(1) This Policy is effective from 27 July 2023. (2) This Policy supports the University to perform transparent, effective and timely debt management and recovery to maintain University cashflows. (3) This Policy applies to all University debts with third parties, including student loans. (4) This Policy does not apply to student fees managed under the Enrolment, Fees and Charges procedure. (5) This Policy does not apply to student residential debt managed by Deakin Residential Services. (6) The University will take steps to ensure that all monies owed are invoiced and collected within a reasonable timeframe to maximise its cash flow. (7) In managing debtors the University will ensure proper accounts and records are maintained and promptly bring all debts to account in the official accounting records of the University. (8) The University will be fair, transparent and consistent in its approach to recovery of debt and will exhaust all reasonable avenues before writing off a bad debt. (9) A customer account is to be set up in DeakinUniFi for each customer that will be invoiced. Only one account will be setup per legal entity. (10) Prior to setting up a new customer account, Accounts Receivable will conduct due diligence on the customer by verifying their identity and details. (11) Where the value of a contract or engagement exceeds Australian $50,000 (or equivalent) Accounts Receivable will undertake a credit risk assessment in accordance with the Contracts policy. The credit check should be undertaken prior to signing of the original contract, not when the customer is being created. Government and statutory bodies will be exempt from a credit risk assessment. (12) Where the credit assessment indicates an unacceptable level of financial, reputational or other risk, Accounts Receivable may not approve the customer for credit and will notify the requestor of the decision. (13) A tax invoice is to be raised upon confirmation from the relevant area of one of the following: (14) Invoices will be issued in Australian Dollars unless stated in the terms of the contract and will include the applicable Goods and Services Tax (GST) treatment. (15) University Standard Payment Terms are 30 days from the invoice date. (16) The Chief Financial Officer (or delegate) may grant approval to offer non-standard payment terms in a contract. Any variations to standard payment terms must be agreed at the time the original contract is negotiated, not at the time the customer account is created. (17) Where Deakin has agreed with a debtor, customer or partner to change an invoice milestone or payment condition, that change must be recorded in a binding legal document in accordance with the Contracts procedure and the Externally Funded Research Contracts procedure and the amendments entered into DeakinUniFi as required. (18) Following an agreed change to a milestone or invoice condition under clause 17: (19) Monies will not be allocated to individual invoices until either a remittance or confirmation email is received from the customer providing details of the payment, except at the discretion of Accounts Receivable. (20) Where the payment details are not sufficient or a part payment is received, the customer will be contacted for the allocation advice on the payment. If no response is received the payment will be left open on account as an unallocated payment. (21) If a customer account is in credit due to an overpayment a refund can be processed. The customer will be required to provide their banking information to facilitate payment. (22) Accounts Receivable will send statements to customers on the first working day of each month. (23) Dunning letters relating to outstanding invoices will be sent by Accounts Receivable to customers at 30, 60 and 90 days. If collection has been unsuccessful by 90 days, the 90 day Dunning letter is sent advising the customer that the debt may be referred to an external debt collection agency. (24) Any debt that is overdue and exceeds 90 days will be reviewed and the following action will be taken by Accounts Receivable: (25) Where the invoice value exceeds Australian $5000 (or equivalent), costs associated with the debt collection process will be charged back to the relevant cost centre. (26) The collection of aged debt relating to philanthropic donations will only be actioned in consultation with the Advancement team. (27) Customers who fail to meet their financial obligations may have their accounts inactivated by Accounts Receivable. This may affect their ability to engage or contract with the University in the future. (28) A customer may advise the University that there is disagreement regarding the terms and conditions of an agreement/contract and/or the status of project milestones which impacts the collection of the debt. (29) Where a staff member is notified and/or becomes aware of customer concerns/disagreement over the terms and conditions of any agreement/contract or project milestones they must immediately advise Accounts Receivable. (30) An invoice in dispute is not subject to the debt collection process. The debt collection process will resume upon dispute resolution or after 60 days if a mutual resolution cannot be achieved. (31) Any debt that is overdue and exceeds 90 days will be provided for in the management accounts in full. This will be re-assessed on a monthly basis as part of the month end process. The assessment and the journal will be managed by the University Financials team. The charge for the doubtful debt provision will be taken up centrally. (32) The doubtful debt provision will relate to specific invoices outstanding on account and will not be a percentage of trade receivables. (33) The annual assessment of the doubtful debt position must be calculated in accordance with the expected credit loss methodology in Australian Accounting Standards Board (AASB) 9 Financial Instruments. (34) Debts are considered completely irrecoverable and will be written off to bad debts expense in the following circumstances: (35) Staff who are notified and/or become aware of a customer being placed in administration or liquidation must immediately advise Accounts Receivable. (36) Bad debts must be written off by the relevant approval authority in accordance with the table below. (37) Where a bad debt is project related, the expense will be written back to the relevant cost centre and project. All other bad debts will be held centrally and offset against the provision. (38) If a debit or credit balance arises from the translation of a foreign currency and less than $500.00 remains after the full payment of an invoice, the balance will be written off or credited to the University central cost centre. (39) If a debit or credit balance of less than $50.00 remains outstanding on an account and it is not economically viable to recover the debt or refund the credit, the balance will be written off or credited to the University central cost centre. (40) For the purpose of this Policy:Accounts Receivable policy and procedure
Section 1 - Preamble
Section 2 - Purpose
Section 3 - Scope
Section 4 - Policy
Section 5 - Procedure
Customer accounts
Raising of invoices
Payment Terms
Contract variations or termination
Allocation of Payments
Refunds
Statements and Dunning letters
Debt collection process
Dispute process
Doubtful debt provision
Bad Debt Write-off
Value (Australian Dollar or equivalent)
Approval
Under $1,000
Accounts Receivable
$1,000 to $30,000
Director, University Financials
$30,000 and above
Chief Financial Officer
Exchange rate variances
Minor amounts write off
Section 6 - Definitions
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