Purchasing/Spending Process: Department Level Processing
Definition. Source documentation is any invoice or other type of proof of purchase that provides the complete information required to process a payment transaction:
- Original vendor cash register receipt that itemizes the purchase(s)
- Original detailed vendor invoice
- Original vendor statement only if the statement provides a detailed itemization of the goods/services purchased and the charges for each. A statement merely listing invoice numbers and amounts due for each is not acceptable.
- Original credit card receipt that itemize the purchases
- Original canceled check showing proof of payment (in combination with detailed receipt or invoice)
- Itemized receipts requested from vendors after the fact when the original receipt is not available (for the purposes of complying with this policy)
- An affidavit, signed by the purchaser, explaining the reason why the original receipts are not available, providing a detailed accounting of the expenses being claimed, showing a reasonable business purpose for the expense, and certifying that the amounts claimed are true and correct. NOTE: This form of documentation is allowable only in limited circumstances.
- Printouts or screen shots substantiating online purchases
Level of Detail. When a receipt does not provide the essential character of the expense, e.g. rate or period of use, specific description of purchase, etc., the University may require a copy of a contract, a catalog page, or additional information substantiating the expense.
Reimbursement Claims. Original receipts must be attached to any claim for reimbursement submitted to the University. The University recommends that claimants prepare copies of those receipts to be retained for their personal records. Effective May 27, 2009, the due date for submitting non-travel reimbursement claims to the Accounts Payable office is 60 days following the the date the expense was incurred; the due date for submitting travel reimbursement claims to the Accounts Payable office is 60 days following the last day of any contiguous travel period.
Financial Reporting. Once Accounts Payable posts an invoice or expenditure claim into the SAP system, the transaction will appear in the financial reports for the general ledger account and cost object into which the transaction has been classified. Numerous reports are available online to University personnel who desire access to current financial and accounts payable data for their department or functional area. This data should be reviewed for accuracy and any errors in classifications to general ledger accounts or cost objects reported to Accounts Payable immediately.
General Ledger (GL) Account and Cost Object Coding. Each payment request must be coded so that the transaction will appear in the appropriate category in the University's financial reports. To facilitate this coding, each department is issued a rubber ink stamp that may be impressed on each invoice to identify the cost object and general ledger account for the transaction. If a transaction must be split-coded between cost objects and/or general ledger accounts, the Accounts Payable Split-Coding Form may be completed and attached in lieu of the rubber ink stamp impression to better organize the coding information.
Invoices (Current). Only original copies of vendor invoices will be accepted for processing by Accounts Payable. Prior to processing, invoices should be perused to ascertain:
Terms of Payment. The terms or agreements for payment vary by vendor. Most vendor invoices contain a statement of the terms for expected payment. For example, the term "Net 30 days" indicates that payment is expected within 30 days. Unless the department shows good cause why a payment should be held, the University's payment policy provides that payment is due to vendors upon receipt of the invoice.
Discounts. Some vendors offer discounts if payment is received by a designated date. Department staff should peruse vendor invoices for discount terms and process those invoices in a timely manner so that discounts may be taken.
Credits. When a vendor invoice reflects a credit to the University's customer account, it is the general policy of the University to request a refund of the credit from the vendor. However, if the vendor is a common vendor used by the University, the credit may be applied against current outstanding invoices on the account. Note: Department personnel may not enter credit invoices in the SAP system. Departments are requested to transmit all credit invoices upon receipt to Accounts Payable for entry into SAP.
Shipping, Handling and Freight Charges. Shipping, handling and freight charges appearing on an invoice should be included as a part of the cost of the item being purchased rather than being broken out and assigned a separate "freight" general ledger account code.
Sales Tax. Nebraska sales tax charged on invoices for which an exemption is appropriate will be deducted for the purposes of determining final payments to vendors. Departments observing that sales tax has been charged are responsible for immediately contacting and notifying vendors of UNK's sales tax exemption and requesting that UNK's account be adjusted accordingly. Upon request by a vendor, the department may request that the Business Services Office forward a copy of the Nebraska Form 13 Nebraska Resale or Exempt Sale Certificate to the vendor's business office.
Prepayments. Generally, the University of Nebraska does not allow payments for goods or services in advance. The position of the State of Nebraska is that until the vendor's goods and/or services are received, there is no legal obligation for payment. Certain exceptions apply, including common arm's length business transactions which are normally prepaid, e.g. subscriptions, conference registrations, rents, etc. When a prepayment for goods or services must be made to a vendor, a written agreement must be in place with the vendor which describes the terms of the prepayment, and which includes a provision stating that the vendor agrees to refund any prepayments (net of any reasonable processing costs, when applicable) for which goods or services are not delivered in a timely manner in compliance with a contract or other prepayment agreement.
Invoices (Old). The State of Nebraska requires that unpaid out-of-date invoices (those which are older than two years) be processed through the Office of Risk Management, State Claims Board. The process involves the completion of a claim form that is forwarded to the State Claims Board and subsequently reviewed and approved or denied, based upon the circumstances. There is generally a lengthy processing period involved.
Out-of-date invoices should be forwarded immediately to Accounts Payable. Accounts Payable will forward the necessary paperwork to the State Claims Board for further action.
Accounts Payable Transactions. Except for procurement card transactions and blanket travel authorizations, all official documentation for payment transactions is maintained by the Accounts Payable Office for seven years. Departments are encouraged to retain file copies of payment documentation on site for a convenient length of time when deemed appropriate for timely reference, but for no longer than seven years.
Procurement Card Transactions. Original copies of procurement card transaction invoices and receipts must be maintained for seven years in the University department to which the expense is charged. This documentation is subject to periodic review by Accounts Payable staff to ensure that the documentation is being preserved in compliance with University records retention guidelines. Before documentation for procurement card transactions may be disposed of by the custodial department, the department must notify the Accounts Payable Office so that appropriate disposal paperwork may be transmitted to the Nebraska Secretary of State.
Remittance Copies of Invoices. It is the objective of Accounts Payable to maintain adequate documentation for each transaction without superfluous paperwork.
No Remittance Copies Required - Generally, departments requesting payments of invoices should submit to Accounts Payable only the original copies of invoice documentation. In cases where invoices bear unique identifying numbers, those numbers are entered in the payment system exactly as they appear on the invoices. The numbers then appear on the payment stubs of the warrants to identify those transactions to vendors. This process eliminates the necessity to include remittance copies of the invoices with payments to vendors.
One Remittance Copy Required - If invoice documentation must be included with payment in order to identify the payment to the vendor, one additional copy of the documentation should be submitted to Accounts Payable along with the originals. In addition, the department must include clear instructions to Accounts Payable noting that the warrant (check) must be returned from the State before mailing for inclusion of the appropriate copies.
Order, Registration and Subscription Forms -The department must transmit to Accounts Payable:
The completed original form (accompanies payment to vendor)
One duplicate or photocopy of the completed original form (stamped, coded, approved, and placed on file in the Accounts Payable office)
Preaddressed envelope from vendor (if available).
SAP Entry, Prerequisites.
User must have SAP Navigation training. To register for SAP Navigation training, click on the Training link on the SAPPHIRE Home Page.
User must have Accounts Payable entry & display security in SAP. Request security by clicking on the Request or Update SAP ID link on the SAPPHIRE Home Page.
User must complete Bill-Paying Process training & SAP Parked Invoice Entry training. To register for these trainings, click on the Training link on the SAPPHIRE Home Page.
Special Handling. Any instructions for special handling of vendor payments must be clearly stated and attached with a staple (please do not use paper clips) to the front of the payment documentation prior to transmission to the Accounts Payable office. (e.g., "Please enclose attached letter with payment." or "Please return warrant (check) to Student Services so that additional information may be enclosed with payment.")
Vendor Credits/Refunds. See Credits above.