| Accounts
Payable Policy |
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Table of Contents |
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Introduction
The Accounts Payable (AP) department is responsible for the auditing
and processing of invoices and payments for The University of Iowa.
Invoices, credits, vouchers, and payments are processed on line
through the Accounts Payable/Purchase Order (AP/PO) System.
This authority is delegated from the Board of Regents through the
President of the University in accordance with the statutes and
administrative rules of the State of Iowa and the procedures
of the Board of Regents. top |
Payment Processing for Purchase Order Invoices
Payment
Process
Accounts Payable processes payments for Purchase Order
transactions. When invoices are received from vendors, they
are audited against the purchase order number that is referenced
for correct vendor name and remit address, items, price, quantity,
and terms. If the invoice and purchase order match, the invoice
is entered on line in the AP/PO System to create Assumed Receipt
and Capitol Equipment and/or > $10,000 voucher reports. Vouchers
are entered in Control Groups for the purpose of controlling
voucher input into Payables System, to review input
by data entry staff, and to verify totals. Vouchers
go through a nightly process to Budget Check, Match, Post, and Edit.
The AP/PO System applies match control rules against
the voucher and purchase order, ensuring that the invoice being
entered reflects the amounts and quantities ordered. E-mail
notifications are being sent to the requester (or designee) when
PO vouchers have been created. The hyper link "view voucher"
will take you directly to an on-line voucher report. Within 3-4
business days of receiving the e-mail notification, an image of
the corresponding invoice will be viewable from the voucher report
site on the AP/PO web application by clicking on the invoice number.
Two copies of the Capital Equipment and/or >$10,000 voucher report
are mailed to the Requester or designee. One copy must be signed,
dated and have Asset Management area completed and returned to Accounts
Payable.
The payment process involves many elements:
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Processing
timely payments to vendors, verifying pricing and terms of the Purchase
Order |
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Monitoring
vendor statements and investigating invoicing or payment errors
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Requesting
and processing credit memos |
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Resolving
problems, providing assistance and direction to departments in settling
disputes with vendors arising from payment deductions |
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Providing
follow-up service on outstanding invoices to ensure payment in a
timely fashion |
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Applying
refund checks to the proper accounts |
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Researching
returned checks to cancel, void or reissue. |
Invoices
Invoices must be submitted to Accounts Payable for auditing, to prepare
voucher reports, and to make payments. If a department receives
an invoice from the vendor, the invoice must be sent immediately to
Accounts Payable, 202 PCO if it is for payment on a purchase order.
Write the purchase order number on the invoice if it is not included.
Invoices received not referencing a purchase order number are returned
to the vendors requesting this information before they can be
processed. After the invoices are entered on line in the AP/PO
system, they are scanned as and the image is available to view on line
via the AP/PO web application for 3 years.
Invoice Number
The invoice number identifies the vendor invoice that is being paid,
and is usually assigned by the vendor. If the vendor does not
provide an invoice number, the invoice total dollar amount and invoice
date are used, and in some instances the vendor account number and invoice
date may be used.
Short Payments
If a vendor overcharges the University, Accounts Payable makes the necessary
deduction and provides a short payment message on the vendor's check
stub. Examples of "short pay" are sales tax, inappropriate
freight charges, goods or services not ordered or not received, or prices
greater than the contracted price.
Credit Memos
If the University has overpaid an invoice, or if merchandise has been
returned, Accounts Payable requests and applies the credit memo to the
same MFK. If the invoice has not been paid and the credit memo
cancels the entire invoice, the voucher will be manually closed.
If the invoice has a balance due after the credit memo is applied or
if the invoice has been paid, Accounts Payable will enter an adjustment
voucher. If possible, the adjustment voucher will
have a scheduled due date the same as the invoice voucher, so the payment
will reference both the invoice and the credit memo. If this is
not possible, the credit memo (adjustment voucher) will be applied to
the next payment. Payments will not be made to vendors that have
credit balances. The AP/PO System will hold vouchers
until the vendor has a debit balance before creating a payment.
E-mail voucher notifications are sent to the Requester
or designee. For blanket orders, an Assumed Receipt Voucher Report will
be created and the e-mail notification will be included with all other
e-mail notifications for vouchers created that day. For non-blanket
orders, a separate e-mail notification will be sent to the Requester
by the credit staff.
If you have questions regarding
the use of credits or credit memos, go to the Staff
listing.
Refund Checks
Vendors may issue refund checks for rebates, returned goods, duplicate
payments, credit memos or overpayments. Refund checks are processed
and deposited in the corresponding purchase order’s MFK. Accounts
Payable is responsible for requesting and depositing vendor refund or
rebate checks.
Delinquent Voucher Reports
Delinquent Voucher e-mail notifications for Capitol Equipment and/or
>$10,000 are sent monthly to the department requester or designee.
The e-mail serves as notice that these vouchers were not paid on the
scheduled due date(s) and are on hold status. Requesters are asked
to complete the receipt and equipment information and return to AP within
10 days or provide information as to why the voucher should not be released
for payment. If the voucher is not returned or a reason is not
given why payment should be held, the vouchers under $25,000 are released
for payment by Accounts Payable. On vouchers over $25,000 a third
follow-up is made via phone call to the requester.
Manual Close
Manual Close is the procedure for removing liability on vouchers that
will not be paid. It decreases the outstanding payable account
by the amount of the unpaid portion of a liability created from a voucher.
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Voucher
Types
Assumed Receipt Voucher
This voucher report provides departments information on invoices which
have been received by Accounts Payable and entered to the AP/PO
System for non-equipment and purchases less than $10,000. E-mail
notifications are sent to the Requester or designee when the vouchers
are created. Payments are automatically made within the voucher
terms - the earliest of the Discount Due Date or the Scheduled Due Date,
unless Accounts Payable is notified prior to that date (acntpay@uiowa.edu
or 335-0408). For more detailed information departments
can access the AP/PO
Web site.
Capital Equipment Voucher and/or > $10,000
This voucher report provides departments information on invoices which
have been received by Accounts Payable and entered to the AP/PO
System for capital equipment purchases and dollar purchases over $10,000.
The AP/PO System automatically puts these vouchers on a hold
status. Two copies of this report are mailed to the department
requester a well as an e-mail notification. The department must
complete receipt and equipment information and return the voucher report
to Accounts Payable to release payment. When the completed voucher
report is returned, Accounts Payable will remove the hold status
which releases the voucher for payment according to the payment
schedule. The voucher copy is then given to Property Management
to update Asset Management records, and then microfilmed.
If for some reason the voucher should be held before payment is
created, please e-mail Accounts Payable
or call (335-0408) with a reason. For more detailed information
departments can access the AP/PO
Web site .
Adjustment Voucher
An adjustment voucher is created when Accounts Payable enters credit
memos, charge backs, and/or adjusted invoices in the AP/PO
System. E-mail voucher notifications are sent to the Requester
or designee. For blanket orders, an Assumed Receipt Voucher Report will
be created and the e-mail notification will be included with all other
e-mail notifications for vouchers created that day. For non-blanket
orders, a separate e-mail notifications will be sent to the Requester
by the credit staff providing voucher#, vendor name, purchase order
#, related voucher # and the dollar amount. This credit will
be applied to the next available check to this vendor. Verify
your statement of account for use". For more detailed information
departments can access the AP/PO
Web site. top
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Departments'
Responsibilities
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Compare
voucher reports and invoices with receiving records and purchase
orders for accuracy |
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Review
voucher reports promptly to ensure that any cash discounts are
processed within the voucher payment terms |
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Sign
"articles received" line on the Assumed Receipt Voucher
report, packing/delivery slip, email notification or purchase
order. Receiving records should be maintained for 3 years. |
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Return
copy of Capital Equipment and/or >$10,000 voucher to AP with
receipt and capital equipment information completed |
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Process
on line CV for MFK changes |
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If
problems occur (i.e. damaged product, short shipments, merchandise
returned, overpricing), notify Accounts Payable to hold the
voucher, request credit and/or short pay |
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For
returned merchandise, contact the vendor for authorization to
return |
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Notify
Purchasing for all purchase order changes, additions and deletions
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Verify
Statement of Account |
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Before calling the Accounts Payable Department, visit the Frequently
Asked Questions (FAQ) link. top
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Low
Dollar Transactions
A number of transactions are processed without the issuance of a
Purchase Order because no value is added by a Purchasing Agent audit.
This alternative provides the flexibility to order products and
services less than $3000 directly from the vendor. A Requisition
is not necessary and a Purchase Order will not be issued because
Low Dollar transactions are not processed or tracked by the Purchasing
Department. To generate payment, complete a Non-Purchase Order Voucher
and Invoice form approved with two signatures and forward with all
supporting documentation and price verification to Accounts Payable.
Accounts Payable audits and reviews the Non Purchase Order Voucher
and Invoice, assigns a vendor number, and enters on-line in the
AP/PO System where a voucher number is assigned. Vouchers are entered
in Control Groups for the purpose of controlling voucher input into
Payables System, to review input by data entry staff, and to verify
totals. Vouchers go through a nightly process to Budget Check, Post,
and Edit. Payments are automatically made within the voucher terms
or the Scheduled Due Date. The department assumes the responsibility
for maintaining sufficient order records, answering vendor questions
and handling credits.
If the department does not wish
to use this option, Purchasing will issue Purchase Orders for orders
less than $3000. Some vendors may require a Purchase Order number
before shipping merchandise. In this case, send a Requisition to
Purchasing with the notation, "Please issue a Purchase Order"
in
the Notes to Purchasing field on the Requisition.
Low Dollar Transactions are
defined as being any purchases totaling less than $3000, including
shipping and handling, which is not taggable equipment.
Items that may not be purchased
by Low Dollar Transaction include:
- Alcoholic Beverages**
- Animals (including
fertilized embryos)
- Automotive Repairs
- Business Cards
- Cash Advances
- Controlled Substances
- Cylinder Gases and
Liquid Nitrogen
- Gasoline
- Hazardous Chemicals,
Materials
- Hospitality or Entertainment*
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- Leases, Rentals
- Personal Items (flowers,
gifts, food)*
- Printing and Photocopying
- Purchase involving
trade of Univ. Property
- Radioactive Materials
- Telephones, Related
Equipment not compatible with University system (contact
Telecommunitcations )
- Trade of University
Property
- Travel, Travel-Related
Expenses
- Weapons and Ammunition
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* These items require your Vice President’s
signature. See The University of Iowa Operations Manual, Part 5,
Chapter 11, Section 11, or view at www.uiowa.edu/~our/opmanual/v/11.htm#1122
** Alcoholic Beverages are restricted to certain
funds. See The University of Iowa Operations Manual, Part
5, Chapter 11, Section 11, or view at www.uiowa.edu/%7Eour/opmanual/v/11.htm#1125
Many items that are
routinely purchased are:
- Cash reimbursements for awards
or prizes
- Charter Services for bus
and air
- Conference charges for rentals,
services, and equipment
- Emergency transportation
to UIHC
- Exhibit fees for art work
- Fees; such as transcripts,
academic testing, inspections, entrance fees for tournaments,
lab and x-ray fees for patients, lab animal maintenance fees
- Fines
Freight
- License applications
- Medical Services
- Memberships
- Postage
- Reimbursements to an individual
when an item is purchased for University use
Registrations for meetings
- Utilities (telecommunications,
water, sewer, gas)
- Contact the vendor to place
an order. Provide the "ship-to" address and request
that the invoice be mailed directly to your department. Accounts
Payable routes all invoices less than $3000 to the department
if no Purchase Order number is associated with the invoice. If
Accounts Payable is unable to determine which department placed
the order, the invoice will be returned to the vendor.
- Receives the ordered goods
and an invoice from the vendor.
- Complete a Non-Purchase Order
Voucher and Invoice form and pay particular attention to the following:
- Provide vendor name,
remit address, and vendor number. For detailed vendor information
departments can access the AP/PO Web site at http://www.bo.uiowa.edu/~ap-po/.
- Provide department name,
contact, and phone number.
- For special check processing
please complete Handling Code with "RA" (attachments
need to accompany check) or "IN" (department requests
that the check be held for them to pick-up). Also note to
hold check and provide name and phone number to call when
check is ready for pick-up.
- Complete invoice number
field. Use vendor invoice number if provided. For reimbursements
use amount and date of receipt. For refunds use last name
of the recipient and date of refund. For memberships and subscriptions
use last name and either invoice date or voucher date. For
utilities use account number and either invoice date or voucher
date. For Medical Services use eight digit patient number
and date of service. (For dates use six digits, ie 081298
for August 12, 1998).
- Provide quantity, unit
of measure (UOM), description, unit price, extended price
and total.
- Provide complete and
accurate MFK. If there are multiple MFK’s, provide splits
by dollar amount.
- Complete "articles
received" line, department/deans approval line and dates.
Two signatures are required.
- Staple the original invoice
or price verification to the back of the white copy. Staple a
copy of the remittance invoice to the back of the yellow Non-Purchase
Order Voucher and Invoice form. Mail to Accounts Payable, 400
Northwestern Bell Building (400 NWB). The pink copy is for your
records.
- Maintain records for a minimum
of 3 years to satisfy auditing requirements
- Resolves problems with back
orders and damaged products.
- Be responsible for correcting
billing discrepancies by submitting an additional Non-Purchase
Order Voucher and Invoice form with supporting documentation to
Accounts Payable.
- Process Credit Memos using
one of the following options:
- If the credit amount equals
the unpaid invoice amount, retain the invoice and Credit Memo.
In this case, no documentation is routed to Accounts Payable.
- If the credit amount does
not equal the invoice amount, send the invoice and Credit Memo
with a Non-PO Voucher and Invoice form to Accounts Payable.
- If payment has been made,
request a refund check directly from the vendor. If you need assistance,
send the Credit Memo and MFK information to Accounts Payable.
If a department wishes to track
expenses, Purchase Orders can be issued to cover off-premises utilities
or other recurring expenses, such as telephones or rent.
If you have questions, please call 335-1207.
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In some situations, the vendor requires payment before
any merchandise will be shipped or offers a
discount if the order is paid in advance.
Prepayments less than $3000
Prepaid purchases totaling less than $3000 do not require
a Requisition. Submit the following directly to Accounts Payable, 202
Plaza Centre One:
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Non-Purchase
Order Voucher and Invoice Form - Include the complete department
delivery address in the "Ship-to" box, as this is
the only delivery information the vendor will receive. They will
not receive an accompanying Purchase Order. |
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Price
Verification from the vendor (see below) . |
Prepayments greater than $3000
For purchases totaling more than $3000 submit the following
to Purchasing, 202 Plaza Centre One:
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Purchase
Requisition Form with "Prepayment" noted in the body |
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Price
Verification from the Vendor (see below) |
The Controller
reviews and approves prepayments over $10,000.
Price Verification
Price verification can be either written or verbal,
but written is preferred. It can take the form of an order blank,
price list, or catalog page which includes the vendor name and address.
If the quote was verbal, provide the name of the person who quoted the
price and the date. Include shipping and handling costs or discounts.
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Check Processing
Accounts Payable produces checks on Mondays and Wednesdays.
Exceptions may occur around the Holidays, beginning of school semester,
or in special circumstances. The Payment Coordinator initiates
the payment creation process and verifies the Daily Pay Cycle defaults.
Vouchers are selected for payment based on payment due dates,
pay through date, and next payment date. Selection Exceptions
are researched and corrections made as necessary. The Trial Register
is printed which is reviewed and approved by the Payment Manager.
The Payment Coordinator prints the checks and records the check numbers
in a ledger. Checks are sorted, verified, and distributed according
to their Handling Code. Checks over $10,000 are reviewed by the
Manager.
Payment Cancellation & Voucher Reissue
Checks with discrepancies are reviewed by the Payment
Coordinator to resolve or to cancel. Checks returned from vendors
are reviewed by the Check Specialist to determine if check should be
cancelled and/or reissued. Checks that are cancelled are noted
"Void", reason is noted in the comments field, and liability
is reversed. If check should be reissued, the original voucher
is re-opened and corrections made. top |
1099 Reporting
1099 reporting is determined by the Institutional Account (IACT) in
the MFK which is provided by the departments and audited by AP for
appropriateness. Categories currently being reported on a
yearly basis to the IRS are:
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Rents
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Royalties
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Non-employee
compensated services |
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Medical
and health services |
Also see: 1099
FAQ's
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Accounts Payable and Travel: This
department processes payments for all transactions and
produces the checks that are sent to all vendors. They
also process travel expense vouchers,
process payments for meeting registrations, issue travel advances,
and maintain records of
payments and vouchers.
Assumed Receipt Vouchers:
These voucher reports are computer generated and used for the payment
of invoices to external vendors when a Purchase Order has been established
for non-equipment and purchases less than $10,000..
Capital Equipment and/or >$10,000 Voucher:
These voucher reports are computer generated and used for
the payment of invoices to external vendors when a Purchase
Order has been established for equipment and high dollar purchases.
Credit Memo: A listing of products
or services sent to a purchaser itemizing prices and quantities
being credited for returned products, overpricing, products received
damaged, short shipments, duplicate billing, etc.
EDI: Electronic Data Interchange,
the computer-to-computer transmission of standardized
business data.
Encumbrance: A University accounting
method that reserves funds from a department's budget
for an anticipated expenditure. Funds are encumbered when a purchase
order is issued.
Expenditure: A University accounting
method that identifies payments on a department’s budget.
GL:M: General Ledger: Millennium,
the University's financial accounting system.
Grant Accounting: The department that
monitors compliance with regulations for funds received
through the Federal and Non-Federal Grant processes.
Invoice: A bill listing products or
services sent to a purchaser itemizing prices, quantities, shipping
charges and requesting payment. Provides vendor name and remit
to address.
ITS: Information Technology Services
supplies departments with computer access, information and support
to the University mainframe operations.
Low Dollar Transaction: Purchases
of items costing less than $3000 that are not taggable equipment
by the processing of a Non-Purchase Order Voucher and Invoice form
rather than a Purchase Order. Examples include magazine subscriptions,
membership dues and fees.
MFK: The Master File Key is a system
of codifying accounting data such as funding, Federal and
state classifications, use of funding, responsibility, etc. Fields
for entering these codified data appear
on most of the forms used in the purchasing and payment processes.
Departments can customize certain areas of the MFK to further detail
their income and expense reporting.
Non-Purchase Order Transaction: Any
purchasing transaction that is handled without the
issuance of a Purchase Order. Often these payments are for low dollar
transactions, fees, membership dues, or other intangible items.
Non-Purchase Order Voucher and Invoice:
This Voucher form is originated by the ordering department and is
used for non-purchase order payments of products and services.
Prepayment: A transaction in which
payment is sent with the order. For orders less than $3000 the department
must complete a Non-Purchase Order Voucher and Invoice with price
verification attached for Accounts Payable to generate a check.
Procurement Cards: Procurement
cards are available for payment of small dollar items such as
registrations, software upgrades, orders from catalogs and other
miscellaneous expenditures less than $3000.00.
Purchase Order: This form is the official
document authorizing the purchase of products and
services.
Requester: The person or persons in
each department who work directly with Accounts Payable and Purchasing
to facilitate the procurement and payment process. They are assigned
unique requester codes. They may be contacted by Purchasing,
Accounts Payable, or the vendor if there is a question about an
order.
Short Payment: Payment of an invoice
deducting any overcharged amounts. top |
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