220-02
MISCELLANEOUS ACCOUNTS RECEIVABLE SYSTEM

POLICY & PROCEDURE

Subject:

Miscellaneous Accounts Receivable System

Index: Finance

Number: 220-02

Effective Date

1/4/2010

Supersedes

8/8/85

Page

1 of 3

Staff Contact

Iwen Wang

Approved By

Denis Law

1.0 PURPOSE:

To establish a policy and procedure for the use of a Miscellaneous Accounts Receivable System.

2.0 ORGANIZATIONS AFFECTED:

All City departments/divisions.

3.0 REFERENCES:

RCW 19.16.500 (related to collection agency fees)

RCW 62A.3-515 (related to collection of NSF checks) See NSF Check Policy 220-04

4.0 POLICY:

It is the policy of the City that all miscellaneous billings (except interdepartmental) shall be processed through the automated Miscellaneous Accounts Receivable System centralized within the Office of Finance hereafter referred to as Accounts Receivable.

5.0 DEFINITIONS:

Miscellaneous Accounts Receivable shall include but not be limited to the following types of billings:

5.1    Grants

5.2    False Alarms, Jail Housings, and Fire Permits

5.3    Damage Repairs, Fuel and Maintenance

5.4    Leases, including Airport Leases (monthly, quarterly, semi and annual billings)

5.5    Miscellaneous Licenses and Permits

5.6    Penalties

5.7    Miscellaneous Services, Renton Community Center Services (i.e. Henry Moses Aquatic Center, Carco Theater) Returned Check Fees

6.0 PROCEDURE:

6.1    Billing

An invoice request must be submitted to Accounts Receivable in order to create an invoice for billing or to receive grant funds.

6.1.2    Departments/divisions shall submit the required invoice request to Accounts Receivable who will then enter the data into the system for billing.

6.1.3    Invoices will be printed weekly for all billing data input since the previous week.

6.1.4    Accounts Receivable will mail the invoices weekly. Any supporting documents which need to accompany the invoice shall be submitted to Accounts Receivable.

6.1.5    One copy of the invoice will be submitted to the originating department.

6.1.6    Auto billing is generated on the 5th of each month for leases, Airport leases, and revocable permits and contracts. Accounts receivable will set up new customers for auto billing with required documentation, i.e.; copy of agreement or written request from originating department.

6.2    Adjustments to outstanding invoices will be initiated by the originating department/division in writing and sent to Accounts Receivable. Only authorized personnel can access an account to make adjustments to the original invoice.

6.3    Payments will be receipted by Finance through the cashiering system.

6.4    Reports

6.4.1    An aged receivable report reflecting the status of accounts will be generated by the system and reviewed monthly. Accounts Receivable will contact originating departments with past due accounts.

6.4.2    Departments will have on-line capability and be able to review the status of an account at any time.

6.5    Collection of Accounts (for all applicable accounts)

6.5.1    Unless otherwise indicated, late notices will be mailed at month-end to all accounts with a past due balance owing. Accounts Receivable will take the following steps to collect past due debts before sending the accounts to the designated collection agency.

a)    Stamp the first late notice past due 31-60 days.

b)    Stamp the second late notice second notice past due 61-90 days.

c)    Attempt to contact by telephone prior to sending the final notice.

d)    Send a final notice letter with the third late notice 91-120 days, instructing the customers that after 15 days of date on notice, account will be turned over to collection agent.

e)    Send aged receivable in excel format listing customer to collection agency.

Only applicable accounts as determined by Finance will be sent to collections. For example, pledged donations or grant reimbursements are exceptions.

6.5.2    Interest at rate of 12% per year shall accrue on past due debts starting on the date the debts become past due.

6.5.3    Unless otherwise addressed by the lease agreement, a penalty will be charged on past due balances for Airport customers if payment is not received by their due date according to the lease agreement. This is usually a 5% penalty if not paid within 10 days. A default notice is also sent to Airport customers on the 10th of the month following their due date. For all other fees and charges, unless prohibited by law, a 5% penalty will be added to the amount owed if not paid within 10 days of the initial due date.

6.5.4    Accounts Receivable will follow up on all past due accounts to insure collection which may result in additional collection costs and fees as authorized by RCW 19.16.500 and RCW 62A.3-515.