FIACCT 06-01_07: Overview of Correcting Receivable Errors

Effective: July 1, 1998
Revised: December 1, 2019
Reviewed: December 1, 2019

---

Purpose

This policy provides an overview for correcting billing and payment errors on a Receivable (RE) document or a Cash Receipt (CR) document that references an RE.

---

Definitions

---

Policy

A. An RE modification is processed:

1. To increase or decrease an RE to correct billing errors.
2. To change accounting information.
3. To close an open amount on an RE if a portion of the RE had previously been referenced by a CR.

B. An RE can be canceled only if no portion of the RE has been referenced by another FINET document. After processing the cancellation, a new RE with the correct information can be entered.

C. An IET or IDT document may need to be processed to correct any portion of the RE that had previously been referenced by a CR.

D. A CR modification should be used to reverse a payment applied to an open Receivable or Customer Account in error.

E. During the year-end close out period, verify that the FISCAL YEAR in either the RE HEADER or the ACCOUNTING line section is correctly entered since both prior fiscal year and current fiscal years are open.

FINET entry and processing instructions are found on the training page of the Division of Finance website.

---

Background

There are five basic instances when a Receivable (RE) or Cash Receipt (CR) referencing an RE may need to be adjusted:
1. To increase or decrease an RE to the proper amount.
2. To change Coding Block or Header Information.
3. To change Customer Information.
4. To cancel an RE recorded in error.
5. To correct the following CR referencing errors:
a. The RE was not referenced on the CR when the payment was received.
b. The RE was referenced in error because no payment was received.
c. The RE was referenced in error and the payment needs to be applied to a different RE.
d. The RE was overpaid on the CR and the overpayment needs to be refunded or applied to another receivable.

If the RE was referenced in error by any document other than a CR, e.g., a Write Off (WO) document, please contact the State Revenue Accountant at the Division of Finance for assistance.

An RE should be canceled only if it was entered in error. If an RE was entered in error and the entire balance should be deleted, the original Receivable document can be modified using the Cancel option. The cancellation RE will reverse the entries posted by the original RE. If the RE has previously been sent to OSDC for collection, recall the account from OSDC.

If a Receivable was entered correctly but is later determined to be uncollectible, see the FIACCT 06-01.14 Receivables – Write-Offs and Allowances policy.

If the fiscal year in the Header or the Customer information needs to be changed such as the Billing Profile code (BPRO), or Customer code, the original RE must be canceled, and a new RE entered.

Current and Prior Year Considerations
Often when RE documents are modified or cancelled, an adjustment to revenues or expenditures occurs. If the original RE fiscal year is closed for budget purposes, revenues or expenditures cannot be changed in the closed fiscal year. These corrections are made in the current fiscal year.

An RE that records federal revenue in a prior fiscal year but is modified or cancelled in the current fiscal year often results in a Single Audit reconciling item. Contact the State Single Audit Coordinator at the Division of Finance with questions about Single Audit Reporting. See also policies FIACCT 07-02.15 Federal Revenue at Fiscal Yearend and FIACCT 07-02.16 Single Audit Reporting Requirements.