City and County of Denver
FISCAL ACCOUNTABILITY RULES
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Adopted 11/28/2005
Revised 03/20/2012
RULE 4.1 – ACCOUNTS RECEIVABLE,
ALLOWANCE FOR DOUBTFUL ACCOUNTS AND WRITE-OFFS
Purpose
Accounts receivable are an important asset of the City. Control of accounts receivable consists of
determining amounts due from others, timely billing, prompt collection and accurate reporting. This rule
recognizes that certain accounts receivable, or portions of certain accounts receivable, will be uncollectible.
Definitions
Accounts Receivable – Amounts due to the City for transactions with entities outside the City, excluding
“due from” transactions involving inter-agency billings.
Allowance for Doubtful Accounts – An estimate of the accounts receivable, or portions of certain accounts
receivable, that will not be collected. The estimate is based on past experiences and an analysis of current
accounts receivable.
Uncollectible – The amount due that cannot be collected because the debtor either cannot be located,
does not have the ability to pay the amount owed, the statute of limitations has run on the account; or the
cost of collection exceeds the amount due.
Write-off – To reduce the value of an asset (e.g. accounts receivable) by the amount of an expense.
Rule
1. Every agency/department with accounts receivable is responsible for managing its own accounts
receivable and shall be able to support the total receivable amount.
2. Every agency/department with accounts receivable shall develop policies and procedures that describe
how to establish accounts receivable, bill amounts due, determine allowance for doubtful accounts,
write-off uncollectible amounts, and collect a receivable. The policies and procedures shall be available
for review upon request.
3. Every agency/department with accounts receivable shall review its accounts receivable policies and
procedures at least annually to ensure compliance with this rule.
