Policy FN02 CHARGE SALES AND BILLING

Policy Steward:  Office of the Corporate Controller

Contents:

  • Purpose
  • Authority
  • Guidelines
  • .... Billing Terms
  • .... Areas of the University Which Have NOT Been Authorized to Maintain Accounts Receivables
  • .... Areas of the University Which HAVE Been Authorized to Maintain Accounts Receivables
  • Credit Adjustments
  • Uncollectible Charge Sales
  • .... For Bursar's Receivables
  • .... Billed Under Approved Departmental Receivables
  • Further Information
  • Cross References

  • PURPOSE:

    To outline the University's policy on the billing and recording of charge sales of materials and services by departments of the University to persons or organizations external to the University's budget system.

    See Policy FN14 for services that are applicable for University billings. Refer to Policy FN16 for interdepartmental billings. For credit card charge sales, see Policy FN07.

    AUTHORITY:

    All areas of the University have the inherent authority to bill for materials and services rendered provided that published University criteria are followed. However, the authority to maintain accounts receivable and collect payments on such receivables is granted only when there is a justifiably compelling reason to do so.

    Several areas have been granted an inherent right to maintain receivables. They are: Bursar (general receivables), Bursar (ISIS - student receivables), Financial Officers at Non-University Park locations, the Office of Research Accounting (receivables for sponsored activity), and the Hershey Medical Center Finance Office (Hershey Medical Center patients).

    Other areas may be granted a right to maintain receivables by their budget executive and Financial Officer.

    GUIDELINES:

    The University has established general basic minimum performance criteria applicable to any area granted the authority to maintain its own receivables. These criteria appear in the University procedure CR2066, "Guidelines for Accounts Receivable." That procedure also indicates the steps to be taken to procure the authority to maintain accounts receivables.

    BILLING TERMS:

    Billing terms of the University are `net payable upon receipt.'

    Areas of the University Which Have NOT Been Authorized to Maintain Accounts Receivables

    For areas of the University which have NOT been authorized to maintain its own accounts receivable, all materials and permitted services (per Policy FN14) that are sold on a charge sale basis must be billed via CARP (Central Accounts Receivable Portal).

    All checks received in payment of a billing must be made payable to The Pennsylvania State University.

    Payment must be mailed (or taken) to the Office of the Bursar. In the event that payments for charge sales are received at the department initiating the Invoice, such payments must be taken to the Bursar at once, without preparing a Report of Cash Receipts

    Areas of the University Which HAVE Been Authorized to Maintain Accounts Receivables

    For areas which HAVE been authorized to maintain their own receivables, all materials and permitted services sold on a charge sale basis must be billed on the "A" Invoice (or an invoice meeting the requirements delineated in procedure CR2066).

    All charge sales are reported to the University by the area authorized to maintain its own receivables when the remittances are received and the ROCR is prepared by the department.

    All checks received in payment of a billing must be made payable to The Pennsylvania State University.

    Payments must be mailed (or taken) to the area designated for processing accounts receivables. An area may have various departments generating invoices and a central department maintaining the receivables. The payments are always to be remitted to the area authorized to maintain its own receivables.

    CREDIT ADJUSTMENTS:

    Credits covering the cancellation or adjustment of charges previously billed are to be reported in the same manner as the original charge sale. Details on the credit invoice should include the reason for the credit and a reference to the original billing.

    UNCOLLECTIBLE CHARGE SALES:

    FOR BURSAR'S RECEIVABLES

    In the event that a charge sale processed through the Bursar is deemed uncollectible, the Office of the Bursar will request that the originating department issue a "CREDIT" to offset the existing charge. If a department refuses to or cannot issue a "CREDIT," the Office of the Bursar will initiate a Journal Voucher to charge back the corresponding department and fund number that was credited on the original invoice. An invoice will be considered uncollectible if:

    BILLED UNDER APPROVED DEPARTMENTAL RECEIVABLES:

    The area should make every effort to pursue all invoices in order to receive all the revenue due the department. However, if it is evident that there will be no remittance from a customer, all services should be withheld until all invoices (current, past due, and those which may have been written off of the local receivables) have been paid. Since these sales are not credited to the department's budget until a payment is processed, there is no central documentation to institute.

    FURTHER INFORMATION:

    For questions, additional detail, or to request changes to this policy, please contact the Office of the Corporate Controller.

    CROSS REFERENCES:

    Other Policies in this Manual may have specific application and should be referred to, especially;

    Central Accounts Receivable Portal (CARP)

    FN07 - Electronic Payments - Credit Cards (formerly Credit Card Sales),

    FN14 - Use of Tangible Assets, Equipment, Supplies and Services,

    FN16 - Interdepartmental Transactions, and

    Procedure CR2066 - Guidelines for Accounts Receivable.


    Effective Date: September 23, 2014
    Date Approved: September 22, 2014
    Date Published: September 23, 2014

    Most recent changes:

    Revision History (and effective dates):

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