This procedure for refunding a payment is specifically for transactions that have been processed through centralized Accounts Receivable. Refunds may become necessary as a result of duplicate or over payments made by customers or adjustments and cancellations of invoices that result in over payments.
Any department that sells goods or services for non-sponsored activities should use this procedure.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW-Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched November 2018 and introduced to campus-wide in the following months/years – unless otherwise agreed upon with the Division of Business Services (DoBS).
The following steps represent the overall process for requesting a refund:
If the refund is a result of an adjustment or cancellation of a bill, clearly indicate on the Cancel_Adjust Form that a refund needs to be processed.
Any duplicate payments received by customers will be placed on account for the customer in SFS. DoBS will work collaboratively with departments to determine if the payment needs to be refunded or can be applied to other open invoices.
Weekly, DoBS will request refunds to be processed through Accounts payable.
The following journal entry is a sample of what will post when a payment is refunded:
Debit: Selling Department Accounts Receivable (#6200) XXXX
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.
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.
Refund – The process of returning money to a customer as a result of over payment for goods or services.
Any department that sells goods or services for non-sponsored activities should use this procedure.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW–Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched November 2018 and was introduced campus-wide in the following months/years – unless otherwise agreed upon with the Division of Business Services (DoBS).
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.
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.
Refund – The process of returning money to a customer as a result of overpayment for goods or services.
NSF – Non-sufficient funds. This term is commonly used for when a credit card or check payment is declined. This could be the result of many different reasons such as insufficient funds or closed bank account.
(Non-Sponsored receivable balances will be managed centrally by the Division of Business Services.)
Once an invoice is generated the customer will receive a monthly statement. If payment is not received, the customer will receive dunning letters each month after the due date. Once the invoice reaches 90 days past due, write offs and collection activities will be managed centrally by the Division of Business Services (DoBS) in collaboration with UW–Madison divisions and departments. Write off and collection activities need to be processed timely to ensure responsible stewardship of UW–Madison resources.
Write offs and collection activities are only for External customers. All intra-unit invoices are paid immediately so no collection activities are needed.
Any department that has an invoice outstanding in the SFS AR module and has become a doubtful account.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW–Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched November 2018 and was introduced campus-wide in the following months/years – unless otherwise agreed upon with the Division of Business Services.
The following steps represent the overall process for collection efforts:
Statements will be sent for all outstanding invoices regardless of due date on or around the 15th of the month.
Dunning letters (reminder notices) will be issued by DoBS monthly on or around the 15th. Dunning letters will begin after 30 days past due and will continue to be sent until the debt is cleared.
At 90 days, DoBS will reach out to the billing department to discuss collections. Decision needs to be made at that time if the invoice should be sent to a collection agency, the state of Wisconsin Department of Revenue or written off. If the department is working with the customer on payment, a note can be placed on the account providing detail on the expected date of resolution.
The following steps represent the overall process for requesting a write off:
Write -off transactions are initiated through workflow in SFS. Follow instructions on how to initiate a write-off.
Write-offs over $1,000 require Dean or Director and DoBS approval.
Write offs must include explanation.
The following journal entry is a sample of what will post after a write off has been processed:
Debit: Selling Department contra-revenue account (#9312) XXXX
Credit: Selling Department accounts receivable account (#6200) XXXX
Doubtful account – a doubtful account refers to outstanding balances that we do not expect to be paid. Typically, a doubtful account takes many things into consideration such as age of the invoice, ability to make contact with the customer or bankruptcy notification.
Dunning letter – The word dunning stems from a 17th century word dun which means to demand payment of a debt. Dunning letters are reminder notices that are sent periodically when an accounts receivable balance is past due.
Write-off – Write off relevant to this policy means that we cannot collect on the outstanding balance for an invoice. Examples 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).
Cancelations and adjustments of open invoices are processed centrally in the Division of Business Services (DoBS). Adjustments and cancelations need to include explanation for the adjustment.
Cancellations and adjustments of open invoices are processed centrally in the Division of Business Services (DoBS). Adjustments and cancellations need to include explanation for the adjustment. This procedure should not be used to write off a debt. For instructions on how to write off a debt, please refer to 3077.4 Write off and Collection Procedure. Please review the definitions section of this procedure to help determine which process to use.
Any department that has an invoice outstanding in the SFS AR module and has found an error in the bill.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW–Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched in November of 2018 and will be introduced campus-wide in the coming months/years – unless otherwise agreed upon with the Division of Business Services.
Adjustments and cancellations over $1,000 need additional review from the Dean or Director and DoBS.
DoBS will create a credit memo in SFS. The credit memo will be matched up to the original invoice to correct the balance due. The customer will receive a copy of the credit memo.
The following journal entries are samples of what will post after a cancellation or adjustment is processed:
Internal customer:
Debit: Selling Department Revenue XXXX
Credit: Buying Department Expense XXXX
External customer:
Debit: Selling Department Revenue XXXX
Credit: Selling Department Accounts Receivable (#6200) XXXX
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.
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.
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).
Departments are responsible for entering bills into SFS. The Division of Business Services (DoBS) will generate invoices from the bills entered. Bills can be entered as either one-time or installment. Payment terms generally will be Net30, unless an exception has been approved by DoBS.
Departments are responsible for entering bills into Shared Financial Services (SFS). The Division of Business Services (DoBS) will generate invoices from the bills entered. Bills can be entered as either one-time or installment. Payment terms generally will be Net30, unless an exception has been approved by DoBS.
Any department selling goods or services for non-sponsored activities should use this procedure.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW–Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched in November 2018 and will be introduced campus-wide in the coming months/years – unless otherwise agreed upon with the Division of Business Services.
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.
Invoice – A bill becomes an invoice when the bill is delivered to the customer and creates a balance due.
UW–Madison Non-Sponsored AR and Billing has a shared customer file that is managed centrally by the Division of Business Services (DoBS). Departments can request new internal or external customers by submitting the Customer upload file. Customers can have multiple contacts and locations. Modifications to existing customer information including additional contacts or locations should be requested through the uwmsnar@bussvc.wisc.edu mailbox. DoBS will review each customer request to ensure compliance with export control lists such as OFAC.
Any department that is using Billing and Accounts Receivable modules in SFS for invoicing to non-sponsored customers either within the UW–Madison community or externally.
The SFS Accounts Receivable and Billing System is currently being rolled out to UW–Madison departments for all non-sponsored accounts receivable, including internal and external customers. The use of SFS for non-sponsored billing and receivables was launched in November of 2018 and will be introduced campus-wide in the coming months/years – unless otherwise agreed upon with the Division of Business Services.