Financial Services

Financial Services

site header

External Revenue

External Revenue Flow Chart

External Revenues for Queen's are generated through funds received by departments from external sources in exchange for goods and services provided by departments/units: non-credit student fees, miscellaneous fees, rentals, etc. ​

​External Revenues are generated primarily through the following sources:

External Revenue Source Chart

Financial Objectives

Whether providing goods and services to external customers on a sales or cost recovery basis, there are five key financial objectives that departments must consider:

  • limit contractual liability
  • set prices sufficient to cover all costs
  • record transactions in the correct period
  • collect amounts due, and
  • correctly calculate sales taxes


1.  Limit Contractual Liability

When transacting with external customers it is important that departments:

  • avoid unreasonable requirements for indemnification (damages or a sum of money paid in compensation for loss or injury), and
  • protect the university against loss associated with inadequate performance


2.   Set Prices Sufficient to Recover All Costs

​Queen's University generally does not have a "profit motive" as it is a not-for-profit organization, however, like a commercial enterprise, it must seek to keep its costs in line with its revenues.

For the most part the university has limited control over its revenues, the largest components of which are provincial government grants and student fees, the majority of which are controlled by the government.  Therefore, the focus of the university is primarily on controlling costs. (i.e. Carrying out the mission of the university within its budget constraints.)

In the case of divisional income and some expense recoveries, the divisions are able to exercise control by:

  • negotiating financial agreements under which the university will be compensated for all costs of goods and services - where the intention is to generate a profit to enhance the university mission (i.e. for self-funded units and ancillary operations), the ability to meet this objective must be determined with reference to all costs of the service (both direct and indirect)
  • declining arrangements which do not cover all costs

As a public institution, Queen's should not undercut the market prices.


​Direct and Indirect Costs

​For any service provided by the university, there are both direct and indirect costs. (Both of which divisions should seek to recover.)

Direct Costs
The "selling" department should ensure that, at a minimum, all direct costs of the service are reflected in the charge to the customer.  Direct Costs are those which are traceable to the specific activity. For example, with respect to administrative costs, if the amount of administrative time is such that it is reasonably measurable, i.e. hours or percentage of time, then it is a traceable and, therefore, a Direct Cost.
Indirect Costs
​Departments which price their services on the basis of Direct Costs only are underpricing since the objective of full cost recovery is not met.  There are three levels of Indirect Costs which the "selling" department should consider:
  • Departmental - Departmental costs which are not traceable to specific activities in the department, i.e. to research, instruction or a service.  Indirect departmental costs include the salaries of chairs and administrative staff, regular telephone service, supplies not specifically charged out, etc.
  • Faculty - Cost of faculty administration, i.e. the faculty office
  • University-wide costs should be considered when determining Indirect Cost
Total Cost
​The total cost of the service is the sum of Direct and Indirect Costs, and it is the Total Cost which should be used as the basis for the price of the service, whether charged on a cost or cost plus basis.
Departments are responsible to charge and collect applicable taxes on External Revenues.  For more info on taxes, please visit GST/HST.

3.  Recording Transactions in the Correct Period

​Charges must be recorded in the fiscal period for which the goods are received or the services are rendered.

Primary concerns are:

  • Reporting Accuracy - External Revenue and any related operating expenses must be recorded in the university fiscal year in which they occur
  • Compliance with funding limitations - Where restricted funding includes an expiry date (as it does with most Research Awards), billing for goods or services to be delivered after the expiry date is a violation of award terms.

As a general rule, there should be no pre-billing ​for deliveries to be made (or services to be provided) beyond the fiscal period.  In addition, there should be no delay in billing beyond a fiscal period for goods delivered or services rendered in a previous fiscal period.

It is expected that all sales invoices and internal revenues and recovery transactions will be processed by the year-end-cutoff and, therefore, it should not be necessary to accrue income.

If an accrual over $100,000 is necessary, contact Financial Services for assistance.  No amounts less than $100,000 will be accrued.

In some cases, the university receives funds for which there are external restrictions.  In these cases, revenues can only be recorded when the related expenses are incurred.  At year end (April 30), departments must inform Financial Services of any situations where cash received exceeds related expenditures because it will be necessary to defer the revenue.  This will be done centrally using a central department.  No amounts of less than $100,000 will be deferred.


4.  Collect Amounts Due

​For most invoices related to external revenue the terms of payment are due upon receipt of invoice.

The selling department is responsible for the collection of amounts due.  Financial Services does not contact customers, or otherwise pursue outstanding Accounts Receivable.

Departments should record External Revenue activity in PeopleSoft using the appropriate revenue GL account. These are generally in the 45XXXX and 46XXXX series of accounts.

For a complete listing of Accounts, go to Account ID's



Queen's University sells conference space to the Downtown Kingston BIA

External Revenue Debit Credit Example