Cash Management Subfunction
The Cash Management subfunction includes the processes for:
- recognizing revenue
- creating invoices and accounts receivable items
- recording and collecting cash
- performing write-offs and other adjustments for sponsored projects.
The goal of these processes is to ensure that all valid payments due from sponsors are identified, required invoices are issued to the sponsor, and items due are tracked until they are relieved (either by payment or reversal of the invoice).
These processes interface between many PeopleSoft modules including:
- (eventually) post-accounting entries to the General Ledger.
Accounting Services for Research and Sponsored Programs (ASRSP) will centrally perform the majority of these processes. All of these processes are planned to go-live with the implementation of the core financials system in September 2008.
The Cash Management business process is intended to demonstrate the following benefits to Northwestern:
- Allows revenue to be recognized differently based on types of contracts and to be able to reflect revenue on financial reports in a manner consistent with contract terms (based on expenses for cost reimbursable awards and based on milestone completion for fixed price awards).
- Allows systematic billing for costs incurred on a project according to defined billing rules, including billing limits and billing cycles and systematic creation of financial status reports (e.g., SF272).
- This will allow ASRSP to devote resources to better monitor sensitive accounts, be more proactive in invoicing strict sponsor deadlines (e.g., DOD) accounts, and follow up with PI’s on issues related to their projects.
- Enables review and adjustment of bill lines created by the Billing module before invoices are generated and allows for adjustments or updates to be passed from the Billing module to the Projects module.
- Users in projects will have access to information on the progress of a project—such as outstanding revenue—and gain an understanding of financial status of projects they manage.
- Allows the integration of Accounts Receivables and Billing by providing an invoice generation process that automatically creates open receivables in the AR module.
- This will allow ASRSP to research, manage and post cash promptly.
- Enables ASRSP to complete bank reconciliation within PeopleSoft to only allow NU to recognize cash in GL after it has been successfully deposited in the bank.
- This will allow NU to report on cash in a manner consistent with actual cash received in the bank account.
- Enables PeopleSoft AR module to systematically age invoices, create dunning letters to remind sponsors of overdue payments, and centrally track conversations with sponsors to allow ASRSP staff and management to understand and manage payment related issues.
- Allows an increased level of data integrity between systems due to the integration within PeopleSoft Financials modules.
Note that this subfunction also includes processes for creating AR items and applying payments for non-sponsored activity such as the facilities department billing external entities. These processes are performed within the AR module and are done by the Accounting Services office.