FIACCT 06-01_13: Past Due Receivables

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

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Purpose

This policy provides an overview of the functions that are available in FINET Receivables to assist in making collections of past due Receivables. This policy also explains how these processes relate to each
other.

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Policy

A. The Office of State Debt Collection (OSDC) is responsible for setting up the system-wide defaults for the content and timing of Dunning Messages.

B. Agencies can have these system-wide Dunning Message defaults overridden by getting permission from OSDC to set up different content and timing for their own Dunning Messages.

C. OSDC is responsible for setting up the system-wide defaults for the content and timing of Collection Letters.

D. Agencies can have these system-wide Collection Letter defaults overridden by getting permission from OSDC to set up different content and timing for their own Collection Letters.

E. OSDC is responsible for setting up the system-wide defaults for the Receivable Due Date Lag establishing the number of days past the date on an invoice or a statement that a Receivable becomes
past due.

F. Agencies can have this system-wide past due default overridden by getting permission from OSDC to set up different a different Receivable Due Date Lag.

G. Any Late Charges and/or Interest charged by agencies must be in compliance with all applicable laws and administrative rules.

H. Agencies should pursue collection efforts on past due receivables for 60 calendar days. After 60 days, past due receivables should be sent to OSDC for additional collection effort unless the agency receives a written exemption from OSDC.

I. Payments received by an agency for Receivables sent to OSDC for 5 days or less should be deposited into the agency’s depository bank account and recorded in FINET to the correct bank account code. An agency is to notify OSDC of all such payments. Notification is required in order for OSDC to adjust the receivable balance for the amount of the payment.

J. Payments to the agency for a Receivable sent to OSDC for longer than 5 calendar days shall be coded in FINET to an OSDC account coding (Agency 100 Fund 2105 Unit 5020 Rev 2930 Approp Unit 2105), and shall not reference the Receivable. Notify OSDC of the account and dollar amount the payment applies to. OSDC is to post the payment to collection fees and the Receivable (RE).

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Background

There are four functions available in the FINET system to assist in the collection of past due Receivables. They are as follows:
A. Dunning Messages – available for Billing Profiles set for “Invoices,” “Statements,” or “Invoices and Statements”
B. Collection Letters – available for Billing Profiles set for “Invoices,” “Statements,” or “Invoices and Statements”
C. Reports – Current and Aged Receivables
D. Sending Past Due Receivables to OSDC for Collection

Each of these functions is explained in greater detail below.

A. Dunning Messages
Dunning Messages are messages that are printed on invoices to notify a Customer that they are overdue on paying their bill. The system-wide messages are set up by OSDC, who determines the timing and the content of the printing of these messages. The text and timing of these messages can be modified to provide agency-specific Dunning Messages, if approved by OSDC. Agencies should contact OSDC and request agency-specific Dunning Messages.

The system-wide codes used in FINET for Dunning Messages can be found on the Collection Control Table (COLLC). The Dunning Messages that correspond to these codes can be found on the Dunning Message Table (DNGM).

B. Collection Letters
Collection Letters are printed independently of invoices. Collection Letters are sent by an agency to Customers for payments that are significantly overdue. A Collection Letter is sent by an agency to notify a Customer that if payment is not received, then the account will be turned over to OSDC’s collection agency. The system-wide Collection Letter wording and timing are set up by OSDC.

The print process for Collection Letters is the same for printing invoices. However, there is no reprint process for Collection Letters. For information on printing invoices, go to financesupport.utah.gov.
The system-wide Collection Letter text and timing can be tailored to an agency’s needs, with OSDC’s approval. The state agency must contact OSDC to set up Collection Letters text and timing that are agency-specific. The system-wide codes used for Collection Letters can be found in FINET on the Collection Control Table (COLLC). The Collection Letters that correspond to these codes can be found on the Collection Letter Table (COLL).

C. Current and Aged Open Receivables by Customer Reports
These reports are accessed through DataWarehouse and list the current and aged open Receivable documents by Billing Profile, Customer Name, and Transaction ID. Open Receivables are considered current until they reach the Receivable Due Date. Receivables begin aging once they are past the due date when the Receivables should be paid. Receivables are aged in the following categories: 0–30 days, 31–60 days, 61–120 days, and over 120 days.

These reports give totals by current and aged categories for each Customer. These reports also show the total amount outstanding for each Customer.

D. Sending Past Due Receivables to OSDC for Collection
Agencies should pursue collection efforts on past due Receivables for 60 days. Unless the agency has a written exemption from OSDC, once the Receivable is 61 days past due, it should be sent to OSDC for further collection efforts. This is done in FINET by modifying the RE document and adding the OSDC reason code “OSDC-COL” in the REASON field in the ACCOUNTING :G ENERAL I NFORMATION section. OSDC will place the Receivable with one or more private sector collectors for up to 18 months.

Payment Received Within 5 Calendar Days

If the agency receives payment on the past due Receivable within 5 calendar days of sending it to OSDC for collection, the agency should deposit the payment and process a Cash Receipt (CR) document referencing the Receivable (RE) document. After processing the CR, the agency should notify OSDC of the payment. Contact OSDC for clarification in providing this notification.

Payment Received After 5 Calendar Days

Once a past due Receivable has been sent to OSDC for collection for longer than 5 calendar days, additional collection fees may be due that are not included in the original Receivable document. Customers are still liable for the additional collection fees. If the agency receives payment on the past due Receivable after 5 calendar days of sending it to OSDC, OSDC is to apply the payment against collection fees and the RE. The agency should deposit the payment in their bank account and process a non-referencing CR with the following:

1. The Bank Account code that corresponds to the bank account where the funds were deposited.
2. Accounting Coding Block: Fund 2105, Department 100, Unit 5020, Revenue Source 2930, and Appropriation Unit 2105.

After processing the CR, the agency should notify OSDC of the payment. Contact OSDC for clarification in providing this notification. Contact OSDC if your agency does not have access to the coding block listed above.

Additional information is found on the training page of the Division of Finance website, finance.utah.gov/training.

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Procedures

A. Dunning Messages

B. Collection Letters

C. Current and Aged Open Receivables by Customer Reports

D. Turning Past Due Receivables Over to OSDC