100 Non-Sponsored Centralized Accounts Receivable Policy

UW-Madison Administrative Policy
Policy # 110
Capital Equipment Policy

Effective Date: June 1, 2020
Last Updated: June 1, 2020
Last Reviewed: June 1, 2020
Next Review: TBD

Functional Owner: Director of Financial Information Management
Executive Sponsor: Asst. Vice Chancellor for Business Services
Policy Contact: Supervisor Central AR for Non-Sponsored Billing, 608-890-1328, Email : uwmsnar@bussvc.wisc.edu


Policy Summary

Non-sponsored accounts receivable for both internal and external sales is managed centrally in the Division of Business Services (DoBS). Departments are responsible for creating accurate, timely billings in the PeopleSoft Shared Financial System (SFS) at the time the goods or services have been provided and not at the time the payment is received. Departments must have appropriate financial internal controls when working with accounts receivable. DoBS will manage invoice generation, adjustments, cancelations, write-offs, collection efforts and payment applications in collaboration with UW-Madison divisions and departments.

This policy is not guidance for grants, tuition or student housing revenues.


Policy Application

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.


Rationale

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.


Policy Detail

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.


Supporting Procedures and Templates


Definitions

  1. 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.
  2. Invoice – A bill becomes an invoice when the bill is delivered to the customer and creates a balance due.
  3. 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.
  4. Accrual Accounting – A basis of accounting that recognizes revenue when earned, and expenses when incurred, regardless of when cash changes hands.
  5. 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).
  6. 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.
  7. 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.
  8. Refund – The process of returning money to a customer as a result of overpayment for goods or services.

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.


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