Credit Management Policy


Application


This policy applies to all University staff who are involved in raising invoices and credit notes, and the management of debtor accounts (except student debts which are managed by student administration).

Purpose


To provide a framework for accounts receivable and credit management within the University.

Introduction


The areas covered by this policy are the raising of invoices, credit notes, the payment of accounts, and collection of overdue accounts.

Policy


1.    Payment for goods and services must be received before goods / services can be delivered unless credit terms have been         granted

2.    Payment on credit terms is only allowed where payment cannot be obtained in advance and the debtor's credit credentials have been adequately established

Note- In most cases this will be by credit reference checking

3.    Debtors must agree to this policy before they can be approved to trade with the University on credit terms

4.    In line with normal commercial practice, debtors are to be requested to provide a purchase order when purchasing goods and/or services from the University

5.    Credit is not normally extended to staff or students and will only be granted in exceptional circumstances

6.    Further credit will not normally be given to a debtor whose account is overdue

7.    The Director of Faculty Finance and Finance Managers are responsible for all decisions to grant credit for goods and services supplied by their faculty/service division

8.    The University will charge for all goods and services supplied to students and third parties

9.    Credit notes can only be given in limited circumstances. They must be authorised by the designated approver for each billing business unit within the financial system

10.   The collection of overdue accounts will be performed by the originating faculty or service division. Financial services may assist the originating department to collect overdue debts

11.   The mandatory procedures that also form part of this policy appear in the related document Credit Management Procedures

Definitions


The following definitions apply to this document:

Credit means deferred payment by a customer for the goods/services provided by the University.

Debtors is a party who owes money to the University

Staff means those employed or contracted by the University

University means the University of Auckland and includes all subsidiaries

Document management and control


Owner: Group Financial Controller

Content manager: Financial Services

Approved by: Director of Finance

Date approved: 3 April 2014

Review date: 3 April 2016