Accounts Receivable, PPM6210

The State Department of Administration has established policies and procedures to be followed by all state agencies in the management, collection and reporting of accounts receivable.

As used in this chapter, "accounts receivable" refers to amounts due from federal, state or local governmental agencies, from other funds within the same agency, and from firms, individuals or others which have been billed as a result of regular business transactions. Amounts covered by Interdepartmental Vouchers (IDVs) which have been received by the Selling Department need not be included as receivables, even though the IDV credit has not yet appeared on the monthly departmental FRS statement.

.020 Records and General Receivable procedures

Accurate records are to be maintained on all accounts receivable. The records to be maintained for each customer must include the complete name and address plus the social security number, Federal Employer Identification Number (FEIN) or other taxpayer identification number.

At the time of sale, a charge slip or invoice is to be provided to the customer. These are to be consecutively numbered for accountability. The sale is to be entered into an accounts receivable ledger for the customer and the total sales for the day are entered into a control ledger. The accounts receivable ledger is to be maintained for each account showing all charges and payments. The control ledger is to equal the receivable ledgers for all customers. A monthly reconciliation is to be completed between the receivable records for the customers and the control ledger to ensure accuracy.

Statements are to be sent at least monthly to all customers who have an outstanding balance due. The statement should indicate the total balance due and identify a payment due date. The payment due date is up to each department, but should allow sufficient time for the department to post the payment before the next billing cycle. If the department has approval to assess a finance charge, the amount and terms must also be disclosed on the statement. If full payment is not received the procedures outlined in .025 are to be followed.

.025 Departmental Collection Procedures

It is the responsibility of each department to collect monies due to Kansas State University in the most effective and efficient manner. The following procedures for collecting accounts are to be used plus any others found necessary or efficient for collecting amounts due:

Obtain the complete name and address before extending credit plus the social security number of individuals or a Federal Employee Identification Number (FEIN) for businesses.

Use the following steps for accounts which exceed $25.00 and keep a record of each action, including the name or initials of the person taking the action and the date the action was taken.

Step	Days From Date of Charge	Action
1	30	Send first statement to customer.
2	60	Send second statement to customer. (If the customer is a student, encumber the student's academic records. See .050 Encumbering Student Records Due to Delinquent Account for further details
3	75	Send a letter to customer requesting immediate payment.
4	90	Telephone or send a second letter to customer.
5	105	Send a letter informing the customer that unless the past due payment of $ _______ is received within the next 15 days it will be necessary to refer the account to a collection agency. The letter needs to identify which of the collection agencies listed in .030 Collection Agencies will be used for the account.
6	120	Send a Delinquent Account Data form (original and one) to the Controller's Office for each account that has been processed through the above steps. The Controller's Office will submit the debtor's name and social security number to the State Division of Accounts and Reports in order to "setoff" any State payment due the debtor such as salary, travel reimbursement, income tax refund, etc. At the same time, the Controller's Office will forward the original Delinquent Account Data form to the collection agency and file the duplicate. If the debt is collected by "setoff" the account will be recalled from the collection agency.
7	360	If the account has been at the collection agency for at least 6 months without any collections, the Controller's Office will request that the collection agency return the delinquent account.
8	360	When the account has been returned from the collection agency, the Controller's Office will notify the department to follow the .070 Departmental Write-off Request Procedures.

Only the first four steps are required for accounts of $25 or less. However, they are to be included in the write-off request if not collected. When any account becomes 60 days past due, additional credit should not be given until the account is returned to current status.

.030 Collection Agencies

Accounts may be referred to any of the following firms. These firms will not initiate litigation action until written authorization is provided by the department involved and the K.S.U. Controller's Office.

Collection Agency	Fee Without Litigation	Fee With Litigation
National Credit Management 1177 North Warson Road St. Louis, MO 63132-8900 800-627-2300 X268 FAX: 314-993-8714	21%	29%
Credit World Services, Inc 6000 Martway Mission, KS 66202 800-844-4084 Fax: 913-362-7658.	22%	27%
General Revenue Corporation 11501 Northlake Drive Cincinnati, OH 45249 800-219-8841 FAX: 972-250-1198	21%	30%
Todd Bremer and Lawson Inc. PO Box 808 325 West Oakland Ave Rock Hill, SC 29731-6808 808-849-6669 FAX: 803-328-8242	24%	30%
Windham Professionals 384 Main Street Salem, NH 03079 800-969-0059 FAX: 603-890-3554	21%	29%

.040 Reporting Receivables

A Monthly Accounts Receivable Report (KSU DA-32 form) is to be completed by each department which has accounts receivable. This report is to be maintained in the department. The cutoff date for posting receivable transactions need not coincide with the end of a calendar month. However, all departments are to report receivable data as of June 30th and submit a copy of the Annual Accounts Receivable Report to the Controller's Office by July 15th.

The Accounts Receivable forms and instructions are available by clicking on one of the following documents.

Monthly Accounts Receivable Report Instructions(KSU DA-32 form)

Monthly Accounts Receivable Report (KSU DA-32 form)
Annual Accounts Receivable Report Form Instructions
Annual Accounts Receivable Report Form

The Controller's Office will handle the accounts receivable procedures for sponsored project invoices sent to the Controller's Office. Thus, departments should not include such receivables in their reports.

.050 Encumbering Student Records due to Delinquent Account

An encumbrance may be placed on a student’s academic record due to a delinquent account and can be established to prevent the issuance of a transcript and/or diploma and enrollment (add/drop). Departments or colleges that encumber a student’s academic record should note the following:

Departmental policy should determine the minimum amount for which an academic record should be encumbered; however, it is recommended that no academic record be encumbered for less than $5.00.
Any encumbrance or clearance of an encumbrance is to be posted to the Student Information System by the originating department, college or the Registrar’s Office. Deadlines for encumbering academic records are available by contacting the Registrar’s Office.
Departments are responsible for timely removal of any encumbrance, which they have placed on a student’s academic record.
There are two ways to remove an encumbrance on SIS. The status can be set to D for deleted or P for paid.

KSU departments are to contact the Registrar's Office with questions concerning procedures for encumbering a student’s academic record due to a delinquent account. The Registrar’s Office will train a department or college in using the delinquency process in SIS to encumber a student's academic record.

Lists of students by name and department and/or by delinquency code can be obtained from the Registrar’s Office. These lists do not include delinquent dollar amount.
The Registrar’s Office distributes to each department a list of students whose encumbrance is in an override status immediately following early enrollment. If a department does not want a student’s academic record cleared, the department is responsible for reactivating the encumbrance.

.060 Setoff Collections

When collections are obtained by the setoff action described in Step 6 of the .025 Departmental Collection Procedures, 100% of the receipts will be credited to the department by using an Interfund Order-Transfer Voucher. Another Interfund Order-Transfer Voucher will be used to pay the State Division of Accounts and Reports their 17% collection assistance fee. The Controller's Office will contact the department to determine which account is to receive the payment and from which account the collection assistance fee is to be paid, and will then send a record of each of these transactions to the department for recording and filing.

.070 Departmental Write-off Request Procedures

A department is to apply to the Controller's Office for authority to write-off a receivable when the following criteria have been met:

There are no unsettled differences on the past due account between the department and the debtor.

The department has complied with .025 Departmental Collection Procedures and has determined that the receivable is uncollectible.

The department has received notification in writing from the Controller's Office that the account to be written off has been returned by the collection agency.

The Write Off Request should be completed and sent to the Controller's Office (original and one copy) which includes the following information:

A statement signed by the department head that in his/her opinion the accounts are uncollectible and should be written off.

A list showing each debtor's social security or tax identification number, the debtor's name, the dollar amount due and the basis for determining the account to be uncollectible.

The total dollar amount to be written off.

The total number of accounts to be written off.

All requests to write-off accounts as uncollectible are submitted to the Division of Accounts and Reports in April each year. When the accounts have been approved for write off by the State Division of Accounts and Reports, the department will be notified by the Controller's Office and instructed to delete the accounts from the department's accounts receivable. These accounts are not to be included on the monthly accounts receivable reports after receiving the notification.

All state agency accounts receivable which have been approved for write-off by the Director of Accounts and Reports become assigned to the Director. Any amounts received on these accounts are to be remitted to the Department of Administration, Division of Accounts and Reports, State Office Building 110N, Topeka, Kansas 66612 by an Interfund Voucher. The description on the Interfund Voucher should read, "Transfer of amount collected from ________________. This account has been approved for write-off and thus transferred to the Department of Administration in accordance with K.S.A. 75-3728b." Use State of Kansas sub-object code 2790 (sub-code 2790) on the Interfund Voucher.

The law also authorizes the Director of Accounts and Reports to attempt to collect the accounts which have been written off and thus assigned to the Director. Any collections made by the Division of Accounts and Reports on these accounts will be retained by that office. Each campus department will be notified if collections are made by State Setoff on accounts written off.

Each department is to provide the same assistance for these written off and assigned accounts as they do for other accounts placed in the setoff program, including answering general debtor inquiries concerning the accounts and participation in any appeal resolution hearings or litigation.

.080 Questions

Please contact the University's Cashiers Office (785) 532-6317 if you have any questions about extending credit; recording, managing, collecting and reporting accounts receivable; or other related matters. Questions regarding the annual reporting of accounts receivable are to be referred to Financial Reporting and Inventory section of the Controller's Office at (785) 532-1853. Questions regarding the encumbering of students' records are to be referred to the Registrar's Office (785) 532-6254.

Accounts Receivable

Revised June 23, 2005

Table of Contents