Accounts Payable (AP) involves the recording and disbursement of payments for purchased goods or services. Payment transactions are processed in the system which includes the creation, validation, approval, and viewing steps for accounts payable transactions. AP is generally the final step in the purchasing chain of events and includes the following processes:

• Payables/Claims: Payment requests for goods received and services rendered. This process establishes a payable in the system and, if specified, liquidates encumbrances.
• Disbursements: Liquidates payables and generates payments. Payments may be in the form of a warrant or electronic funds transfer (EFT).
• Disbursement Reconciliation: Stores information to reconcile new payments with banking transactions.
• Check Cancellation: Cancels checks/warrants and EFTs in the financial system.
• Special AP Processes:
  • Procurement Card (P-Card): Supports credit card purchases, typically for small dollar amount payments.
  • 1099 Reporting: Collects Form 1099 data and generates data files that may be used to then generate 1099 forms for external vendors as well as reporting information that will be sent to the IRS.

Accounts Receivable (AR) functionality supports the billing, tracking, and collection of money owed to the State of Arizona. AR processes cover the billing of customers for goods or services rendered, processing collection activities, and recording the receipt of money received.

AR has the following functions:

• Track who owes the state money and how much
• Record accounting events for receivables and collections
• Process billing
• Record money received
• Track customer financial and credit history
• Provide reports and inquiries about Accounts Receivable status

Asset Management is the management and control of an organization’s assets throughout their life cycle. The system provides the management and control of both fixed assets and memo asset records. 

A fixed asset is equipment or property that is not consumed and has a useful life of more than one year. Examples of fixed assets include: land, buildings, equipment, bridges, laptops, vehicles, and other such long-standing improvements. An asset is classified as a fixed asset, for accounting purposes, if it is designated as one of the following: 

• Intended for internal use, not for resale
• Has a useful life extending beyond the current fiscal year
• Has a monetary value in excess of a specified threshold

Budgetary control functions are used to create, manage, and maintain approved budgets. The budget information can be used to track and/or limit spending. Budgetary Control encompasses several functions and features: 

• Budget Controls: Rules that are put in place to validate activity on budget and accounting transactions and enforce expenditure controls.
• Budget Structures: Determine the type of budget and are made of increasing levels of Chart of Accounts detail.
• Budget Transactions: Used to enter and modify budget lines or individual records within a specific budget level.
• Budget Queries: Pages that display detailed information for each budget, level, and line as well as an audit trail of budget updates.

Note: Before registering for the virtual course, complete the prerequisites CBT - Budgetary Control Basics. 

Cost Accounting is the process of accumulating, analyzing, and reporting cost information related to grants, projects programs, and jobs. Cost Accounting activities range in scope from state-funded operational programs to federally-funded grants and highway construction projects. The lifecycle of an activity may span a few months to several years.

Cost Accounting includes:

• Sets up cost structures after being awarded a grant or starting a project
• Tracks grant and projects
• Generates receivables for reimbursement from external funding sources
• Receives revenues
• Reclassifies grant and project transactions if funding sources change over the lifecycle of the project or grant

Note: Before registering for the virtual course, complete the prerequisite listed on the course in the Employee Learning Portal.

Additional resources and quick reference guides are provided on the Federal & Cost Accounting page under the Financial tab shown in the menu bar above.

The Cost Allocation functionality provides a flexible mechanism to allocate costs and/or revenues. This process is based on the concept of allocating costs and revenues from entity-defined pool accounting distributions to base accounting distributions on a dollar-for-dollar basis. At the time costs are initially recorded, the grant, project, or operational accounting distributions to which those costs should be recorded are not always known. The system tracks these costs, and then later, using the automated Cost Allocation Process, distributes the costs to the proper programs based on instructions defined in the Cost Allocation hierarchy. 

The Cost Allocation hierarchy identifies the costs or revenue to be allocated, how the allocation must be made, and the recipients of the allocation.  This hierarchy can be as simple or complex as necessary to meet agency needs. Costs and/or revenues can be allocated using the follow methodologies:

• Fixed Percentage: Used when the percentage to be allocated to each base is known and/or manually calculated. For example, if IT Service Desk expenses must be allocated to departments based on a manually assigned percentage, fixed percentage type is utilized.
• Statistical: Used for allocation by any statistical method (square footage, number of employees, number of telephones). For example, if utilities must be allocated to departments based on the square footage occupied by the department, this allocation type would be used to record each allocation recipient’s square footage. 
• Direct Financial: The allocation percentage is calculated based on actual expenditures during a specific time frame. This may be referred to as a spending-based allocation because the allocation percentage is calculated by the amount each base contributes to the total expenditures defined and accumulated during a specific time frame.
• Direct and In-Stream Financial: Direct and in-stream financial type is a two-step allocation process. The first step may be an allocation calculated using any one of the base types. The output of the first allocation (in part or in total) is then included in the accumulation for a direct financial allocation that constitutes the second step of the allocation.  

Cost Allocation jobs can be scheduled to run monthly, quarterly, or annually, depending on agency needs. Jobs will be run during month-end close, after all expenditure and revenue transactions have been processed. 

General Accounting focuses on the Chart of Account (COA) and internal accounting transactions. The COA is a key component and is comprised of a set of reference tables used to validate codes entered on system transactions.

The COA has two functions: 

• Provides a centralized uniform set of codes to recognize expense, revenue, and balance sheet transactions across the state. 
• Provides decentralized codes for agencies to meet their own business tracking, reporting and budgeting needs. 

Grant Lifecycle Management (GLM) processes will enable state agencies to track and administer various activities involved with relevant grant opportunities prior to, upon, and after receiving the grant award. It is closely integrated with the Cost Accounting functionality. GLM allows users to view the global lifecycle of a grant from identifying an opportunity through to the audit and close-out stages, allowing for the analysis and tracking of funding streams. The GLM module can function as a tool for Grant Managers, Project Managers, and Fiscal Officers to manage and track funds throughout grants’ life cycles.

Grant Lifecycle Management:

• Provides a global view of grant opportunities, potential grant revenue, and grant statuses.
• Facilitates grant opportunity, application, award, and incremental amendment tracking at all organization levels.
• Identifies patterns for lost grant dollars or failures to win competitive awards.

The Investment Accounting/Cash Management process involves the buying and selling of investments and can be managed at the agency or Treasurer level. Investment funds are managed and maintained through the use of tables and transactions. If an agency manages its own investments apart from the Treasurer, users create a Journal Voucher (JV) transaction to record these investment transactions. Depending on how an agency manages its investments, different investment processes may be applied.

Investment Accounting assists managers in maximizing the earning potential of each dollar invested, both short- and long-term. Users process investment transactions or update investment tables for the purpose of investing and divesting cash. 

The Financial Reporting functional area is a system-wide service team that supports the financial accounting and reporting needs of the State of Arizona. The Financial Reporting area provides accurate periodic and ad hoc statewide financial reports and various other financial reports for the General Accounting Office (GAO), Governor’s Office of Strategic Planning and Budgeting (OSPB), Joint Legislative Budget Committee (JLBC), and other stakeholders.

The Financial Reporting area:

• Works to analyze and resolve existing financial reporting deficiencies.
• Detects financial data inconsistencies.
• Monitors the integrity of the infoAdvantage reporting system.
• Supports state agencies with reporting needs.
• Manages the Arizona Financial Transparency Portal.

In addition, the Financial Reporting area completes and publishes the Report of Outstanding Indebtedness annually.

Users create and maintain vendor and customer records and use various system tables to store these records. Users will use transactions to create and modify vendor and customer records as well as review the tables that are updated by those transactions.