External Billing Procedures:
Information Session
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Agenda
Introduction
5 minutes
Topic 1: Why is the University Implementing the Cash and Billing
Policy?
5 minutes
Topic 2: Billing Procedures Key Points
30 minutes
Topic 3: Question and Answer
15 minutes
Next Steps
5 minutes
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Logistics
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Participate
Ask questions
Turn off cell phones
One person at a time
Location of washrooms
Emergency procedures
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Session Objectives
 At the completion of this session, you will be able to:
– Explain why the University is implementing the new Cash and Billing
Policy
– Explain the key points within the External Billing procedures
– Manage and process invoices effectively and efficiently
– Explain where to go for assistance and help on the policy and
procedures
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Session Structure
Presentation
Reviews/Questions
/Answers
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Why is the University implementing a new
Cash and Billing Policy?
 Auditor General’s Report
– Address potential fraud issues
– Provide clear guidelines and proper controls to
ensure employees are not placed in a harmful
position
 Decentralized processes
– Processing of invoices is managed in a variety
of ways
– Results in lack of internal controls
– Results in invoices not being processed
correctly
– Increases AR effort in matching payment and
invoice
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Why is the University implementing a new
Cash and Billing Policy?
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Clarify accountability
Implement best practices
Improve internal controls
Ensure customers are credit worthy
Ensure the University is compliant with
legislation
 Create efficiency through standardization
of processes and procedures
– University invoice format standardized
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How do these changes impact me?
 You may need to:
– Ensure you are aware of the
changes and new procedures and
have a clear understanding of your
role and responsibility
– Communicate to your Department
staff the implications of the policy
– Update your internal processes to
align with the policy and procedures
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Topic 2: Key Points
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Invoicing
Approval of Invoices
Granting Credit
Cost Recovery
Responsibilities of a Billing Unit
Wire Payments
Collections
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Invoicing
 All billing / invoices are to be processed through the
Finance, Supply Chain Management and Research
(formerly PeopleSoft) system (FSR), Billing Module
 Key points
– Word documents or manual invoices are not
an acceptable format
– If billing outside of FSR in another system,
contact the AR Department
– Exceptions: Tuition, Donations, Retail Sales
and approved exceptions
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Approval of Invoices
 Department Heads
– Individual with the authority for approval (e.g., Manager,
Researcher, etc.)
– Approves all invoices created for Faculty / Department
 Two methods
– Recorded on invoice’s supporting documentation
• For example: Signed Contract, PO Document
– Documented on a pro forma invoice (printed copy of invoice prior
to invoice being set to ready in FSR)
• Applicable supporting documentation attached to approved pro forma
invoice
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Granting Credit
 Department chooses to invoice
– Customer rather than obtain payment at time
good / service, or
– When a recoverable cost is paid
 Decision to extend credit rests with the
accountable Department Head
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Granting Credit
 Department / Department Head responsible to
– Determine credit worthiness of that customer
– Be responsible for associated credit risks
• Charges to be charged to Department bad debt account
– Notify AR of any changes to customer information
 Only those authorized by AR may grant credit to a
customer
– Request submitted in writing to Accounts Receivable using the
Request for New AR Customer/Change in AR Customer Information
form
• New customer is created in FSR so that the invoice can be processed
properly
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Cost Recovery
With a Markup:
Without a Markup:
 If amount is > amount paid =
recovery with a mark-up (sale)
 GL account credited must be
Revenue account and not an
expense account
 GST is charged as it would be for
a normal sale of good/service
 If amount is not > amount paid
= recovery without a markup
(true recovery)
 GL Account credited must be
expense account to which
original charge posted
 Unrecoverable portion of GST
included in recovery as part of
base expense; recoverable
portion not to be included
 No GST charged on the invoice
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Cost Recovery: GST example
Without a Markup:
Original Cost = $100 + $5 GST
Amount charged to the expense account is $100 + $1.67 (1/3
unrecoverable portion of GST)
Amount invoiced as a recovery = $101.67
No amount should be included as GST on the invoice
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GST Treatment
 GST Treatment
– Department is responsible to ensure correct GST assessment of
invoice
• Five applicable GST assessment codes
– FSR Billing Module automatically calculates the applicable GST
depending on the code assigned
• Ensure you check the default code prior to overriding
• Driven by customer setup and address and assigns GST treatment based
on address
– Contact AR if unsure of how to apply GST
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Responsibilities of Billing Unit
 Timing
– Bill only within the current month
– Bills outstanding at month end, must be resolved by 11:00 a.m. on the
first business day of the following month
• Unprocessed items will be deleted by AR
– New invoices are not to be backdated to prior period
– Posting after the period or backdating causes significant system errors
 Invoice Request Form
– AR can provide billing services for those Faculties / Departments who
process < 10 billings per year
– Invoice Request Form should be completed and forwarded to AR
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Payments
 All payments are to be sent directly to Accounts
Receivable
– Internal mail should not be used
– Department advises customer to send future payments
directly to AR
– Hand-delivered to AR
– Should not be deposited at the Cashier’s Office or included in
Departmental deposits
 Invoice number
– System generated alpha numeric characters
 Cheques must be payable to the University of Calgary
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Incoming Wire Payments
 Banking Information
– Only AR is authorized to communicate University banking information
– Against policy to forward University’s banking information to a
Department, Faculty or Customer
– Requests must be send to AR via Request for Banking Information
Form
 Form
– Accounts Receivable sends out form to customer which outlines all
information AR requires to accept and allocate payments
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Collections
 Department Collections
– Expectations and directions are clearly identified through procedures
• Aged Receivables Report
– Communicate back to AR collection activities that have been
conducted and status
 Resulting bad debt charged to Department initiating
invoice
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Topic 3: Question and Answer
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Next Steps: Where to go for Help
 Financial Services Website
– http://www.ucalgary.ca/financial/controller
/accounts_receivable
 Contact:
– ar@ucalgary.ca
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www.ucalgary.ca/financial
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Next Steps
 Accounts Receivable is currently
assessing training requirements
 Future Training
– Instructor-led courses
– Online self-study courses
– Reference material
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Session Evaluation
 Please complete the session evaluation
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