GEARS: Recording and Recovering Accounts Receivable

What’s the same as and what’s different from CARS

As in CARS, GEARS accounts receivable are generated when the amount due to an agency is less than the amount due from an agency after all reported expenses and adjustments (if any) have been processed for a report month. In both GEARS and CARS, the receivables are collected by offsetting the receivables against future payments.

How and when the receivables are recorded and reflected on reports differs slightly between GEARS and CARS. CARS recorded the prior month’s ending receivable in profile 999999. Like CARS, GEARS records the prior month’s ending receivable in profile 999999 AND records the current month’s ending receivable in profile 999998.

The timing of collecting receivables from payments related to subsequent contract years is different in GEARS than it was in CARS.

Generating accounts receivable in GEARS

Most agencies will not have an account receivable in GEARS, just as most did not in CARS.

 The most common causes of accounts receivable are:

• State adjustments, such as monthly board billings (Profiles 947 and 948)
• Corrections or other negative expenses reported by local agencies that reduce costs previously reported and reimbursed
• Audit adjustments

Recording and reporting accounts receivable in GEARS

Accounts receivable information shows up as the first contract type, non contract specific, in the distribution of expenditure section on the CARS and GEARS-603 reports.

GEARS provides more complete information on accounts receivable, by providing information on both the prior and current months’ ending receivable balances.

In GEARS, the account receivable amount as of the report month end is recorded in Profile 999998, current month A/R (profile type X) as a positive amount.

The outstanding accounts receivable as of the end of the prior month is recorded in Profile 999999 as a negative amount.

The net of Profile 999998 and Profile 999999 is the amount a receivable increased (positive amount) or was reduced (negative amount) based on the current month expense/adjustment processing.

On the following month’s report, the current month A/R (profile 999998) will become the prior month A/R (profile 999999). Note that it will change from a positive to a negative amount on the report.

The accounts receivable information is on all GEARS-603 reports for the Agency Number-ID-Agency Type Code.

This means that if the agency has multiple active contract years, the accounts receivable information is reflected on each year’s 603 Report.

Recovering accounts receivable in GEARS

Collecting accounts receivable also works differently in GEARS than it did in CARS.

CARS automatically recovered amounts due from future reimbursements within the AgencyNumberID-Agency Type Code combination. Because the CARS agency type code incorporated the contract year, collection of the account receivable was limited to reimbursements earned for contracts on profiles that ended during the same contract year. Collecting receivables from subsequent contract year payments required CARS staff to manually transfer the receivables from one contract year to the next.

Because GEARS contains a separate code for the contract years, a more timely collection of the receivable is possible. Accounts receivable will be recovered by offsetting the amount due against all payments due to an agency based on the AgencyNumberID-Agency Type Code, without regard to the contract year.

Need more information?

Refer to your GEARS -620 and/or -603 reports.

How will referring to my reports help?

• Both reports provide information on the prior month’s ending accounts receivable balance, if any.
• The GEARS -620 report provides a summary of all amounts due to and due from the agency when the contract year “ALL” is selected. A negative amount on profile 999999 indicates that the agency ended the prior month with an account receivable. The agency’s current month’s ending accounts receivable balance is shown in profile 999998.

Have questions? We're here to help!

 For agency-specific question on an account receivable please email DHSDESBFSCARS@dhs.wisconsin.gov Please format the subject line as Agency #-Agencytype-Accounts Receivable-Agency Name. In addition to your questions, please include relevant supporting information.