0 External Billing Procedures: Information Session.
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Transcript of 0 External Billing Procedures: Information Session.
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External Billing Procedures: Information Session
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Agenda
Introduction 5 minutes
Topic 1: Why is the University Implementing the Cash and Billing Policy?
5 minutes
Topic 2: Billing Procedures Key Points 30 minutes
Topic 3: Question and Answer 15 minutes
Next Steps 5 minutes
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Logistics
Participate Ask questions Turn off cell phones One person at a time Location of washrooms Emergency procedures
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Session Objectives
At the completion of this session, you will be able to:– Explain why the University is implementing the new Cash and
Billing Policy– Explain the key points within the External Billing procedures– Manage and process invoices effectively and efficiently– Explain where to go for assistance and help on the policy and
procedures
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Session Structure
Reviews/Questions/Answers
Presentation
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Why is the University implementing a new Cash and Billing Policy? Auditor General’s Report
– Address potential fraud issues– Provide clear guidelines and proper
controls to ensure employees are not placed in a harmful position
Decentralized processes– Processing of invoices is managed in a
variety of ways– Results in lack of internal controls– Results in invoices not being processed
correctly – Increases AR effort in matching payment
and invoice
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Why is the University implementing a new Cash and Billing Policy? Clarify accountability Implement best practices Improve internal controls Ensure customers are credit worthy Ensure the University is compliant
with legislation Create efficiency through
standardization of processes and procedures
– University invoice format standardized
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How do these changes impact me?
You may need to:– Ensure you are aware of the
changes and new procedures and have a clear understanding of your role and responsibility
– Communicate to your Department staff the implications of the policy
– Update your internal processes to align with the policy and procedures
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Topic 2: Key Points
Invoicing Approval of Invoices Granting Credit Cost Recovery Responsibilities of a Billing Unit Wire Payments Collections
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Invoicing
All billing / invoices are to be processed through the Finance, Supply Chain Management and Research (formerly PeopleSoft) system (FSR), Billing Module
Key points– Word documents or manual invoices are not
an acceptable format– If billing outside of FSR in another system,
contact the AR Department– Exceptions: Tuition, Donations, Retail Sales
and approved exceptions
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Approval of Invoices
Department Heads– Individual with the authority for approval (e.g., Manager,
Researcher, etc.)– Approves all invoices created for Faculty / Department
Two methods– Recorded on invoice’s supporting documentation
• For example: Signed Contract, PO Document
– Documented on a pro forma invoice (printed copy of invoice prior to invoice being set to ready in FSR)
• Applicable supporting documentation attached to approved pro forma invoice
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Granting Credit
Department chooses to invoice– Customer rather than obtain payment at
time good / service, or– When a recoverable cost is paid
Decision to extend credit rests with the accountable Department Head
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Granting Credit
Department / Department Head responsible to– Determine credit worthiness of that customer– Be responsible for associated credit risks
• Charges to be charged to Department bad debt account
– Notify AR of any changes to customer information
Only those authorized by AR may grant credit to a customer
– Request submitted in writing to Accounts Receivable using the Request for New AR Customer/Change in AR Customer Information form
• New customer is created in FSR so that the invoice can be processed properly
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Cost Recovery
With a Markup: If amount is > amount paid
= recovery with a mark-up (sale)
GL account credited must be Revenue account and not an expense account
GST is charged as it would be for a normal sale of good/service
With a Markup: If amount is > amount paid
= recovery with a mark-up (sale)
GL account credited must be Revenue account and not an expense account
GST is charged as it would be for a normal sale of good/service
Without a Markup: If amount is not > amount
paid = recovery without a markup (true recovery)
GL Account credited must be expense account to which original charge posted
Unrecoverable portion of GST included in recovery as part of base expense; recoverable portion not to be included
No GST charged on the invoice
Without a Markup: If amount is not > amount
paid = recovery without a markup (true recovery)
GL Account credited must be expense account to which original charge posted
Unrecoverable portion of GST included in recovery as part of base expense; recoverable portion not to be included
No GST charged on the invoice
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Cost Recovery: GST example
Without a Markup:Original Cost = $100 + $5 GSTAmount charged to the expense account is $100 +
$1.67 (1/3 unrecoverable portion of GST)Amount invoiced as a recovery = $101.67No amount should be included as GST on the invoice
Without a Markup:Original Cost = $100 + $5 GSTAmount charged to the expense account is $100 +
$1.67 (1/3 unrecoverable portion of GST)Amount invoiced as a recovery = $101.67No amount should be included as GST on the invoice
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GST Treatment
GST Treatment– Department is responsible to ensure correct GST assessment
of invoice• Five applicable GST assessment codes
– FSR Billing Module automatically calculates the applicable GST depending on the code assigned
• Ensure you check the default code prior to overriding• Driven by customer setup and address and assigns GST treatment
based on address
– Contact AR if unsure of how to apply GST
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Responsibilities of Billing Unit
Timing– Bill only within the current month– Bills outstanding at month end, must be resolved by 11:00
a.m. on the first business day of the following month• Unprocessed items will be deleted by AR
– New invoices are not to be backdated to prior period– Posting after the period or backdating causes significant
system errors
Invoice Request Form– AR can provide billing services for those Faculties /
Departments who process < 10 billings per year– Invoice Request Form should be completed and forwarded to
AR
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Payments
All payments are to be sent directly to Accounts Receivable
– Internal mail should not be used– Department advises customer to send future payments
directly to AR – Hand-delivered to AR– Should not be deposited at the Cashier’s Office or
included in Departmental deposits
Invoice number – System generated alpha numeric characters
Cheques must be payable to the University of Calgary
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Incoming Wire Payments
Banking Information– Only AR is authorized to communicate University banking
information– Against policy to forward University’s banking information to a
Department, Faculty or Customer– Requests must be send to AR via Request for Banking
Information Form
Form– Accounts Receivable sends out form to customer which
outlines all information AR requires to accept and allocate payments
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Collections
Department Collections– Expectations and directions are clearly identified through
procedures• Aged Receivables Report
– Communicate back to AR collection activities that have been conducted and status
Resulting bad debt charged to Department initiating invoice
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Topic 3: Question and Answer
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Next Steps: Where to go for Help
Financial Services Website– http://www.ucalgary.ca/financial/con
troller/accounts_receivable
Contact:– [email protected]
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www.ucalgary.ca/financial
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Next Steps
Accounts Receivable is currently assessing training requirements
Future Training – Instructor-led courses– Online self-study courses– Reference material
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Session Evaluation
Please complete the session evaluation