External Sales Policy, Procedure, Contract, Amendments Updates April 30th, 2014

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External Sales
Policy, Procedure, Contract, Amendments
Updates
April 30th, 2014
University of Minnesota
Agenda
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Policy & Procedure Update
Risk Assessment Survey
Contracts Library
Terms & Condition on Invoice
Approval Form
Service Agreement Short Form
Amendments
Other process considerations
Questions & Answers anytime during the presentation
2
Policy
University Administrative Policy:
“Selling Goods and Services to External Customers”
http://policy.umn.edu/Policies/Finance/Accounting/EXT
ERNALSALES_PROC04.html
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Procedures
University External Sales Procedures:
• Conducting External Sales
• Establishing an External Sales Accounting Structure
• Establishing External Sales Rates
• Establishing External Sales Agreement
• Unrelated Business Income Tax Procedures, and
Collecting and Remitting Minnesota Sales Tax on
External Sales Transactions
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Policy Update – Risk Based Approach
Use the on-line risk assessment survey to determine
whether a sales transaction is classified as low, medium
or high risk.
• Defines the accountability
• Operating procedures
• Oversight
• Monitoring procedures
Handout provided: Risk Profile of sales Transactions (Roles
and Responsibilities)
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Low Risk
• Self-monitor and provide local oversight regarding pricing
decisions and financial implications.
• Discretion as to the method used to process sales activity.
– Units may choose to either use a University-approved contract
– Bill customers via the EFS billing system.
• Management of compliance activities (e.g. collecting and payment
of sales tax)
• Controller's Office will review low-risk sales activities every 4-5
years for compliance with the policy
• Controller's Office will keep a repository of all external sales
contracts
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Medium Risk
• Units will work with the Controller's Office:
– to complete a business plan for sales activity
– formal rate development
– contract
• Controller's Office will provide:
– pricing assistance for units requesting the service
– responsible for monitoring and providing oversight
– review medium risk sales activities every 2-3 years for
compliance with the policy
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• Units will work with the Controller's Office:
– Business plan for sales activity
– Formal rate development
– Contract
– Market pricing
– Financial stability of customer
• Controller's Office will provide:
– Pricing assistance for units requesting the service
– Responsible for monitoring and providing oversight
– Review high risk sales activities every 1-2 years for compliance
with the policy
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Risk Assessment Survey
This survey (on-line risk assessment survey or External Sales Risk
Assessment) is designed to help units conducting external sales
determine if their sales activity with a given customer is
,
or
risk.
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Risk Assessment Survey
The survey is located at :
 Selling Goods and Services to External Sales: Assessing the Risk
Profile of Sales Transactions, Use of Contracts, Appendices
 Conducting External Sales Activity: Applying risk based factors,
Evaluate risk category,
 Establishing External Sales Rates: Applying risk based factors
 Establishing External Sales Agreements: Introduction
 External Sales website: Risk Assessment
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Risk Assessment Survey
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Example of using the Risk Assessment Survey online
To begin the survey, please fill out the following information
fields
Full Name
Email Address
Department Name
DeptID #
Choose the answer to each characteristic that best describes your
activity.
FORM: OGC-SC102
Form Date: 01.29.02
Revision Date: 11.16.10
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Risk Assessment Survey
Questions that are asked on the survey:
1)
2)
3)
4)
5)
6)
7)
8)
What is the anticipated revenue on this transaction?
What is the customer type?
What is the payment history?
Does the customer contribute to the design or manufacturing?
Customer’s main line of business?
Service provided by the unit?
Taxes or fees as a result of transaction?
Shipped outside of United States?
FORM:
12 OGC-SC102
Form Date: 01.29.02
Revision Date: 11.16.10
Risk Assessment Survey
Results that are provided:
Your activity is considered to be “Low, Medium, or High Risk”
based on the answers you have selected.
Will provide a summary of what it means to be at “Low, Medium
or High Risk” activity.
Important: You must click submit to finish this survey.
FORM: OGC-SC102
Form Date: 01.29.02
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Revision Date: 11.16.10
Contract Library
Utilize standard U of M agreements whenever possible, available at
OGC website: www.ogc.umn.edu/
Standard Agreement
• If standard agreement is used, OGC does not review
Non-Standard Agreement
• If non-standard agreement is used, OGC must review, and
usually negotiate with customer’s counsel
FORM: OGC-SC102
Form Date: 01.29.02
Revision Date: 11.16.10
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Contract Library
Go to “Contracts”
http://www.ogc.umn.edu/contracts/index.htm
Standard Contracts Library
http://policy.umn.edu/contracts/
External Sales & Purchasing Agreements
Used for external sales and purchasing.
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Terms & Condition on Invoice
If customers are billed via the EFS billing system.
 Provide customer with the terms and conditions
provided on the back of the invoice in advance of starting
work.
FORM: OGC-SC102
Form Date: 01.29.02
Revision Date: 11.16.10
Handout provided: Terms & Conditions
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External Sales Activity Form
Internal/External Sales Approval Form UM 1699
Updated:
External Sales Activity Form UM 1799
FORM: OGC-SC102
Handout provided: External
Sales Activity Form UM1799
Form Date: 01.29.02
Revision Date: 11.16.10
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Service Agreement Short Form
UNIVERSITY SHORT FORM SERVICES AGREEMENT
Current criteria:
• Use with low risk transactions
• Should not be used in lieu of an existing standard service
agreement template, unless ALL of these criteria are met:
• Value of services being provided must be $5,000 or less;
• No additional terms, conditions, services, activities or
modifications of the agreement
Handout provided: Short form and Guidelines
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Amending a Service Agreement
Contract has been identified as an agreement that can be modified
• An amendment can change the compensation or term sections of the
services Agreement.
• Increases the compensation, add services or extending the term of an
agreement without having to start a new agreement.
• Once an agreement has expired it can no longer be amended.
• Extend the term for up to three years.
• Consider collection issues, services provided and terms.
• Original agreement will be included in the amendment.
Handout proved: Amendment and19 Instructions
Other Considerations
Customer presents their company contract to University, these steps
may help to speed up the contracting process:
• Offer the University Standard Contract as a counter offer. If they
accept it and sign it, then the negotiations are complete.
• If they choose to "mark-up" or "take exception" to parts of our
standard agreement, then it would need to go through OGC for
review
• If they reject our contract and insist on using their company
contract, negotiations on terms & conditions will generally take
longer than starting with the University agreement
me offering, these steps may help to speed up the contracting process:
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Contracting Tips
Tips Unit to help speed up a medium or high risk contract through
OGC:
•Use the latest revision of the standard contract.
•Supply any background information and/or related contracts with
customer.
•Provide standard rate sheet or rate development.
•Provide the contact information for the customer's legal
representative.
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Contracting Tips - Cont.
Additional tips:
•Provide a date when you need the contract to be ready for
customer signature.
•Provide any changes to the insurance clauses.
•Provide information is work for a foreign entity, services will be
provided in or is coming from a foreign entity.
•Supply DeptID # and approved ESAF #.
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Contract Review
Questions and Answers
Contact Information:
Keith Jansen
Russ Bakke
Steve Brandeen
4-5540 [email protected]
4-8835 [email protected]
4-9014 [email protected]
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