Customers-Credit Balances and Refunds

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Customers-Credit Balances and Refunds: Flowchart

Scope

This procedure covers verifying and processing accounts receivable credit balances and customer refunds.

System References

Transactions-Credit Memos

Transactions-Creating

Receipts-Entering and Applying

Receipts-Unapplying

Policy

A customer refund for a credit balance or overpayment:

is only issued upon customer request
requires the approval of the Departmental Manager

To request a refund:

a Transaction Request Form is required
is submitted by the requesting department to Accounts Receivable

Responsibility

The Departmental Manager is responsible for approving customer refunds.

The AR Manager is responsible for:

preparing and submitting check requests for customer refunds
unapplying and applying receipts as part of the refund process
generating credit memos as part of the refund process
generating debit memos as part of the refund process

Distribution

AR Billing Specialist^*

AR Billing Specialist-Remote^*

AR Manager^*

Ownership

The AR Manager is responsible for ensuring that this document is necessary, reflects actual practice, and supports University policy.

Activity Preface

This activity is initiated by the receipt of a customer refund request.

The job title Refund Requester refers to:

AR Billing Specialist
AR Billing Specialist-Remote

Refund Requester

1. Receive refund request from customer.

2. Obtain Departmental Manager approval.

If approved, goto task #4. Otherwise, goto task #3.

3. Inform customer that refund request was not approved.

End of activity.

4. Determine if receipt has been applied to the transaction.

If a receipt has been applied to the transaction, goto task #6. Otherwise, goto task #5.

5. Create a credit memo.

Create a Credit Memo for the amount to be refunded.

Receivables
N ® Transactions ® Credit Transactions
Credit Transactions

Refer to Transactions-Credit Memos.

6. Send Refund Request form to Accounts Receivable.

Complete the appropriate portion(s) of the form.
Send a copy of the credit memo if one was created.

End of activity.

AR Manager

7. Receive Refund Request Form from requesting department.

Verify information on Refund Request Form.

8. Determine if an open receivables balance exists for this customer.

If an open receivables balance exists in IS, goto task #9. Otherwise, goto task #11.

9. Apply the credit balance to the open invoice.

Receivables
N ® Receipts
Receipts

Refer to Receipts-Entering and Applying.

10. Inform the requesting department that the credit balance will be applied to the open receivables and that a refund will not be issued.

End of activity.

11. Complete a Payment Voucher.

Refer to Payment Voucher.

12. File the refund request documentation.

13. Unapply the receipt.

Unapply the entire receipt amount.

Receivables
N ® Receipts ® Receipts Summary
B ® Applications
Applications

Refer to Receipts-Unapplying.

If the requesting department has already created the credit memo, goto task #15. Otherwise, goto task #14.

14. Create a Credit Memo.

Create a Credit Memo for the amount to be refunded.

Receivables
N ® Transactions ® Credit Transactions
Credit Transactions

Refer to Transactions-Credit Memos.

15. Create a Debit Memo.

Create a Debit Memo for the amount to be refunded.

Receivables
N ® Transactions ® Transactions
Transactions

Refer to Transactions-Creating.

16. Reapply the receipt.

Apply the original invoice and the Debit Memo to the original receipt.

End of activity.

Effective: 08/13/04

Revision: 2

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