6-5: Year-end receivables

Effective: July 1, 1998
Revised: July 2, 2026
References: 6-1: Receivables general policies and procedures, 6-4: Accounts receivable subsystems, 6-6: Past due receivables, 6-8: Write-offs and allowances, 13-4: Returned checks and debit card chargebacks

Purpose

This policy sets the requirements for recording and classifying revenue, receivables, and cash receipts at fiscal year-end. These rules ensure accurate and complete financial reporting.

Definitions

Accounts receivable – Amounts owed to the state for goods or services provided.

Agency – Any agency, board, bureau, commission, office, department, or other administrative subunit of the executive, legislative, and judicial branches of state government.

Cash receipts – Cash, checks, currency, credit and debit card payments, electronic funds transfer (ACH or wire transfer), or any type of electronic payments received by an agency.

CR – Cash receipt transaction in Vantage Financial.

Deferred inflow – Revenue that doesn’t meet availability criteria and must be recognized in a future period.

GovOps – The Department of Government Operations

IDT – Interdepartmental transfer transaction in Vantage Financial.

IET – Internal exchange transaction in Vantage Financial.

Interagency – Between different agencies, such as GovOps and DNR.

Intra-agency – Between different divisions or departments within the same agency.

ITA – Internal Transfer Agreement transaction in Vantage Financial.

JVYE – Year end accrual journal voucher transaction in Vantage Financial.

New year – Term used at state fiscal year end to distinguish the new fiscal year beginning July 1.

Old year – Term used at state fiscal year end to distinguish the closing fiscal year ending June 30.

OSDC – The Office of State Debt Collection.

RE – Receivable transaction in Vantage Financial used to record and track amounts owed to the state.

State finance – The GovOps Division of Finance.

Policy

A – Agencies must record revenue in the proper fiscal year

1 – Agencies must record revenue in the fiscal year they earn it, regardless of when they receive the cash receipts.

2 – Agencies must complete all year-end receivable and revenue transactions by the deadline in the state finance year-end closing calendar.

B – Agencies must record receivables when revenue is earned

1 – If agencies earn revenue by June 30 but haven’t yet received the cash receipts, they must record the amount as a receivable.

2 – Agencies must only record receivables that represent valid, legally enforceable claims.

3 – Agencies must record receivables in Vantage Financial using:

an RE transaction when a receivable is tied to billing or customer activity;
an approved system interface or manual entry, for agencies with approved subsystems; or
a JVYE transaction when revenue is earned but can’t yet be billed or recorded through standard receivable processes in old year.

4 – When recording receivables using JVYE transactions at year-end, agencies must complete the correct JVYE form (FI61AR: Accounts receivable, FI61ER: Expenditure refund, FI61DIA: Deferred inflow accrued receivable) and select the correct balance sheet account code for the receivable type (such as federal, customer, interest, taxes, notes or mortgages, or other).

4a – To ensure accurate financial reporting, agencies must not record all JVYE receivables to a general or default balance sheet account if a more specific classification exists.

C – Agencies must record cash receipts in the correct fiscal year

1 – Agencies must record cash receipts in Vantage Financial based on the date they receive them (see section G for more details):

On or before June 30: Record in the old fiscal year.
On or after July 1: Record in the new fiscal year.

2 – Agencies must coordinate with state finance if adjustments are needed due to late or incorrect recording.

D – Agencies must review and adjust receivables at year-end

1 – Agencies must review all old year receivables for accuracy, validity, collectibility, and completeness and decide the appropriate accounting treatment. See state finance policies 6-6: Past due receivables and 6-8: Write-offs and allowances for factors to consider during the review.

2 – Agencies must complete all adjustments to old year receivables by the deadline in the state finance year-end closing calendar.

3 – Agencies must coordinate with state finance for adjustments of $1 million or more or any unusual adjustments.

4 – State finance determines if agencies will likely collect receivables within 45 days after year-end. State finance will reclassify amounts not collectible within that timeframe as deferred inflows for financial reporting.

E – Agencies must properly record year-end receivable and revenue transactions

1 – Agencies must record unearned revenue when cash receipts are received on or before June 30, but the related revenue isn’t earned until the new fiscal year. This occurs when agencies receive payment before providing goods or services.

2 – Agencies must properly account for returned or reversed cash receipts, including re-establishing receivables when necessary. If a payment previously recorded as old year cash receipts are returned or reversed after June 30 (such as a non-sufficient funds check), the agency must see state finance policy 13-4: Returned checks and debit card chargebacks for recording guidance.

3 – Agencies must record federal revenue in the fiscal year they actually earn it according to the grant agreement, rather than when they receive the cash receipts. Agencies must recognize this revenue as soon as it meets all funding requirements, which usually happens when they incur allowable costs or satisfy specific grant conditions.

F – Agencies must maintain documentation

1 – Agencies must maintain supporting documentation for:

revenue recognition;
receivables recorded at year-end;
cash receipt dates; and
adjustments and reclassifications.

1a – The documentation must support audit, financial reporting, and record retention requirements and be readily available for review.

G – Agencies must record transactions based on timing

1 – Agencies must determine the proper fiscal year for recording transactions based on the following factors:

When was the revenue earned?
When were the cash receipts received?

2 – To record old year cash receipts and old year revenue, agencies must:

record an old year RE to establish the receivable (if needed); and
record an old year CR referencing the RE when payment is received.

3 – To record old year cash receipts and new year revenue, agencies must:

record an old year CR to record the cash receipts; and
record an unearned revenue JVYE to defer revenue to the new year (the reversal of the JVYE in the new year will record the revenue in the new year).

4 – To record new year cash receipts and old year revenue, agencies must:

record an old year RE to recognize the revenue; and
record a new year CR referencing the RE when payment is received.

4a – When an old year RE was not recorded, agencies must:

record a new year CR when payment is received; and
record an accounts receivable JVYE to recognize revenue in the old year (the reversal of the JVYE in the new year will eliminate the revenue recorded on the CR in the new year).

5 – To record new year cash receipts and new year revenue, agencies must:

record a new year RE to recognize the revenue; and
record a new year CR referencing the RE when payment is received.

H – Agencies using receivable subsystems must record revenue and receivable activity in Vantage Financial at year-end

1 – At year-end, agencies must ensure that all the revenue and receivable activity maintained in their subsystems is accurately summarized in Vantage Financial for financial reporting purposes.

2 – Agencies may record year-end adjustments in Vantage Financial using their regular approved system interface or manual entry in compliance with state finance policy 6-4: Accounts receivable subsystems, or they may use JVYE transactions when necessary to:

recognize receivables for revenue earned but not collected before July 1;
defer revenue that’s not yet earned before July 1; and
properly reflect timing differences between when revenue is earned and when cash receipts are received.

3 – Agencies must ensure that JVYE transactions recorded at year-end are supported by subsystem data and reconciled to underlying receivable balances.

I – Agencies must record interagency activity in the appropriate fiscal year

1 – State finance centrally manages interagency receivables and payables. State finance will reclassify these balances to “due to/from” accounts as needed for financial reporting. Agencies must not record interagency “due to/from” balances unless State finance specifically authorizes or instructs them to do so.

2 – Agencies must record all year-end interagency activity through period 13 using the correct interagency transactions (ITA, IET). This ensures the cash receipts, revenue, or expenditures are recorded in the proper fiscal year.

2a – Agencies must record interagency transactions (ITA, IET) in the fiscal year the work or service occurred.

3 – If an interagency transaction can’t be completed on time, agencies may use a JVYE transaction to record a year-end accrual. Agencies may only do this when it’s necessary to show financial activity in the correct fiscal year. These situations should be rare.

3a – Agencies must coordinate with one another before recording a JVYE to ensure both sides enter matching and consistent data. An agency must not record an interagency accrual JVYE unless they’ve confirmed that the other agency will record the related entry.

3b – Agencies must not record an interagency transaction (ITA/IET) and a JVYE for the same activity.

3c – Agencies must reverse interagency JVYE accruals in the next fiscal year and complete the original interagency transaction (ITA/IET).

3d – Agencies must enter a description in Vantage Financial that clearly identifies the agencies involved and notify state finance when interagency JVYE transactions are recorded.

J – Agencies must record intra-agency activity in the appropriate fiscal year

1 – Agencies must use IDT transactions for all intra-agency activity, including all year-end intra-agency activity through period 13. Agencies must not use JVYE transactions to record or adjust intra-agency activities.

2 – Agencies must not record intra-agency receivables or payables between their own divisions unless state finance specifically authorizes or instructs them to do so.

3 – Agencies must record activity in the fiscal year the work or service occurred.