From: Cecelia C. Dry (Cecelia.Dry@uvm.edu)
Date: Thu Jan 30 2003 - 11:44:38 EST
Some of you have asked that I post responses to the list, so here is the one response I've gotten so far to my question about a methodology for supporting the allowance for doubtful accounts. It is from John Brown, Manager, Credit and Collections, Financial Services, for Boston College:
We use a formula that we developed between us and our Auditors:
We take 100% of our Inactive Accounts (those students who are
not longer enrolled and left the University owing a balance)
We take 2% of our Active Accounts (Those balances as of our
fiscal close on May 31, 0000)
This figure usually comes out in the neighborhood of $750,000.00.
We actually write-off to bad debt approximately $500,000.00
We will recover of that $500,000.00 approximately $300,000.00
The recovery is made from our internal efforts after write-off and from
collections from our collection agency.
Our Initial receivable at the beginning of the second semester is
around $119,820,000.00 (this is less much of the
Financial aid awarded to our students).
Hope this is helpful to you, John
*******************************************
Cecelia C. Dry
University of Vermont
Assistant Controller for University Financial Services
(802) 656-1340
Cecelia.Dry@uvm.edu
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