1. UNIVERSITY RECEIVABLES Policy ▪ Resources ▪ Options
Presented by
University Student Financial Services and Cashier Operations (USFSCO)
and
University Accounting and Financial Reporting (UAFR)

2. Why a Receivables Policy?
Lack of an Existing Policy
The University of Illinois does not have a comprehensive receivables policy that regulates all student and general accounts receivable. Without a comprehensive receivables policy the University is at risk of:
Inadequate allowance for uncollectible accounts.
Failure to place delinquent accounts in the State Offset system, and to properly write off uncollectible accounts.
Inaccurate receivables reporting to the State.
Unfavorable audit findings.
Generally Accepted Accounting Principles
The University complies with generally accepted accounting principles (GAAP) as established by the Governmental Accounting Standards Board (GASB) for state and local government entities. These require:
Accrual of accounts receivable at fiscal year-end.
Estimate an allowance for uncollectible receivables and record in the general ledger.

3. Why a Receivables Policy? (Cont’d)
State Regulations
The University is subject to and complies with Illinois State receivables law (Illinois State Collection Act of 1986, and Statewide Accounting Management System (SAMS) Subsection 26: Accounts Receivable Reporting) which mandates State organizations that process receivables to:
Assess monthly late payment charges on delinquent receivables balances.
Perform collection due diligence on all accounts with a balance of $25 or more that are 30-days past due.
Place receivable balances of $1,000 or more with the Illinois Comptroller’s State Offset System when they are 180 days delinquent.
Obtain permission from the State Attorney General’s Office to write off uncollectible accounts over $1,000.
Submit Quarterly Accounts Receivables Reports to the State Office of the Comptroller. These reports must include the beginning quarterly accounts receivable balances, changes to the balances during the quarter, estimated uncollectible balances, aging amounts, write-offs, and information about collection activity.
Submit the University’s Annual Financial Report to the State of Illinois governor’s Office and the Office of the Auditor General. This report must include all receivable balances at year end.

4. Why a Receivables Policy? (Cont’d)
University Requirements
The University needs to develop improved processes to ensure compliance with State regulations and the following best practices:
Bill customer no later than 30 days after goods or services have been provided and send monthly follow-up bills for all unpaid balances.
Document collection activity on past due accounts.
Review all accounts receivable transactions at least monthly to ensure that customers who owe the University for goods or services have been charged the appropriate amount and that no customers have been charged in error.
Reconcile accounts receivable to the Banner General Ledger. Identify and resolve all differences.
Our purpose in being here today is to open a dialogue on how best to accomplish these goals. The following slides briefly describe the resources and options currently available.

5. Resources and Options 1. BANNER AR: For units that use Banner AR –
USFSCO handles the following activities:
Billing
After you send invoice(s) and assess the corresponding charges in Banner AR, USFSCO bills your customers on the first business day of each month until there is no activity during the prior month and no unpaid balance. Payment is due on the 28th.
Payment Processing
USFSCO receives, verifies, and applies all payments to your customer accounts, so you no longer have to comply with OBFS Cash Handling and credit card processing requirements. Your customers have multiple payment options: e-check, credit card, paper check mailed to the lockbox address on their bill or to USFSCO Cashier Operations at Urbana, wire transfer.
Collections
USFSCO performs all collection activity on delinquent accounts including State Offset, and writes-off uncollectible accounts.
Calculating the Allowance for Uncollectible Accounts
USFSCO estimates an allowance for uncollectible receivables and records it in the general ledger. This also aids you in accurately projecting your unit’s actual income.
UAFR handles the following reporting and reconciliation activities:
Reporting
UAFR extracts data directly from Banner AR so you do not have to submit your unit’s quarterly receivable and reconciliation information.
Reconciliation
UAFR performs a daily reconciliation of the Banner AR system to the general ledger. This identifies problems that may affect your unit’s funds. Units that do not use Banner AR have to perform this reconciliation themselves. Units that use Banner AR only have to perform a review of their AR detail.

6. Resources and Options (Continued)
BANNER AR: For units that use Banner AR (Cont’d) –
The unit is responsible for the following activities:
Receive training from USFSCO Accounts Receivable Operations on how to use Banner AR (web based training will also soon be available).
Submit one-time GAR Account Creation Request Forms for new customer accounts.
Submit one-time Detail Code Requests for new types of unit charges.
Posting line-item charges to the appropriate customer accounts in Banner AR after sending itemized invoices for goods or services provided.
Verifying customer detail in Banner AR to ensure that customers have been accurately charged.

7. Resources and Options (Continued)
2. UNIT MANAGEMENT: Units that do not use Banner AR must handle the following activities internally –
Billing
Send bills no later than one month after goods and services are provided.
Send follow-up bills each month for outstanding balances.
Payment Processing
Ensure separation of duties to meet audit requirements outlined in OBFS P & P Section 9.1.
Ensure compliance with University Cash Handling and credit card processing policies and procedures.
Collections
Perform and document timely collection activity on past due accounts.
Place accounts of $1,000 or more and 180 days delinquent with the State Offset System.
Calculate and post to the general ledger estimated allowances for uncollectible accounts.
Obtain State and University approval to write-off uncollectible accounts.
Reconciliation
Record all billing and payment activity into the general ledger each month.
Reconcile unit’s AR system detail to the general ledger each month, and confirm that customers have been accurately charged and billed.
Reporting
Provide to UAFR quarterly receivables data including: total receivables, adjustments, aging, collections, write-offs, and estimated allowance for uncollectible accounts.
Provide to UAFR itemized detail and collection status for accounts $15,000
or more and greater than 180 days past due.

8. DIALOGUE