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Departmental Billing and Receivables

The information provided in this guide is intended to assist a UCSC department manage its billings and receivables associated with products or services sold to the general public, students and employees as a by-product of the unit's research or instructional activities. These situations occur when other payment options, such as collecting cash at the time of the sale are not practical and hence the credit of the University must be extended.  ​​​​​​

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  • Before you start

    Follow these steps to request the authority to extend the credit of the UC Regents to bill customers for the sale of services and/or products:

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  • Eligibility

    Your department or program must meet all of the following criteria in order to extend credit:

    • The product or service for sale must be a by-product of research or instructional activities
    • It can be demonstrated that collecting cash at the time of sale is impractical
    • The annual revenue to be generated from the sales exceeds the cost of producing the products and/or providing the services being sold
    • As necessary, approval to sell the product or service must be obtained from the appropriate campus oversight body

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  • Obtaining approval to extend credit

    Follow these steps to request approval for your department or program to extend the credit:

    • Complete the Departmental Request to Extend Credit form,
    • Obtain the required approvals on the form,
    • Submit the form to the Director, Student Business Services (SBS), mailstop: Accounting Office.
    • The Director, or authorized designee, will review the application
      • A SBS Office representative may request additional information.
      • The department head will be notified of the SBS Director's determination.

    The department's billing and receivables management function may be audited at any time by the Office of Internal Audit or the Student Business Services (SBS) Office.

    • The SBS Director may suspend or rescind the authority to extend credit if your department fails to comply with applicable UC and UCSC policies or determines that there is no longer a valid need to extend credit.

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  • Establishing accounts

    Your department or program is responsible for obtaining customer billing and collection information, and evaluating each prospective accountholder's credit worthiness.

    • Each prospective accountholder must complete and submit to your department or program a completed credit application:
    • Obtain a consumer credit report for any prospective non-governmental or non-higher education accountholder for which $1,000 or more in credit is expected to be extended
    • Evaluate the credit application
      • Credit may not be extended if any of the following apply in reviewing the credit application:
        • It is incomplete
        • It is a photocopy or appears to have been reconstructed from separate pieces
        • It contains a suspicious address, such as a mail drop or that of a prison
        • It contains a suspicious phone number, such as to an answering service or pager
        • The address or phone number provided matches that supplied by a large number of applicants
        • It includes a social security number matching one submitted by another accountholder
      • Consider these key factors in evaluating creditworthiness:
        • Years in business
        • Previous application for credit with UCSC or another UC campus
        • The frequency with which the organization makes payments within payment terms, based on credit report review
        • The organization's credit rating, based on credit report review
    • Notify the customer of the determination, providing the following information if credit is extended:
      • Terms and conditions associated with the extension of credit
      • Maximum amount of credit to be extended to the customer
    • Re-evaluate the creditworthiness of each accountholder on an annual basis.

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  • Accountholder inquiries and change requests

    Screen each accountholder account change request or inquiry to ensure personally identifying information is not disclosed to an unauthorized party.

    • Telephone
      • Verify caller identity by requesting confirmation of account number, name, address, and telephone number
      • Send an account change confirmation to the accountholder at the mailing address on file
    • In-person
      • Verify identity by checking valid government-issued picture identification and ensuring information provided on it is consistent with accountholder information on file
    • Mail
      • Verify the name, signature, and address of the accountholder
      • Send an account change confirmation to the accountholder at the mailing address on file

    Account Monitoring

    • Regularly monitor activity occurring in accounts. Do not extend credit in the following situations:
      • Accountholder has an unpaid balance of more than $50 that is 60 or more days olds
      • Accountholder has failed to fully comply with any payment term

    Data Protection

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  • Billing

    Bill accountholders on at least a monthly basis. Provide the following information on each bill:

    • A unique invoice or billing reference number
    • Description of the service or product being billed, transaction date, quantity, unit price and extended charge, as applicable
    • Total amount due, including any past due balance and late payment fees
    • The following notations:
      • Payment in full is due upon receipt
      • Checks are to be made payable to the "Regents of the University of California" or "UC Regents"
      • Payment is to be mailed to or paid in-person at the UCSC Cashier's Office, 1156 High Street, Santa Cruz, CA 95064
        • A payment may not be accepted by the billing department unless it is an authorized UCSC cash handling department
      • Accounts over 30 days old are past due and are subject to the assessment of a one-time late payment fee calculated at a rate of 5.0% of the balance due
    • Department contact information

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  • Managing receivables

    Perform the following functions each month:

    1. Reconcile the accounts receivable balance appearing in the general ledger to department subsidiary billing records
    2. Prepare and review a monthly aging report of all outstanding bills for the following:
      • Identify each past-due account
        • Do not extend further credit to the accountholder
      • Identify accounts showing unusual balance fluctuations indicating possible identity theft
        • Follow-up with accountholder to ensure activity is valid
    3. Assess a late payment fee on each account that remains unpaid for 30 or more days after the original billing date
      • Apply a one-time late payment fee calculated at 5.0% of the total balance due
    4. Initiate collection efforts for each account that remains unpaid for 30 or more days after the original billing date.
      • Contact the accountholder through a collection letter or telephone call
      • Document each contact with the accountholder, noting date, time, and nature of contact
    5. Refer each account past due by more than 60 days with a balance of $25 or more to the Student Business Services (SBS) Office:
      • Follow the Campus AIS Billing instructions to set up an account in the Academic Information System (AIS) to begin the collection effort.
        • Complete an AIS Non-Student Billing Form (Excel | PDF)
        • Print out the form and attach supporting documentation related to the past due balance
        • Send the form with supporting documentation to the SBS Office
      • Prepare the appropriate entry to reverse the revenue recorded and to eliminate the receivable balance.
      • Do not extend any further credit to the accountholder or pursue any further collection efforts unless directed by the SBS Office.
        • Any payment received after the account has been referred must be deposited in the Cashier's Office.
          • Notify the SBS Office of the payment
      • The past-due balance will be processed for collection in the AIS:
        • AIS will record a credit (revenue) accounting entry in the revenue account.
          • This "revenue" should not be considered spendable; it will be reversed if collection efforts are unsuccessful.

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  • Processing payments

    Important information to know

    • Checks are to be made payable to "The Regents of the University of California" or "UC Regents"
    • All payments are to be mailed to or paid in-person at the UCSC Cashier's Office
      • Contact the Cashier's Office to coordinate the exchange of payment data necessary to maintain departmental receivables records
      • A department may accept payments only if it is an authorized UCSC Cash Handling Department

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  • Reporting requirements

    Quarterly Reporting
    If your department has billed, uncollected receivables at the end of September 30, December 31, or March 31 prepare a report that includes the following information for each account with a non-zero balance as of the quarter-end date:

    • Accountholder Information:
      • Name
      • General description of goods or services provided
      • Balance owed at the quarter-end date
    • Accounting Information:
      • Revenue account string (FOAPAL), if receivables have not been accrued
      • The total accounts receivable balance at the end of the quarter

    Submit the report to the Accounting Services Director, mailstop: Accounting Office within 30 calendar days of the end of the quarter.

    Fiscal Year-End (June 30) Reporting
    As of June 30, prepare a report of aged accounts receivable that includes the following information:

    • Accountholder Information
      • Name
      • Date service or product sold
      • General description of goods or services provided
    • Accounting Information
      • Balance owed at the end of the year classified by:
        • 0-30 days outstanding
        • 31-60 days outstanding
        • 61-90 days outstanding
        • Over 90 days outstanding
      • Total receivables for each aging category with comparative total from June 30 of the prior fiscal year
      • Revenue account string (FOAPAL) if receivables have not been accrued
      • Listing of any accounts written off during the fiscal year with the approval of the Director of Student Business Services. Include:
        • Accountholder name
        • Authorized write-off amount
        • Total amount written off during the fiscal year
      • Submit the report to mailstop: Accounting Office by July 15

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  • Forms used

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  • Policy references

    This policy applies to the campus business process:

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  • Where to get help

    Assistance is available for the following topics:

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  • Management processes

    Ensure that your department complies with the following requirements in setting up its billings and receivables management processes:

    • Internal controls - The department is responsible for establishing a billing and receivables management process that includes the following internal controls:
      • Assigning billing and receivables process duties to qualified, properly trained and adequately supported staff
      • Maintain Individual accountability at each key control point in the process
    • Establishing procedure for the following:
      • Timely and accurately billing accountholders
      • Monitoring and follow-up of unpaid bills
      • Accurate accounting and recordkeeping
      • Effectively managing the resolution of accountholder disputes
      • Documenting collection efforts for each past due account
      • Documenting and approving adjustments made to an account
      • Reporting uncollectible accounts to the Office of Student Business Services (SBS)
    • Maintaining relevant billing and collection procedure documentation

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  • Separation of duties

    Assign the following duties to qualified staff members in ways that avoid potential conflicts:

    Responsibility Duty Category Ideal
    Review of prospective accountholder's application and approving the extension of credit Asset handling Coworker 1* Coworker 1* Coworker 1*
    Billing preparation (including input of charges appearing on billing), review, and distribution Booking/ Recording Coworker 2 Coworker 2 Coworker 2
    Approval of billing adjustments, including account credit issuance Asset handling Coworker 3 Coworker 1* Coworker 1*
    Review of monthly reports, including aging and ledger Comparison/ Review Coworker 4 Coworker 3 Joint - Coworkers 1 & 2
    Account inquiry handling Comparison/ Review Coworker 4 Coworker 3 Coworker 2
    Past due account collection effort Booking/ Recording Coworker 2 Coworker 2 Coworker 2
    Authorization to refer past due account to the SBS Office Asset handling Coworker 1* or Dept Head Coworker 1* or Dept Head Coworker 1* or Dept Head

    * Must be a knowledgeable, high-level employee

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  • Other key controls

    • Payments are expected to be made directly to the Cashier's Office or an authorized campus cash handling station.
    • Any payment received by the department must be processed by someone other than the individuals listed in the chart above.
    • Refer to the Guide to Understanding Separation of Duties - "Separating Duties" topic for more information about assigning duties to an individual involved in handling duties in more than one financial process.
    • Refer to the Cash Handling Guide for more information about handling cash deposits

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  • Obtaining a credit report

    Your department or program is responsible for obtaining and reviewing a consumer credit report for any commercial entity to which $1,000 or more in credit is expected to be extended.
    Follow these steps to obtain a credit report:

    • Go to the Experian Smart Business Reports website.
    • In the search box, enter the name and address of the organization for which you are requesting a credit report.
      • You may be presented with a list of organizations matching the name provided; select the desired organization name.
    • Select the desired type of credit report from the options provided.
      • At a minimum, the "Credit Score" report must be obtained.
    • Use your UCSC Procard to complete the transaction.
    • Once the credit report is obtained, ensure that it is secured from unauthorized access at all times.

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  • Evaluating a credit report

    The "Credit Score Report" is used to assess the credit worthiness of an organization requesting an extension of credit. It contains detailed information divided into sections. An annotated sample report provides additional guidance.

    • Days Beyond Term (DBT): The number of days beyond term should be 15 days or less. Credit should not be extended if the DBT is 50 or more days.
    • Payment Trend Indicator: Credit should only be extended to companies with "Stable" rating
    • Years in Business: Companies in business for less than 2 years require a higher level of scrutiny of the other credit factors than more well-established companies
    • Credit Ranking Score: Ranges from 0 - 100
      • An organization requesting an extension of credit should have a score of 60 or higher
      • A new business may have an unusually low score because of using large amounts of credit combined with a relatively short payment history
    • Recommended Action: the organization should have a rating of Medium Risk or better
    • Collection Filings: Review for history of open or recently closed collections actions which may indicate the organization is a poor credit risk
    • Credit should not be extended to a prospective accountholder if any of the following notices are received in response to obtaining a credit report
      • Credit freeze
      • Fraud alert
        • The identity of a prospective accountholder must be verified before credit may be extended
      • Unusual credit activity, such as an increased number of accounts or inquires
        • A satisfactory explanation must be provided by the accountholder before credit may be granted
      • Address discrepancy
        • The discrepancy must be satisfactorily resolved before credit may be granted

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  • Safeguard key data

    All data containing protected information, whether in electronic or paper format, must be secured from unauthorized access at all times.

    Key Data

    • Protect data containing any of the following information:
      • First name or initial, and last name
      • Signature
      • Address
      • Telephone number
      • Social security number (as applicable)
      • Driver's license or state-issued identification card number (as applicable)
      • Bank account or credit card number, including associated security code or password (as applicable)
      • Credit report information (as applicable)
    • Notify one of the following individuals if you suspect unauthorized access of protected data has occurred.

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  • Scope

    Each of the following data handling processes must include controls ensuring that personal sensitive information is protected.

    Data collection

    • Use secure means to obtain customer information
      • Do not transmit unencrypted data as an attachment file to an e-mail message
      • Facsimile machines used to collect customer data must be secured from unauthorized access

    Data maintenance, update, access, and disclosure

    • Ensure paper records are secured and access to them is controlled
    • Ensure information in electronic format is maintained in compliance with campus IT practices
      • Do not store accountholder information on individual workstations
      • Do not transport accountholder information on unsecured portable storage devices
    • Ensure procedures are in place to detect and prevent attempts to fraudulently obtain personally identifying data
      • Verify the identity of any individual making an accountholder account inquiry or change (i.e. update)
      • Investigate suspicious account activity

    Data disposition

    • Ensure data is timely, appropriate, and properly disposed
    • Shred (preferably cross-shred) all material containing accountholder information

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  • Data handler requirements

    Individuals must meet all of the following criteria in order to gain access to information containing protected data:

    • Business purpose - Individuals must have a valid business reason in order to access accountholder data.
    • Appropriate access - Limit data input and update privileges only to those requiring such access.
    • Competency - Individuals having access to data must be competent and qualified.

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  • Applicable regulations and policies

    Campus department personnel must have a working knowledge of all laws, regulations and policies governing the collection, retention, and distribution of the data it collects and maintains. Refer to the ITS Restricted Data Resources website for more information about protecting restricted and confidential data from unauthorized access.

    • California State Information Practices Act of 2002 (SB 1386) - outlines requirements and procedures for notifying parties whose computerized, personal information is reasonably believed to have been acquired by an unauthorized person
    • Federal Trade commission Red Flags Rule - outlines requirements for implementing controls in accountholder data handling processes to detect and manage attempts by unauthorized parties to access personal, identifying data.
    • UC Business and Finance Bulletin RMP-2 - Records retention and disposition: principles, processes, and guidelines - describes UC principles and processes for managing records and outlines roles and responsibilities of those involved in the processes.
    • UC Business and Finance RMP-7 Privacy of and Access to Information Responsibilities - describes UC principles and processes for managing records and outlines roles and responsibilities of those involved in the processes.
    • UC Business and Finance Bulletin RMP-8 Legal Requirements on Privacy and Access to Information - outlines the legal requirements governing the privacy of and access to information.
    • UC Business and Finance Bulletin RMP-12 - Guidelines for Assuring Privacy of Personal Information in Mailing Lists and Telephone Directories - outlines the requirements governing the use of personal information in mailing lists and directories

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