Departments must assess specific credit risks associated with any income-generating activities that they engage in. Activities that may present prompt settlement risks and generate customer disputes should be carefully considered. Some examples are:
Course and conference fees
It is strongly recommended that course and conference fees should be collected in advance of the course or event commencing to:
- minimise the potential financial loss to the Department of non-attendance
- insure against the impossibility of recovering intangible assets such as knowledge gained from an educational course.
Advance payment may be full or part payment at the time of booking and can be received in a variety of ways, including via eSales on the University's online store or by credit card payments. Non-payment should result in non-attendance. (Ref. Clause 3, University Standard Terms & Conditions)
It must be made explicitly clear to customers at the time of booking, and reinforced when invoicing, of the consequences of non-settlement before the event or course commences.
Fees relating to facilities hire can be of small value and become uneconomical to chase when they become overdue. When Departments allow external parties to hire University facilities, strong consideration should be given to collecting payment in advance of the event to ensure against non-payment. (Ref. Clause 3.2, University Standard Terms & Conditions)
The nature of the customer should be considered when agreeing to extend credit. In some cases customers will be informal, transient organisations (e.g. some sports clubs, music and drama groups) and may be difficult to locate for payment - for example, when membership of a club changes or an organisation is dissolved. Contact details must always be obtained to avoid this potential problem.
Where facilities are hired continuously over a period of months (e.g. bench fees) and departments can not easily invoice in advance as full costs are not yet known then departments could bill in advance for known fixed costs for the entire period and retrospectively at specified intervals for any further costs and rates. It is good practice to ensure that some payment is received before access to the facilities is granted. Failure to settle as per the terms of the invoice should result in the customer's access to the facilities being denied.
It is strongly recommended for any sale outside of the UK that full payment is collected in advance of the supply of goods and services. The risk of not being able to obtain payment for non-UK overdue accounts is significantly higher than UK-based sales. Debt recovery outside the UK is a difficult and often expensive business.
Where Departments re-charge the salaries of staff to external or associated bodies, they must ensure that formal written agreements are in place in advance of providing the service and subsequent billing for the following:
- Salary re-charge plus any overhead, consumables and/or administrative rates and charges.
- Sickness, holiday, pension, maternity and redundancy arrangements.
Invoices based on estimated rates and costs may not speed up the process of payment as they can result in future disputes over settlement terms. If there are fixed costs which are known, it can be part of the agreement that these be invoiced in advance.
Sponsorship and student support
For the most part, this will be in the form of research grants or studentship agreements which are handled by RSD. Where, however the customer provides finance in return for some form of commercial benefit, Departments must be in receipt of a customer purchase order or an appropriate written agreement from the customer, in advance of raising an invoice. This can be referenced on the invoice to ensure that payment can be processed quickly. Where a customer order is received, care must be taken to ensure that the customer's standard terms are not being accepted as a result. (See Ensuring that the University's STC apply)
Overheads and administration charges
Overhead or administration charges to be billed in addition to the charges for goods and service provided must be agreed in advance as part of a contract or written customer purchase order. Disputes are more likely and recovery of debts can prove difficult when an agreement has not been made in advance.