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Reporting Accounts Receivable

Accounts Receivable is the amount of money OWED TO a department for goods or services sold to outside parties. The amount should be recorded as an asset and the revenue recognized in the proper fiscal year. Accounts that are no longer collectible should be written off by submitting a Form T-35 to the Office of Budget & Finance by the deadline noted on the attached pull-off reminder schedule.  Any write-off requests received after this date will post in the subsequent fiscal year. Write-offs can be requested throughout the year and do not have to wait until the year-end process. Refer to FI0305 for additional information on the proper handling of accounts receivable. NOTE: Amounts owed by other UT departments are NOT considered as Accounts Receivable for financial statement purposes because these funds are within the University.

Credit Balances in Accounts Receivable: Amounts due to be returned to a customer outside the University, either as a result of a customer over paying an invoice or as a result of a refund due to the customer for returned goods, may be reclassified as a liability (Accounts Payable), if significant.

Each department is required to provide a Cover Memo along with supporting schedules and other documentation to report the department’s Accounts Receivable as of June 30, 2022 to the Office of Budget & Finance. Please refer to the reminder schedule for due date(s). The documents listed below are required for each A/R fund maintained by the department, including A/R Returned Check accounts. If the department does not have an A/R account but needs one to be established, contact Melissa Johnson johnsonm@utk.edu to request a new account.  Otherwise the receivable will be posted to the departmental expense cost center.

A/R Reporting Package (click link to open file):

  • The Cover Memo should summarize the total dollar value of the Aged Accounts Receivable. If there was no activity and/or the fund balance is zero, check the “No Activity and/or Zero Balance” box, and identify the Contact Person. The department head must sign the cover memo to attest to the accuracy of the balances, including zero balances. An e-signature is fine; otherwise print, sign and attach the cover memo as pdf document. (Required).
  • Schedule 1: Detailed list of receivables by individual customer account balance according to age of the invoice(s). If no activity, complete Section B only when there is an A fund. Schedule 1 is required for each active A/R fund at year-end.
  • Schedule 2: List customers with credit balances, noting the nature of the credit balance. Depending on the amount of the balance, our office may reclassify the balances for financial statement reporting, if significant. Schedule 2 is required for each A/R fund to be adjusted at year-end, if any credit balances exists.
  • A/R Template: Use this template to record the journal entry per the instructions included in the spreadsheet. A template is required for each A/R fund to be adjusted at year-end.
  • PLEASE READ Additional A/R procedures.

Return completed reporting package as an excel file and other supporting documents as a pdf, via email, to Pam Arrowood parrowoo@utk.edu by the due date.

 

IMPORTANT:

Do not record receivables from other UT departments!

EXAMPLES:

#1 – No Activity and/or Zero Balance

#2 – Book receivable to A Fund

#3 – Book receivable to Income Cost Center

#4 – Returned Check No Activity