Some campus departments may be authorized to provide services or products to students, faculty, staff, and/or the general public.
The information provided is intended to assist a UCSB 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 to the University must be extended.
This information should not be used as a comprehensive reference to the related UC policy. In cases where a comprehensive reference is needed, the UC policy should be consulted. Where conflicts exist between this policy and UC policies, UC policies shall take precedence.
Accounts receivable – Money which is owed to UCSB by a customer for products and services provided on credit.
Billing department – A UCSB department or program that is authorized to bill a customer for services or products provided.
Customer – a member of the general public or campus community (student, staff, faculty) who purchases a service or product from a campus department.
General public – an individual that is not a student or employee of the University, or an entity that is not officially affiliated with the University.
Responsibilities and Authority
The Department Billing Coordinator is accountable for ensuring that the departmental billing and accounts receivable process operates effectively. For the purposes of good separation of duties, other departmental staff members are expected to be involved in each of the different billing and receivables
The Department Head is accountable for ensuring that the credit of the University is extended in a prudent manner to members of the general public, and for the proper application of this policy.
The Associate Vice Chancellor – Finance and Resource Management and Campus Controller have primary responsibility for rescinding the authority of a campus department to extend credit.
Requirements for Granting Credit
The granting of credit is not a primary function of the University. The 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
A campus department authorized to extend the credit of the University must comply with the following requirements:
- 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 old
- Accountholder has failed to fully comply with any payment term
- Ensuring the prompt and accurate billing of all customers
- A department may manage its own billing and receivables or utilize the services of the central campus billing and receivables management system (BARC)
The department is responsible for maintaining adequate internal controls over the billing and receivables process. This includes the following:
- Maintaining relevant written billing and collection procedures
- Using sequentially numbered invoices
- Documenting and obtaining appropriate approvals for all adjustments made to customer accounts
- Using qualified staff in the billing and receivables process and providing them with adequate training and support
- Documenting collection efforts for each past due account
Billing and receivables process functions must be assigned to the appropriate staff members in order to avoid potential conflicts in duties. To allow for adequate separation of duties, each of the following functions should be assigned to a different, qualified staff member:
- Approving the granting of University credit
- Reviewing and approving billing production and distribution
- Reviewing and approving customer account adjustments
- Handling and accounting of cash payments received by the billing department in error
- Pursuing collection efforts on past due accounts
The department is responsible for complying with the following billing requirements:
- Obtaining and maintaining current customer account information necessary to facilitate billing and collection efforts
- Providing the following information with 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 UCSB Cashier's Office, 1212 SAASB, University of California, Santa Barbara, CA 93106-2003
- A payment may not be accepted by the billing department unless it is an authorized UCSB Cashier Office
- Promptly billing customers for the sale of goods or products no less frequently than monthly
- Recording the billing in departmental accounts receivables records
The department is responsible for complying with the following receivables management requirements:
- Reconcile the accounts receivable balance appearing in the general ledger to department subsidiary billing records
- 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 account holder
- Identify accounts showing unusual balance fluctuations indicating possible identity theft
- Follow-up with accountholder to ensure activity is valid
- Identify each past-due account
- Assess a late payment fee on each account that remains unpaid for 30 or more days after the original billing date
- Initiate collection efforts for each account that remains unpaid for 30 or more days after the original billing date
- Contact the account holder through a collection letter or telephone call
- Document each contact with the account holder, noting date, time, and nature of contact
- Write Off Invoices that remain unpaid after 6 months
- Prepare the appropriate entry to reverse the revenue recorded and to eliminate the receivable balance
- Do not extend any further credit to the account holder or pursue any further collection efforts
Accrued Revenue Reporting to Business and Financial Services
At fiscal year-end, departments should contact General Accounting to record non-BARC system Account Receivable transactions greater than $50,000. This is to record revenue earned by UCSB and billed to outside organizations in the current and correct fiscal year.
Accountholder data must be safeguarded from unauthorized access at all times by:
- Complying with all UC and UCSB policies applicable to maintaining and protecting the data collected or produced as a function of the billing, receivables and collections process.
- Complying with all laws and regulations applicable to the protection of customer financial and personal identity information.
Rescission of Authority
A campus department failing to comply with the University’s or the UCSB billing and receivables guidelines may have its authority to extend the credit of the University rescinded by the Campus Controller; Associate Vice Chancellor, Finance and Resource Management; Executive Vice Chancellor; or Chancellor.
Related Policies/References for More Information
UC Accounting Manual