Chapter 8b - Internal trading

Overview

Internal Trading is the process by which goods and services are bought and sold between Cambridge University departments using UFS Accounts Receivable (AR) and Accounts Payable (AP) modules. A technical interface is run between the two modules to push AR internal transactions into the AP module awaiting secondary approval.

The successful creation of an internal transaction requires all correct internal data to be used.

On this page:

• Introduction
• Monitoring and further guidance
• Customer numbers

Introduction

Defining a University internal customer

Internal customers are those that are part of the legal entity of the Academic University e.g. the Schools, faculties and departments.

HMRC also include Cambridge University Press and Assessment (CUPA) and Cambridge Enterprise as part of the University’s VAT Group and these both have the same VAT registration number as the University. Therefore, the tax code of ‘internal’ should be allocated for transactions with all these organisations.

However, as only University departments are using UFS you must not use either internal trading or raise an internal invoice to either CUPA or Cambridge Enterprise, as internal trading invoices are only used for trading between University departments using the entity code ‘U’ in UFS.

Internal customer numbers

• Each internal customer has a two-letter 'department code' which in most instances coincides with the two letters at the beginning of their departmental cost centres.
• Every internal customer has been pre-allocated a customer number that MUST be used when creating internal transactions. These internal customer records have been created centrally and include data that enables the Internal Trading process to work.
• Any amendments to, or new internal customers can only be successfully carried out by the Finance Division - forward any queries to ARCustomer@admin.cam.ac.uk

Sub-departments within a larger department

Sub-departments within larger departments must be treated as an additional 'Bill To' location within the main department's customer number.

For example: Temporary Employment Services (TES) of Personnel Division has its own cost centres. Departments needing to raise an invoice to TES must use the internal customer number allocated to the Personnel Division and then create a new address line within the customer with TES' details.

VAT

All internal trading invoices do not attract VAT. The VAT code used must be INTERNAL.

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Monitoring and further guidance

Reports on UFS

It is the responsibility of Heads of Departments and Department Administrators to monitor outstanding / unpaid Internal Trading invoices.

As part of month-end procedures for the Accounts Payable module, users are advised to :

1. Run the 'Invoice Register' report for uncompleted invoices. Ensure that there are no invoices remaining on the default transaction code FKAA waiting re-coding to the correct departmental account.

2. Run the 'Invoices on Hold' report. Internal invoices on hold must be investigated and resolved. Guidance and mediation are available from the Finance Division.

Year end

The Finance Division produce detailed year-end procedures which include the processing and resolving of Internal Trading invoices. Further information is available in the Year End Guidance pages of the Financial Procedures Manual.

Heads of Institution are required to confirm compliance with these procedures in their year-end certificate.

Further guidance and support

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Customer numbers for internal departments

A list of customer numbers for internal departments can be found under "Department Contacts"

Invoicing sub-departments

To invoice departments that are sub-ledgers of another department, an additional address line will need to be created in the original customer record. For example to invoice CamSIS

• go to Customer number 1000 (Central Admin)
• create a new address line with CamSIS's details
• The location field of the BILL TO USAGE should include your department code followed by the word CamSIS (eg. AG_Camsis)

Invoicing Physics

When departments deal with any of the sub-ledgers of PHYSICS (Department code KA- KN) they should ensure that:

• purchase orders to Physics are all addressed to department code KA
• purchase invoices from Physics will appear in the customer's AP module as supplier PHYSICS (KA)
• sales invoices to Physics are addressed to the appropriate sub-ledger eg. KB_KN

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