Receivables and Handling Receipts in the Treasury Office

Governments have many types of receivables:  utilities, taxes, service fees as well as other miscellaneous invoices.  The timing of the receipt of the receivables is critical to the cash flow and treasury function of a government.  Therefore, care must be taken to establish enforceable invoicing and collection policies and the consequences of non-payment of amounts due.  Governments should ensure their revenue control and management policy and procedures are in full compliance with any applicable laws or requirements.  Due to the special nature of funds received from grants, developers, or those which originated from a referendum, governments should consider whether separate procedures should be established for recording and depositing these funds.

• Governments should ensure that all policies and procedures related to customer receipts and accounts receivable are in conformance with all applicable laws and regulations.  Due to the special nature of certain receipts including grants, governments may need to adopt separate procedures for recording and deposit of these funds.
• Governments should establish invoicing and accounts receivable controls, processes, and procedures for services provided in advance of payment, considering the following:  billing timeframe, dollar thresholds, use of outside collection services, write-off of bad debt, receivables aging analysis, and decision-making authority. 
• Governments should accept a variety of receipt types and establish specific policies and procedures outlining proper handling, reconciliation, accounting, fraud prevention, and safekeeping of each. Acceptable types of receipts may include cash, check, credit/debit card, and automated clearing house (ACH), and wire transfer.  Electronic receipt methods should be encouraged when feasible and cost-effective to reduce overall risk and improve cash flow certainty. Governments should not collect revenues through cryptocurrencies, and be cautious with other emerging technologies.
• Governments should establish appropriate controls related to receiving money from customers including the use of integrated receipts and accounting systems, where practical, to allow for the timely deposit, reconciliation, and recognition of collected revenue. Also, a way to ensure proper controls are in place and working, variances to budgeted revenue should be monitored and significant deviations should be investigated thoroughly and immediately. 
• Governments should establish and deliver training programs for employees to cover proper procedures for cash handling, customer receipts and accounts receivable including the ability to detect fraud related to various payment types.  In addition, new employees who will handle money should be properly vetted via a criminal background check or a similar process.   
• Governments should have robust segregation of duties and supervision policies incorporated into to their receivables policies and procedures.  These policies should try and avoid having a single individual be responsible for both the receiving and recording of revenues.  If the government does not have the personnel available for this separation it should develop mitigating controls to prevent recording errors and/or fraud. 
• Governments should also have policies and procedures in place for record retention of receivables information.