Year-end Accounting Accrual Policy

STATE of POLICY and PROCEDURE
Department
 Finance Policy No. (or n/a)
 17.01
Name
 Year-end Accounting Accrual Policy
 Review Frequency
 3 yr
Approved By
 Management
 Replaces
 n/a
Effective Date
 April 18, 2024 Dated
 n/a

1. PURPOSE

1.1. To provide guidance on the management of year-end financial accruals for MakeWay Foundation and MakeWay Charitable Society.

1.2. MakeWay practices accrual accounting: revenues are recognized when they are receivable, and expenses are recognized in the fiscal year in which they are incurred.

1.3. This policy establishes reasonable thresholds for the accrual of revenues and expenses

2. SCOPE

2.1. This policy applies to Senior Management, the Finance Department and all employees involved with entering revenues and expenses.

3. POLICY

3.1. Revenues

3.1.1. Individual revenue items of $5,000 or greater are accrued in the fiscal year in which they meet Revenue Recognition Criteria.

3.1.2. Any overhead allocation or administrative fee associated with each revenue item will be included in the accrual.

3.1.3. Individual revenue items of less than $5,000 are not accrued.

3.2. Expenses

3.2.1. Expense items of $5,000 or greater are accrued in the fiscal year in which they are incurred. Expense items include a single invoice or a single expense claim.

3.2.2. Expense items of less than $5,000 are not accrued

3.3. Salary Expenses

3.3.1. Salary and related expenses are accrued for all employees on payroll based on the remaining working days in the fiscal year after the last payroll date.

3.3.2. There is no threshold for accrual of salary or related expense.

4. RESPONSIBILITY

4.1. It is the responsibility of the Business Analyst, Finance to ensure that all MakeWay Foundation revenues listed in the Customer Relationship Management (CRM) are assessed for Revenue Recognition Criteria, and to prepare related journal entries to accrue qualifying revenue and associated overhead allocation according to this policy.

4.2. It is the responsibility of the Business Analyst, Finance to work with the Manager, Shared Platform Finance to ensure that all Shared Platform revenues listed in the CRM are assessed for Revenue Recognition Criteria, and to prepare related journal entries to accrue qualifying revenue and associated overhead allocation according to this policy.

4.3. It is the responsibility of the Controller to ensure that all expenses listed in the Invoice and Expense Management System are assessed to determine the year in which they are incurred, and to prepare related journal entries to accrue qualifying expenses according to this policy.

4.4. It is the responsibility of the Controller to ensure that the bi-weekly payroll and adjustments in the Financial Accounting System are processed according to the information listed in the Human Capital Management (HCM) database, and to prepare journal entries to accrue qualifying salary expenses according to this policy.

4.5. It is the responsibility of the Director, Finance to ensure the completeness and accuracy of the financial accruals in the Financial Accounting System.

5. DEFINITIONS

5.1. Customer Relationship Management (CRM): At the time of this policy, MakeWay’s Customer Relationship Management database is Salesforce.

5.2. Financial Accounting System: At the time of this policy, MakeWay’s Financial Accounting System is NetSuite.

5.3. Human Capital Management (HCM): At the time of this policy, MakeWay’s Human Capital Management database is Ceridian Dayforce.

5.4. Invoice and Expense Management System: At the time of this policy, MakeWay’s Invoice and Expense Management System is SAP Concur.

5.5. Revenue Recognition Criteria: MakeWay recognizes revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.

6.1. 004 – Expense and Purchasing Policy

6.2. 023 – Purchasing Card Policy

6.3. 001 – Travel and Per Diem Policy