Date Created:    April 12, 2024    Last Updated: April 17, 2024

Overview: 

Cornell Catering generates revenue with internal and external customers for food and services and ensures revenue is recorded accurately in the financial statements for the month/period that the income is earned.  In addition, customer receivables are tracked in the catering software to ensure timely payment for goods or services.  Collection efforts are made by the Sales Managers, and any bad debts are processed for write off after three collection attempts have failed.  Write offs must be approved according to the established SCL process.

Criticality:  High

Frequency:  Other

Turnaround:  Other

Customer:  The customer or client is the party purchasing goods or services from the business. They initiate the transaction by requesting the products or services offered and are responsible for making payment according to the terms agreed upon in the contract or agreement.

Unit Sales Staff:  The unit staff are responsible for engaging with potential customers, negotiating contracts, and securing sales. They play a critical role in the revenue generation process by identifying opportunities and understanding customer needs.  Unit staff may be involved in assessing the creditworthiness of customers, establishing credit limits, determining terms and deposit requirements, and monitoring customer payment behavior to minimize credit risk. Unit staff invoice the customer for the transaction and/or issue credit for returned items.  Unit provides FTC with billing file to load to the general ledger if local systems are used.

Financial Transaction Center (FTC):  Responsible for the financial aspects of the transaction, including recording revenue billed in the General Ledger and tracking receivables and collections for external customers. The FTC follow’s up on overdue payments with reminder emails, phone calls and Teams chats to the catering team, and reconciles payments received with outstanding balances.

  • EventWorx system
  • Kuali Financial System
  • Invoices, credits to customer
  • EventWorx system
  • Cardpointe
  • Kuali Financial System (KFS)
  • OAS Reporting Dashboard (KDW)
  • Collections issues due to slow or non-payment by customer
  • Contract adjustments made after signing original agreement.
  • Special item sourcing
  • Regulatory compliance and licenses (ex. Food safety and liquor licenses)
  1. Event Booking: The revenue generation process typically begins with a customer contacting Cornell Catering to inquire about services for an event, such as a wedding, corporate function, or private party. The sales team or catering manager collects details about the event, including the date, location, number of guests, dietary preferences, and menu preferences.
  2. Quotation and Contract: Based on the event details, Catering prepares a quotation outlining the proposed services, menu options, pricing, and any additional charges (e.g., for equipment rental, staffing, or special dietary requests). Once the customer approves the quotation, a contract is signed, specifying the terms and conditions of the agreement, including payment terms and cancellation policies.
  3. Deposit: To secure the booking, Catering may require a deposit from the customer. The deposit amount is typically a percentage of the total estimated cost of the event and is paid by the customer upon signing the contract. This deposit serves as a commitment from the customer and helps cover initial expenses incurred by the catering business, such as purchasing ingredients or reserving equipment.
  4. Event Delivery: Catering delivers food and services as specified in the customer contract.
  5. Invoicing: After the event, the catering business prepares an invoice detailing the services provided, including any additional charges incurred during the event (e.g., extra hours worked by staff, last-minute menu changes). The invoice is sent to the customer along with any relevant documentation, such as receipts for additional expenses.
  6. Revenue Recognition: Catering generates a billing file for the FTC to review and upload into the university financial system on a weekly basis.
  7. Receivables Management: Upon receiving the invoice, the customer is responsible for making payment according to the terms outlined in the contract or on the invoice. The FTC tracks outstanding receivables and follows up with the catering team monthly so they can reach out to the customers to ensure timely payment.
  8. Collections: If payment is not received by the due date specified in the invoice, the catering team initiates collections procedures, which may include sending reminder notices, making phone calls to the customer, or possibly engaging a collections agency for assistance. The goal is to resolve any outstanding balances and ensure that Catering receives payment for its services.
  9. Reconciliation: The FTC reconciles accounts receivable balances monthly. In addition, sales generated from the Catering system are reconciled to amounts posted in the general ledger to verify all sales have been accounted for.

Key Risks

Key Controls

Billing Errors: Mistakes in invoicing, such as incorrect pricing, missing items, or inaccurate quantities, can lead to disputes with customers and delays in payment. Billing errors may result from manual data entry, changes made after contract signed, or inadequate review processes.

1.       Client signs a contract stating fees and terms.

2.       Catering team provides the clients with a copy of the invoice prior to the event for review and asks for a signed copy to be returned after the client reviews the options and the costs.

3.       FTC confirms the amount of the invoices matches the reports (Revenue Breakdown and Invoice Listing) in EventWorx.

Regulatory Compliance: Failure to comply with regulatory requirements related to taxation, licensing, food safety, and health regulations can result in fines, penalties, or legal liabilities.

1.       Catering provides ongoing annual training (and upon hire) for staff to ensure these compliance regulations are followed and understood.

2.       The sales team monitors liquor licenses to ensure permits stay current.

3.       FTC processes all alcohol purchases quickly to ensure permits are not violated.

4.       The FTC verifies taxes are assigned appropriately to external invoices.  If sales tax is not applied and sales tax exemption is noted, the FTC contacts catering for verification.

Data Security and Privacy: Handling sensitive customer information, such as payment details and personal data, exposes the university to risks of data breaches, identity theft, and PCI regulatory non-compliance.

1.       Catering ensures appropriate credit card handling procedures are followed to prevent risk of exposure to personal

  • Catering gross margins
  • AR write offs
  • Repeat business
  • KFS – Kuali Financial System
  • OAS – Oracle Analytics Server, financial reporting tool (formerly known as OBIEE)
  • GL – General Ledger
  • FTC – Student and Campus Life Financial Transaction Center that processes financial transactions for Cornell Catering

Cornell Catering Revenue & Receivables Process Flow Chart

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