Adjusting Scheduled and Paid Payments (FC Grants)

Why Adjust a Payment?

Foundation Cloud Grants (FC Grants) includes new functionality for capturing payment Adjustment information. In the FC Grant system, an Adjustment is defined as a change to a payment after its invoice has been created in Financial Edge (FE). If an invoice needs to change in FE, the payment record in FC Grants needs to be kept in sync with the FE invoice. Therefore, adjustments in FC Grants were designed to offset payment amounts, in order to reflect changes made in FE. For an example of how adjustments present on grant see Adjusted Amount Field.

There Are Five Types of Adjustments:

• Voids – When a check has been cut in FE for a given payment, and that payment is voided in FE, a Void adjustment can be made to the payment in FC Grants. This sets the adjusted amount of the FC Grants payment record to zero, and it changes the payment status to Void. When voiding a payment in FC Grants, the payment can be reissued or cancelled.
• Refunds – When a check has been cut in FE for a given payment, Refund adjustments can be made to the payment in FC Grants. The amount of the refund is entered, and the money is distributed among the various funds for the payment record in FC Grants. A Journal Entry to offset the original transaction will be automatically created in FE (if this optional function is enabled in the Business Rules configuration area of FC Grants). The adjusted amount of the payment record in FC Grants becomes offset by the amount of the refund. Multiple refunds can be applied to the same payment as long as the adjusted amount does not go below $0.00. 
• Cancellations – After an invoice has been created in FE for a given payment, but before the check has been created, the invoice can be cancelled in FE. Once the invoice is manually cancelled in FE, a Cancel adjustment can be created in FC Grants. This sets the adjusted amount of the FC Grants payment record to zero, and it changes the payment status to Cancelled. When cancelling a payment in FC Grants, the payment can be reissued.
• Rescinds – After an invoice has been created in FE for a given payment, but before the check has been created, the amount of the invoice can be changed in FE. After the invoice is manually changed in FE, a Rescind adjustment can be created in FC Grants. The amount of the rescind is entered, and the money is distributed among the various funds for the payment record in FC Grants. The adjusted amount of the payment record in FC Grants becomes offset by the amount of the rescind.
• Splits – After a single payment has been added to an invoice (but before an invoice has been created in FE), the Split adjustment allows a user to split a single payment into smaller payments to multiple payee.

Voids and Refunds apply to payments which have been paid (i.e., a check has been created). Cancellations and Rescinds apply to payments which have been invoiced but not paid. Use the table of contents on the right side of this screen to skip ahead if necessary.

Note that adjustments only apply to Donor Advised Grants, Grants from Proposals, Designated Grants, and Scholarship Grants. Interfund Transfers do not have adjustment functionality at this time. Additionally, when making adjustments to the general ledger in FE, the user must have the rights to create/modify Journal Entries and Invoices in FE as a some of these adjustments require that access. 

Voids

Once a payment has gone through a check run and marked as Paid in FC Grants, links to the FE check number and invoice are present on the payment. Before voiding a payment, the corresponding invoice in FE must be manually voided.  (Users can also void imported historical payments in FC Grants where the payment has a paid check number, but no corresponding link to a check in FE). Voiding a payment in FC Grants changes the status of the payment to Void, and it changes the adjusted amount of the payment (and the grant). When voiding a payment, users have the option to reissue the payment or simply cancel it.

Note that in order for a user to void a payment in FC Grants, the user must be connected to FE through FC Grants, the user must have security rights in FE to view a check and security rights in FC Grants to Void a check, and the check must be manually voided in FE before voiding in FC Grants.

To Void a Payment:

1. Grants > Grants > locate grant > open the grant.
2. On the Payment tile open the Payment component screen by clicking on the ellipsis next to the payment > click Edit.
3. Use the +New Adjustment drop-down menu at the top of the modal to click Void.
4. In the new modal, choose a void date, and then choose whether to reissue the payment or not, add notes.
5. Click Process.

In the example below, the user has elected to reissue the payment. Notice the new payment has the same sequence number (but a different issue number when opened). The new payment is in a schedules status and is ready to be put in a Check Run Batch and processed as usual.

Refunds

Refunds can be applied to payments in FC Grants that are marked as Paid. Refunding a payment in FC Grants leaves the status of the payment as Paid, and it changes the adjusted amount of the payment (and the grant).

On the Finance tab of the Business Rules configuration screen in Grant Edge Classic, there is an option to “Post a Journal Entry in Financial Edge when processing a grant refund”. If this option is selected, Journal Entries will be created to offset the original FE transactions by the amount of the refund. If this feature is not enabled, the user will need to manually make the changes in FE.

To Refund a Payment:

1. Grants> Grants > locate grant > open the grant.
2. On the Payment tile open the Payment component screen by clicking on the ellipsis next to the payment > click Edit.
3. Use the +New Adjustment drop-down menu at the top of the modal to click Refund.
4. In the new modal, the user enters the amount of the adjustment as a negative number in the “Adjustment Amount” field (as pictured below), and the amount is automatically distributed evenly among all the funds in the payment. The automatic distribution can be overridden manually if the user wishes to perform a custom distribution. However, the sum of the individual amounts must equal the total adjustment amount. 
5. To customize the distribution, enter the new negative amounts in the Adjustment column field for each fund in the grid. The Adjustment Amt field will be highlighted in red until the Adjustment amounts in the grid equal the Adjustment Amt field entered in step 4.
6. Add a note.
7. Click Apply.

When the user clicks the Apply button, the adjustment is created in FC Grants. If the FC Grants Business Rules are configured to create FE journal entries, this is done automatically at this point. The user will be notified of the success.

The Payment Component modal will shows the original amount, the adjusted amount, and the Refund Adjustment record that was created see below.

Cancellations

When a payment has been created in FC Grants, and an invoice has been created in FE, the payment cannot be deleted in FC Grants, because the history would be lost. The invoice should be manually closed in FE and then the payment can be cancelled in FC Grants. Cancelling a payment in FC Grants changes the status of the payment to Cancelled and changes the adjusted amount of the payment (and the grant). An organization’s business rules will dictate what the status of the grant should be if one or all payments are cancelled.

To Cancel a Payment:

1. Grants> Grants > locate grant > open the grant.
2. On the Payment tile open the Payment component screen by clicking on the ellipsis next to the payment > click Edit.
3. Use the +New Adjustment drop-down menu at the top of the modal to click Cancel.
4. In the new modal, enter the date of the adjustment and add a note.
5. Click Process.

The payment now shows with the new status of Cancelled.

Rescinds

When a payment has been created in FC Grants, and an invoice has been created in FE, the original payment amount cannot be changed in FC Grants, because the history would be lost. The invoice should be manually changed in FE. Then, to keep FC Grants in sync with FE, the payment should be Rescinded in FC Grants. Rescinding a payment in FC Grants leaves the status of the payment as Scheduled, and it changes the adjusted amount of the payment (and the grant).

To Rescind a Payment

1. Grants> Grants > locate grant > open the grant.
2. On the Payment tile open the Payment component screen by clicking on the ellipsis next to the payment > click Edit.
3. Use the +New Adjustment drop-down menu at the top of the modal to click Rescind.
4. The Rescind menu opens in a new modal similar to the Refund modal. Enter the amount of the adjustment in the “Adjustment Amount” field, and the amount is automatically distributed evenly among all the funds in the payment. This can be overridden manually if the user wishes to perform a custom distribution (refer to Refund a Payment step 5 above), however, the sum of the individual amounts must equal the total adjustment amount. 
5. Click Apply.

As shown below, the payment amount will be lessened by $100.00 so the amount is entered with a minus sign (-100.00). If the amount is to be increased, it should be entered without a minus sign (100.00).

The Payment popup screen now shows the original amount, the adjusted amount, and the Rescind Adjustment record that was created.