Allowance for Doubtful Accounts

Methodology for  ”Allowance for Doubtful Accounts”.

Under 90 Days Old

The summer balances of resident and non-resident tuition  accounts on June 30, XXXX are totaled and then divided into the balance of these accounts uncollected on the first day of the following Fall semester.   These are averaged for 3 year  totals . 

90 Days to One Year

The total dollar amount of the resident prior and non-resident prior, on  June 30, XXXX .  This is the uncollected balance of these accounts from the previous Fall and Summer semesters.  This relationship is stated as the percentage of allowance for doubtful accounts.

The percentage of allowances calculated for these tuition accounts has been applied to all Financial Accounts with a receivable.

 1 yr to 3 yr  & Over 3 yr  

The legacy system has not been able to track  receivables during this part of the aging process with any accuracy.    During previous external audits, discussions with the auditors resulted in recommendations that the allowance be 80% & 90 % respectively.  These have been reviewed by all external auditors with no recommendation of change.

Banner system carries a charge date with every charge and payments are handled within the system as a “first charged, first paid” process.  This will enable a more accurate calculation of an allowance.

These percentages are a reflection of doubtful accounts as of 6/30/XXXX SAR (Student Accounts Receivable) balance,  not a reflection of uncollectable total charges.