Invoicing, Financial Reporting, & Cash

Receipts

DatePresenter Name

Presenter Phone NumberPresenter E-mail Address

2

Types of reporting

• Financial– Normally prepared by campus / unit

business office• Invoices• Financial reports

• Technical– Normally prepared by PI

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Typical requirements• Typical reporting requirements on a

Federal award:– Monthly electronic drawdown of funds via

letter-of-credit• Amount drawn is based on previous month’s

expenditures– Annual financial report– Annual technical report– Final financial report– Final technical report

• However, UT will send invoices and reports in whatever manner the sponsor prescribes in the award document

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Types of invoices

• Invoicing Type– Resource-related– Schedule– Milestone– Item-based– Letter-of-credit– None – automatic

payments– N/A – not applicable

Invoicing information is shown on the cust. enhancement tab of CJ20N for the WBSE

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Resource-related type• Resource-related invoicing type

– Also called cost type or cost reimbursement– The most common type of invoice that UT sends– UT’s default invoicing method with a standard form

• UT invoices actual expenses that have posted to the restricted WBS element in the previous period– Always a time lag and normally a deficit balance on

the account– May be monthly, quarterly, semi-annual, or annual

frequency• UT’s preference and default frequency is monthly• Based on the calendar, for example, quarterly means

3/31, 6/30, 9/30 & 12/31– May be interim or final invoice

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Schedule type

• Schedule invoicing type– Invoices are sent based on a prescribed

schedule of regular billing amounts at regular intervals

• For example, the award document specifies that UT must invoice $1,000 per month for 12 months

– Invoicing does not follow actual expenditures• At any given point in time, UT may have invoiced

for either more or less than actual expenditures that have posted to the WBSE

• By the end of the award, invoicing and expenditures should be approximately equal

7

Milestone type

• Milestone invoicing type– Invoices are sent based on prescribed dates

for irregular billing amounts and / or irregular intervals

• For example, the award document specifies that UT will invoice $20,000 on January 15th, $50,000 on June 30th and $50,000 on July 15th

– Invoicing does not follow actual expenditures

• At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE

• At the end of the award, invoicing and expenditures should be approximately equal

8

Item-based type• Item-based invoicing type

– Invoices are sent as needed• Example

– The award document specifies that UT will invoice $2,000 per test case completed

– In August, the PI provides the campus / unit business office with required information about 10 test cases that have been completed

– An invoice is then prepared and sent for $20,000

– Invoicing does not follow actual expenditures• At any given point in time, UT may have invoiced

for either more or less than actual expenditures that have posted to the WBSE

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Letter-of-credit type

• Letter-of-credit type– LOC’s exist with most large Federal agencies– UT requests funds electronically on at least a

monthly basis, usually right after month-end closing

• Requests are for expenditures that have posted to the WBSE since the previous funds request was made

– Cost reimbursement basis

• Requests may be for hundreds of accounts and may total millions of dollars

• Funds are wired to UT within 48 hours

10

Automatic payments type

• Automatic payments invoicing type– UT is not required by the award

document to send invoices to the sponsor• For example, the sponsor may pay the

entire award amount up front• For example, the sponsor may make

periodic payments – maybe upon receipt of technical reports

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Other situations• Miscellaneous

requirements are usually noted in PS Text on CJ20N– Backup documentation

required– Multiple copies of

invoice sent to different addresses

– Invoice sent to a particular person at a sponsor

– Task or milestone information required to be printed on invoice

– Special forms needed

PS Text is shown on the WBSE on CJ20N

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Invoice forms

• UT has standard invoice forms that are used as the default forms if no other is specified in the award document– Resource-related form– Schedule / milestone / item-based form

• Federal agencies use standard forms– SF270, 1034, etc– State agencies have various forms– Private companies usually accept UT’s

standard

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Timeliness of invoicing

• Important because– Sponsor expects it

• Private companies expect UT to act like a business and bill promptly

– Protect UT’s reputation for fiscal responsibility• Late, incorrect and revised invoices and

financial reports are bad

– Speeds up UT’s cash flow

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Timeliness of initial invoice• Dependent upon

– Timely setup of WBSE• Get Advance WBS Element, if necessary

– Timely charges• For resource-related and LOC invoicing types

because actual expenditures for the previous period are invoiced

– Doesn’t matter for schedule, milestone, etc.

• Automated charges post to correct cost object– Notify Payroll via PIF and service centers of new

WBSE # to charge

– Timely invoice preparation by CBO

15

Timeliness ofinterim invoices

• Dependent upon– Timely charges

• For resource-related and LOC invoicing types because actual expenditures for the previous period are invoiced

– Doesn’t matter for schedule, milestone, etc.

– Avoiding overexpenditures or removing them promptly

• For resource-related invoicing type where UT sends a line-item invoice form

• CBO may not be able to invoice because they don’t know from which cost elements the overexpenditures will be removed

– Timely invoice preparation by CBO

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Timeliness of final invoices• Dependent upon

– Timely charges• For resource-related and LOC invoicing types

because actual expenditures are invoiced– Doesn’t matter for schedule, milestone, etc.

– Due date in the award document• Research office tries to avoid unreasonable terms,

such as final invoice due 10 days after ending date

– Timely cost transfers, if they are needed• All cost transfers must be posted by 60 days after

the end date or 30 days before the final invoice is due (whichever comes first)

– Timely invoice preparation by CBO

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Financial reports• Financial reports are due

– As specified in the award document– As specified by the Federal agency in their

grant policy manual– On an interim and / or final basis

• Interim financial reports are often due at the end of each grant year

• Final financial reports are usually due by 90 days after the ending date of the award

– Federal reports are usually on a standard Federal form and some are submitted electronically

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Timeliness offinancial reporting

• Deadlines that UT must meet– Final invoice and / or financial report is

normally due by 90 days after the end date of the project

– All charges must have posted to the WBSE by 60 days after the end date of the project (or 30 days before due date)

• Important for good sponsor relations– Incorrect / revised financial reports cause

UT employees more work and makes us look bad to the sponsor

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Monitoring invoicing

• Academic departments / PI’s should monitor invoicing and collection activity on a regular basis– Invoicing information is shown on

several IRIS reports• ZDEPT_LEDGER (ledger)• ZFM_WBS_SUMMARY (one-page summary)• Others such as CJI3 (line item report),

Y_DEV_17000002 (available budget report), and FMRP_RFFMEP1AX (line item report)

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ZDEPT_LEDGER (ledger)

• Total sources of funds = $455,651.36 project-to-date

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ZFM_WBS_SUMMARY

• Letter of credit invoicing type

• Net revenue = $455,651.36 project-to-date

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Other reports

• Invoicing normally appears in cost elements 700800 and 700300

• Total invoicing project-to-date = $455,651.36

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Cash receipts

• UT’s sponsors normally pay promptly– Most are government agencies

• Delays sometimes occur– Incorrect invoicing address or form– Waiting on technical report from PI

• Non-collection sometimes occurs– Private, start-up companies– Cash-flow problems, bankruptcy– Write-off to departmental funds

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Collection procedures• CBO’s send late letters to sponsors after an

invoice has been outstanding for more than 60 days

• CBO’s telephone sponsor financial contacts• CBO’s should notify academic department

and PI if there are payment problems – PI may be asked to telephone sponsor technical

contacts• CBO’s ask UT’s legal counsel for assistance

as a last resort• Bad debt is written off to academic

departmental funds

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Monitoring collection

• CBO’s are primarily responsible for monitoring collection from sponsors; however, academic departments should also monitor– Since it is their funds at risk– Dept should call CBO with questions /

concerns• Use IRIS transactions to find the

outstanding invoices for a particular WBS Element– ZAR_AGING– Z_AR_STMT_ACCT

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ZAR_AGING

• The report lists all unpaid invoices for the WBS Element selected– Invoice date– Invoice

amount– # of days

unpaidInvoices greater than 60 days old

are considered past due

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Training classes• 1 Overview of Accounting for Sponsored Projects• 2 OMB Circulars & Cost Accounting Standards• 3 Understanding F&A Costs• 4 Direct Costing• 5 Cost Transfers & Closeout• 6 Cost Sharing• 7 Subcontract Monitoring• 8 Advanced Topics• 9 Invoicing, Reporting & Cash Receipts• 10 Sponsored Projects Reports in IRIS

• Other – IRIS reporting for sponsored projects