Track Costs/Income from Reunion Classes, Alumni Clubs


Alumni administers all reunion associated activities and alumni related clubs. SAP, with the use of internal orders, will track cost and income by reunion class or club.

The recovery of expenditures made on these internal orders will be the responsibility of the Alumni Association. The Central A/R will not participate in the billing of these amounts. Since these receivables are part of MIT's total accounts receivable, A/R will set up and monitor the balance of such cost objects.

Additionally, because there is inherent risk involved in MIT's outlay of funds subject to later reimbursement, the Alumni Association must designate, at inception, another cost object which will alleviate any possible deficit.

As expenditures for a reunion or club are made they will be posted to an internal order associated directly with the reunion class. As registration fees are received for the reunion, these will be posted to the internal order. As payments are received by the clubs, they will be posted as income to the internal order.

When the Alumni uses an internal provider, a journal voucher will be created to debit the appropriate Alumni customer internal order and credit the internal provider's internal order.

Procedure

1. The Alumni Association realizes a need to create a cost object within the parameters above.

2. A letter explaining the need and designating another account to cover any shortfall is written and forwarded to the Assistant Controller.

3. The Assistant Controller reviews the request and either requests more information or approves the creation of the cost object.

4. The approved request is forwarded to A/R and an internal order is created (order type 0010 - Accounts Receivable).

5. Monthly, A/R personnel will review balances of all type 0010 internal orders. Based on their knowledge of the particular event (some involve significant outlay prior to reimbursement and some collect large amounts of revenue prior to expense) balances will be noted and, where appropriate, the Account Supervisor/Addressee will be contacted and requested to bring the balance to zero by depositing funds against the account at the Cashier.

6. All type 0010 internal orders will be settled to GL account 101225 monthly. At month/year end, after settlement, this balance and the balance of account 101200 - A/R General will represent the balance of all outstanding general accounts receivable.

7. When the activity which prompted the creation of the cost object has ended (i.e., the reunion has been held):

  • Any positive balance (profit) will be transferred, by means of a journal voucher, to another cost object in the same department;
  • Any negative balance (loss) will either be recovered from the sponsor of the event as final billing or transferred from the cost object originally designated for this purpose (as noted in step 2) by means of a journal voucher.