Financial Services

Overarching revenues and receivables

Further Information

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Responsible
Associate Director, Business Services (Financial Services)

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The University receives income (or revenue) from a variety of sources.

The University is required to include as income only monies received from external sources. Income is inflow or other enhancement, or savings in outflow, of future economic benefits in the form of increases in assets or reductions in liability of the entity (other than capital) that result in an increase in equity during the reporting period.

The University earns income primarily from the following sources:

  • Commonwealth Government grants
  • Student contribution income
  • Western Australian Government grants
  • Research grants and contracts
  • Investment income
  • Fees and charges (includes consultancy fees for non-research activities)
  • Donations and bequests
  • Trust funds
  • Other miscellaneous sources (includes salary recoveries, general sales of goods and services, intellectual property).

Income earned within these categories can be received in the form of cash, EFT, cheque, credit cards, foreign currency cheques, drafts and bank direct credits or arise out of a non-cash transaction.

Policy statement

  • The University seeks to maximise resources from a diversity of funding sources. The University must record, promptly and accurately, all types of income received from external sources by Central Administration, Business Units. All income must be recorded as revenue and not as a reduction of expenses or other costs.
  • It is important to include only income received from external sources. Transactions between cost centres do not create income and expenditure for the University but are rather an internal recovery against the expenditure incurred in providing the goods and services involved. There is no accounting gain to the University as a whole arising from such inter-departmental transactions.
  • Collection of funds on behalf of another body (Collection of Funds as an Agent), while external to the University, also are not treated as income. Funds collected as an agent are not University funds and as such are held in trust prior to forwarding to the other entity involved, for example Medicare, booked tours for overseas students. At year-end any balances held are recognised as a liability in the Financial Statements.
  • All income must be allocated to the relevant income account code in PeopleSoft. All income account codes are used in determining the appropriate GST implications, so using the correct account codes is most important.
  • The Billing and Accounts Receivables (AR) System is that part of the University’s Financial Management system dealing with income due and payable to the University from various sources of income including payments for goods and services provided by the University. The AR system is concerned with raising invoices, matching payments to invoices to record the amount owed or payments pending to the University by each individual or entity. The AR system must ensure that all amounts received have been accurately recorded and that any outstanding invoices are paid within a specific time frame. The University’s trading terms are 14 days unless other terms and conditions have been entered into under contract.
  • The AR System relies on accurate information provided on invoice requests from Schools/Areas for the creation of invoices. All official University invoices must be raised by Financial Services (Revenue) or Schools/Areas who have online access to the AR system. This is not only to ensure all monies due and payable to the University are recorded in the books of account for audit and control purposes but to ensure compliance to the GST legislation. In the University's case all GST must be remitted at the end of each month and includes the GST components of any invoice whether paid or not. Invoices raised outside the AR system and without a valid reference may be seen to be in breach of current GST legislation unless arrangements have been made to remit the appropriate GST by the due date.
  • Outstanding amounts are reviewed by Financial Services on a monthly basis and include forwarding each debtor a statement of account a requirement under the credit act, follow up letters and letters of demand where necessary. Monthly reconciliations are also performed between the AR system balance and the debtorcontrol totals in the general ledger for each fund. For further information please consult Debt Recovery Management and Bad Debts.

Operational issues

  • The receipt and appropriate recording of income by the University is outlined in the Finance Manual sections Sources of Income, Income Payment Methods, Receipting of Monies and Accounts Receivable System. In addition to the details provided in those sections, there are several requirements that must be done in order to satisfy the audit and legal requirements for the receipt and recording of income in general.
    • Use of official pre-numbered, sequential receipts.
    • All receipts must be retained and accounted for.
    • All cancelled receipts to be processed by Financial Services and copies retained by Business Unit.
    • Monies and receipts to balance and discrepancies to be reported to Financial Services immediately.
    • Daily banking of funds.
    • Receipts processed in batches for completeness and accuracy.
    • Monies not to be placed in the internal mail.
    • Safe custody of monies.

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Key controls

  • Segregation of duties: responsibilities for billing adequately segregated from those for collection and accounting.
  • Controls to provide assurance customer database and where appropriate, usage records are accurately maintained to ensure amounts due are billed.
  • Periodic review and approval by legislative bodies of rate of taxes, fines, fees, programs of tax exemption, rate schedules and the like.
  • Prompt investigation of credit issuance and disputes with billing amount.
  • Regular review on delinquent accounts and take prompt action to collect or consider them for write-off on a timely basis

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