Responsible Executive: Finance and Administration

Approving Official: Vice President for Finance and Administration

Effective Date: April 5, 2016

Last Revision Date: New Policy, no revisions at this time.

1. INTRODUCTION
   1. This policy provides reference and procedural guidelines for the management of accounts receivable activities at Florida State University. It establishes how accounts receivable will be monitored and collected. The policy’s intended outcome is to minimize the amount of past due, delinquent, and uncollectible accounts and to establish standards for the timely and systematic recognition, reporting, and collections of all accounts receivables owed to the University.
   2. Definitions
      1. Accounts Receivable: Amounts due the University for goods or services that have been provided, but for which payment has not been received. Examples include billable items related to tuition and fees, sponsored projects, library fines, parking tickets, commissions, rent, and returned checks.
      2. Aging Schedule: A report classifying accounts receivable according to their due date used to determine which accounts are current and which are past due.
      3. Charge Adjustment: A correction to an erroneous accounts receivable balance.
      4. Customer: Users of goods and/or services provided by a University department. Customers can include students, faculty, staff, agencies, companies, or members of the public. i. Internal customers include Education & General (E&G) departments, auxiliaries, sponsored research projects, and any other University departments having a six-digit OMNI department number. ii. External customers include faculty, staff, students, Direct Support Organizations (DSOs), other state agencies, and any other individuals or organizations that are not University departments and do not have a six-digit OMNI department number.
      5. Delinquent Receivables: Receivables that remain unpaid beyond 120 days past the due date.
      6. Past Due Receivables: Receivables that remain unpaid from 1-120 days past the due date.
      7. Settlement: An agreement to accept a sum of money or other consideration from a customer as full discharge of a debt owed to the University and previously written-off. The sum may be less than the total amount owed.
      8. Uncollectible Balance: The portion of an account receivable for which all efforts to collect the balance have been exhausted and any additional cost or effort to collect would exceed the expected amount to be recovered.
      9. Write-Off: The reduction of an accounts receivable balance to record a loss due to an account being deemed uncollectible after all reasonable and lawful collection attempts have failed. A write-off does not discharge a debt: charges that have been written off are still owed to the University. Departments may not authorize their own write-offs.
2. POLICY
   1. Authorization
      1. It is preferred that departments accept payment before or upon the delivery of a good or service; however, when this is impossible or impractical, it may be necessary to provide a good or service prior to a payment.
   2. Billing/Invoicing Activity
      1. Sufficient demographic information must be collected from each customer to enable the establishment of an accounts receivable record and subsequent collections, if necessary.
      2. All accounts receivable must be billed at regular intervals.
      3. Invoices will clearly indicate the following items at a minimum:
         1. Description and price of the goods and/or services purchased
         2. Address to which payment must be sent
         3. Contact name and information for billing inquiries
         4. The total amount due
         5. The date the invoice is due, which will normally be upon receipt
   3. Systems and Processes
      1. Written procedures for establishing, recording, adjusting, reconciling, collecting and reporting receivables must be maintained.
      2. Accounting systems and processes should be capable of ensuring compliance with this policy. Processes must allow for adequate segregation of duties, such that employees with the responsibility for maintaining and billing accounts receivable should not have responsibility for collecting payments or making deposits.
      3. Accounts receivable records should be reconciled to sales, service, and/or contract records to ensure all sales and services are billed. Payments posted to accounts receivable records should be reconciled to cash collection records.
      4. Staff members handling accounts receivable records must receive training and have an understanding of the University’s cash management policy (4-OP-D-2-B Cash Management).
      5. Departments should maintain documentation of charges, payments, and collections efforts in accordance with policy 4-OP-F-3 Records Management.
   4. Credit Balances
      1. Written procedures should be maintained for the periodic review of credit balances to determine the underlying cause. Errors must be corrected timely and refunds provided to customers when appropriate.
      2. Accounts receivable credit balances resulting from customer overpayments may be applied to future orders of goods or services when there is an expectation of an ongoing relationship with the customer
      3. When credit balances are to be paid back to the customer, they are reclassified as liabilities and are governed by policy 4-OP-D-2-C Payables and Disbursements.
   5. Returned Payments
      1. Any physical check or e-check returned to the University is assessed bank fees actually incurred in the course of tendering the payment.
      2. Returned payments may be subject to a service charge not to exceed the amounts authorized by Section 832.07, Florida Statute. Before a returned payment service charge is assessed, the customer must be notified in writing as instructed in FS 832.07.
   6. Reporting
      1. A billing status report indicating whether a customer has been billed/invoiced for a good or service rendered should be maintained for all receivables.
      2. An aging schedule should be maintained and must be submitted to the Controller’s Office on a regular basis.
   7. Collections
      1. The University is required to exert every effort to collect all delinquent receivables. The University may withhold a customer’s access to goods or services when their account has a receivable balance.
      2. Late fees may be assessed when accounts are past due. The amount charged must be reasonable.
      3. Accounts past due may be assessed interest charges. Interest charges may not exceed the amount authorized by Section 687.03, Florida Statute.
      4. Customers must be notified in writing of potential late fees and interest charges before goods and services are rendered in order for these charges to be assessed.
      5. Departments should maintain written procedures for assessing late fees and interest.
      6. Any efforts to collect overdue accounts receivable performed by University employees must be documented. These efforts must be conducted according to the provisions of the Federal Fair Debt Collection Practices Act.
      7. Any notifications of bankruptcy must be forwarded to the Controller’s Office. Collection efforts pertaining to a customer that has filed for bankruptcy must cease.
      8. The Controller’s Office is authorized to contract with third party collection agencies; non-central departments should not independently submit accounts receivable to collection agencies. Delinquent accounts (over 120 days past the original due date) must be referred to the Controller’s Office.
      9. Collection fees will be added to outstanding debts when they are transferred to a third party for collection. In order to pass these fees on to the customer, customers must be notified of the terms of collection as directed by the Federal Fair Debt Collection Practices Act at the time of the original transaction.
      10. Write-offs are processed through the Controller’s Office. The Vice President of Finance & Administration will serve as the President’s designee for the authorization of write-offs of uncollectible accounts.
3. LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY
   1. The University Controller shall be responsible for the review of this policy.
   2. Specific Authorities:
   3. Automatic Stay 11 U.S.C. 362, Effect of Discharge 11 U.S.C. 524; and the Fair Debt Collection Practices Act 15 U.S.C. 1601 et seq.
   4. Florida Statutes 1010.03 K-20 Education Code Financial Matters - Delinquent Accounts; 687.03 “Unlawful Rates of Interest” defined; proviso; and 832.07-Prima Facie Evidence of Intent Identity.
   5. Board of Governors Regulations: 7.002 Tuition & Fee Assessment, Collection, Accounting and Remittance; and 7.003 Fees, Fines and Penalties.
   6. FSU Regulations: 2.022 Employee Debt Collection; 2.02423 Delinquent Accounts; 2.02424 Dishonored Checks or Electronic Payments; 2.0247 Tuition and Fee Liability; 2.0248 Cancellation of Student Schedule.