In an effort to better predict and record software expenses, the College is adopting modified processes for software license and/or software support purchases.
Going forward, software purchases that total more than $6,000 in a single transaction will be expensed monthly over the term of the license — whether the purchase covers two fiscal years or one. (Previously, this rule only applied to purchases that covered a time period crossing fiscal years.)
One-time data software purchases should be expensed to the 657010 (data software – educational) or 657020 (data software – administrative) account codes. The 657011 (software licenses – educational) and 657021 (software licenses – administration) account codes should be used to expense software license and/or software support purchases that will be renewed in the future.
If the software license term crosses fiscal years (July 1 through June 30), the remaining balance of this expense will carry forward into the following fiscal year.
Consider this example: You purchase an Adobe site license on Saturday, April 1, 2017, that is for the period Monday, May 1, 2017, through Monday, April 30, 2018. The total purchase will be divided into 12 monthly amounts ($750/month) at a total cost of $9,000. A total of $1,500 will be charged to your budget in fiscal year 2017 for May and June. The remaining $7,500 will be charged to your fiscal year 2018 budget at a rate of $750/month.
If the software license purchase crosses fiscal years and is a recurring yearly expense, please make sure to notify the Budget Office via email at firstname.lastname@example.org when preparing your department’s budget for the following year. Funds will need to be added to cover this expense. Please note, the total purchase amount will not be included on your department’s budget reports. Only the monthly charges applicable to the current fiscal year will be included.
When expensing these purchases, which will be expensed monthly, please utilize the instructions listed below effective immediately:
- When processing the requisition, check request or Pcard transaction for the purchase, the purchase amount should be charged to Index 100000, Account 145040.
- Please indicate the index and account to charge the monthly amount to in the document text (FOATEXT) on your requisition, description line if using a check request form or in the notes section if purchasing with a PCard.
- Complete the subsequent necessary steps in processing the purchase order or check request process.
- Upon completion of the process, email Josh Grossman, assistant director, accounting, a copy of the invoice/check request/Pcard transaction screen and provide the department’s Index for the monthly charge. You can email Josh at email@example.com.
If you have any questions, please email firstname.lastname@example.org.