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Before agreeing to supply goods and services on credit (i.e. without receiving payment in advance), Departments must assess the credit worthiness of a customer. Anticipated annual trading activity with a single customer to a value greater than £1,000.00 should not entered into without such investigation, particularly if the Department has:

  • Never before supplied to the potential customer.
  • Not supplied the potential customer within the past six months.

'Internal' or 'External'

Determining the correct status of a customer is imperative to the sale as it may have an effect on the costs of goods/services, tax treatment and the options available for debt recovery should action become necessary.

Internal customers are generally those that are part of the legal entity of the University e.g. the Schools, Faculties and Departments.

With effect from the 1st August 2006 HM Revenue & Customs have ruled that the University, Cambridge University Press (CUP), Cambridge Assessment (formerly UCLES) are a single entity and as such must also have the same VAT number. Prior to this HMRC have also included The Cambridge Society within the University's VAT registration and Cambridge Enterprise is also included from the 1st December 2006.

Therefore, the tax code of 'internal' should be allocated for transactions with all these organisations. However, as only University departments are using UFS you must not use either internal trading or raise an internal invoice to any of the organisations listed in the paragraph above, as internal trading invoices are only used for trading between University departments using the entity code 'U' in UFS.

    Tax Code Invoice type
Internal Customers
  • University Schools
  • University Faculties
  • University Departments
  • UAS Divisions
  • Council Institutions
Internal Internal Trading
Internal Customers
  • The Cambridge Society

With effect from 01/08/06

  • Cambridge University Press (CUP)
  • Cambridge Assessment (formally UCLES)

With effect from 01/12/06

  • Cambridge Enterprise Ltd
Internal External Trading
External Customers
  • Students
  • Employees
  • Colleges
  • Most associated bodies
  • Any other organisation or individual
Appropriate tax code of item purchases/sold e.g. standard or zero-rated External Trading

Credit Risks

External affiliated organisations (e.g. Colleges, CMIT, CUP, Cambridge Assessment) should not present a credit risk to the University.

However, other external customers present a number of varying credit risks to Departments. It is important that Departments consider the credit risks associated with the type of customer they are intending to trade with when agreeing to extend credit, in order to minimise the associated risks of late or non-recovery. See Appendix A for further details.

Credit checks

Assessment of the credit-worthiness of a customer may involve obtaining trading references or having a credit check performed. The Credit Control Team should be asked to perform a basic credit check using an external credit reference agency covering limited companies and non-limited organisations simply email Credit Control. This is a free service to Departments. Credit reference reports will be e-mailed back to Departments for assessment. Typical information provided by credit checks include:

Limited Companies

  • Company Information - registered and trading addresses, industry, shareholders
  • Accounts - profit and loss, balance sheet, capital and reserves, ratios
  • Rating and limit - credit rating and recommended limit
  • County Court Judgement (CCJ) Information
  • Group structure - parent and subsidiary companies
  • Event history
  • Directors - names and addresses

Non-limited Businesses

  • Business Information
  • CCJ Information
  • Rating & limit - credit rating and recommended limit
  • General Information - contact details & event history

Individuals

Please note that we do not currently have the facilities to conduct credit checks on individuals and could not do so legally without their express consent.

Existing customers

For customers already trading with the University (e.g. have an existing customer number on UFS) the Credit Control Team could check the settlement history and the current total balance due, to establish if there is a potential credit risk.

See Appendix A for a more details of the risks and correct treatment in UFS.

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