Billings - Receivables
The Billing rule categorizes the manner in which a grant is billed. It discerns the type of postings that are billed and affects the actual billing functionality. For example, rule RRB-LOC bills automatically, while role RRB-NON Loc must be manually released. There are seven billing rules: RRB-Letter of Credit, RRB - Non Loc, Direct Pay - Various Amounts, Direct Pay - Like Amounts, Manual Billing, Pre-Award and Scheduled Billing.
A cost center is an organizational unit responsible for budgetary monitoring and reporting that collects revenues and costs. Organizational divisions can be based on functional requirements, physical location and/or responsibility for costs. The cost center number indicates a university division or health system entity, department or functional unit and/ or sub-department or other sub-organization level. Every cost center in Controlling (CO) corresponds to a funds center in the FM module.
Credit Memos are used to decrease the amount of an invoice. An example would be if the AAA Company is allowed to deduct $500.00 off a $1,000.00 invoice. A credit memo of $500.00 is issued to decrease the invoice amount.
A customer is defined as a business partner with whom a business relationship exists, involving the issue of goods or services. If the Orioles rent a room for a conference from Johns Hopkins, the Orioles are the customer. If the billing address is different you would add the bill to customer to the sales order, so that you will know where to mail the invoice.
There are 2 types of customers at Johns Hopkins: Sponsored and Non-sponsored.
- A sponsor is an organization or other source that finances a project conducted by the Johns Hopkins personnel. The sponsor may be a government agency, company, foundation, or individual interested in a 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 Johns Hopkins Enterprise. A sponsor is identified by a six digit numerical sequence beginning with 3 (300000).
- A non-sponsored customer is an outside organization which is billed by Johns Hopkins Enterprise for goods, services or reimbursement of expenses that were provided to that third party by Johns Hopkins Enterprise. A non-sponsored customer is identified by a six digit numerical sequence beginning with 6 (600001).
AR customer correspondence is the form Johns Hopkins Enterprise sends to communicate with their customers. Once a billing document has been created in SAP, an invoice is requested and printed out to be mailed or electronically transmitted to the customer. All evaluations and reports that are sent to business partners are considered correspondence.
Customer Master Records
Customer Master Records are a grouping of customer information that consists of General data, Company Code data and Sales Area data.
- General Data consist of address, control data, contact information and payment transactions.
- Company Code Data consist of account management, payment transactions and correspondence.
- Sales Data consist of sales, billing document and partner functions.
An internal order is a Controlling (CO) object responsible for budgetary monitoring and reporting that collects revenues and expenses separately from a cost center. All internal orders are assigned a responsible cost center. There are two main classifications of internal orders, sponsored (Sponsored Program) and non-sponsored (for costs and revenues not directly related to a Sponsored Project.) There are several types within each. The non-sponsored internal order has a one-to-one link with the funded program in the Funds Management (FM) module and the numbering is the same. Similarly, sponsored internal orders are linked one-to-one with the sponsored program in Grants Management (GM). The system automatically assigns a unique 8 digit number for the internal order. The first digit indicates the type of order: Non-sponsored (8), Sponsored (9) and IPA Agreements (1). The remaining digits are based on the next available value in the range for the type of order.
A request is created to the sponsor or non-sponsored customer for the reimbursement of expenses that contains, among other things, the following information:
Allowable Budget Amount
Total of Expenditures
Invoices are sent to the sponsor or customer after expenditures for a specific time period have been accumulated.
A lockbox is an arrangement with a bank under which payments are mailed to a strategically located post office box, which is serviced by the bank. The bank picks up the payments from the post office several times a day and accelerates the processing of the checks to make funds available to the customer (the university). Lockboxes enhance the security and control of funds and can reduce workloads in customer offices. Offices that have a significant volume of receipts that cannot be converted to electronic funds transfer and for which the university’s central lockbox is not appropriate should contact Kaliopi Provencher, Director of Treasury Operations (443) 997-8120 to conduct an analysis of the costs and benefits of a lockbox arrangement.
Maintain Billing Due List Report
The Maintain Billing Due List is a report that is run by a billing specialist to determine which customer is to be invoiced. Once the list has been compiled and the customer identified an invoice is mailed.
Master Data Defined vs. Transactional Data
Master Data consists of those values which the system will use to classify, categorize and store transactional data. Transactional data consists only of the data that is specific to the individual business transaction (amount and debit or credit indicator). Each of the operational modules within the system contains master data that is specific to that area. When documents are posted in the SAP system the master data from the various modules is entered or derived on the document line items and therefore shared throughout the system.
Master Data includes General Data, Company Code Data and Sales Data. General Data consists of an address, control data, contact information and payment transactions. Company Code Data consists of account management, payment transactions and correspondence. Sales Data consists of sales, billing documents and partner functions.
At Johns Hopkins each expenditure category is given a material number. The material number pulls the expenses associated with the expenditure categories. The amount is then placed on the invoice form.
An open item in Accounts Receivable is an invoice or debit memo generated by Johns Hopkins requesting payment from a customer. Open items can be tracked by age, customer number, or balance due using Business Warehouse (BW) reports. Closing an open item is triggered by payment from the customer. A credit memo is an open item on the customer's account which indicates an overpayment.
Release Sales Orders
A debit memo request is created based on the expenses. These requests are held until reviewed in another transaction. Once the debit memo is reviewed and released the invoice is created, which creates the finance document or open item at the same time.
In SAP revenue is posted to the grant at the time of invoicing. Currently, Johns Hopkins recognizes revenue on grants at the time the expense incurs. The difference in timing in SAP is due to utilizing a program that posts the amount of the unbilled amount at the end of the month as an accrual. This accrual will reverse at the beginning of the following month.
Sales Orders are requests from Sponsors or non-sponsored customers for services. Sales Orders are created to facilitate billing. At Hopkins there are two types of such requests; cost based billings and fixed price billings. Cost based billing is when a sales order is set up and linked to a grant or internal order to drive the resource related billing. Fixed price billing is when sales orders are set up and billing schedules are created based on the requirements of the customer.
Sales organization is an organizational unit responsible for distributing products and/or services and negotiating sales conditions. The sales organization unit will always be Johns Hopkins Enterprise.
A sponsor is an organization or other source that finances a project conducted by Johns Hopkins personnel. The sponsor may be a government agency, company, foundation, or individual interested in a 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 Johns Hopkins Enterprise. A sponsor is identified by a six digit numerical sequence beginning with 3 (300000).
A customer is equal to a sponsor so there will be a one-to-one relationship in SAP. A sponsor is created in the SAP Grants Management Module which uses the Business Partner functionality and automatically creates a customer master record.