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I. POLICY

A. Approval of and Responsibility for Accounts Receivable

1. It is a University policy to discourage the use of accounts receivable. In those unusual circumstances where it appears that an accounts receivable procedure should be used, approval will be obtained from the Controller's Office.

2. The accounting and tracking of credit transactions will be the joint responsibility of the originating (selling) department and the accounts receivable section of the Controller's Office. The accounts receivable section will be responsible for maintaining the accounts, issuing monthly statements and issuing past due notices to delinquent customers. The originating department will be responsible for preparing the invoices supplying data to the Controller's Office and assisting as needed to follow up on collections. Write-offs will be charged against the originating department in the year and write off occurs.

B. Allowance for Bad Debts

At the end of each fiscal year, a complete review of all outstanding accounts receivable will be made. From the review, a determination of doubtful accounts will be set up on the books of the University. The above process will apply to all accounts receivable balances of the University, i.e., Bookstore, shop accounts, housing, etc.

C. Interest Charges on Past-Due Accounts

A finance charge will be computed on a periodic rate of 1 1/2% per month (or a minimum of 50 cents for balances under $30) which is an annual percentage rate of 18%. The finance charge will be applied to all University accounts receivable where the balance has been on the books of the University 30 days or longer. Interest income accrues to the central University funds.

In the event the account is written off as an uncollectible account, the interest that applies to the account will be charged to the originating (selling) department unless that department or specific fund has accumulated sufficient working capital to be recognized as fully self-supporting.

II. PROCEDURE

A. Handling of Accounts Receivable

1. Invoices will be originated by individual departments on a standard three-part invoice form obtainable from Stores.

2. Each invoice will be assigned an invoice number consisting of two (2) numerals representing the calendar year, an alpha character indicating the department, and four (4) numerals indicating the numeric sequence of the invoice. At the time the invoice is prepared, the originating department will be required to obtain a sequential invoice number from the accounts receivable section of the Controller's Office.

3. Each customer will receive a copy of the invoice -- the originating department will receive one copy, and the third copy will be marked with the cost code to which the money is to be credited. The receipt copy is to be sent to the Controller's Office.

4. The Controller's Office will assign a customer number to each invoice, input the information into the computer system and review the cost code used on the receipt copy of the invoice.

5. The invoice will be forwarded to the Cashier's Office and retained in a permanent numeric file. The accounts receivable section of the Controller's Office will retain EDP records of the invoice charges.

6. Payments will be received by the Cashier's Office and entered into the accounts receivable system through data input from the cashier. The cashier will utilize the customer invoice number placed on the receipt.

7. On approximately the 15th of each month the computer will produce and forward to the accounts receivable section monthly statements which will be mailed to all the accounts receivable customers. The statement will show balances due.

B. Past Due Accounts

1. Notification of intent to turn past due accounts (all accounts over 90 days) over to a collection agency, if not cleared within fifteen (15) days, will be printed on the delinquent customer's statement. Governmental agency customers will be exempt from this policy. At the time the notification is sent, a separate file for each customer so notified will be established. All information affecting that customer and his account will be maintained in the newly formed files.

2. The following months' accounts which the customers have made no effort to clear will be reported by the accounts receivable section to the originating department. The originating department will initiate paper work to either turn the account over to a collection agency, recommend the account be written off as uncollectible or take other appropriate action. When the completed paperwork is returned to the accounts receivable section, the recommended action will be reviewed and appropriate action taken in the circumstances.

3. Write-offs will be requested by the selling department, recommended by the central accounts receivable section and authorized by the controller. Write-offs will be charged back to the originating department.

4. A permanent file of all accounts turned over to the collection agency will be maintained in the Cashier's Office and the accounts receivable section.