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Accounts Payable Accountant – Keli Feely, 256-549-8353 kfeely@gadsdenstate.edu

INVOICES AND CREDIT MEMOS

An itemized invoice is required by the Accounts Payable Office (AP) to make payment. Invoices mailed or emailed to the college by the vendor are forwarded to the Purchase Order (PO) originator/requestor. If your dept. has not received an itemized invoice in a timely manner, please inform the vendor and request an itemized invoice. The college cannot pay via statements or packing slips. Itemized invoices are to be held until it is verified that items listed on the invoice are received in good order. The invoice is paid when the MASTER Copy of the PO(s) is received by AP with the approval signature of the Budget Manager. By signing the PO approval, the Budget Manager is stating that all items marked on PO have been received and are approved for payment.

When items received from a vendor are not in good order or it is discovered the incorrect items were ordered or received, items should be returned to the vendor and a credit memo received from the vendor. All invoices and credit memos related to a PO should be sent into AP together. If a credit memo is received after invoices have been paid, a copy of the PO (even if it is closed) and the credit memo can be sent in for processing and the budget number on the PO will be processed and credited.

Any purchase order payment requests to pay vendors providing food, meals, or catering must have a student sign-in/attendance list to accompany the invoice. Paperwork is not considered complete without a list. An event flyer is also requested, if available.

PURCHASE ORDER PAYMENT

When submitting purchase orders for payment, either PARTIAL or COMPLETE payments of a purchase order can be made. When all invoices to be paid by a PO are being submitted for processing at one time, a COMPLETE payment of a PO is made, and the PO can be CLOSED during invoice processing. Once COMPLETE, that PO cannot be used in the future to make further payments of invoices. PARTIAL or COMPLETE need to be written on the PO to ensure correct processing. The Master Copy of the PO is used to send in payment requests because it lists the budget number (FOAP) and has a place to write any remarks. Note: More than one PO can be used to pay a single invoice. Also, multiple invoices can be paid with a single PO. 

When only part of what was ordered by a PO has been received and invoiced, a PARTIAL payment can be made.  This will allow future payments to be made using the same purchase order.  This can be done as many times as necessary until you know the order/service is complete. One example might be a PO for a monthly service such as garbage service.

PARTIAL PAYMENT

    To submit an invoice(s) for partial payment, please do the following:

  1. Send/email the signed and approved Master copy of the PO and write “PARTIAL” in Remarks and the amount being paid.
  2. Cross-out the PO total and write the amount to be paid, if different.
  3. Attach itemized invoice.
  4. Attach sign-in sheets or attendance list for any PO involving food, meal or catering items. (Paperwork is not considered complete without a list) An event flyer is also requested, if available.
  5. Attach any paperwork/forms to be sent with check and indicate in PO Remarks. 
  6. Send to AP. (Scanned and emailed copies of POs and invoices are accepted—make sure scan is legible)

COMPLETE PAYMENT

    To submit an invoice(s) for complete payment, please do the following:

  1. Send/email the signed and approved Master copy of the PO and write “COMPLETE” in Remarks.
  2. If the amount to be paid is different from the purchase order total, cross out the purchase order total and write the amount to be paid.
  3. Attach Itemized invoice.
  4. Attach sign-in sheets or attendance list for any PO involving food, meal or catering items. (Paperwork is not considered complete without a list) An event flyer is also requested, if available.
  5. Attach any paperwork/forms to be sent with check and indicate in PO Remarks.
  6. Send to AP. (Scanned and emailed copies of POs and invoices are accepted—make sure scan is legible)

BALANCES SHEET PAYMENTS AND REVENUE REFUNDS

Payments made with money deposited into a specific balance sheet code and refunds paid from a revenue code are not made with purchase orders. The payment or refund is made from the balance sheet code or revenue code. An interoffice memo can be used to request payment processing for this type of payment.

To request payment from a balance sheet code or a refund from a revenue code, create a memo to AP with the following information that applies to the situation:

  1. From whom was the money collected.
  2. For what purpose was the money collected and for what period of time.
  3. What transaction code was used while collecting money.
  4. List the total amount collected and the total amount to be paid.
  5. List vendor name, A#, and address to be paid.
  6. List balance sheet code or revenue code payment is to be made from.
  7. Budget Manager signature/approval.
  8. Include documentation for backup of request.

DEADLINE TO SUBMIT ITEMS FOR PAYMENT

Accounts payable checks are printed on a weekly basis, every Thursday. To ensure this deadline is met, items to be paid must be received by the Accounts Payable Office by 11:00 a.m. Wednesday.  Financial Services reserves the right to make changes to this schedule based on holiday weeks and any special requests. Special requests that may take extra time or effort are to be requested weeks in advance to ensure enough time for processing, printing, cashing or special handling.

DISTRIBUTION OF CHECKS

All AP checks are mailed (or hand mailed) by 10:00 a.m. Friday from the Business Office. Checks to vendors are mailed through the U.S. Postal Service.

If a vendor has a special request regarding the distribution of a check, please make a note in the Remarks section or on the memo when the request is submitted to AP. A vendor is allowed to pick up their check only in special circumstances. Proper ID will be required.

REVIEW ITEMS

Items submitted to AP for payment should be reviewed to see that everything required is present. If any required documentation or signatures are missing, AP will request the missing information be sent or completed before any processing can begin. This could delay items being paid. Items to watch for are:

  1. The Budget Manager signs the materials receipt section/bottom of the PO to authorize the payment of the invoice. When a PO is not used, the Budget Manager signs the item to authorize payment. The Budget Manager ensures there is money available in the budget to cover the expenditure.
  2. Only itemized invoices can be paid. The college cannot pay by statements or packing slips–these items do not itemize items purchased and prices.
  3. When an item is printed for the college, a sample of the ad or article is required to be attached to the PO when submitted for payment. Items printed for the college are newspaper ads, publications, books, calendars, rubber stamps, etc. In the first four examples given, the actual item is to be attached to the purchase order.
  4. Request for payments of radio broadcasts should be original and itemized.  The dates and times of broadcasts are listed.
  5. Invoices for hotel bills are to itemize fees charged. Lodging taxes are payable.
  6. Meals are paid on a per diem basis. Per diem amounts are set by the state. Meals provided at an event or meeting must be indicated and then subtracted from the per diem payment (include meeting agenda).
  7. The College is an institution of the State of Alabama and does not pay late charges, sales tax or any minimum fees and charges of this type.  If a vendor lists such a charge on an invoice or statement, the charge is deducted.
  8. Shipping and installation are usually not charged on invoices when items are purchased through a bid. (The bid number is specified on the purchase order.) If the vendor lists shipping or installation charges on an invoice, highlight the charges. They may be deducted from the invoice and the remaining amount paid. If charges are deducted, the vendor must be contacted to make sure the charges are removed.
  9. The value of moveable equipment and/or furniture is $5000.00 or more per item.  These items are charged to inventory. Materials and Supplies costing less than $5000.00 are charged to materials and supplies.
  10. Independent contractors are to be paid through the AP system. Employees are to be paid through the payroll system.

Purchases not made according to the College’s approved purchase procedures require approved justification before payment can be made.  There are three reason for the form–(1) Prior Year Purchase, (2) Purchase Date, (3) Purchase In Excess of Approved Amount.

If an item to be submitted to AP for payment requires justification, complete the appropriate form, attach it to the front of the paperwork to be processed, forward it to the Budget Manager and to the Dean for approval. Descriptions of the unapproved purchases requiring justification, and how to avoid them, are as follows:

1. PRIOR YEAR PURCHASE JUSTIFICATION FORM

All purchases are to be processed and paid within the fiscal year in which the purchase took place (date goods were received or services were performed). The fiscal year of the college is October 1 – September 30 each year. Any invoices sent for payment after Sept.30 or after the last processing business day (before Sept 30) that should have been paid are considered a violation of Generally Accepted Accounting Principles; therefore, a completed justification form is required for payment to be made.

This applies also to budgets of which the fiscal year differs from the fiscal year of the college. For example: a grant’s budget year is September 1 to August 31. That budget would need to submit invoices for items received in September for payment to AP within the month of September. Invoices must be submitted early enough for payment to be made in the month of September. All budgets must comply with the fiscal year policies of the College.

To avoid this justification form, submit all items or services received within a fiscal year for payment within that same fiscal year. 

Any items or services received in the current fiscal year that will not be invoiced until the next fiscal year, must be submitted by the Budget Manager as a list of POs to be accrued on the Year End Accounts Payable Request form. This form is provided to the Budget Managers at the end of each fiscal year. A justification form is not necessary if the purchase has been accrued. (listed on the Year End form)

2. PURCHASE MADE WITHOUT AN APPROVED PURCHASE ORDER JUSTIFICATION FORM (DATE)

Purchase orders are to show an approval date on or before, the order/invoice dates or the date services take place. Goods and services are to be purchased with a previously approved PO or work order. Purchases in violation of this policy are considered an unapproved purchase; therefore, a completed justification form is required for payment to be made.

To avoid this justification form, do not order goods or services without an approved PO or work order. Purchase orders are considered approved on the date signed by the Purchasing Agent. (Approved Date)

To ensure you will have a PO to cover annual invoices that arrive such as memberships, maintenance agreements, and subscriptions, request purchase orders for these annual expenses at the beginning of each fiscal year as soon as the Purchasing Dept resumes activity. When entering the requisition, enter “do not forward to vendor.”

If somehow goods were ordered and received without proper approval, you may return the goods to the vendor, obtain a credit memo for the full amount of the purchase, and then request and receive the proper approval to order the items at that point.

If you would like to order an item for preview, first request a purchase order.  When entering the requisition, enter “for preview-do not mail.”  If you decide to keep the item, you have a purchase order to pay the invoice.  If you return the item, you can cancel the purchase order and the money will return to the budget.

3. PURCHASE AMOUNT EXCEEDS AMOUNT APPROVED JUSTIFICATION FORM

  An order is placed to a vendor by means of a purchase order, which is approved by the Purchasing Agent. An overage of 10% of the purchase order amount is allowed. This allowance is given to cover price increases and unexpected shipping or freight charges. The allowance is not given to purchase additional items or services. Any amount over the 10% allowance or any items purchased but not listed on the purchase order is considered an unapproved purchase; therefore, a completed justification form is required for payment to be made. The 10% allowance does not apply to bid purchase orders.

To avoid this justification form, use current prices when requesting a PO. If you must estimate cost, estimate high. After the invoice is paid/processed, any excess money that was encumbered will be returned to the budget.

If your purchase exceeds the approved amount on the PO, you may return the item purchased to the vendor. Obtain a credit memo for the full amount of the purchase. Request the Purchasing Agent void the purchase order.  Request a PO be issued for the correct purchase amount.

Financial Services reserves the right to set deadlines and make decisions regarding invoice/PO processing based on Generally Acceptable Accounting Principles.