Credit Control and Debt Management Policy

Transcription

1 Credit Control and Debt Management Policy Issue Date: August 2011 Author: Head of Finance Approval Body: Senior Leadership Team

2 CONTENTS Page(s) 1. Policy Statement 3 2. Background Debt Management Terms 4 4. Invoicing Arrangements 4 5. Payments Arrangements Reminders Student Debt Sanctions Refunds Credit Management Bad Debt and Write-Offs 10 2

3 1. POLICY STATEMENT To collect all income due to the College within the agreed payment terms, by the effective management and application of the agreed credit policy so as to maximise its resources available within the College to support the delivery of services. It is recognised that successful credit management requires the collaboration of management, academic, finance and support staff within the College. 2. BACKGROUND College debtors can be analysed in the following categories: 2.1 Student Tuition and examination fees payable by students who are responsible for the payment of their own fees. On enrolment, students who are not eligible or have not applied for student loans relating to fees must pay in full or enter into a direct debit arrangement for payment by instalments. Student debt may also include the higher education tuition fees payable by students who are awaiting grant funding or student loans. 2.2 Sponsor Tuition and examination fees payable by a sponsor who has indicated that they will pay fees for the student (eg employer or another organisation). 2.3 Sundry Sales Invoices Invoices raised to customers who are not directly student related. 3

4 2.4 Other Accounts Receivable Income arising from the provision of cost recovery training not funded by DEL and other sundry income. 3. DEBT MANAGEMENT TERMS The College will seek to recover outstanding debt from College debtors (ie students/sponsors/organisations) in the most efficient, effective and economical manner. The normal invoice terms will require that invoices raised by Belfast Metropolitan College are payable at the date of invoice. The College s standard terms are that invoices are payable immediately. Alternative terms may be agreed by the College in exceptional conditions if approved by the Director. 4. INVOICING ARRANGEMENTS The College will operate the following invoicing arrangements: 4.1 Student and Sponsor Invoices will be raised and issued on a weekly basis on the basis of data transferred from the student database. 4.2 Other Accounts Receivable To initiate the invoicing arrangements for other accounts receivable a Sales Invoice Request should be completed by the originator and forwarded to Finance for processing on a timely basis. The College Finance Section is responsible for ensuring that invoicing arrangements are administered in the College. 4

5 5. PAYMENT ARRANGEMENTS The College offers a method of paying course fees in the form of cash, cheque and credit or debit card. 5.1 Payment of Fees by Direct Debit Students with a UK bank account that facilitates direct debit can arrange for fees to be paid in instalments if they are enrolling on a course(s) of 16 weeks duration or more and the total cost is greater than 200. With the exception of HE courses students will have to pay a minimum of 25% of the total fee at time of enrolment, followed by three consecutive monthly equal payments by direct debit. Fully completed Direct Debit Forms must be provided at time of enrolment. 5.2 Payment of Tuition Fees by Student Loans Company HE students who are eligible for a student loan to cover their fees must provide a copy of the student loan letter showing their fees are covered at time of enrolment. A 200 deposit must be paid at enrolment by any student who does not have a student loan letter. This deposit will be refunded by Finance on receipt of the appropriate student loan letter. Please note, if a student has been granted a tuition fee loan from the Student Loans Company, but withdraws before 1 st December, the Student Loans Company will not pay any tuition fee. The student will be liable for tuition fees in full and expected to pay this to the College. If a student withdraws after the 1 st December the college will draw down the full tuition fee loan from the Student Loans Company and the student will then be liable for this amount to the Student Loans Company. 5

6 5.3 Student Debt from Previous Years If a student has a debt outstanding (part or full fees) from a previous year, they will not be allowed to enrol for a course in the new academic year. 5.4 Examination and Registration Fees Examination and registration fees are due immediately prior to examinations entry or upon registration with the relevant awarding body. Students are liable for any uncollected fees at the time of withdrawal from a course. 6. REMINDERS The College will issue Reminder Letters in respect of all debt/invoices as detailed below: First Reminder. Second Reminder. Reminder Letter Aged Debt (days) 35 days from the invoice date. 50 days from the invoice date. This is a final demand warning that a debt agency may be used. Debts over 50 days will also be pursued by telephone or contact initiated by the College. Students who opt to pay their fees by direct debit and default during the process will be contacted by credit control on the first default. On the second default, the arrangement will be required to be paid in full. 6

7 After 90 days from the invoice, Student Debtors will be sent sanction letters. A list of all debtors (students and employers) will be reviewed by the Head of Finance on a monthly basis and by Senior Management on a quarterly basis. When all reasonable steps have been taken by the College to recover the outstanding debt, the debt shall be passed to an external debt collection agency. This shall normally take place after 90 days outstanding. Notification of legal action is advised to debtors by recorded delivery. The College Finance Section is responsible for issuing reminders, and management of the debt collection agency arrangements. 6.1 Sponsor Debt If the debt remains unpaid after the second reminder, a copy of their original sponsor letter and a copy invoice is sent. If payment is not forthcoming, they are passed to debt collection agency and sanctions imposed on the student. 6.2 Miscellaneous Trade If this remains unpaid after the second reminder, the originator of the invoice is contacted and if there are no outstanding issues, this is then passed to the debt collection agency. 7. STUDENT DEBT SANCTIONS Any student who has outstanding debt (this includes those for whom sponsor debt is outstanding) and has not agreed payment arrangements with the College will be subject to any or all of the following sanctions: Withdrawal of library and reprographics privileges. Student will not be entitled to receive tuition, ie students will be terminated from the course with immediate effect. Student will not be entered for examinations. Student will not have assessment marks forwarded to the examining body. 7

8 Student will not be allowed to enter the examinations room to sit examinations. Examinations results will be withheld. Examination certificates will be withheld. Student will not be eligible to attend the College Graduation Ceremony. Student will not be able to progress to second or third year of course. 8. REFUNDS The College policy is that fees are not refundable except in the circumstances outlined below: (i) A course/session is cancelled by the College. Where cancellation of a course takes place, students will be offered either a place on a suitable alternative course or a full refund. (ii) Where a student has not attended course and has provided written notification to the College at least 5 working days before the course commences. (iii) If the time and day or evening meeting of the class has been changed, and the student is unable to continue attending because of these changes, a refund will be issued if written notification is received within 20 working days of change. (iv) FOR FULL-TIME COURSES ONLY other refund applications shall be considered only in exceptional circumstances by the Principal and Chief Executive. If an applicant has made more than one attendance, no refund may be given, except in circumstances as in (iii) or (iv) above. However, where a refund has been refused it may be possible to transfer the tuition fee paid to another programme. This will be put in writing by the Head of Finance. 8

9 Where a refund has been authorised, payment originally made by credit or debit cards will be refunded by cheque. Applications for refunds of fees shall be made in writing by an individual or organisation or by College staff on behalf of the applicant. Course Transfer A student may transfer from one programme to another; permission must be obtained from the lecturer in charge of the programme he/she wishes to join. Lecturers granting such approval must bear in mind the educational needs of the applicant, the timing of the proposed transfer and whether or not such a transfer will meet the student s needs. Examination/Registration fees may only transferred prior to registration with the external body. It should be noted that applicants may be requested to pay additional tuition fee or alternatively they may be entitled to a partial refund where the fee differs. 9. CREDIT MANAGEMENT Regular Aged Debtor reports shall be provided by the Finance Section to Heads of Department/budget holders to assist with credit management activities. All budget holders and staff with regular contract with debtors have a responsibility to take action to assist with debt recovery. Credit meetings will be held on a regular basis to discuss the prior month results and any other issues that may be relevant. Students in the current year, with outstanding balances, may have sanctions applied against them at the discretion of the Chief Operating Officer. The College may off-set a payment from a current year student to an outstanding debit from a previous year. 9

10 Finance staff will liaise with the debtor and the relevant internal staff to ensure that customer queries are investigated and resolved promptly. Where appropriate, a Credit Note will be raised by Finance staff. 10. BAD DEBT AND WRITE-OFFS The Head of Finance is authorised to make any bad debt provision in the College s financial accounts. The Chief Operating Officer may authorise the writing-off sums due up to 750 and should report details of all write-offs to the Finance and Resources Committee. For individual debts over 750, the prior approval of the Department must be obtained to write-off debts in line with requirements of the Financial Memorandum Appendix D. The College should take steps to ensure that future debt is not incurred with customers with a prior payment or bad debt history. Commission charges from the debt collection agency will be charged to the originating department. 10