Chargebacks

Chargebacks

This section contains the following topics:

About Chargebacks

How to Set up GL Accounts and Chargebacks

General Ledger Accounts

Chargeback Rules

How Chargebacks Work

Investment Chargebacks

Department Invoices

Department Recovered Costs

About Chargebacks

Chargebacks represent the inter-account transfers of investment or service costs to departments. Chargebacks debit (or charge) departments for their shared cost of investments or services that were delivered during a specified period. A chargeback represents the debit-side of an accounting system. A corresponding credit is issued to departments that provide the investment or service crediting them for the work they completed during a specified period.

To process chargeback transactions, set up general ledger accounts and create chargeback rules, such as standard debit rules, credit rules, or overhead rules. The rules you create depend on the type of chargeback processing you want to implement.

Rules drive chargebacks and credits and determine the shared costs of investments and services. A chargeback rule is a set of unique properties that are matched to transactions when debiting and crediting departments. Chargeback rules are composed of:

• Header containing a unique set of properties that are matched with transactions during processing.
• General ledger (GL) account - department combinations to identify departments charged or credited for specified investments or services.
• Allocations to determine the distribution of shared costs or credits to departments.

The following debit and credit rules are supported:

• Debit Rules. An investment-specific rule setup by the investment or service manager to charge departments for the cost of work delivered.
• Standard Rules. A general, global debit rule setup by the finance manager.
• Credit Rules. A rule to credit departments for the resources that perform the work. The finance manager sets up credit rules.
• Overhead Rules. A rule that determines which GL accounts are debited for any overhead costs. The finance manager sets up overhead rules.

More information:

Standard Rules

Credit Rules

Overhead Rules

How to Set up GL Accounts and Chargebacks

Chargebacks assumes that transactions exist in the system for the associated investments.

Set up the following to work with chargebacks and GL accounts:

• Entities
• Departments
• Locations
• GL accounts
• Charge codes and input type codes

  For more information, see the Project Management User Guide.

• Financial classes
• Financially enabled investments or services.

  For more information, see the Project Management User Guide.

• Financially enabled team members of investments or services including any labor, equipment, material, and expense resources.

  For more information about managing resources, see the Resource Management User Guide.

• Users must be granted access rights to manage GL accounts and standard, credit, and overhead rules.
• Credit rules
• Standard or debit rules

More information:

Entities

Fiscal Time Periods for Entities

General Ledger Accounts

Define general ledger (GL) accounts to assign to cost plan details. Later, if you extract the planning data from CA Clarity PPM to an external accounting system, you can use the GL accounts for mapping purposes. You can also import GL accounts into CA Clarity PPM from an external accounting system using XOG.

For more information, see the XML Open Gateway Developer Guide.

Use GL accounts to define time-based GL allocations used in chargebacks.

GL accounts are combinations of main account codes and subaccount codes that are used to categorize accounts. For example, the main Assets account can have a code of 100 and the Asset subaccounts can have a code of 111 for Capital and 112 for Expense.

More information:

Create GL Accounts

Edit GL Accounts

Create GL Accounts

Verify that an entity exists before creating GL accounts.

Follow these steps:

1. Open Administration, and from Finance, click GL Accounts.

   The GL accounts list appears.

2. Click New.

   The create page appears.

3. Complete the following fields:

   Main Account ID

   Defines the first part of the natural account number.

   Sub Account ID

   Defines the second part of the natural account number.

   Entity

   Defines the entity associated with the GL account.

   Account Description

   Defines the account description.

   Account Class

   Defines the account class.

   Values:

   • Balance Sheet
   • Profit and Loss

   Account Type

   Defines the account type used for classifying accounts.

   Values:

   • Asset
   • Liability
   • Income
   • Expense

   Is Active

   Indicates if this account is active and available for assigning to cost plans.

   Overhead

   Indicates if this account is used to charge any costs to designated departments. If selected, be sure to create overhead rules.

   Capital Expense

   Indicates if this account is used for capital expense.

   Noncash Expense

   Indicates if this account is used for noncash expense.

4. Click Save.

More information:

Entities

General Ledger Accounts

Edit GL Accounts

Edit GL Accounts

You can delete a GL account not referenced by any cost plan or transaction.

Follow these steps:

1. Open the GL account by clicking the Natural Account Code link.

   The GL account properties appear.

2. Edit the following fields:

   Main Account ID

   Defines the first part of the natural account number.

   Sub Account ID

   Defines the second part of the natural account number.

   Entity

   Defines the entity associated with the GL account.

   Account Description

   Defines the account description.

   Account Class

   Defines the account class.

   Values:

   • Balance Sheet
   • Profit and Loss

   Account Type

   Defines the account type used for classifying accounts.

   Values:

   • Asset
   • Liability
   • Income
   • Expense

   Is Active

   Indicates if this account is active and available for assigning to cost plans.

   Overhead

   Indicates if this account is used to charge any costs to designated departments. If selected, be sure to create overhead rules.

   Capital Expense

   Indicates if this account is used for capital expense.

   Noncash Expense

   Indicates if this account is used for noncash expense.

3. Save the changes.

More information:

General Ledger Accounts

Create GL Accounts

Chargeback Rules

Chargeback rules determine which GL accounts get debited and credited for costs associated with investments or services.

You can configure the unique codes—Allocation Code (for standard rules) and Resource Credit Code (for credit rules)—to auto-populate.

For more information, see the Studio Developer’s Guide.

More information:

Standard Rules

Credit Rules

Overhead Rules

Standard Rules

A standard rule can be globally applied to many investments or services when the same chargeback rules can be used to debit departments for costs.

When setting up chargebacks, investment or service managers can choose to apply standard-based rules (set up by a finance manager) or investment-based rule (set up by the investment or service manager).

More information:

Chargeback Rules

Create Standard Allocation Rule Headers

Modify Standard Rule Header Properties

Create Standard Allocation Rule Headers

Follow these steps:

1. Open Administration, and from Chargebacks, click Standard Rules.

   A list of existing standard rule headers appear.

2. Click New.

   The create standard allocation rule page appears.

3. Enter the following required information:

   Allocation Code

   Defines the unique code used to classify the chargeback (or standard debit) rule. Required.

   Entity

   Defines the entity associated with this chargeback rule. Required.

   User Value 1, User Value 2

   Custom properties. Available for selection only if lookup values have been defined in Studio.

   For more information, see the Studio Developer’s Guide.

   Charge Code

   Defines the charge code associated with the chargeback rule.

   Input Type

   Defines the input type code associated with the chargeback rule.

   Transaction Class

   Defines the transaction class associated with this transaction rule.

   Charge Remainder to Overhead

   Specifies whether you want to charge any remaining costs to overhead. If you select this option, be sure to define overhead chargeback rules.

   Default: Cleared

   Status Code

   Indicates if the standard rule is available for chargebacks. Required.

   Values:

   • Active. The rule is always considered and may be matched to a transaction when generating invoices.
   • Inactive. The rule is not considered when generating invoices.
   • On Hold. The rule may be considered and matched to a transaction if no active rule can be matched.

4. Save changes and continue adding the GL accounts and the allocation percentage to debit accounts.

More information:

Modify Standard Rule Header Properties

GL Allocations for Standard or Credit Rules

Standard Rules

Modify Standard Rule Header Properties

To delete a standard rule, select the rule and click Delete.

Follow these steps:

1. Click the Allocation Code link for the selected standard rule header.

   The standard rule properties details appear.

2. Open the Properties menu and click Main.

   The main properties appear.

3. Edit the following properties:

   Allocation Code

   Defines the unique code used to classify the chargeback (or standard debit) rule. Required.

   Entity

   Defines the entity associated with this chargeback rule. Required.

   User Value 1, User Value 2

   Custom properties. Available for selection only if lookup values have been defined in Studio.

   For more information, see the Studio Developer’s Guide.

   Charge Code

   Defines the charge code associated with the chargeback rule.

   Input Type

   Defines the input type code associated with the chargeback rule.

   Transaction Class

   Defines the transaction class associated with this transaction rule.

   Charge Remainder to Overhead

   Specifies whether you want to charge any remaining costs to overhead. If you select this option, be sure to define overhead chargeback rules.

   Default: Cleared

   Status Code

   Indicates if the standard rule is available for chargebacks. Required.

   Values:

   • Active. The rule is always considered and may be matched to a transaction when generating invoices.
   • Inactive. The rule is not considered when generating invoices.
   • On Hold. The rule may be considered and matched to a transaction if no active rule can be matched.

4. Save the changes.

More information:

Standard Rules

Create Standard Allocation Rule Headers

Credit Rules

Credit rules identify the departments that are credited for the cost of delivered investments or services. Departments are credited based on the attributes of the resources assigned to the delivered investments or services. Accordingly, the location and department assigned to a resource must match the location and department assigned to the department receiving the credit.

More information:

Create Credit Rule Headers

Edit the Properties of Credit Rule Headers

Chargeback Rules

Create Credit Rule Headers

Follow these steps:

1. Open Administration, and from Chargebacks, click Credit Rules.

   A list of existing rule headers appears.

2. Click New.

   The create page appears.

3. Complete the following fields:

   Resource Credit Code

   Defines the unique code used to classify the credit rule.

   Status Code

   Indicates if the credit rule is active, inactive, or on hold.

   Entity

   Defines the entity associated with the department receiving the credit.

   Location

   Defines the location associated with the department receiving the credit.

   Department

   Defines the department receiving the credit.

   Resource Class

   Defines a resource class associated with the credit rule.

   Transaction Class

   Defines the transaction class associated with the credit rule.

4. Save changes and continue adding the GL accounts and allocation percentage credited.

More information:

Edit the Properties of Credit Rule Headers

GL Allocations for Standard or Credit Rules

Add GL Accounts and Define Allocations

Credit Rules

Chargeback Rules

Edit the Properties of Credit Rule Headers

To delete a credit rule, select the rule and click Delete.

Follow these steps:

1. Click the Resource Credit Code link for the selected credit rule header.

   The credit rules properties details appear.

2. Open the Properties menu and click Main.

   The main properties appear.

3. Complete the following fields:

   Resource Credit Code

   Defines the unique code used to classify the credit rule.

   Status Code

   Indicates if the credit rule is active, inactive, or on hold.

   Entity

   Defines the entity associated with the department receiving the credit.

   Location

   Defines the location associated with the department receiving the credit.

   Department

   Defines the department receiving the credit.

   Resource Class

   Defines a resource class associated with the credit rule.

   Transaction Class

   Defines the transaction class associated with the credit rule.

4. Save the changes.

GL Allocations for Standard or Credit Rules

GL Allocations identify the GL accounts and departments that are debited (for standard rules) and credited (for credit rules). GL allocations also indicate the percentages of the cost that are charged or credited.

Add GL Accounts and Define Allocations

The allocation percentage for a credit rule for any time period must always equal 100 percent.

Follow these steps:

1. Click the Allocation Code link for standard rules or the Resource Credit Code link for credit rules to edit the properties of the selected rule.

   The rule property details appear.

2. Do one of the following:
   1. Click New to add an account to the rule and define allocations.
   2. Click the GL Account link to edit allocations for an account already included in the rule.

   The rule detail page appears.

3. In the General section, complete the following fields:

   GL Account

   Defines the GL account associated with the rule.

   Department

   Defines the department associated with the rule. For credit rules, indicates the department receiving the credit. For standard rules, indicates the department being charged.

   By default, an empty row with fields for start and finish dates, and percentage appears.

4. Enter a start and end period for the rule.
5. Specify the percentage to debit or credit the department for the specific period.
6. Click New Row to continue adding time periods and percentages.
7. Click Save and Return when done.

More information:

GL Allocations for Standard or Credit Rules

Standard Rules

Credit Rules

Overhead Rules

When the rules for standard or debit rules charge remaining costs to overhead, overhead rules determine which GL accounts are debited. Overhead rules can contain only one set of GL allocations. No header information is required.

To charge departments for overhead costs, set up the following:

• GL accounts for overhead.
• Remaining costs are charged to either standard or debit rules.

More information:

Create Overhead Rules

Edit the Allocations for Overhead Rules

Standard Rules

Create Overhead Rules

Edit the Allocations for Overhead Rules

Chargeback Rules

Create Overhead Rules

Follow these steps:

1. Open Administration, and from Chargebacks, click Overhead Rules.

   A list of existing rules appears.

2. Click New.

   The create page appears.

3. Complete the following fields:

   Entity

   Defines the entity associated with the rule.

   GL Account

   Defines the GL account associated with the rule.

   Department

   Defines the department associated with the rule.

4. Save changes. Once saved, the properties of this rule become display-only.
5. Define the overhead rule details as follows:
   1. Specify the percentage to allocate to overhead for the specific period.
   2. Click New Row to continue adding time periods and percentages.
   3. Save the changes.

More information:

Modify Standard Rule Header Properties

Edit the Allocations for Overhead Rules

Edit the Allocations for Overhead Rules

To delete an overhead rule, select the rule and click Delete.

Follow these steps:

1. Click the GL Account link to edit the properties of the selected account.

   The rule detail page appears.

2. In either the Start or Finish fields, use the date picker to select a period time.
3. Specify the percentage to set the allocation for the full GL account.
4. Save to continue adding time periods and percentages.
5. Save the changes.

Set Up Resource Credits

You need the Financial Maintenance - Financial Management access right to set up resource credits for posting to the general ledger account.

Most IT departments charge back credits to the group for which they worked to allocate expenses and work. A resource credit indicates which department, entity, location, transaction class, or resource class receives the credit. Incidents support resource credits.

How to Remove GL Allocations from Chargeback Rules

You can remove GL allocations from:

• standard rules or credit rules.
• overhead rules.

Remove GL Allocations from Standard or Credit Rules

You can remove GL allocations only if they are not referenced referenced in chargebacks and cost plans.

Follow these steps:

1. Click the Allocation Code link or Resource Credit Code link to edit the properties of the selected rule.

   The rule property details appear.

2. Select the check box next to each GL allocation you want to remove from the rule, and click Delete.

Remove GL Allocations from Overhead Rules

Follow these steps:

1. Click the GL Account link to edit the properties of the selected overhead rule.

   The rule details page appears.

2. Select the check box next to each time period you want to remove from the rule.
3. Click Delete.

Chargeback Errors and Warnings

Use the Messages page to view and monitor chargeback errors and warnings:

• Errors. If a chargeback error occurs, the transaction causing the error cannot be processed. Fix these errors to process charges and credits.
• Warnings. Chargeback warnings inform you of potential problems that you can fix.

Once the errors and warning are corrected, messages are removed from this page. The following table includes some of the more common messages and their resolutions:

More information:

GL Allocations for Standard or Credit Rules

Credit Rules

Overhead Rules

Monitor Chargebacks Errors and Warnings

Follow these steps:

1. Open Administration, and from Chargebacks, click Messages.

   A list of chargeback errors and warnings appear.

2. Review the following:

   Investment

   Displays the name of the investment used in the transaction.

   Charge Code

   Displays the charge code type associated with the investment.

   Transaction Date

   Displays the transaction date.

   Expense Type

   Displays the type of expense.

   Resource

   Displays the resource that incurred cost against the investment.

   Allocation

   Displays the rule on which the error or warning occurred.

   Allocation Type

   Indicates if this is a credit or debit rule.

   Allocation Subtype

   Indicates if the rule is standard or investment-based.

   Batch Date

   Displays the date the Generate Invoice job was run.

   Batch Ran By

   Displays the user who initiated the Generate Invoice job.

   On Hold

   Displays that the error message is on hold.

   Message

   Displays the error or warning.

3. Select the check box next to each message and do one of the following:
   • Click On Hold to put the error message on hold.
   • Click Release to release the error message from hold.
4. Correct the errors and warnings.

More information:

Chargeback Errors and Warnings

How Chargebacks Work

Rules drive chargebacks and credits and WIP transactions process them. These rules are used during transaction processing to apply charges or credits appropriately to designated departments. Department managers can view their charges and credits using the following tools:

• Department invoices to view and approve charges.
• Department recovery statements to view credits. The statements are available for departments that manage services.

The following chargeback rules are supported:

• Investment-specific Debit Rules. A set of investment-specific rules that determines how to debit departments for the cost of investments or services delivered to them during a specified period. If some costs are charged to overhead, allocations cannot always equal 100 percent. Investment or service managers set up debit rules.
• Standard Debit Rules. A standard set of debit rules that can be used globally within an entity to charge departments for investment costs.
• Credit Rules. A set of rules that determines which departments are credited for the cost of investments or services delivered during a specified period. Allocations on credit rules must equal 100 percent of the debited costs.
• Overhead Rules. A standard set of rules that determines how to charge remaining costs for a specified period.

When setting up debit rules, as the investment manager or service manager, you can base charges on standard rules or investment-specific rules.

More information:

Department Invoices

Department Recovered Costs

Set Chargeback Options

Rule Headers and Time-based GL Allocations

Debit and credit rules are composed of a header and a set of time-based GL allocations.

Rule Headers

A header uniquely describes the rule and is used during financial processing to match to transactions. Some examples include:

A debit rule DB-800 is described as charge code Expenses and transaction code techSup. Another debit rule DB-900 is described as charge code Expenses and transaction code SysMaint.

A credit rule CR-000 is described as location Santa Clara and resource class ENG. Another credit rule CR-111 is described as location Bournemouth and resource class ENG.

The GL allocation code used to create and identify rules can be configured to auto-populate.

For more information, see the Studio Developer’s Guide.

Time-based GL Allocations

Debit and credit rules are composed of a header and a set of time-based GL allocations. Time-based allocations determine how much departments are debited or credited for costs during a time period. Chargeback rules are based on the following:

• Full GL Account. Determines the general ledger (GL) account the cost is charged to and the department responsible for the cost.
• Fiscal time period. Identifies the time period for the GL allocation.
• Allocation percentage. Determines the percentage of the total cost debited or credited to the full GL account.

By Example: Sharing Costs

Retail Banking of Forward Inc commissioned the development of a mortgage application whose systems are shared by Retail Self Services and Retail Premier Accounts. Retail Banking is using the Chargeback feature to allocate costs incurred by IT for this development project.

This project required expertise from application developers, analysis expertise from Retail IT technical operators, and technical securities expertise from Investment Banking IT. Retail Banking IT set up investment-specific debit rules and credit rules to charge back costs to departments that commissioned the work and credit those that provided the work.

Crediting Multiple IT Departments for Work Completed

The Retail IT finance manager set up a credit rule to allocate 100 percent credit among three provider departments:

Retail Application Development is doing the bulk of the development work and is credited 50 percent for the first three months and 80 percent for the remaining three months.

Retail Technical Operation is providing consultation at the beginning of the project and is credited for 25 percent for the first three months, and 10 percent for the remaining three months.

Investment Banking IT is also providing consultation at the beginning of the project and is credited for 25 percent for the first three months and 10 percent for the remaining three months.

Debiting Multiple Business Units for Commissioned Work

The Retail IT project manager for this project set up a debit rule to charge back 50 percent each quarter to the Retail Self Service department and Retail Premier Accounts department.

With flexible chargeback rules, Forward Inc can allocate charge costs appropriately to the departments benefiting from the services IT is providing. It also enables IT departments to get credit for the work they deliver.

Investment Chargebacks

Managing chargebacks from investments involves setting up chargeback options. You can select from the following chargeback options or types:

• Standard. The investment or service charges the cost back to departments based on a standard, globally available debit rule. The finance manager or CA Clarity PPM administrator sets up standard chargeback rules.
• Investment. The investment or service charges costs back to departments based on a debit rule defined specifically for this investment or service. Investment and service managers setup debit rules for their investments or services.

  Investment-specific debit rules determine how much of the total cost each consuming department is charged for investments or services.

  If you charge remaining costs to overhead, the amount debited to consumer departments does not need to equal 100 percent of the costs. Your finance manager is responsible for setting up any standard, credit, or overhead rules, and for verifying that debits and credits equal. On the Chargebacks page for an investment or service, you can view a list of any debit rules defined for the investment or service. From this page, you can drill down and view, add, or update GL allocations for the selected debit rule.

Bill Expense identifies how costs are booked. Bill Expense is also used to match with transactions to determine whether investment costs are invoiced or not. Suppose your company has a policy to charge back only investments that are considered capital expenses. Suppose further that you manage e-mail servers. Companies consider servers and other mission-critical hardware to be depreciable and handle them differently during transaction processing. Any capital expense transactions that are processed against your e-mail servers are ignored and not charged back.

More information:

Set Chargeback Options

Create or Edit Investment-specific Debit Rules

Set Chargeback Options

Chargeback options determine how and when charges are generated during invoicing. Set up chargeback options to process chargebacks.

Chargeback type determines whether an investment-defined rule or a standard debit rule is matched to transactions during financial processing.

Important! Select a chargeback type to generate invoices for matched transactions.

Follow these steps:

1. Open an investment or service.

   The properties page appears.

2. Open the Chargebacks menu, and click Options.

   The chargebacks options page appears.

3. Complete the following fields:

   Chargeback Type

   Defines the chargeback type for the investment or service.

   Values:

   • Standard
   • Investment

   Bill Expense Type

   Indicates how costs are accounted for and whether they are considered for invoicing when transactions are processed

   Values:

   • Capital expense. Charges are considered for invoicing.
   • Depreciation. Charges are not considered for invoicing.

4. Save the changes.

More information:

Investment Chargebacks

Create or Edit Investment-specific Debit Rules

Edit Debit Rule Properties

Create or Edit Investment-specific Debit Rules

Debit rule properties uniquely describe a rule and are used to match transactions during financial processing. An overhead rule must exist to charge any remaining costs to the full GL account.

If a rule has not been used to process transactions, you can delete a debit rule.

Follow these steps:

1. Open an investment or service.

   The properties page appears.

2. Open the Chargebacks menu and click Debit Rules.

   The chargeback debit rules page appears.

3. Click New.

   The create page appears.

4. Complete the following fields:

   Allocation Code

   Defines the unique code used to classify the debit rule for this investment.

   Charge Code

   Defines the charge code associated with the debit rule.

   User Value 1 and User Value 2

   Defines custom properties associated with the debit rule. You can select custom attributes only if lookup values have been defined in Studio.

   For more information, see the Studio Developer’s Guide.

   Input Type Code

   Defines the input type code associated with the debit rule.

   Transaction Class

   Defines the transaction class associated with the debit rule.

   Status Code

   Indicates if the debit rule is available for chargebacks.

   Values:

   • Active. Indicates that the rule is always considered and can be matched to a transaction when generating invoices.
   • Inactive. Indicates that the rule is not considered when generating invoices.
   • On Hold. If no active rule can be matched, the rule can be considered and matched to a transaction.

   Charge Remainder to Overhead

   Indicates whether to charge any remaining costs to overhead. Select this check box to charge any remaining costs to overhead.

5. Save changes and continue adding the GL account and department combinations to charge for costs.

More information:

Investment Chargebacks

Set Chargeback Options

Edit Debit Rule Properties

Edit Debit Rule Properties

Follow these steps:

1. Open the investment or service.

   The properties page appears.

2. Open the Chargebacks menu and click Debit Rules.

   The debit rules page appears.

3. Click the Properties icon for a debit rule.

   The GL allocations properties main page appears.

4. Edit the following properties as needed:

   Allocation Code

   Defines the unique code used to classify the debit rule for this investment.

   Charge Code

   Defines the charge code associated with the debit rule.

   User Value 1 and User Value 2

   Defines custom properties associated with the debit rule. You can select custom attributes only if lookup values have been defined in Studio.

   Input Type Code

   Defines the input type code associated with the debit rule.

   Transaction Class

   Defines the transaction class associated with the debit rule.

   Status Code

   Indicates if the debit rule is available for chargebacks.

   Values:

   • Active. Indicates that the rule is always considered and can be matched to a transaction when generating invoices.
   • Inactive. Indicates that the rule is not considered when generating invoices.

     On Hold. If no active rule can be matched, the rule can be considered and matched to a transaction.

   Charge Remainder to Overhead

   Indicates whether to charge any remaining costs to overhead. Select this check box to charge any remaining costs to overhead.

5. Save the changes.

More information:

Set Chargeback Options

Create or Edit Investment-specific Debit Rules

GL Allocations

Once you have created debit rules, you can define the GL allocations that determine how consumer departments are charged for costs. A GL allocation is composed of a full GL account and a set of allocation rules. The rules represent the percentage of the allocated cost for a specified time period. A full GL account is a combination of the natural GL account and department.

For each GL allocation, you can evenly distribute chargeback percentages across all fiscal time periods, or specify different percentages for each time period. For example, if your company sets up its fiscal time period on a quarterly basis, you can specify 100 percent allocation for the first quarter. You can then specify 50 percent in the remaining quarters. The remaining costs for the last three quarters can be charged to another department or to overhead.

Create or Edit GL Allocations

You can remove GL allocations from debit rules as long as they are not referenced in financial plans or chargebacks.

Follow these steps:

1. Open the investment or service.

   The properties page appears.

2. Open the Chargebacks menu and click Debit Rules.

   The chargebacks debit rules page appears.

3. Click the GL Allocation Code link to access the rule details.

   The GL allocation detail list page appears.

4. Do one of the following:
   • Click New to add a new GL account.

     The create GL allocation detail page appears.

   • Click the GL Allocation Code link to edit existing allocations.

     The GL allocation properties details page appears.

5. Under the General section:
   1. Select or change the GL account.
   2. Select or change a corresponding department.
6. In either the Start or Finish fields, use the date picker to select a period time.

   The entity fiscal time period type determines the time periods available for selection.

7. Specify the percentage to allocate with charges to the GL account and department combination.
8. Save to continue adding allocations for more time periods.
9. Save the changes.

Reverse Charges on Transactions

You can review transactions processed for your investments or services to verify that they were posted correctly. If you find errors that require reversals, you can reverse charges on selected transactions or on all listed transactions.

When you reverse charges, the allocated charge is removed from department invoices. The charges do not appear when invoices are generated next or when the department manager manually regenerates an invoice. If the invoice is locked or approved when you reverse the charges, this change is reflected in future invoices.

Follow these steps:

1. Open the investment or service.

   The properties page appears.

2. Open the Chargebacks menu and click Transactions.

   The chargebacks transactions page appears.

3. In the filter section, browse for and select the fiscal period for which you want to view or reverse charges on transactions, and click Filter.
4. Review the transactions.
5. If the transactions are incorrect and require reversals, do one of the following:
   • Select each transaction whose charges you want to reverse and click Reverse Selected Charges.
   • Click Reverse Filtered Charges to reverse the charges of all of the listed transactions.

   The selected transactions indicate that charges were reversed.

Department Invoices

Each department charged for the cost of delivered investments and services receives an invoice for each time period. You can view invoices periodically to monitor charges, make corrections, approve or reject invoices, and manually regenerate invoices.

The investment or service manager sets up the debit rules that identify the departments that get charged. The rules also indicate the percentage of the cost they are debited.

More information:

Create or Edit Investment-specific Debit Rules

How to Set Up for Invoices

How Invoice Approval Works

View Department Invoices

How to Set Up for Invoices

To receive and submit, approve, or reject an invoice, set up the following:

• Fiscal time period type for establishing the invoice cycle
• Investment-specific debit rules

  Or

• Standard debit rules
• Credit rules
• Access rights must be granted to users responsible for viewing, submitting, and approving or rejecting invoices.

More information:

Investment Chargebacks

How Invoice Approval Works

Typically, the finance manager and department manager work together to approve invoices. The finance manager submits invoices for approval and the department manager approves or rejects invoices. Department invoice access rights determine the users who can do invoice-related tasks.

Use your company policies and best practices to identify the roles responsible for invoices and to determine cutoff periods for submitting and approving invoices. The following describes the approval process:

1. The invoice is generated by running the Generate Invoice job, which can be scheduled to run periodically. When the job is complete, the invoice is available with a status of Proforma. The invoice is open to receive additional transactions and available for review. The finance manager can manually regenerate invoices as needed and capture newly added transactions or adjustments in between scheduled invoice generation runs.
2. Your finance manager submits the invoice for approval. The status changes to "Submitted" and the invoice becomes locked. No further transactions can be added. If additional transactions are processed for that time period, they are added to the next time period invoice.
3. The department manager can approve or reject the invoice.
   • If approved, the status changes to "Approved". The invoice is complete and no further actions can be taken.
   • If rejected, the status changes to "Rejected". The finance manager can adjust or reverse a specific transaction or the entire invoice.

Delegated Invoice Approvals

Delegated invoice approval enables sub departments to view and approve their own invoices. Delegated invoice approval is determined when setting up departments.

When sub departments are given delegated invoice approval, invoices are generated for each sub department and the parent department. This condition applies if debit rules exist and transactions are posted against them. Sub department charges are not rolled up to the parent.

When sub departments do not have delegated invoice approval, any charges posted against these sub departments are rolled up into the invoice of the parent department.

Parent departments must have delegated invoice approval to delegate invoice approval to any of their sub departments. If the top-level parent department does not set delegated invoice approval, no sub department in that branch can view or approve invoices. All charges are rolled up to the top-level parent department.

Consider the following organizational structure and the effect delegated invoice approval has on each department:

The Retail Banking business unit

Delegates invoice approval to its two sub departments, Self-service Banking and Premier Customer Accounts. An invoice for the Retail Banking business unit is generated when transactions are posted against the business unit.

The Self-service Banking department

Does not delegate invoice approval to its two sub departments, Marketing and Customer Service. An invoice is generated for the Self-service Banking department when transactions are posted against it. Any charges posted against Marketing and Customer Service departments are rolled into the Self-service Banking invoice. The Self-service Marketing and Customer Service departments do not receive invoices.

The Premier Customer Accounts department

Delegates invoice approval to its two sub departments, Marketing and Customer Service. An invoice is generated for the Premier Customer Accounts department when transactions are posted against the department. The Premier Accounts Marketing and Premier Accounts Customer Service departments also receive their own invoice when transactions are posted against their department.

Invoice Aggregation

Each line item in an invoice shows the aggregate charges of the top-level parent investment or service in a hierarchy. You can drill down and view the detailed charges of the parent and any child investment involved in transactions during the invoice time period.

Refer to the following documents to learn how to work with charges in investment or service hierarchies:

• See the IT Service Management User Guide for more information.
• For more information, see the Project Management User Guide.

By Example: Bottomline Charges are the Tops

The Retail Self-service department at Forward Inc manages a product named Self-service Banking. This product is the top-level parent to several other child investments, such as the Online Bill Presentment (OBP) system and technical support. When viewing invoices, department managers only see the aggregated charges of the top-level parent. For example, the $4,190.00 for Self-service Banking represents total charges for any investment in the hierarchy involved in a transaction during the invoice period.

Department managers can view detail charges on each investment in the hierarchy by clicking the amount or total amount.

Invoice Adjustments

Occasionally you can see charges that are incorrect and require some adjustment or reversal. You can reject the invoice and request an adjustment. The following are examples of adjustments you can request:

• Change your share in the cost of the investment or service.

  Contact the investment or service manager and request an adjustment to your debit allocation percent.

• Update the transaction.

  Contact your financial manager to create a WIP adjustment and modify the transaction as needed, such as increasing or decreasing the rate, cost, or units.

• Reverse the charges completely.

  Contact your investment or service manager, or finance manager to reverse charges.

Adjustments or reversals to transactions or debit rules trigger adjustments to other departments sharing in the cost of the investment. For example, if your allocation percentage reduces by 5 percent, other departments pick up those additional charges. If the total cost is discounted for one transaction, then all departments sharing the costs also receive an adjustment in their charges.

Any adjustments or reversal made to locked or approved invoices is reflected in the next unlocked invoice or future invoice.

View Department Invoices

Department managers can view a list of invoices generated for their departments. Finance managers can view all generated invoices, and drill-down and view details and transaction information.

Department managers can view their invoices from department invoice pages.

Follow these steps:

To view a department-specific invoice.

1. Open Home, and from Organization, click Departments.

   The list page appears.

2. Open the department and click Invoices.

   A list of invoices for your department appears. You can view invoice status and amount.

3. Click an invoice number to review invoice details.

Finance managers can view all chargeback-related invoices from financial management invoice pages.

Follow these steps:

To view all invoices.

1. Open Home, and from Financial Management, click Invoices.

   The list page appears. You can view invoice status and amount.

2. Click an invoice number to review the invoice details.

View Invoice Details

You can view invoice details, prior period adjustments, and the invoice amount. You can also approve or reject invoices depending on their state.

Follow these steps:

1. Click the Invoice Number link to open the invoice.

   The properties page appears.

2. View the following information:

   Investment

   Displays the investment from which the charges originated.

   Current Amount

   Displays the amount of the charge for the specified time period. Click this link to view transaction details.

   Prior Period Adjustment

   Displays the amount of an adjustment that occurred during a previous time period. If zero, then no prior period adjustments were made. Click this link to view adjustment details.

   Total Amount

   Displays the total amount of the charges less adjustments for the specified time period. Click this link to view transaction details.

   Subscription

   Indicates whether you have subscribed to a service. If you have subscribed to a service, a checkmark is displayed.

3. Do one of the following:
   • Click the Current Amount link or Total Amount link to view transaction details.
   • Click the Prior Period Adjustment link to view prior period adjustment details.

   Key information includes:

   Type

   Indicates if the transaction is a work-in-process (WIP) or an adjustment.

   Amount

   Displays the amount of the transaction.

   Percentage

   Displays the percentage charged to service.

   Example: 100 percent indicates that one service is using the investment and 50 percent indicates the investment is shared between two services.

   Scaled Amount

   Displays the scaled dollar amount based on the percentage charged to the service.

4. If the invoice is not yet approved, you can do the following from the invoice properties based on your access rights:
   • Submit the invoice.
   • Lock or unlock the invoice.
   • Approve or reject the invoice.
   • Regenerate the invoice.

Submit Department Invoices

Your finance manager typically submits invoices for approval. Submitted invoices are automatically locked and have a status of "Submitted". Submitted invoices can be recalled, approved, or rejected.

Follow these steps:

1. Open the invoice by clicking the Invoice Number link.
2. Save the changes.

More information:

View Department Invoices

Lock and Unlock Department Invoices

Your finance manager typically locks and unlocks invoices.

Use the department invoice items page to lock and unlock invoices.

When an invoice is submitted, it is automatically locked. When an invoice is locked, transactions cannot be added to the invoice. If you have rights to submit invoices, you can temporarily unlock and regenerate last-minute changes.

Follow these steps:

1. Open the invoice by clicking the Invoice Number link.
2. Do one of the following:
   • Click Lock to block updates to the invoice.
   • Click Unlock to open the invoice for updates.

More information:

View Department Invoices

Approve or Reject Department Invoices

The department manager typically approves or rejects an invoice.

When an invoice is approved, you cannot recall or take any other action on the invoice. Any adjustments or reversals made to the invoice after approval are included with the next unlocked or future invoice.

When an invoice is rejected, WIP adjustments or changes to debits rules can be made to correct charges. Contact your finance manager for assistance with WIP adjustments.

Follow these steps:

1. Open the invoice by clicking the Invoice Number link.
2. Click the Invoice Number link to access the invoice details.
3. Do one of the following:
   • Click Approve.

     The invoice status changes to "Approved".

   • Click Reject.

     The invoice status changes to "Rejected".

More information:

Work-in-progress Adjustments

View Department Invoices

Regenerate Department Invoices

Invoices are updated continually during scheduled runs of the Generate Invoice job. However, you can manually update an invoice in between scheduled runs and view recently added transactions.

If a recalculation affects multiple invoices and all affected invoices are unlocked, the invoice is updated. Recalculations are ignored if any invoice affected by the change is locked. If a recalculation is not possible, a message appears letting you know.

Follow these steps:

1. Open the invoice by clicking the Invoice Number link.
2. Click Regenerate.

   A progress bar appears during the regeneration process. When complete, the recalculated invoice appears.

3. Click the Current Amount or Total Amount link to view transaction details and see the effects any adjustments had on the invoice.

More information:

View Department Invoices

Recall Department Invoices

You can change the status of an invoice back to its submitted state by recalling it.

Follow these steps:

1. Open the invoice by clicking the Invoice Number link.
2. Click Recall.

   The invoice status changes to the "Recalled" state.

More information:

View Department Invoices

Department Recovered Costs

A recovery statement tells departments how much of their incurred costs can be recovered from the departments who benefited from services provided. A recovery statement is similar to a company income statement—only for departments.

Incurred costs are charged to the departments that receive services. Department managers can view their charges from an invoice.

Only departments that provide services can view department recovery statements. The following must be set up:

• Services must exist and be associated with the department.

  See the IT Service Management User Guide for more information.

• At least one department must subscribe to at least one service offered by the provider department.
• Debit rules must exist for services. Contact the service manager to create debit rules for the service.
• Credit rules must exist.
• Users must be granted rights to view recovery statements.

Recovery statements are generated with invoices during scheduled runs of the Generate Invoice job.

More information:

Department Invoices

Investment Chargebacks

By Example: IT Departments Aren't Cost Centers Any More

View Recovery Statement Summaries

View Recovery Statement Details

By Example: IT Departments Aren't Cost Centers Any More

Forward Inc offers its business units a wide variety of IT supporting services, including email support, desktop support, and network support. The services are vital for each business unit to maintain their lines of business. Each of these departments are charged for those services. Each department that delivers services receives credit for work performed.

Approved Invoices Charge Costs to Departments that Benefit from Services

Department invoices are generated, reviewed, and approved on a quarterly basis by the departments that benefit from services delivered to them. Corporate Human Resources has subscribed to several IT services and has agreed to accept charges for a portion of these services. The Human Resources department has approved an invoice that totals $7,400.

Charged Costs Translate into Credit for Departments that Deliver

The IT Delivery Services department receives credit for services provided. The department manager can view incurred costs and credits by viewing the department recovery statement. This statement shows that some charges were approved and the department has recovered $7,400 so far. Other department managers have yet to approve their charges. The charges appear as recovery variance.

View Recovery Statement Summaries

On a recovery statement you can view a summary of all your incurred costs, recovered costs, and credits sorted by your services.

Follow these steps:

1. Open Home, and from Organization, click Departments.

   The list page appears.

2. Click a department link to open the department.

   The properties page appears.

3. Click Recovery Statement.

   The department recovery statement appears.

4. Filter for recovery information as needed.

   A list of investments owned by the department appear.

5. Review with the following information:

   Investment

   Displays the name of the investment owned by this department and offered as a service to other departments.

   Type

   Indicates if the investment is a service or some other type of investment.

   Incurred Cost

   Displays the total cost incurred to-date by this investment that was charged to other departments. Click this value to drill down to view transaction details.

   Recovered Cost

   Displays the total charges approved to-date by departments charged for this investment. This amount represents the total costs recovered to-date by this department. Click this value to drill down and view transaction details.

   Recovery Variance

   Displays the difference to-date between incurred costs and recovered costs. This amount represents the total amount this department is expecting to recover.

   Credits

   Displays the total possible credit this department can receive. Click this value to drill down to view transaction details.

   Credits Variance

   Displays the difference to-date between recovered costs and credits.

View Recovery Statement Details

 You can view recovery statement details to view transaction details.

Follow these steps:

1. With the department open, click Recovery Statement.

   A list of investments appears.

2. Click any of the following links to view transaction details:
   • Incurred Cost
   • Recovered Cost
   • Credits

   A list of the processed transactions affecting this recovery statement appears.

3. Select the Include Sub-departments check box to view transactions from sub departments. This check box is inactive if sub departments do not exist.
4. View the following information:

   Investment

   Displays the name of the investment from which costs were incurred.

   Department

   Displays the name of the department charged for costs.

   Transaction Date

   Displays the date of the transaction.

   Amount

   Displays the total incurred costs.

   Percentage

   Displays the GL allocation defined in credit rule by your finance manager.

   Scaled Amount

   Displays the scaled amount as per the GL allocation percentage.