A Business Process Managed by Internal/External Sales Office
Internal Sales business process facilitates the review of, and gives approval for, all internal sales to other departments. University colleges and departments are encouraged to utilize academic expertise and institutional resources on a ongoing basis that are unique, convenient or are not readily available from external resources to other internal customers.
University colleges and departments are encouraged to utilize academic expertise and institutional resources on an ongoing basis that are unique, convenient, or are not readily available from external resources to other internal customers.
Is your activity an internal sale?
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.)
Steps to Obtain Approval for Internal Sales
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 firstname.lastname@example.org for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.
Step 3: Complete the Internal/External Business Proposal Outline and sent to email@example.com for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.
Step 4: Complete a Rate Development Template and sent to firstname.lastname@example.org 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).
Policy and Procedure
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.
Administrative Costs (docx)
1300 S 2nd St
Minneapolis, MN 55454
Standard & Non-Standard Contracts
Request to join:
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.
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.
- Obtaining Approval to Conduct Internal Sales Activity
- Establishing an Internal Sales Accounting Model
- Establishing Internal Sales Rates
- Unit Review of Internal Sales Activity
- Capital Equipment Acquisition: Internal Sales Organizations
- Internal Sales Office, Review of Internal Sales
- Approval, Internal/External Sales overall presentation (August 2015, updated March 2016) (pptx)
- Agreements (August 2015, updated March 2016) (pptx)
- Agreement Forms (August 2015, updated March 2016) (pptx)
- Subsidies, surplus, and deficit management (ppt)
- Equipment and depreciation (ppt)
- Equipment and depreciation reconciliation (ppt)
- Fiscal year-end actions for Recharge Centers (August 2015) (pptx)
- Reviewing Internal Sales Activity/Rates (August 2015) (pptx)
- Rate Development:
- Billable Hours (August 2015) (ppt)
- Internal Sales policy and procedure updates (August 2015) (ppt)
- Internal/external sales business proposal outline (docx) (step 3)
- Internal/external sales approval form UM1608 (step 2)
- Internal Sales vendor authorization form UM1793
- What's included in an internal sales rate development (pdf)
- Internal Sales Responsibility List (xlsx)
- Sample rate sheet per hour (xls)
- Sample rate sheet per test (xls)
- Calculating Productive Time (docx)
- Billable Hours template (xls)
- ISO Chart of Accounts information (pdf)
- Equipment and depreciation reconciliation process (ppt)
- Internal Sales activity reconciliation template (xlsx)
- Internal Sales billing and spreadsheet upload process (docx)
Recommendations & Frequently Asked Questions
- 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.
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.