Internal/External Sales

Business Processes Managed by the Internal/External Sales Office

Internal sales facilitates the review of, and gives approval for, all internal sales to other departments. University departments are encouraged to use the academic expertise and institutional resources of other University departments, especially those that are unique, convenient, or are not readily available from external resources.

External sales business process facilitates the review of, and gives approval for, all external sales related, activity, contracts and documents. University colleges and departments are encouraged to make use of academic expertise and institutional resources to generate additional sources of revenue from external customers in a commercial and competitive manner.

Leadership

Sue Paulson
Controller

Contact

Staff List & Organization Chart

Phone: 612-624-5007
Fax: 612-625-7384
Email: extsales@umn.edu

Does it meet the following criteria?

  • Provide a specific ongoing good or service to other campus units or projects, and recover the costs by charging the users on a "rate basis."
  • Develop rates to consistently and equitably recover the costs of the service.
  • Rates set annually to operate on a breakeven basis.
  • Customers are other colleges or departments within the University of Minnesota.
  • Expect annual internal sales revenue greater than $25,000.
  • Expect to charge a federal grant of any dollar amount.

The following units cannot conduct internal sales activity:

  • Units, such as parking or housing services, that primarily serve individuals and whose revenues are recorded as income to the University (these are auxiliary services).
  • Units that provide a one-time distribution of an expense rather than an ongoing activity.
  • Units with expected annual internal sales less than $25,000 that do not charge federal grants. (These units should use salary adjustments/direct retro distributions, transfers, or a non-ISO revenue Account such as 500103.)

Step 1: Verify that the activity is an internal sale. See criteria outlined above.

Step 2: Complete the Internal/External Sale Approval form and send to extsales@umn.edu for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.

Step 3: Complete the Internal/External Business Proposal Outline and sent to extsales@umn.edu for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.

Step 4: Complete a Rate Development Template and sent to extsales@umn.edu for review. See Administrative Procedure: Establishing Internal Sales Rates.

Step 5: After the Internal Sales Compliance Office has completed review, obtain administrative approvals.

Step 6: Establish an accounting structure. See Administrative Procedure: Establishing an Internal Sales Accounting Model.

Step 7: Complete activity and invoice.

Print the Internal Sales checklist (pdf).

The internal sales training modules are required every two years for RRC contacts and anyone in the department involved with the internal sales activity. Each module takes about 30 minutes.

Presentations

Most Common Audit Findings and Recommendations

  • Failing to base rates on actual required resources and\or usage.
  • Failing to charge all internal customers the same rate.
  • Rate calculations and/or actual costs include unallowable costs.
  • Transfers out (other than depreciation) recorded without adequate documentation.
  • Conducting activity with excessive operating margins creating a surplus or deficit.
  • Unsupported combination of external sales with internal sales for cost or revenue.

Does the activity meet the following external sales criteria?

  • The funds are in exchange for services performed by the University and any tangible goods produced as a result of such services, use of laboratory equipment, or a license to use information on University maintained databases;
  • The transaction is not a Sponsored Project, Gift, or an excluded transaction; and
  • The transaction is consistent with the scope, guiding principles, and criteria set forth in Board of Regents Policy: Direct Sales of Goods and Services. (pdf)

Definitions of Gifts, Sponsored Projects and External Sales (pdf) appear in an appendix to the policy Selling Goods and Services to External Customers.

  • If additional clarification is needed regarding the classification of the activity, contactclassification@umn.edu.
  • A transaction classification group with representatives from SPA, External Sales, and both University Foundations has been established to provide rapid input to faculty and administrators who are uncertain how to classify a given transaction. This group also has ready access to University counsel when needed.
  • To obtain input from this group, send a copy of the proposed statement of work, budget and performance dates, contact information for the person most knowledgeable about the proposed transaction, and any other background information the requestor feels is pertinent to classification@umn.edu. A classification decision or a request to obtain clarifying information will be provided to the requestor within three working days.

External Sale Risk Assessment: Take this risk assessment to assist in detemining where your risk level is.

Step 1: Verify that the activity is an external sale. See criteria outlined above.

Step 2: Complete the Internal/External Sale Approval form and send to extsales@umn.edu for review. See Administrative Procedure: Obtaining Approval to Conduct External Sales Activity.

Step 3: Complete the Internal/External Business Proposal Outline (doc) and sent to extsales@umn.edu for review. See Administrative Procedure: Obtaining Approval to Conduct External Sales Activity.

Step 4: Complete a Rate Development Template and sent to extsales@umn.edu for review. See Administrative Procedure: Establishing External Sales Rates.

Step 5: After the External Sales Compliance Office has completed review, obtain administrative approvals.

Step 6: Establish an accounting structure. See Administrative Procedure: Establishing an External Sales Accounting Structure.

Step 7: Complete activity and invoice.

Print the External Sales checklist (pdf).

The External Sales training modules are highly recommended for Chief Financial Managers, business managers, and anyone in the department involved with the external sales activity. Each module takes about 30 minutes. After completion of each module, the training record of the individual will be updated to show that the course has been completed. These courses are in the Training Hub:

Presentations

Most Common Audit Findings and Recommendations

  • Ensuring contracts are in place where appropriate to support external sales.
  • Verifying sales tax collected and remitted are appropriate and accurate.
  • Establishing policy and methodology for pricing of goods and services sold.
  • Reporting external sales to External Sales Office.

Need to sell high-value equipment?

The ReUse Program will partner with you to sell high-value items to the public and profit share from the proceeds back to your department. The ReUse Program has established relationships with buyers and secondary markets and they are experts in finding homes for surplus or no longer needed materials. More information is available on the ReUse website.

Rate Development I

A beginner's seminar on understanding the rate development process, determining what kinds of costs are allowable, and discussing how to develop rates. The rate development templates and billable hours templates will be presented.

Recorded Seminar is no longer available (WebEx).

Materials

Rate Development II

A deeper dive into developing rates

Recorded seminar is no longer available (WebEx)

Materials

Fiscal Year End Activities for Internal/External Sales

Recorded seminar is no longer available (WebEx)

Materials

Rate Development III

The final installment of Rate Development

Recorded seminar is no longer available (WebEx)

Materials

Software as a Service

In this session we will discuss "Software as a Service" as an external sales activity. This seminar will review the new procedure for Selling University-Developed Software and Services, what is University developed software, when the activity is an external sale, when is should be processed through the Office for Technology Commercialization, which contract to use, when a licensing agreement is required, and other topics. A member of the Office for Technology Commercialization will join the Internal/External Sales Office team to present this seminar.

Recorded seminar is no longer available (WebEx)

Materials

Billable Hours

This seminar will review the "billable hours" costing concept that can be used to recover all costs associated with salaries and equipment.

Recorded seminar is no longer available (WebEx)

Materials

Queries

External and Internal Sales useful queries for monitoring transactions

Materials

Reviewing Internal/External Sales Rates Review at The End of The Year

Discuss reviewing actual performance to budget and how to handle for next year's adjustments.

Recorded seminar is no longer available (WebEx)

Materials

Questions?

Internal/External Sales
227 WBOB
1300 S 2nd St
Minneapolis, MN 55454
Fax: 612-626-3969
Email: extsales@umn.edu

Standard & Non-Standard Contracts
Russell Bakke
612-624-8835

Internal/External Listserv

Request to join: 
Email: extsales@umn.edu
List members receive announcements regarding upcoming Internal/External Sales events, communication on significant topics, ability to ask questions of other University staff involved in internal or external sales.

Internal/External Sales Advisory Board

About the advisory group (pdf)

Frequently asked question about the board (pdf)

Application to join the board (pdf form)

Campus Club customers should enter a manual journal entry into the General Ledger. Use this account string for the Campus Club side of the transaction: Fund 9000, DeptID 12065, Program 21383, Account code 520601. Campus Club asks that departments also fax a copy of the journal entry to the Campus Club.

No. You have to be an ISO in order to do the Journal Voucher in the AP system to charge a department for goods or services sold to them. Contact the Helpline to assign a ticket to the ISO group for them to determine if your department should be an ISO.