Policy and Procedure

Name: Approved by: Last reviewed: Trade Debtor Management Executive Group 28 October 2008

SECTION 1 - INTRODUCTION ___________________________________________________________________________ 2 PURPOSE SCOPE ______________________________________________________________________________________ 2 ______________________________________________________________________________________ 2

DEFINITIONS _____________________________________________________________________________________ 2 LEGISLATIVE CONTEXT ____________________________________________________________________________ 2 SECTION 2 - POLICY __________________________________________________________________________________ 3 PRINCIPLES ______________________________________________________________________________________ 3 POLICY ______________________________________________________________________________________ 3

SUPPORTING DOCUMENTATION_____________________________________________________________________ 4 SECTION 3 - GOVERNANCE ____________________________________________________________________________ 4 RESPONSIBILITY __________________________________________________________________________________ 4 VERSION CONTROL AND CHANGE HISTORY __________________________________________________________ 4 POLICY & PROCEDURE DIRECTORY REQUIREMENTS __________________________________________________ 4

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 1 of 8

SECTION 1 - INTRODUCTION
PURPOSE
To formalise debtor management for Swinburne University of Technologys Trade Debtors. To provide specific processes and quality service for departments, minimise credit risk, address recovery of debts, and clear ambiguity.

SCOPE
All Trade Debtors of Swinburne University of Technology. Useful as a guide for all other types of debts, across the entire University. Applies to: Finance Department and all departments who raise invoices on Finance One

DEFINITIONS
Word/Term Definition

LEGISLATIVE CONTEXT
Name Location

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 2 of 8

SECTION 2 - POLICY
PRINCIPLES
The University will invoice for goods and services provided to clients. Debtors will be required to pay in accordance with the Universitys terms of trade.

POLICY
1. 1.1 NEW ACCOUNTS Setting up a New Account An Account Application Form is to be completed by the relevant debtor (client) entity (except where the Donations, Sponsorships and University Services Billings form is used, which may be completed by Swinburne staff). All applicable forms can be found under Finance Department, Forms on the intranet. Once all relevant forms are completed and appropriately signed, these forms are to be lodged via e-mail to creditaccount@swin.edu.au Provided all documentation has been fully completed (must contain signatures), Finance will process the application and activate a new account on Finance One. This process will usually be within 72 hours, with the relevant staff member (as noted on the form) notified via e-mail. All applicants, except cases where the Donations, Sponsorships and University Services Billings form is used, are subject to satisfactory credit approval. Finance reserve the right to refuse credit if the application forms have not been appropriately completed or searches/references prove incomplete or questionable. All student related debts which are already included on the student administration database (Ascol), are not to be transferred to Finance One. This includes, but is not limited to, all course related, fee categories, organisational units, etc which are already adequately maintained in the Student Administration database. This ensures that current contact details are maintained and automatic blocks are activated. The only exception being Third-Party invoices (refer 2.2). 1.2 Account Application Form All departments must ensure that one of three Account Application Forms is completed for any new debtor for inclusion into Finance One. The first form titled Account Application Form - GovSX is for Government, SemiGovernment, Statutory Organisations, Registered Charities or Stock Exchange Listed Enterprises. This form consists of two parts; Part A - Business Details Part B - Terms and Conditions (including privacy).

The second form titled Account Application Form - Standard is for all other entities, (guarantees may be required for customers deemed as risky). This form is broken into four (or five) parts;

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 3 of 8

Part A - Business Details Part B - Terms and Conditions Part C - Privacy Legislation Part D - Request for Credit Part E - Guarantees.

The third form titled Account Application Form - Donations, Sponsorships and University Services Billings is for customers that wish to provide funds to Swinburne or engage a University staff member for consulting, teaching, research and other university activities that do not involve expenses that the University must incur prior to invoicing, or the use of University resources other than the staff members time. This form may be completed by Swinburne staff with appropriate delegation. When this form is used, a staff member will be required to guarantee that any funds which are expended through the University based on invoiced but uncollected amounts that are not subsequently covered by receipts from the debtor will be reimbursed from other University accounts under the control of that staff member. Within the forms there are terms and conditions which include the provision that, should a company default in payment of their debts, the company will be liable to pay for any associated administration, agent and/or legal fees. Swinburne University of Technology will retain the right to deactivate the account and charge interest on any outstanding debts. Only one application needs to be completed by/for the one business. Invoices for the same entity can be sent to multiple delivery addresses, ensuring that only the one entity receives a credit check and the same accounts payable department receives the total of all applicable External Searches External searches may be conducted for all debtors who have completed the GovSX or Standard credit application forms at no charge to the requesting department. Those debtors with questionable or transactional material over $20,000 may have both a fully detailed company search and directors search conducted at minimal cost. Finance will conduct these searches on behalf of the appropriate department, usually within a 48-hour time frame.

1.3

2. 2.1

Once the searches have been conducted, credit references checked and approval signed off by Finance, the Accounts Receivable department will e-mail the debtor ID to the staff member lodging the application This will confirm actions and approval to begin invoicing. No debtor will be allowed more than $50,000 (or $25,000 when using the Account Application Form - Donations, Sponsorships and University Services Billings) credit unless authorised by Finance. INVOICING Raising an Invoice Individual departments are responsible for raising invoices through the Finance One system (Finance One is the only approved system for creating invoices, besides Ascol for student invoices). Relevant training manuals may be found on the intranet under Finance documentation (refer related material). Please note that Finance One has batch limits

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 4 of 8

automated against Accounts Receivable invoices ($200,000 ex GST). Please contact the Finance One System Team for further advice, or assistance with authorities, limits, training schedules and access requirements to the Finance One accounting system. It is mandatory to have either an approved purchase order or contract reference number from the customer on all invoices that are raised, plus a detailed description of goods or services performed and a Swinburne University of Technology contact name and number. Projects which are invoiced before completion should be placed into future items by changing the invoice date to the time when it is payable. This will ensure debts are not chased before they are due and therefore are not sent unnecessarily to an external collection agency. 2.2 Third-Party Invoices Third party invoices are created for entities that have notified schools/departments/faculties that they have accepted responsibility for a students fees or will pay on behalf of another entity. Students whose fees are to be paid by a third party must follow the Enrolment Fee Payment and Debtors Management policy. Foreign Currency Invoices The University accounting package, Finance One, does not have provision for foreign currency or the conversion thereof. When international contracts are specified to be paid in foreign currency, raise the invoice in $AUD equivalent. The body of the invoice has substantial space to specify any information, such as the actual foreign currency amount to be paid, conversion rate used, reference to equivalent, banking details, etc. When the foreign currency amount is transferred to Swinburne's bank account, the bank will automatically convert to $AUD and the converted amount will be allocated to the invoice. Any loss in the conversion will have to be borne by the department. Adjustments / Credit Notes Adjustment Notes (also known as credit notes) are used to cancel invoices that have been raised in error, or where a fault is found in the goods or services supplied/performed, or to remove receipts for invoices that were allocated incorrectly to the wrong account or debtor. Adjustment notes are also used to allocate EFT amounts paid directly to Swinburnes bank account. An incorrect entry will be reversed back to the same general ledger account as the original invoice. An EFT allocation will be transferred to the bank general ledger account code. No department in Swinburne University of Technology is able to raise adjustments other than Finance. A request to raise an adjustment must be forwarded via e-mail to

2.3

2.4

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 5 of 8

2.5

traderemit@swin.edu.au, specifying which invoice(s) it relates to, the actual amount to credit, reason for doing so, and any receipt numbers, payment dates, etc will be included in the narration. Document Retention Invoices are required to be maintained for a period of 7-years, according to the Public Record Office Victoria (PROS 96/13). Invoice retention is maintained within the Finance accounting system provided full narrations are available on the invoice. DEBT COLLECTION Ageing of Debts Finance is responsible, in conjunction with the operating unit that raised the invoice, for the collection of all trade debtors across Swinburne University of Technology. The accounts receivable department sends monthly statements to prompt payment collection and will telephone/email on a regular basis in an effort to obtain payment. From past history, or at a maximum of 60 days, Finance will either phone/email/send a final letter of demand as the last opportunity to avoid any further fees. If the debtor claims to have spoken with a Swinburne University of Technology department and advise Finance that they are no longer required to pay, or a credit should be on its way, Finance will notify the department via e-mail. In this case, there must be a response from the department within three working days regarding the possible solution, or a request for more time to clear any problems. If no response is forthcoming Finance can only consider that the debt is legitimate and remains outstanding, therefore, the usual course of action such as external debt collection agency and/or deactivating the account will continue. From past history or at a maximum of 120 days, and if no favourable response is forthcoming, all outstanding invoices will immediately be sent to the external collection agency and the debtors account will be deactivated. If at any time, departments have been made aware of issues with an invoice without Finance knowledge, they will need to advise Finance to place a note against the applicable debtors account within Finance One. Collection Agency When the debt has been sent for external debt collection, the debtor deals directly with the debt collection company or applicable lawyers. Finance will notify the department who originally raised the invoice via e-mail, that the account has now been deactivated and passed onto the external debt collector. The account will not be re-activated until the original debt is paid, with no exceptions. Finance will notify the department if the debt has been subsequently cleared and the account activated again. If the initial debt has been cleared but additional charges/fees are still on the account, these outstanding amounts will become the responsibility of the department/school/faculty, which should advise Finance if they wish to pursue the matter further or absorb the charges. The account will not be made active again until the additional charges (legal, interest, or otherwise) have been cleared.

3. 3.1

3.2

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 6 of 8

SUPPORTING DOCUMENTATION
Forms and Records Management Form Finance Forms Account Application FormGovSX Account Application Form Standard Account Application Form-Donations, Sponsorships and University Services Billings Related Material Name Finance forms Finance Documentation (Training Manuals) Enrolment Fee Payment and Debtors Management Domestic Higher Education and TAFE Students OUA Enrolment Management OUA Students Course Fee Payment and Debtors Management International International Students Finance Policies and Procedures section of the Policies and Procedures Database http://policies.swinburne.edu.au/ppdonline/default.aspx?mode=folder&uri=5 Delegation of Expenditure Authority

Retention Time

Retention Location

Location

Document Type

SECTION 3 - GOVERNANCE
RESPONSIBILITY
Policy Owner Other Responsibilities Chief Financial Officer Manager, Tax and Financial Operations Accounts Receivable Team Leader Operating Unit Staff responsible for raising invoices.

VERSION CONTROL AND CHANGE HISTORY

Version Number
4 3 2 1

Approval Date 28 October 2008 12 June 2007 15 November 2005 January 2003

Approved by Executive Group Executive Group Executive Group Executive Group

Amendment

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 7 of 8

POLICY & PROCEDURE DIRECTORY REQUIREMENTS

CATEGORY Trade Debtor Management KEYWORDS
Trade Debtor, Account Application, Invoicing, Debt Collection

Please Note: Printing this document may make it obsolete. For the latest version of this policy always check the Policy and Procedures Directory

Page 8 of 8