Purchases

Fiscal Year End Purchases

Proper Fiscal Period

  1. In accordance with generally accepted accounting principles, Wellesley College is required to report transactions in the proper fiscal period. For that reason, revenues are recognized in the period they are earned and expenses are recorded in the period when goods are received and/or services are rendered. Wellesley College’s fiscal year runs from July 1st to June 30.
  2. Goods and/or services received on or before June 30 will be recorded as an expense in the fiscal year ended June 30. If they are received after June 30, they will be recorded in the new fiscal year. It is important to note that neither the budgeting process nor the purchasing process has any bearing on when a transaction is recorded for financial accounting purposes.

 

Year-end Purchases

For accurate financial statement presentation, all expenses incurred by June 30 must be included in the current fiscal year. Similarly, all materials and services not received by June 30 must be charged to the new fiscal year. The year in which these items are budgeted has no impact on when they are recorded for financial statement purposes.

To assist in this effort, all invoices for materials and services received on or before June 30 should be submitted to accounts payable by the deadline date with delivery date clearly indicated on the invoice or check request.

Please reference the following examples:
  1. Service was rendered in June but invoice is dated in July:

    • This expense will be included in department budget for June

  2. Equipment was purchased in June, invoice is dated in June, but equipment was not delivered until July:

    • This expense will be included in departmental budget for July.

  3. Service contract was paid for and invoiced in June, but service date begins in July:

    • An adjustment needs to be made as this expense should be included in the departmental budget for July. Refer to procedures for requesting a prepaid expense adjustment.

  4. Goods were purchased and received in June but no invoice has been received as of the deadline:

    • An adjustment needs to be made as this expense should be included in the departmental budget for June. Refer to procedures for requesting an accrued expense adjustment.

The Controller’s office may request packing slip or other similar official document from the department indicating that the goods or services have been received on or before June 30 for posting to the current fiscal year.