300.0 Accounts Receivable Introduction

Owned by Chad
May 20, 2021
2 min read

This policy establishes standards for the accounting of accounts receivable and notes receivable.  To ensure that the net realizable value of receivables is fairly presented in the Statement of Net Position, PSU seeks to have policies and procedures in place related to accounts receivable and notes receivable that are documented, communicated, clearly understood, and consistently applied.

The following are general Accounts Receivable policies:

  • PSU policy on the accounting and overall monitoring of receivables is assigned to the Controller.  Receivables comprise accounts receivable and notes receivable.  Year-end accounts receivable balances are current assets and expected to be collected in cash within the following fiscal year.  Year-end notes receivable balances are supported by signed promissory notes, and comprise both a current asset (portion expected to be collected in cash in the following fiscal year) and a long-term asset (portion expected to be collected in cash in subsequent fiscal years). 
  • Fiscal responsibilities over receivables are the responsibility of the President, and may be delegated to the Vice President for Finance and Administration, or business officer. 
  • PSU may render services on a charge basis where it is in the overall best interests of the University.  No department shall extend credit to faculty, staff, students, or other entities outside the university without the prior documented approval of the institution business officer.
  • Accounts Receivable balances are written off at the time that active collection efforts by PSU has ceased.  In addition, all accounts that are over five years old and that do not have a written payment plan which is currently receiving payments, are included 100% in the allowance for doubtful accounts.
  • Receivables policies and procedures pertaining to credit, billings, and collections are institution-specific.  The policies and procedures must comply with federal and state laws and regulations.
  • PSU follows the accrual method of accounting and record an annual bad debt expense and allowance for doubtful accounts.