Non-sponsored Centralized Accounts Receivable Policy

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Policy Number:

UW-3077

Old Policy Number:

100

Responsible Office:

Accounting Services, Division of Business Services

University Policy

Rationale/​Purpose:

To comply with State of Wisconsin DOA accounting manual (07-01), through the centralized timely collection of non-sponsored receivables. To minimize the exposure of uncollectible receivables and to increase the integrity of the financial statements through consolidation of receivables and revenues.

Definitions:

Accrual accounting

A basis of accounting that recognizes revenue when earned, and expenses when incurred, regardless of when cash changes hands.

Accounts receivable

An asset that refers to the amount due from a customer for the sale of goods or services, when the goods or services have been delivered to the customer and payment is not received by the seller.

Adjustment

Adjusting the bill should be reserved for errors in amounts invoiced. Such as charging the wrong rate for a service or the wrong quantity ordered.

Bill

A bill is a document created when a sale is made. A bill becomes an invoice when a balance is due. For the purpose of this policy, intra-unit bills (Madison department to Madison department) never become invoices because the bill is paid at the same time the bill is created.

Cancellation

Canceling an invoice should only be used when an error has been made on the bill. An error can include the incorrect customer, contact or location identified on the bill. A duplicate bill for services already invoiced would be a good reason to cancel the bill.

Invoice

A bill becomes an invoice when the bill is delivered to the customer and creates a balance due.

Refund

The process of returning money to a customer as a result of overpayment for goods or services.

Write off

Write off relevant to this policy means that we cannot collect on the outstanding balance for an invoice. Types of reasons for a write off would include a customer in bankruptcy or deceased, or the debt has reached the age where we can legally no longer attempt to collect payment (statute of limitations).

Policy:

Departments will upload bills to SFS using a shared customer file. DoBS will generate invoices from the uploaded bills and process all transactions related to the invoices from that point.

The shared customer file will be managed centrally by DoBS. Payment terms will be established and managed centrally.

DoBS is responsible for the collection of non-sponsored receivables in collaboration with UW-Madison divisions and departments as outlined in procedure 100.4. This includes uploading invoices to third party accounts payable companies. Outstanding balances of any non-sponsored receivables may be referred to either a third-party collection agency or the State of Wisconsin’s Department of Revenue. Wisconsin’s Department of Revenue will be used for collection efforts if the DoBS has a Tax-ID for the customer that can be helpful to the DOR. Otherwise the third-party collection agency will be used.

Forms of payment include check, credit card, ACH and Wire transfers. Credit card fees that result from payments on invoices will be charged to the department for that invoice on a monthly basis.

Any adjustments, cancelations or write-offs will be processed centrally and must include valid explanation and documentation as outlined in procedures 100.3 and 100.4. Write-offs of $1,000 or more will require dean or director and DoBS approval and approval from UW System Administration.

It is the responsibility of the department to correctly charge sales tax on bills per the state of Wisconsin sales tax policy.

GENERAL RESPONSIBILITIES

Division Chief Financial Officer (CFO) – Coordinates the designation of billing specialist(s) for their division and provides oversight and support to the billing specialist(s) in execution of their responsibilities.

Accounts Receivable and Billing Manager – Coordinates rollout of AR/BI modules to campus divisions and provides troubleshooting, reporting, analysis and guidance on invoicing and collection efforts.

Accounts Receivable and Billing Accountant – Responsible for the overall processing of Accounts Receivable & Billing assigned to the University of Wisconsin – Madison. Duties include establishing and maintaining a customer database, training, troubleshooting and to ensure accurate accounting and reporting.

Billing Specialist – Responsible for the departmental functions in the AR/BI module in SFS. Duties include verifying and submitting customer requests as needed, bill generation, and collaborating with the AR/BI Manager and AR/BI Accountant on collection efforts and inquires.

Related UW-Madison Policies:

Sales Tax

Cash Handling 

External References:

State of Wisconsin Accounting Manual 7-01

Policy Administration

Approval Authority:

Assistant Vice Chancellor for Business Services and Controller

Policy Manager:

Director of Financial Information Management

Contact:

Assistant Director of Non-Sponsored Billing & Accounts Receivable -- Tricia Johnson, tricia.johnson@wisc.edu, (608) 890-1328

Effective Date:

06-01-2020

Revised Dates:

06-01-2020

Reviewed Dates:

6/1/2020

Retrieved:

01-29-2022 00:55:26