Invoicing, Financial Reporting, & Cash Receipts

1. Invoicing, Financial Reporting, & Cash Receipts Date Presenter Name Presenter Phone Number Presenter E-mail Address

2. Types of reporting • Financial • Normally prepared by campus / unit business office • Invoices • Financial reports • Technical • Normally prepared by PI

3. Typical requirements • Typical reporting requirements on a Federal award: • Monthly electronic drawdown of funds via letter-of-credit • Amount drawn is based on previous month’s expenditures • Annual financial report • Annual technical report • Final financial report • Final technical report • However, UT will send invoices and reports in whatever manner the sponsor prescribes in the award document

4. Types of invoices • Invoicing Type • Resource-related • Schedule • Milestone • Item-based • Letter-of-credit • None – automatic payments • N/A – not applicable Invoicing information is shown on the cust. enhancement tab of CJ20N for the WBSE

5. Resource-related type • Resource-related invoicing type • Also called cost type or cost reimbursement • The most common type of invoice that UT sends • UT’s default invoicing method with a standard form • UT invoices actual expenses that have posted to the restricted WBS element in the previous period • Always a time lag and normally a deficit balance on the account • May be monthly, quarterly, semi-annual, or annual frequency • UT’s preference and default frequency is monthly • Based on the calendar, for example, quarterly means 3/31, 6/30, 9/30 & 12/31 • May be interim or final invoice

6. Schedule type • Schedule invoicing type • Invoices are sent based on a prescribed schedule of regular billing amounts at regular intervals • For example, the award document specifies that UT must invoice $1,000 per month for 12 months • Invoicing does not follow actual expenditures • At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE • By the end of the award, invoicing and expenditures should be approximately equal

7. Milestone type • Milestone invoicing type • Invoices are sent based on prescribed dates for irregular billing amounts and / or irregular intervals • For example, the award document specifies that UT will invoice $20,000 on January 15th, $50,000 on June 30th and $50,000 on July 15th • Invoicing does not follow actual expenditures • At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE • At the end of the award, invoicing and expenditures should be approximately equal

8. Item-based type • Item-based invoicing type • Invoices are sent as needed • Example • The award document specifies that UT will invoice $2,000 per test case completed • In August, the PI provides the campus / unit business office with required information about 10 test cases that have been completed • An invoice is then prepared and sent for $20,000 • Invoicing does not follow actual expenditures • At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE

9. Letter-of-credit type • Letter-of-credit type • LOC’s exist with most large Federal agencies • UT requests funds electronically on at least a monthly basis, usually right after month-end closing • Requests are for expenditures that have posted to the WBSE since the previous funds request was made • Cost reimbursement basis • Requests may be for hundreds of accounts and may total millions of dollars • Funds are wired to UT within 48 hours

10. Automatic payments type • Automatic payments invoicing type • UT is not required by the award document to send invoices to the sponsor • For example, the sponsor may pay the entire award amount up front • For example, the sponsor may make periodic payments – maybe upon receipt of technical reports

11. Other situations • Miscellaneous requirements are usually noted in PS Text on CJ20N • Backup documentation required • Multiple copies of invoice sent to different addresses • Invoice sent to a particular person at a sponsor • Task or milestone information required to be printed on invoice • Special forms needed PS Text is shown on the WBSE on CJ20N

12. Invoice forms • UT has standard invoice forms that are used as the default forms if no other is specified in the award document • Resource-related form • Schedule / milestone / item-based form • Federal agencies use standard forms • SF270, 1034, etc • State agencies have various forms • Private companies usually accept UT’s standard

13. Timeliness of invoicing • Important because • Sponsor expects it • Private companies expect UT to act like a business and bill promptly • Protect UT’s reputation for fiscal responsibility • Late, incorrect and revised invoices and financial reports are bad • Speeds up UT’s cash flow

14. Timeliness of initial invoice • Dependent upon • Timely setup of WBSE • Get Advance WBS Element, if necessary • Timely charges • For resource-related and LOC invoicing types because actual expenditures for the previous period are invoiced • Doesn’t matter for schedule, milestone, etc. • Automated charges post to correct cost object • Notify Payroll via PIF and service centers of new WBSE # to charge • Timely invoice preparation by CBO

15. Timeliness ofinterim invoices • Dependent upon • Timely charges • For resource-related and LOC invoicing types because actual expenditures for the previous period are invoiced • Doesn’t matter for schedule, milestone, etc. • Avoiding overexpenditures or removing them promptly • For resource-related invoicing type where UT sends a line-item invoice form • CBO may not be able to invoice because they don’t know from which cost elements the overexpenditures will be removed • Timely invoice preparation by CBO

16. Timeliness of final invoices • Dependent upon • Timely charges • For resource-related and LOC invoicing types because actual expenditures are invoiced • Doesn’t matter for schedule, milestone, etc. • Due date in the award document • Research office tries to avoid unreasonable terms, such as final invoice due 10 days after ending date • Timely cost transfers, if they are needed • All cost transfers must be posted by 60 days after the end date or 30 days before the final invoice is due (whichever comes first) • Timely invoice preparation by CBO

17. Financial reports • Financial reports are due • As specified in the award document • As specified by the Federal agency in their grant policy manual • On an interim and / or final basis • Interim financial reports are often due at the end of each grant year • Final financial reports are usually due by 90 days after the ending date of the award • Federal reports are usually on a standard Federal form and some are submitted electronically

18. Timeliness offinancial reporting • Deadlines that UT must meet • Final invoice and / or financial report is normally due by 90 days after the end date of the project • All charges must have posted to the WBSE by 60 days after the end date of the project (or 30 days before due date) • Important for good sponsor relations • Incorrect / revised financial reports cause UT employees more work and makes us look bad to the sponsor

19. Monitoring invoicing • Academic departments / PI’s should monitor invoicing and collection activity on a regular basis • Invoicing information is shown on several IRIS reports • ZDEPT_LEDGER (ledger) • ZFM_WBS_SUMMARY (one-page summary) • Others such as CJI3 (line item report), Y_DEV_17000002 (available budget report), and FMRP_RFFMEP1AX (line item report)

20. ZDEPT_LEDGER (ledger) • Total sources of funds = $455,651.36 project-to-date

21. ZFM_WBS_SUMMARY • Letter of credit invoicing type • Net revenue = $455,651.36 project-to-date

22. Other reports • Invoicing normally appears in cost elements 700800 and 700300 • Total invoicing project-to-date = $455,651.36

23. Cash receipts • UT’s sponsors normally pay promptly • Most are government agencies • Delays sometimes occur • Incorrect invoicing address or form • Waiting on technical report from PI • Non-collection sometimes occurs • Private, start-up companies • Cash-flow problems, bankruptcy • Write-off to departmental funds

24. Collection procedures • CBO’s send late letters to sponsors after an invoice has been outstanding for more than 60 days • CBO’s telephone sponsor financial contacts • CBO’s should notify academic department and PI if there are payment problems • PI may be asked to telephone sponsor technical contacts • CBO’s ask UT’s legal counsel for assistance as a last resort • Bad debt is written off to academic departmental funds

25. Monitoring collection • CBO’s are primarily responsible for monitoring collection from sponsors; however, academic departments should also monitor • Since it is their funds at risk • Dept should call CBO with questions / concerns • Use IRIS transactions to find the outstanding invoices for a particular WBS Element • ZAR_AGING • Z_AR_STMT_ACCT

26. ZAR_AGING • The report lists all unpaid invoices for the WBS Element selected • Invoice date • Invoice amount • # of days unpaid Invoices greater than 60 days old are considered past due

27. Training classes • 1 Overview of Accounting for Sponsored Projects • 2 OMB Circulars & Cost Accounting Standards • 3 Understanding F&A Costs • 4 Direct Costing • 5 Cost Transfers & Closeout • 6 Cost Sharing • 7 Subcontract Monitoring • 8 Advanced Topics • 9 Invoicing, Reporting & Cash Receipts • 10 Sponsored Projects Reports in IRIS • Other – IRIS reporting for sponsored projects