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(Approved by authority of the President)
Purpose
This policy governs miscellaneous accounts receivable from the sale of goods and services to ensure effective internal controls over management and collection.
This policy:
- Establishes monitoring, application, and collection processes for accounts receivable;
- Minimizes past due, delinquent, and uncollectible accounts; and
- Sets standards for timely and systematic recognition, reporting, and collection of receivables owed to the University.
Scope
This policy applies to miscellaneous accounts receivable from the sale of goods and services by University units and departments using central bank accounts for payments from outside customers.
This policy:
- Does not govern patient billings, grant and contract receivables, or student tuition billings.
- Applies to all University entities unless specifically excluded by the Senior Vice President for Finance, Planning & Budgeting.
Definitions
Customer—User/consumer of a good and/or service provided by a University department. External customers can include private persons, businesses, agencies, funds, other educational institutions, or other governmental entities, foreign or domestic.
Delinquent Receivables—Receivables that remain unpaid 120 or more days past due date.
Miscellaneous Accounts Receivable—The amount of money owed to the University for goods or services that have been delivered or provided to outside parties. The amount should be recorded as an asset and the associated revenue recognized in the proper fiscal year. Amounts owed by other departments are not considered as accounts receivable for financial statement purposes, because these funds will remain within the University. Miscellaneous accounts receivable does not include receivables related to sponsored agreements, student tuition, and patient billings.
Past Due—Accounts are past due if not paid by the 30th day and remain unpaid up to 209 days.
Write-Off—The reduction of an accounts receivable balance to record a loss due to an account being deemed uncollectible after all reasonable and lawful collection attempts have failed. A write-off does not discharge a debt. Charges that have been written off are still owed to the University, consistent with Washington State Accounting and Administrative Manual, Section 85.54, Receivables.
Responsibilities
University Controller’s Office, Finance, Planning & Budgeting
- Estimate the total allowance for uncollectible accounts for the University.
- Research all unclaimed cash.
- Consult with units regarding possible write-off of uncollectable accounts.
- Process refunds to customers.
Policy Statements
To ensure an effective system of internal controls over management, application, and collection of miscellaneous accounts receivable is maintained, the following sections establish requirements for each major business process for the accounts receivable lifecycle.
1. Accounting and Recording
The University will follow U.S. Generally Accepted Accounting Principles (GAAP) in the preparation of its annual financial statements. Receivables are to be recorded as soon as the underlying accounting event has occurred and the amount is determinable.
2. Billing and Invoicing
All accounts receivable must be recorded in Workday at intervals established within relevant contracts or University practices.
3. Credit Balances
Written procedures must be maintained for the periodic review of credit balances to determine the underlying cause. Errors must be corrected in a timely way and refunds provided to customers when appropriate. Accounts receivable credit balances resulting from customer overpayments may be applied to future orders of goods or services when there is an expectation of an ongoing relationship with the customer. When credit balances are to be paid back to the customer, they should be classified as refunds of revenue for accounting purposes.
4. Collections
It is the responsibility of a business unit to ensure customers pay funds due to the University. When accounts become past due, the University is required to exert every reasonable effort to collect delinquent receivables. The University may withhold a customer’s access to goods or services when the account has a receivable balance.
In the event of a bankruptcy, the unit will cease collection efforts. Notifications of bankruptcy must be forwarded to the UW Cash Application Team Services and Controller’s offices. The UW Cash Application Team Services manager will work with the UW Division of the Attorney General’s office to file a claim for any owed amounts, as deemed necessary by the parties involved.
5. Recording and Reporting
All departments are to review available reports documenting accounting and aging of any past due receivables at least monthly.
University departments are responsible for invoicing for sales and services provided to non-University customers. Sales tax must be collected for any taxable items sold or services rendered.
6. Bad Debts and Write-Offs
In the event an invoice reaches 120 days past due, units must consult with the UW Cash Application Team to discuss potential write-off of the uncollectible account. In assessing the potential write-off, Finance, Planning & Budgeting will consider the following potential justifications:
- The debtor cannot be located, nor can any of the debtor’s assets;
- The debtor has no assets and no expectation of having any in the future;
- The debt is disputed, with insufficient documentation to pursue collection efforts;
- The debt is discharged in bankruptcy, and there is no guarantor or successor;
- The debtor has died;
- Cost of debt collection or other recovery efforts exceeds amount to recover;
- The debt is delinquent;
- Collection efforts have been exhausted.
7. Systems and Processes
Written procedures for establishing, recording, adjusting, reconciling, collecting, and reporting receivables must be maintained.
Accounts receivable records must be recorded in Workday using Workday invoicing functionality and reconciled to sales, service, and/or contract records to ensure all sales and services are billed. Payments posted to accounts receivable records should be reconciled to cash application and collection records.
8. Records
Accurate records are to be maintained on accounts receivable in accordance with University records retention requirements. The records maintained for each customer must include the complete name and address plus the social security number (when appropriate), Federal Employer Identification Number (FEIN), or other taxpayer identification number. Social security numbers, federal tax numbers (EIN), and other sensitive information must be maintained in a secure environment.
9. Internal Controls
Processes must allow for adequate segregation of duties, so that employees with the responsibility for maintaining and billing accounts receivable will not have responsibility for applying payments or making deposits.
Responsible Office and Additional Information
Policy questions: University Controller’s Office
Accounts receivable for sponsored agreements: Program Income |Post Award Fiscal Compliance
Customer update and maintenance and tax questions: Finance, Planning & Budgeting Tax Office
Grants questions: Sponsor Payments, Grant & Contract Accounting
Washington State Accounting and Administrative Manual, Section 85.54, Receivables
History
March 3, 2026.