2. Objectives
• Understand the differences between key
words (accrual, deferral and prepayment,
debtors and creditors, cash and profit,
asset and liability, financial and
management accounts, etc…)
• Identify how accounting processes and
procedures work at the University of
Huddersfield
• Understand the meaning of common
financial statements
3. Part 1 - Accounting Theory
• Accounting terms
• Management v financial accounts
• Accounting data entry
• Profit & Loss
• Balance sheet
• Debits and credits
• Costing
• Cash
• Measuring performance
5. Financial Accounts: Prepared at the end of each year and
are a ‘snap shot’ of an organisation’s financial standing.
Published externally.
Management Accounts: Prepared each month and
compare forecast income and expenditure with actuals.
Published internally.
7. Profit and loss account
An analysis of income and expenditure which includes:
• Turnover (All income)
• Staff expenditure (salary payments)
• Non-pay costs (any expenditure other than pay e.g.
printing, stationery, telephone bills etc..)
• Gross profit
• Net profit
8. Balance sheet
“A summary of all the accounts of
a business. Usually prepared
at the end of each financial
year. The term 'balance sheet'
implies that the combined
balances of assets exactly
equals the liabilities (i.e. net
worth)”.
9. Debits and credits
Newton’s third law of physics “to every
action there is an equal and opposite re-
action”
Accountancy principles “to every debit there
is an equal and opposite credit(s)!”
(eg. if you are paying money into your bank
account you would debit the bank when
making a journal entry and credit an
income account).
10. Costing
Identifying the expenditure of an
activity
Different types of costing: ABC,
marginal costs, absorption
costing, etc..
University wide methodology:
Transparency Review and full
Economic Costing
11. Cash
Cash flow statement: A report which shows the flow of
money in and out of the business over a period of time.
Cash accounting: This term describes an accounting
method whereby only invoices and bills which have been
paid are accounted for. However, for most types of
business in the UK, as soon as you issue an invoice
(paid or not), it is treated as revenue and must be
accounted for.
12. Measuring financial performance
• Variances from budget
• Profit or loss
• Sufficient cash
• Ratio analysis
Published Annual Financial Accounts
(http://www.hud.ac.uk/finance/finstat/index.htm)
Monthly Management Accounts
(Available from Agresso or Accounting Technicians)
13.
14.
15.
16.
17. Part 2 - How do things work at
Huddersfield?
• Budgeting
• Structure of the accounts
• Transactions
• Reporting
• Where to go for help
• Financial Services department
18. Budgeting
The annual budget planning function utilizes a University-
wide Devolved Revenue model to allocate funds to
schools, services and strategic provision.
19. Budgeting
Strategic Provision
Schools
Infrastructure & Reserves
The DevRev model is
simple, straightforward
and transparent. All
qualifying income is
top-sliced to give the
strategic provision [SP]
and the remainder is
split between schools
and infrastructure.
20. Budgeting
The budget operating function is contained within the
finance system, Agresso, which allows budget holders
and financial services staff to update, maintain, and
monitor the operating budget throughout the financial
year.
21. Budgeting
• Forecasting of income and
expenditure
• Profiling (placing ‘pots’ of income
and expenditure into the correct
month)
• Virements (Moving budgets around)
22. Structure
Coding Structure:
• The account identifies the type of income or
expenditure being recorded
• Account (Nominal)
– Income codes have the form 8nnn
– Salary codes have the form 1nnn
– Other expenditure codes have the form annn (product code)
– Balance sheet codes have the form Bnnnnn
23. Structure
• Sub Project (aaannn-nn) identifies which part of the university
‘owns’ the transaction
• Additional codes can be ‘attached’
• Trees are used for reporting and analysis
29. Where to go for help?
• Accounting support team
• Agresso training and other courses
• University web site for Financial
Services pages
(www.hud.ac.uk/finance/index.htm) –
Link to glossary of terms
• External web sites
• Library texts
30. Accounting Support Team - Structure
Diane Webster
Applied Sciences
Art, Design & Architecture
NHS Contract
Cash Flow Forecasting
Statutory Reporting
TRAC
Phil McEwan
Management reports
Music, Humanities & Media
Estates Department
Education & PD
Education Consortium
Allison Taylor
Management reports
Capital Expenditure
Business
Computing & Engineering
Computing & Library
Nathalie Chavrimootoo
Human & Health Sciences
Service Departments
Research & Enterprise Office
Statutory Reporting
Investment Appraisals
