1. Invoicing, Financial Reporting, & Cash Receipts Date Presenter Name Presenter Phone Number Presenter E-mail Address

2. 2 Types of reporting Financial –Normally prepared by campus / unit business office Invoices Financial reports Technical –Normally prepared by PI

3. 3 Typical requirements Typical reporting requirements on a Federal award: –Monthly electronic drawdown of funds via letter-of-credit Amount drawn is based on previous months expenditures –Annual financial report –Annual technical report –Final financial report –Final technical report However, UT will send invoices and reports in whatever manner the sponsor prescribes in the award document

4. 4 Types of invoices Invoicing Type –Resource-related –Schedule –Milestone –Item-based –Letter-of-credit –None – automatic payments –N/A – not applicable Invoicing information is shown on the cust. enhancement tab of CJ20N for the WBSE

5. 5 Resource-related type Resource-related invoicing type –Also called cost type or cost reimbursement –The most common type of invoice that UT sends –UTs default invoicing method with a standard form UT invoices actual expenses that have posted to the restricted WBS element in the previous period –Always a time lag and normally a deficit balance on the account –May be monthly, quarterly, semi-annual, or annual frequency UTs preference and default frequency is monthly Based on the calendar, for example, quarterly means 3/31, 6/30, 9/30 & 12/31 –May be interim or final invoice

6. 6 Schedule type Schedule invoicing type –Invoices are sent based on a prescribed schedule of regular billing amounts at regular intervals For example, the award document specifies that UT must invoice $1,000 per month for 12 months –Invoicing does not follow actual expenditures At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE By the end of the award, invoicing and expenditures should be approximately equal

7. 7 Milestone type Milestone invoicing type –Invoices are sent based on prescribed dates for irregular billing amounts and / or irregular intervals For example, the award document specifies that UT will invoice $20,000 on January 15th, $50,000 on June 30th and $50,000 on July 15 th –Invoicing does not follow actual expenditures At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE At the end of the award, invoicing and expenditures should be approximately equal

8. 8 Item-based type Item-based invoicing type –Invoices are sent as needed Example –The award document specifies that UT will invoice $2,000 per test case completed –In August, the PI provides the campus / unit business office with required information about 10 test cases that have been completed –An invoice is then prepared and sent for $20,000 –Invoicing does not follow actual expenditures At any given point in time, UT may have invoiced for either more or less than actual expenditures that have posted to the WBSE

9. 9 Letter-of-credit type –LOCs exist with most large Federal agencies –UT requests funds electronically on at least a monthly basis, usually right after month-end closing Requests are for expenditures that have posted to the WBSE since the previous funds request was made –Cost reimbursement basis Requests may be for hundreds of accounts and may total millions of dollars Funds are wired to UT within 48 hours

10. 10 Automatic payments type Automatic payments invoicing type –UT is not required by the award document to send invoices to the sponsor For example, the sponsor may pay the entire award amount up front For example, the sponsor may make periodic payments – maybe upon receipt of technical reports

11. 11 Other situations Miscellaneous requirements are usually noted in PS Text on CJ20N –Backup documentation required –Multiple copies of invoice sent to different addresses –Invoice sent to a particular person at a sponsor –Task or milestone information required to be printed on invoice –Special forms needed PS Text is shown on the WBSE on CJ20N

12. 12 Invoice forms UT has standard invoice forms that are used as the default forms if no other is specified in the award document –Resource-related form –Schedule / milestone / item-based form Federal agencies use standard forms –SF270, 1034, etc –State agencies have various forms –Private companies usually accept UTs standard

13. 13 Timeliness of invoicing Important because –Sponsor expects it Private companies expect UT to act like a business and bill promptly –Protect UTs reputation for fiscal responsibility Late, incorrect and revised invoices and financial reports are bad –Speeds up UTs cash flow

14. 14 Timeliness of initial invoice Dependent upon –Timely setup of WBSE Get Advance WBS Element, if necessary –Timely charges For resource-related and LOC invoicing types because actual expenditures for the previous period are invoiced –Doesnt matter for schedule, milestone, etc. Automated charges post to correct cost object –Notify Payroll via PIF and service centers of new WBSE # to charge –Timely invoice preparation by CBO

15. 15 Timeliness of interim invoices Dependent upon –Timely charges For resource-related and LOC invoicing types because actual expenditures for the previous period are invoiced –Doesnt matter for schedule, milestone, etc. –Avoiding overexpenditures or removing them promptly For resource-related invoicing type where UT sends a line-item invoice form CBO may not be able to invoice because they dont know from which cost elements the overexpenditures will be removed –Timely invoice preparation by CBO

16. 16 Timeliness of final invoices Dependent upon –Timely charges For resource-related and LOC invoicing types because actual expenditures are invoiced –Doesnt matter for schedule, milestone, etc. –Due date in the award document Research office tries to avoid unreasonable terms, such as final invoice due 10 days after ending date –Timely cost transfers, if they are needed All cost transfers must be posted by 60 days after the end date or 30 days before the final invoice is due (whichever comes first) –Timely invoice preparation by CBO

17. 17 Financial reports Financial reports are due –As specified in the award document –As specified by the Federal agency in their grant policy manual –On an interim and / or final basis Interim financial reports are often due at the end of each grant year Final financial reports are usually due by 90 days after the ending date of the award –Federal reports are usually on a standard Federal form and some are submitted electronically

18. 18 Timeliness of financial reporting Deadlines that UT must meet –Final invoice and / or financial report is normally due by 90 days after the end date of the project –All charges must have posted to the WBSE by 60 days after the end date of the project (or 30 days before due date) Important for good sponsor relations –Incorrect / revised financial reports cause UT employees more work and makes us look bad to the sponsor

19. 19 Monitoring invoicing Academic departments / PIs should monitor invoicing and collection activity on a regular basis –Invoicing information is shown on several IRIS reports ZDEPT_LEDGER (ledger) ZFM_WBS_SUMMARY (one-page summary) Others such as CJI3 (line item report), Y_DEV_17000002 (available budget report), and FMRP_RFFMEP1AX (line item report)

20. 20 ZDEPT_LEDGER (ledger) Total sources of funds = $455,651.36 project-to-date

21. 21 ZFM_WBS_SUMMARY Letter of credit invoicing type Net revenue = $455,651.36 project-to-date

22. 22 Other reports Invoicing normally appears in cost elements 700800 and 700300 Total invoicing project-to-date = $455,651.36

23. 23 Cash receipts UTs sponsors normally pay promptly –Most are government agencies Delays sometimes occur –Incorrect invoicing address or form –Waiting on technical report from PI Non-collection sometimes occurs –Private, start-up companies –Cash-flow problems, bankruptcy –Write-off to departmental funds

24. 24 Collection procedures CBOs send late letters to sponsors after an invoice has been outstanding for more than 60 days CBOs telephone sponsor financial contacts CBOs should notify academic department and PI if there are payment problems –PI may be asked to telephone sponsor technical contacts CBOs ask UTs legal counsel for assistance as a last resort Bad debt is written off to academic departmental funds

25. 25 Monitoring collection CBOs are primarily responsible for monitoring collection from sponsors; however, academic departments should also monitor –Since it is their funds at risk –Dept should call CBO with questions / concerns Use IRIS transactions to find the outstanding invoices for a particular WBS Element –ZAR_AGING –Z_AR_STMT_ACCT

26. 26 ZAR_AGING The report lists all unpaid invoices for the WBS Element selected –Invoice date –Invoice amount –# of days unpaid Invoices greater than 60 days old are considered past due

27. 27 Training classes 1 Overview of Accounting for Sponsored Projects 2 OMB Circulars & Cost Accounting Standards 3 Understanding F&A Costs 4 Direct Costing 5 Cost Transfers & Closeout 6 Cost Sharing 7 Subcontract Monitoring 8 Advanced Topics 9 Invoicing, Reporting & Cash Receipts 10 Sponsored Projects Reports in IRIS Other – IRIS reporting for sponsored projects