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 [email protected] for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.

Step 3: Complete a Rate Development Template and sent to [email protected] for review. See Administrative Procedure: Establishing Internal Sales Rates.

Step 4: After the Internal Sales Compliance Office has completed review, obtain administrative approvals.

Step 5: Establish an accounting structure. See Administrative Procedure: Establishing an Internal Sales Accounting Model.

Step 6: Complete activity and invoice.

Print the internal sales checklist.

Note people have expressed interest in the process used to review approve a unit to conduct internal or external sales, to understand what steps occur after their paperwork is submitted. 

Selling Goods and Services to University Departments

• Obtaining Approval to Conduct Internal Sales Activity
• Establishing an Internal Sales Accounting Model
• Establishing Internal Sales Rates
• Internal Sales Office Review of Internal Sales Activity
• Capital Equipment Acquisition: ISO Capital Equipment Purchases

• What's included in an internal sales rate development (pdf)
• Internal Sales Responsibility List (xlsx)
• Sample rate sheet per hour
• Sample rate sheet per unit
• Calculating Productive Time (docx)
• Billable Hours template (xls)
• ISO Chart of Accounts information (pdf)
• Equipment and depreciation reconciliation process (ppt)
• Internal Sales: discontinuing, transferring, or combining recharge centers (pdf)
• Internal Sales activity reconciliation template (xlsx)
• Internal Sales billing and spreadsheet upload process (docx)

• Internal/external sales approval form UM1608 (step 2)
• Internal Sales vendor authorization form UM1793

Internal Sales Agreements Database

Administrative Costs

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.

• Conducting Internal Sales Part I (FIN804)
• Conducting Internal Sales Part II (FIN805)
• Conducting Internal Sales Part III (FIN806)

• Approval, Internal/External Sales overall presentation (August 2015, updated March 2016)
• Agreements (August 2015, updated March 2016)
• Agreement Forms (August 2015, updated March 2016)
• Subsidies, surplus, and deficit management
• Equipment and depreciation
• Equipment and depreciation reconciliation
• Fiscal year-end actions for Recharge Centers (August 2015)
• Reviewing Internal Sales Activity/Rates (August 2015)
• Rate Development:
  • Beginning (August 2015, updated March 2016)
  • Intermediate (August 2015, updated March 2016)
  • Advanced (August 2015, updated March 2016)
• Billable Hours (August 2015)

• 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  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, contact: [email protected].
• 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 [email protected]. 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 determining 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 [email protected] for review. See Administrative Procedure: Obtaining Approval to Conduct External Sales Activity.

Step 3: Complete a Rate Development Template and sent to [email protected] for review. See Administrative Procedure: Establishing External Sales Rates.

Step 4: After the External Sales Compliance Office has completed review, obtain administrative approvals.

Step 5: Establish an accounting structure. See Administrative Procedure: Establishing an External Sales Accounting Structure.

Step 6: Complete activity and invoice.

Print the external sales checklist.

Selling Goods and Services to External Customers

• Conducting External Sales Activity
• Establishing an External Sales Accounting Structure
• Establishing External Sales Rates
• Establishing External Sales Agreements (Contracts)
• Unrelated Business Income Tax Procedures, and Collecting and Remitting Minnesota Sales Tax on External Sales Transactions
• Selling University-Developed Software and Services

• Distributed External Sales Desk Procedures
• RRC External Sales Project
• Billing External Sales
• Establishing Market Driven External Sales Rates
• Risks to Consider/Identify
• Calculation for Billable Hours
• Sample Rate Development Template
• Contract Review process flow
• External sales, questions to answer

• Internal/external sales approval form UM1608
• Contracts Library, standard external sales contracts
• Deficit Approval form

• External Sales Agreements (Contracts) Process Improvements
• Administrative Costs
• External Sales Agreements Database
• External Sales Standard Agreements Instructions
• 3 to 5 Years for Agreements

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:

• Conducting External Sales Part I (Fin801)
• Conducting External Sales Part II (Fin802)
• Conducting External Sales Part III (Fin803)

• Approval, Internal/External Sales overall presentation (August 2015, updated March 2016)
• Agreements (contracts) (August 2015, updated March 2016)
• Agreement Forms (August 2015, updated March 2016)
• External Sales Policy, Procedure, Contract Amendments Updates
• Rate development process
• Rate Development
  • Beginning (August 2015, updated March 2016)
  • Intermediate (August 2015, updated March 2016)
  • Advanced (August 2015, updated March 2016)

• 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 Internal/External Sales Office.

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
• Rate Development Spreadsheet
• Example of Unallowable Costs

A deeper dive into developing rates

Recorded seminar is no longer available (WebEx)

Materials

• Rate Developement II Presentation (pptx)
• Account Budget Status Report Example (pdf)
• Actual Account Summary Report Example (pdf)
• Asset Management Depreciation Schedule Report Example (pdf)
• Salary and Fringe Detail Report Example (xlsx)

The final installment of Rate Development

Recorded seminar is no longer available (WebEx)

Rate Development 3

Recorded seminar is no longer available (WebEx)

Materials

• Fiscal Year-End Activities for Internal and External Sales
• Unallowable Costs
• IS Capital Asset Reconciliation Process

See also the Fiscal Year-End procedures (link in this site's menu or z.umn.edu/fye).

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

• Office for Technology Commercialization
• Software as a Service
• Summary of Software as a Service

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

• Billable Hours

External and Internal Sales useful queries for monitoring transactions

Materials

• EXT_SALES_BY_END_DT
• EXT_SALES_BILLED_SUMM
• OES_ALL_CONTRACTS
• IESAF_APPROVALS

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

Recorded seminar is no longer available (WebEx)

Materials

• End of the Year Presentation