Managing Sales Process

Focus Points

Where possible, sales invoices should be emailed as pdf documents to customers.

Introduction

Sales to external customers are carried out via a variety of channels at the University, and likewise the payment for the goods or services is received via a number of different routes. The process has been written for anyone who is involved at any stage of the activity.

The process and associated financial controls have been written in support of Section 2.1 & 2.2 of the Financial Regulations.

Note: this process details steps to be taken by departments, Credit Control and Cashiers as indicated.

Receive Purchase Order

(Departments)

All requests for goods/services should be supported by an official Purchase Order issued by the buyer.

Remember: if the order is from another University department, it must be processed following the Internal Trade process.

Record purchase order

On receipt of an external order for goods or services, the details must be recorded on a spreadsheet, order book, or similar. Where appropriate, the order should be checked against any contractual agreement. The details recorded should include a customer purchase order reference and/or contact name/number.

Process order

1. Is advance payment required?
   All customers should be encouraged to pay in advance of receiving goods or service. Where an order is received without payment, but the customer has a poor payment history, or is deemed 'high credit risk', the customer should be contacted to request payment before processing the order any further. Refer to Process Payment for guidance on handling payments.
    
2. Look up customer on Oracle Financials.
   It is important to check Oracle Financials to establish if the customer and invoice address already exists. Refer to Find a Customer for guidance. 

   Where the customer is found, if required, a new contact can be added to the customer record by the Credit Control team in response to a completed Customer Contact Form.

   If the order is from a customer not on Oracle Financials, or if the customer is there with a different invoice address, new details must be set up on the system before the order can be processed any further. Go to New Customer Set-up.
    

3. Send order acknowledgment to customer.
   An acknowledgment should be sent to the customer as appropriate to indicate that the order has been received. A standard Acknowledgement of Order is available online.
    
4. Supply goods/services.
   The relevant goods/services should be supplied to the customer as required. 

   Note: Exports of goods/movement of goods overseas:

   When sending goods overseas, the University is legally obliged to obtain:
   a)  Documentary evidence of the removal of the goods from the EU within 3 months of exporting them to non-EU countries, or 

   b)  Documentary evidence of the removal of the goods from the UK within 3 months of sending them to a VAT registered customer in another EU country.

   The evidence can be either official customs declarations or other evidence such as airway bills and seaway bills showing the goods leaving the country. Your freight forwarding agent or courier should be able to provide this evidence to you. (Please note that official customs evidence will only be available if the goods are sent to a country outside the EU). 
    

5. Raise and send out Sales Invoice.
   Invoices relating to research activity must only ever be raised by Contacts.

   Invoices should only be raised in £ Sterling.

   A sales invoice should be raised in Oracle Financials, unless payment is received with the order where the equivalent of an invoice is generated through another route, e.g., EPOS, courses and conferences or online (detailing University name, address, VAT number, date, description of goods, VAT amount and total amount).

   For sales of items over £250 generated via such routes, a sales invoice may be raised if required. For guidance on invoice types refer to the Income Decision Tree.

   Whenever possible, sales invoices should be sent by email to the customer. It is important to check the invoice using the invoice preview option and sending to the customer by post or email.

   Once an invoice has been printed, users can not amend or void the invoice. It should be credited and re-invoiced.

   Invoices found to be incorrect after generating the printable document image, or no longer required anytime after the day they were raised, will need to be credited and re-invoiced as necessary. See the Manage Debt section for further guidance.

   Invoices relating to orders that were received with payment must be clearly stamped 'paid with thanks'. Once these have been sent to the customer it is important that departments notify Cashiers of the need for cash to be applied to the correct invoice.

   Has payment been received against the Invoice?

   Yes: Process Payment
   No: Manage Debt

Conditions of sale and supply 

It is the departments' responsibility to send this document to the 'orderer' before the order is accepted/processed further. All new customers MUST be notified of the University's Standard Conditions of Sale and Supply (Terms and Conditions).

Complete and submit set-up form

The Customer Set-up form should be completed for either a new customer, a new contact, or a new invoice address, and submitted to the Credit Control team.

Review set-up form 

Credit Control will check all requests to ensure that the customer does not exist before creating a new record. Where the customer/address is found to exist, they will contact you with the account details.

Where a new customer is required, Credit Control may carry out credit checks (where relevant). If any issues with the set-up request are identified during this activity they will refer back to your department. It is at the discretion of your department to decide the appropriate action to take, i.e. to take a risk and continue with the transaction, to renegotiate the transaction or to request payment in advance.

Customer set-up

Credit Control will set up the new customer or amend existing customers in Oracle Financials within 48 hours of receipt of the request, allocating a customer number. 

Various activities are carried out during the life of a sales invoice, depending on the nature of the debt, value, customer etc. Research invoices are managed by Research Accounts.

1. Statements and debtors reporting (Departments and Credit Control).
   At the start of each month Credit Control generate and post customer statements detailing all unpaid invoices. The OU AR Aged Debtors Report is run showing all outstanding debts. It is recommended that this is also run by each department for your own tracking of customer debts.
    
2. Liaise with the customer (Credit Control).
   Credit Control will initially follow up debts with customers (via Dunning letters, statements, phone, email etc) to discuss a resolution to the debt. This may be done as the Invoice becomes due and/or at various stages of the debt management process, as per this Schedule.

   Where it is identified that there is an issue with the original invoice e.g. information was missing, the query will be referred to the department to investigate. The department is responsible for resolving the outstanding issue and communicating its findings promptly to both the customer and Credit Control. If the debt continues to be outstanding, the customer details may be passed to a debt agency to follow up.
    

3. Send copy invoice to customer (Departments).
   In circumstances where the customer did not receive the original invoice, a copy should be printed out and sent to the customer. The invoice will be clearly marked as copy. See Print an Invoice for a Customer.
    
4. Credit notes (Departments).
   Where it is found that the invoice is incorrect, a credit may be required. Best practice requires the invoice to be fully credited and re-invoiced correctly. Refer to Raise Sales Invoice in Process Payment. 
    
5. Debt write off (Credit Control).
   Where Dunning letters and debt collection have not been successful, Credit Control will discuss with the department whether to write off all or part of the debt. Any write-off activity is only to be carried out by the Credit Control team; VAT cannot be recovered for 6 months.

Payment queries

Where over or erroneous payments are received, there are two possible solutions.

Leave on Account (Cashiers)

The preference is for credit balances to be left on the customer's account, to be matched against subsequent Invoices.

Where a credit note is raised for an incorrect Invoice, a new Invoice may need to be raised (refer to Raise Sales Invoice section of Process Order) and/or a refund made to the customer (see below).

Refunds (Credit Control)

In some circumstances, a refund may be appropriate. Such decisions are made by Credit Control who should be contacted with any questions regarding refunds.

Invoice Queries (Departments)

Note: if the invoice has already been paid by the customer, you should follow point 1 below before raising the credit note.

1. Refer to Cashiers to unapply receipts 
   The invoice should be referred to the Cashiers team who will unapply the receipts. You can then raise the credit note as per the details below. 

   In the case of internal invoice receipts, please contact the Credit Control team.
    

2. Raise Credit Note 
   The credit note should be raised for the appropriate part or full invoice value as per Enter a Credit Note against an Invoice in Accounts Receiveable.

The controls that are embedded in the Managing Sales process are listed below. When following the Managing Sales process, staff should ensure that all of these controls take place.

1. The Departmental Administrator, or other senior Officer, approves the sales price of all goods and services where a standard list price does not exist, and a price has therefore been calculated.
    
2. Where appropriate, customer purchase orders are received for internal and external sales of goods and services before goods are dispatched or services provided.
    
3. A sales invoices should be raised in Oracle Financials as soon as goods have been despatched or services supplied, unless payment is received with the order where the equivalent of an invoice is generated through another route, e,g, EPOS or the Online Store.
    
4. All invoices are checked for accuracy prior to sending to the customer via the invoice preview functionality in Oracle Financials.

Segregation of Duties

One of the key financial control principles to be adopted in all University finance processes is the need to ensure no single member of staff completes all stages of any particular process. This principle requires an adequate 'segregation of duties' when designing work flows. As an example in the Managing Sales of Goods and Services process:

• Staff who authorise the sales price must not also raise the applicable invoice in Oracle Financials.

For further advice on this subject, please contact the Financial Assurance Team.