Operating Procedures Manual

2.11. Credit and Collections

General Information

This section contains policies and procedures relating to the processing of credit sales, the collection of monies from debtors, and related functions.

2.11.1. Credit Sales

General Information

Credit management involves decisions concerning the extension of credit to persons, businesses, and other organizations which transact business with the University. The primary concerns in such a program are: protection of the investment in receivables, timely collections, and the maintenance of accurate, timely records for credit transactions. The decision to extend credit by most business enterprises involves consideration of the revenues to be gained from credit sales against costs of granting credit (time value of money, collection costs, and risk of losses). The University is not unlike those business enterprises in many respects except that the additional revenues to be gained by permitting credit is not necessarily a primary consideration, since such actions are incompatible with the mission of the University.

A report will be run daily listing all pending vendor payments for those customers that have outstanding receivable balances. If the vendor is a student, the active student receivables will be credited. If the vendor is an individual (non-business, non-student account), Accounting Services will deduct the amount owed from the outgoing payment. If the vendor is a regular business customer with a good repayment history, Accounting Services will not deduct the outstanding receivable balance. If it is 90+ days delinquent, Accounting Services will first telephone the vendor, and if not resolved, then deduct the amount due from the payment.

Policy

The terms of all credit sales, when authorized, shall be established by the controller. There shall be no deviations from set terms of sales without the written consent of the controller.

This policy does not apply to the payment of tuition, fees, room/board payment, or loan repayments by regularly-enrolled students or former students holding Perkins loans and/or institutional loans.

The University requires up-front payments in full from recipients receiving the benefit of services and/or goods sold by the University, whenever possible. Certain exceptions must obviously be permitted, and are outlined below:

1. Banquet/Food Service Sales

On occasion, it may be feasible for various University food service units to provide banquet services for non-University entities.

Any person or organization requesting this type of service from a University organization will be billed by Accounting Services on a net 30-day payment basis. A 50% prepayment may be required.

2. Pro Shops

Sales of pro shop items at the Golf Course, Ski Hill, University Images, and Tennis Center are generally on a cash basis. Limited credit sales may be made and will be billed by Accounting Services on a net 30-day payment basis.

3. Other Services

Other services offered on a credit basis (advertising, seminar fees, Library photo duplication services, sale of various publications, etc.) will be billed by Accounting Services on a net 30-day payment basis. Whenever such a sale represents the sale of a material item, a copy of the invoice is to be included with the packing slip for the shipment.

Procedure

When making a credit sale, do the following:

1. Complete a Request for Invoice form, available from Accounting Services, or from the Web site <http://www.mtu.edu/fso/forms/dept/>, by filling in the following information:


1. The department providing the service.


2. Phone number of department providing the service.


3. The organization receiving goods and/or services.


4. The contact person, if there is a specific one.


5. The vendor's phone number with the area code.


6. Mail Attachments: If attachments are to be mailed with the invoice, check box.


7. The number of items being filled.


8. A very brief description of the service/item.


9. Fill in Index, Organization Code, and Account Code -- refer to BANNER index.


10. The total amount to be billed.


11. Signature of person requesting invoice.

NOTE: Non-Research Invoices under $50.00 will not be processed.

2. If a Web form, print out the form and have the person requesting the invoice sign the form.


3. Make a copy of the Request for Invoice and cover sheets for department records.


4. Forward the Request for Invoice with attachments to Accounting Services.