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Approved byChief Financial Officer
Date Procedure Took Effect16 April 2002
Last approved revision25 February 2022
SponsorFinancial Controller
Responsible officerTeam Leader, Revenue Management


These procedures relate to the processing of Debtors invoices by the University and debt management functions performed by Revenue Management.

Organisational scope



Organisation or person owing money to the University.
Finance One
University corporate financial system


  1. Introduction

    1. Sales revenue is derived through either a cash sale or a credit sale. A cash sale results in the collection of cash at the time of the sale. A credit sale results in an invoice being created and given or sent to the purchaser who will then send payment back at a later date. Wherever possible cash sales should be made for the following reasons:
      1. Cash in the bank earns interest income
      2. Credit sales incur costs in creating and distributing invoices and statements
      3. Some credit sales result in non-payment or are very difficult to recover resulting in significant costs being incurred
      4. Cash payments can be made by EFTPOS and credit card.
  2. Existing debtor accounts

    1. In order to make a Credit sale a Debtor Account must be used, if the University has previously allowed credit to the purchaser then an account will exist.
      1. A list of all debtor accounts is available by accessing the Debtor Chart within Finance One.
      2. All Debtors Accounts that have not had any activity for more than 13 months are made status “Inactive”. This means no transactions can be put against the account.
      3. To reactivate the Debtor account, a new AR Account Application form must be completed to ensure the correct details are recorded. Where the transaction is a “one-off” and the value is less than five thousand dollars (NZ$5,000) then an appropriate Sundry Debtor Account within Finance One may be used.
      4. An account number must be entered onto the invoice at the time of the sale.
  3. New debtor accounts

    1. All new Debtor accounts require a new AR Account Application form to be completed.
      1. Departments and Academic Units who regularly request invoices be raised for less than $100 should investigate the option of establishing a web-based sale interface that accepts credit card payments as this is the most cost-effective way to process high volume low value transactions. Where a pattern of regular but relatively low value transactions is likely then a new Debtors Account should be established to process these, rather than using a Sundry Debtors account as this aids the collection of outstanding amounts.
      2. To request a new Debtor account, Departments are required to complete a new AR Account Application form. This form completed and signed by the Debtor is essential in order to properly manage the collection process, in the event that the debt becomes overdue.
  4. Maintenance of debtor accounts

    1. The Revenue Management Office is responsible for the maintenance of the debtors account list. Where no transactions have been entered against a debtor account in the previous 13 months the account will be made inactive and the procedures for the creation of a new account will apply.
  5. Creation of an invoice

    1. An invoice is required in all circumstances where a cash sale is not made.
    2. Invoices must be created using Finance One Smartform.
  6. Credit Notes

    1. Credit Notes are used to cancel invoices either in whole or part (only issue a partial Credit Note if a part payment has been made).
    2. They are not to be used to write off uncollectable debts.
    3. Legitimate uses include the correction of errors in the original invoice, to account for the return of goods or to amend a disputed price.
    4. Because GST is paid by the University to the IRD as soon as a GST invoice is issued it is important that any credit notes be issued promptly.
    5. Credit Notes must be created using Finance One Smartform.
  7. Debt collection

    1. The Revenue Management Office manages the collection of debt in the University. For any one debtor numerous departments may issue numerous invoices in any one month.
    2. These invoices, along with any payments received, will be summarised onto a debtor statement which is emailed to the debtor monthly.
    3. The collection action adopted by the Revenue Management Office is based on the length of time an invoice has been outstanding, measured in months since issue
      1. Current – A Debtor Statement is sent to the debtor at the end of the beginning of the following month. University policy is all invoices on these Statements are to be paid by the 20th of the month following (normal commercial practice).
      2. One month – The debtor is sent a statement clearly noting “OVERDUE ACCOUNT”.
      3. Two months – The Debtor Statement (i.e. 60 days overdue) “FINAL NOTICE” statement is sent.
      4. Three months – At the end of the month when the account is 90 days overdue, a debt collection letter is sent. The letter clearly states that no further credit will be granted and that the debt will be sent for debt collection unless there is a legitimate reason as to why the account should remain unpaid.
        No further invoices should be issued to a debtor with invoices outstanding for this period. The Department which issued the invoice is notified that the debt remains unpaid and is asked for their assistance in recovering the debt.
        The Department is also advised that the debt will be passed for debt collection and is asked to advise immediately if this course of action is not warranted, if no response is received regarding outstanding invoices, the outstanding amount will be debited back to the Department which will reduce their income.
        The account will be passed to the collection agency, the debtor will be liable for all costs associated with collecting the debt.
  8. Write off of unrecoverable debt

    1. Debt cannot be written off without prior approval in writing from the Chief Financial Officer.
    2. Applications for write off should be forwarded to setting out the details of the invoices and the circumstances surrounding the request.

Related policies, procedures and forms

Contact for further information

For further information, contact:

Accounts Receivable
Tel +64 3 479 7306

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