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The Three Rs
Recharge, Rebill and Reimbursement
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What does this document cover?
Understand the key characteristics of
each of the three Rs
Understand the underlying accounting
concepts that provide guidance on how
these activities should be recorded
Understand how to apply the accounting
procedures
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What is a Recharge?
istinguishing !haracteristics " Recharge# $ recharge is a charge
for goods or services provided by one internal
university unit to other internal university units# Rates must
be approved by the %ffice of &inancial $nalysis# These revenue
generating 'recharge( activities have rate structures that
include direct costs such as technicians to maintain testing
e)uipment, officestaff to administer billing and timekeeping,
supplies consumed and the costof e)uipment maintenance contracts*
etc+
# Units who recharge usually operate in the auiliary fund range,
and mosttypically in the -nternal .ervices &und '/0111(
2ample3 $ !hemistry 4ab analy5es samples for another
academic
department# The !hemistry department charge the academic
departments chartfields atan epense account 67800/ '!hemical
$nalysis &ees(
# The !hemistry department records recharge revenue on their
chartfields ataccount 971111 ':eneral Recharge Revenue(
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$ccounting for Recharge
$ctivity# Recharge activity must be billed through the
.ervice Unit ;illing '.U;( process
# !hanges to the .U; process $dditional re)uired fields
'&all 0179(
# !ontact &inancial %perations
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What is a Rebill?
istinguishing !haracteristics " Rebill
# $ rebill is a specific type of cost transfer3
=oving the original cost of a good
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$ccounting for Rebill $ctivity
# $ll rebill activity must be recorded as a reallocationof
epenses instead of revenue
# %ptions3
=ove the epense using the original epense account onboth sides
of the service unit billing or Aournal entry
$ Universitywide rebill program 'R2;-4( has been createdto help
identify rebill activity
!ontraepense accounts in the B-nternal RebillC range of
accounts '601011 to 601DDD( have been epanded to helpidentify
rebill activity
# !ontact &inancial %perations
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What is a Reimbursement
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$ccounting for
Reimbursement
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What resources are available?
&inancial %perations3www+finance+umich+edu
