An organizational unit that requires audited financial statements for external use. Often this corresponds to a separate operational or responsibility area in the organization at the highest level.
Chart of Accounts
A chart of accounts provides a framework for the recording of values to ensure an orderly rendering of accounting data. The chart of accounts is the operative chart of accounts and is used in both financial accounting and cost accounting.
In the commercial, organizational and technical terms, a self-contained unit in a R/3 System with separate master records and its own set of tables.
Commitment Items represent budget classifications of revenues and expenditures in the Funds Management Module. Commitment items are linked to the GL account in FI and the revenue and cost elements in CO. With this linkage, transactions posted to the GL account or revenue or cost elements are automatically posted to FM. Commitment items can also be arranged in a multi-level hierarchy where the top nodes are defined for reporting and/or controlling levels.
The highest organizational unit of financial accounting for which a complete self-contained set of accounts can be drawn up for purposes of external reporting.
An organizational unit within a company used to represent a closed system for cost accounting purposes.
An organizational unit within a controlling area that represents a clearly delimited location where revenue and costs occur. Organizational divisions can be based on functional requirements, allocation criteria, physical location and/or responsibility for costs.
Cost Center Group
A hierarchical group of cost centers defined and organized according to selected criteria. (also see Funds Center Group). It can be any group of cost centers used for reporting aggregated data.
A cost element classifies the organization’s expenses within a cost object (Examples: cost center, internal order, WBS). A cost element corresponds to a commitment item in FM and the GL account in FI.
A generic term referring to both cost centers and internal orders.
An agreement by the University to support the costs of certain sponsored projects through University funds, third party sponsors or volunteer time. Cost sharing is normally broken into three categories:
1) Reportable/Mandatory 2) Committed, and 3) Non-Reportable/Voluntary. SAP will allow cost sharing to be budgeted and recorded along with the grant in Grants Management (GM) by identifying the funding sources in the grant master data.
Cost Sharing (Committed)
Cost sharing that was included in the proposal document that resulted in an award to the institution. This cost sharing was not required by the sponsor but was offered and therefore becomes a commitment of the award.
Cost Sharing (Non-reportable/Voluntary)
Cost sharing that was neither required by the sponsor, nor included in the proposal. These are costs that were unanticipated by either party. For example, an investigator may have recorded that the planned effort would be 10 percent of the academic year effort. In reality, the investigator spent 12 percent of the academic year effort working on the grant. The extra 2 percent would be considered non-reportable/voluntary cost sharing. Currently, this type of cost sharing is only reflected in FES.
Cost Sharing (Reportable/Mandatory)
Costs required being reported to the sponsor as detailed in the request for proposal, sponsor guidelines or award document.
An aging schedule of accounts receivable invoices is used to review customer accounts for delayed payments. (Also see Dunning)
Customer (A/R and S/D)
A business partner from whom receivables are due for, among other things, goods delivered, services performed and rights transferred, and/or a business relationship exists, involving the issue of goods or services. Used for grant sponsors, employees for direct benefit billing and county appropriations.
A rule defined by IF-THEN logic which controls how certain target characteristic values are derived automatically from source characteristic values. This rule will be used to minimize entry of the account string to only those elements that vary or for which entry is required.
Provides the ability to evaluate accounts receivable and send notifications of invoices that are past due. Dunning incorporates many parameters, but normally the length of time an invoice is overdue is key to determining which notices to send. (also see Customer Aging)
Financial Management Area
SAP defines a financial management area in R/3 as the organizational unit within an institution used to represent budgeted and actual revenues and expenses.
SAP defines the functional area as a master data element that is maintained within the Funds Management (FM) Module. It is used in FI to classify revenues and expenditures of an organization by function. The functional area is often referred to as mission. The functional area will be derived from the cost center.
A separate and distinct fiscal/accounting object containing a self-balancing set of accounts used to budget and control costs and to identify source and use of funding. Financial data will be separated by Funds so that certain activities can be performed or objectives achieved in accordance with special regulations, restrictions, or limitations. The fund is not hierarchical. The Fund is the lowest level at which a balance sheet can be created.
An organizational unit within the Funds Management (FM) Module. It represents the lowest level area of responsibility for budgetary monitoring and controlling costs by area of responsibility. Fund centers are arranged in a multilevel hierarchy where a parent-child relationship is defined for reporting and/or controlling levels.
Funds Center Group
Funds Centers can be grouped together to form funds center groups (not necessarily hierarchical). Funds Center groups will be used to provide the organizational structure for reporting information from the SAP system. Budgeting will be done at the Funds Center level.
General Ledger (GL) Account
A structure that records values and represents assets, liabilities, revenues, expenses and fund balances. A G/L account has transaction figures that record changes to the account during a posting period. These figures are used for financial reporting.
Contains financial conditions and legal rules agreed upon by the sponsor and the University which may require financial reporting. It can cover project costs partially or in total. It has a limited life cycle, split into phases, indicated by a system status in GM as follows:
- Proposal: The proposal is a complete formal document, including budget.
- Award: If the sponsor approves the grant, an award is received. This is the operative phase of the grant. The budget is released in whole or in part in this phase.
- Conclusion: If an award is expired, but not closed, then it is in the conclusion phase. There are posting restrictions on the grant in this phase.
- Final Conclusion: The grant has expired and been closed. It can be archived, but no other actions are allowed.
- Terminated: The grant was terminated, either for internal reasons or because the sponsor rejected the application.
A business partner that represents a bank through which the University can process its own internal transactions.
Similar to a cost center, an internal order is used to record and monitor costs and, in some cases, revenues. A guiding principle is that internal orders should be set up for programs that are short-term or finite in nature.
Agricultural Research and Cooperative Extension programs in which funds are distributed by the U.S. Department of Agriculture on an annual basis according to a statutory administrative formula (non-competitive funding). Eligibility is limited to cooperating land grant institutions. Awarded on a federal fiscal year basis (October 1 – September 30).
Letter of Credit
An agreement between a sponsor and the University to provide payment via Federal Reserve ACH when the University requests reimbursement for grant expenses. These sponsors have a secured system through which the University requests payment.
Master data form a pool of information stored on a long-term basis in the SAP system and can be incorporated into individual transactions. Master data are entered once and can be modified as needed.
A revenue element classifies the organization’s revenue within a fund center. A revenue element corresponds to a cost element in CO and the GL account in FI.
Special Purpose Ledger (SPL)
A special purpose ledger provides the ability to produce balance sheets based on fund accounting. Most of the financial activities updating general ledger accounts will be posted to the special purpose ledger simultaneously as transactions are processed. It uses the split processor functionality to create entries to balance transactions among funds. The SPL shares the same GL accounts as FI. The difference between the two is that the SPL will break the transaction down even further to allow the correct split by fund and business area.
An organization or another source that finances a project conducted by University personnel. The sponsor may agree to fund the project in total or in part based upon an application or proposal provided in response to a request for proposal. The sponsor may be a government agency, company, foundation, or individual interested in furthering study or interest in a particular area and is entitled to receive some consideration or benefits. The agreement from the sponsor represents a contractual obligation for performance of the specific activity by the University.
The sponsored class represents the sponsor’s expense and revenue classification. The sponsored class is used to group expenses and revenues in order to satisfy the sponsor’s view and reporting needs. It is also used to specify in detail which expenses are relevant for billing and for indirect cost calculation.
This master data element is maintained within the Grants Management (GM) Module. It is used to classify revenues and expenditures of a grant by mission. Sponsored Program is equivalent to functional area in FM.
Statistical Internal Order
An internal order created and maintained by a department user to accumulate costs and revenues for internal reporting purposes. These orders are created using master data functionality and may be short- or long-term in nature. The user may enter the statistical internal order number on a posting transaction to make a real posting to a cost center and simultaneously make a statistical posting to the internal order to track department specific activity.
Work Breakdown Structure (WBS) Element
A cost object, similar to an internal order, used to represent grants, land grants and capital projects in the Controlling Module of SAP. When used for grants, the WBS element represents a grant in the Controlling Module and is used to post transactions to the grant in the Grants Module (GM). When used for capital projects, the WBS element represents a Project in the Controlling Module (CO) and is used to post transactions to the capital project in Project Systems (PS).
The sequence and evaluation of conditions needed to complete a business process. This is an electronic function monitored by the workflow manager within SAP.