Recently, Jim Wrenn, President and CEO of IT Works and Rebecca Vandall, Director of New Program Development and Strategic Partnerships at SRA International, held a seminar entitled Managing Re-charge Centers and Research Service Facilities. The next several blog posts will provide an outline of material that was covered during the seminar.

Establishing and Revising Billing Rates

• Defining cost recovery: “The recoupment of the purchase price of a capital or qualified asset through depreciation over a prescribed period” [source]
• How long would it take the work to reach its maximum level?
• How much work will be performed by that facility? (This will depend on the type of research being done at the facility.
• Look at what your budget expenses are (prior year under/over recoveries) divided by expected volume of work performed.
• Billing units may be expressed in units of output, labor hours, machine time or other measurement.
• Rates for external users may include costs associated with facilities and administrative (indirect costs).
• Track internal versus external charges separately in order to avoid the perception of overcharging.
• Use a separate Direct Charge account for subsidized users.

Standard Billing & Collection Procedures

• Complete invoice only after work is completed.
• Work is charged according to predefined billing rates: University Rates; Outside University Rates; Track Rates Historically.
• A detailed invoice should be generated, including the following: Itemized list of charges and rates; Track who received the work; How to pay for it: info@b5media.com
• A monthly billing cycle should also be generated.

Example of How to Track Billing Rates:

Item/Service | Rate Group | Rate | Start Date | End Date

Invoices Should Include the Following:

• Billing address for facility
• Date invoiced
• List of items or services that were performed
• Instructions on how to pay for invoice (which will vary from university to university, regarding how the accountant will pay for work that is charged)
• Identifying direct account prior to purchase
• Past due invoice collection: [Frequency; Who collects (better to have administrator collect because he has better access to the university accounting system, and  it also has to do with a quality assurance issue); Discontinuation of services

Dates to Monitor

• Work scheduled, started, and completion dates (month that invoice is completed is what is going to drive the invoice)
• Invoice date
• Payment date
• Past due date (Unpaid invoices are an audit problem!)

Managing money is a critical factor in any Re-Charge Center structure, and one which should not be overlooked. Establishing billing rates will assist recharge centers in retaining accurate documentation as well as assist them in processing any billings in a timely manner. Setting up a system that supports any charges that are made, including documentation of various expenses and uses should be retained by the recharge center in the even of an audit.

For more information about Facility/Re-Charge Center Management or for questions regarding this seminar, contact Rebecca at rvandall@srainternational.org or Jim Wrenn at wrennj@itworks-inc.com.