Financial Procedure Accounts Receivable - the Royal Cornwall ...

Document Title
Accounts Receivable - Guidance
Date Issued/Approved: 02 July 2012
Date Valid From: 02 July 2012
Date Valid To: 30 June 2014
Directorate / Department responsible
(author/owner):
Director of Finance
Contact details: Stacy Richards 01872 258039
Brief summary of contents
Suggested Keywords:
Target Audience
Executive Director responsible for Policy:
Provides guidance to managers and staff
on the collection of income
Income, Credit Control, Cash
Collection
RCHT PCT CFT
Director of Finance
Date revised: Updated June 2012
This document replaces (exact title of
previous version):
Approval route (names of
committees)/consultation:
Divisional Manager confirming approval
processes
Name and Post Title of additional signatories
Accounts Receivable -Guidance
Original approved at Finance Committee
- March 2009
Director of Finance
Not required
Signature of Executive Director giving
approval
Publication Location (refer to Policy on
Policies – Approvals and Ratification):
Document Library Folder/Sub Folder
{Original Copy Signed}
Internet & Intranet
Intranet
Only
Finance / Financial Services

Links to key external standards
Related Documents:
Training Need Identified?
Key Governance Document
Standing Orders, Standing Financial
Instructions and Scheme of
Delegation
None
All or part of this document can be released under the Freedom of
Information Act 2000
This document is to be retained for 10 years from the date of
expiry.
This document is only valid on the day of printing
Controlled Document
This document has been created following the Royal Cornwall Hospitals
NHS Trust Policy on Document Production. It should not be altered in
any way without the express permission of the author or their Line
Manager.

Accounts Receivable - Guidance
V.3
July 2012
Accounts Receivable - Guidance 3 of 12

Version Control Table
Revision
date
Original
November
2008
January
2010
Version No Summary of Changes Changes by
V1
V2
New document introduced to give
guidance on for the collection of
income following the supply of
goods or services
Update to include revised contact
details for debtors team
June 2012 V3 Refresh of document to reflect
current practice and concentrate on
Collection of Income
Sarah Gould
Adam
Wheeldon
Stacy Richards
– Income and
Payments
Supervisor
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Accounts Receivable - Guidance
Contents
1. Introduction...............................................................................................6
2. Purpose of this Policy ...............................................................................6
3. Scope .......................................................................................................6
4. Standards and Practice ............................................................................6
5. Dissemination and Implementation...........................................................9
6. Monitoring compliance and effectiveness ...............................................10
7. Updating and Review..............................................................................10
8. Equality and Diversity .............................................................................10
9. Equality Impact Assessment...................................................................10
Appendix 1: Initial Equality Impact Assessment Screening Form ..................11
Accounts Receivable - Guidance 5 of 12

Accounts Receivable - Guidance to staff
responsible for the collection of income following the
supply of goods or services
1.Introduction
1.1. The Trust receives the majority of its income through contracts
agreed with other trusts for the provision of clinical services. Clear
processes and procedures for agreeing these contracts and collecting
the associated income are in place in line with national protocol.
1.2. Additionally, circumstances will arise where a budget holder agrees
to supply goods or services to an individual or organisation and an
invoice needs to be raised. This policy sets out the process for the
collection of this income.
1.3. This version supersedes any previous versions of this document.
2. Purpose of this Policy
2.1. This document provides detailed guidance to how the collection of
income following supply of goods or services is undertaken. It provides
guidance on the procedures that are required to be undertaken prior to
and during the collection of income.
2.2. A separate policy covers the recovery of payroll overpayments.
3. Scope
3.1. This procedure provides guidance to budget holders responsible
for the collection of income and to staff that undertake the collection of
income.
4. Standards and Practice
Formal Requirements
4.1. The formal requirements for the collection of income are set out in
section 16 of the Trust’s Standing Financial Instructions (SFIs), which
are available on the document library on the intranet. This document
provides additional guidance to budget holders and staff responsible for
the collection of income, where the raising of an invoice is required.
Agreeing to supply goods or services
4.2. Before agreeing to supply any goods or services, the budget holder
/ management accountants need to ensure that the individual or
Accounts Receivable - Guidance 6 of 12

organisation has the ability to pay. The Trust’s Finance Department are
happy to provide guidance to budget holders for this.
4.3. Budget holders / management accountants are also responsible to
complete and supply all back up information to their Divisional Finance
Manager to allow the collection of income to be done within Trust’s cash
control targets.
4.4. Budget holders / management accountants are also responsible to
complete and supply all back up information to their Divisional Finance
Manager to allow the collection of income to be done within Trust’s cash
control targets.
Role of the accounts Receivable (Debtors) team
4.5. The Accounts Receivable team is responsible for collecting
invoiced income in accordance with the Trust’s Standing Financial
Instructions, guidance and procedures. This will include the monitoring
and chasing of debts until payment is received, including where
necessary, referral to a debt collection agency.
4.6. The team is available between 0900hrs and 1700hrs on Monday to
Thursday, and 0900hrs and 1630hrs Friday.
4.7. If there are any queries in respect of debt collection the please
contact the team, queries should be directed as follows:
4.8. NHS Bodies Ext. 8033 Staff Ext. 8035
Private Patients Ext. 8035 General Ext. 8030
Payment Arrangements/Settlements
4.9. The Trust’s payment terms are such that the beneficiary of the
service or supplied goods shall agree to pay any invoice submitted within
14 days of receipt.
4.10. The exception to this is that private patient invoices that are
supported by insurance companies are allowed 30 days for settlement.
4.11. Many invoices with regular traders should normally be settled by
BACS (Bank Automated Clearing System) unless an alternative means
of payment has been agreed.
4.12. Payments can be made by credit or debit card and the front of each
invoice provides contact details for this, or if a cheque payment is
preferred, the address where payment can be forwarded is provided.
4.13. Smaller invoices can be settled by a personal visit to the Trust’s
General Offices/Cashiers Office at Royal Cornwall, West Cornwall or St
Michaels Hospital as long as an invoice number is quoted to allow
allocation of payment to be made to the correct invoice.
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Outstanding Debts
4.14. If an invoice is not settled within agreed terms, then a standard
letter will be forwarded by the Accounts Receivable team to the
organisation or individual concerned, reminding them that payment is
due.
4.15. If the invoice is not settled within a further 7 days, then a telephone
chase, if deemed appropriate or a further chaser letter will be sent, in the
name of the Financial Controller stating that the debt is overdue and
requesting immediate settlement.
4.16. If the debt remains unsettled for a further 7 days, then a final letter
informing that transfer of the debt to the debt collection agency is sent. If
no contact is made within 7 days, the account will be passed onto the
debt collection agency.
4.17. Note that all invoices under £50.00 raised will be chased through
with three standard letters but will not be passed onto the debt collection
agency as the debts will be deemed uncollectable and treated as an
expense if unpaid after 3 months.
Debt Queries
4.18. All queries that are received by the Accounts Receivable team from
debtors regarding their invoice(s) will be forwarded to the relevant
Management Accountant and Budget Holder or the originator of the debt
request to ensure that the debt raised is correct and validate within 24
hours of receipt of the requestor.
4.19. If the originating department agrees to any changes to the sum
involved or debtor details, then any changes to the invoice should be
made by raising a credit note.
4.20. The debtor will be advised by the issuing of a credit note and
requesting prompt payment of any remaining overdue sums.
Statements
4.21. The Accounts Receivable team will issue statements to all debtors
on the first working day of the month the only exception to this are
certain terminal private patients, a list is provided to the Accounts
Receivable team by the Private Patients department, all of these
statements will be sent to the relevant insurance companies.
Staff Debts
4.22. As public monies are involved the Trust has a responsibility to
ensure that all overpayments are recovered. There is a separate policy
and procedure relating to overpayment of allowances and benefits; this
can be found on the documents library.
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4.23. Note it is Trust policy that all staff overpayment is to be recovered
in the time frame that the debt originated.
NHS Debts
4.24. NHS invoices are raised and forwarded to the appropriate NHS
body. An agreement of balances process is undertaken quarterly (from
month 6) whereby debts are compared between NHS organisations. In
the event of discrepancies between the organisations, the organisations
discuss the matter to agree a mutual solution. In the event that this is not
possible, Strategic Health Authority led mediation is available. Budget
holders will be contacted to resolve any issues and assist in the recovery
of the debt.
Debt Collection Agency
4.25. With the exception of NHS debts, and debts of £50.00 and under,
all debts which remain unpaid will be referred to a debt collection agency
for pursuing.
Write off of Bad Debts
NHS Debts
4.26. Transactions between NHS bodies cannot be treated as a bad
debt. There is an agreed dispute resolution process where ultimately the
Strategic Health Authority, if required will arbitrate. When it becomes
apparent that a particular charge is not going to be considered by the
other NHS body, then a credit note must be raised and the cost involved
will be credited against the original income code unless agreed
otherwise by the Director of Finance.
Non NHS Debts
4.27. The Accounts Receivable team will produce a schedule of debts
considered to be uncollectable and pass this to the appropriate individual
or committee.
• All write-offs are reported to the Audit Committee although there
are differing levels of authorisation prior to being reported there
• Debts of up to £50.00 are approved by the Income and
Payments Supervisor and the Financial Controller
• Debts over £50.00 are approved jointly by the Financial
Controller and the Director of Finance.
All debts written off are written back to the originating budget cost
centres.
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5. Dissemination and Implementation
5.1. All persons involved in the collection of income, should be aware of
these guidelines. Therefore this guidance will be held on the Trust’s
document library as a source of information for those persons.
6. Monitoring compliance and effectiveness
6.1. As a guidance note only, compliance with the document will not be
formally monitored, however collection of income procedures will be
annually monitored through internal and external audit reviews.
7. Updating and Review
7.1. This document will be reviewed and updated every 2 years.
8. Equality and Diversity
8.1. This document complies with the Royal Cornwall Hospitals NHS Trust
service Equality and Diversity statement document.
9. Equality Impact Assessment
9.1. The Initial Equality Impact Assessment Screening Form is at Appendix 1.
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Appendix 1: Initial Equality Impact Assessment
Screening Form
Name of service, strategy, policy or project (hereafter referred to as policy) to be
assessed:
Accounts Receivable - Guidance
Directorate and service area:
Finance
Name of individual completing assessment:
Stacy Richards
Is this a new or existing Policy?
Clarification of existing guidance
Telephone:
01872 258039
1. Policy Aim* To provide detailed instructions for managers responsible
for collection of income, and staff undertaking collection of
income.
2. Policy Objectives*
To improve the accuracy of collection of income.
3. Policy – intended
Outcomes*
Improved collection of income accuracy.
4. How will you measure
the outcome?
5. Who is intended to
benefit from the policy?
Internal and external audit reviews will assist in this area.
The Trust, through improved collection of income records.
6a. Is consultation
required with the
workforce, equality
groups etc. around this
policy?
b. If yes, have these
groups been consulted?
c. Please list any groups
who have been
consulted about this
policy.
No
n/a
n/a
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7. The Impact
Please complete the following table using ticks. You should refer to the EIA guidance
notes for areas of possible impact and also the Glossary if needed.
• Where you think that the policy could have a positive impact on any of the
equality group(s) like promoting equality and equal opportunities or improving
relations within equality groups, tick the ‘Positive impact’ box.
• Where you think that the policy could have a negative impact on any of the
equality group(s) i.e. it could disadvantage them, tick the ‘Negative impact’
box.
• Where you think that the policy has no impact on any of the equality group(s)
listed below i.e. it has no effect currently on equality groups, tick the ‘No
impact’ box.
Equality
Group
Positive
Impact
Negative
Impact
No
Impact
Reasons for decision
Age X The guidance clarifies the responsibilities
of all staff equally.
Disability
X
Faith and
Belief
Gender
Race
Sexual
Orientation
X
X
X
X
You will need to continue to a full Equality Impact Assessment if the following
have been highlighted:
• A negative impact and
• No consultation (this excludes any policies which have been identified
as not requiring consultation).
Signed
Karl Simkins
Date July 2012
.
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