3077.3 Cancellation or Adjustment of an invoice Procedure

Procedure #3077.3; Rev.: 7.1.20 (Effective July 1, 2020)
Related Policy: UW-3077 Non-Sponsored Centralized Accounts Receivable Policy
Functional Owner: Director of Financial Information Management
Contact: Supervisor Central AR for Non-Sponsored Billing, (608) 890-1328 or uwmsnar@bussvc.wisc.edu


  1. Procedure statement
  2. Who is affected by this procedure
  3. Procedure
  4. Definitions
  5. Related references
  6. Revisions

I. Procedure statement

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.

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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.

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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 – uwmsnar@bussvc.wisc.edu
  • 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

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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).

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V. Related resources

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VI. Revisions

Procedure Number 3077.3
Date Approved July 1, 2020
Revision Dates Jan. 19, 2021 – Procedure number updated from 100.3 to 3077.2 in new numbering system.

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