6-1: Receivables general policies and procedures

Effective: July 1, 1998
Revised: July 2, 2026
References: 6-2: Customer setup and billing profile codes, 6-3: Correcting receivable errors, 6-4: Accounts receivable subsystems, 6-5: Year-end receivables, 6-7: Payment plans for receivables, 6-8: Write-offs and allowances

Purpose

This policy outlines the requirements for managing receivables, including when they should be recognized and recorded. It establishes internal controls to ensure accurate balances, timely cash flows, and proper reporting in the state’s Annual Comprehensive Financial Report (ACFR).

This policy doesn’t explain how to create a receivable (RE) transaction in Vantage Financial. See the Creating a Receivable (RE) quick reference guide.

Definitions

Agency – Any agency, board, bureau, commission, office, department, or other administrative subunit of the executive, legislative, and judicial branches of state government.

ACFR – Annual Comprehensive Financial Report.

CMIA – Cash Management Improvement Act, which governs the timing of federal fund draws and disbursements.

CR – Cash receipt transaction in Vantage Financial.

GAAP – Generally Accepted Accounting Principles.

GASB – Governmental Accounting Standards Board.

GovOps – The Department of Government Operations

Internal controls – Policies, procedures, and systems put in place to ensure the accuracy and reliability of financial reporting, safeguard assets, prevent and detect fraud and errors, and promote adherence to applicable laws and regulations.

OSDC – The Office of State Debt Collection.

RE – Receivable transaction in Vantage Financial that debits receivable balance sheet accounts and credits either a revenue or an expenditure (for expenditure reimbursements), based on the coding block entered.

State finance – The GovOps Division of Finance.

TSA – Treasury-State Agreement, which establishes state-specific requirements for federal cash management under CMIA.

Policy

A – State finance establishes and maintains receivables policies

1 – State finance establishes and maintains policies and procedures for receivables.

2 – Agencies must get written approval from the state finance director and the OSDC manager for any exceptions to state finance receivables policies.

B – Agencies must manage receivables

1 – Agencies must record, monitor, and collect accounts receivable in Vantage Financial.

2 – Agencies must review receivable balances monthly to ensure amounts remain accurate and collectible. See state finance policy 6-8: Write-offs and allowances for determining uncollectibility and write-off procedures.

3 – Agencies must keep supporting documentation for receivable balances and related activity.

4 – Agencies must separate duties so that the same employee isn’t responsible for both recording receivables, handling or depositing cash receipts, and/or approving changes to them, including adjustments or write-offs.

5 – Agencies must document all adjustments, write-offs, and modifications to receivables and ensure they’re approved in compliance with state finance policies.

6 – Agencies may use written receivable policies that are stricter than state finance’s, but they must still meet state finance’s minimum requirements.

C – Agencies must record receivables

1 – Agencies must record a receivable when they’ve earned the right to be paid (have an enforceable claim to payment) and haven’t yet received the money. This typically occurs when goods are delivered, services are completed, a bill is issued, or a refund is owed to the state.

1a – Agencies must bill customers promptly (generally within 10 business days) after goods are delivered, services are provided, or the amount owed is known.

2 – Agencies must record receivables in Vantage Financial using an RE transaction, unless otherwise specified in this policy.

3 – Agencies must record amounts owed to the state for reimbursements (such as federal grants) as receivables as soon as they incur the eligible expenses, regardless of when they request or receive the money. See section D.

4 – Agencies aren’t required to record a receivable (RE) if they receive payment at the time of service or shortly after, with the following exceptions:

At year-end, agencies must record revenue earned on or before June 30 but received after as a receivable in the closing fiscal year, regardless of timing. See state finance policy 6-5: Year-end receivables.
Federal Awards. See sections C3 and D.

5 – Agencies must not record receivables between themselves and other state agencies or between divisions within their own agency, with limited exceptions for year-end interagency accruals.

6 – Agencies must promptly identify and correct errors in RE transactions and related CR transactions to ensure receivable balances remain accurate.

7 – Agencies must establish and follow billing and collection procedures to ensure receivables are recorded, billed, and collected timely. At a minimum, agencies must:

send invoices timely with sufficient detail, including invoice number, due date, description of charges, and payment instructions;
perform follow-ups on past-due accounts using documented collection procedures, including reminder notices and collection letters; and
use a consistent collection process that includes escalation of delinquent accounts, including referral to OSDC when appropriate.

7a – Agencies must create billing profiles and customer records in Vantage Financial.

8 – Agencies must use Vantage Financial to record and bill receivables using RE transactions unless they receive a written exception from the state finance Director and the OSDC Manager. Agencies approved to use a subsystem must still record their receivable activity accurately and promptly in Vantage Financial using summarized or interfaced transactions. Additionally, they must regularly reconcile their subsystem with Vantage Financial.

D – Agencies must record receivables for federal awards

1 – Agencies must record receivables for federal awards on a timely basis as they incur allowable, reimbursable costs.

1a – Agencies must time federal drawdown requests in accordance with Cash Management Improvement Act (CMIA) and the Treasury-State Agreement (TSA) to minimize the time between the drawdown of federal funds and their disbursement.

1b – Agencies must record receivables and make drawdown requests for federal awards periodically (such as daily, weekly, monthly, quarterly) using a reasonable and consistently applied methodology that minimizes the time between the drawdown of federal funds and their disbursement, in compliance with the CMIA and the TSA.

1c – When developing the methodology to record receivables and make drawdown requests, agencies should consider the interest cost to the state during the time between the drawdown of federal funds and their disbursement.

2 – Agencies must record receivables for federal awards in Vantage Financial using RE transactions, except for yearend accruals.

3 – At fiscal year-end, agencies must record a receivable for federal awards if they’ve paid allowable, reimbursable expenses, even if they have not yet requested a federal drawdown.

E – State finance reviews receivables for financial reporting

1 – State finance reviews receivable balances at year-end to ensure they are reported in the ACFR in compliance with GAAP and GASB.

2 – State finance determines how to classify and present receivables, including ensuring the amounts are reported at the net amount the state expects to collect, including consideration of allowances and other reductions.

3 – State finance may require agencies to record or support adjustments necessary for ACFR reporting, including recognition, reclassification, allowances, deferrals, or corrections.

4 – Agencies must provide documentation and information requested by state finance to verify receivable balances, classifications, and reporting. This includes showing whether receivables are current (expected to be collected within 1 year) or noncurrent (not expected to be collected in 1 year).

5 – State finance prepares the required receivable disclosures for the ACFR.