State Accounting Fiscal Essentials . SAFE Policy Manual

Revised: MM/DD/YYYY

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Chapter / Book Title

Topic Title

 

Applicable or Related Code Sections

•  ORC Section 126.21 (A)(9) - Accounting duties of director of budget and management

 

Related Links

• OAKS FIN Process Manual, "Processing a Credit"

 

 

Agencies may accrue credits or funds due back from a supplier.  A credit may be received by the agency from a supplier in a variety of formats such as a negative invoice, a reduction on a current invoice due, or correspondence indicating a credit balance. Credits may not be processed by simply eliminating or reducing the amount due on subsequent invoices received for payment from the supplier. This dilutes the actual payment transaction information and eliminates transparency of credits received.

 

When an agency receives a credit, the agency should first evaluate the origin by determining the original voucher(s) which resulted in the credit from the supplier. Agencies are required to enter credit transactions in OAKS unless:

• The credit(s) relate to utility payments;  
• The agency enters an open A/R item and invoices the supplier for a refund; or
• The amount of the credit will not be relieved by subsequent invoices within the same fiscal year requiring the agency to contact the supplier for a refund .
  • An agency must take additional steps to collect funds due back (i.e., contact supplier for a check instead of issuing a credit) if additional invoices are not anticipated or will not be received within the same fiscal year in order to clear the outstanding credit voucher. If a refund is received, agencies should review the Refund of Expenditure section of the Revenue Policy in the SAFE to determine if it is appropriate to process as a Refund of Expenditure.

When processing a credit in OAKS, the credit must be processed as a voucher utilizing the same funding as the original payment voucher(s) and entered as a negative expense (for example, a credit of $100 should be entered as -$100). All credits should be processed by using one of the following methods:

 

• If the credit is contained within an invoice from the supplier reducing current amount due, then a separate voucher line with a negative expense amount must be entered for the credit. This may only be used if after the credit there is a balance due to be paid; OR
• If the agency receives a separate document indicating a credit (e.g., email, credit memo, etc.) or the credit is within a subsequent invoice and after the credit is entered there is a negative or zero balance due, then a separate voucher for the credit must be entered into OAKS. The voucher should be entered as a negative expense.
  • Credit vouchers will remain posted in OAKS as a negative value until a subsequent positive voucher to the same supplier posts thus relieving the negative value against the payment to the supplier.  A credit voucher may be put on hold by the agency in OAKS should an agency wish the credit to apply to a particular invoice; however, the invoice must be anticipated to be received within the same fiscal year.  Credit vouchers that remain unrelieved and exist at fiscal year-end will be closed by State Accounting.  

Refer to the "Processing a Credit" topic in the FIN Process Manual for the steps to creating credit vouchers. The credit documentation should be attached to the credit voucher in OAKS to support the entry along with the original voucher support or a reference in the voucher comments indicating the original voucher number.

 

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