Departments are responsible for generating accurate, timely billings to non-University customers for non sponsored receivables. Sponsored Financial Reporting (SFR) is responsible for generating accurate, timely billings to non –University customers for sponsored receivables. These billings must be recorded in the University’s financial system. The standard payment term to be applied to these external billings is Net 30.
If a customer has a pattern of non-payment to the University as a whole, they may be deemed not credit-worthy. Departments may decide to discontinue providing goods or services or halt research until such a time as the internal credit rating has improved and the risk of non-payment has decreased.
Departments should have a high-level of understanding of what receivable are in their balance sheet. The actual collection of outstanding receivables will be handled by the Accounts Receivable department (non-sponsored receivables), or Sponsored Financial Reporting (sponsored receivables), with assistance from the generating department. If not resolved in a specified time period, the collection will be referred to either the Office of the General Counsel (OGC) or collection agencies.
Late fees may be charged on past due balances as provided by law and as permitted by contract.
Fees paid to collection agencies will be deducted from any monies collected from the customer.
Amounts deemed uncollectible after all reasonable collection efforts have been taken will be written-off to a non-sponsored departmental account number, and a bad debt expense will be charged to the department.
Exclusions
Student accounts receivables are handled separately from this process.
To maximize the University’s cash flow through the timely collection of receivables; minimize exposure from uncollectible receivables; and to increase the integrity of the financial statements through consolidation of receivables and revenues.
The folowing procedures will be added as they become available. For more information contact David Laden at 612-624-0929 or laden003@umn.edu.
- Establishing a New Customer Record
- Creating a Billing
- Receiving Payment
- Collection of Outstanding Receivables
- Customer Maintenance
- Charge Code Request Form
- Accounts Receivable Transmittal Advice
| Subject |
Contact |
Phone |
Email |
- Accounts Receivable
- Amounts due the University of Minnesota for credit sales of goods or services to non-University customers, including sponsors of University research. An account receivable is created upon the shipment of a product, rendering of a service, or satisfaction of a performance step as outlined in an agreement. An account receivable maybe be due or not yet due; a receivable that is due is a claim against a customer that the University has the right to collect at the present time.
- Accounts Receivable Aging
- The aging is the starting point for the evaluation of the collectability of accounts receivable and often triggers appropriate actions to mitigate the potential for bad debt.
- Allowance for Uncollectible Accounts
- An estimate of amounts that will likely not be collectible, intended to accomplish these two results: a) to charge the loss for accounts that provide to be uncollectible against the period that caused the loss; and b) to show the estimated realizable value of the customers’ accounts.
- Credit Balance
- A balance due to a customer as a result of returned goods previously paid for by the customer, or the granting of later credits and allowance for various reasons such as unsatisfactory performance. These balances represent obligations of the University that will have to be satisfied either by cash payments or providing a replacement good/service.
- Credit Worthy
- This is an internal designation by the University after evaluating the payment history of an individual customer.
- Invoice/bill
- The document that notifies the customer what is owed for a particular transaction or time period.
- Revenue Recapture Program
- A program authorizing the Minnesota Department of Revenue to recapture taxpayer refunds and apply them to debts the taxpayers owe to other state agencies, the University of Minnesota and to certain local governmental units. A debtor under this program is an individual person who is obligated to pay a debt to a claimant agency.
- Uncollectible Amount
- An amount for which payment from a customer is not expected, for reasons such as disputes over pricing; contractual terms; performance or receipt of product; bankruptcy or other legal proceeding.
- Write-off
- The actual removal of an amount from the accounts receivable subledger once it has been determined that the customer will not pay an amount owed.
- Non-Sponsored Accounts Receivable
- Responsible for customer maintenance, printing and mailing of non-sponsored invoices, non-sponsored accounts receivable, payment application, billing correspondence, and collections. Receive and process uncollectible checks (non-sponsored) returned by the bank because of non-sufficient funds or funds drawn on a closed account.
- Sponsored Financial Reporting Department
- Responsible for managing the external financial reporting and invoicing requirements of sponsored University research projects. Other functions include payment application, collections, letter of credit, A-133 audits and close outs of sponsored accounts. Receive and process uncollectible checks (sponsored) returned by the bank because of non-sufficient funds or funds drawn on a closed account.
- University Clusters and Departments
- Responsible for requesting new or changes to existing customer records, entry of non-sponsored billing information into the financial system, and entry of non-sponsored billing adjustments. Must provide appropriate justification for billing adjustments.
The folowing appendix will be added as they become available. For more information contact David Laden at 612-624-0929 or laden003@umn.edu.
There are no Frequently Asked Questions for this policy.
- Effective:
- July 2008
Supercedes: Accounts Receivable.
-
To obtain a copy of a historical policy,
e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.
Help
Policy Feedback
Print Policy
