Billing and Accounts Receivable

FSUN Brown Bag

April 14, 2015

Handout

• Available at FSUN website

http://www.finsys.umn.edu/fsun/AR_Best_Practices.pdf

Order to Cash

Credit Analysis and Customer Maintenance•Process customer set-

up/maintenance requests & credit applications

•Request credit checks•Maintain customer

records•Communicate results

to clusters

Order Processing and Fulfillment•Receive purchase

order from customer•Manufacturing,

printing, picking, packing, shipping

•Consultation•Provide services•Leasing/renting

Billing•Prepare and enter

billing information

•Receive sales data & billing information from clusters

•Generate and distribute invoices

•Provide support to clusters in billing best practices and system configuration

Payment Application•Receive payments via

cash, check, EFT, or payment card

•Interface from third-party payment processors (lockbox, bank, payment card)

•Apply payments•Reconciliation

Collections•Generate and

distribute statements of account

•Contact customers to collect past due amounts

•Research and resolve AR discrepancies

•Generate and distribute dunning correspondence

•Compile aging reports

Accounting•Research and resolve

short-pays•Process write-offs and

adjustments•Sales Tax Reporting•GL reporting and

reconciliation

Tasks completed in departments and clusters Services provided by Accounts Receivable

Customer Set-up

• Personal or business address?

Customer Set-up

• E-mail addresses– Used as a primary means of contacting

businesses and individuals– Used for automatic follow-up on unpaid

invoices– Automatic e-mailing of invoices coming

with the 9.2 upgrade

Purchase Order Numbers

ATTN:

SAMPLE EMAIL:

Customer ID: 5023487Customer Name: ABC COMPANY

Dear JOHN SMITH

This Email is to inform you that Invoice 2082566134 for $258.00 is 16 days overdue.Currently you owe $258.00 on this invoice.

Item Details:

Please research and let me know when payment might be expected. ***TO PAY THIS INVOICE BY CREDIT CARD PLEASE GO TO WWW.PAY.UMN.EDU*** If paying by check, please make payable to "Regents of the University of Minnesota" and mail to: Regents of the University of Minnesota; NW 5960; PO Box 1450; Minneapolis, MN 55485-5960

Thanks,

DarylAccounts Receivable ServicesUniversity of Minnesota612/624-0849612/626-3969

Invoice Line Line Description Qty Unit Amount Tax LineTotal

2082566134 1Mastitis Cow/Quarter Culture

43 $6.00 $0.00 $258.00

Excel Billing Upload

Other Billing Tips

• Department printing of invoices

• Credit invoices

• Federal agencies

Banking Information & W-9

Checks Rec’d in Department

• Write invoice number and/or customer number on check

Misdirected checks

Payment Remittance

• Forward all remittance to:

arpaymnt@umn.edu

Credit Card Payments

• pay.umn.edu

• 612-625-2392

Collections

• Statements of account• Dunning e-mails • Telephone calls• Aging review• Third-party collection agencies• Revenue Recapture Program• Office of the General Counsel

Dunning e-mails• Customer Groupings

– Customers grouped based on common follow-up parameters and payment behavior• Government Group (Federal, State, and local

government entities; schools and universities)

• Individual Group (individuals)

• Corporate (most everyone else)

Dunning e-mails• Collection email verbiage

– Increasingly blunt, first, second, and third email wording

– Please research and let me know when payment might be expected. ***TO PAY THIS INVOICE BY CREDIT CARD PLEASE GO TO WWW.PAY.UMN.EDU*** If paying by check, please make payable to "Regents of the University of Minnesota" and mail to: Regents of the University of Minnesota; NW 5960; PO Box 1450; Minneapolis, MN 55485-5960

– Please let me know when payment can be expected for the above referenced invoice. If you have any questions or need further information, don't hesitate to contact me…

– Multiple emails have been sent requesting payment for the attached invoice - please give this matter the attention it deserves. Please let me know when payment can be expected…

• Collection parameters for each group– Days to first email follow up (15d overdue for CORP & IND, 35d overdue for

GOV)– Days between subsequent email follow ups (7d)

Automated Collection Process

• Collection Monitor runs Mon – Fri at 2:00pm – emails automatically sent

• Department and AR Services can place items on “HOLD” – no further emails sent automatically

• Collector copied on all emails • Follow up weekly on items with 4th email• Conversation automatically added to item stating that an email

was sent• No active email? Notification conversation added to item and

followed up manually

SAMPLE EMAIL:

Customer ID: 5023487Customer Name: ABC COMPANY

Dear JOHN SMITH

This Email is to inform you that Invoice 2082566134 for $258.00 is 16 days overdue.Currently you owe $258.00 on this invoice.

Item Details:

Please research and let me know when payment might be expected. ***TO PAY THIS INVOICE BY CREDIT CARD PLEASE GO TO WWW.PAY.UMN.EDU*** If paying by check, please make payable to "Regents of the University of Minnesota" and mail to: Regents of the University of Minnesota; NW 5960; PO Box 1450; Minneapolis, MN 55485-5960

Thanks,

DarylAccounts Receivable ServicesUniversity of Minnesota612/624-0849612/626-3969

Invoice Line Line Description Qty Unit Amount Tax LineTotal

2082566134 1Mastitis Cow/Quarter Culture

43 $6.00 $0.00 $258.00

Third-party Collection Agencies

Accounts Receivable Services uses two 3rd Party Collection Agencies

• Minnesota Department of Revenue (Primary)• Used since September 2011• Agency of choice when Social Security no. (individuals) or Tax

ID # (Orgs.) available

• Central Credit Services, LLC. (Secondary)• Used since May 2014• Do not require SSN or Tax ID

Third Party Collections Process

• Third party referral begins when invoice reaches 120 days overdue and is deemed “uncollectible”

• Originating department ALWAYS contacted first– collections, write-off, or continue effort?

• Collections letter sent to customer – 20 days to respond

• No response – refer account to Agency

Aging Reports• Aging by Chartfield• UM Aging by DeptID Tree

0-30 Days

31-60 Days

61-90 Days

90+ Days

Other Reports

• Accounts Receivable Status by Chartstring

Other Reports

• Accounts Receivable Activity by Invoice

Transaction Detail

Transaction Detail

• Journal ID– BI = Billing Module– ARR = AR Module – Receipt– ARM = AR Module – Maintenance– ARD = AR Module – Direct Journal

(primarily Departmental Deposits)– CCF = Credit Card Fees– MC = Merchant Fees, chargebacks

Upgrade Changes

• Invoice Button• Attachments• E-mailing of Invoices• Reprinting Invoices• Adjust Bills – Approval• Work Centers

Thank you! - Questions?

• Nicole Berg– 612-625-0847– bergx541@umn.edu

• Steve Patrician– 612-624-5475– spatrici@umn.edu

• Darla Schroeder– 612-626-7215– schro077@umn.edu

• David Laden– 612-624-0929– laden003@umn.edu