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University of TennesseeFinance Business

Blueprint

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Agenda

Business Blueprint Executive Summary

• Goal of Business Blueprint• Tools Used• Enterprise Structure• Module Overview• Business Fit• Issues / Gaps• Change Management / Training Concerns• Authorizations

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Business Blueprint AnalysisGoals

• Determine UT’s business process requirements

• Achieve a common understanding of how UT intends to run its business within the framework of SAP R/3

• Deliver a record of results gathered

• Move into the next phase with enough information to complete baseline configuration

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Business Blueprint AnalysisTools

• Business Process Questions (by process)– Standard questions regarding UT’s organizational structure,

processes and business needs

• Detailed Workshops– Meetings with key users to discuss business processes and

business needs

• Customer Input Templates– high level summary of Processes

• Business Process Transaction – Business Process Master List (BPML)

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Business Blueprint AnalysisActivities

• Business Blueprint Workshops

• Detail Requirement Workshops

• Preparation of Business Blueprint Deliverables– Creation and review of all Q&A questionnaire

– Creation and review of CI Templates

– Creation and review of BPMLs

– Creation and review of RICES

– Update issue log (which includes the major gaps).

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Financial AccountingEnterprise Structure – General Ledger

Chart ofAccts UT

Company CodeUT

Assets

Liabilities

FundBalances

Revenues

Expenditures

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Financial AccountingEnterprise Structure - Controlling

Cost CenterE011024001

Functional Area Instruction

Profit Center L011002401Chemistry

Fund E011024001

Fund Center U011002401Chemistry

Business AreaCur Unrest E&G Knoxville

Company Code UT

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Financial Accounting Enterprise Structure – Project Systems

Functional Area Research

Profit Center L011002401Chemistry

FundB01001024

Fund Center U011002401Chemistry

Company Code UT

Business AreaCur Rest E&G Knoxville

WBS ElementB01001024

WBS ElementR011024010

FundR011024010

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Company code

Purch. Organization

Plant

Univ ofTennessee

UT

Storage location

KnoxvilleK

Chatta-nooga

C

MartinM

MemphisH

UTSI-Tullahoma

T

Depart.K001...

Depart...C001...

Depart...M001...

Depart...H001

Depart...T001

CentralPurch.Org.

UT

Financial Accounting Enterprise Structure – Procurement

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General Ledger

• Chart of Accounts includes general ledger accounts, the equivalent of object codes (expenditures, revenues, assets, liabilities, and fund balances)

• Posting of journal entries to the General Ledger (direct and through automatic account assignment from other modules)

– Direct postings – journal entry (JV, TV, etc.)

– Automatic account assignments – payroll postings

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Special Purpose Ledger

• Balance Sheet and Revenue and Expenditure Reporting by Fund

– Automatic cash offset posting

– Internal reporting by fund

• Balance Sheet and Revenue and Expenditure Reporting by Fund Group and Budget entity

– For monthly Treasurer’s Report

– For external financial statements

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Asset Management

• Supports tracking and management of fixed assets (equipment, buildings and land)

– Leased and owned equipment

– Sensitive item tracking

– Integration with MM to benefit from automatic capitalization at time of goods/invoice receipt

– UT will have new functionality to meet GASB requirements to depreciate their assets July 2001

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Cash Management

• Cash management manages UT’s short term cash flow and Bank Ledger accounting– Evaluate UT cash position– Lockbox cash receipts– Bank statement input and bank reconciliation– Deposit handling and Cashed Check reconciliation – Monitor cash inflows and outflows to ensure on optimum

amount of liquidity to meet required payments

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Controlling

• Provides collection of costs for unrestricted accounts

– Cost Centers – UT E & I accounts

– Profit Centers - UT departments

– Cost/Revenue Elements – expenditure and revenue codes

– Departmental Planning for cost centers – plan vs actual analysis

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Funds Management

• Provides monitoring and control of budgets for both state and local appropriations as well as sponsored programs

– Commitment items – UT object codes

– Funds centers – UT organizational units

– Funds – UT accounts

– Budgeting at the fund level

– Funds availability control at the fund level

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Project Systems

• Project accounting (revenue and expenses) for UT restricted funds

– Planning (dates, costs at the cost element level)

– Overhead calculation (F&A)

– Integration with FM (wbs element link to funds), AM (plant funds will require AuC’s) and SD (sponsor billing)

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Accounts Payable• Single vendor master database ownership by A/P dept –

purchasing view updated by purchasing dept• Invoice processing

– Processing of purchase order invoices via Logistics Invoice Verification (LIV)

– On-line 3 way matching of invoice/PO/goods receipt– Processing of direct vouchers without purchase order

• Automatic and manual payment process– Manages payments based on frequency of payment runs &

payment terms specified in the vendor master record or invoice

• Integration with Travel Management

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Sales and Distribution

• Supports billing of sponsor reimbursable funds

– Cost reimbursable (resource related billing)

– Schedule billing (example $15,000 each month)

– Item billing (example trial testing)

– Letter of credit (draw down)

– Retainage

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Accounts Receivable

• Single customer master database of sponsored projects shared with Sales and Distribution

• Invoice processing for sponsored projects– Integration with Sales and Distribution billing– Supports accounting for manual billing

• Application of incoming payments for sponsored projects• Supports dunning for sponsored projects

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Travel Management

• Employee and Guest Travel

– Travel Authorizations

– Travel Advances

– Entry and Approval of Trip Facts

– Travel Expense Accounting – posting to GL

– Reimbursement through Accounts Payable

– Incorporates University fiscal policy

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Purchasing

• Requisitions

– Electronic transmission of document to purchasing (eliminates paper document)

– Electronic approval process

– Ability of department to review existing university contracts on-line in determining requisition source

– Assignment of asset at point of requisition

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Purchasing

• Source Lists

– Identify and suggest potential sources based on contracts

– Identify potential sources for bid lists

– Ability to identify sources based on info records and flexible search parameters

– Information contained in central data base accessible to all campus purchasing departments

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Purchasing

• Request for Quotation

– Generation of bidder list based on information records maintained in SAP such as NIGP codes, recent purchases, etc.

– Flexibility in evaluation of quotes received - line item vs totals

– Departments can evaluate on-line vs. sending hard copy for review

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Purchasing

• Purchase Orders

– Identify and suggest potential sources based on contracts

– Identify potential sources for bid lists

– Ability to identify sources based on info records and flexible search parameters

– Information contained in central data base accessible to all campus purchasing departments

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Purchasing

• Contracts

– Available for review and maintenance on-line

– Ability to release order directly against contract without requisition

– Better accountability of funds spent against contract

– Flexible agreement types (i.e. outline, blanket, etc.)

– Ability to review all campus contracts across UT

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Purchasing Matrix

Note

Volume/Value Annual activity

Doc. Type /Method

Req. Request for Quotation ($2,000><10,000) Optional>$10,000 Required

Purchase Orders

Funds Avail. Checking

Goods Receipt

A/P-or Department

Low/Low $3M P-Card N/A N/A N/A N/A N/A Accts. Payable

High/Low or High Outline-Value (WK)

N/A N/A Release Orders (NB)

Yes Yes Depts.

High/Low Note Outline-Value (WK)

N/A N/A Blanket(FO)

N/A N/A Accts. Payable

Low/High(incl. Assets)

Note Purchase Order (NB)

Yes Yes Yes Yes Yes Department

High/Low $100M Non- Purchase Order

N/A N/A N/A N/A N/A Department

Personal Services

  Purchase Order or External Order

Yes   Yes Yes N/A Accts. Payable

Facilities / Construction

  Purchase Order or External Order

           

Library-Books   Out of Scope            

Insurance-Contracts

               

Utilities   Out of Scope            

T-Club                

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Financial AccountingBusiness Fit

In Scope• Financial Accounting

– General Ledger– Special Purpose Ledger– Asset Management– Cash Management– Controlling– Funds Management– Project Systems– Accounts Payable

• Materials Management– Purchasing

• Sales and Distribution

– Billing for sponsored projects

• Accounts Receivable

– A/R for sponsored projects

• Travel Management

– Travel Expenses

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Out of Scope• Inventory Management

• Real Estate Management (Facilities)

• Investment Management

• Internal Orders

• PS Networks (scheduling, resources, tasks, etc)

• General Accounts Receivable (only sponsored receivables in scope)

• Purchasing Material Master

• Purchasing B-to-B Functionality (in RFP)

• Archiving

Financial AccountingBusiness Fit

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• Import of Procurement card transactions into R/3 (Issue 8 – functionality deficit)

• Funds availability checking (Issue 33 – process design)• Creation of external reports such as CFDA, IPEDs, etc (Issue 68 –

functionality deficit)• Data-level security for Finance (Issue 74 – process design)• Support for cost sharing transactions in R/3 (Issue 106 – process

design and functionality deficit)• Research and determine FAX software to acquire (Issue 113 - )• Ability to track source of recoveries of payroll costs (Issue 118, 119 –

process design)• Scope of University procurement processes (Issue 133 – project

scope)

Financial AccountingIssues

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Financial AccountingIssues (cont.)

• Effort Certification processing (Issue 137, 155 – functionality deficit and process design)

• Financial/technical/equipment reporting to Grant sponsors (Issue 157 – functionality deficit)

• Budget transfers for mass salary changes (Issue 162 – functionality deficit)

• What will be the commitment item group standard for unrestricted accounts (Issue 166 – process design)

• Revenue recognition for restricted projects (Issue 178 – process design)

• Accrued annual leave (Issue 186 – process design)• Salary transfer vouchers (STV) (Issue 187 – process design)

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Financial AccountingChange Management Concerns

• Terminology• Decentralization of Accounts Payable functions• Goods receipt (in some situations)• Departmental requisitioning online• Travel request and reimbursement decentralized• Budgets and planning• Departmental entry of service contracts• Departmental entry of assets for equipment• Workflow• Cash management for cash receipts

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Financial Accounting Authorizations

• There will be user authorizations at the following levels:

– By fund/fund center/commitment item

– By transaction