Payables (Accounts Payable)
A Business Process Managed by Disbursement Services
These business processes involve making non-payroll payments to suppliers and employees, vendor maintenance for non-payroll payments, travel advances, emergency checks and foreign payments, payments for withholding to the State, 1099 Miscellaneous Income reporting and payments to the IRS, data entry of payment and financial transactions, and payment corrections.
Facts, Figures, and Recommendations
Ever wonder how much it costs to process an invoice, how long it takes for vendors to cash checks, or how many duplicate payments are erroneously made?
Disbursement Services has compiled some interesting facts and figures about the University’s Accounts Payable operations, including a number of helpful and important recommendations. A factsheet, from February 2011, is available here.
For information about travel advances, visit the Travel Services Website. A UofM login is required to access this site.
Policies and Procedures
The following can be found at the UWide Policy Library:
- Requesting a New Supplier or Changing an Existing Supplier
- Depositing Supplier Checks (sponsored and non-sponsored accounts) and Depositing Refunds of Sponsored Employee Expense Overpayments
- Making Payments Using Single Payment Supplier Numbers
AP01 Vendor Information
AP04 Payments - Cancel/Void
AP04 Payments - Express
AP04 Payments - Manual/Prepay/Pay Cycle
AP80 Batch Processing
AP99 Supplier Payment Inquiry
Job Aids for Accounts Payable
The following forms can be found at the UWide Forms Library:
- Authorization to Travel UM1649
- Check Handling UM1680
- Check Request Form UM1659
- Express Payment Request/Change in Voucher Pay Date UM1734
- Employee Expense Worksheet UM1612
- Employee/Independent Contractor Determination Checklist UM1650
- Request foreign payment wire or draft UM1732
- Single Payment Vendor Request UM1676
- Statement in Lieu of Receipt UM1566p
- Stop payment/check copy request UM1733
- Supplier Authorization Form UM1679
Frequently Asked Questions
Payments to students are complex. It is possible to pay a student through three different systems/processes: financial aid, accounts payable, and payroll. It is critical that the payment is done in the proper system, using the correct process. The University must comply with reporting requirements to the individual or Internal Revenue Service, such as 1098T reporting (financial aid), 1099 reporting (accounts payable), or W-2 reporting (payroll).
Tax Management Office Guideline #8 entitled Payments to Students (pdf) is helpful in determining what type of payment is being made and which is the correct process to use.
Payments to students is a complex area and not every situation has been covered in TMOG 8. The Tax Management Office is available to help analyze situations that are unclear or not addressed in the examples. Contact them for help determining the type of payment being made at email@example.com or 612-624-1053.
See the Policy Library page on processing Single Payment Vendor Payments.
The Office of the Human Research Protection Program has expressed some concern to Disbursement Services regarding the extent to which the full name of human subjects is used when generating the document numbers on the Check Request Form. In response to this concern, the Check Request Form numbering routine has been modified to limit the use of the human subject's name to a few characters.
When completing the form online and using expense Account numbers 810101 (Research Subject Payments) or 810102 (Research Subject Reimbursements), the document number generated will consist of:
- the first three letters of the last name,
- the first two letters of the first name, and
- first two characters of the address and the date (MM/DD/YY).
The Check Request document numbers for all other payments to individuals will consist of:
- the first ten characters of the last name, and
- the first four of the first name and the date (MM/DD/YY).
Please note, when completing the form, the initial document number that will appear on the form will be "010000". That number will be replaced, as indicated above, once the form is completed. The updated form can be found in the Forms Library (xlsx).
Please contact the University Financial Helpline with any questions.
The student organization must be set up as a vendor in the financial system. Enter the transaction to pay the student organization just as you would an external vendor. Ensure you have back-up documentation for imaging, just as you would for any other vendor (an invoice, statement, or whatever other documentation is needed).
Go to Accounts Payable > Vouchers > Add/Update > Regular Entry and search for the voucher number. Click on the payments tab and look at the section called scheduled payment. The Payment Date field is the check date, and the Reference field is the check number.
There is no blanket answer for stipends, since it appears to be a term that is used to refer to payments for many different things. These payments actually may fall into payment types for which there are already procedures defined.
If the payment is to a student, contact the student system helpline (612-624-1111) as any payments made to students may interfere with their financial aid package.
If the payment is for expenses for non-staff or for travel-related expenses for non-staff, then refer to the Non PO Related List. Travel and expenses for non-staff are covered there.
If a stipend is paid for services, then a CPS requisition must be used.
If you cannot find what seems to be the appropriate process, contact the University Financial Helpline.
An issue has been identified with Match Overrides. The problem occurs when some but not all lines are overridden. The result is a PeopleCode error and the remaining match exceptions are not viewable. To avoid this error, either:
- Override match exceptions at the header level, or
- Make sure that you view all lines and override all lines. If all lines are not resolved, wait to override until all lines are resolved.
Vouchers may be closed if they are in a posted, unpaid status. To determine if a voucher can be closed navigate to the voucher's Summary page to research its post status. Then on the voucher's Payment page see if there is a date in the Payment Date box. If there is no date, the voucher has not been paid.
Once it has been determined that a voucher can be closed enter a note in the Payment Note box on the voucher's Payment page. In the note include the reason the voucher is being closed, the name of the person closing the voucher, and the date. After entering the note navigate to the Close Voucher screen and mark the voucher for closure. If the voucher is PO related, determine if the encumbrance should be restored or released.
If the voucher is re-entered and a duplicate invoice error appears, do not alter the invoice number. Contact Disbursement Services at firstname.lastname@example.org for instructions.
There have been additional steps* identified to populate the match workbench so that all match exceptions are located.
Accounts Payable > Review Accounts Payable Info > Vouchers > Match Workbench
Select the <Advanced Search> link
* Select the <Personalize Search> link
* Deselect the Item ID, Item SetID, PO Business Unit, PO Number, Receiving Business Unit, and Receipt Numberboxes
* Click the <Apply> button
Populate the search as follows:
- Business Unit equal to UMN01
- Match Status equal to Match Exceptions Exist
- Origin equal to (your cluster's origin code)
- Optional Search Criteria: Match Rule ID equal to (desired match rule exception ID)
Click the <Search> button.
The search results will display match exceptions for your cluster. To resolve match exceptions, use the Match Exceptions Matrix, which can be found in either the Vendor Payments or Procurement Specialist reference manuals.
The search criteria can be saved by selecting the <Save Search Criteria> link. Name your search and then click <Save>.
To used the saved search criteria, select it from the Used Saved Search drop down menu at the top of the page.
SOME INCORRECT USES OF VCPS
Below are a few items that are being processed on professional service requisitions (VCPS) that should be on other types of transactions:
Fees are approved items on the Non-PO policy. There were some VCPS transactions processed for fees. For example, registration fees or participating fees are not professional services. Use the non-PO voucher process for payment of fees and registrations.
- Maintenance Agreements
Do not use professional service requisitions for paying equipment or computer maintenance agreements or service agreements. These should be processed on general PO requisitions.
- Repair Services
Do not use professional service requisitions for paying repair services on equipment or handy man services. These should be on a general PO or blanket requisitions. The non-PO policy does allow for emergency repairs to be process through the non-PO process.
There were a variety of items coded as professional services that should have been standard services. For example, baby sitting services, data entry services, bartending services, shipping charges. All of these should be on general PO requisitions.
DESCRIPTIONS TOO VAGUE
There were some VCPS transactions with descriptions that were too vague. Even though the work is done, it is important that the description be sufficient to identify what service is being paid. Below are some examples from past VCPS transactions that are too vague to know whether the VCPS was the appropriate process. Since these also used the miscellaneous category for Other Professional Services, we could not tell from the category what the payment was for.
- Description: Wintersown Invoice
- Description: prineas
- Description: scientific services
- Description: B Services
- Description: arkellc&c1009
- Description: Do Not Send, to pay for invoice / accession # xxxxxx
Professional Services less than $3,000 (September 2010)
VCPS criteria (professional services less than $3,000)
- Pays for professional services already provided or initiates payment for an individual at the conclusion of a performance.
- VCPS requisition automatically creates a payment WITHOUT entering a voucher. To change the payment date, follow the regular process for express processing of a voucher using form UM 1734. (pdf)
- Does not require receiving.
- The Document Status inquiry screens in Purchasing and AP modules identify the related PO and Voucher transactions created from the VCPS requisition.
Other VCPS functionality information
- No blanket VCPS available (multiple services or multiple invoices from same vendor): VCPS requisitions are intended to pay for a single service event. They are not intended to set up blanket orders for services costing less than $3,000. If you receive multiple service events provided by the same vendor, set up a VCPS for each service invoice.
- Unit of Measure: The VCPS requisition assumes the quantity is '1 LOT'. If you enter a quantity of '1 each' the system changes it to '1 LOT'.
- Printing a VCPS: There is no print program for VCPS transactions. Nothing is dispatched to the vendor until the payment is issued. The 'view printable version' of the VCPS only displays the distribution information.
- Start and End Dates: These fields record the dates when the service was performed. If there are different dates, use the earliest date for services as the start date and the last date as the end date. All lines on a VCPS requisition must have the same start and end dates.
- Comments: Although the services have already been performed:
- Justification: the requisition still requires justification (5Ws) to explain for the approvers why the service was needed.
- Scope of Work: A full scope of work defining the service provided needs to be entered n the line description. Use the comments area if more space is needed to enter this full scope of work description.
- Attachments: Since the VCPS service has already been provided, the attachments to the requisitions are always for internal use. Nothing is dispatched to the vendor.
- PSIS Form is only required if sponsored funds are used and then only Section 1 and 4 are required.
- Non-Resident Alien Form.
- VCPS invoices - scan these into the imaging system like all other invoices. Do not archive invoices as part of the requisition attachments.
- Change orders: These are not practical on a VCPS since the requisition processes to a voucher very quickly once approved.
- Vendor code: Be sure that the same vendor and location is used on all lines for a VCPS. If the vendor code or locations are different, the system will issue two VCPS transactions for the requisition.
- Imaging VCPS invoices, Check Request Form, or other forms of documentation supporting VCPS payments into Image Now:
- Start the VCPS requisition: Start the process when an invoice is received or a payment is needed for a performance. Please note that there MUST be documentation imaged to support every VCPS transaction/payment. Therefore, absent an invoice, a Check Request Form should be completed and accompanied with any other documentation that will further support the payment.
The supporting documents and invoice must be scanned and indexed. Do not attach invoices to the VCPS requisition in lieu of scanning copies into to ImageNow.
- Invoice numbering: Invoice number and invoice date are required on the VCPS requisition. Be sure to follow the invoice numbering standards in the Vendor Payments reference manual.
- Special handling: Use the link on the VCPS requisition to request the check be held for pick up by the department.
- Avoid duplicate payments on VCPSs: After a VCPS requisition is entered, clearly mark the VCPS invoice with the following: "VCPS - do not enter - submitted for imaging only". Forward marked VCPS invoices to your cluster for scanning to ImageNow.
- Pre-pay for service: Other than checks for performers, the University rarely pays for services before they are provided. It can be difficult to get the funds returned if the service is not provided or the event is canceled at the last minute. If a credit is issued, it may be difficult to apply the credit memo if the University does not use that vendor again.
- Partial payments: In the rare instance that there might be a sound business reason to make a partial prepayment, enter two VCPS requisitions. Enter one to make the partial payment and a second VCPS to pay for the final part of the service when it is complete. Reference the first VCPS in comments on the second VCPS requisition.
- Errored VCPS transactions: If the procurement specialist reduces the money on an existing CPS (those $3,000 and greater) and forgets to click the final flag on the PO header, the system puts the reduced money back on the original CPS requisition. If that amount put back on the requisition is less than $3,000, the system generates another VCPS payment/check to the vendor in error. NOTE: Other transaction types may generate unintended purchase orders, but those do not automatically generate checks.
A reminder memo has been issued to the procurement specialists on this topic. We plan to fix the system to automatically finalize whenever there is a PO change so the procurement specialist does not have to remember to do this step.