 |
 |
Team Accounting
Contents
- Financial terminology
- Team accounting
- Earned Value Metrics
- Glossary
Team Accounting in CET
History
Team Accounting has been first introduced into the AIS Accounting Systems at CERN after a strategical decision which separated CERN money from non-CERN money. None-CERN money such as that coming from Institutes, Teams & Collaborations was to be treated and managed in the financial system in the same way the third party accounts have been managed. Just as in the financial system at CERN one may 'consult' a third party account, e.g. ask how much we have spent to a given supplier, one could 'consult' a Team account in order to know the balance.
Managing Team account money under the CERN corporate applications had many advantages such as the ability to use EDH for purchases. However from the financial perspective, given that the money was managed as 'third party' money, then some information was not recorded to the same level of detail as required for CERN money. In particular the activity code (destination) was not stored and all expenditure was charged to the third party nature 4558 (whereas CERN expenditure is charged to the relevant asset or consumable account as appropriate).
In 1998 some improvements were made in the handling of T5..T9 accounts. For these accounts follow up by nature & activity code became possible.
Today we are presented with (at least) 3 different models of following up Team Account Expenditure.
Scenario 1 : T1..T4 accounts with an expenditure ceiling.
Expenditure Follow up
For example T107700. This account has an agreed expenditure ceiling of 10,000 CHF with CERN. Follow up of this account is a matter of ensuring that the payments and foreseen expenditure does not exceed the ceiling of 10,000 CHF. This expenditure ceiling may be considered as a budget, therefore follow up of expenditure is simply a matter of ensuring the budget is not surpassed. The important figures are :
- Payments for goods or Services (Debits) : These are payments on orders, TIDs, stores, phones etc.
- Received Contributions (Credits) : This is any credit coming in on this team account, e.g. via a TID
- Outstanding (open) Commitments : These are forthcoming payments foreseen, e.g. to pay for an order sent out but not yet received
Note that details by activity code and nature are not available for these accounts.
Cashflow
As the Team account incurs expenditure over the financial year, this expenditure is 'invoiced' to the Institute or Funding agency. The institute or funding agency may at any time view their situation towards CERN by examining the 'cashflow' transactions in CET.
The relevant figure for this account is :
- Cashflow Balance (Income Credits - Invoiced Debits)
This figure shows the latest result of all the debit / credit operations on the teams cashflow. For example if the team started the year with 5000 CHF credit and then received an invoice for 2000 CHF, but paid 7000 CHF to CERN then the net cashflow at the end of these transactions would be 10,000 CHF.
CET also provides an indication of the estimated 'next' amount to be debited/credited on the cashflow account. For example if the Team had incurred expenditure in the last month to the amount of 1,000 CHF then at the end of the month this 1,000 CHF would be invoiced to the team. This amount is visible in the "Expenditure to be Invoiced" column.
Scenario 2 : T1..T4 accounts without an expenditure ceiling.
Expenditure Follow up
For example T301970. This account has no agreed ceiling with CERN. It may therefore spend up to the limit of the 'cash' that is available in the 'cashflow' account. Budget follow up is similar to the follow up of a T1..T4 account with a ceiling, except that the ceiling is not a static agree ceiling with CERN, but a 'dynamic' ceiling depending on the funding available. The following figures are important :
- Payments for goods or Services (Debits) : These are payments on orders, TIDs, stores, phones etc.
- Received Contributions (Credits) : This is any credit coming in on this team account, e.g. via a TID
- Outstanding (open) Commitments : These are forthcoming payments foreseen, e.g. to pay for an order sent out but not yet received
However it is important to compare them with the 'available' cash in the cashflow statement.
Cashflow
As the Team account incurs expenditure over the financial year, this expenditure is 'invoiced' to the Institute or Funding agency. The institute or funding agency may at any time view their situation towards CERN by examining the 'cashflow' transactions in CET.
The relevant figure for this account is :
- Cashflow Balance (Income Credits - Invoiced Debits)
This figure shows the latest result of all the debit / credit operations on the teams cashflow. For example if the team started the year with 5000 CHF credit and then received an invoice for 2000 CHF, but paid 7000 CHF to CERN then the net cashflow at the end of these transactions would be 10,000 CHF
CET also provides an indication of the estimated 'next' amount to be debited/credited on the cashflow account. For example if the Team had incurred expenditure in the last month to the amount of 1,000 CHF then at the end of the month this 1,000 CHF would be invoiced to the team. This amount is visible in the "Expenditure to be Invoiced" column.
Scenario 3 : T5..T9 accounts
These accounts are managed similar to CERN accounts. These are the only accounts in which the activity code an destination is available. There 'invoicing' mechanism used to bill the funding agencies for T1..T4 accounts is not applicable for these accounts and although it runs in the financial system, the results are not relevant nor accurate for these accounts (the results only balance at the end of each annual bookclosing). For this reason the 'cashflow' checkbox is not available for T5..T9 accounts. However we will show you below how CET can provide the correct cashflow balance.
Expenditure Follow up.
The following figures are important :
- Payments for goods or Services (Debits) : These are payments on orders, TIDs, stores, phones etc.
- Received Contributions (Credits) : This is any credit coming in on this team account, e.g. via a TID
- Outstanding (open) Commitments : These are forthcoming payments foreseen, e.g. to pay for an order sent out but not yet received
These figures alone however do not tell the health of the account. In order to have a complete overview it is necessary to take into account the cashflow situation.
Cashflow
The cashflow Transactions are not available for T5..T9 accounts. However CET automatically provides you with the relevant 'cashflow balance'. This is calculated by taking the 'cashflow balance' at the start of the year (Income Carry Forwards) and summing this with the expenditure balance. The net result is labeled :
- Income Balance (including outstanding commitments)
Note therefore that the Income Balance and Income Carry forward columns are only relevant for T5..T9 accounts, whereas the Cashflow Balance is only relevant for T1..T4 accounts.