Finance and Planning
Financial Services
Grants Aging Receivable Procedure
Table of Contents
01. Process Overview ....................................................................................................................... 2
02. Process Description .................................................................................................................... 2
03. Process Flow .............................................................................................................................. 3
Invoices Less than 60 Days Outstanding ................................................................................ 3
Invoices Between 61 – 90 Days Outstanding .......................................................................... 3
Invoices Between 91-120 Days Outstanding ........................................................................... 3
Invoices Between 121-180 Days Outstanding ......................................................................... 3
Invoices Over 180 Days Outstanding ...................................................................................... 3
04. Reasons for Outstanding Payments ........................................................................................... 4
05. Aging Report and Sample Invoice Log ....................................................................................... 5
06. Accounts Receivable Process Flow Chart ................................................................................. 6
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01. Process Overview
This Accounts Receivable procedure describes the steps that are necessary to monitor and
pursue the collection of payments from sponsors where payments are past due. On a regular
basis, Finance and Planning Grant Accountants will review and document the status of open
receivables in their specific populations.
Grant Accountants will identify outstanding invoices with potential problems and resolve them
through the collections process. There are numerous reasons for non-payment of an invoice.
The source of the problem may be associated with the invoicing process, a difficulty on the
sponsor’s end, or a technical/contractual problem with the Primary Investigator (PI).
When reviewing outstanding invoices, the Grant Accountant will take appropriate follow-up action
which, in time, will escalate to leadership and/or legal council depending on the number of days
outstanding and number of unsuccessful follow-up attempts. Examples of possible follow-up
action are letters, emails, and phone calls.
The Grant Accountant must document all actions taken to resolve outstanding invoices in the MS
Access Grants Database. A copy of any correspondence or dunning letter should also go in the
award file and stored in the appropriate grant folder on the shared drive. Since outstanding
payments will always be due from sponsoring agencies, this is considered a cyclical process
needing constant monitoring throughout the year.
02. Process Description
At the beginning of each month, Grant Accountants will review their population of accounts to
confirm that payments have been received. Following this review, each Grant Accountant will
meet individually with the Grants Manager to review their accounts and also to discuss any
Accounts Receivable issues.
At these meetings, the Grants Manager will review the comments and prioritize work for the
following month with each Grant Accountant. Additionally, Grant Accountants will identify each
invoice for which they are responsible that is older than 120 days. In the prioritization meeting, it
will be decided if additional action is needed for these invoices.
In addition to the meeting, each accountant is required to conduct Accounts Receivable follow-up
commensurate with the Accounts Receivable process flow, unless circumstances require different
action as deemed by the Grants Manager.
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03. Process Flow
Details of this process flow are as follows:
Invoices Less than 60 Days Outstanding
1. No action required
Invoices Between 61 – 90 Days Outstanding
1. Prepare and send a signed dunning letter with a copy of the invoice attached.
2. File a copy of the signed dunning letter and the invoice copy in the award file folder.
3. Scan and store the signed dunning letter and invoice copy in the grant’s folder under the
\\fsstor\departments\grantsandcontracts directory.
4. Add comment to the invoice notes section of the MS Access Grants Database.
Invoices Between 91-120 Days Outstanding
1. Contact the sponsor by telephone about the outstanding invoice and document this
conversation.
2. Send a follow-up signed dunning letter with a summary of the conversation.
3. Provide a copy of the signed follow-up dunning letter to the PI.
4. File a copy of the conversation notes and follow-up dunning letter in the award file folder.
5. Scan and store the conversation notes and follow-up dunning letter copy in the grant’s
folder under the \\fsstor\departments\grantsandcontracts directory.
6. Add comment to the invoice notes section of the MS Access Grants Database.
Invoices Between 121-180 Days Outstanding
1. Grant Accountants share query with Grants Manager of all invoices greater than 120
days old.
2. Contact the sponsor by telephone about the outstanding invoice and document this
conversation.
3. Send a follow-up dunning letter, signed by the Grants Manager, with a summary of the
conversation. The tone of the letter will be changed, mentioning legal consequences if
the invoice is not paid.
4. Provide a copy of the follow-up dunning letter to the Budget Representative and PI.
5. File a copy of the conversation notes and follow-up dunning letter in the award file folder.
6. Scan and store the conversation notes and follow-up dunning letter in the grant’s folder
under the \\fsstor\departments\grantsandcontracts directory.
7. Document the history of all actions taken in the invoice notes section of the MS Access
Grants Database.
Invoices Over 180 Days Outstanding
1. Grant Accountants share query with Grants Manager of all invoices greater than 180
days old.
2. The Grants Manager will determine if the matter needs to be referred to legal council.
3. If referred to legal council, provide the legal council with a copy of the dunning letters and
conversation notes, and a list of invoices over 180 days, and update the history in the
invoice notes section of the MS Access Grants Database..
4. If not referred to legal council, follow steps 2-6 for 121-180 Days Aging.
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Financial Services
04. Reasons for Outstanding Payments
Even with strict adherence to the steps documented in this procedure, there will always be
special circumstances for each sponsor on why an invoice may not have been paid. Some of
those reasons include:
The sponsor:
o is insolvent or bankrupt;
o disencumbered the funds prior to paying the final invoice;
o is a slow-payer. Their invoices typically are late being paid;
o only remitted a partial payment;
o moved and failed to provide proper forwarding information;
o skipped the payment as a result of losing or misplacing the invoice;
o paid the invoice, but failed to identify the invoice or award number on their payment,
and Pace has not been able to apply the payment, thus it is in the cash clearing
account awaiting application;
o returned the invoice to Pace because:
 the invoice was issued late (sent after the due date per the contract);
 the invoice was in the wrong format, and/or had the wrong dates of service,
fund year, contract dates, or other information,
 the expenses were not incurred according to budget, were unapproved,
inappropriate, or not sufficiently described;
 financial backup data was not provided where demanded by the sponsor;
 the billed expense exceeded the authorized budget (total budget or line item
budget), and the sponsor short-paid the invoice by this amount plus any
indirect costs.
The invoice was sent to the wrong address, person, or is undeliverable;
The PI did not submit the required deliverables or resigned before completing the work.
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05. Aging Report and Sample Invoice Log
Sponsor:
City of White Plains, Public Safety Department
Banner Numbers
Index
Fund
Org
Advantage
Number
Payment Type #
L6590
F05602
LW6590
2000-383-7170
Invoice
Date
Mailed
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Outstanding
2
1/1/2004
$32,869.74
$2.75
3
1/1/2004
$29,945.10
$0.03
4
7/20/2005
$46,582.43
$100.45
8
2/2/2006
$33,107.62
$33,107.62
10
2/2/2006
$26,106.87
$26,106.87
11
2/2/2006
$6,582.36
$6,582.36
$175,194.12
$65,900.08
Total:
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Invoice
Amount
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Finance and Planning
Financial Services
06. Accounts Receivable Process Flow Chart
End of the billing process
After month-end close,
Grants Manager (“GM”)
schedules a meeting with
Grant Accountants (“GA”)
GA run the “Invoices to be
Paid” report in the MS
Access Grants Database
GA meet with GM by the
10th of the month to review
the Invoices report and
prioritize work for the
current month
GM identifies any AR
issues
No. Days
Outstanding
(“O/S”)?
< 60 Days
O/S
61 < 90 Days
O/S
91 < 120 Days
O/S
121 < 180 Days
O/S
> 180 Days
O/S
No Action Required
GA prepares dunning
letters for accounts w/
outstanding invoices; a
copy of the invoice(s) will
be included
GA contacts the sponsor
via phone for accounts w/
outstanding invoices over
90 days
GA refers any invoices
120+ days outstanding to
the GM
GA prepares & submits a
report of outstanding
invoices over 180 days to
the GM
File a copy of the dunning
letter in the award file folder
Sign and issue a follow up
dunning letter to sponsor
with summary of the
conversation
GM contacts the sponsors
directly (via phone) for
accounts w/ o/s invoices
over 120 days
GM will determine if
matter needs to be
referred to legal council
Provide a copy of dunning
letter to PI
Prepare a follow up
dunning letter to sponsor
with summary of the
conversation and legal
consequences
No
Store the signed dunning
letter and invoice copy in
the computer folder for the
grant
Refer to legal
council?
Yes
Add comment in MS
Access Grants Database
File a copy of the dunning
letter in the award file folder
Provide a copy of the
dunning letter to Budget
Representative and PI
Provide a copy of
correspondence history
with detail summary to
legal council
Store the signed dunning
letter, invoice copy, and
conversation notes in the
computer folder for the
grant
File a copy of the dunning
letter in award file folder
Add comment in MS
Access Grants Database
Add comment in MS
Access Grants Database
Store the signed dunning
letter, invoice copy, and
conversation notes in the
computer folder for the
grant
Start of the billing process
(A/R process starts over)
Last Changed: September 7, 2010
Add comment in MS
Access Grants Database
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