Introduction and overview
The Financial Regulations state "Heads of Departments that receive income from the sale of goods or services must establish procedures to ensure that all sales are authorised and are made only to acceptable credit risks".
The procedures and considerations detailed in this section are designed to ensure best practise in relation to:
- The terms and conditions applicable for the goods and/or services to be provided
- Extending credit to external customers (debtors)
The procedures followed at the pre-sales stage of the trading process are essential in managing the financial, legal and reputation risks associated with trading activities. This section explains the pre-sales procedures to be followed.This needs to be considered in the context of the size, nature and frequency of the transaction(s).
This flowchart gives an overview of the pre-sales procedure.
The following sets summarise the procedures departments must follow before the supply of goods and services is made.
- Evaluate whether the proposed trading activity is appropriate for the University (see Considerations before External sales are made).
- Consider the particular credit risks associated with this type of supply (see Credit risks of particular activities).
- Assess of the credit-worthiness of potential and existing customers (see Credit worthiness of external customers).
- Establish the correct VAT treatment (see Determining the correct VAT treatment).
- Ensuring appropriate terms and conditions of sales are drafted (and if appropriate issued to customer) (see Terms and Conditions).
- If appropriate provide quote for customer (see Quotations).
- Ensure appropriate documentation e.g. order, has been received from the prospective customer (see Customer purchase orders).
- Ensure customer accounts are entered correctly on UFS and contain sufficient information (see Setting up customer accounts on UFS).
Credit control is an important process that establishes controls both pre- and post-sale to ensure the timely recovery of income owed to the University and minimise the risks of non-settlement.