100.3 Cancelation or Adjustment of an invoice Procedure

Cancelation or Adjustment of an invoice Procedure

Procedure # 100.3
Rev.: 7.1.20
Effective Date: July 1, 2020

Related Policy:Non-Sponsored Centralized Accounts Receivable Policy
Functional Owner: Director of Financial Information Management
Contact: Supervisor Central AR for Non-Sponsored Billing, 608-890-1328, Email: uwmsnar@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

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. This procedure should not be used to write off a debt. For instructions on how to write off a debt, please refer to “Write off and Collection Procedure”. Please review the definitions section of this procedure to help determine which process to use.


II. Who is affected by this Procedure

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.


III. Procedure

The following steps represent the overall process for requesting a cancelation or adjustment of an invoice:

  • Fill out the Invoice Cancel_Adjust Form including your signature and the signature of the reviewing party for your area.
  • Submit form to DoBS via email to: uwmsnar@bussvc.wisc.edu
  • Adjustments and cancelations 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 cancelation 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


IV. Definitions

  • 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).

V. Related Resources


VI. Revisions

Procedure Number

 

Date Approved

 

Revision Dates