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Invoicing and Payment of Sponsor Project

The Office of Contracts and Grants (OCG) manages the billing and collections activities for all sponsored projects. Payments are sent to the Treasurer and posted to the award cost center by the General Accounting department. The sponsor award terms and conditions dictate the billing and payment method for each project. The Research Financial Services team within OCG uses the award information to setup the billing structure for the award in the PeopleSoft financial management System.

The billing process is comprised of invoicing and cash drawdown request to the sponsor for paying the award. The basis of the request can be that of cost reimbursement, which is based on expenses posted to the general ledger at the close of a period, or a fixed amount at set intervals, regardless of actual expenses incurred at the time of the payment request.

  • Cost Reimbursable Billing (CRB) is required for most federal and state awards. Invoices or draw amounts are based on actual expenditures posted to the cost center’s general ledger.
  • Fixed price billing is based on one of three potential types of payment arrangements:
    1. Milestones or deliverable – Fixed payment amounts at the completion of each milestone. This method is most common with private industry sponsors.
    2. Fixed schedule payment – Fixed payment amounts at predetermined dates or intervals, (annually, quarterly, etc.). This method is typically used by foundations or charitable organizations. 
    3. Combination – Fixed payment amounts at predetermined dates or intervals which align with the delivery date of technical, financial or other types of reports.

The chart below outlines the steps in the billing and collection process, along with the responsible office or persons, and estimated timing.

Billing Process and Timeline

Steps Responsible Office or Person Timing
Approve, examine, and certify expenditures on grant cost centers Principal Investigator (PI)

Department Business Administrator (DBA)
Daily as incurred
Audit expenditures and generate billing list for invoices and draw down Research Financial Accountant Biweekly for drawn down

Monthly for other cost reimbursable awards
Coordinate milestone deliverables for invoicing Principal Investigator

Research Financial Accountant
As determined by PI
Create invoices and send to the sponsor Research Financial Accountant 20-30 days after the month ends
-or-
As needed for fixed price awards
Receive and post payments to award cost center General Accounting

Research Financial Accountant
Net 30 days
Send 1st Payment reminder notice Research Financial Accountant 60 days after no payment on an invoice
Send consecutive payment reminder Research Financial Accountant,

OCG Director

Principal Investigator
Every 30 days after first reminder, up to 180 days
Place the award funding on hold if there is no response to payment reminders and contact department and PI

OCG Director

180 days after non-payment

 

Monitoring Payment and Collection Process

OCG monitors award cost center/s Accounts Receivable (AR) to ensure that payments are received in a timely manner. Collection efforts may include phone calls to the sponsor, continued notifications and legal letters, legal action or other means to continue contact and collect past due invoices. Both the PI and the DBA are informed of these actions and are required to assist when possible. The PI may be asked to hold deliverables and reports to the sponsor until payments are made and the cost center suspended. If the decision is to continue the project, despite non-payment, the PI and his/her department will become wholly responsible for all additional deficits that occur after the date of notification about non-payment. Failure to assist or respond to non-payment notices will be escalated to the department Chair, Dean and the Associate Vice President for Research, and unpaid expenses will be the responsibility of the department.

Factors Affecting Payment

Sponsor non-payments can be caused by late or missed invoices. OCG will take measures to ensure that invoices are accurate and timely. Others factors resulting in non-payment are unallowable costs, or cash flow problems with the sponsor. As soon as a Principal Investigator learns from their sponsor that there is a payment problem, he should contact OCG so that measures can be put in place to avoid non-payment.

Process Flowchart

invoicing