Non-Sponsored Centralized Accounts Receivable

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Policy Number:
UW-3077
Old Policy Number:
100
Responsible Office:
Accounting Services, Division of Business Services

University Policy

Rationale/​Purpose:

In compliance with the State of Wisconsin Department of Administration (DOA) accounting manual (07-01), through centralized and timely collection of non-sponsored receivables which minimizes exposure and increases the integrity of financial statements.

Definitions:
Accrual accounting
A basis of accounting recognizing revenue when earned, and expenses when incurred, regardless of when cash changes hands.
Accounts Receivable (AR)
An asset referring 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 document created when a sale is made that becomes an invoice when a balance is due.
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 document that typically indicates the products, quantities, terms, and agreed prices for products or services the seller has provided the customer.
Non-Sufficient Funds
The commonly used term when a credit card or check payment is declined. This could be the result of many different reasons such as insufficient funds or a closed bank account.
Refund
The process of returning money to a customer due to overpayment for goods or services.
Write off
Partial removal of the book value of a destroyed or obsolete asset, or an uncollectible sum, from the account books by reducing it to zero. Written off invoice balances cannot be collected. Types of reasons for a write-off would include: a customer in bankruptcy, a customer is deceased, or the debt has reached the age where UW can legally no longer attempt to collect payment (statute of limitations)..
Policy:
  1. Shared Customer File
    1. UW System Shared Services maintains a customer file that is utilized by UW-Madison Accounts Receivable (AR).
    2. The shared customer file is managed by UW-Madison Division of Business Services (DoBS) in collaboration with UW System Shared Services. Payment terms will be established and managed centrally.
    3. Departments must upload invoices (e.g., one-time or installment) to Workday for processing by DoBS and transmission by an automated nightly process. For purposes 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.
    4. Departments may request the addition of or modification to a customer profile in the shared file. DoBS will review each request to ensure compliance with export control (e.g., Foreign Assets Control Regulations).
      1. To add a new external customer, a department must follow the Create Customer Profile job aid or submit the Customer Inbound Enterprise Interface Builder (EIB).
      2. To modify existing customer information, a department must follow the Edit Customer Contact Information job aid or submit the Customer Contact Inbound EIB.
    5. Payment terms (e.g., due dates, payment methods, penalties for late payments) are established and managed centrally.
      1. The standard payment term is Net 30.
      2. Payment methods include checks, credit cards, Automated Clearing House (ACH), or wire transfers.
      3. Only DoBS may approve exceptions to payment terms.
  2. Adjustments and Cancellations
    1. Adjustments are reserved for errors in amounts invoiced (e.g., charging an incorrect rate for a service or ordering an incorrect quantity of goods).
    2. Cancellations are reserved for errors on the bill (e.g., duplicate bill or incorrect customer, contact, or location.
    3. Adjustments and cancellations must be processed centrally and must include valid explanation and documentation as outlined in UW-Madison Accounts Receivable Procedures 3077.3 and 3077.4.
  3. Write-Offs and Collections
    1. DoBS is responsible for the collection of non-sponsored receivables in collaboration with UW–Madison departments as outlined in 3077.4 - Write-off and Collection, including invoices to third-party accounts payable companies.
    2. Outstanding balances of any non-sponsored receivables may be referred to:
      1. The State of Wisconsin’s Department of Revenue when DoBS has a Tax ID for the customer.
      2. A third-party collection agency when a TaxID for the customer is not available.
  4. Declined Payments
    1. When DoBS is notified that a payment has been declined due to non-sufficient funds (NSF), the payment will be reversed by DoBS.
    2. DoBS will apply an NSF fee of $25 to the customer account and send an updated invoice reflecting the additional fee.
    3. NSF fees are used to offset the bank fees UW-Madison incurs. NSF fees are not distributed to departments.
  5. Refunds
    Refunds are available only for eligible transactions processed by DoBS in Workday.
  6. Tax
    It is the responsibility of the department to correctly assess Wisconsin sales tax for goods and services.
Related UW-Madison Policies:
Related UW–Madison Documents, Web Pages, or Other Resources:
External References:

Policy Administration

Approval Authority:
Assistant Vice Chancellor of 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, 07-01-2025

Reviewed Dates:

6-1-2020, 07-01-2025

Retrieved:
07-19-2025 02:34:21