ADMINISTRATIVE PROCEDURE

Collection and Write-off of Outstanding Receivables

Collection of Outstanding Receivables

Introduction

All invoices should be monitored and follow a regular collection schedule with appropriate escalation actions for those not paid in full within 30 days.

Non-sponsored receivables billed through EFS

Accounts Receivable Services handles unpaid non-sponsored invoices generated from the Enterprise Financial System (EFS). Accounts Receivable Services uses the following methods in the collection of outstanding receivables:

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

Accounts Receivable Services will add collection notes to the Customer Conversation page in EFS documenting interactions with the customer.

Fees paid to collection agencies will be deducted from any monies collected from the customer and will be charged to the selling department.

Departments provide assistance as needed by Accounts Receivable Services.

Departments should review the Accounts Receivable Aging report on a monthly basis. Departments having information regarding an open invoice (e.g. service issues with a particular customer) should contact Accounts Receivable Services or enter a Customer Conversation in EFS.

Sponsored receivables billed through EFS

Sponsored Financial Reporting handles unpaid sponsored invoices. Sponsored Financial Reporting uses the following methods in the collection of outstanding receivables:

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

Sponsored Financial Reporting will add collection notes to the Customer Conversation page in EFS documenting interactions with the sponsor.

Departments provide assistance as needed by Sponsored Financial Reporting.

Departments should review the Accounts Receivable Aging report on a monthly basis. Departments having information regarding an open invoice (e.g. service issues with a particular sponsor) should contact Sponsored Financial Reporting or enter a Customer Conversation in EFS.

Non-sponsored receivables billed using approved department system

Departments with an approved department system should establish written collection procedures. Department should make every effort to collect any outstanding receivables and document all customer interactions. Collection procedures may utilize any or all of these follow-up methods:

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

Approved department systems must be able to generate an Aged Accounts Receivable report. Departments should review the accounts receivable aging report on a monthly basis.

Write-off of Outstanding Receivables

Non-sponsored receivables billed through EFS

Amounts deemed uncollectible after reasonable collection efforts have been taken may be written off. A write-off request may be initiated by the department or by Accounts Receivable Services. The department originating the invoice will be consulted prior to completing a write-off.

The write-off transaction will be processed in the Enterprise Financial System (EFS) by Accounts Receivable Services and a bad debt expense will be charged to the selling department. Write-offs over $500 must be approved by a department finance manager.

If a receivable is subsequently collected from a customer, the collected revenue will be credited to the chartstring that received the bad debt expense.

Sponsored receivables billed through EFS

Departments must pay for costs charged to sponsored projects that will not be collected from the sponsor for reasons of unallowability, unallocability, dispute with or bankruptcy by the sponsor, or other reasons, with non-sponsored funds. Uncollectible sponsored receivables may not be written off directly to a sponsored project.

Specific instructions for Departments and Sponsored Financial Reporting are outlined in Administrative Procedure: Moving Uncollectible Costs to Non-sponsored Programs.

Non-sponsored receivables billed using approved department system

Departments with an approved department system may write-off individual charges of $500 or less. All write-offs should be well documented and must be approved by a department finance manager. For any customer with accumulated write-offs of more than $500 in any given year, please contact Accounts Receivable Services at acctrec@umn.edu.

For individual write-off of more than $500, department should request approval for write-off from Accounts Receivable Services. The request should be made in writing and include the following information: customer name, invoice date, and amount to be written off. The request should include a summary of the collection efforts that have been taken. Requests for write-offs should be e-mailed to acctrec@umn.edu. Accounts Receivable Services will review the requests and provide approval.

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