Accounts Receivable: Tips and Tricks

Process

OSU AR Process

 

  1. Order Fulfillment
    1. Invoicing External Customers – Billing after goods/services are delivered (AR process).
    2. Ensure fulfillment aligns with what was ordered and will be invoiced.
  2. Customer Billing/Invoicing
    1. Payment Terms are Net 30 and Discounts for early payment are not allowed.
    2. Invoices must be generated in Workday, unless an approved third-party system is used & should be submitted monthly.
      1. Workday Managed
        1. Refer to the Request New or Edit Existing Customer Records job aid for instructions on adding/managing customer records.
        2. Create a Customer Invoice in Workday once ready to bill. Refer to the Create Customer Invoice job aid.
        3. Apply sales tax as needed using the correct Tax Applicability and Tax Code.
  3. Invoice Aging Review
    1. Review aging reports at least every 30 days.
    2. Follow up with customers on unpaid invoices within the first 60 days of the due date.
    3. After 60+ days past due the Office of the Bursar begins collections process.
      1. If you do not use Workday Accounts Receivable, you will need to Create a Collections Invoice to notify the Bursar that collections are needed.
  4. Bursar Applies Payments
    1. The Office of the Bursar will apply payments to customer accounts in Workday.
    2. Important: Do not deposit payments received for Workday invoices. Contact the Bursar’s Office for proper handling.
  5. Reconcile the General Ledger
    1. Review financial balances monthly using the Balance Sheet and Income Statement.
    2. Reconcile outstanding Accounts Receivable and review revenue.
    3. Review your doubtful accounts balance (estimate uncollectible accounts) and make necessary adjustments.  Doubtful account journals should be done monthly and require a journal.
    4. The Bursar’s Office completes payment and deposit accounting; all other reconciliation is the responsibility of the unit.

Roles and Responsibilities Associated with Accounts Receivable

RoleResponsibility
Finance Director / Senior Fiscal Officer (SFO)Ensure that Accounts Receivable are recorded in the General Ledger, reviewed at least every 30 days, reported to collections as required, and that appropriate internal controls and reconciliation procedures are in place.
Customer Billing Specialist (often the Earnings Operation Manager)Ensure all customer invoices are entered and sent to customers in a timely manner. Review the AR Aging Report at least every 30 days and follow up on outstanding balances as needed.
Cost Center ManagerEnsure all AR transactions are recorded in the General Ledger and collaborate with the Earnings Operation to perform monthly reconciliations.
Office of the University BursarProcess Workday AR payments, manage collections for past-due accounts (60+ days), maintain invoice templates, create workday customers.
Controller’s OfficeApproves third-party billing systems and waivers for Workday AR use.

 

Key Reports Associated with Accounts Receivable

Report NamePurpose
Managerial Balance SheetShows you any activity in your Accounts Receivable and 13200 - Allowance for Doubtful Accounts.
Customer Invoice Lines with Cost CenterUsed to find Customer Invoice details.
Customer Receivables Aging – OSUReport lists customers and the invoice balances based on 31-60, 61-90, and 91 plus days of aging.
Find Customer Invoice Write-offs OSUProvides the details on any invoice write-offs.

 

Key Training, Job Aids, and Resources

Resource TypeResource NameResource Description
BuckeyeLearn TrainingAccounts Receivable at OSU Part 1This XX-minute course is intended to provide an overview of Accounts Receivable at OSU.
BuckeyeLearn TrainingAccounts Receivable at OSU Part 2This XX-minute course is intended to provide a more in-depth understanding of Accounts Receivable accounting at OSU.
Job Aid (ARC)Request New or Edit Existing Customer RecordsJob aid for requesting a new customer or editing an existing customer in Workday. 
Job Aid (ARC)Create Customer InvoiceOverview of how to create a customer invoice in Workday.
Job Aid (ARC)Create a Collections InvoiceOverview of how to create a customer invoice in Workday.
Bursar’s Office Accounts Receivable PageAccounts Receivable – Departments & UnitsWebpage for tools and templates for departments who manage AR..
B&F Sales Tax WebsiteB&F Sales and Use Tax PageDetailed information on how sales and use tax are applied at Ohio State.

 

Notable Information:

Earnings operations at OSU typically generate revenue in three ways:

  • Internal Sales – Sales to other OSU departments or units.
  • Point-of-Sale Transactions – Immediate payment at time of purchase.
  • Invoicing External Customers – Billing after goods/services are delivered (AR process).

Only the third method requires use of the AR process.

Accounts Receivable (AR) is the process of recording money that an organization expects to receive in the future for goods or services already provided but not yet paid for. These amounts are considered assets because there is a reasonable expectation that payment will be received.

At Ohio State, AR is used when billing external customers after goods or services are delivered. This allows earnings operations to monitor outstanding balances and ensure timely collection of revenue. Revenue is recognized when earned, not when payment is received. This means revenue is recorded when goods are delivered or services are rendered.

If your operation only serves internal customers or uses a point-of-sale system, you do not need to record accounts receivable.

  • Internal Customer Billing is done via the Internal Billing Process.
  • Monthly invoicing and reconciliation are mandatory.
  • Workday is the standard system unless an exception is granted.
  • Accurate AR tracking supports OSU’s financial reporting to stakeholders like the Board of Trustees and external auditors.