The Arkansas State University System Board of Trustees has approved a new policy for evaluating and accounting for the uncollectible portion of student accounts receivable.
This new policy, designed to “protect the financial health” ASU System institutions according to a news release, will provide guidance for writing off uncollectible receivables and calculating uncollectible receivable estimates. Through the new policy, campuses will be able to report the total student accounts receivable.
As part of the policy, the ASU System will annually report a series of data related to accounts receivable to the Board of Trustees. This data includes: total accounts receivable, total student accounts receivable, allowance for doubtful accounts, net student accounts receivable, total amount of write-offs, bad debt expense, and student accounts aging report.
“This is a pro-active financial measure and not the result of any issue with our current member institutions,” ASU System President Chuck Welch said in a statement. “The policy formalizes what we already do and ensures transparency. Consistent reporting, collections and write-off practices contribute to a clearer picture regarding our cash flow expectations and problem accounts.”
At ASU System institutions, student accounts will become past due when payment is not received by the established payment due date. Each campus is required to establish written, legal collection prodcedures.