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20.15 Accounts Receivable Write-Off

20.15 Accounts Receivable Write-Off, Chancellor's Office Business Policies & Procedures

Purpose:

To establish policies and procedures for the write-off of uncollectable accounts receivable.

Policy:

The following procedures will be used when writing off accounts receivable.

Procedures:

  1. If an invoice has remained unpaid for longer than three months, Business Processing Staff will evaluate the amount due for write-off.
  2. Business Processing Staff will initiate write-off if the following actions have been taken for the dollar amounts specified below (in conjunction with the normal billing process):
    • under $50.00 - a minimum of three communications, at least one written (mail, e-mail, or fax)
    • $50.01 - $99.99 - a minimum of four communications, at least two written
    • $100.00 or more - a minimum of four communications, at least two written and additional actions taken following consultation with the Controller
  3. Business Processing Staff will prepare a write-off packet which will document all communications related to the amount due, the proposed budgetary impact, and a transmittal memo from the Department Head to the Controller. See the sample request memo for an example.
  4. The Controller reviews and approves the write-off packet if the collection efforts appear reasonable given the amount due and that no further collection efforts should be made.
  5. The Controller routes the write-off packet to Business Services Staff.
  6. Upon confirming that the write-off packet has all necessary approvals, the Business Services Staff initiates the necessary transaction in FIS/HRIS to accomplish the write-off.
  7. The Business Services Staff routes the write-off packet to the FIS Approver.
  8. The FIS Approver approves the transaction if, upon examining the write-off packet:
    1. All necessary approvals have been made.
    2. The information which has been entered agrees with information on the write-off packet.
    3. Prior to final approval, the FIS Approver brings any unusual items to the attention of the Business Services Manager for resolution. The Business Services Manager:
      • reviews the unusual items,
      • clarifies the facts and circumstances (as needed),
      • researches applicable laws, rules, regulations, policies, past practices, and approved exceptions,
      • consults with Controller's Division staff and Controller (as needed) to determine resolution, and
      • coordinates communication of resolution to Department Head and appropriate Department Approver.
  9. Business Processing Staff files the write-off packet in accounts receivable archive files.

Authoritative References:

Examples:

Last Updated: 03/04/03