Loading...
HomeMy WebLinkAboutAccounts Receivable policy Jan 2016Page 1 Administrative Policies and Procedures Title: Financial Policies Section: Accounts Receivable Policy Date of Version: January 2016 SECTION I - POLICIES A. All Accounts Receivable processing will be conducted through the Accounting Division of the Finance Department unless otherwise authorized by the City Manager B. The Accounting Division operates on an ongoing basis to ensure the following: i. Invoices are sent out to appropriate customers ii. Receivables are charged to the appropriate accounts iii. Outstanding receivables are identified and followed up upon C. The Accounting Division receives invoice requests from various departments and processes the requests for approval. D. The Account Clerk manually enters all required data into the Munis financial system for invoice generation. E. Accounts receivable invoices will be sent out weekly by the Accounting Division or more frequently if necessary. F. The Accounting Division sends monthly individual account statements and late due notices for all outstanding accounts receivable unless the account has been written-off. G. Individual departments and the Accounting Division are both responsible for monitoring outstanding invoices monthly in ‘Munis’ and initiating additional action regarding an outstanding receivable. Page 2 H. Individual departments are responsible for taking the required steps necessary to collect an outstanding invoice prior to write-off; the department will also consider additional actions such as denial of service, recovery of property, eviction, or other necessary actions. I. All write-offs and adjustments are made by the Senior Accountant, which are then reviewed and approved by the Controller. Write-offs over $10,000 are required to be approved by the Finance Director. J. A monthly summary/report of all write-offs will be given to the Finance Director and the City Manager’s office for review. SECTION II - PROCEDURES A. An invoice request will be sent to the Accounting Division from an outside department to review and process. Information required for processing includes: i. Customer to bill ii. Description of the services or goods to be billed for iii. Amount of the bill iv. Appropriate account to charge B. Information provided by the outside department regarding the receivable is entered into Munis by the Account Clerk and an invoice is generated. C. New customers are entered by the Account Clerk into the Munis financial system from the information provided by the department. D. All supporting documentation is scanned and added to the appropriate file within the Munis Financial System. E. Once the invoice is generated, the invoice will be placed into a batch with other receivables and then sent out weekly. Invoices are placed in batches based upon when they are generated. If necessary, invoices may also be sent out individually and immediately as needed. F. The Senior Accountant reviews all batches to ensure accuracy. The Account Clerk prints and mails invoices following review by the Senior Accountant. G. The Account Clerk prints and mails statements monthly for active and outstanding accounts. Page 3 H. When an invoice is past due by 90 days these are the procedures that will be followed: i. At 90 days past due a late due notice will be sent by Accounting. ii. At 150 days past due Accounting will notify the respective department of the past due invoice to see if they can provide any assistance to collect payment. iii. At 180 days past due a. For invoices that a lien can be created, see Procedure I. b. If the invoice can’t create a lien and it is greater than or equal to $500 it will be reviewed by the City Attorney’s office. The City Attorney’s office will determine if any further legal action is required or available. The invoice will be written off. c. If the invoice can’t create lien and is less than $500 it will be submitted to a collection agency and the invoice will be written off. I. Semi-annually all outstanding invoices will be reviewed by the Account Clerk. The Account Clerk will create a list of all invoices that can create a lien and prepares a file for each that is sent to the City Attorney’s office for review. The City Attorney’s office will determine if the City can proceed with the lien process. For those invoices that can create a lien, the Account Clerk will work with City Clerk’s office to ensure that the proper notices are sent following their assessment schedule and verify if any payments have been made as deadlines approach. i. For these types of invoices, Accounting can accept a payment arrangement for 6 months or less before City Council accepts and approves scheduled liens. a. If the customer doesn’t make the required payments, a second payment arrangement will not be allowed. ii. When the listing of liens is sent to Johnson County, the invoices will be written off. J. Any necessary adjustments are entered by the Senior Accountant. The Controller reviews and approves all adjustments and write-offs. The Finance Director reviews and approves all adjustments and write-offs greater than or equal to $10,000. K. A monthly report of accounts receivable write-offs will be given to the City Manager’s office and the Finance Director.