Interdepartment Sales and Charge Backs

[Procedure] Last Updated: September 2012
Prior Manual Number: 6-2

The intra-fund transfer system has been developed to accommodate inter-departmental transactions for the sales and service areas, auxiliary enterprises such as the Holmes Student Center, HSC Bookstore, HSC Pheasant Room and related departments. Other divisions or colleges will occasionally need to charge university departments for various sales or services and should follow the same procedures. 

A university department is defined as any department, agency, or cost center whose funds are held by the university. Items representing income to one university department and expense to another university department should be recorded on the Standard NIU Departmental Sales Invoice. The intra-fund transfer system works on the principal that the selling department is immediately given credit for the sale and the buying department is immediately charged for the sale. 

Authorized departments issue charges without the use of an invoice form and they are not processed through the Accounts Receivable Office. These charges are recorded with invoice numbers preceded by a three digit alpha prefix, they are: Architectural Engineering Services (AES), Campus Mail (PST), Computing and Telecommunications Systems (CSO) and (TEL), Printing Services (PDS), Transportation (TRN), and Physical Plant Work Orders (WKO). The charged departments receive an itemized, monthly report of their respective costs. Questions regarding the above should be directed to the original billing department or the Accounting Office.

Holmes Student Center, HSC Bookstore, Central Stores and Media Services use separate forms to record their sales. These departments use their own numbering sequence, or pre-numbered invoices. All other departments use the Standard NIU Department Sales Invoice

Departments desiring to issue inter-departmental billings for the first time should obtain clearance through the Accounts Receivable Supervisor prior to submitting invoices tor processing. 

Preparing an Invoice

The following instructions coincide with the number on the example form and can be followed in preparing the Standard NIU Departmental Sales Invoice.

  1. Sold to-Type in the name of the department being charged, the department head's name, and the campus address. 
  2. Date-Leave this date space blank.
  3. Invoice Number-Will be assigned by Accounts Receivable or will be pre-numbered.
  4. Name of Billing Department-Your Department or the department receiving the proceeds of the sale. 
  5. Account Number-Full ten digit account number (including income code) of the department receiving the proceeds of the sale or service.
  6. Name of the Department Charged-This may be a duplicate of #1. If so, leave blank.
  7. Account Number-full ten digit account number (including expense code) of the department charged for the sale or service. 
  8. Purchase Order Number-A purchase order will be required for bookstore purchases whenever a single item exceeds $100.00. In most cases, a purchase order will not be required for inter-departmental transactions. The exception to the rule are charges to open Purchase Orders. In that case the Purchase Order Number must be listed in the appropriate space. 
  9. Prepared By-this should be the signature and phone number of the person in the department who can be contacted if questions arise about this invoice. 
  10. Date-Type in the date(s) the sale or service took place. 
  11. Description and Amount-Type an adequate itemized description of the item(s) sold or services rendered with the corresponding charges in the amount column. This is to clarify the charges to the department that is charged. 
  12. For Accounting Use Only-Leave blank. The Accounts Receivable Office will complete the information necessary to recording the transactions. 
  13. Received by-The authorized signature from someone within the "buying" department completes the contract. 

Flow and Distribution

The selling or billing department may retain the fourth copy of the invoice (Goldenrod) for their files, however the Accounts Receivable Office prefers all four copies be forwarded for processing. The goldenrod s returned to the originating department reflecting the prefix and invoice number assigned and any corrections necessary. 

Accounts Receivable Office completes the Accounting Use Only section with the appropriate transaction codes. The General Accounting System Budget Status Report is also checked for the availability of funds of the buying department once the Accounts Receivable Office determines that funds are available, the original and one copy of the invoice are mailed to the buying department. The 3rd copy pink is retained by the Accounts Receivable Office for processing. 

The transactions of the processed invoice will appear in both departments' monthly financial reports from General Accounting System.

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