FOUNDATIONS IN UNIVERSITY FINANCE. Non-Student Accounts Receivable

Transcription

1 FOUNDATIONS IN UNIVERSITY FINANCE Non-Student Accounts Receivable

2 Non-Student Accounts Receivable Dominique Bahr Non-Student Accounts Receivable Supervisor Participant Outcomes Identify the difference between Accounts Receivable and Accounts Payable Understand AR s role within the University Distinguish between internal / external customers and customers / vendors Locate AR resources on FMS website INDIANA UNIVERSITY 1

3 What is the difference between Accounts Receivable (AR) and Accounts Payable (AP)? Use your clicker to submit your answer: A. AR pays customers and AP receives vendor payments 25% 25% 25% 25% B. AP pays customers and AR receives vendor payments C. AR receives customer payments and AP pays vendor invoices D. There is no difference A. B. C. D. INDIANA UNIVERSITY 2

4 Non-Student Accounts Receivable BASICS INDIANA UNIVERSITY 3

5 AR s Mission: Ensure the accuracy and integrity of the Non-Student Accounts Receivable balance in the university s general ledger. INDIANA UNIVERSITY 4

6 AR s Goals 1. Centralized payment processing for a decentralized university UA-AR (Bloomington Central Processing) UA-ARCG (Office of Research Admin) UA-CTIN (Clinical Trials) IN-ACCT (Indianapolis Central Processing) 2. Strengthen internal controls as they relate to accounts receivable Segregation of duties INDIANA UNIVERSITY 5

7 AR s Goals, cont d 2. Maintain compliance with university policy and standard operating procedures Policy I-490 & Accounts Receivable system reviews 3. Provide on-going training and support for billing organizations Online and on-site training opportunities INDIANA UNIVERSITY 6

8 Customers & Vendors v. CUSTOMER (Pays IU) VENDOR (IU Pays) INDIANA UNIVERSITY 7

9 Internal & External Customers Internal Customers Another IU department Another IU campus CUSTOMER Not invoiced through KFS-AR External Customers IU Alumni Association Student Organization Any other Non-IU Entity Invoiced through KFS-AR INDIANA UNIVERSITY 8

10 IU Foundation: Internal or External? 1. IU department wants the invoice issued to IUF so Foundation funds can be used to pay the invoice. External 2. IUF is paying the invoice because the good or service benefits IUF only not an IU department. External 3. IU department is invoiced via internal or service billing and then requests reimbursement from their Foundation account. Internal FOUNDATION INDIANA UNIVERSITY 9

11 Accounts Receivable Systems 10

12 Which of the following is an IU-approved Accounts Receivable System? Use your clicker to submit your answer: 20% 20% 20% 20% 20% A. Microsoft Excel B. KFS-AR C. Microsoft Access D. HRMS E. Both A and B A. B. C. D. E. INDIANA UNIVERSITY 11

13 Approved AR System KFS-AR OR Approved Exception INDIANA UNIVERSITY 12

14 Understanding the KFS-AR Module INDIANA UNIVERSITY 13

15 AR Module INDIANA UNIVERSITY 14

16 External Billing and Payment Process Customer orders a product or service Billing organization issues an invoice (IU is the vendor) Customer remits payment AR processes payment Money in the account INDIANA UNIVERSITY 15

17 Customer Database Steps 1. Lookup customer database Make sure Active Indicator is set to Both 2. Update existing customers Manage multiple billing and shipping addresses 3. Create new customers TIP To view invoice and payment history, click the report link next to the customer s record in the search results. INDIANA UNIVERSITY 16

18 KFS-AR Invoices Overview Do not route for approval Customer info is auto-populated Adjustable payment terms (default is net 30) Generates GL entries Discounts and sales tax functionality INDIANA UNIVERSITY 17

19 Payment Process LOCKBOX No entry Check images are viewed online daily CTRL D PORG 8000 Cash C PORG 8015 Unapplied APP D PORG 8015 Unapplied C PORG 8000 Cash D BORG 8000 Cash C BORG 8118 AR Payment is applied to the customer invoice BORG = Billing Org PORG = Processing Org Clearing Acct INDIANA UNIVERSITY 18

20 Payments by Fiscal Year Fiscal Year Payments Processed , , , Payments Breakdown BL, EA, KO, NW, SB, SE 14,666 IUPUI 9,117 Research & Clinical Trials 6,530 *One payment APP doc may be applied to multiple invoices. INDIANA UNIVERSITY 19

21 CUE Timely Payments Steps 1. Correct customer billing information 1. Do you have a direct point of contact? 2. Do you have a customer agreement or purchase order that lists pertinent information or invoicing requirements? 2. Update IU s vendor record 1. Does the customer do business with multiple IU organizations? 2. Does the customer have the correct remittance address listed in their payables systems? 3. invoices whenever possible 1. Saves money and trees! 2. reaches customer almost instantly and delivery confirmation is easily obtained. INDIANA UNIVERSITY 20

22 Must Have Payment Information INDIANA UNIVERSITY 21

23 W-9 Information INDIANA UNIVERSITY 22

24 Correction, Credit Memo, or Write-Off? INDIANA UNIVERSITY 23

25 An international company remits payment by wire transfer. The invoice is short paid by $20 because bank fees are deducted before the payment is deposited into the IU bank account. Which of the following e-docs would be used to close the invoice? Use your clicker to submit your answer: 33% 33% 33% A. Invoice correction e-doc B. Write-off e-doc C. Credit Memo e-doc A. B. C. INDIANA UNIVERSITY 24

26 Ask yourself 1. Does the invoice need to be corrected and reissued to the customer? Invoice Correction 2. Is the unpaid balance due to a return, price adjustment, or an additional cost associated with doing business, i.e. bank fee? Credit Memo 3. Is the customer disputing the invoice, unresponsive or filing bankruptcy? Write-Off INDIANA UNIVERSITY 25

27 Bad Debt Policies Write-Off Policy FIN-ACC-I-500: To ensure that collectible monies are written off in a timely expeditious fashion Collection Agency Placement of IU Accounts FIN-TRE-VI-81: To ensure IU receives the best possible rates and affiliates itself with agencies that have properly trained staff, adequate liability insurance and bonding, and demonstrated collection performance REMEMBER: Writing off an invoice does not prevent you from collecting the money at a later date! INDIANA UNIVERSITY 26

28 FAQs & Training Opportunities INDIANA UNIVERSITY 27

29 Questions? INDIANA UNIVERSITY 28