Printed on: 07/10/2020. Please go to http://policy.umn.edu for the most current version of the Policy or related document.
University of Minnisota  Procedure

Collection and Write-off of Outstanding Receivables

Administrative Procedure

Non-sponsored receivables billed through EFS

Accounts Receivable Services (ARS) is responsible for and uses the following methods in the collection of outstanding receivables that have not been paid in full within 30 days for non-sponsored invoices generated in the Enterprise Financial System (EFS):

  • Statements of account
  • Dunning e-mails
  • Telephone calls
  • Aging review
  • Third-party collection agencies
  • Revenue Recapture Program
  • Office of the General Counsel

  1. ARS will add collection notes to the Customer Conversation page in EFS documenting interactions with the customer.
  2. Departments should review the Accounts Receivable Aging report on a monthly basis and contact ARS or enter a Customer Conversation in EFS when they have information regarding an open invoice (e.g. service issues with a particular customer).
  3. ARS will notify departments when delinquent accounts will be turned over to third-party collection agencies. Fees paid to collection agencies will be deducted from any monies collected from the customer.
  4. The department or ARS may request that amounts deemed uncollectible after reasonable collection efforts have been taken be written off. Write-offs over $500 must be approved by the Controller or designee.
  5. ARS will process the write-off transaction in EFS and a bad debt expense will be charged to the department.
  6. If a receivable is subsequently collected from a customer, ARS will credit the collected revenue to the chartstring that received the bad debt expense.

Sponsored receivables billed through EFS

Sponsored Financial Reporting (SFR) is responsible for and uses the following methods in the collection of outstanding sponsored receivables that have not been paid in full within 30 days or according to the terms of the agreement:

  • Statements of account
  • Dunning e-mails
  • Telephone calls
  • Aging review
  • Office of the General Counsel

  1. SFR will add collection notes to the Customer Conversation page in EFS documenting interactions with the sponsor.
  2. Departments should review the Accounts Receivable Aging report on a monthly basis and contact SFR or enter a Customer Conversation in EFS when they have information regarding an open invoice (e.g. service issues with a particular sponsor).
  3. Departments must remove costs from sponsored projects to a non-sponsored program for amounts deemed uncollectible after reasonable collection efforts have been taken. Specific instructions for departments and SFR are outlined in Administrative Procedure: Moving Uncollectible Costs to Non-Sponsored Programs.

Non-sponsored receivables billed using approved financial system

Departments are responsible for and may use the following methods in the collection of outstanding receivables that have not been paid in full within 30 days for non-sponsored invoices generated in an approved financial system:

  • Statement of account
  • Dunning letters or e-mails
  • Telephone calls
  • Aging review
  • Third-party collection agencies
  • Revenue Recapture Program
  • Office of the General Counsel

  1. Departments should review an accounts receivable aging report generated by the approved financial system on a monthly basis and document interactions with the customer.
  2. Departments may turn over delinquent accounts to third-party collection agencies. Fees paid to collection agencies are the responsibility of the department.
  3. Departments may take action to write-off amounts deemed uncollectible after reasonable collection efforts have been made.
    • Departments may write-off individual charges of $500 or less as long as they are well documented and approved by a department finance manager.
    • Departments must request prior approval from ARS for individual write-offs of more than $500. Requests should be sent to acctrec@umn.edu and include the following information: customer name, invoice date, amount to be written off, and a summary of the collection efforts that have been taken.
    • Departments must retain documentation of write-off approvals.
  4. If a receivable is subsequently collected from a customer, the collected revenue should be credited to the chartstring that received the bad debt expense.

Document Feedback

Finance