Finance and Planning

Financial Services

Accounts Receivable Procedure for Grants

Table of Contents
01. Process Overview ...................................................................................................................... 2
02. Process Description ................................................................................................................... 2
03. Process Flow ............................................................................................................................. 3
04. Reasons for Outstanding Payments .......................................................................................... 4
Appendix A: Aging Report and Sample Invoice Log ........................................................................ 5
Appendix B: Accounts Receivable Process Flow Chart ................................................................... 6

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01. Process Overview

This Accounts Receivable procedure describes the steps that are necessary to monitor and
pursue the collection of payments from sponsors where payments are past due. On a regular
basis, Finance and Administration Grant Accountants will review and document the status of
open receivables in their specific populations.
Grant Accountants will identify outstanding invoices with potential problems and resolve them
through the collections process. There are numerous reasons for non-payment of an invoice.
The source of the problem may be associated with the invoicing process, a difficulty on the
sponsors end, or a technical/contractual problem with the Primary Investigator (PI).
When reviewing outstanding invoices, the Grant Accountant will take appropriate follow-up action
which, in time, will escalate to leadership and/or legal counsel depending on the number of days
outstanding and number of unsuccessful follow-up attempts. Examples of possible follow-up
action are letters, emails, and phone calls.
The Grant Accountant must document all actions taken to resolve outstanding invoices in the MS
Access Grants Database. A copy of any correspondence or dunning letter should also go in the
award file and stored in the appropriate grant folder on the shared drive. Since outstanding
payments will always be due from sponsoring agencies, this is considered a cyclical process
needing constant monitoring throughout the year.
02. Process Description
At the beginning of each month, Grant Accountants will review their population of accounts to
confirm that payments have been received. Following this review, each Grant Accountant will
meet individually with the Grants Manager to review their accounts and also to discuss any
Accounts Receivable issues.
At these meetings, the Grants Manager will review the comments and prioritize work for the
following month with each Grant Accountant. Additionally, Grant Accountants will identify each
invoice for which they are responsible that is older than 120 days. In the prioritization meeting, it
will be decided if additional action is needed for these invoices.
In addition to the meeting, each accountant is required to conduct Accounts Receivable follow-up
commensurate with the Accounts Receivable process flow, unless circumstances require different
action as deemed by the Grants Manager.

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03. Process Flow

Details of this process flow are as follows:
Invoices Less than 60 Days Outstanding
1. No action required
Invoices Between 61 90 Days Outstanding
1. Prepare and send a signed dunning letter with a copy of the invoice attached.
2. File a copy of the signed dunning letter and the invoice copy in the award file folder.
3. Scan and store the signed dunning letter and invoice copy in the grants folder under the
\\fsstor\departments\grantsandcontracts directory.
4. Add comment to the invoice notes section of the MS Access Grants Database.
Invoices Between 91-120 Days Outstanding
1. Contact the sponsor by telephone about the outstanding invoice and document this
conversation.
2. Send a follow-up signed dunning letter with a summary of the conversation.
3. Provide a copy of the signed follow-up dunning letter to the PI.
4. File a copy of the conversation notes and follow-up dunning letter in the award file folder.
5. Scan and store the conversation notes and follow-up dunning letter copy in the grants
folder under the \\fsstor\departments\grantsandcontracts directory.
6. Add comment to the invoice notes section of the MS Access Grants Database.
Invoices Between 121-180 Days Outstanding:
1. Grant Accountants share query with Grants Manager of all invoices greater than 120
days old.
2. Contact the sponsor by telephone about the outstanding invoice and document this
conversation.
3. Send a follow-up dunning letter, signed by the Grants Manager, with a summary of the
conversation. The tone of the letter will be changed, mentioning legal consequences if
the invoice is not paid.
4. Provide a copy of the follow-up dunning letter to the Budget Representative and PI.
5. File a copy of the conversation notes and follow-up dunning letter in the award file folder.
6. Scan and store the conversation notes and follow-up dunning letter in the grants folder
under the \\fsstor\departments\grantsandcontracts directory.
7. Document the history of all actions taken in the invoice notes section of the MS Access
Grants Database.
Invoices Over 180 Days Outstanding:
1. Grant Accountants share query with Grants Manager of all invoices greater than 180
days old.
2. The Grants Manager will determine if the matter needs to be referred to legal counsel.
3. If referred to legal counsel, provide the legal counsel with a copy of the dunning letters
and conversation notes, and a list of invoices over 180 days, and update the history in
the invoice notes section of the MS Access Grants Database...
4. If not referred to legal counsel, follow steps 2-6 for 121-180 Days Aging.

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04. Reasons for Outstanding Payments

Even with strict adherence to the steps documented in this procedure, there will always be
special circumstances for each sponsor on why an invoice may not have been paid. Some of
those reasons include:
The sponsor:
o is insolvent or bankrupt;
o disencumbered the funds prior to paying the final invoice;
o is a slow-payer. Their invoices typically are late being paid;
o only remitted a partial payment;
o moved and failed to provide proper forwarding information;
o skipped the payment as a result of losing or misplacing the invoice;
o paid the invoice, but failed to identify the invoice or award number on their
payment, and Pace has not been able to apply the payment, thus it is in the cash
clearing account awaiting application;
o returned the invoice to Pace because:
the invoice was issued late (sent after the due date per the contract);
the invoice was in the wrong format, and/or had the wrong dates of
service, fund year, contract dates, or other information,
the expenses were not incurred according to budget, were unapproved,
inappropriate, or not sufficiently described;
financial backup data was not provided where demanded by the sponsor;
the billed expense exceeded the authorized budget (total budget or line
item budget), and the sponsor short-paid the invoice by this amount plus
any indirect costs.
The invoice was sent to the wrong address, person, or is undeliverable;
The PI did not submit the required deliverables or resigned before completing the work.

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Appendix A: Aging Report and Sample Invoice Log

Sponsor:

City of White Plains, Public Safety Department

Banner Numbers
Index

Fund

Org

Advantage
Number

Payment Type #

L6590

F05602

LW6590

2000-383-7170

Invoice

Date
Mailed

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Outstanding

1/1/2004

$32,869.74

$2.75

1/1/2004

$29,945.10

$0.03

7/20/2005

$46,582.43

$100.45

2/2/2006

$33,107.62

$33,107.62

10

2/2/2006

$26,106.87

$26,106.87

11

2/2/2006

$6,582.36

$6,582.36

$175,194.12

$65,900.08

Total:

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Invoice
Amount

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Financial Services

Appendix B: Accounts Receivable Process Flow Chart

End of the billing process

After month-end close,

Grants Manager (GM)
schedules a meeting with
Grant Accountants (GA)

GA run the Invoices to be

Paid report in the MS
Access Grants Database

GA meet with GM by the

10th of the month to review
the Invoices report and
prioritize work for the
current month

GM identifies any AR
issues

No. Days
Outstanding
(O/S)?

< 60 Days
O/S

61 < 90 Days
O/S

91 < 120 Days

O/S

121 < 180 Days

O/S

> 180 Days

O/S

No Action Required

GA prepares dunning
letters for accounts w/
outstanding invoices; a
copy of the invoice(s) will
be included

GA contacts the sponsor

via phone for accounts w/
outstanding invoices over
90 days

GA refers any invoices

120+ days outstanding to
the GM

GA prepares & submits a

report of outstanding
invoices over 180 days to
the GM

File a copy of the dunning

letter in the award file folder

Sign and issue a follow up

dunning letter to sponsor
with summary of the
conversation

GM contacts the sponsors

directly (via phone) for
accounts w/ o/s invoices
over 120 days

GM will determine if
matter needs to be
referred to legal council

Provide a copy of dunning

letter to PI

Prepare a follow up
dunning letter to sponsor
with summary of the
conversation and legal
consequences

No
Store the signed dunning
letter and invoice copy in
the computer folder for the
grant

Refer to legal
council?

Yes

Add comment in MS
Access Grants Database

File a copy of the dunning

letter in the award file folder

Provide a copy of the

dunning letter to Budget
Representative and PI

Provide a copy of
correspondence history
with detail summary to
legal council

Store the signed dunning

letter, invoice copy, and
conversation notes in the
computer folder for the
grant

File a copy of the dunning

letter in award file folder

Add comment in MS
Access Grants Database

Add comment in MS
Access Grants Database

Store the signed dunning

letter, invoice copy, and
conversation notes in the
computer folder for the
grant

Start of the billing process

(A/R process starts over)

Last Changed: 8/25/2010

Add comment in MS
Access Grants Database

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