Software SBITA: Tracking Implementation Costs
General Accounting Standards Board's (GASB) Statement No. 96 requires capitalization of time spent on implementing new long term subscription software. Implementation costs are a critical part of SBITA accounting under GASB 96.
Governments must identify and capitalize these costs correctly to stay compliant, improve transparency, and better reflect the true value of their technology investments in financial statements.
Implementation Costs
Implementation Costs are activities associated with a SBITA other than making the contractual subscription payments.
- Implementation costs can be paid to a vendor or incurred by work performed by Ohio University employees.
- Implementation costs paid to a vendor are to be coded to the same object code as the software - (not to professional services)
Three Stages of Software Implementation
Activities associated with a SBITA can be grouped into one of three implementation stages and their costs should be accounted for accordingly. In classifying outlays into the appropriate stage, the nature of the activity should be the determining factor.
In the preliminary project stage, expense as incurred. Hours do not need to be tracked in this stage.
Preliminary Project Stage Activities
- Prior system costs
- Needs assessment, selection, and planning activities
- Conceptual formulation and evaluation of alternatives
- RFP to evaluate alternatives & determine functional requirements
- Requests for proposals costs
- Legal to review request for proposal (RFP)
- Demonstration costs
- Determination of the existence of needed technology
- Formulate and evaluate vendors, pricing, and other alternatives
- Final Selection of SBITA vendor
- Negotiating contracts
The preliminary project stage is complete when these expenses are complete and/or management authorizes and commits to funding the contract.
Hours need to be tracked in the initial implementation stage and capitalized as an addition to subscription asset.
Initial Implementation Stage Activities
- Work getting SBITA (software) ready to use to ensure a good go live
- Upgrade hardware/IT to allow new software to run
- Costs directly related to getting the software ready for use
- All other ancillary charges necessary to place the subscription asset into service
- Ancillary charges related to designing the chosen path
- Configuration, coding, and testing of IT assets
- Parallel processing prior to "Go Live"
- Installation associated with access to the underlying IT assets
- Integrating it with other systems
- Data conversion included if necessary to place into service
- Only the minimum data conversion is included in the initial implementation stage to the extent that it is determined to be necessary to place the subscription asset into service - that is, to make the software operational as the asset cannot be used without the data conversion
- All other data conversions should be considered an activity of the operations and additional implementation stage
The initial implementation stage is completed when SBITA is configured, tested, made compatible with existing IT and placed into service.
If a SBITA has more than one module and the modules are implemented at different times, the asset is placed into service when the first module or first set of independent modules is implemented and the initial implementation stage is considered complete regardless of whether the other modules are completely implemented.
Costs to implement additional modules are considered part of the Operations and Additional Implementation Stage.
The Operations and Additional Implementation Stage can be expensed as incurred or adding to existing asset. Hours may need to be tracked in this stage if adding significant modules.
Costs To Record Without Tracking Hours
The following costs should be recorded as an expenditure/expense and OU employee hours do not need to be tracked.
- Other activities related to the government’s ongoing access to the underlying IT asset
- Ongoing costs like training, stabilization, maintenance and troubleshooting of modules already placed into service
- Data conversion not necessary to place the subscription asset into service (other than what is needed to make underlying assets operational)
- Conversion of unneeded data/ archived/ legacy data
- Tech support
- Maintain software (and hardware)
- Outlays after go live that do not increase functionality/efficiency
When To Track Hours
- OU Employee hours need to be tracked for working on modifications/modules that result in increased functionality of the subscription asset and provide the ability to perform additional tasks
- OU Employee hours need to be tracked for working on modifications/modules that result in increased efficiency of the subscription asset or level of service provided by the subscription asset
- Costs to implement additional modules that meet the modification criteria should be capitalized as an addition to existing subscription asset.
Time Tracking for Implementation Costs
Time tracking is required for implementation work performed by Ohio University employees in order to determine the cost of the employees implementation cost.
- This applies to new long term subscription software only — tracking is not required for short term software
- Refer to the instructions on selecting object codes to determine if software is short term or long term
- Implementation time tracking for a new software may involve several departments in addition to the IT and FAST teams.
- Time tracking begins with the start of the Initial implementation stage and continues through the end of the initial implementation stage.
- Time tracking may also be needed in the Operation and Additional Implementation Stage if increased functionality and efficiency modifications/modules are implemented.
- Hours related to training do not need to be tracked regardless of the stage in which they're incurred. Training costs are expensed as incurred
Contact finance@ohio.edu if you are unsure if time tracking is required.
Time Tracking Tools
Some departments use a time tracking software. The detail provided by that software can be sent to finance@ohio.edu to use for implementation hours calculations.
In the absence of an official time tracking system, an excel worksheet can be used to track time spent each day on implementation. A summary can also be created and sent to finance@ohio.edu along with the detail.
The time tracking needs to be sent by the end of the fiscal year or upon completion of the implementation, whichever occurs first.
Sample Backup Detail and Summary for Tracking Time Spent
Refer to activities involved in the Initial Implementation Stage which will involve most of your time tracking.
Software that includes multiple modules may require time to also be tracked in the Additional Implementation Stage after the main module(s) are already live.
Sample Hours by Day
Click each sample description to view a sample table. Please note: All samples exclude training hours.
Sample of Hours Spent on Initial Implementation Stage
| Name | Position | OHIO ID | Description of Activity Performed & Software Name | Worklog Date | Spent Time (Hours) |
|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | Testing in staging environment | month/day/year | 4.00 |
| Bill Smith | Staff | smith2 | Testing in staging environment | month/day/year | 4.00 |
| Bob Jones | Manager | jones3 | Testing in staging environment | month/day/year | 7.50 |
| Scott Moore | Staff | moore4 | Testing in staging environment | month/day/year | 2.50 |
Sample of Hours Spent Adding Significant Modules in Operations & Additional Implementation Stage
| Name | Position | OHIO ID | Description of Activity Performed & Software Name | Worklog Date | Spent Time (Hours) |
|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | Meeting discussion on implementation and testing | month/day/year | 2.00 |
| Bill Smith | Staff | smith2 | Meeting discussion on implementation and testing | month/day/year | 2.00 |
| Bob Jones | Manager | jones3 | Meeting discussion on implementation and testing | month/day/year | 2.00 |
| Scott Moore | Staff | moore4 | Meeting discussion on implementation and testing | month/day/year | 2.00 |
Sample of Hours Spent on Initital Implementation Stage
| Name | Position | OHIO ID | Description of Activity Performed & Software Name | Worklog Date | Percentage of 8 Hour Day | Spent Time (Hours) |
|---|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | Configuration | month/day/year | 50% | 4.00 |
| Bill Smith | Staff | smith2 | Configuration | month/day/year | 25% | 2.00 |
| Bob Jones | Manager | jones3 | Configuration | month/day/year | 75% | 6.00 |
| Scott Moore | Staff | moore4 | Configuration | month/day/year | 100% | 8.00 |
Sample of Hours Spent Adding Significant Modules in Operations & Additional Implementation Stage
| Name | Position | OHIO ID | Description of Activity Performed & Software Name | Worklog Date | Percentage of 8 Hour Day | Spent Time (Hours) |
|---|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | Coding | month/day/year | 40% | 3.20 |
| Bill Smith | Staff | smith2 | Coding | month/day/year | 60% | 4.80 |
| Bob Jones | Manager | jones3 | Coding | month/day/year | 30% | 2.40 |
| Scott Moore | Staff | moore4 | Coding | month/day/year | 20% | 1.60 |
Sample Hours by Month
Click each sample description to view a sample table. Please note: All samples exclude training hours.
Hours Spent on Initial Implementation Stage by Month FYxx
| Name | Position | OHIO ID | July Hours | August Hours | Sept Hours | Oct Hours | Nov Hours | Dec Hours | Jan Hours | Feb Hours | Mar Hours | Apr Hours | May Hours | June Hours | Total FYxx Hours |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | 4.00 | 10.00 | 14.00 | 16.00 | 17.00 | 8.00 | 5.00 | 17.00 | - | - | - | - | 91.00 |
| Bill Smith | Staff | smith2 | - | 55.00 | 5.00 | 20.00 | 30.00 | 16.00 | 10.00 | 30.00 | - | - | - | - | 166.00 |
| Bob Jones | Manager | jones3 | 7.00 | 15.00 | 50.00 | 55.00 | 21.00 | 11.00 | 15.00 | 41.00 | - | - | - | - | 215.00 |
| Scott Moore | Staff | moore4 | 8.00 | 55.00 | 10.00 | - | 15.00 | - | 15.00 | - | - | - | - | - | 103.00 |
Hours Spent Adding Significant Modules in Operations & Additional Implementation Stage by Month FYxx
| Name | Position | OHIO ID | July Hours | August Hours | Sept Hours | Oct Hours | Nov Hours | Dec Hours | Jan Hours | Feb Hours | Mar Hours | Apr Hours | May Hours | June Hours | Total FYxx Hours |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jane Doe | Manager | doe1 | - | - | - | - | - | - | - | - | 20.00 | 30.00 | 16.00 | 10.00 | 76.00 |
| Bill Smith | Staff | smith2 | - | - | - | - | - | - | - | - | 55.00 | 21.00 | 11.00 | - | 87.00 |
| Bob Jones | Manager | jones3 | - | - | - | - | - | - | - | - | 4.00 | 10.00 | 14.00 | 16.00 | 44.00 |
| Scott Moore | Staff | moore4 | - | - | - | - | - | - | - | - | 8.00 | 5.00 | 17.00 | - | 30.00 |