AR Credit Invoice Approvals

1. AR Credit Invoice Approvals Cluster Director Meeting February 28, 2012

2. Overview What is a Credit Invoice? Invoices are created in EFS when goods or services are sold and payment is not collected at the time of the sale. If an invoice contains errors or goods are returned, a credit must be completed in the financial system. Why do Credit Invoices need Approval? • Credit invoices are considered non-cash adjustments; they reduce the money owed to the University. • An Internal Audit recommendation states an approval should be required on all non-cash adjustments. • By requiring review and approval for all significant financial transactions in the financial system, the University can ensure it’s guiding principles are followed and enforced.

3. Credit Adjustment - Actions • Credit Only Adjustment • Credit and Rebill Adjustment • Chartstring Correction

4. Credit Adjustment - Actions • Credit Only Adjustment • A credit only adjustment is created when a customer should receive a full credit and no rebill will be created. An example would be if the customer received a duplicate invoice. • Note: Adjustments related to payment issues (i.e., write-offs) should be handled by AR Services and should not be credited through this process.

5. Credit Adjustment - Actions • Credit and Rebill Adjustment • Customer invoices that are in error or need to be partially credited should be credited in their entirety and rebilled with the corrected/updated information.Examples would be incorrect pricing or returned/damaged merchandise.

6. Credit Adjustment - Actions • Chartstring Correction • Invoices that are in error due to incorrect Chartstrings should be credited in their entirety and rebilled with the corrected Chartstring. This procedure should be followed regardless if the original invoice has been paid.

7. Credit Adjustment - Process

9. Credit Adjustment - Entry • The Billing Specialist enters the credit invoice and assigns an approver using the Adjust Entire Bill page in EFS.

10. Approval Process Once the Billing Specialist has entered the Credit Invoice and corresponding Rebill (if applicable) in Pending Status, an email is sent to the Approver

11. Approval Process The approver: • Retrieves the transaction • Reviews any attachments • Reviews justification on credit invoice • Reviews rebill if applicable • Approves the transaction

12. Roll-Out Strategy AR Services • Work with Training Services to • Develop on-line Approver Training Course • Develop Approver Job Aid • Update Billing Specialist Job Aid • Update Create Bills Manual • Communicate change to Billing Specialists • Create Credit Request Form and have it added to the Forms Library • Add Credit Invoice Approver Role to EFS Access Request form

13. Roll-Out Strategy Cluster Directors • Determine approver(s) in each cluster • Communicate change to Billing Specialists and Department Initiators Approvers • Take Approver training and complete assessment by April 20thRevised Date – April 19th(training is scheduled to be available 04/01)Revised Date-March 30th • Complete EFS Access Request Form to gain access to Credit Invoice Approver Role Revised – for initial roll-out no Access Request Form is necessary, forward names to Michelle Howard at howar073@umn.edu

14. Who should Approve the Credit Invoice Transaction? Recommendation: • Cluster Director should act as designated approver of the transaction within EFS, but require that the Credit/Credit Rebill Request Form be completed and attached. The Credit Request Form should include the departmental approver’s signature. Rationale • This will allow the Cluster Director visibility into the number of credits and the reason for credits created within their cluster. It will help the Cluster Director assess where there may underlying problems related to invoicing.

15. Questions?