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Polic and Procedure

Name: Trade Debtor Management 

 Approved by: Executive Group 

Last reviewed: 28 October 2008 

SECTION 1 - INTRODUCTION ___________________________________________________________________________2 

PURPOSE ______________________________________________________________________________________2

SCOPE ______________________________________________________________________________________2

DEFINITIONS _____________________________________________________________________________________2

LEGISLATIVE CONTEXT ____________________________________________________________________________2

SECTION 2 - POLICY __________________________________________________________________________________3 

PRINCIPLES ______________________________________________________________________________________3

POLICY ______________________________________________________________________________________3

SUPPORTING DOCUMENTATION_____________________________________________________________________4

SECTION 3 - GOVERNANCE ____________________________________________________________________________4 

RESPONSIBILITY __________________________________________________________________________________4

VERSION CONTROL AND CHANGE HISTORY __________________________________________________________4

POLICY & PROCEDURE DIRECTORY REQUIREMENTS __________________________________________________4

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SECTION 1 - INTRODUCTION

PURPOSETo formalise debtor management for Swinburne University of Technology’s Trade Debtors. To provide

specific processes and quality service for departments, minimise credit risk, address recovery ofdebts, and clear ambiguity.

SCOPEAll Trade Debtors of Swinburne University of Technology.

Useful as a guide for all other types of debts, across the entire University.

Applies to: Finance Department and all departments who raise invoices on Finance One

DEFINITIONS

Word/Term Definition

LEGISLATIVE CONTEXT

Name Location

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SECTION 2 - POLICY 

PRINCIPLESThe University will invoice for goods and services provided to clients. Debtors will be required to pay in

accordance with the University’s terms of trade.

POLICY

1.NEW ACCOUNTS

1.1 Setting up a New Account 

An Account Application Form is to be completed by the relevant debtor (client) entity

(except where the Donations, Sponsorships and University Services Billings form is used,

which may be completed by Swinburne staff). All applicable forms can be found under

Finance Department, Forms on the intranet.

Once all relevant forms are completed and appropriately signed, these forms are to be

lodged via e-mail to creditaccount@swin.edu.au Provided all documentation has been

fully completed (must contain signatures), Finance will process the application and

activate a new account on Finance One. This process will usually be within 72 hours, with

the relevant staff member (as noted on the form) notified via e-mail.

All applicants, except cases where the Donations, Sponsorships and University Services

Billings form is used, are subject to satisfactory credit approval. Finance reserve the right

to refuse credit if the application forms have not been appropriately completed or

searches/references prove incomplete or questionable.

All student related debts which are already included on the student administration

database (Ascol), are not to be transferred to Finance One. This includes, but is not

limited to, all course related, fee categories, organisational units, etc which are already

adequately maintained in the Student Administration database. This ensures that current

contact details are maintained and automatic blocks are activated. The only exception

being Third-Party invoices (refer 2.2).

1.2 Account Application Form 

All departments must ensure that one of three Account Application Forms is completed for

any new debtor for inclusion into Finance One.

The first form titled “Account Application Form - GovSX” is for Government, Semi-

Government, Statutory Organisations, Registered Charities or Stock Exchange Listed

Enterprises. This form consists of two parts;

• Part A - Business Details

• Part B - Terms and Conditions (including privacy).

The second form titled “Account Application Form - Standard” is for all other entities,

(guarantees may be required for customers deemed as risky). This form is broken into

four (or five) parts;

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automated against Accounts Receivable invoices ($200,000 ex GST). Please contact the

Finance One System Team for further advice, or assistance with authorities, limits,

training schedules and access requirements to the Finance One accounting system.

It is mandatory to have either an approved purchase order or contract reference number

from the customer on all invoices that are raised, plus a detailed description of goods orservices performed and a Swinburne University of Technology contact name and number.

Projects which are invoiced before completion should be placed into future items by

changing the invoice date to the time when it is payable. This will ensure debts are not

chased before they are due and therefore are not sent unnecessarily to an external

collection agency.

2.2 Third-Party Invoices 

Third party invoices are created for entities that have notified

schools/departments/faculties that they have accepted responsibility for a student’s fees

or will pay on behalf of another entity.

Students whose fees are to be paid by a third party must follow the ‘Enrolment Fee

Payment and Debtors Management’ policy.

2.3 Foreign Currency Invoices 

The University accounting package, Finance One, does not have provision for foreign

currency or the conversion thereof.

When international contracts are specified to be paid in foreign currency, raise the invoicein $AUD equivalent. The body of the invoice has substantial space to specify any

information, such as the actual foreign currency amount to be paid, conversion rate used,

reference to equivalent, banking details, etc.

When the foreign currency amount is transferred to Swinburne's bank account, the bank

will automatically convert to $AUD and the converted amount will be allocated to the

invoice.

Any loss in the conversion will have to be borne by the department.

2.4 Adjustments / Credit Notes 

Adjustment Notes (also known as credit notes) are used to cancel invoices that have

been raised in error, or where a fault is found in the goods or services

supplied/performed, or to remove receipts for invoices that were allocated incorrectly to

the wrong account or debtor. Adjustment notes are also used to allocate EFT amounts

paid directly to Swinburne’s bank account.

An incorrect entry will be reversed back to the same general ledger account as the

original invoice. An EFT allocation will be transferred to the bank general ledger account

code.

No department in Swinburne University of Technology is able to raise adjustmentsother than Finance. A request to raise an adjustment must be forwarded via e-mail to

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traderemit@swin.edu.au, specifying which invoice(s) it relates to, the actual amount to

credit, reason for doing so, and any receipt numbers, payment dates, etc will be included

in the narration.

2.5 Document Retention 

Invoices are required to be maintained for a period of 7-years, according to the PublicRecord Office Victoria (PROS 96/13). Invoice retention is maintained within the Finance

accounting system provided full narrations are available on the invoice.

3. DEBT COLLECTION 

3.1 Ageing of Debts 

Finance is responsible, in conjunction with the operating unit that raised the invoice, for

the collection of all trade debtors across Swinburne University of Technology. The

accounts receivable department sends monthly statements to prompt payment collection

and will telephone/email on a regular basis in an effort to obtain payment.

From past history, or at a maximum of 60 days, Finance will either phone/email/send a

final letter of demand as the last opportunity to avoid any further fees. If the debtor claims

to have spoken with a Swinburne University of Technology department and advise

Finance that they are no longer required to pay, or a credit should be on its way, Finance

will notify the department via e-mail. In this case, there must be a response from the

department within three working days regarding the possible solution, or a request for

more time to clear any problems. If no response is forthcoming Finance can only consider

that the debt is legitimate and remains outstanding, therefore, the usual course of action

such as external debt collection agency and/or deactivating the account will continue.

From past history or at a maximum of 120 days, and if no favourable response is

forthcoming, all outstanding invoices will immediately be sent to the external collection

agency and the debtor’s account will be deactivated. If at any time, departments have

been made aware of issues with an invoice without Finance knowledge, they will need to

advise Finance to place a note against the applicable debtor’s account within Finance

One.

3.2 Collection Agency 

When the debt has been sent for external debt collection, the debtor deals directly with

the debt collection company or applicable lawyers. Finance will notify the department who

originally raised the invoice via e-mail, that the account has now been deactivated and

passed onto the external debt collector. The account will not be re-activated until theoriginal debt is paid, with no exceptions. Finance will notify the department if the debt has

been subsequently cleared and the account activated again.

If the initial debt has been cleared but additional charges/fees are still on the account,

these outstanding amounts will become the responsibility of the

department/school/faculty, which should advise Finance if they wish to pursue the matter

further or absorb the charges. The account will not be made active again until the

additional charges (legal, interest, or otherwise) have been cleared. 

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SUPPORTING DOCUMENTATION

Forms and Records Management

Form Retention Time Retention Location

Finance Forms

Account Application Form–GovSX

Account Application Form – Standard

Account Application Form-Donations,

Sponsorships and University Services Billings

Related Material

Name Location Document

Type

Finance forms  

Finance Documentation (Training Manuals)  

Enrolment Fee Payment and Debtors Management – Domestic Higher

Education and TAFE Students

OUA Enrolment Management – OUA Students

Course Fee Payment and Debtors Management International – 

International Students

Finance Policies and Procedures section of the Policies and Procedures

Database

http://policies.swinburne.edu.au/ppdonline/default.aspx?mode=folder&uri=5  

Delegation of Expenditure Authority

 

SECTION 3 - GOVERNANCE 

RESPONSIBILITY

Policy Owner Chief Financial Officer

Other Responsibilities

Manager, Tax and Financial Operations

Accounts Receivable Team Leader

Operating Unit Staff responsible for raising invoices.

VERSION CONTROL AND CHANGE HISTORY

Version

Number Approval Date Approved by Amendment

4 28 October 2008 Executive

Group

3 12 June 2007 Executive

Group

2 15 November 2005 Executive

Group

1 January 2003 Executive

Group

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POLICY & PROCEDURE DIRECTORY REQUIREMENTS

CATEGORY

Trade Debtor Management

KEYWORDS

Trade Debtor, Account Application, Invoicing, Debt Collection

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