Chapter 2. Accounting Services
As a matter of sound business practice, it is sometimes necessary that services and/or materials be sold on a credit basis, resulting in the creation of accounts receivable for the selling agency. The value or success of such a business practice is determined by a number of factors, some of which are the proper selection of persons/agencies to whom credit is granted, the amount of control exercised over the accounts, and the ultimate collection of cash due from the accounts.
Whenever possible and practicable, it shall be the position of the University to obtain cash as immediate settlement for services or materials sold to a person or agency. Cash must be immediately obtained in all cases for transactions which are minor in amount to reduce the additional record keeping which is inherent with an accounts receivable system.
All employees of the University are responsible for promptly reporting any sales on a credit basis to Accounting Services unless the department in which the employee works has been delegated the authority, by this policy, to invoice the person or agency that has received the service/material.
Employees should contact the Accounts Receivable office for credit information on non-business accounts prior to delivery of any products or services.
Unless specifically authorized to do so in this policy, no department, office, or division of this University may prepare any billings to any agency or person for services or materials sold. For the purposes of this policy, billing is defined as an invoice in any format, a letter billing, verbal billing, or any other format which might be conceived.
All invoice formats shall be approved by the controller.
Payments on all invoices are to be directed to Accounting Services.
Terms of payments for all billings issued or to be issued by the University shall be prescribed by the controller. Normal terms of payment are:
In the event payment on any invoice is misdirected to an office other than the one authorized to receive it, the receiving office must deliver the payment to the proper recipient as soon as practical so improper collection action will not be initiated.
All accounts receivable are to be promptly recorded in the books of accounts by Accounting Services. This will insure basic control over amounts due the University.
Accounting Services is responsible for follow-up on all accounts receivable which have not been paid in accord with terms of the credit agreement. It may be more effective, on occasion, to have a representative of the department which originally requested a billing to assist with collection efforts. Such aid should be provided, if possible, when requested by Accounting Services.
Guidelines for write-off (cancellation) of accounts receivable are generally as follows:
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