer Monthly Report) will not come from
Funds Management but will be from Special Purpose Ledger (SPL). Any reports that
require balance sheet accounts (e.g. Endowment Funds, Loan Funds) will be from SPL
because FM will only have budgets and actuals.

If other modules do not have standard reports to meet UT's reporting requirement, any
reports can be developed through ABAP tools.

None

Customizing for the information system is done in the FM IMG to create drill-down
reports. A running knowledge of Report Writer/Painter is required to create drill-down
reports in FM.

One can use authorizations to control the display of particular objects (FM area, funds
center, budget version, and so on).
If a user tries to execute a report with selection criterion for which he/she has no
authorization, the program terminates execution of the report. In this case, the user
must execute the report again and adjust the selection criteria according to their
authorizations.

None
4.7.4.1.
Reports
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Questions:
Q: 1) What statutory requirements must be considered (financial regulations, guidelines) for
reporting?
A: We have no statutory requirements for reporting, other than to provide the budget
document support information (detailed object code expenditures by account, and detailed
salary information) that we prepare for the budget recommendation.
We do have other reports requested by THEC, state of Tennessee F&A, and the Legislative
Budget Office that are standard reports but not statutory requirements.
Q:
2) Generate a list of all reports for the budget/budget execution. Provide examples.
A: Budget reports include:

o Schedule 2, Historical Budget
o Income Summary
o Detail Budget Schedule by Budget Entity
o Budget Summary
o THEC Budget Reports
o Budget document reports and files
o comparison of Departmental Budget and Salary Budget
o Expenses by Function
o Income by Source
On the execution side, we have:
- Departmental Budget and Expense Report (Ledger)
- Grants/Contracts Budget and Expense Report (Ledger)
- General and Subsidiary and Income Report (Ledger)
- General Funds Budget Analysis
- Restricted Budget Analysis
- Office of the Treasurer Monthly Report
Q: 3) Describe in detail how your financial statements are structured. Provide a copy (only if
you have not answered these questions for the ASAP area Financial Accounting).
A: See Financial Accounting Area (G/L).
Q:
4) Do you create financial statements per fund? Provide examples.
A: UT has provided financial statements for each fund in the past: however, we are
considering early adoption of GASB 35 recommendations. See FI for details.
Q: 5) Apart from the above mentioned reports, are there any special requirements that only
apply to specific funds (example, reports/prints)?
A: Restricted funds can require special reporting based on the terms of the grant.
All Memphis account budgets must be reported with budget entity rollups (like other
campuses) and also with an alternative grouping called funding source that has to do with
state formula funding.
Q: 6) Do forms for documents, reports have to be produced by the FM system (print of
earmarked funds or invoices, etc.)? Attach these forms.
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A: UT has used the "flash-form" Schedule 3 for entering proposed departmental (object
code) budgets; we anticipate this form will be replaced by an online screen in R/3.
Schedule 2--Historical Data is on a pre-printed form.
Forms required for the Proposed Salary Budget system are detailed in HR.
Q:
7) Describe the reporting requirements for budgeting (examples).
A: As listed in Question 2, above:

Budget reports include:
o Schedule 2, Historical Budget
o Income Summary
o Detail Budget Schedule by Budget Entity
o Budget Summary
o THEC Budget Reports
o Budget document reports and files
o comparison of Departmental Budget and Salary Budget
o Expenses by Function
o Income by Source
Near the beginning of the budget preparation cycle, departments are provided with
statements of their current positions on unrestricted expense accounts. During the update
phase, after a budget entity submits updates, it receives back a full report of their proposed
budgets, including totals at the college, function, fund, and budget entity or fund source level
to confirm their figures. At the end of budget preparation, each budget entity receives a full
report, and copies are prepared for the Board of Trustees. The THEC and other state reports
are prepared later.
Q:
8) Describe the reporting requirements for budget execution (examples).
A: As listed in Question 2, above:

o Departmental Budget and Expense Report (Ledger)
o Grants/Contracts Budget and Expense Report (Ledger)
o General and Subsidiary and Income Report (Ledger)
o General Funds Budget Analysis
o Restricted Budget Analysis
o Office of the Treasurer Monthly Report
Account managers are provided with account information at the end of every month to
evaluate each account. There are on-demand reports and online inquiries where they can
view most current data in detail or summary.
Q: 9) Are there other reporting requirements within your organization that have not been
described yet? Is there one basis of information, or are there other approaches (US GAAP,
etc.)?
A: Ad-hoc.
Q: 10) Provide more details for the above stated reports: Reporting period (daily, monthly,
yearly, on request), detail of report (totals records, line item), etc.
A: Depends on the type of request per ad-hoc report.
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Q: 11) Do you use simulations or special comparison calculations in reporting? Describe

these special reports and the calculations they are based on.
A: Schedule C of the Monthly Treasurer's Reports shows Realized to Date compared to
Realized One Year Ago.
Q: 12) What special requirements exist for the preparation of report data (Views (alternative
hierarchies), special sorting, aggregation level, etc.)?
A: The standard reports produced centrally and distributed are typically sequenced by:
EXPENSE: Fund Group, Budget Entity, Function, College, Department, and Account [and
object].
INCOME: Fund Group, Budget Entity, Major Source of Funds, Minor Source of Funds,
and Account.
ALB:
Fund Group, Budget Entity, Function, College, Department, and Account
(ALB = Asset, Liability, Balance)
For budget preparation, the accounts in Memphis' eight budget entities are shown
alternatively aggregated by Fund Group, Funding Source, Function, College, Department,
and Account [and object].
Alternative special sorting and aggregation can be done by any of dozens of account
attributes through ad hoc reporting.
Q: 13) Provide information on classification and summarization in reporting which is needed

for funds, funds centers, and accounts/account groups.
A: Reporting must follow UT's budget organizational structure of budget entity<vice
chancellor<college<department<account<object code.
Q:
14) Describe additional reporting requirements for the yearend processing.
A: The annual (or year-end) report is similar to the Office of Treasurer Monthly Report
except that the annual report focuses on actuals and does not report budget figures.
Q: 15) Do you reconcile individual documents with totals records (for example,
reconciliation between Financial Accounting and FM)?
A: Yes
Q:
16) USA only: Do you have to report in accordance with GASB pronouncements?
A: Yes
4.7.5.
Fiscal Year Change Operations [Funds Management]
Questions:
Q:
1) Do you carry out year-end processing in Accounting (funds management)?
A: Yes
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Q: 2) Provide an overview of the relationship between financial accounting, logistics, and

funds management regarding year-end closing operations.
A: Conceptually, purchase orders do not survive a fiscal year close. They all are closed out,
and some/most of them are re-instated in the new fiscal year. All encumbrances, including
salaries, are deleted to close the fiscal year. This rule applies to accounts of all fund groups.
For unrestricted expense and revenue accounts, no budgets or actuals are continued into the
new fiscal year. Available balances in "sub accounts" (9-character "E" accounts) are closed
out to the related 7-character "E" account. Remaining balances of "E" accounts are closed to
the fund balance accounts.
Restricted accounts continue budgets and accumulated expense or income across fiscal year
boundaries.
No expense account may end the fiscal year with a negative balance.
The University does accruals at the end of a fiscal year, in particular for salaries earned in the
past academic term and for large unpaid invoices received in the old fiscal year.
Q: 3) Please provide an overall description of the yearend closing of the budgetary area
(dates, timing, sequence).
A: Last posting of regular business and closing of encumbrances occur approximately on
July 15. Adjustments to budgets and actuals are made in the adjusting period from July 16August 15.
Q: 4) Describe the year-end procedure in the budgetary area: calculation of the remaining
budget, rules for carry-over, impact of changes of nomenclature, etc.
A: Individual accounts in the unrestricted funds do not carry over remaining budget.
However, the remaining budget is calculated and shown on final reports. Although balances
are not carried over, an account's contribution to the year-end fund balance can be budgeted
in the new fiscal year, for example, to cover a carried over purchase order. There are no
changes to nomenclature.
Each individual restricted fund carries forward its budget and actuals without regard to the
University's fiscal year.
Plant funds carry forward their remaining balances as new-year budgets.
Q: 5) Describe the year-end procedure: open documents (encumbrances, calculation, carryforward, handling of changes of nomenclature, etc.).
A: As one of the last postings of the regular fiscal year, (about July 15), we close all
remaining encumbrances on all accounts. Then all regular purchase orders with a remaining
balance of $100 or more are retained and these balances posted as encumbrances in period
1 of the new fiscal year. This affects unrestricted and restricted accounts alike. The cutoff
amount is loosely tied to the amount specified in state regulations that can be paid out
without benefit of purchase order, although it often lags behind changes in that limit.
From the purchase orders re-encumbered/carried over in the new fiscal year, we print a list of
those that are on unrestricted accounts and have a total remaining balance >$1000.
Someone in the Treasurer's Office distributes the list to see if the "owner" still wants the
purchase order. Often they say "no", but if they keep the PO, then the Treasurer's Office
enters a transfer from the fund balance to the Allocated Balance for Encumbrance liability
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accounts, a total amount for each budget entity. The University total reserve is documented
in the annual financial statements. As a second response, the "owner" of the PO may contact
the campus business office to arrange a transfer of budget to the expense account in the new
FY if the account ended the year with a balance large enough to cover the PO. This budget
change is always shown as a revision to the original budget, never "buried" in the Original
Budget figures.
Invoices dated before July 1 of $1000 or more paid during July and August are accrued using
Reserve for Encumbrance liability accounts.
July salary paid to faculty with nine-month appointments is accrued.
Q: 6) Please describe the specialties / special treatments currently existing within the
budgetary area to be applied for carry-over budget.
A: Within each of the two main groups of accounts, restricted and unrestricted, all accounts
are handled the same.
Q: 7) Describe additional specialties existing for the yearend handling of specific funds
(accruals of open items, remaining budgets, etc.); requirements and procedures for carrying
balances over the next year, etc.
A: Within each of the two main groups of accounts, restricted and unrestricted, all accounts
are handled the same.
Q: 8) Please describe the general ledger postings that need to be done within the yearend
closing / change of year and the link to budget carried over and open items carried forward to
the next year.
A: Unrestricted expense sub account balances are closed to an unrestricted expense
account.
Unrestricted account balances are closed to fund balance.
Open items carried forward to the new fiscal year do not have budget attached to them, but
fund balance can be requested to cover them.
Since restricted accounts continue their budgets across UT fiscal year boundaries, budgets,
expenditures, and open items are carried forward.
Q: 9) How are purchases/charges pertaining to previous year budget processed in the new
fiscal year?
A: Large purchases (invoice >$1000) paid during July and August on an invoice dated
before July 1 are accrued into the old fiscal year.
Goods and services ordered in the old fiscal year but not received or invoiced until the new
year are usually paid for out of the new budget, but if the amount exceeds $1000 and is on an
unrestricted account, the responsible person may ask for a budget transfer to supplement
their funding to cover it.
4.7.5.1.
Preparing Fiscal Year Change Operations
Questions:
Q: 1) Do different rules exist for processing the commitment and payment budget at the
year end? Do you carry forward only commitment or payment budget?
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A: No. Will only be using payment budget.
Q: 2) Provide an overview of the existing rules to be heeded when processing different

documents in year-end processing.
A: Different deadline for type of document. Refer to Treasurer's Office Schedule of YearEnd Activities.
4.7.5.2.
Open Commitment Document Selection
Questions:
Q: 1) Describe the budget area processes that exist in connection with the transfer of open
commitment items: Calculation of open items, rules for commitment transfer, order of
individual steps, approval procedures, etc.
A: Encumbrances that represent commitments of prior-year funds for goods that have been
ordered but not delivered or services that have not been rendered are recorded as an
allocation of the current funds balances. As one of the last postings of the regular fiscal year,
we close all remaining encumbrances on all accounts. Then all purchase orders with a
remaining balance of $100 or more are retained and these balances posted as
encumbrances in period 1 of the new fiscal year. This affects unrestricted and restricted
accounts alike. According to the Controller, the reasoning behind why only a PO with a
specific amount can be carried forward to the new year is because due to the current
financial system limitations and also the tedious task of carrying forward all POs with
minuscule amounts.
Invoices dated before July 1 of $1000 or more paid during July and August are accrued using
Reserve for Encumbrance liability accounts.
Q: 2) What happens to open commitment items that are not transferred to the new year? Do
these documents need to be blocked against changes/reduction? Are there special rules that
need to be taken into account?
A: A purchase order that is not carried over will be paid as an invoice in the new year. The
agreement with the vendor is not cancelled. The vendor presents the invoice in the new year
and payment is made directly from the invoice out of the new year funds.
Some of the non-carried forward purchase orders were in fact "abandoned" (discontinued
merchandise, order cancelled with the vendor, etc), but accounting records were not updated.
In any case, old purchase orders should not be updated after they are archived.
Q: 3) Are there special rules/restrictions that have to be considered for the

change/reduction of commitment transfer documents in the new year? Is it necessary to
reduce these open items automatically?
A: A purchase order is carried-over as-is, but can be modified subsequently like any other
PO in the new fiscal year.
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Q: 4) A commitment item was transferred to the following year. Amount changes (increase,
reduction) are to be carried out in the new year. Describe the influence on the available
budget.
A: Carried-over purchase orders post into the new year with encumbrance equal to the
remaining balance. These encumbrances reduce available budget the same as any other
encumbrance.
Q: 5) You work with different funds. Are there special rules that must be followed for special
funds or funds groups (procedures, constraints, processes in the new year)?
A: Restricted Funds carry forward entirely across UT fiscal year boundaries. Each fund
defines its own fiscal project life, and at the end date of the grant or contract, it has sixty days
as a grace period to complete outstanding activities. Ending deficits are covered by another
account.
CI Template:
UT closes all remaining encumbrances on all accounts. Then all regular purchase orders
with a remaining balance of $100 or more are retained and these balances posted as
encumbrances in the same accounts for period 1 of the new fiscal year. This affects
unrestricted and restricted accounts alike. The reasoning for the cutoff amount for POs is
due to the current financial system limitations and also the tedious task of carrying
forward all POs with minuscule amounts. The cutoff amount is loosely tied to the amount
specified in state regulations that can be paid out without benefit of purchase order,
although it often lags behind changes in that limit. Therefore, the current process to
close encumbrances should be re-visited to see if R/3 can better provide a solution to
carry forward encumbrances.
Invoices dated before July 1 of $1000 or more paid during July and August are accrued
using Reserve for Encumbrance liability accounts.
In R/3 Funds Management, one can carry forward commitments posted in the current
fiscal year (e.g. purchase requisitions, purchase orders, Earmarked Funds) into the
following fiscal year and these are not reduced until the following fiscal year. The
commitments carry forward debits the budget in the new year. One has the ability to
choose the kind of commitments that should be carried forward to the new year. In that
sense, each commitment in FM is identified as a value type. By selecting the value types
to be carried forward, the FM closing process of commitments will flag and list all
documents to be carried forward to the new fiscal year.

The carry forward of open commitment documents takes place in several steps.
First, one must maintain the carry forward rules. Using the definition of carry forward
rules, one can control and strongly differentiate as to how the commitments carry forward
and budget carry forward are done in a new fiscal year for individual FM Account
Assignments. Carry forward rules apply respectively for a fund and fiscal year. One
describes the relationship between a sending element from the old fiscal year and a new
receiving element of the new fiscal year.
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Second, a program (RFFMC001) is used to select the documents to be carried forward

according to particular selection criteria. After the program run, the selected documents
in the line item table are marked as "earmarked for carry forward". Subsequently one
can only carry forward these documents in the new year.
One can use program RFFMC002 to "unflag" open commitment documents marked for
carry forward.
Third, a program (RFFMC010) should be excited to actually carry forward only
commitments documents previously selected for carry forward using the program
RFFMC001.
Finally, reconstruct assigned values for the old and the new fiscal year. See "Budget
Structure Processing" CIT.
Note: The closing operations in the Funds Management feeder components should be
closed because changes to original documents made by the system are not automatically
supported in Funds Management.
Carry Fwd Open Commit Docs to the Following Year
Prerequisites
The carry forward covers only commitment documents previously selected for carry
forward using program RFFMC001. If an open commitment was reduced or deleted after
selecting the documents (e.g., by reversing a purchase order), these documents are not
carried forward into the new year.
Procedure
You must enter the following data to carry forward the open commitment documents:
FM area
Fiscal year
Payment Budget and or Commitment Budget
You can limit the selection of open commitment documents for particular FM Account
Assignments and for individual documents or Value Types.
You must deselect Test Run to carry forward the documents to the new fiscal year.
Start the program in the background.
Result
For a precise overview of what documents have been carried forward to the new fiscal
year, see the Year-End Closing Report. The information system now shows the
documents carried forward in period 000 of the following year, not in the period they have
been in up to now.
After carrying forward open commitment documents to the new year, you must
reconstruct the assigned values for the old year and the new year. For more information
on this, refer to Reconstructing Assigned Values.
If the open commitments were reduced or deleted in the feeder systems after being
carried forward to the new year (for example, because a purchase order has been
canceled), the documents affected are not automatically carried forward to the new year.
You must then repeat the commitment carry forward.
See also:
Documentation on the program RFFMCF10.
4. Business Model
None
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The closing of Funds Management will require cooperation between the Office of the Vice
President of Business and Finance and the Controller's Office. This process will be part
of the fiscal year closing schedule (W:\Personal Folders\Personal Folders\Laurie\Annual
Close Schedule) where communications between modules is of the utmost importance.
The procedures to close open commitments in FM will be examined by the UT FI team to
see if the current process of closing encumbrances can be redesigned to meet the best
business practice.

The carry forward of open commitments in FM is a simple process that does not require a
technical necessity for closing operations for the fiscal year change. A functional
knowledge of FM is required to understand programs executed in FM fiscal year closing
operations.

Under UT's current process, only encumbrances over $100 will be carried forward to the
new year. In FM closing of open commitments, the program to select documents will flag
all commitments based on value type selected regardless of the amounts. Another
program will need to be written and executed to "unflag" all encumbrances that are less
than $100. The drawback to this process is the tedious task of "unflagging" all purchase
orders under $100.
This may not be an issue under MM proposal for R/3. It is proposed that all items less
than $2,000 should be made through procurement cards and purchase orders will only be
for items over $2,000. Therefore, all purchase orders will be carried forward without a
condition based on the amount of the purchase order.
UT would like to reevaluate the current requirement to carry forward only encumbrances
over $100. If R/3 FM closing of open commitments functionality meets UT approval, UT
may change their policy to carry forward selected documents regardless of the amounts
(all encumbrances). If it does not meet UT's expectations, we may need additional
technical help in developing a program to automatically select purchase orders over
$100.

None
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Controller's Office) are allowed to close year-end processing. Using authorization objects
will help define the roles for each user.
N/A
4.7.5.3.
Define Transfer Rules
Questions:
Q: 1) Carry forward rules exist. Sender and receiver addresses are defined here. You are
changing an existing rule: Which changes are allowed, and how is the change history
currently stored in the system?
A: Purchase Orders >$100 are transferred to the new fiscal year with the accounts
remaining the same. Purchase orders < $100 are recorded in archives with a June 30
deletion date.
Invoices <$1000 are accrued using journal vouchers with Reserve for Encumbrance accounts
to "transfer" across the fiscal year boundary.
Q: 2) Describe the relationship between the sender (old year) and the receiver address
(new year) required by the transfer rules. What information do the transfer rules portray?
A: Account/Object/Amount remain the same.
Q: 3) Is it possible, as part of the budget carry forward, to split the remaining budget of
different sender addresses or to combine them? Describe the existing rules.
A: No.
Q: 4) Is it possible, as part of the carry forward of open commitment items, to split
documents of different sender addresses or to combine them? Describe the existing rules.
A: No.
A: No.
Q: 6) Are the sender/receiver rules for year-end processing subject to changes each year,
or are the same rules used each year?
A: Same rules used each year-end.
4.7.5.4.
Commitments Documents Carry forward
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Questions:
Q: 1) Do you produce your own transfer documents as part of the yearend processing for
the budget carry forward or the carry forward of open commitment items?
A: Yes
Q:
2) Describe in detail the information that is stored in the carry forward documents.
A: Account
Object
Amount
Description
4.7.5.5.
Reset Commitments Carried Forward
Project documentation:
[\\Kw_cont\asap\Shared\UT_FN_HR\QAdb\Documentation\FMci123r.*\FMci123r.*]
Questions:
Q: 1) Do you ever partially or completely reverse the carry forward of open commitment
items (from a document point of view)? What is the procedure and how does it affect the
(available) budget in the old and the new year.
A: No.
4.7.5.6.
Fund Balance Carry forward
Questions:
Q: 1) Balance is carried forward per fund/for certain funds. Describe in detail which
documents (value types) are taken into account when the balance is carried forward (open
items, actual, CO postings, etc.).
A: For unrestricted expense and revenue accounts, no budgets or actuals are continued into
the new fiscal year. Restricted accounts continue budgets and accumulated expense or
income across fiscal year boundaries.
Purchase orders all are closed out at the end of one fiscal year, and some/most of them are
re-instated in the new fiscal year.
No expense account may end the fiscal year with a negative balance.
Available balances in "sub accounts" (9-character "E" accounts) are closed out to the related
7-character "E" account.
Q: 2) Please describe the specialties / special treatments currently existing within the
budgetary area to be applied for carry-over budget.
A: None
4.7.5.7.
Determining Budget Carry forward
Questions:
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Q: 1) What are the requirements of the budget carry forward with regard to: Calculation of
remaining budget, rules for the budget carry forward, cross-year changes of budget
addresses, etc.
A: Remaining budgets are not carried over in the unrestricted funds.
In restricted funds, there is no calculation--the figures just continue forward across the fiscal
year boundary.
In the plant funds, a fiscal year beginning budget is calculated as:
previous fiscal year beginning fund balance + additions-fytd - deductions-fytd
Q: 2) What happens to remaining budget that was not carried forward to the following year?
Should the remaining budget be blocked or are there special rules/constraints that affect the
availability of the remaining budget in the previous year?
A: In the unrestricted funds, remaining balances are closed to the fund balance accounts;
they are not automatically carried over to the original expense account in the new fiscal year.
Q: 3) The remaining budget was carried forward to the new year. Now there are budget
changes or transfers. Are there special rules/constraints that should be considered in
connection with the budget carry forward?
A: N/A
A: N/A
Q: 5) What happens when FM expense addresses are in debit at the year-end? Is negative
budget carried forward? Under what conditions?
A: An unrestricted expense account that shows a deficit balance at the end of the fiscal year
is covered by a funds transfer from another unrestricted account.
Only the plant funds have a calculated carry forward budget, so it theoretically could be
negative.
CI Template:
For unrestricted expense and revenue accounts, no budgets or actuals are continued into
the new fiscal year. No expense account may end the fiscal year with a negative
balance. Individual accounts in the unrestricted funds do not carry over remaining
budget. However, the remaining budget is calculated and shown on final reports.
Although balances are not carried over, an account's contribution to the year-end fund
balance can be budgeted in the new fiscal year, for example, to cover a carried over
purchase order. From the purchase orders re-encumbered/carried over in the new fiscal
year, UT prints a list of those that are on unrestricted accounts and have a total
remaining balance >$1000. Someone in the Treasurer's Office distributes the list to see
if the "owner" still wants the purchase order. Often the "owner" would say "no", but if they
keep the PO, then the Treasurer's Office enters a transfer from the fund balance to the
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Allocated Balance for Encumbrance liability accounts, a total amount for each budget
entity. The University total reserve is documented in the annual financial statements. As
a second response, the "owner" of the PO may contact the campus business office to
arrange a transfer of budget to the expense account in the new FY if the account ended
the year with a balance large enough to cover the PO. This budget change is always
shown as a revision to the original budget, never "buried" in the Original Budget figures.
Restricted accounts continue budgets and accumulated expense or income across fiscal
year boundaries. Each individual restricted fund carries forward its budget and actuals
without regard to the University's fiscal year. Therefore, restricted accounts continue
their budgets across UT fiscal year boundaries, budgets, expenditures, and open items
are carried forward.
Plant funds carry forward their remaining balances as new-year budgets.
There are no changes to nomenclature.
In Funds Management budget closing operations, the budget for commitments and
residual budget can be carried forward from the old year to the new fiscal year. If one
has carried forward open commitments into the new year, the budget assigned in the old
new year becomes free again. If the commitment carried forward does not debit the
budget of the new fiscal year one can carry forward the budget for the commitments into
the new fiscal year.

One can carry forward budget for commitments and residual budget from the old into the
new fiscal year through a series of steps.
First, maintain carry forward parameters and assign these to the desired value types.
Carry forward parameters allows one to target the commitments carry forward and the
budget carry forward to the new fiscal year. So on the one hand, one can take account of
the changes to your organizational structure and functional rededications for the fiscal
year change operations. On the other hand, one can completely exclude certain value
types or FM account assignments from the carry forward.
Second, maintain carry forward rule. Using the definition of carry forward rules, one can
control and strongly differentiate as to how the commitments carry forward and budget
carry forward are done in a new fiscal year for individual FM Account Assignments.
Carry forward rules apply respectively for a fund and fiscal year. One describes the
relationship between a sending element from the old fiscal year and a new receiving
element of the new fiscal year. Note that a definition of carry forward rules can only be
done based on carry forward parameters.
Third, prepare budget carry forward (BPINDX05). The system compiles all the
commitment/actual data for the past fiscal year and sets it against the budget.
Fourth, determine budget carry forward (RFFMCF25). Use this program to determine
the budget for the commitments - that is, the budget freed when the open commitments
were carried forward to the new year and/or previous year residual budget.
After the program (RFFMCF25) was completed in the update run, one can use this
program (RFFMCF26) to selectively delete the determined amounts from the budget
carry forward.
Finally, carry forward budget to the following year (RFFMCF30). This program is used to
actually carry forward the budget for the commitments - that is, the budget freed when the
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commitments themselves were carried forward to the new year and/or the residual
budget for the past year.
=================================
Carrying Forward Budget to Following Year
Prerequisites
The budget carry forward is prepared by the program BPINDX05
Determine the budget to be carried forward by running program RFFMCF25
Procedure
Choose
Enter the required data.
Start the program in the background.
Result
You can get an exact overview of the budget that has been carried forward by running
the Year-End Report
4. Business Model
None

The closing of Funds Management will require cooperation between the Office of the Vice
President of Business and Finance and the Controller's Office. This process will be part
of the fiscal year closing schedule (W:\Personal Folders\Personal Folders\Laurie\Annual
Close Schedule) where communication between modules is of the utmost importance.
The procedures to carry forward budget for commitments and residual budget from the
old into the new fiscal year will be examined by the UT FI team to see if the current
process of closing encumbrances can be redesigned to meet the best business practice.
The procedures to carry forward budget for commitments and residual budget in FM are
a simple process that does not require technical knowledge for closing operations for the
fiscal year change. A functional knowledge of FM is required to understand programs
executed in FM fiscal year closing operations.

Under UT's current process, once the encumbrances over $100 are determined, a
budget transfer is created in the new year for purchase orders over $1,000 that were
agreed upon by the "owner". In FM budget closing operations, a program is used to
determine the budget for the commitments - that is, the budget freed when the open
commitments were carried forward to the new year and/or previous year residual budget.
With this process, all purchase orders are flagged regardless of the amount. Therefore,
one will execute program (RFFMCF26) to selectively delete the determined amounts
from the budget carry forward. Again, the drawback to this process is the tedious task of
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"unflagging" all purchase orders under $1,000.

This may not be an issue under MM proposal for R/3. It is proposed that all items less
than $2,000 should be made through procurement cards and purchase orders will only be
for items over $2,000. Therefore, the budget for commitments will be carried forward for
all purchase orders.

We may need additional technical help in developing a program to automatically select
purchase orders over $1,000 to carry forward the budget to the new fiscal year.

None

Update profile and the default settings for the year-end operations must be defined and
configured in the FM IMG.

Controller's Office) are allowed to close year-end processing. Using authorization objects
will help define the roles for each user.

None
5. Revenue and cost controlling

5.1.
Profit and Cost Planning
5.1.1.
Cost and Activity Planning
CI Template:
The anticipated main use of the planning module in R/3 will be to track the budget base
(beginning budget with any recurring changes that have occurred since the start of the
fiscal year, or any planned changes for the coming year). It will be copied to FM to be the
initial budget of a fiscal year. The plan maintained in CO during a fiscal year will the
budget base of the next year.
The use of it is to model the budget of the coming fiscal year. It is stored at the Cost
Center/Cost Element (Account/Object) level.
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Attachments:
[]
The CO planning model will replace the various shadow systems used by the UT entities.
It is anticipated that plan version zero will be the official UT budget base. After being
copied to FM to be version zero budget, the plan in CO will be copied to the next fiscal
year as version zero and have any one time funds for the current year removed, and any
known one time funding for the next year will be added. It will be updated with base
changes through out the year. Since there are no document numbers in CO planning,
plan versions can be saved at each month end so that changes can be more readily
documented and traced.
Plan version zero will be updated with values from HR, in April at the latest, for inclusion
of the most current position data and funding needs when the next year budget
preparation is occurring. Once the budget process is finished, CO plan version zero will
be submitted to the Trustees for approval and the approved version will be copied to FM
budget version zero in July of the new fiscal year.
See the attached flow chart of the process.
Attachments: [\\UTK_AHT2\DEPTS\UTSAP\SAPADMIN\Personal Folders\Personal
Folders\Laurie\Planning-Budgeting.doc]

See the attached flow chart in CI #2 above for the steps in the anticipated process. R/3
transactions are many and unknown to the writer at this point.
4. Business Model
N/A

The process as anticipated at this point will remain basically the same. The tools used to
accomplish it will change dramatically. The same levels of centralization and
decentralization are expected: each entity will be responsible for maintaining its own
base.

None are anticipated
The replacement of shadow systems with one main system most likely will be an
improvement. Communication of data will be more timely, and input of salary data will be
improved.
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N/A

N/A

Unknown to the writer at this time

Roles will need to be established that allow update at the current decentralized level, and
security and viewing restrictions. Roles for central maintenance functions (copying of
versions, etc.) will need to be established also.

N/A
5.1.1.1.
Copy Plan from Previous Year to Cost Center Planning
Questions:
Q:
1) Describe your planning process. How do you plan cost centers?
A: The planning equivalents at UT are the budget bases carried on shadow systems. The
amounts carried in them are the beginning budget with any recurring changes that have
occurred since the start of the fiscal year, or any planned changes for the coming year.
Q: 2) Do you want to create your cost center/activity plan based on the planned values of
the previous year? (If so, what is the source of this data and in what form is it stored?
A: The anticipated main use of the planning module in R/3 will be to track the budget base
described above (beginning budget with any recurring changes that have occurred since the
start of the fiscal year, or any planned changes for the coming year). It will be copied to FM
to be the initial budget of a fiscal year. The plan maintained in CO during a fiscal year will the
budget base of the next year.
The use of it is to model the budget of the coming fiscal year. It is stored at the Cost
Center/Cost Element (Account/Object) level.
CI Template:
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It is anticipated that the CO plan version zero of one year will be copied into the next year
to be used as the initial budget base.
Attachments:
[]
Once the proposed CO plan is approved by the Board of Trustees, it will be copied into
FM budget and then copied in the CO plan for the next year to be used as the initial base
in the new fiscal year.
See the attached flow chart.
Attachments: [\\UTK_AHT2\DEPTS\UTSAP\SAPADMIN\Personal Folders\Personal

Folders\Laurie\Planning-Budgeting.doc]

Copying Planning
Procedure
To copy planning, proceed as follows:
In the planning menu of your application, choose
Enter the leading currency.
Before executing the copying transaction, you can specify the currency in which the costs
and prices are to be recorded. Choose Plan currencies and select a currency for costs,
and for prices.
transaction currencies, do not select the object currency and the controlling area
currency. Instead, select the transaction currency as the leading currency.
selected All currencies in the source and target fiscal year of your controlling area.
urrency if the transaction currency is the
leading currency.
Select the target to be copied to. To do so, choose one of the following options:
A single cost center or business process
A cost center interval or business process interval
A cost center group or business process group
All cost centers or business processes
You can also define a selection variant in which you specify selection criteria that meet
your particular requirements.
To do so, choose Selection variant and the Create icon.
Choose a reference.
Enter a Version, From period, To period, and a Fiscal year.
Choose a target.
You can copy:
Within fiscal years, periods, and versions
At least one of the above selection criteria must be different in the target version.
Planning values cannot be copied to themselves.
Between different fiscal years, periods, and versions
When copying, either all of the reference selection criteria can differ from the
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target selection criteria or at least one of the selection criterion.

You can copy the following data:
Template
Targets
Version
From period To period
Year Version
From period
To period
Year
0
1
12
1997 1
1
12
1997
0
1
12
1997 0
1
12
1998
0
1
6
1997 0
7
12
1997
Specify whether you want to make a 1:1 copy or a 1:n copy.
To make a 1:1 copy, activate Reference = target.
The system copies planning data belonging to one ore more reference cost center(s) to
the same cost center(s) in the target version.
To create a 1:n copy:
Activate Choose reference
Choose Select
Enter the reference cost center you require.
You can only copy 1:n (multiple copies) if you are not using detailed planning.
Select the plan data to be copied.
This data may be data belonging to:
All planning transactions
Individual planning transactions
You can either copy planning values for all planning transactions or just for individual
business transactions, such as activity-independent primary costs or activity-independent
activity inputs.
Planning structures with or without data
You can copy only the planning structures, that is planning records without planning
values, or you can copy the structures and the corresponding planning values.
Choose the following settings:
Long texts
These are texts that you entered during the planning process
Detailed planning
You can copy detailed planning, provided:
The reference and target fiscal year are identical
You copy the data for all periods, not for individual periods
The exchange rate type and the value date in the reference and target versions
are identical
You create a 1:1 copy (in other words, you must copy from the reference).
You can only copy detailed planning within a cost center, but you can copy
between different versions.
Maintain the following processing options:
Do not change
If you do not want the system to change the data in the target, activate the Do not change
indicator.
If you want to copy data for a certain object that already has data in the target version,
the system does not copy the actual data if the indicator Do not change is active.
Reset and overwrite
When you set this indicator, the SAP system deletes any existing data in the target
version. You therefore should check to make sure that you want to overwrite the existing
data.
Background
If you want to copy large volumes of planning data, you should schedule a background
job for a time when system workload is low and activate the Background processing
indicator.
Test run
If you do not want the system to update the results, select Test run. The system then
generates a log, but does not change any data.
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Detailed lists
The SAP system creates a list with all copied data records and the planning processes
selected for copying.
To speed up copying and avoid unnecessary system use please observe the following
guidelines.
Select only the business transactions you have actually planned. If, for example,
you have not planned any secondary order costs, you should deactivate the
corresponding planning transaction.
If copying large quantities of data, ensure that you select background processing.
This means you can process data at times of minimal system usage.
If copying large quantities of data online, ensure that you start the copying
program per business transaction. Ensure that you copy the activity types before
you copy the other planning areas, since the system requires the activity types to
update activity-dependent records.
Avoid copying existing data with the indicator Reset and overwrite. This
minimizes the amount of data that has to be read during reset.
Do not use the detailed list if the list of copied records is not absolutely
necessary. The basic list (without copied records) is always displayed.
If possible, do not copy long texts, as this considerably increases program
runtime.
Copy only parts of the cost center hierarchy.
Copying multiple periods or an entire fiscal year has only a minimal effect on runtime
when compared with copying a single period.
4. Business Model
N/A

N/A

N/A
N/A


N/A
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None


User roles will have to be established to allow central control of copying CO plan
versions.

N/A
5.1.1.2.
Copy Actual Data to Cost Center Plan
Questions:
Q:
A: The planning equivalent at UT is the budget bases carried on shadow systems. The
Q: 2) Do you want to create your cost center/activity plan based on the actual values of the
previous year? (If so, what is the source of this data and in what form is it stored?
A: No, actual expenditures and revenue will not be used to form the central plan of the
coming fiscal year. However individual departments may wish to copy actuals to create plans.
CI Template:
Actual expenditures and revenue will not be used to form the central plan of the coming
fiscal year. However individual departments may wish to copy actuals to create plans.
Users may have a need to use CO planning to work with actuals from various fiscal
periods.

Copying Actual Data Into Planning
Use
The function Copy actual to plan is a planning aid that lets you copy actual values
automatically from business transactions that can also be planned manually. You cannot
copy any periodic allocations in the actual like periodic reposting, distribution, or accrual
calculation. You must also execute them in the plan. You can:
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Reuse large parts of your actual data from the previous year for your current
fiscal year
Transfer actual values to planning within a fiscal year, independently of period
Use R/3 enhancements to extend the standard functionality for copying actual
data
================================
Copying Actual Values to Planning
Procedure
To copy actual values to a new plan, proceed as follows:
Choose Accounting Controlling Cost Center Accounting Planning Planning aids
Copy Copy actual to plan.
Select the target to be copied to. To do so, choose one of the following options:
A single cost center
A range of cost centers
A cost center group
All cost centers
You can also define a selection variant in which you specify selection criteria that meet
your particular requirements.
To do so, choose Selection variant and the Create icon.
Choose a reference.
Enter a From period, To period, and a Fiscal year.
Choose a target.
You can copy:
Copying data within fiscal years and periods
Copying data between different fiscal years and periods
When copying, either all of the reference selection criteria can differ from the target
selection criteria or at least one of the selection criterion.
You can copy the following data:
Actual reference From period To period Year Target plan Version from period To
period Year
1 6 1997
1 1 6 1997
1 6 1996
1 7 12 1997
1 12 1996
1 1 12 1997
Select the actual data to be copied.
You have the following options:
All actual data
Data belonging to particular business transactions
You can either copy plan values for all planning transactions or just for individual
business transactions, such as primary costs, revenues, and activity quantities.
Structures with or without data
You can either copy the structures only (planning records without planning values) or you
can copy both the structures and the corresponding planning values.
Maintain the following processing options:
Do not change
If you do not want the system to change the data in the target, activate the Do not change
indicator.
If you want to copy data for a certain object that already has data in the target version,
the system does not copy the actual data if the indicator Do not change is active.
Reset and overwrite
When you set this indicator, the R/3 System deletes any existing data in the target
version. You therefore should check to make sure that you want to overwrite the existing
data.
Background
If you want to copy large volumes of data, you should schedule a background job for a
time when system workload is low and activate the Background processing indicator.
Test run
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If you do not want the system to update the results, select Test run. The system then
generates a log, but does not change any data.
Detailed lists
The system creates a list containing all the data records copied and the actual business
transactions that you selected for copying.
If you activated the Reset and overwrite indicator, and have already carried out a plan
cost split in the target version, the system does not overwrite the data that was split. You
need to carry out the split again after copying the data.
To speed up copying and avoid unnecessary system use please observe the following
guidelines.
Select only the business transactions you have actually planned.
If copying large quantities of data, ensure that you select background processing.
This means you can process data at times of minimal system usage.
If copying large quantities of data online, ensure that you start the copying
program per business transaction. Ensure that you copy the activity types before
you copy the other planning areas, since the system requires the activity types to
update activity-dependent records.
Avoid copying existing data with the indicator Reset and overwrite. This
minimizes the amount of data that has to be read during reset.
Do not use the detailed list if the list of copied records is not absolutely
necessary. The basic list (without copied records) is always displayed.
Copy only parts of the cost center hierarchy.
4. Business Model
N/A

It is anticipated the process will be decentralized: any user that desires to work with
actual data in CO plan should be able to access it.

N/A

N/A

N/A
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N/A

Unknown to writer at this time

Decentralized access for users will be needed.

N/A
5.1.1.3.
Redefinition of Plan Version
Questions:
Q:
A: The planning equivalents at UT are the budget bases carried on shadow systems. The
Q:
2) Do you want to represent different planning scenarios in parallel?
A: Yes, it might be useful to have different planning scenarios in R/3 at the same time. The
officially maintained budget base would be one plan, and it could be desirable to carry other
plans at the same time.
CI Template:
Different planning scenarios at the same time might be useful in R/3. The officially
maintained budget base would be one plan, and it could be desirable to carry other plans
at the same time.
Plans other than version zero of the next fiscal year that could be carried are:
Archived monthly versions of plan zero could be used to track changes since CO
planning does not carry document numbers.
Individual users may want to make copies of the official plan to modify for their own uses.

Planning and Parallel Valuations in Multiple Versions
Use
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Planning in multiple versions

You can plan your cost centers in multiple versions. This corresponds to general
business practice: Usually a first version is generated using existing plan and actual
values as base values (for example, from previous fiscal years or from the current fiscal
year). These are mainly percentage-based revaluations (see also: Revaluating Cost
Center Planning) and the plan values are adjusted to the new targets. These plan values
are then revised and reworked in a second version, following discussions with the cost
center managers. You can use these versions as the basis for new revaluations to
generate any number of new versions, for example, to calculate best-case and worstcase scenarios.
These versions are stored separately in the system and can be compared with each
other in the information system (plan/plan comparisons, or comparisons of the actual
costs with different versions).
When you create a controlling area, the system automatically creates version 000
(plan/actual). The actual values created when entering primary costs and allocating costs
internally are posted in this version. You also use this version to store the prices required
for internal activity allocation in the actual. You must use version 000 for plan/actual
comparisons. You can also edit version 000 during cost center planning, without having
to create it previously. Version 000 therefore contains plan and actual data for analysis
purposes. You can also use any number of additional plan versions. However, no actual
data is saved in these alternative versions. For more information on versions, see the
Implementation Guide (IMG) for Controlling, under Overhead Cost Controlling Cost
Planning Basic Settings Maintain Versions.
Parallel valuations in multiple versions
If you have activated parallel valuations in your controlling area, you can use multiple
actual versions. Each actual version can have the following valuations:
Legal valuation
Group valuation
Profit center valuation
One of the valuations becomes the operational valuation (in the actual version 000).
You can only plan data using the operational valuation.
For more information, see Parallel Valuations and Multiple Valuation
Approaches/Transfer Prices
4. Business Model
N/A

It is anticipated the process will be decentralized: any user that desires to work with
multiple CO plan versions should be able to access them.
Maintaining archived monthly versions will be a central function.

None anticipated
The potential for users to work with unique versions of plans.
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None apparent
N/A

N/A


Decentralized access for users will be needed.

N/A
5.1.1.4.
Transfer of Personnel Costs
Questions:
Q: 1) If you are also implementing SAP R/3 Human Resources, do you want to transfer the
results of personnel cost planning to Controlling (CO) as part of your planning for personnel
expenses?
A: Yes. Both the current year costs and annualized (base) costs of positions will be needed.
CI Template:
Since the official University budget base will be carried in CO plan version zero, it will
have to be periodically updated with position costs from HR.
Currently, a roughly equivalent process is done in April for the budget process. In R/3,
the transfer of personnel costs could be done in the same way or more often, if interest
and staffing to reconcile the position changes allow it.
Since the official University budget base will be carried in CO plan version zero, it will
have to be periodically updated with position costs from HR.
Currently, a roughly equivalent process is done in April for the budget process. In R/3,
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the transfer of personnel costs could be done in the same way or more often, if interest
and staffing to reconcile the position changes allow it.

The Cost Center Accounting/Personal Cost Planning Interface
Use
During integrated planning between Cost Center Accounting (CO-OM-CCA) and
Personnel Planning (PD), you can transfer planned personnel costs to primary cost
planning in Cost Center Accounting. The following topics cover which conditions must be
met in both application components and how the data is transferred.
Prerequisites
You created valid personnel records and plan personnel costs in PD before transferring
the data to CO-OM-CCA. For more information on maintaining HR master records, see
the SAP Library under HR Human Resour
Personnel Administration (PA - Personnel Administration) or Human Resource
(see: Personnel
Cost Planning).
You can plan personnel costs for target wages, payroll results, or basic pay, and transfer
these costs to Cost Center Accounting. Note the following:
Selection of a valid cost center as account assignment object
You must specify a cost center to which the personnel costs are posted in the
Organizational Assignment screen of the personnel master record. This cost center must
already exist in Cost Center Accounting and must meet the following requirements.
The cost center must be valid throughout the entire planning period in HR cost
planning.
You must not have entered any planning locks.
The cost center currency must be the same as the currency used in planning personnel
costs.
(See: Cost Centers)
Other fields in which you must enter data include the:
Validity period of the personnel master record
Company code
Plant
Selecting a valid cost element
In Personnel Cost Planning you define a primary cost element with which you post
personnel costs to Cost Center Accounting.
You must have already created this cost element in Cost Center Accounting (see: Cost
Elements).
Currencies
The data transferred from the Personnel Cost Planning application component is always
recorded in transaction currency.
If the All currencies indicator is active for the controlling area, the value in transaction
currency is also translated to object and controlling area currency and transferred to the
transaction currency field.
If you have not selected this indicator, the system transfers only the value in controlling
area currency into the corresponding field during primary cost planning. The other
currency fields are not filled.
If the currencies used in HR and CO-OM-CCA differ, check that the exchange rates for
the currencies are maintained.
Planning period
The planning period in the HR system must be the same as the planning period in COOM-CCA to which you are transferring the personnel costs.
Saving and Releasing Plan Data
After entering the plan data in the Personnel Cost Planning application component, you
must save and release your planning. You must specify a name for the HR plan scenario
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containing the data. The data is transferred with the plan scenario to CO-OM-CCA.
HR plan scenario/version
An HR plan scenario is assigned to one specific version. You can only transfer values
from one HR plan scenario to a version. If you want to transfer data from another HR plan
scenario, you must first reverse the data already transferred. To do this, choose Reverse
transferred data in the data transfer program.
For more information, see Transferring Personnel Costs from HR (as of Release 4.6A)
4. Business Model
N/A

Transfer of personnel costs will have to be coordinated with decentralized work in
departments being done on the budget base. If the transfer can be performed by the
departments/colleges responsible for the data, then there will have to be sufficient
training to prepare users for the task.
Vacant and lump sum positions will be able to be tracked throughout the year.
Adjustments to positions in the budget base can occur through out the year, rather than
to an update of an April payroll snapshot, as with the current process.

None are apparent

N/A

N/A

Unknown to this writer at this time

If the system functionality allows departments to transfer data from HR to CO, then user
roles will need to be defined to allow it.
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N/A
5.1.1.5.
Primary Cost Planning (Full Costs)
Questions:
Q: 1) Which procedure do you use for manual planning of primary costs, when you have
costs that are not transferred from other modules, such as HR or FI-AA?
A: When costs that are not transferred from other modules, such as HR or FI-AA, (examples
are energy costs, maintenance costs, and so on), they are modeled on subsystems or
spreadsheets and the results are entered in the plan (budget base).
CI Template:
The budget base is carried at the two-digit object code (cost element) level. CO planning
will need to support that level of detail.
Operating (non-salary) planning occurs at the two-digit cost element level (object code).
In order to stay within a control amount, operating objects often have to be adjusted when
salary amounts are updated in HR. Budgeting/planning for operating is typically on a
carry forward basis. Adjustments are made periodically and during the spring budget
cycle to reflect actual patterns.
Equivalent adjustments in the current system are done on Schedule 3 forms.

Primary Cost Planning
Use
Planning primary costs involves entering those costs that arise from the consumption of
goods and services supplied to the organization from external (as opposed to internal)
sources.
Primary costs include:
Labor costs
External services
Material costs
Operating supplies
Statistical cost elements for balance sheet accounts (see: Planning Statistical
Cost Elements for Balance Sheet Accounts)
Accrual costs
These accrual costs either have different values in CO than in FI (imputed interest or
depreciation), or are incurred at different times in CO than FI (special payments such as
vacation bonuses, or irregular costs, for example, repairs).
Features
In Cost Center Accounting, primary cost planning lets you enter costs and consumption
quantities for each cost center/activity type. This means that primary costs can be
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planned by quantity, as well as by value.

In value-based primary cost planning, the R/3 System records only the plan costs for
each cost element. To do this, use, for example, planner profile SAP101 and standard
planning layout 1 - 101.
During quantity-based primary cost planning, you plan the consumption of goods and
services that the organization procures from external sources. No valuation occurs. For
example, you can use planner profile SAP101 and standard planning layout 1 - 101,
which includes the characteristics Fixed consumption and Variable consumption for
planning.
If you only know the quantities of the resources consumed, you also use resource
planning to carry out a quantity-based primary cost planning using planner profile
SAPR&R and standard planning layout 1 - 1R1. The R/3 System executes the valuation
using the prices you have stored.
Primary costs can be planned using different methods: The following methods are
available:
Manual primary cost planning
Activity-independent primary cost planning
Activity-dependent primary cost planning
Automatic primary cost planning
Plan distribution
Plan accrual calculation
See also:
Manual Planning
Periodic Allocations
4. Business Model
N/A

Update capability and user knowledge of R/3 will be needed at the department level,
where schedule 3 forms are currently prepared.

None
N/A

None apparent

N/A
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N/A

Unknown at this time to the writer

Update of operating plans will be a decentralized function; user roles and security will
need to reflect that.

N/A
5.1.1.6.
Primary Cost Planning (Prop./Fixed)
Questions:
Q: 1) Which procedure do you use for manual planning of primary costs, when you have
costs that are not transferred from other modules, such as HR or FI-AA?
A: When costs that are not transferred from other modules, such as HR or FI-AA, (examples
are energy costs, maintenance costs, and so on), they are modeled on subsystems or
spreadsheets and the results are entered in the plan (budget base).
CI Template:
The budget base is carried at the two-digit object code (cost element) level. CO planning
will need to support that level of detail.
Operating (non-salary) planning occurs at the two-digit cost element level (object code).
In order to stay within a control amount, operating objects often have to be adjusted when
salary amounts are updated in HR. Budgeting/planning for operating is typically on a
carry forward basis. Adjustments are made periodically and during the spring budget
cycle to reflect actual patterns.
Equivalent adjustments in the current system are done on Schedule 3 forms.

Primary Cost Planning
Use
Planning primary costs involves entering those costs that arise from the consumption of
goods and services supplied to the organization from external (as opposed to internal)
sources.
Primary costs include:
Labor costs
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External services
Material costs
Operating supplies
Statistical cost elements for balance sheet accounts (see: Planning Statistical
Cost Elements for Balance Sheet Accounts)
Accrual costs
These accrual costs either have different values in CO than in FI (imputed interest or
depreciation), or are incurred at different times in CO than FI (special payments such as
vacation bonuses, or irregular costs, for example, repairs).
Features
In Cost Center Accounting, primary cost planning lets you enter costs and consumption
quantities for each cost center/activity type. This means that primary costs can be
planned by quantity, as well as by value.
In value-based primary cost planning, the R/3 System records only the plan costs for
each cost element. To do this, use, for example, planner profile SAP101 and standard
planning layout 1 - 101.
During quantity-based primary cost planning, you plan the consumption of goods and
services that the organization procures from external sources. No valuation occurs. For
example, you can use planner profile SAP101 and standard planning layout 1 - 101,
which includes the characteristics Fixed consumption and Variable consumption for
planning.
If you only know the quantities of the resources consumed, you also use resource
planning to carry out a quantity-based primary cost planning using planner profile
SAPR&R and standard planning layout 1 - 1R1. The R/3 System executes the valuation
using the prices you have stored.
Primary costs can be planned using different methods: The following methods are
available:
Manual primary cost planning
Activity-independent primary cost planning
Activity-dependent primary cost planning
Automatic primary cost planning
Plan distribution
Plan accrual calculation
See also:
Manual Planning
4. Business Model
N/A

Update capability and user knowledge of R/3 will be needed at the department level,
where schedule 3 forms are currently prepared.
None
N/A
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None apparent
N/A

N/A



N/A
5.1.1.7.
Secondary Cost Planning (Full Costs)
Questions:
Q:
1) Do you want to represent activity relationships between cost centers in your planning?
A: Recoveries (service center charges and revenue for services rendered to external
organizations) will need to be reflected in unrestricted cost center plans (budget bases).
These are reflected in the current system through negative budget entries and actuals with
the third digit of the object code having the value of "9".
CI Template:
Recoveries (service center charges and revenue for services rendered to external
These are reflected in the current system through negative budget entries and actuals
with the third digit of the object code having the value of "9"
Since R/3 does not accept negative planning and budget entries, revenue elements will
be used for recoveries.
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Secondary Cost Planning
Use
In addition to primary costs, secondary costs are often incurred during the production of
cost center activity. This is because a cost center must often take activity from other cost
centers to produce its own activity. Secondary costs on the cost center result from
internal allocations, such as activity allocations or assessments.
To get meaningful periodic comparisons of plan and actual data, you must plan
secondary costs as well as primary costs. You can plan secondary costs as value-based
(assessment or order settlement) or quantity-based (activity input).
See also:
Manual Planning
Manual Planning
Use
Manual planning covers the following planning areas:
Planning statistical key figures
Activity type planning
Primary cost planning
Secondary cost planning
Budget planning
Detailed planning
You plan activity types, statistical key figures and costs using the appropriate planning
methods (see also: Techniques for Supporting Manual Planning). In the standard system,
R/3 provides planner profiles and planning layouts for the relevant planning area (see
also: Structuring the Planning Screen). You can either use these profiles and layouts as
they stand, or adapt them to meet your own requirements.
Unlike Periodic Allocations where the system determines the plan values once at periodend with user-defined rules, in manual planning you plan each value yourself.
Integration
Manual planning is implemented in other application components belonging to the SAP
R/3 System.
{0> Application component <}0{> Application component <0} Information:
Internal orders Primary Cost and Revenue Planning
Activity-Based Costing Manual Process Planning
Real Estate Management
Cost and Revenue Planning on Real Estate Objects
Project System Manual Cost Planning in the Work Breakdown Structure
Use
In distribution and assessment, you further allocate costs (or quantities for indirect
activity allocations) collected on a cost center during the accounting period to receivers,
according to user-defined keys. These are therefore indirect allocation methods, because
the exchange of activity is not the basis for allocating costs/quantities. Instead, userdefined keys such as percentage rates, amounts, statistical key figures, or posted
amounts provide the cost/quantity assignment basis.
The advantage of these methods is that they are easy to use. You usually define the keys
and the sender/receiver relationships only once.
Distribution and assessment are used primarily for cost centers. This is because direct
cost allocation is not possible here due to the variety of transactions, the lack of clearly
defined individual activity types and the fact that the entry of the activity is too timeconsuming. For example, the costs of the company cafeteria may be assigned based on
the number of employees in each cost center. Telephone costs are seldom allocated
directly to the individual cost centers, but are collected on a clearing cost center for each
period. They are then repotted or distributed at the end of the period according to the
number of telephone units or telephone installations in each cost center.
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Prerequisites
You carry out allocations at period end (during period-end closing) using predefined
parameters (keys, sender-receiver relationships).
You can use different currencies for the periodic allocations. To do this, you must have
selected All currencies during controlling area maintenance.
The currencies are converted using the translation rates you entered in Customizing
when configuring the system (see also: Currencies).
The value date determines which currency translation rate is used for the currency
conversion. If you do not enter a value date, the system estimates the most accurate
translation rate for the period.
If you are working with transfer prices (parallel value flows) distribution and assessment
are executed in parallel in all valuations. The costs to be allocated are taken from the
corresponding valuation. The tracing factor is always taken from the operational
valuation. The values allocated may differ in the different valuation methods.
Senders and receivers are displayed in the results list, differentiated according to the
parallel actual versions of the various valuations.
For more information about transfer prices, see the SAP Library under
(see: Transfer
Prices) and Parallel Valuations.
4. Business Model
N/A

None apparent

None
None apparent

None apparent

N/A

N/A
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N/A
5.1.1.8.
Secondary Cost Planning (Prop./Fixed)
Questions:
Q:
1) Do you want to represent activity relationships between cost centers in your planning?
A: Recoveries (service center charges and revenue for services rendered to external
These are reflected in the current system through negative budget entries and actuals with
the third digit of the object code having the value of "9".
CI Template:
Recoveries (service center charges and revenue for services rendered to external
These are reflected in the current system through negative budget entries and actuals
with the third digit of the object code having the value of "9"
Since R/3 does not accept negative planning and budget entries, revenue elements will
be used for recoveries.

Secondary Cost Planning
Use
In addition to primary costs, secondary costs are often incurred during the production of
cost center activity. This is because a cost center must often take activity from other cost
centers to produce its own activity. Secondary costs on the cost center result from
internal allocations, such as activity allocations or assessments.
To get meaningful periodic comparisons of plan and actual data, you must plan
secondary costs as well as primary costs. You can plan secondary costs as value-based
(assessment or order settlement) or quantity-based (activity input).
See also:
Manual Planning
Manual Planning
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Use
Manual planning covers the following planning areas:
Planning statistical key figures
Activity type planning
Primary cost planning
Secondary cost planning
Budget planning
Detailed planning
You plan activity types, statistical key figures and costs using the appropriate planning
methods (see also: Techniques for Supporting Manual Planning). In the standard system,
R/3 provides planner profiles and planning layouts for the relevant planning area (see
also: Structuring the Planning Screen). You can either use these profiles and layouts as
they stand, or adapt them to meet your own requirements.
Unlike Periodic Allocations where the system determines the plan values once at periodend with user-defined rules, in manual planning you plan each value yourself.
Integration
Manual planning is implemented in other application components belonging to the SAP
R/3 System.
{0> Application component <}0{> Application component <0} Information:
Internal orders Primary Cost and Revenue Planning
Activity-Based Costing Manual Process Planning
Real Estate Management
Cost and Revenue Planning on Real Estate Objects
Project System Manual Cost Planning in the Work Breakdown Structure
Use
In distribution and assessment, you further allocate costs (or quantities for indirect
activity allocations) collected on a cost center during the accounting period to receivers,
according to user-defined keys. These are therefore indirect allocation methods, because
the exchange of activity is not the basis for allocating costs/quantities. Instead, userdefined keys such as percentage rates, amounts, statistical key figures, or posted
amounts provide the cost/quantity assignment basis.
The advantage of these methods is that they are easy to use. You usually define the keys
and the sender/receiver relationships only once.
Distribution and assessment are used primarily for cost centers. This is because direct
cost allocation is not possible here due to the variety of transactions, the lack of clearly
defined individual activity types and the fact that the entry of the activity is too timeconsuming. For example, the costs of the company cafeteria may be assigned based on
the number of employees in each cost center. Telephone costs are seldom allocated
directly to the individual cost centers, but are collected on a clearing cost center for each
period. They are then repotted or distributed at the end of the period according to the
number of telephone units or telephone installations in each cost center.
Prerequisites
You carry out allocations at period end (during period-end closing) using predefined
parameters (keys, sender-receiver relationships).
You can use different currencies for the periodic allocations. To do this, you must have
selected All currencies during controlling area maintenance.
The currencies are converted using the translation rates you entered in Customizing
when configuring the system (see also: Currencies).
The value date determines which currency translation rate is used for the currency
conversion. If you do not enter a value date, the system estimates the most accurate
translation rate for the period.
If you are working with transfer prices (parallel value flows) distribution and assessment
are executed in parallel in all valuations. The costs to be allocated are taken from the
corresponding valuation. The tracing factor is always taken from the operational
valuation. The values allocated may differ in the different valuation methods.
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Senders and receivers are displayed in the results list, differentiated according to the
parallel actual versions of the various valuations.
For more information about transfer prices, see the SAP Library under Financials
(see: Transfer
Prices) and Parallel Valuations.
4. Business Model
N/A

None apparent

None
None apparent

None apparent

N/A

N/A


N/A
5.1.1.9.
Resource Planning
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CI Template:
Resource planning is a planning aid. If you only know the quantities of consumed
resources (see also: Resources) you can use resource planning to plan activitydependent or activity-independent primary costs or revenues by quantity. You can carry
out detailed planning of a cost element by subdividing the cost element on the basis of
the resources. The SAP R/3 System valuates the given resource consumption with a
price, which you can store separately in the system.
You can also link resources to a material or to a base-planning object. This means that a
resource or a base-planning object has been entered in the resource master record. For
the valuation of resource consumption during planning, the SAP R/3 System uses the
price of the material, regardless of whether you have defined a price for the resource
during pricing (see also: Pricing).
During primary cost planning, you can plan resources on cost centers, cost
center/activity type, orders and WBS elements.
You cannot plan resources during overall planning of orders and WBS elements.
Resource planning differs in the following ways from activity input planning, which also
provides a quantity-based planning approach:
From where is the activity/resource input/taken from?
Cost element, under which the consumption is posted
See #1 above
Resource Planning
Prerequisites
If you want to carry out resource planning without adopting the standard planner profile
SAPR&R, you must define your own planner profile and planning layout.
Procedure
To plan primary costs at resource level, proceed as follows:
Select a planner profile for resource planning such as the standard planner profile
SAPR&R.
To do so, in your application choose Planning Set planner profile.
Choose Planning Cost element/activity input Change.
Select a planning layout for resource planning.
To change existing plans or create new ones, choose Change. In the overview screen
you can enter the fixed and variable plan consumption for a resource. You use a
distribution key to distribute the plan values to the fiscal year periods. You can either
select a standard distribution key or define your own. On the period screen, you can also
distribute your period values manually to the individual periods.
If you have stored a price for the resource (see: Pricing) the system revaluates the
consumption using this resource price (see also Revaluating Resource Planning)
For more information about planning and changing planning screens, see Executing
Manual Planning and Techniques for Supporting Manual Planning
Resource Planning
Prerequisites
If you want to carry out resource planning without adopting the standard planner profile
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SAPR&R, you must define your own planner profile and planning layout.
Procedure
To plan primary costs at resource level, proceed as follows:
Select a planner profile for resource planning such as the standard planner profile
SAPR&R.
To do so, in your application choose Planning Set planner profile.
Choose Planning Cost element/activity input Change.
Select a planning layout for resource planning.
To change existing plans or create new ones, choose Change. In the overview screen
you can enter the fixed and variable plan consumption for a resource. You use a
distribution key to distribute the plan values to the fiscal year periods. You can either
select a standard distribution key or define your own. On the period screen, you can also
distribute your period values manually to the individual periods.
If you have stored a price for the resource (see: Pricing) the system revaluates the
consumption using this resource price (see also Revaluating Resource Planning)
For more information about planning and changing planning screens, see Executing
Manual Planning and Techniques for Supporting Manual Planning
4. Business Model
N/A

None

None
None
None

None

None

None known at this time
582 of 670

Should follow the same authorization and roles as other CO planning functions.
N/A
5.1.1.10.
Periodic Reposting of Plan Data
Questions:
Q: 1) Do you periodically move costs from a project/cost center (such as telephone costs) to
other projects/cost centers?
A: Yes
Q: 2) Did you define the basis for these allocations (such as, percentage, statistical key
figures, for example telephone units consumed, and so on)?
A: The allocation is usually actual usage.
CI Template:
UT usually posts re-allocation of charges from service centers and other cost centers
based actual usage.
=======================================
periodic reposting
Controlling (CO)
Function lets you correct postings to cost centers.
Periodic reposting is an allocation method that uses rules defined in the form of cycles to
credit allocation cost centers. These allocation cost centers are used to collect the
postings relevant for cost accounting.
Defining Periodic Reposting
Use
To allocate telephone costs, you should use the periodic reposting allocation method.
Periodic reposting has the advantage of requiring very little runtime to operate.
Periodic reposting uses the original cost element, meaning the primary cost element
remains intact. When you allocate telephone costs, the allocating cost center is
unimportant for the receiving cost centers. The system therefore stores data records for
periodic reposting in a way that uses less memory than for, say, distribution. The sender
cost center is not updated with this method.
To allocate telephone costs in Controlling (CO), you can use the following allocation
methods:
Periodic reposting
Distribution
Assessment
The allocation methods differ in the manner they transfer information from external
accounting to internal accounting
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See #1 above
Were periodic posting used at UT, this would be the procedure:
Defining Periodic Reposting
Procedure
To define a periodic reposting, carry out the following steps:
Create a cycle.
Create segments for the cycle.
Specify the tracing factors.
Creating Cycles
1. In the Cost Center Accounting initial screen, choose
2. In the Periodic Reposting initial screen, choose Extras
-end
.
You can also create the necessary cycles in the Implementation Guide (IMG) for Cost
Center Accounting (see Calling Up the Implementation Guide for Cost Center
Accounting). Choose
dDefining Periodic Repostings. In the dialog box, choose Create Actual Periodic
Reposting.
3. Enter a name for the cycle (such as tel01 ).
4. Enter a starting date for the cycle.
5. Choose Execute to go to the entry screen for cycle header data.
6. Enter the date marking the end of the validity period for the cycle.
7. Enter a descriptive text for the cycle (such as Per. Reposting Telephone Costs).
8. Deactivate the Iterative indicator because no sender/receiver relationships appear
during allocation of telephone costs.
Creating Segments
1. To create a segment, choose Attach segment.
2. Enter a name for the segment (such as 0001).
3. Enter a descriptive text for the segment (such as Credit Ctr 4712 ).
4. Accept the default settings for sender values and tracing factors.
The actual values posted on the senders allocate in their entirety on the receivers.
Therefore, you choose rule 1, Posted amounts and a Portion of 100%. In addition,
you accept the default setting Actual values.
The tracing factor for periodic reposting is the number of telephone calls carried
out by the receiver cost centers. These are variable portions. Therefore, under
Tracing factors, you accept rule 1, Variable portions.
Because you use variable receiver tracing factors on the basis of statistical key
figures, under Type of variable portion you enter 5 (actual statistical key figure).
You save the statistical key figure representing the number of telephone calls in
the next step, "Determining Tracing Factors".
Under Scaling negative tracing factors, accept the default setting of 1 (no scaling).
5. In the group Allocation characteristics, enter the sender cost center and its cost
element (such as your collection cost center 4712 and cost element 473.120
(telephone call units)).
6. Enter the cost centers acting as receivers (such as 4713, 4714 ).
Defining Tracing Factors
1. Choose Tracing factors to go to the Tracing Factors initial screen.
2. The default settings in the Segment name, Type of variable portions, and Scaling
negative tracing factors are taken from the segment entries.
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3. Under Selection criteria, enter the statistical key figures serving as the basis of the
periodic reposting. Enter your statistical key figure telephone. This represents the
number of telephone calls made from the receiver cost centers.
4. Save your entries.
You can determine the fields for sender and receiver data appearing in the segment and
in the tracing factors in the Implementation Guide (IMG) for Cost Center Accounting).
Choose Actual Postings
Define
Sender/Receiver Types for Periodic Reposting.
For more information on creating cycles, see the IMG for Cost Center Accounting under
Define Periodic
Repostings and under Definition of Periodic Repostings or Period-Based Allocations.
4. Business Model
N/A

N/A

N/A
None

N/A
N/A

N/A

None known to this writer at this time

Should follow the same authorization and roles as other CO planning functions.
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N/A
5.1.1.11.
Plan Cost Distribution
Questions:
Q: 1) Do you want to distribute costs from a cost center or a cost center group to CO
objects (cost center, orders, WBS element), and keep the original cost element from the
sender in the receiver object?
A: Probably.
Q: 2) Did you define the basis for these allocations (such as, percentage, statistical key
figures, for example telephone units consumed, and so on)?
A: Whatever the department wishes to move.
CI Template:
The University requires the ability to distribute costs from a cost center to other cost
centers and WBS elements.
Our understanding is that R/3 does not allow the changing of G/L accounts using the CO
transfer transaction.

A department wishes to move charges to another department or WBS element for
whatever reason.
4. Business Model
N/A

None

None
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N/A

N/A

N/A

N/A

N/A
Our preference is that the CO transfer be very distributed to departmental users and that
the JV transaction would be much more restricted.
6. Asset Accounting
Questions:
Q: 1) Are any of your asset values managed in a foreign currency? If so, specify the
relevant countries and currencies.
A: No
Q: 2) Does the fiscal year for asset accounting correspond to the calendar year? If not,
specify the start and end dates of your fiscal year.
A: All Assets: 07/01 - 06/30
Q: 3) Is your enterprise currently using a shortened fiscal year, or you have used a
shortened fiscal year in the past, for which you want the R/3 System to recalculate
depreciation as part of the asset data transfer?
A: No
Q:
4) Is your enterprise required to calculate mid-month or mid-year depreciation?
A: No
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CI Template:
-
UT will use AM to manage their leased and owned assets.

UT will integrate AM with MM (purchasing) to manage assets and benefit from
automatic capitalization (at time of goods receipt). UT would like to integrate
sensitive items as well, if possible.
UT will post assets acquisitions, transfers, and retirements in AM.
UT will now have the new functionality to begin recording depreciation on their
assets according to GASB requirements effective July 2001.
Current Systems: UT has about 100,000 active assets (equipment only) in AS400 worth
$2 billion that will need to be depreciated due to new GASB requirements. In addition, UT
has facilities (buildings) in a separate database as well as land on a manual card system
(needs to be put in electronic format). All active assets will be brought over from these
three legacy systems into R/3 via conversion programs.
Although there is a new policy to take an asset from $1,000 to $5,000 the amount of
assets will decrease just a little due to another policy to track sensitive equipment
(between $1000 - $4999) in AM. We probably will need to convert into R/3 at least
80,000 assets on estimate. UT is interested in space management (real estate module)
but at this point this is not in scope so we need to interface AM to their existing space
management system. An interface will be maintained just to keep the link between the
asset master and the building/location. Insurance will not be managed in R/3. In phase 3
there will be a lot of clean up and conversion work to prepare for data conversion.
In public sector (e.g., government, universities, etc.), the requirement for asset
accounting is to record the asset in the balance sheet (plant fund) and record the
expense in the P&L (capital outlay expense). In addition, the University is implementing
GASB 34, which requires the depreciation of assets effective July 2001. Depreciation
expense will hit the source fund and accumulated depreciation will hit net investment in
plant (a contra account). The posting into AM are will hit the BS and P&L as follows:
Balance Sheet:
__Asset Account__
(1) 10k I
I
__Net Inv in Plant__
I (2*) 10k
I
__Accum Dep__
I (3) 100
I
Profit & Loss:
__Accounts Pay__
I (1) 10k
I
__Capital Outlay__
(2*) 10k I
I
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___ Dep Exp ____

(3) 100 I
I
* A custom program will be written to allow this posting to occur nightly in FI and CO.
Therefore, departments will be able to see the capital outlay soon after (rather than
waiting until month-end). Meanwhile, the asset is immediately capitalized on the balance
sheet (rather than waiting until month-end). Depreciation will be run monthly as part of
the period end closing process.
The Asset Accounting (FI-AA) component is used for managing and supervising fixed
assets with the SAP R/3 System. In SAP R/3 Financial Accounting, it serves as a
subsidiary ledger to the FI General Ledger, providing detailed information on transactions
involving fixed assets.
As a result of the integration in the R/3 System, Asset Accounting (FI-AA) transfers data
directly to and from other R/3 components. For example, it is possible to post from the
Materials Management (MM) component directly to FI-AA. When an asset is purchased
or produced in-house, you can directly post the invoice receipt or goods receipt, or the
withdrawal from the warehouse, to assets in the Asset Accounting component. At the
same time, you can pass on depreciation and interest directly to the Financial Accounting
(FI) and Controlling (CO) components.
Traditional asset accounting encompasses the entire lifetime of the asset from purchase
order or the initial acquisition (possibly managed as an asset under construction) through
its retirement. The system calculates, to a large extent automatically, the values for
depreciation, interest, insurance and other purposes between these two points in time,
and places this information at your disposal in varied form using the Information System.
There is a report for depreciation forecasting and simulation of the development of asset
values.
Business Process for acquisitions:
UT departments will create a purchase requisition. If it is for an asset the department will
also create the asset master record. The asset number will be recorded on the purchase
requisition. Upon goods receipt being posted in R/3, the system will post the asset
values to AM and update FI and FM accordingly.
Dr. Asset (Asset G/L in FI and Expenditure commitment item in FM)
Cr. GR/IR (Liability G/L in FI)
A batch program will run at night that will record the capital outlay expense in FI and CO.
Dr. Capital Outlay Expense (Expenditure G/L in FI and Cost Element in CO)
Cr. Investment in Plant (Equity G/L in FI)
Business Process for transfers
UT departments complete a transfer request and submit it to the Controller's Office. The
asset staff person will record the asset transfer in R/3.
Dr. Asset (Receiving Department)
Dr. Accumulated Depreciation (Sending Department)
Cr. Asset (Sending Department)
Cr. Accumulated Depreciation (Receiving Department)
Process for Retirement
UT departments will notify the Controller's office if an asset has been sold, demolished,
etc. Asset staff person will record the asset retirement in R/3
Dr. Accumulated Depreciation
Cr. Asset
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Dr or Cr Gain Loss on Retirement
determine need for asset master record creation

if asset is being purchase in MM follow procurement for asset process
create asset master record (useful life, description, and key data)
run depreciation on assets monthly (collectively)
manage asset from an accounting standpoint (transfer to another department,
retire stolen assets)
UT is purchasing a capital item over $5,000.

This should trigger the user to create an asset master record. On the master record the
user will enter a description, cost center or WBS element responsible, business area,
useful life and other identifying data if applicable such as make, model, serial number, tag
number, etc.
If purchased through MM the asset is entered on the purchase requisition.
If directly invoiced the asset is entered on the AP invoice. (This is done in Asset
Management)
If donated asset, the user will capitalize the asset using a journal entry.
Cost center maps to each fund (cost centers roll up into fund centers)

- Running depreciation will be a new process for the University. This will be done by the
- Entering the useful life on the asset will be an important new step. Asset creation is
currently decentralized so there will need to be a process to check that the useful life is
correct prior to the first depreciation run. The Controller's Office should decide the best
steps.
- UT is implementing a policy to change the definition of an asset from $1,000 to $5,000.
This should have reduced the workload for managing assets but since it is in combination
with another policy it will not.
- UT is implementing a policy to track sensitive equipment ($1000-$4999). In order to try
to track items easily stolen (example, cameras)


One chart of depreciation and one depreciation area is required.
Asset classes will be set up as follows:
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The following authorization objects are defined for Asset Accounting by function:
Functions
Assets in general
Asset posting
Asset posting
Asset class maint
Asset accounting
Asset master maint.
Asset master maint.
Asset master maint.
Group asset maint.
Asset Customizing
Authorization object
Asset view
Company code/asset class
Asset class/transaction type
Asset classes
Authorization for periodic processing
Company code/asset class
Company code/business area
Company code/plant
Group asset
Chart of depreciation
From UT's 4.6 system (SU03):

A_PERI_BUK Asset Accounting: Authorizations for Periodic Processing
A_M_ANLKL Asset Classes: Asset Classes
A_C_AFAPL Asset Customizing: Chart of Depreciation
A_S_ANLKL Asset Master Data Maint: Company Code/Asset Class
A_S_GSBER Asset Master Data Maintenance: Company Code/Business Area
A_S_WERK Asset Master Data Maintenance: Company Code/Plant
A_B_BWART Asset Postings: Asset Class/Transaction Type
A_B_ANLKL Asset Postings: Company Code/Asset Class
A_A_VIEW Asset: View
A_S_ANLGR Group Asset
Authorization Checks
The authorization checks are carried out for the following activities:
Maintenance and display of the asset classes
Maintenance and display of the asset master records
Maintenance and display of the values of a fixed asset
Posting to a fixed asset
Carrying out periodic processing
Creating a list using the logical database ADA
Maintenance and display of control data
For asset class maintenance, you assign the authorization for different activities to the
user for each individual asset class. For master record maintenance, you can also assign
the authorization for certain organizational units (company code, plant, business area).
You can protect asset transactions at company code and asset class level depending on
the type of transaction.
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AM Authorization Recommendation for asset transactions:

Secure AM Postings: Postings will be controlled by fund (FM).
Create / Change / Display master data: Currently assets are secured by accounts or
colleges. In the future, we can restrict by asset class but for equipment this is not low
enough since asset creation for equipment is done decentrally. Authorization for these
transactions (AS01, AS02, AS03) will be allowed for either 1) all asset classes or 2) only
equipment asset classes (decentralized).
Asset Classes Proposed (equipment asset classes in bold):
AM Reports: Either the users will have access to the AM report tree or they will not. No
further restriction is required.

Interfaces
Asset equipment is in 1 system and buildings/rooms facility (ex: room 412, footage,
usage, location) in another. This link needs to be maintained in the future for space
management and insurance purposes. Interface from R/3 to legacy will validate the
asset record has a valid building and room number.
Conversion
Bring over all active (non retired assets) approx 80,000. May consider bringing over
retired legacy but difficult to clean up (map to cost centers).
1.
Land (not currently in electronic format)
2.
Building (in mainframe IMS system - not AS/400.)
3.
Equipment (in AS 400 system)
4.
Infrastructure (Details do not exist currently data is just captured on 'sidewalk
account' or 'other UTK'. How does GASB recommend we create, post, depreciate
these assets?)
Load process: Enter asset and post to cost center and business area. Do a G/L posting
in FI (need to break out by business area).
6.1.
Handling Fixed Assets
CI Template:
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Requirements: UT would like to maintain the asset records from 2 legacy systems and
one manual system in R/3.
Expectations:
Online-real time Management of the assets acquisition

Integrated purchasing of assets
Tracking of assets under construction
Management of transfers and retirements
Online calculation of depreciation (this is a new GASB
requirement)
Flexibility for mass changes, i.e. a variety of mass changes
needs to be handled centrally by the Controller's Office.
Master Data: This part of the master record contains concrete information about the fixed
asset. The following field groups exist:
General information (description, quantity, etc.)
Account assignment
Posting information (for example, capitalization date)
Time-dependent assignments (for example, cost center)
Information for plant maintenance
Entries for net worth tax
Information on real estate
Leasing conditions
Investment support measures
Information on the origins of the asset
Physical inventory data
Insurance data
User fields/evaluation groups
In addition, you can create long texts for the individual field groups belonging to the
general data part of the asset master record. You can simplify the creation of long texts
by using freely definable long text templates. You define these templates in FI-AA
Customizing under Define long text templates.
Depreciation: You can specify depreciation terms in the asset master record for each
depreciation area in the chart of depreciation. In order for you to make these
specifications, the master record contains an overview of the depreciation areas. In
addition, there is a detailed display available for each depreciation area. If there are
depreciation areas that are not needed for a specific asset, it is possible to deactivate
these depreciation areas at the asset level.
Acquisitions: You can perform integrated acquisition with materials management,
manual acquisitions, or acquisitions from construction in progress from project systems.
Transfers: You can transfer assets between business areas, cost centers, locations, etc.
Asset history information is available online for all transfer postings. Transfers are
integrated with the general ledger.
Retirements: You can retire assets from your records. The asset history information is
available online.
Reporting: You have online reporting on all asset transactions, balances, and
depreciation.
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Asset Acquisition: Integrate the purchase of asset with MM.
Record donated assets
Manual capitalization for corrections
Asset Transfer: User completes a transfer form and submits it to Controller's Office.
Controllers Office enters the transfer into R/3. Transfer would apply when assets move
between business areas, cost centers, locations etc.
Asset Retirement: User completes a retirement form and submits it to Controller's
Office. Controllers Office enters the transfer into R/3. An asset would be retired when
sold, demolished, of scrapped.
Depreciation: Controller's Office will have the ability to post depreciation on all assets
on a monthly basis. (UT currently does not depreciate any of its assets so this is a new
business process for them.)
Post capitalization: (increasing value to existing asset not sub asset). Depreciation is
already started but the value of the asset has gone up due to an improvement of $5000.
Post an increase to the value of the asset and the straight-line depreciation value is
increased accordingly. Useful life will stay the same.
Surplus process: All campuses send the asset to a central surplus account (transfer to
surplus cost center for each campus) and warehouse. Stays on that account until they
notify Verna it is sold or disposed of (retired). UTK Asset usually stays on department's
inventory until sold (not transferred to a surplus cost center). Then department notifies
Verna and she retires the asset.
Retirement process in the future: Stays the same as current (T-64 form and send to
Verna). All assets will retire without revenue and post revenue separately.

Assets purchased through MM will be integrated. However, if the user purchases an
asset and does not create a PR with account assignment A how will UT track this
information and capitalize the asset.
Proposed solution: Create a report to identify the expenditure GL account and the
account assignment category on PR's for a period of time. Monitor this report daily, and
contact users if errors are noted. Additionally, If not using a PR then UT will continue it's
process of reviewing the sensitive item and capital outlay object codes and verifyin g that
assets are created where applicable.

UT is on a manual system for tracking asset purchases and capitalizing them to their
systems.
UT manually calculates assets under construction at year-end.
R/3 will enable UT to create and manage asset master records online, integrate the
purchase of assets, and automate the tracking of assets under construction.

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N/A at this time
Managing Trade-ins. How will these be posted in R/3? This will be addressed in Phase
3
Managing capitalization of assets that were not integrated.

Configuration: Chart of Depreciation
Account assignment for asset transactions
Screen layouts for asset classes
Asset classes to be managed by UT
Assets under construction
Depreciation terms
6.1.1.
Asset Maintenance
CI Template:
6.1.1.1.
Creation of Master Record for Tangible Assets
Questions:
Q: 1) Who is responsible for the initial creation of an asset maser record? Who provides
which information?
A: Equipment: Departments either complete an Equipment Acquisition Report (T-66) or
enter an electronic version into a suspense file on the Equipment Inventory System before an
invoice is paid. Once the invoice is paid, the equipment inventory section of the Controller's
Office checks the report or suspense file for accuracy and adds additional information such
as DV#.
Buildings: The accounting manager in the Controllers Office creates the initial asset master
record. Costs are accumulated in a plant fund account and these costs are capitalized at the
end of the year.
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Land: The land card is created in the Treasurer's Office 3rd floor after land is received or
purchased.
Infrastructure: The accounting manager in the Controller's Office creates the initial master
end of the year.
Q: 2) How does information flow back and forth between the person responsible for the
capital investment project and the accountant in Asset Accounting, with respect to the
creation of a master record for an asset under construction?
A: Equipment: N/A
Building: Once a construction contract is approved, Risk Management requests a building
asset master record to be created by the Controller's Office.
Land: Infrastructure: N/A
Q: 3) Which organizational units and/or which functional areas have authorization for
creating or displaying asset master records?
A: Equipment: Departments/Business Areas have authorization for creating and displaying
asset master records.
Buildings and Infrastructure: Controller's Office for creating / Campus Business Office or
Physical Plant view only.
Land: Treasurer's Office and Controller's Office for creation and viewing.
6.1.1.2.
Creation of Group Asset
Questions:
Q: 1) Do you need to manage and depreciate certain parts of your asset portfolio in the
form of group assets?
A: Yes. UT will need group assets for buildings. For example, the group asset would be the
building and the assets assigned to the group asset would be the main building, and
expansion assets, remodeling, etc. This allows the user to keep all individual asset records
relating to one main asset together.
6.1.1.3.
Asset Master Record Change
Questions:
Q: 1) In your enterprise, who has authorization to change asset master records? For which
areas? Are these authorized individuals different from those who create the master records?
A: Equipment: Controller's Office - all fields. Departments/Business Areas - certain fields
(example description, room, building but not tag, cost, or depreciation).
Buildings and Infrastructure: Controller's Office; Physical Plant and other authorized
individuals.
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Land: Controller's Office and Treasurer's Office all fields.
Q: 2) How often is it necessary to change your asset master records? Which parts of the
asset master record are most often affected?
A: Equipment: constantly. Location; department (account #).
Buildings, Infrastructure, Land: Rarely
Q: 3) Are there certain asset master record fields that need to be protected against
changes? If so, which fields?
A: Equipment: The Controller's Office needs to be able to change all of an equipment
master record. Departments should not be able to change certain fields such as historical
cost, responsible department, etc.
Building: The Controller's Office will be able to change all the building asset master records
(ex insurance).
Departments should not be able to change certain fields.
Land: Infrastructure: same as buildings.
6.1.1.4.
Mass Changes
Questions:
Q: 1) In your enterprise, who has authorization to change a large number of assets
simultaneously?
A: Equipment: The accounting manager, the accounting clerk and data integrity supervisor
in the Controller's Office.
All other assets: The accounting manager and their designee.
Q:
2) Do you need to make changes to a large number of assets simultaneously?
A: Yes
Q:
3) If so, under what circumstances? Please describe.
A: Equipment: Moving all fixed assets from one location to another location; transferring all
assets from one department to another department.
In addition, a change in the capitalization policy might require massive changes.
Change of business area responsibility.
6.1.2.
Receipts
Questions:
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Q: 1) Does your organization have a specific amount, above which purchases are to be
capitalized as fixed assets? If so, what is this amount?
A: Equipment: currently $1,000. Effective 06/30/00, $5,000 - except for "sensitive items"
(items between $1,000 and $4,999.99).
Buildings and Infrastructure: $5,000
Land: ?
6.1.2.1.
Processing of Asset Acquisition
Questions:
Q:
1) Describe the information flow for asset acquisitions in your enterprise
A: Equipment: Departments submit requisitions for items over $2000 to the Purchasing
Department. Purchasing creates a purchase order. Bids are most-often required unless the
items are sole-source. When the invoice is received, the departments fill out a paper asset
master record or complete the asset master record on-line. The invoice and asset master
record is sent to A/P who forwards the two documents to the Controllers Office. The
Controller's Office uses the paper asset master record to set up the equipment item (or to
release the record if it was previously created on-line.) The checks paid for equipment and
additions to the equipment inventory are reconciled on a monthly basis.
Buildings: Governed by University FPS 180
The capital budget process begins each spring for the fiscal year that begins approximately 1
1/2 year in the future. (Budgeting done Spring 2000 for work to be done beginning July 2001).
Projects are submitted to each campus office where the projects are prioritized and divided
into 3 categories 1) Capital outlays (>1million/new buildings) 2) Capital maintenance ($100,000 to 1million) and
3) internally funded projects (w/ funding from parking revenues, athletic dept. revenues, etc.)
The campus lists are sent to the UT President who develops an overall UT priority list. The
Board approves the UT priority list, and the list is sent to the TN Higher Education
Commission (THEC). THEC merges UT projects with the TN Board of Regents (TBR)
projects, and prioritizes this combined list, and forwards the list to the Governor. The
Governor merges projects from all over the State and sends a recommended list to the State
Legislature.
The State Legislature approves both state-funded and internally funded projects, and
appropriates funds in May (May 2001 for projects beginning July 2001).
When UT receives their approved projects, the projects are sent to the State Building
Commission (SBC) for its approval. The SBC gives each project a SBC #. Once UT
receives notice of the SBC #, the assistant manager in the UT Controller's Office sets up a
plant fund (project account) (J account). The project is also set up in a departmentally
maintained (in Facilities Planning) database for the internal tracking of various internal
costing and reporting.
Miscellaneous contracts are entered into with architects, surveyors, and testers. A contract is
set up with one general contractor. (The general contractors form agreements with the
subcontractors; thus, UT has no subcontracts.)
The J account collects all costs for the asset under construction as individual expenses.
Once a year at fiscal year-end close, the UT Controller' Office Assistant manager, makes
manual capitalization entries.
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UT withholds 5% of the contractor's billings each month as retainage. This retainage is

transferred into an agency account set up specifically for this project. Interest is earned on
the funds set aside in this agency account. Retainage is released to the contractors in stages
when the work is near completion. The retainage is reduced to a smaller percentage 2 1/5%
in the later stages.
State funds are received based on cost-reimbursable invoices that are submitted by the asst
manager to the State on a monthly basis. Copies of all expenditures must be forwarded to
the State with the invoice. The State's payment is deposited into the corresponding H
account. Any surplus funds remain in the account until formal approval is given to transfer
the excess funds to another project or the excess funds are returned to the State.
Closeout documents must be received prior to the asset-close. Rita notifies the Controllers
Office when the project is completed so that the completed asset may be established.
Infrastructure: Is very similar to buildings.
Land: Governed by university FPS 180. When land is purchased or received a land card is
prepared by the endowment accountant in the Treasurer's Office. Most information is
provided by Rick Burks and Alvin Payne. If the University is purchasing the land, the same
steps for state and board approval are required as for buildings. If the land is a gift, the board
can decide on the use of the land (retain or resale).
Q:
2) Describe your capital procurement requirements.
A: Equipment: University FPS 050 and 170. All capitalized equipment items require a
purchase order above $2,000. Sensitive low-dollar items below $2000 do not have to have a
purchase order. The departments order these items directly from the vendors.
Land, building, infrastructure: University FPS 180 governs the procurement.
Q:
3) What types of acquisition occur in your enterprise?
A: [X] Integrated with Materials Management (M)

[X] Integrated with Accounts Payable (FI)
[X] Directly to Asset Accounting (FI-AA)
Q: 4) Are asset acquisitions posted on a net basis (deducting any discounts) or as a gross
amount (discounts are deducted only on payment)?
A: All Assets: Net basis
Q: 5) Do you want to show acquisitions to certain depreciation areas differently than you do
in the book depreciation area (for example, to fulfill certain cost accounting, tax or group
requirements)?
A: Equipment: No
Buildings and Infrastructure: No
Land, library and livestock: N/A
Q:
6) Do you post goods receipt to assets valuated or non-valuated?
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A: All assets: Our current systems do not have this functionality.

Valuated means you can you pay the invoice before goods receipt.
Q:
7) Do you want down payments for assets to be shown separately?
A: Yes
Q: 8) If using asset sub-numbering, do you want to permit asset acquisitions only to the
main number in the year of capitalization, and post all later acquisitions to sub-numbers?
A: Yes
Q:
9) Do you keep a record of costs using acquisitions to the asset under construction?
A: Equipment: Yes
Buildings: Yes
Infrastructure: Yes
Q: 10) Do you plan and budget for capital investments in your enterprise? Should assets
that are capitalized directly also be included in the planning and budgeting processes?
A: Equipment: Yes departments budget for equipment.
Buildings: Each building and infrastructure item has a budget. Capital budgeting will not be
done in R/3???. We do have the option to use PS and AM functionality to do this. Will
investigate further.
Q: 11) How is the interaction between general ledger and asset accounting in the
acquisition process?
A: All assets: No integration in the acquisition process and asset accounting.
Q: 12) Which is the procedure from invoice receipt to posting of capitalization? Outline the
different steps.
A: All Assets:
At invoice payment:
Debit - Account (cost center) and Expenditure Object Code (G/L account)
Credit- Cash or A/P
At year end:
Debit - Asset by type (land, building, equipment)
Credit- Investment in Plant by asset (land, building, equipment)
6.1.2.2.
Subsequent Acquisition
Questions:
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Q: 1) Under what circumstances do you intend to post subsequent acquisitions to

previously capitalized fixed assets?
A: None. If there is an additional acquisition, we will set up sub-assets in order to manage
the useful life.
6.1.3.
Depreciation
CI Template:
Needs to calculate depreciation on a straight-line basis for all university owned property.
1. Book Depreciation Area: Straight-line depreciation expense in FI (debit asset,
credit payable).
2. CO (Capital Outlay) Depreciation Area: total capital outlay expense in FI (debit cap
outlay exp, credit investment in plant). May write a program to meet this
requirement.
Won't keep track of gains/losses
No negative depreciation
Controllers Office will run depreciation program on a monthly basis and process the
batch input session. (This can be a scheduled job by the Basis team.) UT will be using
one Depreciation Area. Book depreciation area to record the debit and credit to
depreciation expense and accumulated depreciation. We considered using two
depreciation areas, the second depreciation area could have been to post the capital
outlay expense in FI and CO in the month of purchase. However, UT would like to see
the capital outlay expense post immediately so a program needs to be written to read all
asset acquisitions for the day and post the debit to capital outlay expense and the credit
to investment in plant.
Depreciation is run in the Asset Management module. When executed it updates the
individual asset records with the following: Posted depreciation, adjusts the remaining
useful life, adjust the book value. The depreciation program creates a batch session that
needs to be processed from the batch editor. The batch session updates the general
ledger. If the batch session is not processed then the general ledger is not updated.

Depreciation is a centralized function run monthly by the Controller's Office. UT needs to
"catch up" accumulated depreciation on existing assets as the entity currently does not
post depreciation to the general ledger.
UT currently does not depreciate assets. GASB 34 requires depreciation to be reported for all assets. UT will
be recording depreciation on a straight-line basis. Accumulated depreciation will need to be recorded for
assets.
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1. Currently there is no integration between the general ledger the asset accounting
process. Asset management will provide UT with detailed asset records and
integration to the general ledger.
2. Reports can be run at the department levels to view new asset acquisition rather than
having Verna print hard copies centrally and mail to the departments. Users need to
be trained. Also, standard reporting for asset balances, retirements, transfers, all
transaction, depreciation, etc.
3. Capital projects can be integrated with Asset Management. This will allow UT to
create a project in PS, manage the project, settle the costs for the asset to an AUC
(asset under construction) and capitalize the final asset(s) upon completion of the
assets.
4. Currently there is no integration to purchasing. Asset management can be integrated
with materials management allowing the users to purchase an asset and the system
will capitalize the asset upon goods receipt or invoice receipt (as determined by UT)

Not apparent at this time

No gaps in depreciation processing


Posting depreciation will be in FI only. Debit Depreciation Expense, Credit Accumulated
Depreciation. Except for Service Centers - Depreciation will be posted in FI and CO.
This will be accomplished by creating a separate asset class for Service Center
Equipment and creating a new depreciation expense G/L account that is CO relevant.
FI requirements:
- Need to see full capital outlay expense in FI (debit to capital expenditure account)
- Need to see capitalization of asset (debit to the asset)
- Need to see depreciation expense in FI (GASB 34 requirement)
CO requirements:
- Don't need to see depreciation expense in CO (cost center)*.
- Need to see capital outlay in CO (cost center / WBS)
FM requirements:
- Need to see capital outlay expense in FM because they budget for it (Debit the asset,
credit expense in FM). Need to see capital hit FM at same time as asset hits BS so map
asset G/L to an expense CI.
- Don't need to see capital depreciation expense in FM because they don't budget.
* The majority of the service centers want to see depreciation expense create a separate
G/L account (do we need a separate asset class?) Within one class we need some
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postings for service centers to go to CO (10 need to see depreciation expense) so keep
just use the equipment asset class and use a dummy cost center for 90% of the services
then use the correct cost center for the 10 exceptions). Maybe create a G/L account for
service centers. Issue is it can be CO relevant or not. Can't be both. Solution TBD.
Service Center Equipment Requirements:
Want to see depreciation expense in CO we can create a new asset class with account
assignment to different G/L accounts (create an account for depreciation that is CO
relevant). Need to test both scenarios because the details in FI may be sufficient. UT
needs to see depreciation expense in CO so service centers can allocate these service
charges to other departments. Expenses posted to the WBS then depreciation is on the
cost center (asset master record).

Security for depreciation will be limited to the Controller's Office. The authorization group
for the Department asset accountant's roles will exclude depreciation processing.
6.1.3.1.
Reserves Carry forward
Questions:
Q:
1) Do you create reserves for fixed assets?
A: Yes
Q:
2) If so, provide examples. How do you post? What are the reasons?
A: Equipment: Record depreciation expense for certain activities such as Convenience

Copiers, etc. May want to post depreciation expense to a cost center.
Other assets: N/A
6.1.3.2.
Depreciation Processing
Questions:
Q:
1) What are the methods of depreciation that you are currently using?
A: Equipment: Currently none but effective July 1, 2001 depreciation will need to be run on
assets. Straight line is required.
Buildings: Currently none but effective July 1, 2001 depreciation will need to be run on
assets. Straight line is required.
Infrastructure: Currently none, but effective July 1, 2001 depreciation will be required. Straight
line is required.
Q:
2) Do you calculate depreciation values to the day?
A: Equipment: No
Buildings: No
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Infrastructure: No
Q: 3) In certain cases do you change over from declining-balance depreciation to straightline depreciation? If so, when?
A: Equipment: No
Q: 4) Do you want to allow negative depreciation for certain assets or categories of assets?
If so, please specify.
A: Equipment: No
Q:
5) Do you distinguish between a fixed and a variable depreciation portion?
A: Equipment: No
Q:
6) How do you handle the period control for depreciation values?
A: All assets: Depreciation will post in the month of acquisition. No depreciation will be
posted in the month of retirement.
6.1.3.3.
Manual Depreciation Planning
Questions:
Q:
1) In which cases do you need to start depreciation manually?
A: May occasionally want to do manual depreciation.

Q:
2) How often do you use the manual depreciation function?
A: Rarely.
Q:
3) When do you use unplanned depreciation?
A: May occasionally want to use unplanned depreciation.

6.1.3.4.
Depreciation Posting
Questions:
Q: 1) Is there a business need to post depreciation directly to cost accounting? If so, what
receivers are to be charged when you do so (for example, cost centers, internal orders etc)?
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A: Equipment: Service Centers. Will post depreciation directly to a cost center, not a
dummy cost center (Service Centers may need a dummy cost center.).
Buildings and Infrastructure: No.
Q: 2) How often do you intend to post depreciation to the general ledger and to cost
accounting?
A: Equipment: Monthly
Buildings and Infrastructure: Monthly
Q:
3) Do you post depreciation to assets under construction?
A: Equipment: No
Buildings and Infrastructure: No.
Q:
4) To which account(s) is depreciation posted?
A: One-to-one relationship for every asset class that requires depreciation: Accumulated
depreciation and depreciation expense.
16 asset balance sheet accounts for the 16 asset classes??????.
Q: 5) Do you want to show interest only in reports, or do you want to post interest directly to
cost accounting?
A: We want to post interest directly to cost accounting.
6.1.4.
Business Transactions
CI Template:
6.1.4.1.
Settlement of Asset under Construction
Questions:
Q: 1) What steps are involved in your capitalization process? Do you show assets under
construction in asset accounting?
A: Building and Infrastructure: Costs by project are capitalized back to the appropriate
building or improvements other than buildings asset account at the end of the year.
Equipment is capitalized at the end of each year to the appropriate equipment asset account.
Land: Capitalized by Treasurer's Office staff at year-end based on changes to the land
cards.
Library holdings and livestock: Capitalized at year-end based on a list received from the
campus.
Assets under construction: Not capitalized.
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Q:
2) What is the timing for the capitalization process?
A: Equipment: Year-end currently and in the future at time of acquisition.

Buildings and Infrastructure: Year-end and in the future at time of acquisition.
Land, library and livestock: Year-end.
Q:
3) With respect to capitalization, are you bound by specific laws?
A: Yes
Q:
4) Is it possible that an asset under construction is capitalized as a low value asset?
A: Equipment: No
Q: 5) Do you intend to use summary settlement or line item settlement for assets under
construction?
A: Equipment, Buildings, and Infrastructure: We believe that line item settlement will be
used because it gives us better tracking. It will allow us to see the individual costs that were
capitalized.
Q:
6) To which receiver(s) do you settle assets under construction?
A: Equipment, Buildings and Infrastructure: In the majority of cases, we will settle to the
final asset or sub-asset. Could be a WBS element.
Q:
7) Do you use partial capitalization?
A: Yes
Q: 8) What kind of information flow do you have for when an investment measure is
completed and the asset under construction is ready for settlement to the final asset?
A: Buildings and Infrastructure: The AUC accountant calls the Controller's Office in order to
notify that the asset is complete.
Q:
9) Do you display down payments to assets under construction separately?
A: No
6.1.4.2.
Post-capitalization
Questions:
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Q: 1) What circumstances make post-capitalization necessary in your enterprise?

One amount on the asset should have a different depreciation start date than the original
asset.
A: Increasing the value of assets. (e.g. police car purchased and then later upgraded with
decals, lights or adding a wheelchair lift to a van in the van pool) We currently record these
items as components.
Q: 2) How do you intend to post post-capitalization: - Gross, that is, with historical values
(APC and depreciation)- Net, that is, depreciation begins on the posting date using the net
book value.
A: Net book value.
Q:
3) Do you want to post to a separate sub-number for post-capitalization?
A: It depends. We will probably post at net book (historical cost) value and not re-open prior
periods.
6.1.4.3.
Write-up
Questions:
Q: 1) Do the value of your assets appreciate, and if so, do your ledgers need to be
adjusted?
A: Equipment: Yes, but only rarely. Once, the hospital had an outside appraisal that
subsequently increased asset values of some of their equipment.
Buildings: Yes, but only rarely.
Q: 2) Describe the reasons for a fixed asset revaluation, the process used, and give
examples of the assets that are to be revaluated.
A: See above answer.
6.1.4.4.
Reposting
Questions:
Q: 1) How and when do you transfer assets to other assets? What are the reasons?
(Example: You take the engine from one vehicle and install it in another).
A: It could occur in sub-assets, but true transfers would be rare. However, if errors were
made in the posting of the assets then they must be corrected via transfers.
Q:
2) Do you sometimes split an asset into one or more new assets? If so, please specify.
A: Sometimes we have cannibalization of assets where we dismantle one asset and create
a new one. This would be rare.
Q:
3) Do you transfer between different asset classes? Give examples.
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A: Corrections of errors would be the main reason. In R/3, it must be done through the
system.
Q: 4) Is the changing of an assigned cost center or a business area, for example, a reason
for a transfer posting?
A: Yes
Q:
5) How do you find out about necessary transfer postings in asset accounting?
A: T-64s are received by the Controller's Office from personnel all over the University.
Transfers of assets to Surplus may also be accomplished in R/3 prior to retirement of the
assets that are sold by the Surplus department. In this instance, the department would
remain officially responsible until Surplus has sold the assets.
We need to review again this issue.
6.1.5.
6.1.5.1.
Group Requirements
Questions:
Q:
A:
Q:
A:
Q:
A: [ ] Integrated with Materials Management (MM)

[ ] Integrated with Accounts Payable (FI)
[ ] Directly to Asset Accounting (FI-AA)
A:
requirements)?
A:
Q:
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A:
Q:
A:
A:
Q:
A:
A:
A:
different steps.
A:
6.1.6.
6.1.6.1.
Retirements
Retirement
Questions:
Q:
1) How and when is asset accounting informed of the retirement of an asset?
A: Equipment: When the Controller's Office receives a T-64 Surplus form is received, a
police report that the asset has been lost or stolen, or a University representative calls.
Building: Call from Alvin Payne or read about demolition in the paper.
Q:
2) Do you sell or transfer assets to affiliated/associated companies?
A: No
Q: 3) How do you process retirement of a low value asset (e.g. retirement with zero value;
retirement with revenue; account assignment for retirement with revenue)?
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A: Low value assets that are sensitive will be depreciated 100%, but they will remain on the
books at a zero value until retired. No revenue is expected to be received upon retirement.
Q:
4) Who issues invoices for asset sales?
A: Sales are cash only at public auctions.

6.1.6.2.
Mass Retirement
Questions:
Q: 1) When retiring assets, is there ever a need to retire a large number of assets at the
same time?
A: Equipment: Yes
Q: 2) If yes, how many assets are normally concerned? Please provide an example with
documents.
A: We sell fleets of cars through auction. We buy new cars every year at a deep discount
and then sell the 3 or 4 year old ones for almost the same amount that we had purchased
them. Motor Pool acts as a service center. Thus, it needs its own cost center to collect the
revenue.
In addition, we sell groups of computers at a time. The revenue we receive on computers is
minimal. We must receive at least $15 per sold computer. The revenue received from
computer sales won't post to the asset.
6.1.7.
Closing Operations [Asset Accounting]
Questions:
Q:
1) What activities are included in the month-end process for asset accounting?
A: Equipment: reconciling all equipment transactions on the equipment inventory system

against the financial accounting system (manual process). Generating "change reports" to
mail out to departments documenting an addition or deletion from the inventory.
All other assets: None
Q: 2) Which internal and external asset valuations belong to month-end closing process?
Please provide a sample of all required valuations.
A: Monthly reports are run on equipment as listed above. We don't go back and perform
appropriate asset valuation amounts.
Q:
3) What activities are included in the year-end closing process for asset accounting?
A: Equipment: Same process as the monthly close, except inventories for physical
verification are mailed to departments. Capitalization is done at year-end. And assets are
capitalized as previously described.
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Departments can change location but not amount, tag number or retire the asset. The
Controller's Office updates the other information for the departments. The Controller's Office
communicate what action must be taken to remove the asset such as getting police report to
say that it is lost or stolen.
Buildings: The building object code is reconciled against additions in the Facilities Data Base
(manual process). Currently, assets are created and capitalized at year-end.
Other assets are capitalized at year-end.
Q: 4) Which internal and external asset valuations belong to year-end closing process?
A: We are only valuating assets at historical cost with straight-line depreciation as per the
GASB regulations.
CI Template:
Update the general ledger for changes in asset accounts as transactions occur. (Current
system in manual journal entries)
Post depreciation to the general ledger. (Currently depreciation is not posted.)
Post assets under construction to the general ledger. (Currently this is manually
calculated)
Manage inventory of assets.
The asset year-end closing is the cut-off date after the end of the fiscal year. The asset
year-end closing program checks all the data for the old fiscal year and blocks the year to
changes up to this date.
The year-end closing program checks the following:
complete posting of all asset values in the general ledger
complete posting of all depreciation
adherence to all rules for net book value
1) By campus: Each campus has several business areas making up the fund group and
entity. Equipment will be tied to cost center or WBS (depreciation posts here) and
BA. If CO capital outlay can post to both the cost center and the WBS' then we will
meet this need at period end (depreciation run) else consider a special program.
Land and buildings will be tied to only the BA.
2) Need to track asset by source of fund. There is not a field for fund sources. Funding
source can be tracked by using sub assets. Use evaluation group 1: source of fund
(Federal, state, plant fund, gifts, etc.) Funds are directly mapped to cost center and
WBS' therefore we can report by cost center and WBS to get data by individual fund.
(R/3 doesn't have a fund field on asset master record.) Also if we set up configuration
for budget object assignment the fund can be entered on the asset acquisition
transaction. TBD if we should have this turned on. Multiple funding = sub asset.
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3) Need to track improvements / infrastructure (a wing expansion to an existing building)

we will use group assets for improvements. Example: Every building will be a group
asset. A new renovation will be one asset (with 2 sub assets) which actually is new
asset 0 and sub asset 1 since there is no parent/child relationship in the asset
master. Improvements = group.
4) Report to control asset set up centrally. Is there a report in MM where we can see all
the PRs by account assignment A for assets? If not consider a custom report to see
all the PRs requesting purchase of assets. Look at all PRs over $5000 and check
account assignment and G/L account so that assets are capitalized. Need to do the
same thing for $1000 since tagging etc still needs to occur.
5) R/3 standard reports should provide similar data as current UT asset reports. UT
month end closing, periodic reports (assets by tag number, assets by type, inventory
by cost center) are standard. Departments can be trained to run some reports
themselves. No special custom reporting needs have been identified at this time.
Brenda will email some example reports to Verna to review.
6) Interested in adding an attribute to the asset master record for "person responsible"
but the list of these people will change and it would require configuration change.
N/A

Year-end processing of AM
Online reporting for departments for asset transactions. Users can run reports on
Acquisitions, Transfers, Retirements, Depreciation, Asset balances, etc. at their PC
versus receiving a hard copy at the end of the month or period.
Integration with the general ledger, materials management, and project systems.
UT will now have up to date accurate records in the general ledger. Purchases of capital
items will be capitalized at the time of purchase. Assets under construction will be
recorded on a monthly basis.
UT will have reports available online to users to monitor asset activity in their department.


N/A at this time
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N/A

Configuration: Depreciation areas, Inventory Reports, Special year-end reports if
applicable. UT will not have special configuration to enable the year-end closing
processes.
6.1.7.1.
Multiple Valuations
Questions:
Q: 1) Do you have parallel valuation for your asset, e.g. for group valuation, for cost
accounting purposes or for legal reasons?
A: All assists: Possibly need parallel valuation for cost accounting. The portion of the asset
funded from federal funds needs to be excluded for cost accounting purposes.
Q:
2) Do you have to valuate your assets in different currencies?
A: No
Q: 3) Is there a distinction necessary between book depreciation (for balance sheet) and tax
values (for a tax balance sheet)?
A: No
6.1.7.2.
Preparations for Year-End Closing in Asset Management
Questions:
Q:
A: End of year is June 30

Current practice is to close the University's books by August 15.
Q: 2) Do you run the year-end closing process in asset accounting separate from general
ledger?
A: Yes They are currently separate systems. The Equipment system is reconciled to the
checks written for equipment on a monthly basis. Inventory sheets are mailed out to
departments for physical verification at a separate time than the year-end close.
Q:
3) Are leased assets treated like any other fixed assets in year-end closing?
A: Yes
6.1.7.3.
Mass Changes
Questions:
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simultaneously?
A: The accounting manager, the accounting clerk and data integrity supervisor in the
Q:
A: Yes
Q:
A: Moving all fixed assets from one location to another location; transferring all assets from
one department to another department.
In addition, a change in the capitalization policy might require massive changes.
Change of business area responsibility.
6.1.7.4.
Depreciation posting
Questions:
A: Equipment Depreciation may be posted directly to cost accounting to service centers and
in some limited cases for auxiliaries.
Only see depreciation in CO for service centers.
accounting?
A: Monthly
Q:
A: No.
Q:
A: In R/3 we plan to set up a "dummy" WBS in plant funds to capture all depreciation
postings except for certain auxiliaries and service centers that will have a separate cost
center for their depreciation.
cost accounting?
A: We will post directly to cost accounting.
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6.1.7.5.
Carry Out Year-End Closing in Asset Management
Questions:
Q: 1) How do you conduct the physical inventory for fixed assets (e.g. manually, using
barcode scanner)?
A: Currently, on an annual basis, the Controllers Office sends physical inventory sheets out
to the departments that show all the equipment that has been assigned to the department.
The individual departments manually verify that the equipment is still there. Any changes in
locations are hand-written on the form or corrected on-line if the department has on-line
access. If corrected on-line, the Controllers Office sends out a change report automatically
to the department. The original sheets must signed by the department verifying that the
changes made were correct and that the equipment is there. If items are not there because
the item has been surplused, the department must also send in a T-64 form. If the item has
been lost, the department must attach a copy of the police report and a T-64 form. If the
police report has not yet been obtained then the department notes that it will be forthcoming.
The sheets are returned to the Controller's Office, who makes any needed changes based on
the returned sheets and the T-64 forms.
There is no bar coding.
Q:
2) Who is responsible for the physical inventory of the fixed assets?
A: The responsible person is typically the department head. However, some colleges
officially assign a single person to be responsible for all inventories. This individual is often
the college's business manager.
Q: 3) What is the relation between the inventory number of an asset and the number of the
asset master record?
A: Equipment: The asset master record is an internally assigned number. The inventory
number is an externally assigned tag number.
Q:
4) Do you create inventory lists using the SAP R/3 System, or using a non-R/3 system?
A: Currently, we keep inventory on the equipment inventory system. However, in R/3 we

want to keep the inventory lists on R/3.
6.1.7.6.
Periodic Reports
Questions:
Q:
expenditure object code. Change reports are generated and mailed to departments that
indicate an asset was added, changed, or deleted. An annual report of equipment additions
and deletions is generated that is used to prepare a journal entry to the asset accounts.
Accounting?
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ledger?
Q:
the regular assets.
Q:
structured (for example, company, cost center etc)?
assets.
Other assets: are reported at a campus or university level only.
6.2.
Handling of Leased Assets
Questions:
Q: 1) What kind of leasing agreements do you normally make? Operating leases (not
necessarily shown in Asset Accounting) or Capital Leases (Asset capitalized)?
A: For the University, it is generally cheaper to buy equipment than to lease it. The leases
we do have are generally operating leases. We lease buildings or partial buildings using
operating leases. We have leases on a few pieces of equipment.
CI Template:
See handling of fixed assets section
At end of FY debit the asset and credit lease hold payable liability to capitalize the asset.
Create amortization schedule and break payments into principle and interest for lease
payment. Process will be the same in R/3 but we need to discuss how we manage the
lease process. Transfers, changes, retirements, depreciations are the same as nonF:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc
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leased assets.
6.2.1.
6.2.1.1.
Asset Maintenance
Asset Master Record Change
Questions:
Q:
1) Do you transfer your assets from one legal entity to another?
A: No
Q: 2) If not transferred between legal entities, do you create a new master record when
location changes?
A: No. We only change the location but keep the asset record the same.
Q: 3) Describe possible ways of processing changes in location. What procedures are
currently in place?
A: The location of the whole department may change. Thus, when this happens all of the
equipment locations for that department must be updated to the new location. Currently we
can do this in mass. In addition, the use of certain individual pieces of equipment is changed
(another department begins using it). In these instances, the location and responsible
department is changed. A formal transfer form is completed in this instances by the two
departments involved. In addition, equipment may be surpluses. In this case, a surplus form
is completed by the responsible department. The equipment items remain the responsibility
of the using department until after the surplus department confirms that the item has been
sold at the surplus sale.
Q:
4) Does changing of location apply to low value assets?
A: Yes
6.2.1.2.
Mass Changes
Questions:
simultaneously?
A: The manager and assistant manager over plant and equipment have the authorization to
change a large number of assets simultaneously. Individual departments can go in and
change the locations of the equipment; however, they must make the change one asset at a
time.
Q:
A: Yes
Q:
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A: Mass changes are needed when the space changes for the whole department or unit.
For example, if a lease expires on a building, then the equipment must be moved to a new
location, and the asset master records are generally changed in mass.
6.2.2.
6.2.2.1.
Receipts
Acquisition of Leased Asset
Questions:
Q: 1) Who is responsible for the acquisition of a leased asset? Who will negotiate the
leasing agreement?
A: The individual departments have negotiated leases in the past, although they are not
supposed to. When this happens, the Controllers Office Manager of Plant & Equipment
finds out after the fact and creates the asset upon learning of the lease. The Purchasing
Department has the official responsibility of acquiring leased equipment. Tim Mapes of the
Treasurer's Office is responsible for the accounting for capital leases.
Q: 2) Describe the process for the acquisition of a leased asset, from the purchase order to
capitalization in Asset Accounting.
A: Very seldom are there ever any items that are leased. Items that have been leased in
the past include mainframe computers and large production printers. In these instances, the
leases have been capitalized, lease-purchase (with a buy-out option at the end of the lease
period).
Departments prepare a requisition for a lease. Purchasing puts out a bid, with both a request
for quote of lease and also out-right purchase. Then, Purchasing evaluates whether it is
cheaper to lease or buy the item. For some high-dollar leases, state bonds may be issued.
When Purchasing determines a lease is appropriate, the lease is prepared and sent to the UT
Legal department for review and recommendation for approval by a Vice President who must
ultimately approve the lease.
Purchasing sets up a purchase order to facilitate the payment process. Payments then go
through Accounts Payable with the vendor supplying invoices on a set schedule.
Purchasing gives a copy of the executed purchase order to the Controller's Office for the setup of the asset.
The asset is set up and capitalized as would any other asset.
6.2.3.
6.2.3.1.
Depreciation
Depreciation Processing
Questions:
Q:
1) What are the methods of depreciation that you are currently using?
A: Currently we do not depreciate any assets, but we believe our policy for depreciating
lease-purchase assets will be the same as purchased assets. If the leases are operating
leases without a purchase option, they will not be capitalized or depreciated.
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Q:
2) Which depreciation method is used particularly for leased assets?
A: Straight-line depreciation will be used for all assets.

Q:
3) Do you calculate depreciation values to the day?
A: No. In the future in R/3 we expect to depreciate values to the month.
Q: 4) In certain cases do you change over from declining-balance depreciation to straightline depreciation? If so, when?
A: No.
Q: 5) Do you want to allow negative depreciation for certain assets or categories of assets?
If so, please specify.
A: No. Negative depreciation will only be done through manual adjustments.
Q:
6) Do you distinguish between a fixed and a variable depreciation portion?
A: No.
Q:
7) How do you handle the period control for depreciation values?
A: Depreciation will post in the month of acquisition. No depreciation will be posted in the
month of retirement.
6.2.3.2.
Questions:
A: Depreciation may be posted directly to cost accounting in some limited cases for
auxiliaries.
accounting?
A: Monthly
Q:
A: Currently, depreciation is done manually to assets under construction at year-end. In R/3

we plan to settle costs monthly from a WBS that is set up to capture the capitalized
purchases.
Q:
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A: In R/3 we plan to set up a "dummy" WBS to capture all depreciation postings except for
certain auxiliaries and service centers that have a separate WBS for their depreciation.
cost accounting?
6.2.4.
6.2.4.1.
Business Transactions
Transfer Leased Asset
Questions:
Q:
1) Do you transfer leased assets between companies?
A: No
Q: 2) Would a transfer of a leased asset affect the leasing agreement? If so, please
describe.
A: A lease may be extended or shortened.
6.2.4.2.
Change in a Leasing Agreement
Questions:
Q:
1) How often are changes in a leasing agreement necessary?
A: Not often; however payment amounts have been lowered and terms have been
extended. In addition funding out clauses are included in the lease which states that UT is
funded with state funds which are not guaranteed from year to year; thus, the vendor agrees
to allow UT to get out of the lease with no penalty is funding is not continued by the State.
Sometimes equipment upgrades are obtained via contract modifications. Upgrades are
generally not included in initial lease agreements. Any changes in lease agreements must be
coordinated through Purchasing and must be approved by the Vice President who approved
the initial lease agreement.
Q:
2) What type of changes are most frequent? Provide examples.
A: See above. The Purchasing Department is responsible for making the changes to the
lease.
Q: 3) In cases where changes to a leasing agreement are necessary, how many assets
would be affected?
A: In the future, the amount of the monthly depreciation posting would change.
Q:
4) Does a change of location affect your leasing agreement? In what way?
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A: Generally, no. However, some leases may not allow for movement of the asset from the
initial agreed-to location. When a change of location is needed in this instance, the lease
must be re-negotiated. Any renegotiations or modifications must be approved by the Vice
President who signed the original lease agreement.
Q: 5) What is the information flow in your enterprise regarding a change in asset location or
a change of an asset to a different organizational unit?
A: On the Knoxville campus, 200 bookkeepers have access to the equipment system. On
the other campuses, generally the Business Office has access to the equipment system. The
bookkeepers are allowed to change the location (building & room #) of the equipment. They
may also change the description of the item. Some bookkeepers do not have access to the
equipment system. In this case, the bookkeepers send e-mails or other written request to the
Controllers Office, and the Controller's Office will make the change in the equipment system.
Only the Controller's Office may change the cost or the tag number.
If the responsible department changes, then a manual T-64 form must be signed by both the
transferring and the receiving department.
6.2.4.3.
Lease Payment
Questions:
Q: 1) Describe the payment conditions of your leasing agreements. Differentiate if
necessary between different kinds of agreements.
A: Payment conditions most often include a Funding-Out clause that allows UT to get out of
the lease without penalty if State funding is not provided in subsequent years.
Q:
2) How often are your leasing payments due?
A: Typical payment schedules are monthly, quarterly, or annually. Schedules might also be
biannually or bimonthly.
6.2.5.
6.2.5.1.
Retirements
Retirement of Leased Asset
Questions:
Q:
1) What are the reasons for retiring a leased asset?
A: Equipment: At the end of the term (lease is up), we will take possession at lease-end for
those lease-purchases and dispose of it at the point it is no longer function.
Q:
2) What is your process for retiring leased assets? Please describe the postings.
A: The process for disposal of leased assets is the same as owned assets.
Q: 3) Do you normally buy leased assets after expiration of the leasing contract or do you
return them to the leasor?
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A: If the asset has been leased through a lease-purchase, UT normally buys the asset after
the contract expiration.
6.2.6.
Closing Operations
Questions:
Q:
1) What activities are included in the month-end process for asset accounting?
A: Same process as for purchased assets. EXCEPT there is a monthly payment to the
leasor. This payment is processed in parts: A portion is processed against the leasehold
principal balance and a portion is process against the interest. An amortization schedule
must be kept on the principal and interest. Principal and interest are identified as two
different cost elements on the same WBS. Generally the payment is posted to the principal
(the equipment code) and then the Asset Accountant journal vouchers a portion to the
interest object code on the same account.
Q: 2) Which internal and external asset valuations belong to month-end closing process?
A: Same process as purchased assets.
Q:
3) What activities are included in the year-end closing process for asset accounting?
Q: 4) Which internal and external asset valuations belong to year-end closing process?
6.2.6.1.
Multiple Valuations
Questions:
Q: 1) Do you have parallel valuation for your asset, e.g. for group valuation, for cost
accounting purposes or for legal reasons?
A: See 1.1.7.1
Q:
2) Do you have to valuate your assets in different currencies?
A: No.
Q: 3) Is there a distinction necessary between book depreciation (for balance sheet) and tax
values (for a tax balance sheet)?
A: Only one method, straight-line depreciation, will be used.
6.2.6.2.
Preparations for Year-End Closing in Asset Management
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Questions:
Q:
A: End of year is June 30.

Current practice is to close the university books by August 15.
Q: 2) Do you run the year-end closing process in asset accounting separate from general
ledger?
A:
Q:
3) Are leased assets treated like any other fixed assets in year-end closing?
A: Yes
6.2.6.3.
Mass Changes
Questions:
simultaneously?
A: Plant & Equipment manager
Q:
A: Yes
Q:
A: Mass changes are needed when space changes for the whole department or unit.
6.2.6.4.
Questions:
A: Yes. May be posted directly for auxiliaries or service centers.
accounting?
A: Monthly
Q:
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A: Currently, depreciation is done manually to assets under construction at year-end. In R/3

we plan to settle costs monthly from a WBS that is set up to capture the capitalized
purchases.
Q:
A: In R/3 we plan to set up a "dummy" WBS to capture all depreciation postings except for
certain auxiliaries and service centers that have a separate WBS for their depreciation.
cost accounting?
6.2.6.5.
Carry Out Year-End Closing in Asset Management
Questions:
Q: 1) How do you conduct the physical inventory for fixed assets (e.g. manually, using
barcode scanner)?
A: Currently, on an annual basis, the Controller's Office sends physical inventory sheets to
the departments that show all the equipment that has been assigned to the department. The
individual departments manually verify that the equipment is still there. Any changes in
locations are hand-written on the form or corrected on-line if the department has on-line
access. If corrected on-line, the Controllers Office sends out a change report automatically
to the department. The original sheets must be signed by the department verifying that the
changes made were correct and that the equipment is there. If items are not there because
the item has been surplused, the department must also send in a T-64 form. If the item has
been lost, the department must attach a copy of the police report and a T-64 form. If the
police report has not yet been obtained then the department notes that it will be forthcoming.
The sheets are returned to the Controller's Office, who makes any needed changes based on
the returned sheets and the T-64 forms.
There is no bar coding.
Q:
2) Who is responsible for the physical inventory of the fixed assets?
A: The responsible person is typically the department head. However, some colleges
officially assign a single person to be responsible for all inventory. This individual is often the
college's business manager.
Q: 3) What is the relation between the inventory number of an asset and the number of the
asset master record?
A: The asset master record is an internally assigned number. The inventory number is an
externally assigned tag number.
Q:
4) Do you create inventory lists using the SAP R/3 System, or using a non-R/3 system?
A: Currently, we keep inventory on the equipment inventory system. However, in R/3 we

want to keep the inventory lists on R/3.
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6.2.6.6.
Periodic Reports
Questions:
Q:
expenditure object code. Change reports are generated and mailed to departments that
indicate an asset was added, changed, or deleted. An annual report of equipment additions
and deletions is generated that is used to prepare a journal entry to the asset accounts.
Accounting?
ledger?
Q:
the regular assets.
Q:
5) Are there any particular reports you run for leased assets?
A:
Q:
structured (for example, company, cost center etc)?
assets.
Other assets: Reported at a campus or university level only.
6.3.
Direct Capitalization
CI Template:
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Integrate the purchase and capitalization of assets though MM and AM.
MM/ AM
UT intends to integrate assets purchased through MM to AM. Two options are being
discussed for Release Strategies. UT is leaning towards Option #1.
Decentralized Option #1: End users create the asset and the purchase requisition.
User's steps: Create asset master record -> Create PR with asset account assignment
category A on requisition -> release strategy for approval / review of master record for
accuracy from AM -> release strategy for creation of PO by Purchasing Department ->
Asset purchased -> Goods receipt posted when item received which initiates the
capitalization of the asset -> invoice verification -> AP pays the invoice.
Centralized Option #2: End user initiates the purchase requisition and Controllers Office
creates the asset and finishes the requisition.
PR with account assignment K (cost center) rather than A (asset) -> release strategy
sees using Capital outlay account (and above $5000) or sensitive equipment and trigger
approval in AM -> AM creates the asset, changes the PR to account assignment A, and
enters the asset on the PR -> release strategy for creation of PO by Purchasing
Department -> Asset purchased -> Goods receipt posted when item received which
initiates the capitalization of the asset -> invoice verification -> AP pays the invoice.
Note: Option 2 won't work because Release strategies can't be done at the G/L account
level; therefore, all purchase requisitions would have to be review by the Controllers
Office and this would not be feasible.
A/P AM integration
If we have an asset purchased with multiple funding (sub assets) can we validate that the
invoice maps to these funds? Is there a way to validate that the payment is coming from
the fund sources identified on the asset masters?

Sensitive equipment bought on a procurement card will need to be managed at month
end (after vendor payment). Verna to manually review and clean up from charges to
equipment object code. All sensitive equipment assets should be created centrally.
If someone buys a camera thru the procurement card (non MM) after the invoice is
received then create the sensitive 'asset' and do a posting (debit the asset, credit the
contra). Can we set up the AP invoice to debit the asset instead of the expenditure
account?

Blanket purchase orders and Procurement Card:
Procurement card is used for purchases between $1 and $2,000. Doesn't go through MM
but will go to AP to be entered. Issue: how do we capitalize assets that are purchased on
the procurement card?
Blanket purchase order is used for purchases above $2,000. MM sets up a blank PO
with a vendor for high volume purchases. In theory this is not intended for assets. Issue:
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how do we capitalize assets purchased on the blanket purchase order?

Recommend new UT policy: Policy to not allow asset to be purchased on the blanket
purchase order. Departments should create a new PR and PO for asset purchases to
allow the integration and control through MM.
Current business process for assets: UT is on a manual system; at the end of each
month they review all expenditures and manually capitalize assets after the purchase.
R/3 business process: Asset record will be created at the purchase requisition phase;
therefore, the asset record will not include all the information such as tag number, serial
number etc. User will have to go back and update the asset master record after the item
has been received. Training Issue.
Integrated purchasing with materials management allowing UT to capitalize assets at the
time of purchase rather than after the fact.
Release strategies can not be activated at the G/L account level (it must be done on the
document header) therefore, users can purchase an item and charge it to a cost center
and use a G/L account for a capital item or a sensitive item and the system would not
prevent this.

Two possible solutions:
1. Develop a report that identifies all purchase requisitions for a period, account
assignment category, G/L account. Controllers Office would review the report
throughout the day and look for inaccurate data (e.g., account assignment K using G/L
account for capital or sensitive item).
2. Consider creating a validation on the PR where the sensitive item G/L or capital outlay
G/L's should be an account assignment category A.

N/A

MM configuration:
Account assignment category A needs to be active.

Release strategy from the PR to the AM needs to be set up.
Account assignment for asset number must be a required field
on the PR
GR/IR flag for valuated should be set so assets will be
capitalized a goods receipt
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6.3.1.
Procurement and capitalization
6.3.1.1.
Creation of Master Record for Tangible Assets
Questions:
Q: 1) Who is responsible for the initial creation of an asset maser record? Who provides
which information?
A: Equipment: Departments either complete an Equipment Acquisition Report (T-66) or
enter an electronic version into a suspense file on the Equipment Inventory System before an
invoice is paid. Once the invoice is paid, the equipment inventory section of the Controller's
Office checks the report or suspense file for accuracy and adds additional information such
as DV#.
Buildings: The accounting manager in the Controllers Office creates the initial asset master
end of the year.
Land: The land card is created in the Treasurer's Office 3rd floor after land is received or
purchased.
Infrastructure: The accounting manager in the Controller's Office creates the initial master
end of the year.
Q: 2) How does information flow back and forth between the person responsible for the
capital investment project and the accountant in Asset Accounting, with respect to the
creation of a master record for an asset under construction?
A: Equipment: N/A
Building: Once a construction contract is approved, Risk Management requests a building
asset master record to be created by the Controller's Office.
Land, Infrastructure: N/A
Q: 3) Which organizational units and/or which functional areas have authorization for
creating or displaying asset master records?
A: Equipment: Departments/Business Areas have authorization for creating and displaying
asset master records.
Buildings and Infrastructure: Controller's Office for creating / Campus Business Office, or
Physical Plant view only.
Land: Treasurer's Office and Controller's Office for creation and viewing.
6.3.1.2.
Questions:
Q:
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A: Equipment: Departments submit requisitions for items over $2000 to the Purchasing
Department. Purchasing creates a purchase order. Bids are most-often required unless the
items are sole-source. When the invoice is received, the departments fill out a paper asset
master record or complete the asset master record on-line. The invoice and asset master
record is sent to A/P who forwards the two documents to the Controllers Office. The
Controller's Office uses the paper asset master record to set up the equipment item (or to
release the record if it was previously created on-line.) The checks paid for equipment and
additions to the equipment inventory are reconciled on a monthly basis.
Buildings: Governed by University FPS 180
The capital budget process begins each spring for the fiscal year that begins approximately 1
1/2 year in the future. (Budgeting done Spring 2000 for work to be done beginning July 2001).
Projects are submitted to each campus office where the projects are prioritized and divided
into 3 categories 1) Capital outlays (>1million/new buildings) 2) Capital maintenance ($100,000 to 1million) and
3) internally funded projects (w/ funding from parking revenues, athletic dept. revenues, etc.)
The campus lists are sent to the UT President who develops an overall UT priority list. The
Board approves the UT priority list, and the list is sent to the TN Higher Education
Commission (THEC). THEC merges UT projects with the TN Board of Regents (TBR)
projects, and prioritizes this combined list, and forwards the list to the Governor. The
Governor merges projects from all over the State and sends a recommended list to the State
Legislature.
The State Legislature approves both state-funded and internally funded projects, and
appropriates funds in May (May 2001 for projects beginning July 2001).
When UT receives their approved projects, the projects are sent to the State Building
Commission (SBC) for its approval. The SBC gives each project a SBC #. Once UT
receives notice of the SBC #, the assistant manager in the UT Controller's Office sets up a
plant fund (project account) (J account). The project is also set up in a departmentally
maintained (in Facilities Planning) database for the internal tracking of various internal
costing and reporting.
Miscellaneous contracts are entered into with architects, surveyors, and testers. A contract is
set up with one general contractor. (The general contractors form agreements with the
subcontractors; thus, UT has no subcontracts.)
The J account collects all costs for the asset under construction as individual expenses.
Once a year at fiscal year-end close, the UT Controller' Office Assistant manager, makes
manual capitalization entries.
UT withholds 5% of the contractor's billings each month as retainage. This retainage is
transferred into an agency account set up specifically for this project. Interest is earned on
the funds set aside in this agency account.
Q:
A: Equipment: University FPS 050 and 170. All capitalized equipment items require a
purchase order above $2,000. Sensitive low-dollar items below $2000 do not have to have a
purchase order. The departments order these items directly from the vendors.
Land, building, infrastructure: University FPS 180 governs the procurement.
Q:
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A: [X] Integrated with Materials Management (MM)

[X] Integrated with Accounts Payable (FI)
[X] Directly to Asset Accounting (FI-AA)
A: All Assets: Net basis
requirements)?
A: Equipment: No
Land, library and livestock: N/A
Q:
A: All assets: Our current systems do not have this functionality.

Valuated means you can you pay the invoice before goods receipt.
Q:
A: Yes
A: Yes
Q:
A: Equipment: Yes
Buildings: Yes
Infrastructure: Yes
A: Equipment: Yes departments budget for equipment.
Buildings: Each building and infrastructure item has a budget. Capital budgeting will not be
done in R/3???. We do have the option to use PS and AM functionality to do this. Will
investigate further.
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A: All assets: No integration in the acquisition process and asset accounting.
different steps.
A: All Assets:
At invoice payment:
Debit - Account (cost center) and Expenditure Object Code (G/L account)
Credit- Cash or A/P
At year-end:
Debit - Asset by type (land, building, equipment)
Credit- Investment in Plant by asset (land, building, equipment)
7. Travel Management
7.1.
Travel Expenses
7.1.1.
Presettings for Travel Expenses
Questions:
Q:
1) Which employees in your enterprise take trips?
A: All employees are eligible to travel with proper authorization. Students, candidates for
hire, guests and consultants are also reimbursed for University business related travel.
Q: 2) What rules, if any, are used to determine whether an employee is entitled to a trip
advance?
A: Trip advances are given to certain individuals where University travel would impose a
financial burden on the people involved. The following individuals can be given a travel
advance:
New employees (employed 3 months or less)
Student employees
Group leaders/directors of team or group travel (one responsible for distributing
cash/paying expenses)
Employees traveling outside the continental U.S.
Term employees
Non-exempt employees
There must be an approved travel authorization for all out-of-state and foreign trips
accompany the request for the travel advance.
Q:
3) Are these rules based on certain organizational structures within your enterprise?
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A: No - they are based on employee job titles or the location of travel.
Q:
4) Do you use travel requests in your enterprise?
A: Yes. Any University employee or student traveling out-of-state must have an approved
authorization for the travel before they go. A Travel Authorization (Form T-18) needs to be
completed prior to the trip. The exception to this is the group labeled as "Senior
Administrative Officers". They are not required to have a travel authorization. Guests,
candidates for hire and consultants do not require travel authorizations.
Q: 5) What are the rules that specify which employees have to submit travel requests
before going on trips?
A: For out-of-state and foreign travel, all employees/UT students must complete the Travel
Authorization (Form T-18) prior to a trip. Sr. Administrative Officers are not required to
complete this form. Guests, candidates, and other non-University employees are not
required to complete the T-18.
Q:
6) For which countries do trip rules have to be established?
A: There are no rules for specific countries. There are set per diems for meals and
maximum amounts for lodging but no other rules. However, foreign travel requires an
additional approval on the Travel Authorization (T-18). It requires the approval of a vice
president, chancellor or their designee.
Q: 7) Please classify all possible vehicle types, so that it is clear which vehicles can be used
by which employees and which vehicle types affect reimbursement amounts.
A: Personal vehicles, UT car, rental car (economical), motorcycle, train, commercial plane,
personal plane, UT plane, charter aircraft, animals (dog sleds, donkeys, etc), ship, bus, ferry,
bicycle, ground transportation (taxis, shuttles, limos)
Q:
8) Do you use different reimbursement amounts for different geographical areas?
A: Hotel maximum reimbursement rates are based on location.

Within the state of Tennessee they are based on county location and are divided into Level I
and Level II.
Level I includes Davidson, Hamilton, Knox, Shelby, Sevier and Washington (Johnson City)
counties (rate $60 plus tax/night)
Level II covers all other counties in Tennessee (rate $50 plus tax/night)
Most all other cities are reimbursed at $80 plus tax/night. There are two exceptions:
Selected Cities ($120 plus tax/night) and Special Exceptions ($180 plus tax/night).
Selected cities include Atlanta, Boston, Chicago, Dallas, Phoenix, Philadelphia, Los Angeles,
New Orleans, San Francisco, San Diego, Seattle and Washington, D.C.
Special exceptions include New York City and all international cities. NOTE: Alaska and
Hawaii are considered foreign travel.
Meals are reimbursed on a per diem - rates are different for in state vs. out of state.
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Q:
9) Are there general reimbursement amounts for specific countries in your company?
A: All foreign lodging is reimbursed at a higher rate ($180 plus tax/night). Foreign meal
rates are the same for out-of-state travel.
Q:
10) Are there statutory regulations for trips?
A: Yes, meals for trips where there is no overnight travel are considered taxable. However,
we currently do not report or deduct these taxes.
Q:
11) Do you classify your employees in different groups with regard to expense types?
A: Yes. There are six classifications:

1.
2.
3.
4.
5.
6.
General (most University employees, guests, students, etc)

President
Sr Administrative Officers (President's Staff)
Board of Trustees
Athletics
University Pilots
Q: 12) Do you use enterprise-specific trip activities to determine per diems to be reimbursed
and maximum amounts?
A: Yes, athletic recruiting trips are reimbursed at different rates.
Q:
13) Please tell us your reimbursement rates for meals and accommodations.
A: MEALS:
Full Day
Within TN
Outside TN
Foreign travel
Partial Day
$30 ($35 -Sr Admin & Bd of Trustees)
$22.50 ($26.25 - Sr Admin &

Bd of Trustees)
$40 ($45 - Sr Admin & Bd of Trustees) $30 ($33.75 - Sr Admin & Bd
of Trustees)
of Trustees)
Overnight travel: Partial meal allowance (75% of the daily rate) is available for the date of
departure and the date of return.
One day travel: Meal allowance is available when working beyond the 8 hr work day and the
hours of departure and return are in accordance with the schedule below (not required to
show this on the reimbursement request):
In-State
Out-of-State
Departure/Return
Breakfast & Dinner
$20 ($25 - Sr Admin/Bd of Trustees) $29 ($33)
Before 7:00am & after 6:30pm
Breakfast
$6 ($7 - Sr Admin/Bd of Trustees)
$9 ($10)
Before 7:00am & before 6:30pm
Lunch (for Sr Admin only where entertainment is involved)
$10
$12
Dinner
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$20 ($23)
After 7:00am & after 6:30pm
If one or two meals are included as part of the registration fee for a conference, seminar or
workshop, a partial meal allowance is available (75% of daily rate). If all meals are included,
no meal allowance is available. Continental breakfasts are not considered a meal.
Team, Group or Retreat Travel:
Meal
In-State
Breakfast
Lunch
Dinner
$ 6
$10
$14
Out-of-State
$ 9
$11
$20
Entertainment: The actual amount spent for the entertainment meal will be reimbursed. In
addition, a partial meal allowance (75% of daily rate) will be reimbursed in addition to the
entertainment meal unless it is a one-day trip. In this case, the rates for one-day trip will
apply depending on which meal is the entertainment meal. A receipt is required for all
entertainment.
Sr. Admin Officers: Group breakfasts, luncheons, and dinners are allowed provided written
advance approval is given or a receipt is given. When acting as a host to guests of the
University, actual expenses will be reimbursed.
Pilots: Meals may be allowed in excess of regulations when it is necessary to take meals at a
hotel or other area when eating facilities are limited. In those cases, where meals exceed
limitations, an explanation must be given and receipt furnished.
ACCOMMODATIONS:
In-State:
Level I
Level II
Out-of State:
$60 plus taxes ($67 plus taxes for all cities - Sr Admin)
$50 plus taxes ($85 plus taxes for all cities - Bd of Trustees)
General
Selected Cities
Special Cities
$ 80 plus taxes ($85 - Sr Admin/Bd of Trustees)

$120 plus taxes ($125 - Sr Admin/Bd of Trustees)
Athletics: While in recruiting status, actual expenses for lodging will be reimbursed.
Pilots: Actual lodging expenses will be reimbursed when accompanying University or State
officials on official business or when it is necessary to wait overnight for passengers.
NOTE: If lodging is at a conference hotel, the conference rate will be reimbursed provided
there is support for the conference rate or the name of the conference hotel is given on the T18 or T-3.
SEE QUESTION 8 FOR A LIST OF LEVEL I & II, GENERAL, SELECTED AND SPECIAL
CITIES.
Q:
14) Do you maintain special cost centers for Travel Management?
A: No, each department is charged directly for their travel.
Q: 15) Do you split your cost centers according to a certain scheme? Was it split
(Background: infotypes 0027, 0017, 0001)?
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A: No
Q: 16) Do you maintain special bank accounts for Travel Management (background:
infotype 0009, as reminder for new consultants)?
A: No, we currently process travel reimbursements through Accounts Payable as a
disbursement. We would like to use direct deposit for travel checks and would like to
support different bank accounts for travel reimbursements.
7.1.2.
Process-oriented questions for Travel Expenses
Questions:
Q: 1) Please define exactly: your existing trip rules and the processes involved with trips.
For which employees do these trip rules and processes apply?
A: All travel must be for official University business. Authorization for travel and
reimbursement of expenses must be in accordance with provisions in policy and rates given.
A Travel Authorization must be completed and approved prior to all out-of-state and foreign
travel. Sr. Administrative Officers and guests do not need to complete a Travel Authorization.
Reimbursement of expenses incurred is subject to limitations of policy (rates given) and are
not the amounts that should be spent but rather the maximum amounts that can be
reimbursed. Original, itemized receipts must be submitted for lodging, registration fees,
airline tickets, rental cars and any other allowable expense over $50 (except for ground
transportation).
A T-3 (Travel Reimbursement Form), along with required receipts, must be processed upon
completion of trip. This form must be signed by the traveler and the department head
(individual responsible for account to be charged) or their designee. A department head can
approve his/her own travel expense but not the travel authorization. Any T-3's with
entertainment or exceptions to policy require a further approval.
Q:
2) What types of authorizations are required for the Business Trip Administrators?
A: Sr. Administrative Officers are not required to complete a Travel Authorization.
Q:
3) Are travel expense bills recorded centrally or decentrally in your company?
A: Currently, travel receipts are entered and stored centrally at UT. Reimbursements can
be entered in the campus business offices, but all receipts and all releases for payment are
handled by the Treasurer's Office.
Q:
4) Do you record travel expenses (bills) offline or online?
A: We record travel expense reimbursements online.

reimbursement is entered - not by individual expense.
The total amount of the
There is an online Travel system, currently only used by 2 -3 departments. In this system,
actual expenses are recorded.
In addition, all paper requests are entered online once they reach either the campus business
office or the Treasurer's Office.
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Q:
5) Does each employee enter his/her own trip data?
A: Only the 2-3 departments using the online Travel system are entering their own trip data.
All other departments send the information to a central office on the travel reimbursement
form.
Q: 6) Do you create statements regarding reimbursement of expenses for planned or

completed trips?
A: No. The traveler initiates the travel reimbursement form.
Q: 7) How is the approval process conducted in your enterprise? Who is responsible for this
task in the different departments or for which group of employees?
A: The travel authorization must be approved by the department head, dean, or director
(individual responsible for account charged). In addition, all foreign travel must include the
approval of a vice president, chancellor or their designee.
The travel reimbursement request must be approved by the individual responsible for the
account charged. A department head can approve his/her own travel expenses. If
entertainment charges are included on the request, this requires the approval of a vice
president, chancellor or their designee. Any exceptions to policy require the approval of the
campus Chief Business Officer and the Vice President for Business and Finance.
Sr. Administrative Officers can approve their own expenses.
Q: 8) When do notifications concerning rejections, approvals, and corrections of planned

trips have to be sent to the traveler? Whose task is this?
A: An approval or rejection of a trip takes place at the departmental level.
If a reimbursement request is rejected or adjusted, this is usually done at the campus
business office or Treasurer's Office level. An adjustment is made at the request of the
traveler (there is a box that can be checked if the request is to be returned and not adjusted).
Q: 9) Do you reimburse different amounts according to miles/kms accumulation, for
example, within a certain time?
A: No, not for personal automobiles. However, courtesy cars for athletics are reimbursed at
a different rate (but it does not depend on mileage).
Mileage rates for private aircraft are different depending on number of miles flown. First 600
miles is reimbursed at $.55/mile; beyond 600 miles at $.40/mile. Land mileage according to
Rand McNally is used.
Q: 10) Do you pay company-specific reimbursement amounts for transportation or do you

use the statutory (tax-free) amounts?
A: Currently, all travel reimbursement is tax-free.
Q: 11) Do you reimburse different employee groups with different amounts for meals and
accommodations?
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A: Yes, see question 13 under "Presettings for Travel Expenses".
Q: 12) Do you pay company-specific reimbursement amounts for meals and

accommodations?
A: Yes
Q: 13) Do you pay different reimbursement amounts for different countries, different regions
of certain countries or for the capital cities of countries?
A: All foreign lodging and meal rates are the same regardless of what country the travel is
in.
Q: 14) What kinds of travel expenses in the form of individual receipts does your company
reimburse? Do maximum amounts apply for some kinds of travel expenses?
A: Receipts are required for lodging, registration fees, airline tickets, rental cars and any
other allowable expense over $50 (except for ground transportation). There are maximum
amounts allowed for lodging.
Q: 15) What kinds of travel expenses are reimbursed by per diems/flat rates in your
company (with regard to: transportation, meals, and accommodations)? Are some kinds of
travel expenses always reimbursed by per diem/flat rate? (See below.
A: Per diems: Meals (entertainment is an exception)
There is a mileage rate given for personal automobiles and a maximum rate given for
lodging.
Q:
16) Does your company grant cash advances? If so, what is the internal procedure?
A: Yes. Travel advances are given to certain individuals: new employees (employed less
than 3 months), student employees, team/group directors, foreign travel, term and nonexempt employees.
Advances should not be requested for employees or students who are not expected to be on
campus to clear the advance.
A written request, signed by the department head, must be received by the appropriate
business office 5 days before the advance is needed. The original travel authorization and
an itemized estimate of expenses needed must accompany the request.
Cash advances cannot be made for prepaid items or items billed directly to the University. A
maximum of 80% of the estimate will be given for domestic travel and 100% for foreign or
team travel estimates.
Cash advance are made form petty cash funds except Short term and Long term travel
advances.
Upon completion of trip, the traveler must submit a request for reimbursement of expenses.
When the check has been prepared, the individual will be notified by the appropriate business
office or Treasurer's Office to come by and complete the transactions necessary to clear the
travel advance.
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All travel advances must be repaid within 30 days after completion of the travel. If not, a
deduction may be made from the employee's or student's payroll check. Any person from
whom 2 payroll deductions are made will forfeit future cash advance privileges.
advance?
A: See question 2 under "Presettings for Travel Expenses".
Q:
18) How is the reimbursement approval process handled in your enterprise?
A: The travel reimbursement form (T-3) must be approved by the department head
(individual responsible for the account to be charged) or their designee. A department head
can approve his/her own travel expense form.
If a T-3 contains entertainment charges, this requires the approval of a vice president,
chancellor or their designee.
Any charges that would be considered exceptions to policy (i.e. excessive lodging rate)
requires the approval of the Chief Business Officer for that campus and the Vice President for
Business and Finance.
Q: 19) What rules are applied in your enterprise to determine that the estimated travel
expenses of an employee must be approved before he/she is entitled to a trip advance?
A: The written request for the travel advance requires the authorized signature for the
account being charged for the travel advance. All travel advances must have this approval.
A maximum of 80% of the estimate will be given for domestic travel and 100% for foreign or
Q:
20) Who approves the reimbursement?
A: The reimbursement is approved by the department head or individual responsible for the
account being charged (or their designee).
Q: 21) Are travel expenses reimbursed all of your employees? If so, are there different rules
for certain employee groups?
A: Yes, according to policy limitations.
Yes, see question 13 under "Presettings for Travel Expenses.
Q: 22) Do you send some kind of notification to your employees if a travel expense
reimbursement is rejected?
A: Yes, a notification is returned, along with the T-3, if the reimbursement has been rejected.
However, if an adjustment is made, a notification (stating the adjustment made) is sent along
with the traveler's check.
Q: 23) Who controls and approves the trip facts? (Does this always have to be approved for
all employees first?)
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A: This is done at the departmental level. Out-of-state and foreign trips are approved by
way of the Travel Authorization and must be done in advance.
Q: 24) What is the procedure for informing an employee that he has to change his trip data
entries?
A: At the campus business office and Treasurer's Office, notification is sent to the traveler of
changes that need to be made or what additional support is needed to process their
reimbursement. Either the notification is sent along with the T-3 or an adjustment is made
and the notification is returned with the check.
Q: 25) Please make a complete list of the expenses that are actually reimbursed in
accordance with the relevant expense account.
A: All reasonable expenses are reimbursed to the department account number. There is no
one set expense account.
Some types of expenses are (but not limited to): lodging, meals, mileage, airfare,
transportation to and from city, rental cars, taxis (not for personal activities), hotel check-in,
business phone calls, conference registrations and supplies, training fees, parking, tolls,
entertainment, excess baggage handling fees, laundry, airline change penalties, early checkout penalties, etc.
Q: 26) How do you manage your travel expenses? Do you need transfers of travel expense
results to HR Payroll, to FI, etc. or to some other non-R/3 system?
A: Checks are issued to the traveler from the Treasurer's A/P Office. The accounting is
done in A/P.
We would like to look further at direct deposit of traveler's checks.
Q: 27) Please describe the decision logic that is to be used to determine the house bank for
DME payments and for automatic creation of a vendor from HR Master Data.
A: Travel reimbursements are currently paid from the same account as other disbursement
checks. Payroll is processed from a different bank account.
Any individual employed by the University is authorized to travel on behalf of the University
(with proper departmental approval). However, there are some positions within the
University that never do any travel.
Q:
28) What expense types do you transfer to payroll?
Q:
29) Which employees in your enterprise take trips?
A: All employees are eligible to travel with proper authorization. Students, candidates for
hire, guests and consultants are also reimbursed for University business related travel.
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advance?
A: Trip advances are given to certain individuals where University travel would impose a
financial burden on the people involved. The following individuals can be given a travel
advance:
New employees (employed 3 months or less)

Student employees
Group leaders/directors of team or group travel (one responsible for distributing
cash/paying expenses)
Employees traveling outside the continental U.S.
Term employees
Non-exempt employees
There must be an approved travel authorization for all out-of-state and foreign trips
accompany the request for the travel advance.
Q:
31) Are these rules based on certain organizational structures within your enterprise?
A: No - they are based on employee job titles or the location of travel.
Q:
32) Do you use travel requests in your enterprise?
A: Yes. Any University employee or student traveling out-of-state must have an approved
authorization for the travel before they go. A Travel Authorization (Form T-18) needs to be
completed prior to the trip. The exception to this is the group labeled as "Senior
Administrative Officers". They are not required to have a travel authorization. Guests,
candidates for hire and consultants do not require travel authorizations.
Q: 33) What are the rules that specify which employees have to submit travel requests
before going on trips?
A: For out-of-state and foreign travel, all employees/UT students must complete the Travel
Authorization (Form T-18) prior to a trip. Sr. Administrative Officers are not required to
complete this form. Guests, candidates, and other non-University employees are not
required to complete the T-18.
Q:
34) For which countries do trip rules have to be established?
A: There are no rules for specific countries. There are set per diems for meals and
maximum amounts for lodging but no other rules. However, foreign travel requires an
additional approval on the Travel Authorization (T-18). It requires the approval of a vice
president, chancellor or their designee.
Q: 35) How many different trip rules are used in your enterprise (for instance, meals per
diems, etc.)?
A: There are maximum amounts allowed for lodging and hotel check-in fees. There are per
diems for meals. All other expenses must be reasonable.
There are different categories of travelers and these have their own reimbursement rates. In
addition, some travel is done under contract, state or federal guidelines and these rates have
to be followed.
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Q: 36) Do you use deductions from per diem amounts in special cases in your enterprise
(for example, for unrecorded breakfasts, free meals)?
A: Yes, if one or two meals are provided as part of the registration fee or there is an
entertainment meal, then only a partial rate is allowed for that day. If all meals are provided,
then no allowance is provided.
Q:
37) Do you want to use credit card clearing?
A: Not at this time. The American Express card held by University employees is also used
for personal charges.
We would like to discuss the possibility of using this for direct bill of airfares.
Q: 38) Please classify all possible vehicle types, so that it is clear which vehicles can be
used by which employees and which vehicle types affect reimbursement amounts.
A: Personal vehicles, UT car, rental car (economical), motorcycle, train, commercial plane,
personal plane, UT plane, charter aircraft, animals (dog sleds, donkeys, etc), ship, bus, ferry,
bicycle, ground transportation (taxis, shuttles, limos)
Q:
39) Do you use different reimbursement amounts for different geographical areas?
A: Hotel maximum reimbursement rates are based on location.

Within the state of Tennessee they are based on county location and are divided into Level I
and Level II.
Level I includes Davidson, Hamilton, Knox, Shelby, Sevier and Washington (Johnson City)
counties (rate $60 plus tax/night)
Level II covers all other counties in Tennessee (rate $50 plus tax/night)
Most all other cities are reimbursed at $80 plus tax/night. There are two exceptions:
Selected Cities ($120 plus tax/night) and Special Exceptions ($180 plus tax/night).
Selected cities include Atlanta, Boston, Chicago, Dallas, Phoenix, Philadelphia, Los Angeles,
New Orleans, San Francisco, San Diego, Seattle and Washington, D.C.
Special exceptions include New York City and all international cities. NOTE: Alaska and
Hawaii are considered foreign travel.
Meals are reimbursed on a per diem - rates are different for in state vs. out of state.
Q:
40) Are there general reimbursement amounts for specific countries in your company?
A: All foreign lodging is reimbursed at a higher rate ($180 plus tax/night). Foreign meal
rates are the same for out-of-state travel.
Q:
41) Are there statutory regulations for trips?
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A: Yes, meals for trips where there is no overnight travel are considered taxable. However,
we currently do not report or deduct these taxes.
Q:
42) Do you classify your employees in different groups with regard to expense types?
A: Yes. There are six classifications:

1.
2.
3.
4.
5.
6.
General (most University employees, guests, students, etc)

President
Sr Administrative Officers (President's Staff)
Board of Trustees
Athletics
University Pilots
Q: 43) Do you use enterprise-specific trip activities to determine per diems to be reimbursed
and maximum amounts?
A: Yes, athletic recruiting trips are reimbursed at different rates.
Q:
44) Please tell us your reimbursement rates for meals and accommodations.
A: MEALS:
Full Day
Within TN
Outside TN
Foreign travel
Partial Day
$30 ($35 -Sr Admin & Bd of Trustees)
$22.50 ($26.25 - Sr Admin &

Bd of Trustees)
of Trustees)
of Trustees)
Overnight travel: Partial meal allowance (75% of the daily rate) is available for the date of
departure and the date of return.
One day travel: Meal allowance is available when working beyond the 8-hour work day and
the hours of departure and return are in accordance with the schedule below (not required to
show this on the reimbursement request):
In-State
Out-of-State Departure/Return
Breakfast & Dinner
$29 ($33) Before 7:00am & after 6:30pm
Breakfast
$9 ($10) Before 7:00am & before 6:30pm
Lunch (for Sr Admin only where entertainment is involved)
$10
$12
Dinner
$20 ($23)
After 7:00am & after 6:30pm
If one or two meals are included as part of the registration fee for a conference, seminar or
workshop, a partial meal allowance is available (75% of daily rate). If all meals are included,
no meal allowance is available. Continental breakfasts are not considered a meal.
Team, Group or Retreat Travel:
Meal
In-State
Out-of-State
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Breakfast
Lunch
Dinner
$ 6
$10
$14
$ 9
$11
$20
Entertainment: The actual amount spent for the entertainment meal will be reimbursed. In
addition, a partial meal allowance (75% of daily rate) will be reimbursed in addition to the
entertainment meal unless it is a one-day trip. In this case, the rates for one-day trip will
apply depending on which meal is the entertainment meal. A receipt is required for all
entertainment.
Sr. Admin Officers: Group breakfasts, luncheons, and dinners are allowed provided written
advance approval is given or a receipt is given. When acting as a host to guests of the
University, actual expenses will be reimbursed.
Pilots: Meals may be allowed in excess of regulations when it is necessary to take meals at a
hotel or other area when eating facilities are limited. In those cases, where meals exceed
limitations, an explanation must be given and receipt furnished.
ACCOMMODATIONS:
In-State:
Level I
Level II
Out-of State:
$60 plus taxes ($67 plus taxes for all cities - Sr Admin)
$50 plus taxes ($85 plus taxes for all cities - Bd of Trustees)
General
Selected Cities
Special Cities
$ 80 plus taxes ($85 - Sr Admin/Bd of Trustees)

Athletics: While in recruiting status, actual expenses for lodging will be reimbursed.
Pilots: Actual lodging expenses will be reimbursed when accompanying University or State
officials on official business or when it is necessary to wait overnight for passengers.
NOTE: If lodging is at a conference hotel, the conference rate will be reimbursed provided
there is support for the conference rate or the name of the conference hotel is given on the T18 or T-3.
SEE QUESTION 8 FOR A LIST OF LEVEL I & II, GENERAL, SELECTED AND SPECIAL
CITIES.
Q: 45) Define the relevant conditions under which your organization reduces amounts to be
reimbursed on the basis of certain trip criteria (e.g. complimentary lunch included in costs of
course).
A: If meals are included as part of a registration fee or there are entertainment charges, the
full per diem for meals will not be reimbursed - only a partial rate.
If an individual claims a full meal per diem on the day of departure or day of return, then it will
be adjusted to a partial rate.
If a University employee or student does not use the Designated travel agency, they will only
be reimbursed 94.5% of the base price of the airfare.
Q:
46) Do you maintain special cost centers for Travel Management?
A: No, each department is charged directly for their travel.

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Q: 47) Do you split your cost centers according to a certain scheme? Was it split
(background: infotypes 0027, 0017, 0001)?
A: No
Q: 48) Do you maintain special bank accounts for Travel Management (background:
infotype 0009, as reminder for new consultants)?
A: No, we currently process travel reimbursements through Accounts Payable as a
disbursement. We would like to use direct deposit for travel checks and would like to
support different bank accounts for travel reimbursements.
Q:
49) Do you need per diem rates?
A: Yes
Q: 50) Which means of travel (e.g. car, plane, train) are your employees authorized to use
on their business trips?
A: See question 38.
7.1.3.
Entry of a travel request
CI Template:
Any University employee or student can travel. Also, guests, candidates for hire,
and consultants
A travel authorization must be completed and approved for all University
employees, students and guests that travel on behalf of the University (for
both in-state and out-of-state travel). We should have the ability to
discontinue the need for travel authorizations for in-state at a later date if
desired.
Need a personnel id for all travelers
Originating city, dates of travel, destination, hotel info, purpose (i.e. recruiting),
account number and object code to be charged are to be included on the travel
authorization
Approval of travel authorization is needed: In-State - no approval (for anyone);
Out-of-State - dean, director or department head (with the exception of Sr
Administrative Officers and guests - no approval); Foreign - the out-of-state
approval plus the approval of a vice president, chancellor or their designee (with
the exception of Sr Administrative Officers and guests - no approval)
Allow for on-line entry of travel authorization by traveler or designated individual
in department (decentralized office).
Allow for a maximum reimbursement amount to be entered for lodging and
check-in fee.
Allow for travel advance to be requested at this point if eligible
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This business process will be handled using Travel Expense Manager transaction (TRIP).
Traveler or designated person enters costs for each expense type incurred by receipts,
such as airfare, hotels, registration fees etc. for domestic and international trips. The
system calculates the per diems / flat rates (mileage) based on the destination and
duration per the business rules and policies set up by the University.
All eligible travelers must have a HR master data set up.

Sr Administrative Officers, Guests, candidates for hire, consultants, Board of
Trustees and the President will be assigned separate travel privileges group from
the others to handle special travel authorizations. This travel privileges group can
be easily changed to reflect policy change in future.
Originating city, dates of travel, destination, hotel info, purpose (i.e. recruiting),
account number and object code to be charged can be entered in the travel
request screen
Use enterprise-specific trip activities to differentiate In-State, Out-of-State,
Foreign and Athletic Recruiting travel approval
The travel request data entry can be performed by individual in decentralized
office
Incorporates approval routing using workflow
The statement will be formatted to replace T-18
Maximum reimbursement amount can be set for the expense type
Advance amount can be entered if travel advance is requested

1)
2)
3)
4)
5)
You start the travel manager by calling the Travel manager function in Travel
Accounting. The system gives you an overview of all of the trips that you have
entered for the employee.
You can either choose a trip and change it or create a new trip.
If you create a new trip, you first have to enter the framework data and the per
diem accounting.
To enter detailed trip facts, you can call other entry functions from the travel
manager. Which entry functions you can call depends on the trip schema that
you defined in Customizing for Travel Accounting for the travel manager.
You end the scenario by choosing the Save trip function.
The system saves the new or changed trip as "Trip Request" with status "to be
accounted" in the database.

This process will be decentralized. Data entry will be performed by traveler or assigned
Travel assistant at respective departments.

Any individual traveling for the University will be required to have a travel
authorization.
Automatic pre-encumbrance of estimated trip costs
The Employee Self Service (ESS): Travel Expenses enables a decentralized recording of
trip by the travelers themselves.
Automatic calculation of per diems and travel allowance checks should reduce
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number of errors on expense reports

If Travel Planning component is implemented, it is integrated to Travel Expense/Request
component, i.e. departure times and destination and costs for transport and
accommodations will be automatically copied into the trip request without additional data
entry.

All travelers will be given the Traveler role (SAP_FI_TV_TRAVELER_AG) to enter own
trip data.
A representative in a department, e.g. Secretary, Bookkeeper may be assigned the role
of Travel Assistant (SAP_FI_TV_TRAVEL_ASSISTANT_AG) to enter trip data for limited
number of travelers within the department only.
7.1.3.1.
Enter per diems / flat rates for travel request
Questions:
Q:
A: Yes
CI Template:
4. Business Model
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7.1.4.
Approval of travel request
7.1.4.1.
Check for travel request [standard]
Questions:
Q: 1) How is the approval process conducted in your enterprise? Who is responsible for this
task in the different departments or for which group of employees?
A: The travel authorization must be approved by the department head, dean, or director
(individual responsible for account charged). In addition, all foreign travel must include the
approval of a vice president, chancellor or their designee.
The travel reimbursement request must be approved by the individual responsible for the
account charged. A department head can approve his/her own travel expenses. If
entertainment charges are included on the request, this requires the approval of a vice
president, chancellor or their designee. Any exceptions to policy require the approval of the
campus Chief Business Officer and the Vice President for Business and Finance.
Sr. Administrative Officers can approve their own expenses.
CI Template:
Allow for approval of domestic travel authorizations (dean, director or department

head or their designee) - if traveler is dean, director or department head, then
their travel authorization must be approved by their supervisor
Allow in-state travel authorizations for all travelers and all travel authorizations
for the Sr Administrative Officers, guests, candidates for hire and consultants to
be automatically approved
Allow for approval of foreign travel authorizations (requires approval needed for
domestic travel plus the approval of a vice president, chancellor or their
designee)
Allow for notification of a rejection of a trip request (travel authorization) at either
the department level or at vice president and chancellor level
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Use enterprise-specific trip activities to differentiate In-State, Out-of-State, Foreign and

Athletic Recruiting to handle different travel approval.
This business process will be handled using SAP Business Workflow standard task
TS20000118 (Approve Travel Request).
The Approve Travel Request workflow is started when a trip is saved with the travel
request/to be accounted status. The workflow item may be in the form of an SAP mail or
e-mail to the Approver's inbox. The approver can review the trip request and can either
approve, send back for correction, or reject.
If it is approved, the trip request is further routed to next in the approval hierarchy and
finally to Treasurer's Office (Accounts Payable) for preparation of a check if an advance
is requested.
Alternatively, approval can be performed without workflow using a program. The approval
program includes a number of functions with which you can check and approve employee
trip requests in the Treasurer's Office (Accounts Payable) department.

Display/Edit travel request
Approve/Send back for correction/Reject
Workflow agent will generate the appropriate routing based on Supervisor's actions
above.
4. Business Model
Chart attached

This process will be decentralized. Supervisors in departments will be responsible to
ensure trip is justified and information is correct.
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The workflow scenarios in Travel Management strongly support the decentralized trip
facts recording model. The advantage is that they connect all persons who are involved
in approval directly via the R/3 System, making the approval processes automatic and
much more efficient.
Approval process will be paperless and manual signatures are not required.

SAP Business Workflow standard task TS20000118 (Approve Travel Request) must be
activated for this approval process.
Defining Organization Plan to determine the approval hierarchy.
Set up relationship between system user name and Person (infotype 0105
Communication)
Senior Administrative Officers will be categorized separately from regular traveler.
Heads of department and above will have Approving manager's role
(SAP_FI_TV_APPROVING_MANAGER_AG) to approve trips for limited number of
travelers who reports to them but not their own.
7.1.4.2.
Notification of rejection of travel request [standard]
Questions:
completed trips?

7.1.4.3.
Notification of approval of travel request [standard]
Questions:
completed trips?
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7.1.4.4.
Notification of need to correct travel request [standard]
Questions:
completed trips?

7.1.5.
7.1.5.1.
Advance payment
Trip advance payment/transmission [standard]
Questions:
Q:
1) Does your company grant cash advances? If so, what is the internal procedure?
A: Yes. Travel advances are given to certain individuals: new employees (employed less
than 3 months), student employees, team/group directors, foreign travel, term, and nonexempt employees.
Advances should not be requested for employees or students who are not expected to be on
campus to clear the advance.
A written request, signed by the department head, must be received by the appropriate
business office 5 days before the advance is needed. The original travel authorization and
an itemized estimate of expenses needed must accompany the request.
Cash advances cannot be made for prepaid items or items billed directly to the University. A
maximum of 80% of the estimate will be given for domestic travel and 100% for foreign or
Cash advance are made form petty cash funds except Short term and Long term travel
advances.
Upon completion of trip, the traveler must submit a request for reimbursement of expenses.
When the check has been prepared, the individual will be notified by the appropriate business
office or Treasurer's Office to come by and complete the transactions necessary to clear the
travel advance.
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All travel advances must be repaid within 30 days after completion of the travel. If not, a
deduction may be made from the employee's or student's payroll check. Any person from
whom 2 payroll deductions are made will forfeit future cash advance privileges.
advance?
A: See question 2 under "Presettings for Travel Expenses".
done in A/P.
CI Template:
Ability to provide travel advances for both domestic and foreign travel for eligible
employees
Ability for traveler or designated individual in department to submit request for
travel advance to A/P.
Ability to calculate estimated amount for travel advance requests based on
lodging, transportation (excluding airfare), food, automobile rental, other
(excluding registration)
Ability to calculate amount of travel advance based on the following:
Domestic travel (80% of estimated expenses)
Foreign/Group travel (100% of estimated expenses)

Ability to reject a travel advance if request is received by A/P less than 5 days
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before advance is needed

Allow for advances to be made from petty cash funds (regular) or expense funds
(long/short term)
Allow for clearing of travel advances within 30 days of completion of trip - with the
ability of A/P personnel to override this 30 day stipulation if needed
Ability to allow for payroll deduction if necessary
Allow the amount of the travel advance to be automatically carried into the trip
facts when they are entered (based on trip number)
You record trip advances via the amount and the currency. If you want to record a cash
advance for documentary purposes, you have to set the cash indicator. Save the trip as a
request.
Use enterprise-specific trip activities to differentiate In-State, Out-of-State,

Foreign and Athletic Recruiting to handle different travel approval.
Traveler or any person authorized to create travel request can enter an advance
request in the advance amount column
At any time during data entry, a simulated trip cost can be generated onscreen
calculated based on all data entered
Require modification or user exit
Require modification or user exit
Data entry screen provides a box to indicate that advance is paid directly from
Petty cash funds. If box is not checked, a request for advance check will be
generated through Accounts Payable.
Advance posted in Employee A/P accounts. The outstanding advance can be
monitored through a dunning process
Manual action to be performed depending on the dunning result
All advances are automatically taken into consideration when travel
reimbursement is calculated.

1. In trip request data entry, you enter the trip advances via the amount and the currency.
2. If you want to record a cash advance for documentary purposes (i.e. amount given as
cash to traveler), you have to set the cash indicator. Otherwise, the advance amount
becomes a request and will be passed to Accounts Payable for payment processing.
3. Save the trip as a request.
4. Business Model

N/A

N/A
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Advance entered in trip request will be taken into consideration in the calculation of travel
expenses reimbursement. The accounting results are transferred to Accounting, and the
relevant accounts are balanced. Any remaining trip expenses are reimbursed to the
employee by bank or excess due from employee is posted as a debit on the Employee
account in Accounts Payable.
Not able to calculate advance amount automatically

Not able to automatically reject advance if less than 5 days

User exits if available will be generated, else some modifications would be required.
N/A

Customizing for Travel Accounting to ensure correct posting of trip advances in Financial
Accounting.
Make the following system settings in Expert Mode of Feature TRVCT:
R line
Position Entry Meaning
2
1
The system considers the advance only in request
7
0
The system does not consider the advance in Travel Accounting
Position 2 refers to advances without cash indicator
Position 7 refers to advances with cash indicator.
In general, mixed forms can be set up via Customizing, but it is recommended that only
one method of advance payment be used within one employee trip

Various positions in Accounts Payable will be given authorization for the following roles:
Travel Administrator (SAP_FI_TV_ADMINISTRATOR_AG) to settle all trip expenses, and
Payer of Trip Advance (SAP_FI_TV_ADVANCE_PAYER_AG)
7.1.6.
7.1.6.1.
Entry of trip facts

Entry of trip facts (including per diems/flat rates and expenses)
Questions:
diems, etc.)?
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to be followed.
Q: 2) Do you use deductions from per diem amounts in special cases in your enterprise (for
example, for unrecorded breakfasts, free meals)?
CI Template:
Allow entry of trip facts (travel expenses) at departmental level by traveler or

designated individual in department
Do not allow entry of expenses at official station with the exception of local
mileage for University business
Allow entry of expense types (lodging, meals, mileage, airfare, rental cars, taxis,
hotel check-in, business phone calls, conference/seminar registrations, supplies,
parking, tolls, entertainment, excess baggage handling fees, laundry, airline
change penalties, early check-out penalties, etc)
Allow entry of per diems and actual expenses based on traveler category (i.e.
General, Sr. Administrative Officers, Board of Trustees, Athletics, Pilots)
Allow automatic completion of per diems (meals)
Allow additional entertainment meals (with proper approval and comments)
Allow actual expenses incurred (up to maximum) for hotels, check in, etc with the
exception of meals.
Allow automatic calculation of mileage amount either by trip meter, odometer
readings or travel accessory (i.e. Rand McNally) x mileage rate
Allow for miscellaneous field for any other expenses
Require additional information when one of the following expense types is
entered: entertainment meal, taxis, mileage (how derived), phone calls, supplies,
excess baggage handling fees, laundry, airline change penalties, early check-out
penalties, any "miscellaneous" expense, excess lodging
Allow for separate hotel tax field
Ability to input the hotel chain, airline, car rental and travel agency used from a
help "list"
Ability for error to appear if an agency other than the University designated
agency is entered - requires a deduction of 5.5% off base price of ticket
Allow field to show prepayment/direct bill of airfare, registration fee and lodging
Ability to automatically insert correct per diems when an employee is based in a
state other than Tennessee
Ability to allow two travel categories: One validated against University of
Tennessee guidelines and one for travel under federal, state or contract
guidelines (NOTE: Second type must have guidelines attached to travel facts
statement)
Allow for deductions from meal per diem amounts if meals are included in
registration fees
Allow for mileage rate to be different than standard rate if an athletic dept
employee is using a courtesy car
Allow entry of certain expenses to be flagged as taxable or nontaxable for
moving/relocating trips
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The travel expense data entry can be performed by traveler or authorized

assistant in department. All eligible travelers must have a HR master data set up
Controlled using Trip Region
Each type of expense will have a corresponding Expense Type code
Per-diems rates can be controlled by category. Actual expense can be restricted
by type of expense but not the amount
Per-diem is automatically calculated based on time and duration of travel
Not possible in standard R/3, possibly through User Exit
All actual expenses will be treated as a receipt and entered with a corresponding
Expense Type code
New functionality under development
Miscellaneous expenses can be configured using a separate Expense Type code
Each expense type can be configured to require additional explanatory text
(Identify the expense types that require additional information)
Hotel tax can be configured as a separate Expense Type code
Only if Trip Planning component is implemented
Only if Trip Planning component is implemented
Prepaid expenses can be configured using a separate Expense Type code with
its own posting rule
Not possible in standard R/3, possibly through User Exit
Use enterprise-specific trip activities to differentiate the two categories of travel
and link each type to its own reimbursement guideline
Deductions for meals per diem is available
Use enterprise-specific trip activities to identify Athletic department trip with link
to its own reimbursement guideline
Moving/relocating trips will be set up as another enterprise-specific trip activities
that will have specific configuration to transfer the trip costs to Payroll for taxation
and W-2 reporting purposes. (Note: the reimbursement will still be paid by A/P)
4. Business Model
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Entry of trip facts will be done on-line by line item (expense type).
The Employee Self Service (ESS): Travel Expenses enables a decentralized recording of
trip by the travelers themselves.
Automatic entry of some fields by system creates less entry by operator and
improves error ratio.
List of Expense types

Identify the expense types that require additional information
Configure enterprise-specific trip activities with its own reimbursement rate for
the following:
o Travel under state guidelines
o Travel under Federal guidelines
o Travel under Contract guidelines
o Athletic department trip
Deductions amounts/percentages for meals per diem
Trip regions
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All travelers will be given the Traveler role (SAP_FI_TV_TRAVELER_AG) to enter own
trip data.
A representative in a department, e.g. Secretary, Bookkeeper may be assigned the role
of Travel Assistant (SAP_FI_TV_TRAVEL_ASSISTANT_AG) to enter trip data for limited
number of travelers within the department only.
7.1.6.2.
Supplement trip facts [standard]
Questions:
diems, etc.)?
to be followed.
7.1.6.3.
Correction of trip facts [standard]
CI Template:
Ability to make corrections (either additions or subtractions) after a check is written

Allow these corrections to be approved by appropriate departmental personnel
(dean, director or department head)
Allow for payroll deduction of these corrections (if necessary)
Ability to make corrections (either additions or subtractions) before check is written
but after approval has been made. Corrections must be reapproved.
You can correct trips before posting to accounting and also trips that have been posted in
accounting.
Corrections made to a trip will be subjected to the same approval process all over again.
To effect correction after posting, an accounting program and posting is to be executed
again. Only the difference (additional/deduction) in amount will be posted to Employee
A/P account. Check/direct deposit will be generated for the additional amount, while the
deduction amount will stay as an amount owing in the Employee A/P account and should
be addressed the same way as Advance outstanding.
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You can correct trips before posting to accounting and also trips that have been posted in
accounting.
To effect correction, you have to change the trip status to accounting status "to be
accounted".
Corrections will be posted the same way as normal trip reimbursement.

Corrections will be done on-line.
Allows traveler or designated departmental employee to make corrections and
have approvals done electronically.
Allows for payroll deduction if necessary.

Travel Administrator (SAP_FI_TV_ADMINISTRATOR_AG) to correct and settle all trip
expenses.
7.1.7.
7.1.7.1.
Approval of trip facts

Check for trip facts [standard]
Questions:
Q:
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Q:
Q: 4) Are travel expenses reimbursed all of your employees? If so, are there different rules
for certain employee groups?
A: Yes, according to policy limitations.
Yes, see question 13 under "Presettings for Travel Expenses.
Q: 5) Who controls and approves the trip facts? (Does this always have to be approved for
all employees first?)
A: This is done at the departmental level. Out-of-state and foreign trips are approved by
way of the Travel Authorization and must be done in advance.
CI Template:
Allow approval of trip facts as follows: Dean, Director or Department Head or

their designee (NOTE: Deans, Directors, Dept Heads, and Sr. Administrative
Officers can approve their own expenses)
Allow for additional approval if entertainment expense is entered (vice president,
chancellor or their designee)
Allow for additional approval if there are any amounts entered as exceptions (i.e.,
excess lodging) (Chief Business Officer and Vice President for Business and
Finance)
Allow for adjustments to be made on travel reimbursements before approval by
traveler or designated individual in department or after travel by campus
business office or Treasurer's Office personnel.
Ability to send notification to traveler of rejection or adjustments made to trip
facts.
Use enterprise-specific trip activities to differentiate In-State, Out-of-State, Foreign and
Athletic Recruiting to handle different travel approval.
This approval business process will be handled using R/3 Business Workflow standard
task TS20000131 (Approve Trip Facts). The Approve Trip workflow is started when a trip
is saved with the trip completed/to be accounted status. The workflow item may be in the
form of an SAP mail or e-mail to the Approver's inbox. The approver can review the trip
request and can either approve, send back for correction, or reject.
If it is approved, the trip request is further routed to next in the approval hierarchy and
finally to Treasurer's Office (Accounts Payable) for preparation of a check if an advance
is requested.
Alternatively, approval can be performed without workflow using a program. The approval
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program includes a number of functions with which you can check and approve employee
trip requests in the Treasurer's Office (Accounts Payable) department.
4. Business Model
Chart attached.

Approvals will be done electronically.
The workflow scenarios in Travel Management strongly support the decentralized trip
facts recording model.
Electronic approvals will allow quicker processing of trip facts.
Automatically routes to authorized approver for exceptions and other expenses needing
additional approval.

R/3 Business Workflow standard task TS20000131 (Approve Trip Facts) must be
activated for this approval process
Defining Organization Plan to determine the approving party.
Set up relationship between system user name and Person (infotype 0105
Communication)
Senior Administrative Officers will be categorized separately from regular traveler.

Heads of department will have Approving manager's role
(SAP_FI_TV_APPROVING_MANAGER_AG) to approve trips for limited number of
travelers who reports to them.
Senior Administrative Officers will have Traveler (SAP_FI_TV_TRAVELER_AG) and
Approving manager's roles and can approve their own travel expense.
7.1.7.2.
Notification of rejection of trip facts [standard]
Questions:
Q: 1) Do you send some kind of notification to your employees if a travel expense
reimbursement is rejected?
A: Yes, a notification is returned, along with the T-3, if the reimbursement has been rejected.
However, if an adjustment is made, a notification (stating the adjustment made) is sent along
with the traveler's check.
7.1.7.3.
Notification of approval of trip facts [standard]
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Questions:
Q:
Q:
7.1.7.4.
Notification of need to correct trip facts [standard]
Questions:
Q: 1) What is the procedure for informing an employee that he has to change his trip data
entries?
A: At the campus business office and Treasurer's Office, notification is sent to the traveler of
changes that need to be made or what additional support is needed to process their
reimbursement. Either the notification is sent along with the T-3 or an adjustment is made
and the notification is returned with the check.
7.1.8.
7.1.8.1.
Travel Expenses
Performance of Travel Expenses [standard]
Questions:
diems, etc.)?
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to be followed.
Q: 3) Do you reimburse different amounts according to miles/kms accumulation, for

example, within a certain time?
A: No, not for personal automobiles. However, courtesy cars for athletics are reimbursed at
a different rate (but it does not depend on mileage).
Mileage rates for private aircraft are different depending on number of miles flown. First 600
miles is reimbursed at $.55/mile; beyond 600 miles at $.40/mile. Land mileage according to
Rand McNally is used.
Q: 4) Do you pay company-specific reimbursement amounts for transportation or do you
use the statutory (tax-free) amounts?
A: Currently, all travel reimbursement is tax-free.
Q: 5) Do you reimburse different employee groups with different amounts for meals and
accommodations?
A: Yes, see question 13 under "Presettings for Travel Expenses".
Q: 6) Define the relevant conditions under which your organization reduces amounts to be
reimbursed on the basis of certain trip criteria (e.g. complimentary lunch included in costs of
course).
A: If meals are included as part of a registration fee or there are entertainment charges, the
full per diem for meals will not be reimbursed - only a partial rate.
If an individual claims a full meal per diem on the day of departure or day of return, then it will
be adjusted to a partial rate.
If a University employee or student does not use the Designated travel agency, they will only
be reimbursed 94.5% of the base price of the airfare.
Q:
A: Yes
Q: 8) Do you pay company-specific reimbursement amounts for meals and

accommodations?
A: Yes
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Q: 9) Do you pay different reimbursement amounts for different countries, different regions
of certain countries or for the capital cities of countries?
A: All foreign lodging and meal rates are the same regardless of what country the travel is
in.
Q: 10) What kinds of travel expenses in the form of individual receipts does your company
reimburse? Do maximum amounts apply for some kinds of travel expenses?
A: Receipts are required for lodging, registration fees, airline tickets, rental cars and any
other allowable expense over $50 (except for ground transportation). There are maximum
amounts allowed for lodging.
Q: 11) What kinds of travel expenses are reimbursed by per diems/flat rates in your
company (with regard to: transportation, meals, accommodations)? Are some kinds of travel
expenses always reimbursed by per diem/flat rate? (See below.
A: Per diems: Meals (entertainment is an exception)
There is a mileage rate given for personal automobiles and a maximum rate given for
lodging.
7.1.8.2.
Transmission of Travel Expense results [standard]
Questions:
done in A/P.
Q: 3) Please describe the decision logic that is to be used to determine the house bank for
DME payments and for automatic creation of a vendor from HR Master Data.
A: Travel reimbursements are currently paid from the same account as other disbursement
checks. Payroll is processed from a different bank account.
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Any individual employed by the University is authorized to travel on behalf of the University
(with proper departmental approval). However, there are some positions within the
University that never do any travel.
Q:
4) What expense types do you transfer to payroll?

CI Template:
Ability to clear travel advances against trip facts using trip number
Ability to clear prepayment of airfare, registrations and hotel
Ability to post transaction type to the correct expense account
Ability to post against object codes for in-state (currently 311), out-of-state (312),
registrations (468) and entertainment (462)
Ability to apply different trip rules depending on employee classification (i.e., Sr
Administrative Officers)
Ability to use per diems
Ability for R/3 to identify what expense types are required to have receipts
Ability to reimburse for lodging, meals, mileage, airfare, all types of ground
transportation (i.e., taxis, bus, bicycles, donkeys, etc), hotel check-in, business
phone calls, conference registrations, supplies, parking tolls, entertainment,
excess baggage handling fees, laundry, airline change penalties, early check-out
penalties, etc
Ability to have both checks issued directly to traveler or direct deposit of checks
Travel advances will be taken into consideration in calculation of reimbursement

Prepayment is added to trip costs but will not be paid to employee
Ability to post transaction type to the correct expense account???
Each expense type code is linked to one object code, e.g. in-state (311),
registrations (468) and entertainment (462).
Not able link an expense type to in-state (311) or out-of-state (312)
Sr Administrative Officers, Guests, candidates for hire, consultants, Board of
Trustees and the President will be assigned separate travel privileges group from
the others to handle special travel authorizations
Per-diem is automatically calculated based on time and duration of travel
Each expense type can be configured to require additional explanatory text
Each type of above mentioned expense will have a corresponding Expense Type
code to be able to be reimbursed
One payment method will be set as the default and can be substituted manually
when the reimbursement is posted to Employee A/P account.
This business process will be handled using Trip costs accounting (PREC) and Posting to
accounting (PRFI) programs.
During accounting, the system creates accounting results for each trip from the recorded
trip facts and stores them in the database. They are the basis for payment, posting and
possible taxation of the travel expenses.
In a posting run, the results of travel accounting are collected as posting documents for
transfer to Accounting.
The pre-encumbered estimated costs will be relieved and the actual total costs will be
charged to the department cost center
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Using the trip data entered and the reimbursement rates specified in Customizing, the
Travel Management accounting program calculates the results (specifically, the
reimbursement amounts) for a trip for a certain accounting period.
Trips and travel requests can only be processed by the accounting program if they have
the approval status approved and the accounting status either to be accounted or
canceled.
Reimbursement rates are determined and stored in the database for all trips and
requests that have the approval status...approved and the accounting status to be
accounted and which take place before the end date of the accounting period. The
accounting status of the trip or request is set to accounted after accounting has taken
place.
In the case of trips with the approval status...approved and the accounting status
canceled, the accounting period which was valid until an accounting run is performed is
replaced by the accounting period with which the accounting program is started.

Two steps process:
Accounting step
1.
Choose Travel accounting.
The Travel Accounting screen appears.
2.
Choose Edit Accounting.
The Accounting of trip data screen appears.
3.
Enter the relevant payroll area in the Payroll period group box.
4.
Choose an accounting period.
5.
Choose Enter.
The system displays the selection period next to the Payroll area field and, if
relevant, the current period.
6.
Enter the relevant selection criteria in the Selection group box.
7.
In the Selection of a specific trip group box, you can specify whether you only
want to carry out accounting for a certain trip number.
8.
Choose the parameters with which you want to account the selected trips in the
Accounting parameters group box.
9.
Choose Program Execute in background.
The Batch print parameters screen appears.
10.
Choose the relevant print parameters.
11.
Save the print parameters.
Posting step
1.
Choose Travel accounting.
2.
Choose Edit Posting run
The Interface Travel Management Accounting screen appears.
3.
Choose an accounting period.
4.
Specify the personnel numbers.
5.
Specify the posting run conditions.
6.
Specify the criteria for the structure of the posting document.
7.
Choose Program Execute.
4. Business Model
Chart attached:
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Entry will be done on-line (by expense type) at departmental level.
During posting, budget availability check is performed and pre-encumbrance (if any) is
relieved.
Object code automatically derived from Expense Type, per-diem and flat rates.
Ability to either issue check to traveler or have direct deposit.
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Not able to charge a travel expense type to different Object code (e.g. 311 and 312)
depending on Trip destination.
One expense type can only be assigned to one Object Code. For the purpose of
displaying the cost for In-State and Out-of-State expenses by Expense type, there are
management reports in Travel Management component.

T706A Deductions
T706B Expense types
T706D Default values for dialog
T706F Travel costs
T706H Meals/Time
T706L Country - country group assignment
T706M Input tax for international per diems
T706P Miles/Kms accumulation periods
T706S Trip schema
T706U Accommodations
T706V Meals
Account determination for Expense type, Per-diem, Flat rates.

Manager in Accounts Payable will be given authorization for the role of
Travel system manager (SAP_FI_TV_SYSTEM_MANAGER_AG) to perform customizing
tasks and create reports.
Travel Administrator (SAP_FI_TV_ADMINISTRATOR_AG) to settle all trip expenses, and
Payer of Trip Advance (SAP_FI_TV_ADVANCE_PAYER_AG)
7.1.8.3.
Creation/transmission of Travel Expenses statement [standard]
CI Template:
Allow for expense cover sheets to be printed for all trip facts
Expense cover sheet should contain a signature line for traveler
Expense cover sheet must contain statement "I certify that the above stated
expenses were incurred by me while traveling on business for The University of
Tennessee. The University of Tennessee Agricultural Extension Service and
U.S. Department of Agriculture cooperating."
Expense cover sheet must identify which expense types require receipts
Ability to issue rejection or adjustment sheets/notices to traveler
Ability to run reports by various criteria such as transaction type, destinations of
trips, hotel amounts and name, transportation costs, expense accounts,
comparisons between different cost centers, WBS, etc
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The standard form produces a printout for each trip.
Beneath the form header (which contains the employee's name, the master cost center
and the trip number) the trip itinerary is presented. The accounting section is structured
as follows:
Per-diem and flat-rate accounting
Accommodations
Meals
Travel costs
Receipt accounting
Receipts
Meals receipts (as an alternative to per diem accounting for meals)
Presentation of results
Total expenses of trip
Total advances (if any)
Total receipts paid by company (if any)
Reimbursement amount for employee
The standard form can be changed to include a signature line for traveler
The standard form can be changed to include statement "I certify that the above
stated expenses were incurred by me while traveling on business for The
University of Tennessee. The University of Tennessee Agricultural Extension
Service and U.S. Department of Agriculture cooperating."
Any additional information entered in trip facts will be printed on form
Same form is used
Standard R/3 reports are available with dynamic selection criteria and drill down
capability to get to the details of a trip.
Many comparison reports can be generated by A/P using various criteria.
Expense statements can be automatically generated.
Manager in Accounts Payable will be given authorization for the role of
Travel system manager (SAP_FI_TV_SYSTEM_MANAGER_AG) to perform customizing
tasks and create reports.
Heads of department will be assigned Approving manager role
(SAP_FI_TV_APPROVING_MANAGER_AG) to approve travel expenses and create
reports.
7.1.9.
Cancellation
7.1.9.1.
Cancellation of Travel Expenses reimbursement [standard]
CI Template:
Ability to cancel a trip and notify the traveler (if necessary) after a travel request
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has been approved.

Ability to cancel a trip and notify the traveler (if necessary) after a travel request
has been approved and a travel advance has been received.
Ability to clear a travel advance if a trip has been cancelled.
You can cancel trips before having posted to accounting or trips that have been posted in
accounting.
Workflow agent will generate the appropriate routing based on approval/rejection action.
Reversal accounting posting will be generated automatically

You can cancel trips anytime before it is posted in accounting.
If a trip is to be cancelled after being posted in accounting, the following reversals are
required to correct the accounting entries.
To effect cancellation, you have to change the trip status to accounting status Canceled.
This can be done using the entry scenarios or the approval program. In the approval
program, the trips and requests are given the accounting status Po.can. (posting
canceled) and the status Corr (corrected).
The next accounting run also includes trips that have the accounting status Canceled.
The accounting program replaces the old accounting period of these trips with the
accounting period with which the accounting program was started.
The next time accounting results are transferred to accounting after the accounting run,
the system includes the trips that have accounting status Canceled in the posting run.
Cancellation of postings in accounting takes place after the posting run is posted.
In the approval program, finally, the trips and requests are given the accounting status
Can.po. (Cancellation posted).
Change the accounting status of trips that you want to cancel to canceled.
4. Business Model
None
Ability to maintain travel advances easier if trip has been cancelled.

N/A
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N/A

Similar to Transmission of Travel Expense results.

Travel Administrator (SAP_FI_TV_ADMINISTRATOR_AG) to cancel and settle all trip
expenses.
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What are the main master data elements described?

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AcceleratedSAP - Business Blueprint

ASAP Business Blueprint

May 25, 2000

Report select options:

Financial Team Business Blueprint

Sign Off Date

File location: F:\zameer SAP\blueprint\Blueprint_finance_IRIS.doc

AcceleratedSAP - Business Blueprint

Cross-application/central organizational units _____________________________________________ 10

Sales and Distribution _________________________________________________________________ 26

Project management ___________________________________________________________________ 27

Financial Accounting __________________________________________________________________ 32

Enterprise Controlling _________________________________________________________________ 35

General settings _______________________________________________________________________ 39

Units of measurement __________________________________________________________________ 39

General master records ________________________________________________________________ 40

AcceleratedSAP - Business Blueprint

Purchasing info record ______________________________________________________________ 61

Sales and Distribution _________________________________________________________________ 74

Project management ___________________________________________________________________ 74

Financial Accounting __________________________________________________________________ 78

Revenue and cost controlling ____________________________________________________________ 97

Asset Accounting_____________________________________________________________________ 106

Business Processes ____________________________________________________________________ 110

Procurement ________________________________________________________________________ 111

AcceleratedSAP - Business Blueprint

1.1.3.1. Goods Receipt Processing ____________________________________________________ 137

Sales and Distribution ________________________________________________________________ 192

Project Management * ________________________________________________________________ 210

AcceleratedSAP - Business Blueprint

3.2. Planning ________________________________________________________________________ 226

Financial Accounting _________________________________________________________________ 308

AcceleratedSAP - Business Blueprint

4.3.2.4. Vendor Credit Memo ________________________________________________________ 355

AcceleratedSAP - Business Blueprint

4.5.2.2. Cash Journal _______________________________________________________________ 444

AcceleratedSAP - Business Blueprint

Revenue and cost controlling ___________________________________________________________ 557

Asset Accounting_____________________________________________________________________ 587

AcceleratedSAP - Business Blueprint

6.2.4.2. Change in a Leasing Agreement _______________________________________________ 620

Travel Management __________________________________________________________________ 631

AcceleratedSAP - Business Blueprint

2) Do you have foreign companies?

3) Which companies are going to work with which chart of account?

4) In which currencies are the transactions posted in the companies?

AcceleratedSAP - Business Blueprint

A: All transactions will be posted in US dollars.

5) Are all companies managed in FI company codes, and is FI integration used?

4. Assignment of Organizational Units

5. Changes to Existing Organization

7. Project Specific CI Section

AcceleratedSAP - Business Blueprint

4) Do all companies use the same operating chart of accounts?

3. Definition of Organizational Units