1. New Customer Account Set Up
These process notes cover the set up process and approval of all new customers and amendments to existing customer accounts. This process should be undertaken before any work commences or liability is undertaken by SGUL (i.e. staff employed or expenditure incurred).
New customers will be set up by the Accounts Receivable Team within 5 working days of receiving a correctly completed form. If the form does not include all the necessary information or is not filled out correctly it will be returned to the person who requested it.
No invoices will be raised for a new customer until the new customer set up process has been completed and approved. There is a separate process for raising an invoice and new customers must be set up and approved prior to requesting an invoice be raised.
New customer Account set up form can be found here.
All new customer requests forms with supporting documentation should be sent to accountsreceivable
2. Accounts Receivable
On receiving a correctly completed new customer request form, Accounts Receivable will check the following:
- Duplication: Customer is not already set up within Agresso – searches run on customer name, address and VAT numbers to check for duplicated records.
- Information: All the details are correctly provided i.e. trading name, address, company registration number, VAT number.
- Payment terms: Agreed credit terms are within the parameters set out in the SGUL Financial Regulations, if alternative arrangements have been made that these are reasonable and have been authorised by the Head of Department and Head of Credit Control
- Documentation: Supporting document is attached and aligns with information provided on form. Form and supporting documentation to be filed electronically on the Finance shared drive.
- Authorisation: The form has been approved by an appropriately authorised. This should be electronic ie either electronic signature or sent from the individual’s email.
- Credit Checks: Examine the company’s credit worthiness for anticipated sales greater than £2,000 (see credit approval section below)
The details should be input by one member of Accounts Receivable and checked by another.
Advance Payments: Consider if advance payment is appropriate for the new customer eg where the sale is one-off or of a low monetary value it may be more administratively efficient to take an upfront payment by credit card.
Please Note: A New Customer Accounts Set up form should be completed in all instances for new customers or changes.
3. Credit Approval
Credit checks are carried out to avoid bad debt, write offs and to help reduce the overall risk to SGUL.
Credit Checks: Accounts Receivable use Creditsafe to search for customer by name and company registration number. On receiving the credit rating a copy of the report is filed electronically with the new customer set up form. A general search of the internet should also be undertaken for any recent information published
If the credit limit does not cover the monthly amount to be billed then the request will be sent back to the department for them to underwrite the value of the project/contract/invoice and only once this has been received can the customer be set up on the system.
Credit checks can be carried out at any time if the value is less than £2,000 but Accounts Receivable believe that the customer represents a risk.
For entities with no company registration: The set-up can be done on the condition that an Income and Expenditure for the most recent financial year are submitted for review. The Accounts Receivables Manager will review the financial information provided alongside any information available in public forums to determine credit risk. If this is not submitted and the department still require an account set up, then the risk of any bad debt lies with the department.
Where an unsatisfactory credit rating is obtained for a new customer (or a current customer has a poor payment history) and the department insists on proceeding with the sale, it must be emphasised that the department has to accept responsibility for any debt. An email confirmation departmental responsibility for debt must be sent to accountsreceivable. The Accounts Receivable Manager will maintain an electronic register of customers set up with unsatisfactory credit ratings.
Approval Limits: New customers with satisfactory credit rating and an expected annual sales value of less than £5,000 can be approved by a member of Accounts Receivables, £5,000-£50,000 by the Accounts Receivables Manager and over £50,000 by the Deputy Finance Director or Finance Director.
4. Payment Terms
SGUL’s standard credit terms are payment due within 30 days of invoice date.
If alternative arrangements have been made these must be checked for reasonableness and authorised by the Head of Operations and the Accounts Receivable Manager.
Advance Payment: when receiving a new customer set up form the amount and length of the sales arrangement should be considered and if appropriate advance payment options or shorter payment terms considered.
The following should be discussed with the invoice requestor
- For one-off customers have you considered advance payment (20% to 50%) and/or taking a credit card payment?
- For customers requesting credit for services or goods below £1,000, have you considered advance payment (20% to 50%) and/or taking a credit card payment?
- Requests for services or goods of a significant value or which require capital outlay may be require an advance payment to mitigate risk. This should also be discussed with the Deputy Finance Director.
5. Communication
New customer set up form which are not completed correctly are to be queried and returned immediately to the requestor.
Once the new customer is set up, Accounts Receivable will send a confirmation email to requestor detailing the new customer number.
A standard formatted confirmation email or letter will generated to send to new customer. It will include company information as provided to be confirmed as correct and outlining SGUL’s terms and conditions, payment terms and any sales related processes they need to be aware of.