Departments are required to create internal sales transactions when trading with other internal departments. Upon receipt of a request or a purchase order, the selling department must raise a UFS invoice using the correct internal trading data.
Departments must not create manual invoices.
Generating an internal trading invoice
The process for generating an invoice to another department is very similar to that of raising an invoice to an external customer.
For full details of how to raise an internal invoice please see the Income Collection training manual available on line.
Key points to remember are listed below.
On the main invoice header screen:
- Currency - must remain as the default GBP
- Class - invoice or credit memo (debit memos can not be used for internal trading)
- Type - internal invoice or internal credit memo
- Customer number - select from pre-allocated internal customer number listing
- Terms - defaults to 'Internal'
In the 'More' tab in the header region:
- Purchase order number - if available
Within transaction lines:
- Description - include details that will assist with the settlement of the invoice (i.e. relevant dates, refer to individual who authorised purchase from the University)
- Tax Code - must be 'Internal'
When line details have been entered users are advised to save their work before they update the accounting information.
AR transaction Receivables and Revenue codes
For each transaction line UFS will default in three account codes:
The revenue account code must be amended to an appropriate departmental cost centre, source of funds of 'GAAB' and a transaction code in the L range or occasionally the K range (the latter are normally retained for central divisions use). Transaction codes in the E or F range are NOT to be used in the AR module as they refer to expenditure.
The receivables code will default as a University departmental internal trading control account that is linked to the internal customer record. This code must not be changed or deleted. Nor should you ever amend the Tax lines.
Recharging another department
The terms 'recharges' and 'reimbursements' are commonly used inter-changeably however, for taxation purposes they are treated slightly differently. Please see the VAT & Other Taxes section Financial Procedures Manual.
If you are recharging another department for goods or services that your department has previously received from a supplier then there are two separate transactions.
- Between the original supplier and your University department.
- Between your department and your customer.
There are three options:
Code the AP invoice from the supplier to source of funds GAAB and the appropriate E transaction code if at the time of acquisition the department knows that the goods/services are to be passed on and recharged to another department.
Post purchase raise a GL journal to transfer the cost to the correct source of funds code
- Credit: the original source of funds and transaction code
- Debit: source of funds GAAB with the original transaction code
Save and post the journal
Adjust the original AP invoice if it was originally paid for out of a research grant
- Remove: the existing distribution line for the item in question on the original accounts payable invoice by entering a corresponding negative line.
- Enter: a new line in the AP invoice distributions, coded to source of funds GAAB with an appropriate E or F transaction code.
Validate and secondary approve the invoice again.
An internal trading invoice should then be raised in the normal way using an appropriate L transaction code to describe the supply and the source of funds code GAAB.