General Ledger Redesign Process Improvements

technology

The General Ledger (Finance) transformation was the second of three phases in the overall Transform Purdue initiative and deployed successfully July 1, 2018. The project rebuilt the university’s core financial structure, reducing the complexity and inconsistency of our previous structure. A simpler, standardized format increases our data quality and enables better, more transparent financial reporting. The new basic financial structure redefines cost elements and ultimately simplifies account management.

Along with the redefined financial structure, the upgrade to SAP S/4 Hana provides the opportunity to automate and streamline processes within the following areas. Each area includes examples of current pain points and anticipated process improvements.

Pain Points:
  • Excel-based forms to request new vendors, manually routed and re-keyed
  • Over 500,000 paper pages are manually routed to AP for direct invoice payments
  • Payment information for Excel-based DIVs must be re-keyed by AP
  • Fiscal approvals required for low-value transactions
  • Multiple vendor records for the same company cause confusion
Process Improvements:
  • Electronic new vendor forms initiated by the business offices and routed automatically
  • Archival of outdated or inactive vendor records reduces the number of vendors users have to review to find the correct vendor record
  • Use of ZV60 for all Direct Invoice payments
  • Invoices and associated backup attached electronically to SAP document
  • Electronic routing of Direct Invoices for required fiscal approvals
  • Removal of Accounts Payable pre-audit of all direct invoices
Pain Points:
  • Public Sector Costs and Distribution (PSCD) billings system is cumbersome to use
  • Billings processed only once per month
  • High rate of paper-based billings
  • Billings post to SAP Finance only once per day
Process Improvements:
  • PSCD replaced with FI-AR, a simpler SAP billings module
  • Real-time integration of FI-AR with SAP Finance modules eliminates nightly batching
  • Utilizes business partner functionality and eliminates multiple master data objects
  • Daily billings
  • Higher rate of electronic billings
Pain Points:
  • There is not a central place to view all accounts managed by faculty.
  • Reports are processed through various systems and then manually created in Excel.
Process Improvements:
  • Utilize the Work Breakdown Structure (WBS) to identify all accounts.
    • Faculty accounts are recognizable because they start with ‘F’ and include the faculty member’s individual person ID.
    • The organization within the WBS (nodes and elements) allows for predefined account categories (discretionary, startup and restricted use).
  • The simplified WBS structure enables better reporting and an automated dashboard
Pain Points:
  • Complex and inefficient structure
  • Inconsistent use of cost elements (cost centers, funds, internal orders)
  • Multiple accounting, analyzing and reporting structures used  throughout
  • Limited institution-level reporting, ability to utilize standards and maintain data integrity
Process Improvements:
  • Standardized elements with definitions will increase consistency.
    • Funds will represent specific funding source, rather than operating activity
    • Cost Centers will represent an organizational unit
    • Orders will represent a specific account tied to an organizational unit. Order types and groups will be used to categorize orders. Orders are intuitive account numbers, important information can be derived for transaction and reporting.
    • Work Breakdown Structure (WBS) will represent a specific account tied to a funding source. It will be used to provide structure for faculty allocations. Important information can be derived for transactions and reporting.
    • General Ledger represents an accounting record used to keep track of financial transactions
  • Accounting manual will clearly outline how to use the elements in order to maintain consistency, increased data integrity and accurate reporting.
Pain Points:
  • Manual emails outside the system are generated to acknowledge grant lifecycle changes.
  • Budgets for grants are received in the business office and re-keyed in SPS.
  • Manual cost share tracking and reconciliation
Process Improvements:
  • Auto-generated emails will communicate new awards, increase/decrease, extension, notice to proceed, closeout, etc.
  • SPS will review and post the uploaded budget template created by the business office.
  • Streamlined cost share process automates transfers and reduces reconciliation burden. 
Pain Points:
  • Complicated and time consuming rate request process often requires many iterations between business offices, departments and managerial accounting
  • Inconsistent classification of income producing operations results in confusion and restrictions being placed on accounts that may not be necessary
Process Improvements:
  • The revised accounting structure will allow for clear identification of each type of activity for enhanced reporting and simplified monitoring procedures that is adapted to limit the governance to what is required for each of the activities.
  • Electronic rate submission and approval with an enhanced rate storage solution
  • Updated rate approval delegations
  • The development of a ‘Cost Accounting Shared Service’ team will provide expertise and advice prior to rate documentation
Pain Points:
  • Increased transaction processing time due to manual routing of multiple approvals.
  • Multiple business office touches often required on a single transaction
  • Significant effort required to review low-value transactions
Process Improvements:
  • Fiscal approval no longer required on transactions less than $1,000
  • Electronic workflow to automatically route SAP documents (e.g. direct invoice payments and journal vouchers)
  • Decreased cycle time for transactions

A Signature Delegation PowerPoint presentation was facilitated at a Director of Financial Affairs (DFA) meeting. 

An article was published in Purdue Today announcing the fiscal approval changes.

Click the following to review project-related information:

GL Overview

GL overview document

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