A write-off is an elimination of an uncollectable accounts receivable recorded on the general ledger. An accounts receivable balance represents an amount due to Cornell University. If the individual is unable to fulfill the obligation, the outstanding balance must be written off after collection attempts have occurred.
Asset/Liability Reconciliation Guidelines require that accounts receivable object codes be reconciled monthly, assuming monthly activity has been posted. An accounts receivable reconciliation should include an aged list of outstanding invoices and amounts that agree to the general ledger balance.
Generally, receivable outstanding balances should be paid within 30 days. If any unpaid balance exceeds 60 days, the unit should contact the customer to request payment.
Units are expected to include accounts receivable write-offs as part of the internal control initiative and include the unit-specific process and materiality threshold.
Requests for authorization of non-sponsored, non-employee-related write-offs should include:
Sponsored accounts receivable write-offs will be handled internally, following Sponsored Financial Services guidelines.
Write-off e-docs for sponsored funds will be originated by Sponsored Financial Services. See the instructions below for employee-related write-offs on sponsored accounts.
Typically, these write-offs are for travel advances. This does not apply to payroll overpayments.
For non-sponsored accounts, the unit’s finance manager, BSC director, or college business officer should send requests for employee-related (current and prior employment) write-offs to the university controller. Include in the backup a brief narrative of the reasons for the write-off, evidence of multiple collection attempts, and the account number that will fund the write off.
For sponsored accounts, to write off an employee-related receivable, expense or travel advance from a sponsored project, a unit must first prepare an e-doc moving the expense from the sponsored account to a non-sponsored discretionary account with the same higher-ed function code. Once the expense has been moved, the unit’s finance manager, BSC director, or college business officer should send the write-off request to the university controller. Include in the backup a brief narrative of the reasons for the write-off, evidene of multiple collection attempts, and the account number that will fund the write-off.
Note: An employee-related write-off may result in taxable income to the employee. Payroll should be notified of all employee-related write-offs.
Once authorization has been granted for a write-off, the requesting unit will process a Distribution of Income and Expenses (DI) e-doc with the following entries:
The documentation submitted for authorization must be attached to the e-doc.
Accounting will conduct a post-audit review of object code 6330 to ensure that it is used in conjunction with an appropriate offsetting account receivable or accounts receivable allowance object code.
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