1. Invoicing, Cash Receipts and Revenue Recognition
Glenita Segura, Senior Finance Manager
Office of Sponsored Programs, Finance (OSPF)
Accounts Receivable Billing (AR Billing)
July 2010

2. Office of Sponsored Programs Finance (OSPF) -AR Billing
The Accounts Receivable Billing area of Research Services is responsible for the following:
Invoicing for different agreement types
Requesting cash through the Letter of Credit
Applying payments as they are received
Monitoring the revenue recognition process
Managing outstanding accounts receivable balances
Providing accounts receivable aging and revenue reports

3. Agreement types invoiced by OSPF-AR Billing
Prepaid
Sponsor pays upfront or scheduled payments
Unexpended funds need to be returned to the sponsor
Fixed payment
Sponsor pays as milestones are met or scheduled payments
Unexpended funds do not need to be returned to the sponsor
Cost Reimbursable
Sponsor agrees to reimburse UTMB for expenses as they are incurred
Letter of credit (LOC)
Manual invoicing
Non-Grants Module Contracts
Flat fee
Cost reimbursement
Fee for Service

4. Agreement types invoiced by both AR Billing and individual departments
Case_Study
Industry sponsored clinical trials
AR Billing will invoice for non-refundable fees
Department is then responsible for invoicing as milestones are met

5. Agreement types invoiced by others
TMO(Technology Management Office) – Fixed or TMO – Cost Reimb
Invoiced by the Center for Technology Development (CTD)
Contact Rhonda Warner, or x20371
Bill or Other
Placed in Grants Module for tracking
May or may not be invoiced by the departments

6. What starts the process in the OSPF-AR Billing Office?
Receive an notification from Project Set Up (PSU) that the project has been established and is ready to use.
Review the contract, activate the contract and establish the billing and revenue plan.

7. Prepaid What it looks like in general ledger: Cash is received
Credit to deferred revenue (account )
Debit to cash at the operating unit level for the project.
Expenses are incurred
Entry for the expense is to debit the expense account (5xxxxx) and credit cash at the project level.
Revenue is recognized
Entry for the revenue is to credit/increase revenue (4xxxxx) at the project level and to debit /decrease deferred revenue (208060) at the operating unit level.
The expense and revenue recognition processes are completed nightly.
No revenue will be generated if the amount of expenses are over the budgeted amount.

8. Fixed Expenses are incurred
General ledger entry is recorded for the expense to debit the expense account (5xxxxx) and credit cash at the project level.
This process is completed nightly.
Monthly, revenue is recorded based on a percentage of the total award amount to account 4xxxxx at the project level and an unbilled AR (114090) at the operating unit level.
Milestones are completed
Sponsor will send the payment.
Payment is received, the invoice is created.
This invoice will transfer the amount of cash received from unbilled AR to billed AR (account ).
The payment is applied to the billed AR.
PI/Department should notify AR Billing of the milestone completion so that receipt of payment can be monitored.
Occasionally, the sponsor will send payment based on the agreement.

9. Cost Reimbursable What it looks like in general ledger:
Expenses are incurred
Entry for the expense is to debit the expense account (5xxxxx) and credit cash at the project level.
Revenue is recognized
Entry for the revenue is to credit/increase revenue (4xxxxx) at the project level and to debit /increased accounts receivable (114090) at the operating unit level.
The expense and revenue recognition processes are completed nightly.
No revenue will be generated if the amount of expenses are over the budgeted amount.

10. Cost Reimbursable Invoices are created
The invoice amount will be transferred from unbilled AR (account ) to billed AR (account ) at the operating unit level.
Invoicing is processed weekly for DHHS awards.
Invoicing is processed monthly for all other LOC non-DHHS awards.
Invoicing for non-LOC cost reimbursable awards is completed monthly.
Concurrence is requested on the final invoice of the award.
Notification of any outstanding invoices to vendors is also requested.
Invoices are only billed for amount of expenses, it does not include encumbrances or pre- encumbrances.
When the payment is received it is applied to the billed AR.

11. Non-Grants Module Contracts
Expenses are incurred
General ledger entry is recorded for the expense to debit the expense account (5xxxxx) and credit cash at the project level.
This process is completed nightly.
Invoices are created monthly
Debit to AR (accounts or ) at the operating unit level.
Credit to revenue (accounts 4xxxxx) at the project level.
Flat fee – same amount each month.
Cost reimbursement – based on allowable expenses per the contract.
Fee for Service – based on invoice prepared by department.
When the payment is received it is applied to the appropriate AR account.

12. Case_Study: Industry Sponsored Clinical Trial
AR Billing
notification from Project Set Up (PSU) that the clinical trial project has been established and is ready to use.
Receive a notice that IRB has been approved.
Review contract and invoice sponsor for all initial fees that can be invoiced
IRB fee (Full or expedited review),
Admin fee
Any one-time start up fees
When the money for the initial invoice is received it will be recorded as revenue
The IRB fee - account in the IRB class.
The remainder of the payment received will be recorded as direct revenue (411010) and indirect revenue (411030) in the clinical trial project established by PSU.

13. Case_Study: Industry Sponsored Clinical Trial
Department
As the department enters patient related data into the case report forms/electronic database, payments from the sponsor will be generated for work performed.
Payments will be recorded as revenue, PS accounts or , in the clinical trial project established by PSU.

14. Payment Information
All payments made via checks should be sent to a UTMB lockbox account per IHOP- Policy Cash Handling and Reporting
Payments made via check should be made payable to The University of Texas Medical Branch at Galveston and sent to the Research Services lockbox at the address below:
UTMB
Office of Sponsored Programs
PO Box
Houston TX
For electronic payments please contact Gayle Praker at extension

15. Payment Information (cont.)
If you receive a check directly from a sponsor
Make a copy for your records
Ensure that the PI name, CON number, project number, protocol number, and any other information that will help identify where the money belongs is on the check stub.
Forward the check and a completed ‘Deposit Form For Lockbox’ to Gayle Praker at route number 0156 for deposit into the Research Services lockbox.
Any payments in foreign currency will be delayed 30 to 60 days due to the conversion time. The converted amount will be applied to the award.
Any wires received from a sponsor may be reduced by the wire fee.
Copies of checks and documentation received from the bank is sent via to the departmental contacts for each department. This should be received within 2 business days of the payment posting.

16. Where to Find Financial Information
PeopleSoft Grants Module Account Status Inquiry Screen
Available spending authority
Reflects the budget that has been loaded less any expenses incurred, encumbrances or pre-encumbrances obligated to the project to date
Does not reflect the money or payments you have received from the sponsor.
Financial Datamart
View revenues and expenses
‘Project Ledger Summary by Project Years’ – provides summary information
‘Project Detail Transaction by Project Years’ – provides the detail for the project
‘Balance Sheet by Sub Fund’ – balance sheet activity
Ask your Trusted Requestor for access

17. Primary Responsibility
Contact Information
Name
Primary Responsibility
Extension
Glenita Segura
Manager
69460
Larry Copado
Non-GM contracts
69494
Hehua (Hope) Liu
Fixed
Jim Lombardo
Reports
Gayle Praker
Payments
69463
Candy Quintanilla
Cost Reimbursable – Manual invoicing
Ben Robertson or
Neil Santana
Cost Reimbursable - LOC
69453
Xiaoying (Sharon)Wang
Prepaid