FINANCIAL ACCOUNTING


ACCOUNTS PAYABLE

ACCOUNTS PAYABLE PURPOSE STATEMENT

The Accounts Payable area processes invoices for purchase orders. We audit the invoice for accuracy of what was ordered and the price that is on the purchase order. After the invoice is entered, we file it in the University’s permanent files.

PURCHASE ORDER CHANGE ORDERS

The department has the responsibility to notify the Purchasing department or Accounts Payable on changes to an open purchase order.

  1. Accounts Payable area will process the change order for the following reasons when the department notifies them by an email message addressed to r-anthrop@indstate.edu (Bob Anthrop).

    1. Change in index/account code on the purchase order
    2. Purchase order close after there has been an invoice processed on it

  2. Purchasing department will process the change order for the following reasons when the department notifies them by entry on the Change Order/Follow Up/Returns form (FZAPOFU).

    1. Quantity change
    2. Unit price change
    3. Line item description change
    4. Line added to purchase order
    5. Line item deleted
    6. Purchase order cancelled – A purchase order can be cancelled if there has been no invoicing entered.

REQUISITION/PURCHASE ORDER CANCELLATION OR CLOSING

The department needs to notify the Purchasing department to cancel the Purchase order by using the Change/Follow Up/Returns form (FZAPOFU) to cancel the purchase order. When the department notifies the Purchasing department to cancel the purchase order, you will have to have them cancel the requisition at the same time.

If the purchase order has had an invoice paid on it, you will have to email Accounts Payable to close the purchase order by emailing r-anthrop@indstate.edu (Bob Anthrop).

INVOICE APPROVAL

By using the User Approval form (FOAUAPP), the department will review the invoice and determine if they want to approve the invoice for payment. The following instructions for reviewing the data and approving the invoice are:

  1. Enter the User Approval form. Next Block button in the tool bar will bring the invoice documents that are in your invoicing queue.

  2. To review the invoice information, click on the Detail button under the invoice you are reviewing. It will open the Invoice Approval Query form. The information on this form is the Invoice Document number, Credit memo indicator (Y for credit memo and N for invoice), vendor name, transaction date (date has to be in an open month), index and account code, amounts for this document. There may be more than one index and account code on an invoice. If the invoice is document accounting, use the scroll bar to the right of the accounting information. If the invoice is commodity accounting (Capital equipment purchases), use the scroll bar to the right of the line item information. With the type of accounting information that is on the invoice, the scroll bar will display all accounting distribution records one at a time.

  3. If this is not enough information to know that you want to approve the invoice, click on the Document Query words under Options. It will open the Invoice/Credit Memo Query form (FAIINVE). The information on this form that is especially important to the approval process is: The transaction date must be in an open month, Credit Memo blank (not a credit memo) or has a check mark ( is a credit memo), Vendor invoice number. Click on the words Commodity Information under the Options. PO item number, Invoice item number, and Commodity Record Count (number of lines on this invoice), Commodity code and description, if you want to see the Purchase Order Item Text (the text the requisitioner entered), Invoiced and approved quantity and unit price, additional amount charged (if there is additional amount, there will be document test to tell you what the amount is for), Final Payment Indicator is blank (the quantity does not match what was ordered) or F for final payment on this line.

  4. After reviewing all lines on the invoice, you should know if you want to approve the invoice, disapprove it, or let the invoice sit in your invoice queue.

    1. To approve the invoice on the User Approval form, click the Approve button under the invoice you want to approve. Then a window will pop up that says Document is approved, you will click on the OK button and another window will pop up that says Document is approved, you will click on the OK button. At this time the invoice has been approved and it will disappear from the User Approval form.

    2. To disapprove the invoice on the User Approval form, click the Disapprove button under the invoice you want to disapprove. A window will pop up that says Document is disapproved, after those words, please state a reason why you are disapproving the invoice. Click on the OK button. Another window will pop up that says Document is disapproved, click on the OK button. At this time the invoice has been disapproved and it will disappear from the User Approval form.

      Reasons for disapproving an invoice include: some or all of the items are being returned, or the invoice quantities or unit prices are incorrect, or some or all of the items may be broken, or the transaction date is in a closed month. Do not disapprove an invoice if the only reason you don’t want to pay for the items is that you haven’t received the items on the invoice yet.

    3. Do not disapprove an invoice if you have not received the items on the invoice, or you have not unpacked the merchandise. If you disapprove the invoice, Accounts Payable would return it to your invoicing queue.

MERCHANDISE RETURNS

If the department wants to return some or all of the items received, the Purchasing department can assist you with the return to the vendor.

CREDIT MEMOS

All credit memos will be entered by Accounts Payable. The reason for this is so that the vendor will see on the check stub all documents that we are taking credit for. All invoices and credit memos from vendors will be entered. The department will have to approve all invoices and credit memos that pertain to a purchase order.

ENCUMBRANCES

Encumbrances are the reserving of funds for a specific purchase order. The encumbrance is established when a requisition or a purchase order is approved. The encumbrance is reduced or eliminated when the requisition is transferred to a purchase order, or when a purchase order has an invoice approved, or when the encumbrance is cancelled.

How do you cancel an encumbrance? If the purchase order has had no payment activity, Purchasing will cancel it. If payments have been made on the purchase order, email r-anthrop@indstate.edu to cancel the encumbrance balance on a purchase order.

DOCUMENT TRACKING

If the department wants to know the status of a purchase, the Document History (FOIDOCH) form will show you where your purchase is. You will be able to track it from the requisition, to the bid (if the items being purchased is put out on a bid to a number of vendors), to purchase order, to invoice, and to the check. From this form you can look at any of the documents, requisition, purchase order, invoice or check.

PURCHASE ORDER TOLERANCES


QUANTITY DIFFERENCES

All purchase orders have no tolerance for quantity ordered. The quantity should match the purchase order. The exception is printed materials by a printing or publishing company. There is a standard 10% overrun on the printed material. On quote orders for invoicing that exceeds the purchase order, a letter will be sent to the vendor describing why we paid the invoice short.

PRICE DIFFERENCES

Quote orders will have no overcharge for price. They will be paid per the purchase order and a letter will be sent to the vendor describing why we paid the invoice short.

All other types of purchase orders will have a price overcharge as long as the extended price does not exceed $50.00 per line. If the increase in price has an overall effect of increasing the extended price more than $50.00 per line, the department will be contacted by Accounts Payable so that the department can create the Change Order/Follow up/Returns (FZAPOFU) form for the increased unit price.

FREIGHT

Freight is authorized for Accounts Payable to pay up to $75.00. If the freight is more than $75.00, Purchasing will be notified by the use of Change Order/Follow Up/Returns (FZAPOFU) form for their approval of the freight. If the purchase order is a quote order, the amount of freight in the additional amount field on the Commodity Records window of the purchase order is the total amount of freight that can be paid.

FUEL SURCHARGES

Fuel surcharge is a charge for increased fuel costs for the vendor. Accounts Payable can add up to $15 per invoice for fuel surcharges. Purchasing will have to approve any charges over the $15 per invoice for Accounts Payable to pay.

OTHER CHARGES

Departments will be contacted for approval to add other charges to an invoice. The department will have to send an email message to Accounts Payable authorizing us to add the charge to the invoice. Accounts Payable can add to the payments other miscellaneous charges that the vendors put on the invoices for a purchase order. Examples of some of the charges are special packaging charges (dry ice packing) or hazardous material charges.

SUBSTITUTION OF MERCHANDISE

If the department is told an item has to be substituted for another before it is shipped, the department will enter a Change Order/Follow Up/Returns (FZAPOFU) form to correct the purchase order. If they do want the substituted item, they will tell the vendor to cancel that item and then will enter a Change Order/Follow Up/Returns (FZAPOFU) form to cancel the item off the purchase order.

If the substitution is not known until the invoice is received in Accounts Payable, we will contact the department notifying them of the substitution. If the department determines that they do not want the substituted item, they will enter a Change Order/Follow Up/Returns (FZAPOFU) form to cancel that line on the purchase order and make arrangements with the vendor to return the substituted item.

FREQUENTLY ASKED QUESTIONS


HOW DO I FIND THE BALANCE OF MY BLANKET/REGULAR PURCHASE ORDER?

To find a balance on any type of purchase order:

  1. Departmental Users Menu
  2. Accounting Access Menu
  3. Organization Budget Status Form – Enter your index and click on the Next Block button in the tool bar.
  4. Under the Options (left frame) click on the words Organization Encumbrances
  5. Find the purchase order you want by scrolling up and down in this form.
  6. After locating your purchase order, under the Options (left Frame) click on the words Query Detail Encumbrance Info.
  7. The balance shows in the middle top of the form, just below the document number.

HOW CAN I DISTINGUISH A CREDIT INVOICE FROM A DEBIT?

To find out if an invoice is a credit memo, you need to follow these steps:

  1. Departmental Users Menu
  2. Invoicing Menu
  3. User Approval form
  4. Click on the Next Block button in the tool bar.
  5. Click on the Detail button under the invoice you are looking at.
  6. At the top, next to the Document number, is a field C/M. If the field has a “Y”, it is a credit memo. If the field has a “N”, it is an invoice.
  7. Under the Options (left frame), click on the words Query Document.
  8. It will display the invoice. Click on the words Invoice Header under the Options (left frame).
  9. At the bottom right hand corner of the form, you will see “Credit Memo”. If the small block has a checkmark in it, it is a credit memo. If the small block does not have a checkmark, it is an invoice.

WHO DO I CONTACT ABOUT CLOSING OPEN ENCUMBRANCES, EITHER REQUISITIONS OR PURCHASE ORDERS?

WHO HANDLES WHAT VENDORS IN ACCOUNTS PAYABLE?

This changes from time to time. Call extension 3520, and the person answering the phone will direct you to the correct Accounts Payable clerk.

WHY DO THE DEPARTMENTS HAVE TO REQUEST CHANGE ORDERS, WHEN ACCOUNT PAYABLE ALREADY KNOWS WHAT NEEDS TO BE CHANGED? CAN’T ACCOUNTS PAYABLE JUST DO THE REQUEST?

See PO Tolerances, under Quantity Difference or Price Difference.

IS A BUDGET TRANSFER GOING TO INCREASE MY PO? WHY OR WHY NOT?

WHY DO WE HAVE TO CLEAR OUR APPROVAL QUEUE EACH MONTH?

The invoice has to be processed in an open month. Once the preceding month is closed, no transactions with the transaction date of the preceding month will be processed. If you don’t approve the invoice before the month is closed, you will have to disapprove it and the Accounts Payable clerk will change the transaction date to the current month.

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