• 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
• Exchange rate variances
• Minor amounts write off
• Section 6 - Definitions 

Section 1 - Preamble

(1) This Policy is effective from 27 July 2023.

Section 2 - Purpose

(2) This Policy supports the University to perform transparent, effective and timely debt management and recovery to maintain University cashflows.

Section 3 - Scope

(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.

Section 4 - Policy

(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.

Section 5 - Procedure

Customer accounts

(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.

Raising of invoices

(13) A tax invoice is to be raised upon confirmation from the relevant area of one of the following:

1. provision of a service/s;
2. transfer of a good;
3. receipt of a purchase order;
4. contract billing point has been achieved: or
5. a project/research milestone has been achieved.

(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.

Payment Terms

(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.

Contract variations or termination

(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:

1. to avoid re-aging debt, new payment terms should be as short as practicable (eg. within 7 days or 14 days of receipt of an invoice by a partner) and standard University payment terms should be avoided; and
2. any third party debts that have been agreed to be cancelled, voided, reduced, credited, consolidated or otherwise, changes must be accounted for in full, such as through the issue of credit notes or other debit or credit instruments.

Allocation of Payments

(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.

Refunds

(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.

Statements and Dunning letters

(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.

Debt collection process

(24) Any debt that is overdue and exceeds 90 days will be reviewed and the following action will be taken by Accounts Receivable:

1. consideration given to entering into a formal payment plan. The customer must provide adequate reasons for wishing to enter into a payment plan (eg financial hardship); or, 
2. the debt may be referred to an external debt collection agency appointed by the University.  Exceptions may be approved by the Chief Financial Officer. 

(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.

Dispute process

(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.

Doubtful debt provision

(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.

Bad Debt Write-off

(34) Debts are considered completely irrecoverable and will be written off to bad debts expense in the following circumstances:

1. all attempts to recover the funds have been exhausted; 
2. the debtor is bankrupt, in receivership, administration or liquidation;
3. it is uneconomical to pursue the debt; or
4. the appointed debt collection agency advises it is no longer effective to pursue the debt. 

(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.

Exchange rate variances

(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.

Minor amounts write off

(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.

Section 6 - Definitions 

(40) For the purpose of this Policy:

1. Accounts Receivable: the finance team who administer invoicing customers and the collection of payments on behalf of the University.  
2. Bad debt: an invoice or collection of invoices that have not been able to be collected after being subject to legal proceedings. 
3. Credit Note: a document that reduces or eliminates the amounts a customer needs to pay on an invoice. The term credit adjustment is used interchangeably.  
4. Customer: an individual, corporation, company, institution, Government agency, etc. that has been provided with goods/services by the University under credit arrangements. Includes funding agencies for research projects.
5. Debtor: a third party who have an outstanding invoice due to Deakin University. 
6. Debt Collection Agency: external agency engaged to follow up bad debts on behalf of the University. 
7. Dunning: the process of methodically communicating with customers to ensure the collection of outstanding accounts receivable invoices.
8. Invoice: a document that places an obligation on an external entity to pay for goods or services rendered. 
9. Payment terms: a specified timeframe which an invoice is required to be paid. 
10. Statement: summary of open invoices against a customer. 
11. Overdue: debt has not been paid within payment terms.