4.0 - Write-Off Recoveries

SUBJECT:

Write-off Recoveries for Non-Student Accounts Receivable

SOURCE:

Non-Student Accounts Receivable, Financial Management Services

DATE ISSUED:

December 2004

DATE OF LAST REVISION:

March 2019

ARSOP NO:

4.0

RATIONALE:

To account for recovered accounts receivable previously deemed uncollectible.

ARSOP:

Should funds be collected at a later date, the entry to record the recovery of these funds is as follows for both KFS and Non-KFS Accounts Receivable users is as follows.

NOTE: KFS Accounts Receivable users should not create a new invoice

Allowance Method:

Direct Method:

Collection Agency: Should the funds later be recovered via a Collection Agency, the entry to record the recovery of these funds is as follows for both KFS and Non-KFS Accounts Receivable users:  NOTE:  KFS Accounts Receivable users should not create a new invoice. Collection agency fees and charges are considered an expense of the unit generating the charges and should be charged to the appropriate object code—5110.

Annual Reporting of Write-offs:
Per Indiana University Policy VI-80, all invoices written-off during the year must be submitted and reported to Accounts Receivable on an annual basis for review by the Board of Trustees.

Exceptions to this standard operating procedure require the approval of the Controller, Chief Accountant or Director of Non-Student Accounts Receivable.

DEFINITIONS:

Aged Receivable Report as of June 30 should include customer name and outstanding balance, aged for current, 30, 60, 90, and 120 days. Report should be system generated by KFS accounts receivable or by accounts receivable system previously approved for use by Auxiliary Accounting in consultation with campus administration.

Average Accounts Receivable should represent the sum of the prior fiscal year's twelve months accounts receivable balances divided by twelve.

Materiality should be set at a level at which a user of the financial statements would not be influenced if this information were missing. Materiality should be agreed upon with campus administration for each unit individually.

Non-Student Accounts Receivable are charges billed outside of the bursar system to students, as well as charges billed to external parties by the university for goods or services.

Productive Activity is having a recent (within 30 days) promise to pay, in writing and signed by the debtor, or a current payment plan in place on the account. Additionally, Non-Student AR requires that all non-student payment plans have payment activity within 90 days of the plan effective date of the payment plan, or within 90 days of the invoice aging to 365 days old, unless otherwise stated in the terms and conditions of payment plan.

CROSS REFERENCE:

Accrual Voucher Documentation

RESPONSIBLE

ORGANIZATIONS: 

All auxiliary units reporting non-student accounts receivable