UCR Policies and Procedures

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Policy Number:                 200-16                                               
Policy Title:                       Billing and Accounts Receivable Management
Policy Owner:                   Student Business Services
Effective:                            05/01/2006
Date of Last Revision:     07/01/2013
         I.   OVERVIEW:
To provide guidance regarding Accounts Receivable Billing, Collections and Sundry Debt Processing.
A.     SCOPE:
·         Collections for Accounts Receivables
·         Define the requirements for Sundry Debtor Processing and Student Loans Receivables
·         Describe the process for establishing the Sundry Debtor Billing Process
·         Describe the methods of Sundry Debtor Billing
·         Outline the billing cycle
There are authorized and approved sales and service activities conducted on the campus (See UCR Campus Policy Number 300-66.). The wide variety of receivables generated by the various activities of the University results in thousands of individual accounts representing, in total, millions of dollars. In order to effect early conversion of these receivables to cash and minimize credit losses, each campus must maintain a diligent program for managing receivables. The management function consists of granting credit, billing accounts, effecting collection, analyzing outstanding accounts (aging), and providing for bad debts. The University has established the following policy and procedures to meet this need.
     III.  POLICY & PROCEDURES-Accounts Receivable Billing and Collections:
1.     Although cash for authorized sales should be collected whenever possible, credit may be granted in cases where no facilities for cash collection exist or non-collection of cash is deemed to be in the best interest of the University. In these cases, prudence with respect to the credit risk incurred must be observed at the time of transaction.                                                                                                       
2.     Formal arrangements that require the extension of credit beyond 30 days must have the approval of the Vice Chancellor, Business and Administrative Services except when established University policies or regulations specifically provide authorization for such arrangements.
3.     Implicit in the granting of credit by campus departments is the intention that payment will be made in full upon receipt of an invoice.
    The granting of credit is not a primary function of the University of California; therefore, credit will be granted only as follows:
1.     Students Credit is granted to students as required for the administration of fines and the assessment of additional fees that may be determined to be applicable after the student registers. Credit is also granted to students in accordance with existing policies pertaining to student loans and deferred payment of fees.
2.     General public Credit may be granted to the general public (which may include students and employees) by departments that are authorized to provide services or products. These services or products are normally provided as an adjunct to instruction or research activities.
3.     Governmental units, foundations, and medical financial sponsors credit is automatically extended to governmental units, foundations, and medical sponsors during the time claims for reimbursement are outstanding. Diligence must be exercised to ensure timely billing and collection efforts to minimize the receivables arising from these claims. 
The department providing the service or product initiates billings to individuals and organizations. Billings must occur via the sundry debtor process. Student Business Services/Cashiers is responsible for maintaining the accounts receivable, billing, and collection of these accounts for UCR. (Note: Billing related to contract and grant funds is performed by the Accounting Office - Extramural Funds section.)
The campus uses an integrated central billing system to manage billing and accounts receivable (SIS Billing/Receivables module). If a department wishes to explore another system they must receive written approval from the Vice Chancellor, Business and Administrative Services.
Method I:
For those departments who wish to input their department sundry debtor bills on-line manually, the following procedure must be followed:
1.      Must have access to the mainframe integrated system SIS (Please see Computing & Communication’s [C&C] website re: gaining access to UCR applications at http://cnc.ucr.edu/passwords/.).
2.      Receive appropriate training on using the Billing Receivables (B/R) on-line module from Student Business Services personnel. Please have your supervisor send an e-mail with your userid to Maria.Garza@ucr.edu to schedule a training time.
3.      Obtain security access to appropriate screens in the B/R module for data entry through Student Business Services. (SBS will grant access once training is successfully completed).
Method II:
For those departments who wish to do their sundry debtor billing by using tape/electronic transfers, the following procedure must be followed.
1.      Approval to do tape transfers to the integrated system SIS B/R module must be granted through Student Business Services and Computing.
2.      Development of specifications must be written in accordance to meet requirements by Student Business Services and Computing.
3.      Appropriate audit trails must be implemented.
Method III (Invoice Billing):
In special circumstances, a department may receive approval to use Invoice Billing. This would provide departments the ability to send invoices to their customers rather than utilize the normal paper billing statement that is available through SIS B/R module. Payments would be collected at the Main Cashier’s Office. Late fees are assessed when an account becomes 60 days past due.
The following procedure must be followed:
1.      For departments who wish to do Invoice Billing, approval must be granted from SBS. An email must be sent to sbsofc@ucr.edu requesting approval to perform invoice billing and the justification to perform invoice billing rather than Method I or II.
2.      Must have access to the mainframe integrated system SIS (Please see Computing & Communication’s [C&C] website re:  gaining access to UCR applications at http://css.ucr.edu/Accounts_Passwords/Accounts.htm.).
3.      Please refer to Step 2 and 3 under Methods of Billing, #1 above.
4.      Departmental Invoices must be reviewed by SBS to ensure that all pertinent information has been included on the invoice to be used.
A subcode identifies the type of transaction and the general ledger account to which it will feed appropriately. To establish a new subcode:     
1.      Direct a memo or e-mail to Jerry Monahan in the Accounting Office (Jerry.Monahan@ucr.edu). The subject line should state "New Subcode Establishment Request.”
2.      List the Account/Activity/Fund/Function/Cost Center/Project Code (FAU) that should be associated with the new subcode. The Cost Center and Project Code are optional. The FAU for these subcodes should normally be associated with income in the sales and service area.
3.      Provide a reason for requesting the new subcode. For example, who will be billed and what kind of service are being performed.
4.      Provide your department 2-character code (Cost Center prefix).
5.      Provide a description for the requested subcode. For example, LATE FEE - STU BUS SVCS.
6.      Provide the name and telephone number of a person that can be contacted if additional information is needed.
7.      List other subcode numbers you currently have so the new subcode can be established close to your existing subcode numbers.
After reviewing the information, the Accounting Office will forward approved requests to Student Business Services for establishment in SIS.
Originating Department:                  
1.      Must assure that appropriate revenue account is established.
2.      Ensure that an allowance is established for charge back of uncollectible debts to be charged back to FAU that received revenue.
3.      Must request any new subcodes needed for new types of charges through Accounting.
4.      Individual who is responsible for entering transactions in SIS must ensure accuracy and timeliness of billing, credit, or cancellations of account.
5.      Review monthly SIS paid in full (BRS039) and outstanding receivables report (BRS038) on departmental accounts. This will alert departments to any accounts that are outstanding through SIS and may become potential chargebacks to their revenue account.
6.      Reconcile departmental charges billed through SIS to general ledger on a monthly basis to ensure all revenue billed is properly recorded.
7.      Must maintain any backup documents needed to prove accuracy or legally enforce the charge billed.
Student Business Services:
1.      Responsible for maintaining integrity of SIS and monthly billing statement to account holders.
2.      Responsible for responding to individual questions from account holders or departments and assist in problem resolution.
3.      Responsible for monthly reconciliation of total SIS receivables to general ledger.
4.      Responsible for aging of accounts and charge back to departments.
5.      Responsible for collection activities performed on accounts.
1.      Responsible for processing payments through SIS.
2.      Monthly reconciliation of payment transactions from SIS to the general ledger.
3.      Assist account holders with questions and problem resolution.
1.      Responsible of accuracy of FAU’s that departments are requesting be used to process transactions via subcodes onto SIS.
2.      Oversight of transactions that feed from SIS into general ledger.
Reports are generated on the last business day of the month and are available online through iReport (http://cnc.ucr.edu/ireport/) in the general SIS reports repository. Please contact your departmental SAA for access.
Each department billing on SIS should receive the following standard monthly reports by subcode:
1.      Current Activity (BRS043AX) – Shows current month’s activity that was billed by the department. Departments should review and compare to general ledger to ensure that all charges billed on SIS are properly recorded and appear in general ledger.
2.      Bills Outstanding (BRS038) – Lists charges that are still outstanding and have not been paid by account, subcode, amount, and date billed. Departments should review these accounts monthly for potential chargebacks.
3.      Bills Paid (BRS039) – Lists bills that were paid that month by account, charge billed, and amount.
If a department has need for a report separate from the standard reports listed above, a request can be submitted to C&C.
Billing Statements are generated on the 16th of each month (if the 16th falls on a weekend or holiday, then will occur on the following business day) and will show all new activity since last billing date. The bill is due on the 15th of the following month after billing has occurred (if the 15th falls on a weekend or holiday, then will be due the Friday before).
1.      Late fees of $12.50 per month will accrue on unpaid bills. If a department cancels a debt and late fees have accrued, the department will be charged for those late fees that have accrued. Departments that use Method III for their billing and use their own invoice rather than use the SIS generated billing statement will be responsible for applicable late fees that are assessed and not collected. Invoice billing assesses a $12.50 late fee after 60 days. Please note late fees are not charged on government or foreign accounts which are shown by external indicator of “G” or “F” on SIS.
2.      Returned paper or e-checks will be assessed a $20.00 returned check charge and a hold will be placed on the account until the original check amount and returned check charge are paid in full.
SBS recharges all departments who bill on SIS for mail and printing costs associated with mailing statements. This is done twice a year (usually in January and May) and is calculated using actual mail and printed costs incurred divided by a weighted average of the volume of activity billed by all departments who billed on SIS during the period of time associated with the charge.
1.      Chargeback of Sundry Debtor Bills:
There is no central reserve for write off of bad debts. Therefore, if the bill cannot be collected, it will be charged back to the departmental account previously credited. Departments should plan for this in their budgeting process. Chargeback will occur when there has been no payment for a period of 6 months or more, and in the case of a student, they are no longer enrolled at UCR. SBS charges accounts back to departments twice a year (usually May and November) and will send a letter to the department listing the accounts and amounts that will be charged back. Please note:  Departments who invoice bill their accounts rather than send a billing statement through the B/R system will have bi-annual review of their accounts by SBS to ensure that timely payments are being made. If payments are not being made within a 6 month period, SBS will place those accounts in the normal billing cycle so the customer may receive regular monthly billing statements through the B/R system. This will ensure that customers have gone through the due diligence of receiving billing notifications, before a charge back to the department is initiated.                                                                 
2.      Collection Efforts:
While the account has been charged back to the department, Student Business Services will continue to try to collect on the debt. A hold will be placed on the account to prevent the debtor from receiving any transcripts or services from the University. All accounts over $50 with a social security number on file will be referred to an external collection agency and accounts over $10 will be submitted to the California State Franchise Tax Board. Student Business Services will credit the department’s account for 50% of any funds recovered after collection costs have been paid.
Please note that if an account has been placed with an external collection agency and finance charges have been assessed and it is then discovered a department is at fault for not canceling the debt, in addition to late fees, any finance charges incurred will be charged back to the department.
All matters related to student loan collection are handled by the Collection Department, Student Business Services. There are three categories of student loans: Student Emergency, Short Term, and Long Term. Each loan involves a promissory note. Student Emergency and Short Term loans are due and payable while the student is still on campus and have an established repayment schedule. If a student leaves campus and has not repaid an Emergency or Short Term loan, the account will be sent to an external collection agency or the California State Franchise Tax Board for collections. Long Term loans are converted to collectible status when the student borrower leaves campus.
All notices received by the University relating to bankruptcy proceedings (from individuals, businesses or the court) should be forwarded to Student Business Services, Collection Department. Please see Campus Policy 200-02 for additional information.
       VI.    REFERENCES
Please send questions or comments via e-mail to sbsofc@ucr.edu.
1.     Q: When does a department receive their income from charges billed on SIS ?
A: Most departments will see their income post to their general ledger account the next day after posting a charge to SIS .
2.     Q: How do I get an account setup on SIS if I want to bill a person/organization that does not already have an account on SIS ?
A: Please send an email to sbsofc@ucr.edu to have an account setup. Please be prepared to provide the name and address of the individual or organization.
3.   Q: Should departments send their own invoices?
A: Please refer to Billing Method III up above.
4.   Q: Can I accept payments in the department office?
A: All students should be directed to the Main Cashiers Office or to GROWL to make their payments. If a department receives a payment in the mail that is for an account on SIS , it should be sent to the Main Cashiers Office immediately for posting.
5.   Q: What if my department does its own invoicing, how does it get recorded to SIS ?
A: Departments doing their own invoicing are still responsible for entering the charges on SIS .
       IX.   ACRONYMS:
·         B/R                                                 Billing Receivable
·         C&C                                               Computing and Communication
·         FAU                                                Full Accounting Unit
·         SBS                                               Student Business Services
·         SIS                                                Student Information System
Charge Back:  A sundry debt charge that has been billed on SIS and has become uncollectible and is charged back to the originated department’s revenue account
Full Accounting Unit (FAU):  Fields and values (codes) used to record, control, and summarize all budgetary and financial transactions.
General Ledger:  This is where all financial transaction information is recorded into appropriate campus department accounts.
Student Information System (SIS ):  This is the campus receivable system for transactions to be processed on. This provides monthly billing statements to students, other individuals, and a variety of entities that a department may bill for services or miscellaneous items.
Subcode:  An identifying code which represents a type of transaction and appropriate corresponding FAU’s that will feed to the general ledger from SIS .
Sundry Debt: A charge incurred for services or products by a student or other individual/entity and billed and collected through SIS .