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Advanced Purchasing

Advanced Purchasing. Finance Business Solutions. Shaleen Batra Finance Business Solutions – User Support & Training. Agenda. Foreign Currency Overview Strategic Procurement Treasury Buying Network FX PO – deal FX PO – No deal. What is an Asset? Tagging of UNSW Asset Buying an Asset

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Advanced Purchasing

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  1. Advanced Purchasing Finance Business Solutions Shaleen Batra Finance Business Solutions – User Support & Training

  2. Agenda • Foreign Currency Overview • Strategic Procurement • Treasury • Buying Network • FX PO – deal • FX PO – No deal • What is an Asset? • Tagging of UNSW Asset • Buying an Asset • Create a PO for Asset • Receipt an Asset PO • Scenarios • BUILTIN and TRADEIN • Asset Reports

  3. Foreign Currency Overview Purchase Major Equipment inn foreign currency

  4. FX Purchases (Hedging Required when Purchase > AUD50k)

  5. Strategic Procurement (SP) • What’s the difference between Purchasing and Strategic Procurement? • - Strategic Procurement supports and helps the end-to-end buying of goods/services across UNSW by assessing opportunities, analysing your needs and potential suppliers, engaging suppliers, implementing UNSW wide goods/services contracts, and the continuous management of those suppliers. It also includes high value one-off transactions. • This makes Strategic Procurement distinctly different from Purchasing. Purchasing encompasses the administrative activities associated with raising and goods receipting an order which may form part of a boarder Procurement activity. Purchasing links with Accounts Payable to ensure the payment of goods and services. • When engaging Strategic Procurement? • As early as possible so that SP can define the most appropriate level of support

  6. Strategic Procurement So what they do not do: • create vendors in UNSW's financial systems • complete forex hedging application • manage the customs clearance process • organise payment of invoices • collect signatures for procurement documentation • complete purchase order forms • raise purchase orders • force you to select the cheapest deal • take over your relationship with the supplier

  7. Strategic Procurement So what they do: •   Support preparation of procurement activities / tenders such as determining • approach and preparing tender documentation (requirements, contracts, • etc.) • Facilitate or project manage procurement/tender process • Negotiate with suppliers on commercial, technical, and contractualaspects • and resolve disputes • Draft purchase agreements (contracts) • Provide ongoing post-agreement commercial and procurement support Contact details: http://www.fin.unsw.edu.au/OurServices/FinancialOperations_Procurement_WCH.html Procurement Area and process: http://www.fin.unsw.edu.au/OurServices/Procurement.html • When involved in the project, Strategic procurement : • can support Buyer/researcher through this process • should be CC’ed in order to follow up the project’s progression

  8. Strategic Procurement :UNSW Policy

  9. Treasury The Group Treasury team has the primary objective to ensure that the treasury activities and risks of the UNSW Community are managed in a prudent, cost-effective and comprehensive manner, reflecting the needs of all UNSW stakeholders, by means of actively aligning to the strategic objectives of UNSW Finance and the University as a whole. • Foreign exchange risks • Payments, receipts and cash applications • Bank guarantees and letter of credit • Credit risk • Equipment leasing agreements • Banking relationships • Short term liquidity risks • Funding and re-financing risks • Interest rate risks Contact details:https://www.fin.unsw.edu.au/OurServices/FinancialOperations_Treasury_WCH.html About Treasury: https://www.fin.unsw.edu.au/OurServices/FinancialOperations_Treasury.html

  10. Foreign Exchange Risks • Cashflow is impacted by movements in exchange rates • Potential gain or loss from exchange rate can result in a movement of payments and receipts • To hedge a foreign currency deal Treasury Dept needs to be involved • along with the Buying Network

  11. UNSW Head Office (Buying Network) http://www.fin.unsw.edu.au/OurServices/FinancialOperations_Purchasing.html **

  12. FX PO with Deal • Contact Treasury to hedge a deal so that the rates can be locked in • Treasury will send a Foreign Currency Agreed Rate PO Form (FC1) • Complete FC1 form and get approval from Financial delegate • Send the form and all relevant documents to Buying Network • Buying Network will raise the PO Checklist before sending completed FC1 form and documents to Buying Network Check if Vendor is already set up in NS Financials If vendor is set up in the system but is older than 6 months, then bank details should be provided on Vendor’s letterhead Business Unit is clearly written e.g. MEDIC, COMEC, SCTEC. Do not use UNSWA. Buyer Name, Employee ID and contact number are correct Correct description should be written in FC1 form e.g. Ship to Code, chartfields, price etc. Other comments that may need to be written on the PO for the supplier Milestones/Prepayments

  13. FX PO – No Deal

  14. FX PO – No Deal Enter the Vendor Details On Behalf of PO Reference

  15. FX PO – No Deal Enter Line details but not the Chartfields. For multiple line PO enter only line 1 first. Go to Header Details to change the currency

  16. FX PO – No Deal

  17. FX PO – No Deal

  18. FX PO – No Deal

  19. FX PO – No Deal Save and Budget Check

  20. FX PO – No Deal Make sure to check Total amount and encumbrance

  21. Fluctuation in rate Difference of $454 Another PO was raised two days later and there was a difference of $454

  22. Asset Definitions What is an Asset? A physical or non-physical item that generates future benefits beyond 12 months that can be identified and which UNSW has ownership of. An asset can be tangible (like a building) or intangible (such as intellectual property). Types of assets purchased at UNSW include computer, laboratory and plant equipment, etc. Associated costs of a Fixed Asset The cost of a fixed asset includes all amounts incurred to acquire the asset and any amounts that are directly attributable to bringing the asset into working condition.

  23. Asset Definitions Directly attributable: • Delivery, freight costs • Costs associated with acquiring the asset such as stamp duty and import duties • Costs of installation of the asset (installation and labour costs) • Professional fees, such as legal fees and architects' fees (building, land) Assets Help Sheet Not Directly attributable: • Training • Maintenance services • Warranties

  24. Asset Definitions • Up until December 2013, only equipment equal or greater than $5,000 were listed on the UNSW Assets Register as capitalised assets. • From January 2014 onwards, equipment equal, greater than or less than (if you wish to track) will be listed on the UNSW Assets Register for tracking purposes, as follows: • Equipment equal or greater than $5,000 is to be listed on the Register as capitalised (depreciated) assets. • Equipment under $5,000 is to be listed on the Register as non-capitalised (expensed) assets for tracking purposes. This is up to the Business Unit to decide if they wish to track the equipment or not.

  25. Artwork • Paintings • Prints • Ceramics • Photographs PO Item Categories

  26. Computer Equipment • Servers • Mainframes • Monitors • Base Units • Modems • Multi-controllers • Notebooks • Laptops • PCs • Desktop printers • Plotters • Barcode Readers • Image Device Scanners • Digitisers • Sensitisers • Interface Cards

  27. Lab & Plant Equipment • Tractors • Farm Machinery • Mowers • Maintenance Machinery • Forklifts • Trailers • Laboratory • Generators • Pumps • Surgical Equip • Gym Equip • Aeroplanes • Music instruments

  28. Other Equipment Office Equipment Audio Visual Photography • Camera • Lenses • Floodlights • Processing equip • Projectors • TV • Video • Microphones • Camcorders • Editing equip • Studio equip • Photocopiers • Fax Machine • Air Conditioning Unit • (Portable) • Fridge** • Shredders **only for office use not for research purposes

  29. Motor Vehicles • Cars • Motor Bikes • Quad Bikes • Vans PO Item Categories Motor Vehicles for transportation only. Motor Vehicles for research purposed should be categorised under lab/plant equipment.

  30. Important note • Software – Not an asset. Expense A/C 5260 is used • Software included in a package – It is an Asset. Use Software category • Computer accessories are not included in assets • Furniture – No longer regarded as an asset. Expense A/C 5600 is used • Direct Associated cost should be included in the total cost of a capitalised asset. e.g. freight, installation, tax & levy. • Additional insurance cost, annual fee, training & maintenance should not be included in Asset • Only the cost of acquiring the asset should be added not the cost of maintenance

  31. Asset Tags Tags are issued in advance of the purchase of an asset Issued by Asset Management Unit (AMU) Issued to Business Units (Faculties, Schools & Divisions) Issued to one designated staff in each area Contact designated staff in your dept to get a tag Tags should be affixed to assets at the time of receipt Apply the tag in the front of the equipment

  32. Assets should ONLY be bought using a Purchase Order. Purchase Orders for assets can be created via eProcurement or Purchasing. should not be ASSETS Purchased Unless they are bought using a Purchase Order, there is no way of entering the Asset Management information e.g. owner, tag no, serial no, asset location, dept etc. Contact Asset Management Unit for more information. Buying an Asset

  33. Buying an Asset -Prepayment Under Review Payment in advance for goods or services Create a PO – Standard process Contact AP and provide details for prepayment Receipt when goods are physically received or commissioned* Notify AP via email and write prepayment in the subject line *Process by which equipment (installed or near completion) is tested to verify if it functions according to the requirement

  34. Asset Purchasing Process Is this owned by UNSW? *1 Have all costs been identified? Is the total cost ≥ $5k (excl GST Raise Assets PO Check if the correct category code is used Submit PO for approval Y Y Y N N N Code to relevant Expense accounts *2 Prepayment? Need to identify all costs *3 Do you want to track it? Contact AP Y Y N N Code to relevant Expense accounts *4 Send PO to supplier Examples: *1- Research Equipment, lab Equipment, computer equipment & etc *2- Consumable goods, Services related costs & etc *3- Inclusion of all parts/components costs of the asset, Freight cost, installation cost & etc *4- Furniture, equipment not owned by UNSW, equipment <$5k (not tracked) etc

  35. Create a PO for Asset Asset Category will default the Asset Account code and Profile ID. DO NOT CHANGE PO Item Categories

  36. Manufacturer ID Purpose: To associate PO lines to an Asset Identifies: Components, built-ins, upgrades, Trade-ins

  37. Asset PO - Description Description of the Asset

  38. Description & Comments • Description field is limited - only 30 characters will display to Assets Management. (incl. spaces, commas, etc) • Ensure the name of the asset is entered in the description field first • Attachments – scan and attach quotes, supporting documents, etc.

  39. Asset PO - Comments

  40. Asset PO - Category Refer to PO Item Categories

  41. Asset Category When a Purchase Order for Asset is created, the buyer must select an Asset Category This defaults the appropriateAsset account & Profile ID Purchase will only be receipted as an Asset if a proper Asset Category is selected Most Important

  42. Manufacturer ID

  43. Asset PO - Distribution

  44. Asset PO - Distribution Asset Account Code has been defaulted according to the Asset Category. Please DO NOT change Account Code Enter FUND, Program/Class & PROJECT and then click Asset Information Tab

  45. AM Unit & Profile ID Defaults from Category Code

  46. Additions – Existing Asset Core Asset Trade-in Built-in Component

  47. Components Component A Core Asset Component B Example: MacBook Pro – Core Asset Keyboard – Component A Delivery Fee – Component B

  48. Built-ins Core Asset Built-in It enhances the Core Assets capabilities/ functionalities or extends the useful life of an asset Example 1: Pump of an existing Cryogenic chamber Additional freight costs for a piece of an equipment that has already been receipted and made an asset Example 2:

  49. Trade-ins Core Asset Trade-in This refers to the sale of one asset, with the proceeds to this sale going towards the purchase Price of the new asset. New asset tag to be used for the new equipment.

  50. Asset Component Scenario

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