Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL

FINANCE
30.56
Revised 9-13
University Receivables
335-9651

Accounts Receivable

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POLICY

Each University department administering accounts receivable is responsible for following University and state of Washington regulations for documenting monies owed and monies actually received.

Definition

Receivables are defined as amounts due, which are expected to be collected from private persons, businesses, agencies, funds, or other governmental units.

Immediate Payment

Whenever possible, a vendor department is to collect payment at the time goods or services are provided to non-University clients. The Controller's Office specifically recommends that vendor departments immediately collect payment for the following types of transactions:

Computer System

The University's official Billing Receivables System (BRS) provides automated receivables processing for University departments. See 30.57 for information about accessing and using BRS.

If the BRS does not meet the business requirements of a department, the department may request that the Controller's Office approve the use of an independent receivables system.

Applicability

The following procedures apply to all University departments providing goods and services to non-University clients on a credit basis.

NOTE: For purposes of this procedure, the term "non-University client" includes:

BILLING/COLLECTION SYSTEM

Invoicing

At the time of the sale, the vending department issues a sequentially-numbered invoice to the client. BRS users issue WSU Invoices. Other departments must use invoice forms which have been approved by the Controller.

Establishing a Customer

When a customer first purchases from the vending department, the vending department provides the following information to University Receivables:

Definition

Code

Private persons or businesses

0

Federal government

1

State of Washington agencies (except WSU)

2

Other foreign, state, or local governments

3

Recording Receivables

The vendor department must maintain a written record (subsidiary ledger) of outstanding receivables. This ledger is to be maintained and updated on an open-item basis, i.e., an entry must be included for each outstanding amount due. NOTE: BRS provides this ledger for user departments.

The vendor department record must include the following information for each receivable:

The vendor department should periodically purge the ledger of items which are no longer outstanding, moving items which have been paid to a historical file for retention purposes.

Payment Due Dates

The vendor department routinely notifies clients when payments are due.

The department issues an invoice at the time the goods and services are provided or prior to an installment payment coming due. The invoice indicates the date payment is due or indicates that payment is due upon receipt of the invoice.

Long-Term Receivables

The vendor department must obtain the Controller's specific approval before establishing due dates more than 12 months from the current date.

PAST-DUE AND DELINQUENT ACCOUNTS

The vendor department is responsible for vigorous pursuit of all past-due and delinquent receivables.

Past Due Accounts

Accounts with unpaid balances 1 to 90 days past the due date are considered past due.

The department is to issue a minimum of two reminder notices between 30 and 90 days after the bill becomes past due. (Notices to debtors with account balances of less than $5 are not required.)

These notices request immediate payment of the outstanding balance and notify the debtor of additional actions which may be taken if the debt is not paid.

When warranted, the vendor department should make additional collection efforts, e.g., telephone contacts.

Collection--Delinquent Accounts

Accounts with unpaid balances more than 90 days past the due date are considered delinquent and are subject to collection procedures.

Collection procedures include intensive efforts to recover amounts owed. (Collection procedures are not required on accounts with a remaining balance of less than $25.)

Collection Area

The vendor department may refer uncollected receivables to the Collection Area of University Receivables when:

NOTE: This service is automatically provided for invoices which are processed through BRS.

Once an account has been referred to the Collection Area, departmental efforts to collect the money should cease. Double collection efforts may be considered as harassment of the debtor.

The vendor department is to refer all subsequent debtor contacts to the Collection Area.

Collection Area Actions

Actions by the Collection Area may include, but are not limited to:

NOTE: When a receivable is collected 150 days or more past the due date, the Collection Area charges the vendor department a collection fee of 25 percent of any monies collected. The collection fee charge appears on the department's online Account Balances/Detail or monthly Budget Statement. See 30.07.

Referral

Before referring an account to an outside collection agency or seeking redress through the court system, the Collection Area notifies the vendor department. NOTE: The contracted collection fee for first-time outside agency referrals is 33 1/3 percent of monies collected. The collection fee for second-time outside agency referrals and legal action accounts is 40 percent of monies collected. The department is responsible for paying this fee.

WRITE-OFF PROCEDURES

The vendor department may request that uncollectible accounts be written off if the billing and collection procedures as detailed in this section have been exhausted.

Write-Off Criteria

Several criteria may justify write-offs:

Other criteria to be considered include the type of debt, how long the debt has been outstanding, and debtor's status.

Review and Approval

The vendor department is responsible for requesting approval to write off uncollectible accounts at least quarterly. In each request, the vendor department indicates the collection procedures followed and the reasons the accounts are considered uncollectible.

University management reviews all write-offs in accordance with the following guidelines:

Write-Off Entry

After administrative approval, the vendor department enters the write-off into the department's receivables system. The entry includes the following information:

CENTRAL REPORT

Each vendor department maintaining receivables systems other than BRS is responsible for reporting receivables information to the Controller's Office on the central report. The central report is due annually as required by the state of Washington's Office of Financial Management. The Controller's Office notifies vendor departments when reports are due.

The report includes the following information:

The vendor department routes the report to the Controller's Office.

RECORDS RETENTION

Records of receivables are to be retained in accordance with the All-University Records Retention Schedule. See 90.01.