Re: Fiscal close-Method 2

["Seeman, Corey" <cseeman at UTNet dot UToledo dot Edu>]

Diane --

Thought I would throw out a few ideas.  I have been doing the fiscal 
close session at IUG since 2002 and we have seen a great deal of change 
in the module, except in the basic way that the methods are used.  I 
have the link below to my slides from last year's presentation (which 
includes graphical overviews of each of the three methods.

http://library.utoledo.edu/userhomes/cseeman/presentations/IUG2004/IUG04_Color_of_Money.pdf

The ultimate decision on which method you choose depends in great part 
on the fiscal policy of the library as a whole.  Theses policies are 
almost always directed from outside the acquisitions unit...driven by 
city policy for many public libraries, campus policies for academic 
libraries, and organizational policies for special and corporate libraries.

I do not recall hearing of a library that can use next fiscal year 
before it opens besides the time-honored method of sitting on a bill 
until the new fiscal year starts.  I think that you have two basic options.

The three methods of fiscal close really draw upon different structures 
for paying for current bills.  With Fiscal Close Method #1, you are 
always paying in this fiscal year.  (NOTE:  You do have this year's and 
last year's reports and you can make manual adjustments to both this 
year's and last year's figures, but that might be more trouble than its 
worth.  I call this the Circle of Life method because it appears that 
you lose money every year. My thought is that the materials ordered in a 
 fiscal year that become carry-forward encumbrances for the next year 
are not a huge issue, because at the beginning of the fiscal year, you 
paid for things ordered in the previous year.  We order all sorts of 
things in May and June that we know we will not have a bill until the 
new fiscal year...so for a few months every year, a medium sized state 
school can have a budget almost as big as their imagination!

With Fiscal Close Method #2, you are working with two years or groups at 
once.  Traditionally, it has been setup as 1) this year and 2) all 
previous years.  In this sense, any encumbered money that is not paid by 
the change of the fiscal year will get moved to the previous year's 
funds and not have an impact on the current year's budget.  This method 
uses the previous year's funds to not just be last year, but any old 
encumbrance that has not been paid.  This might be useful if you are 
working with many small presses where books can be delayed by years, not 
months.

You might be able to flip that to show two years, current year and 
future years.  You will have to engineer slightly a different set of 
procedures than are outlined in the manual.  Also, you would need to 
make sure that you do not allow previous years to be paid out of the old 
funds, and not moved to the current year, like it is with Method One.

I think that Fiscal Close Method #3, might do the trick for your 
library.  With that, you can basically setup an maintain as many years 
as you want and have funds for (your system has a max number of funds so 
this will help drive it).  Right now, you could have FY04 funds for last 
years lingering bills; FY05 for current year orders; and FY06 funds 
setup for next years expenditures.  While the creation of new funds is 
often laid out as a fiscal close activity, there is no reason why it 
cannot be done at anytime during the year.

Depending on what you do with previous year's encumbered orders, you 
might be able to run with either Method #2 or Method #3.

If I can be any more help, please do not hesitate to contact me.

Best --

Corey

--
Corey Seeman
Asst. Dean for Resource and Systems Management
University of Toledo

corey dot seeman at utoledo dot edu
http://library.utoledo.edu/userhomes/cseeman/
(419) 530-2333

Dianne Howlett wrote:
> Good morning,
> We are a brand new Acquisitions user, starting out in Millennium Silver. 
> We are working on the set up now and  will need to be able to operate in 
> two fiscal years at once since we are allowed to order, receive and pay 
> for materials out of the next fiscal year before it officially opens in 
> July. We believe this means that Method 2 for fiscal closing would be 
> best for us, but we don't really understand how it works. Is anyone out 
> there using this method described in the Millennium manual @ #106022, 
> and in the Innopac manual @ #102936?  If so and you are willing to help, 
> please contact me off list.
> Thank you very much!
>
> Dianne Howlett
> Head of Cataloging & Acquisitions
> St. Mary's College of California
> 925-631-4661
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