Create or Approve an Internal Transfer
Internal transfers are used for several reasons, including to allocate revenue and expenses from one valid chartstring to another and to execute fund transfers from one valid chartstring to another.
Note: Expenditure corrections on an Accounts Payable entry should be handled through Accounts Payable (AP) journal vouchers. Internal transfers and salary corrections should be processed through Labor Accounting.
Unlike general journal entries, internal transfers are limited to a narrower range of options to ensure transfers are easily identifiable for reporting purposes and are one-to-one and equal in amounts.
In Columbia University's chart of accounts, the ranges of account numbers that can be selected for internal transfers are as follows:
- 4 series: Direct revenue
- 6 series: Direct expenses
- 7 series: Indirect transfers
When to Use Internal Transfers
Internal transfers are the most common type of journal entries.
They are used in the following situations:
- To allocate revenue/expenses from one valid ChartString to another.
- If one department charges other departments for services performed as a valid recharge center (e.g., Print Services).
- To execute a fund transfer from one valid ChartString to another.
Rules for Entering Internal Transfers
When creating internal transfers in ARC it is crucial to keep the following rules in mind:
- Internal transfers are made using the “Internal Transfers Page” in ARC.
- All transfer debits must have one matching transfer credit, with the same dollar amount.
- Certain chartfield values will be defaulted upon save, as follows:
- Fund – this will default on "save," but can be overwritten.
- Function – this will default on "save," and any values entered will be overwritten by the default logic once the page is saved. (Only select users within the Controller's office will have access to override the defaulted values for function).
- Only specific account numbers will be available for use in the internal transfers page in ARC.
- Credits must be entered as negative numbers.
The first step in the journal entry process is entering the journal header information. For interfaced journals, this will happen in the subsystem where the entry was created initially (i.e., Accounts Payable).
On the Journal Header page the system required fields will default to the following:
- Ledger Group - will default to Actuals. This field is grayed out, meaning that it can not be changed.
- Source - will default to ITF for Internal Transfer Journal Entries. This field is grayed out, meaning that it can not be changed.
- Transaction Code - will default to "GENERAL". This field is not grayed out and therefore, can be changed.
- Long description and journal class are also required fields from a business process perspective. The system will not stop the transaction if these fields are not populated, but it’s best practice that all users fill these fields with accurate information.
- The long description is a simple text field where you can enter a description of the journal being entered. This will give the journal approver helpful context about the particular type of journal entry (e.g., a 7 series fund transfer).
- The journal class field is a three-digit code that represents the department that initiated the transaction. The initiator of the transaction must populate this field with the correct information since this will also be used for reporting purposes.
Once the journal header information has been entered and saved, you will be taken to the journal lines page.
The journal lines page is where you enter the chartstrings for your transaction. The amounts are entered (debits must equal credits) and journal processing is initiated.
Journal processing involves edit checking, budget checking, routing a journal for approval and posting a journal to the general ledger. These processing options are within the process menu towards the top of the journal lines page.
For guidance on how to create or approve an internal journal transfer in ARC, please refer to these job aids: