Financial Affairs Policies


UMB Policy on Customer Billing and Collections

Financial Affairs   |   Approved November 1, 2015

Responsible VP/AVP

Dawn M. Rhodes, DBA, MBA

Applies to Staff

Revision History

Effective November 1, 2015; Revision of A&F Policy 3511


In the course of business operations at the University of Maryland, Baltimore (UMB), schools and departments enter into agreements with customers for non-sponsored projects as permitted in USM Policy VIII - 6.00 Policy on Business Activities. The agreements include promises to pay UMB in consideration for its good and/or services. The purpose of this policy is to:

  1. Further support the USM Policy on Business Activities by prescribing the standards for billing and collecting amounts due to UMB in consideration for its performance under the agreements.
  2. Develop required procedures for processing invoices and collections.
  3. Establish departmental responsibilities.

Policy Statement

In the course of business operations at the University of Maryland, Baltimore (UMB), campus units need to invoice external persons and organizations. UMB has established a method for processing, approving, tracking, and storing invoices issued to external customers.

  1. Departments that provide goods and services to or seek reimbursement of expenses from external entities are responsible for initiating the billing process, monitoring receivables, and facilitating prompt collections.
  2. All invoices to external entities must be generated from, and recorded as accounts receivables, in the UMB financial system. Department faculty and staff are required to submit invoice requests timely to Financial Services (FS). FS is required to generate invoices and process payments timely.
  3. Departments must maintain detailed supporting documentation for each transaction and be able to submit the documentation to FS upon its request.
  4. Revenue will be credited to a department after payment of the invoice is received by UMB.
  5. The revenue credited to the department project(s) will be adjusted accordingly for fees incurred for credit card payments, wire transfers, collections, or other adjustments such as foreign currency exchange rate differences.
  6. Invoices generated by the UMB financial system are the only UMB approved invoices. Departments are prohibited from creating or generating their own invoices, unless an exception or other arrangements have been approved by the Chief Administrative and Finance Officer (CAFO) (or designee). Falsifying accounting records is prohibited- for example, recording revenue before payment is received or requesting invoices prematurely.
  7. Agreements between UMB and external entities involving promises to pay UMB create legal debts to UMB, which are debts to the State of Maryland. UMB will take the necessary steps to obtain payment of invoices, and to collect for unpaid invoices, using debt collection procedures in accordance with the Maryland State Central Collection Unit's (CCU) Standard for Administrative Collection of Claims. A collection fee will be added to debts transferred to CCU.
  8. The standard payment term for all invoices is Net 30 days. FS will issue monthly dunning letters until the invoice is paid or until it is deemed delinquent and sent to CCU.

Related Administrative Policies and Procedures:

COMAR 17.01.01 Standards for Administrative Collection of Claims
Comptroller of Maryland General Accounting Division Accounting Procedures Manual Section 5.2
USM Policy VIII-6.00 Policy on Business Activities


  • Agreement - An agreement between UMB and an external entity involving the delivery of UMB goods or services in exchange for a payment of monetary consideration. The agreement should be in writing, but oral agreements may give rise to claims for collection in some cases. Under COMAR 17.01.01 Standards for Administrative Collection of Claims UMB is required to issue an invoice to record each transaction resulting in an obligation to make payment to UMB and to collect payments due to UMB.
  • Dunning letter - A notification to a debtor of an outstanding debt owed to UMB. The dunning letter includes outstanding balance and contact information, demand for payment, and information about additional collection action that may be taken.
  • External entity - A separate legal organization or individual that enters into an agreement with UMB. External entities are not included in UMB's financial system. Examples include private and public companies, nonprofit organizations (including UMB affiliates that are separately incorporated or otherwise not organized legally as part of UMB), and individuals.
  • Sponsored project - An externally funded activity that is separately budgeted and accounted for according to the terms of a sponsored work agreement between a Sponsor and UMB. Sponsored projects include grants, contracts, and cooperative agreements for research, training, and other public service activities.
  • UMB Affiliate - Person employed by an entity that has a relationship with UMB authorized by the Board of Regents or by law, e.g., faculty practice plan organizations, University of Maryland Baltimore Foundation, Inc. and other affiliated foundations, the University of Maryland School of Medicine Alumni Association, Inc. and other recognized incorporated alumni associations, UMB's recognized affiliated business entities, the University of Maryland Medical System/University of Maryland Medical Center, and other University System of Maryland institutions. A UMB Affiliate approved to have UMB fiscal authority is responsible for the administration and reporting of UMB resources.

Scope and Exceptions


This policy applies to all billing arrangements between UMB and external entities, except for sponsored project billings and student tuition and fee billings. Generally, the billing arrangements covered under this policy are related to state, auxiliary, and revolving fund activities. This policy does not apply to interdepartmental billings.

Exceptions / Request Process:
Exceptions to this policy must be approved in writing by the CAFO. Requests may be submitted to the Controller using the Policy or Procedure Exception Form. Alternatively, a request may be submitted in the form of a memo to the CAFO. Requests must be signed by the Dean/Vice President or Associate Dean/AVP.

Roles and Responsibilities

  1. The department of A&F-Financial Services, under the direction of the Chief Administrative and Finance Officer (CAFO), is responsible for establishing procedures to promote compliance with this policy.
  2. Department of Financial Services
    1. Review invoice requests for appropriateness.
    2. Generate invoices using the UMB financial system.
    3. Apply payments to invoices.
    4. Prepare and send dunning letters.
    5. Work with departments to facilitate collections.
    6. Work with departments, CAFO or designee, and University counsel to negotiate settlements of disputed accounts in appropriate cases.
    7. Transfer delinquent accounts to CCU.
    8. Retain invoicing records, including communications and support documentation.
  3. Schools/Departments
    1. Identify transactions that require billing and initiate the billing process.
    2. Monitor receivables recorded on the school/department's accounting records.
    3. Retain detailed support documentation and other records related to receivables.
    4. Work with FS to facilitate additional collection efforts when needed and to evaluate disputes about unpaid invoices and debts.
  4. All UMB personnel and UMB Affiliates must follow UMB A&F Financial Services Standard Operating Procedures No. 3511 - Customer Billing and Collections.
  5. UMB employees who improperly submit, create, or adjust invoices may be subject to disciplinary action up to and including termination of employment, and may be referred for criminal investigation possibly leading to prosecution. Any UMB Affiliate who improperly submits, creates, or adjusts invoices will lose the privilege of being a UMB Affiliate and may be referred for criminal investigation possibly leading to prosecution.


See UMB A&F Financial Services Standard Operating Procedure No. 3511 - Customer Billing and Collections

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