Finance & Procurement

Consultancies and other services rendered


Consultancy is primarily aimed at academic members of staff who have fulfilled their teaching and research obligations and must comply with the conditions set out under University of Bath Ordinance 18 - External Work.

Consultancy work is carried out by an academic staff member for an external client. It can be defined as:

“The deployment of existing knowledge for the resolution of specific problems presented by external clients through the provision of services, guidance and expert or professional advice, for a fee. It does not normally involve the creation of new knowledge, with the outputs usually partly or wholly owned by the client.”

When the work is conducted under the University's auspices, all income and expenditure associated with the work should be recorded in the University's accounts through the project code assigned to the consultancy. In addition, the academic is protected by the University's professional indemnity insurance, assuming that the terms of the consultancy have been agreed to by the University before work commences

Any potential project must be discussed and agreed with the Head of Department or Dean of Faculty before contacting Consultancy Services.

It is important that the advice of Consultancy Services in RIS is sought in the early stages of contract negotiation to enable them to assist in drafting the contract and ensuring that the terms and conditions are acceptable to the University.

Set-up process

Following liaison with HoD and Consultancy Services in RIS, the academic or departmental administrator submits a Consultancy Costing & Approval Form (CCAF) to Consultancy Services Manager for review.

The CCAF must be signed by the academic and their Head of Department and important supplementary information should be attached to the form. Contractual negotiations should run in parallel with the completion of the CCAF, but the approval of the Head of Department should be obtained before the University is contractually committed to the work.

The budget arithmetic on the CCAF should be accurate, and in particular, it is a requirement that the academic's net consultancy income already approved in the financial year (excluding the project under consideration) is inserted in the form, as this drives the calculation embedded in the CCAF for the net income available to the academic and to the University (i.e. to the department's overhead account). An overhead of 20% will be levied by the university per CCAF completed.


Prior to commencing work on the consultancy contract, the academic must determine how the income available to them should be treated. This commitment is irrevocable, and must be documented in the CCAF.

  • Fee Payment Options are.  A payroll payment to the academic.  It should be noted that where a payment to an academic is being made through payroll, the Employers National Insurance contribution must be met from the amount available to the academic By way of illustration an amount of £2,000 processed through payroll in tax year 2014/15 (Employers NIC rate of 13.8%) would result in a gross payment of £1757 (£2000 minus £243 Employers NIC). The gross payment (£1757) will be treated by Payroll in the same way as any other income for the purposes of deducting Income Tax and Employees NIC via PAYE. The instruction to payroll to pay the fee is raised by the Finance Office, using a duly authorised payroll form
  • A waiver to a general fund (K account). In this case the academic irrevocably gives up his or her right or expectation of receiving a fee on the project. The waiver must be documented on the CCAF which is signed by the academic in advance of any work being undertaken on the consultancy contract. As a result of the waiver the University will retain the profit element that could have been paid to the academic as a fee, the amount being lodged in a general account (This may be nominated by the Academic) It is important to understand that General Funds can only be used to support the normal academic activities of the University, including attendance at conferences and travel by University employees. General Funds must not be used to fund the private expenditure of any employee. Heads of Department are responsible for authorising the use of General Funds created by staff employed in their department. Further information about the use of general funds
  • A combination of the above can also be agreed in advance of starting work on the contract.

It should be noted that a waiver can only be made where the University is the contracting party. Where academic contracts directly with a client no waiver made with the University can be effected, as the University will have no legal entitlement to payment under that contract.

If one of the academics involved in the project is a Head of Department and is to benefit from a fee payment, or if a fee payment to an academic is to be greater than £5,000 from any one project, the payroll form must be signed by the Director of Finance.

The academic should be aware that if the client for any reason does not ultimately make payment for the work conducted, then fee payments will not be made and overheads will not be debited. Any expenditure charged to the consultancy must be transferred to an alternative departmental code. Only when payment for the invoice has been received by the University, will agreed disbursements take place.

Once Consultancy Services has checked and approved the CCAF, a copy of the form is passed to the Finance Office where the Faculty & External Activities Accounting Technician (FEAAT) assigns the consultancy the next available Project code, AB-@@n, where @@ is the department's two letter abbreviation and n is the next available number. The project code is then passed to Consultancy Services who then notify the academic confirming the project code and VAT status. If the budget indicates that either external fee payments or payments to non-academic staff (e.g. postgraduates, technicians, etc.) are to be made.  The assistance of HR should be sought along with HoD approval before payments are arranged.

A file is maintained by Consultancy Services, holding information relating to the consultancy project, CCAF, and executed contract.

If income and/or expenditure vary dramatically from the budgeted amounts however, Consultancy Services may seek a revised CCAF, (in which case the original instructions regarding the fee must be adhered to). For ongoing consultancies spanning several years, a budget detailing an annual figures may be appropriate.


Upon completion of the project, or as outlined within the consultancy contract, the academic must let the Consultancy Services Manager know when an invoice is due to be raised to the client in respect of the project. Such request should provide unambiguous details of the work to be invoiced, an exact amount, any expenses (with copy receipts), plus a contact name and address, especially if the details are not clear on the original submitted CCAF budget form.

Consultancy invoices are then “tracked” by the FEAAT. This means that the debtors' ledger is checked periodically to confirm when payment has been received, so that fee payments can be made and overheads debited. This is generally done during the first week of each month, to meet the payroll submission deadline for the month.

Closing projects

Whilst a few consultancies represent ongoing pieces of work, the vast majority are relatively small, short-term projects which will be closed within six months of the contract end date. Once any fee payments, direct expenditure and overhead transfers have been made, the balance should be zero or near zero and efforts should be made to close the project. In some circumstances after all relevant expenditure has been posted a balance may remain on the project.

A credit balance may arise where more income was received on the project than originally budgeted, or where the expected direct costs had been less than expected. In this case the academic will be asked to confirm that all relevant expenditure has been charged to the project. The FEAAT will then make a final distribution of the surplus in accordance with the instructions on the CCAF regarding overhead and treatment of the fee element. If any additional fee payment exceeds £100, prior authorisation by the HOD must be obtained in advance of initiating the payment instruction. (email confirmation is adequate )

A debit balance is not an expected outcome from consultancy project, as we would expect the academic to closely manage the project to ensure the budget is not exceeded. If during the course of the project it becomes apparent that net income received from the consultancy will be less than the budgeted amount, the academic should liaise with the FEAAT to discuss whether the department is willing to remove or reduce direct costs charged to the project, or whether further invoices may be raised. If at the conclusion of the project a deficit still remains the FEAAT will refer to the department for a code to which the debit balance can be transferred.