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AR Collection - Referrals to a collection agency

What is a collection agency?

A collection agency is an organization specializing in obtaining payment from customers in debt.

When is a customer referred to a collection agency?

A non-government customer is referred to a collection agency if a customer's account is delinquent after prior collection attempts have failed (see the schedule), and provided the cost of using the collection agency does not exceed the anticipated recovery amount; government customers are not referred to a collection agency. If using a collection agency is deemed not cost effective, use the write-off process.

How do I refer a customer to an agency?

For Banner, Student Accounting will contact you to discuss whether referring a customer to an agency is appropriate. If appropriate, Student Accounting will work with the agency, on your behalf.

For DaFIS , the department decides whether it wants to refer the customer to a collection agency or write off the unpaid amount as a bad debt. For referral to a collection agency, use the Refer to Central Office function:

  1. Click Inquiries
  2. Click Accounts Receivable
  3. Click Refer to CO Collections
  4. Enter your customer information
  5. Modify the Receivables Age section if needed and click OK
  6. Click the customers you want to refer and click OK
This action updates the customer's collection status in DaFIS from Phase 1 (PH1) to Referred (R). when the customer is actually placed with the agency, the collection status code changes to PH2 (Phase 2).

Where can I look up which customers have been referred to an agency?

In DaFIS Decision Support (DS), use AR Write Off Listing (309). On the input page, the default for AR Collection Status field is to display all customers, regardless of collection status. However, you can modify the criteria to limit the results (e.g., Assigned to Collections Agency).

What are some best practices for using an agency?

Collection agencies are in the business of extracting payments from individuals or corporations that have not paid voluntarily. As such, their tactics can seem gruff at times, but generally speaking it is best to permit the agency to work their accounts while avoiding the temptation to intervene on a customer’s behalf. Of course, there is no excuse for abusing a customer, and if you feel one of UCD’s collection agencies is acting unprofessionally towards one of your customers, you should let Student Accounting know right away.

Customers with debts in collection still have rights. These rights are enumerated by the Fair Debt Collection Practices Act.

What happens after a customer is referred to a collection agency?

The collection agency will immediately begin their recovery efforts. Student Accounting will work with you each step of the way to get your feedback on how aggressive you want the collection agency to act on your accounts. If you authorize litigation against the customer, for example, Student Accounting will help you understand the costs of that action, including attorney fees, possible witness fees, and travel for out-of-state cases.

In DaFIS, you will see any payments reduce your receivable balance; because Banner departments already received their revenue up-front, they will see the collection agency’s commissions post to their DaFIS account as an expense.

If the collection agency is unsuccessful in recovering the debt, Student Accounting asks the department if it would like to try a different collection agency. If so, then Student Accounting contacts a second agency. If not, the debt is written off.

Next: Write-Off

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