Financial Administration
Currently, University finance and administrative work—such as accounts receivable, journal entries, cash management, internal recharges, and fixed assets—are managed using segmented systems and manual reconciliation processes.
When the University implements Oracle Cloud ERP, new business processes will be introduced to improve financial management and reduce the need for manual processing of financial information.
To learn more about what is changing with each individual process, select the relevant box below:
What is the current process in Accounts Receivables?
Currently, AR practices are decentralized, with disparate processes across the University. As a result, multiple invoicing Excel templates create inconsistencies in the accounts receivables process.
How will Oracle Cloud ERP impact Accounts Receivables?
The Accounts Receivables module within Oracle Cloud ERP will create unified AR business processes that are comprised of centralized and unit-managed receivables functions. The University will now have one UChicago invoice template for invoices, statements, and delinquent-letter communication. This standardization will improve the business processes by streamlining customer management, AR invoicing, receipting, collection, and bad debt. With the new platform, each unit engaged in the AR process will be grouped into one of the following three categories:
- Independent Banking Unit
- Independent Business Unit
- Dependent Banking Unit
Frequently Asked Questions About Account Receivables
How will the transition to Oracle Cloud ERP affect University of Chicago units?
Each unit will be classified into one of the following three categories:
- Independent Business Unit.
- Independent Banking Unit.
- Dependent Banking Unit
How will the transition to Oracle Cloud ERP affect accounts receivable?
Currently, units manage accounts receivable locally in disparate systems. In the future, the University of Chicago will have a centralized AR team supporting invoicing and receiving. Some units will utilize the centralized AR team as soon as the FTS go-live, and work will shift to the central team. Other units will utilize the centralized AR team at a later date during post-go-live optimization.
What is the current process for cash management?
Currently, bank statements are downloaded manually and bank reconciliation for all accounts is performed offline.
How will Oracle Cloud ERP affect cash management?
Oracle Cloud ERP enables automated integration of bank statements for certain accounts and bank statement reconciliation to cash transactions created in other Oracle modules. The key, campus-facing business processes that flow into automatic reconciliation are payments (AP), cash receipts (AR), and in some cases, general ledger journals (GL). In the future, bank statement details will either be imported automatically, or in some cases, created manually to assist automatic reconciliation for system transactions.
Frequently Asked Questions About Cash Management
Will my unit’s bank account be configured for reconciliation in Cash Management?
Due to configuration and maintenance efforts, bank accounts identified by the treasury team will be configured in Oracle.
What processes will not change with the transition to Oracle Cloud?
- Requests to open, close, and manage bank accounts will follow the same request process as they do now.
- Requests to enable auto-debit for a specific supplier will follow the same request process as today.
- Bank account owners will continue to manage wires, transfers, etc. through bank portal.
- Units should continue to communicate large, expected payments to the treasury.
What is the current process for fixed assets?
Capitalized assets are recorded and depreciated annually in the University's Property Management System.
How will Oracle Cloud ERP affect fixed assets?
When Oracle Cloud ERP is implemented, capitalized assets will be recorded in the Fixed Assets subledger. Most assets will originate from:
- In the future, depreciation will be recorded using a prorate convention of "following month" and recorded monthly. For example, if a depreciable asset is placed in service on 11/24/22, it will begin depreciation December 2022.
- Capital projects and/or constructed equipment will be created via project portfolio management (PPM).
Frequently Asked Questions About Fixed Assets
Are any policies changing?
- In the future, depreciation will be recorded using a uniform prorate convention of “following month” rather than on a monthly basis. For example, if a depreciable asset is placed in service on 11/24/2024, it will depreciate in December rather than November 2024.
- Upon go-live, several asset categories will reflect a new useful life span. For example, the lifespan of Moveable Equipment – Scientific and Technical will be decreased from 10 years to seven years. This will apply to new assets in Oracle upon go-live. Legacy assets will keep current useful life.
Am I able to forecast my unit’s depreciation expense for the year?
- Yes, we will have the ability to produce a what-if depreciation report based on multiple criteria. Specifically, based on a specific entity/organization and/or asset category.
Will the physical inventory process change?
- No, nothing will change.
What is the process for constructed equipment?
- Constructed equipment will be created in PPM as a capital or sponsored project, where project-related costs are accumulated over a period of time and capitalized when the asset is completed.
What is the current process in FFIT?
The University of Chicago Medical Center (UCM) and the University of Chicago (UChicago) both use ACCTS to transfer transactions through journal entries, but they use different systems to capture transactions and balances, which creates reconciling and transparency challenges.
How will Oracle Cloud ERP affect FFIT?
When Oracle Cloud ERP goes live, as it already has for UChicago Medicine, transfers are no longer posted through ACCTS journal entries.
Once UChicago implements Oracle ERP, there will be a need for ongoing coordination and integrations between its version of Oracle and UCM’s. The Funds Flow and Intercompany Transactions (FFIT) process area exists to monitor funding and transactions that flow between both entities. In the future, UCM and UChicago will leverage Oracle’s invoicing process to facilitate the reconciliation of transactions between both entities.
Frequently Asked Questions About Funds Flow and Intercompany Transactions
What kinds of transactions fall within the scope of FFIT?
- Transactions may range from purchase service agreements (PSAs) to chargebacks and miscellaneous cash transfers. PSAs exist between the two entities to keep track of costs related to services performed by staff and faculty across both entities, whereas chargebacks occur when one entity purchases goods and/or services on behalf of the other and in turn charges the other entity back for the purchases made on their behalf.
How frequently will there be reconciliation efforts between UCM and UChicago?
- While transactions between the two may occur at any time, there will be a monthly reconciliation process in which outstanding AP invoices net against outstanding AR invoices, thus simplifying and streamlining the actual cash transactions between both entities. Both UChicago and UCM will need to ensure their platforms align for these transactions.
What is the current process for the general ledger?
Users submit journal entries (JEs), interdepartmental orders (DDs), and expenditure transfers (EEs) via ACCTS, which post directly to FAS. User must request access to transact in ACCTS.
In addition to users submitting JEs, many ancillary systems currently have integrations that batch journal entries via ACCTS and will have integrations directly to Oracle GL in future state. The same callout could be made for the other financial data types, since there will be integrations for AP, AR, recharges, etc.
How will Oracle Cloud ERP affect the general ledger?
When Oracle Cloud ERP is implemented, most users will create transactions in subledgers, so fewer people will need to access the GL. For example, a user may create an invoice to send to an external customer via accounts receivable or create an internal charge representing a recharge transaction via accounts payable, but only select users will have access to the general ledger to transact entries like accruals.
Frequently Asked Questions About the General Ledger
What improvements will we see with Oracle General Ledger?
- Currently, FAS is not a real-time system, as entries recorded during the week post on Fridays. This creates lags in operational reporting and may affect users’ abilities to perform reconciliation. Furthermore, if a mistake is made, changes aren’t reflected until the following week.
- In Oracle Cloud, journal entries will automatically post at least daily and can be viewed in real time. Additionally, users with appropriate security provisioning will be able to view a variety of reports and dashboards. For the basis of reporting, the Orbit data warehouse will combine multiple sources of data, including data that resides outside of Oracle Cloud.
How can I make sure I use the correct chart of accounts values?
- Oracle Cloud has several ways of validating that chart of accounts combinations are valid:
- Dependent relationships between segments—When selecting an entity in Oracle, only related organizations will show up as available.
- Cross-validation for invalid combinations—Only recharge-related funds can be used with recharge-related purpose codes. A user will receive a detailed error message if this rule is violated and will be unable to proceed with the transaction.
- Pre-integration Validation—Systems integrating with Oracle Cloud will be screened before being imported to verify that they will pass all chart of accounts (COA) validations.
- COA and POETAF Mapping Database—This tool provides a crosswalk for FAS account/subaccount combinations and may assist in learning new valid combinations. This feature will be released to general users in the near future.
What is the current process for internal recharges and chargebacks?
Most units process recharge/chargeback transactions via journal entries (JEs) or interdepartmental orders (DDs) in ACCTS, while some units process these entries via a specialized, integrated billing system (i.e., Maximo, Pinnacle).
How will Oracle Cloud ERP affect internal recharges and chargebacks?
When Oracle Cloud ERP is implemented, transactions will be performed one way for internal University recipients and another way for external recipients (i.e., UCM). In the former case, charges internally will be processed via accounts payable using a $0 invoice transaction, though no cash will be exchanged. In the latter case, charges externally will be processed via accounts receivable using an AR invoice, and cash will be exchanged via a month-end netting process. Broadly, provider units (those providing goods/services) will initiate the transaction to the receiver unit(s) (those consuming good/services). Billing systems being retained in the future will be retrofitted with new values for COA and POETAF (project, expense organization, expenditure type, task, award and funding source).
Frequently Asked Questions About Internal Recharges and Chargebacks
How does the new chart of accounts process recharges/chargebacks?
- Internal transactions will use internal revenue and expense Account values. For example, in IT Services:
- 60701 – IC – Telecommunication (Revenue, Provider Unit side)
- 80701 – IC – Telecommunication (Expense, Receiver Unit side)
- Recharge-related transactions will use a recharge-related fund, which tracks spending restrictions and designations to categorize fund balances, and a recharge-related purpose code, which corresponds to the NACUBO classification/ mission.
- 346000 – Recharge (Fund)
- 820 – Recharge Operations (Purpose code)
- Provider Units with multiple service lines may also use the Activity segment, in order to track revenues/expenses generated by a particular event.
- 85507 – Office Machines
- 85509 – Computer Leasing
- 89602 – Site Licensing
Is there a difference between charging a project or non-project receiver unit?
Both project and non-project receiver units can be charged via these processes, but the distinction between them might affect the transaction.
- Projects are tracked within Project Portfolio Management (PPM) and use unique PPM fields (POETAF) to map to the COA segments. A project could be a capital project, individual discretionary fund, or grant. Non-project sources are simply represented in the COA distribution and may represent a unit.
For more information about topics covered on this page, please see the related learning opportunities in Workday.