1. Reviewing Internal & External Sales Rates at Year End Internal / External Sales Office

2. Internal/External Sales Activity related to:
Learning Objectives
Internal/External Sales Activity related to:
Annual review
Budget to Actual Analysis
Budget Considerations
Reducing Budget Variances
Determine Surplus or Deficit
Adjustments to Rates
Submit & Implement Rates

3. Annual Review
Monitor Internal/External sales activity throughout the year
Identify potential significant surplus or deficit balances (+/-15% of the revenue)
Determine the source of the issue
Determine best course of action
Rate review should be performed during budget process with final updates prior to July 1
Contact customers with new rates
Preceding year's financial information will provide the basis for developing the following year's rate

4. Case Study - Example Documents used: Reporting Center
Account Budget Status for Current Non Sponsored Funds
Actual Account Summary by Accounting Period for Current Funds
Salary and Fringe Detail by Pay Period
Asset Management Depreciation Expense/Schedule
Internal Sales Reconciliation Template
Rate Development Reconciliation Template

5. Budget to Actual Analysis
Compare budgeted revenues, resources, depreciation and other expenditures to the current year-end results on a line-by-line basis
Identify large variances and determine reason for variance
Recharge center sold more than expected, costs of materials higher/lower, unexpected downtime, purchasing more than required
Determine if all resources are used as planned
Salaries, supplies, depreciation, etc.
Depreciable life versus remaining useful life of capital assets should be analyzed

6. Budget Considerations
Salary & Fringe adjustments
Salary allocations (Internal vs External) (Planned vs Actual)
Capital equipment added, fully depreciated or improved
Purchases of non capital equipment
Equipment repairs
Maintenance contracts renewed or expired
New services provided
Purchase of materials / supplies
Overall volume of activity

7. Reducing Budget Variances
Productive time vs. hourly wages (Billable hours)
Production volume estimates
Consider moving to an hourly rate if the task values are unpredictable
Cost estimates
Review utilization of resources
Include all costs
Detailed analysis of variable vs. fixed costs variances
Too few/many rates
Do not round
Estimated values or rates

8. Surplus or Deficit
Surplus or deficits from prior year should be considered as indicator of a potential rate change
Handling of surplus/deficit less than 15%
Should be included in next year’s rates
Work with the Internal Sales Office for variances greater than 15%
Any excessive surplus may require refunding the customers
Any excessive deficit may require a subsidy from the college or department

9. Submit & Implement Rates
Submit rates to the appropriate financial staff
Upon approval, distribute rates internally & externally
Implement the new rate

10. Summary Monitor activity throughout the year
Review current year sales activity & business plan
Analyze variances between actual & budget
Determine potential rate change
Implement the new rate

11. Summary Determine if the Recharge Unit should continue
Sales less than $25,000
Not charging grants
Not charging on a rate basis (Account Non-ISO sales)
Not enough sales volume to cover expenses

12. Internal Sales Rate Development Procedure & Website
Internal Sales website:
Reviewing Internal Sales Activity Job Aid
Internal Sales Reconciliation for Surplus and Deficits
Calculation for Billable Hours
Beginning, Intermediate and Advanced Rate Development Presentations
Subsidies, Surplus, Deficit Management Presentation
Equipment and Depreciation Reconciliation Presentation
Administrative Procedure: Establishing Internal Sales Rates