External Sales Policy, Procedure, Contract, Amendments Updates April 30th, 2014

External Sales

Policy, Procedure, Contract, Amendments Updates

April 30th, 2014

University of Minnesota

http://www.morris.umn.edu/

• Policy & Procedure Update

• Risk Assessment Survey

• Contracts Library

• Terms & Condition on Invoice

• Approval Form

• Service Agreement Short Form

• Amendments

• Other process considerations

• Questions & Answers anytime during the presentation

Agenda

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Policy

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University Administrative Policy:

“Selling Goods and Services to External Customers” http://policy.umn.edu/Policies/Finance/Accounting/EXTERNALSALES_PROC04.html

http://policy.umn.edu/Policies/Finance/Accounting/EXTERNALSALES_PROC04.html

http://policy.umn.edu/Policies/Finance/Accounting/EXTERNALSALES_PROC04.html

Procedures

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University External Sales Procedures:

•Conducting External Sales

•Establishing an External Sales Accounting Structure

•Establishing External Sales Rates

•Establishing External Sales Agreement

•Unrelated Business Income Tax Procedures, and Collecting and Remitting Minnesota Sales Tax on External Sales Transactions

Use the on-line risk assessment survey to determine whether a sales transaction is classified as low, medium or high risk.

•Defines the accountability

•Operating procedures

•Oversight

•Monitoring procedures

Handout provided: Risk Profile of sales Transactions (Roles and Responsibilities)

Policy Update – Risk Based Approach

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• Self-monitor and provide local oversight regarding pricing decisions and financial implications.

• Discretion as to the method used to process sales activity. – Units may choose to either use a University-approved contract

– Bill customers via the EFS billing system.

• Management of compliance activities (e.g. collecting and payment of sales tax)

• Controller's Office will review low-risk sales activities every 4-5 years for compliance with the policy

• Controller's Office will keep a repository of all external sales contracts

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Low Risk

• Units will work with the Controller's Office:

– to complete a business plan for sales activity

– formal rate development

– contract

• Controller's Office will provide:

– pricing assistance for units requesting the service

– responsible for monitoring and providing oversight

– review medium risk sales activities every 2-3 years for compliance with the policy

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Medium Risk

• Units will work with the Controller's Office:

– Business plan for sales activity

– Formal rate development

– Contract

– Market pricing

– Financial stability of customer

• Controller's Office will provide:

– Pricing assistance for units requesting the service

– Responsible for monitoring and providing oversight

– Review high risk sales activities every 1-2 years for compliance with the policy

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Risk Assessment Survey

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The survey is located at :

Selling Goods and Services to External Sales: Assessing the Risk Profile of Sales Transactions, Use of Contracts, Appendices Conducting External Sales Activity: Applying risk based factors, Evaluate risk category, Establishing External Sales Rates: Applying risk based factors Establishing External Sales Agreements: Introduction External Sales website: Risk Assessment

FORM: OGC-SC102Form Date: 01.29.02

Revision Date: 11.16.10


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Example of using the Risk Assessment Survey online

Choose the answer to each characteristic that best describes your activity.




Full Name Email Address Department Name DeptID #

To begin the survey, please fill out the following information fields

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Questions that are asked on the survey:

1) What is the anticipated revenue on this transaction?2) What is the customer type?3) What is the payment history?4) Does the customer contribute to the design or manufacturing?5) Customer’s main line of business?6) Service provided by the unit?7) Taxes or fees as a result of transaction? 8) Shipped outside of United States?




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Results that are provided: Your activity is considered to be “Low, Medium, or High Risk” based on the answers you have selected.

Will provide a summary of what it means to be at “Low, Medium or High Risk” activity.

Important: You must click submit to finish this survey.




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Utilize standard U of M agreements whenever possible, available at OGC website: www.ogc.umn.edu/

Standard Agreement• If standard agreement is used, OGC does not review Non-Standard Agreement• If non-standard agreement is used, OGC must review, and

usually negotiate with customer’s counsel



Contract Library

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Go to “Contracts” http://www.ogc.umn.edu/contracts/index.htm

Standard Contracts Library http://policy.umn.edu/contracts/

External Sales & Purchasing Agreements

Used for external sales and purchasing.

Go to FORM: OGC-SC102Form Date: 01.29.02


Contract Library

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If customers are billed via the EFS billing system.

Provide customer with the terms and conditions provided on the back of the invoice in advance of starting work.



Terms & Condition on Invoice

Handout provided: Terms & Conditions

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Internal/External Sales Approval Form UM 1699

Updated:

External Sales Activity Form UM 1799



External Sales Activity Form

Handout provided: External Sales Activity Form UM1799

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UNIVERSITY SHORT FORM SERVICES AGREEMENT

Current criteria:

• Use with low risk transactions

•Should not be used in lieu of an existing standard service agreement template, unless ALL of these criteria are met:

•Value of services being provided must be $5,000 or less;

•No additional terms, conditions, services, activities or modifications of the agreement

Handout provided: Short form and Guidelines

Service Agreement Short Form

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Contract has been identified as an agreement that can be modified

• An amendment can change the compensation or term sections of the services Agreement.

• Increases the compensation, add services or extending the term of an agreement without having to start a new agreement.

• Once an agreement has expired it can no longer be amended.• Extend the term for up to three years.• Consider collection issues, services provided and terms.• Original agreement will be included in the amendment.

Handout proved: Amendment and Instructions

Amending a Service Agreement

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Customer presents their company contract to University, these steps may help to speed up the contracting process:

•Offer the University Standard Contract as a counter offer. If they accept it and sign it, then the negotiations are complete.•If they choose to "mark-up" or "take exception" to parts of our standard agreement, then it would need to go through OGC for review •If they reject our contract and insist on using their company contract, negotiations on terms & conditions will generally take longer than starting with the University agreement

me offering, these steps may help to speed up the contracting process:

Other Considerations

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Tips Unit to help speed up a medium or high risk contract through OGC:

•Use the latest revision of the standard contract.

•Supply any background information and/or related contracts with customer.

•Provide standard rate sheet or rate development.

•Provide the contact information for the customer's legal representative.

Contracting Tips

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Additional tips:

•Provide a date when you need the contract to be ready for customer signature.

•Provide any changes to the insurance clauses.

•Provide information is work for a foreign entity, services will be provided in or is coming from a foreign entity.

•Supply DeptID # and approved ESAF #.

Contracting Tips - Cont.

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Questions and Answers

Contact Information:

Keith Jansen 4-5540 [email protected] Bakke 4-8835 [email protected] Brandeen 4-9014 [email protected]

Contract Review

External Sales Policy, Procedure, Contract, Amendments Updates April 30th, 2014

Documents

Transcript of External Sales Policy, Procedure, Contract, Amendments Updates April 30th, 2014