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Introduction to Accounts Payable

Introduction to Accounts Payable

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Introduction to Accounts Payable

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  1. Introduction to Accounts Payable Andre Simmons, Assistant Manager Accounts Payable

  2. Role of Accounts Payable • Accounts Payable is responsible for examining all accounts, claims, and demands against the University of Georgia, and for making payment of all the University’s legally incurred obligations for materials and services other than payrolls. • No payments are to be made unless there is money in the Treasury legally allocated for such payments, and until the Accounts Payable Department has been presented with supporting documents and invoices which have been reviewed and found to be correct.

  3. Regulating Entities Federal State Board of Regents (Delegates Procurement function) State Accounting Office Department of Revenue (Escheatment of Unclaimed Property) • Internal Revenue Service (1099 reporting, TIN matching/B-Notices, Accountable Plan, Employee/Independent Contractor relationships) • US Treasury Department (OFAC)-maintains a Specially Designated Nationals List that we must review • Sarbanes-Oxley-Requires certification and attestation of a public company’s internal controls.

  4. International Tax Coordinator,Susan Caldwell UGA must comply with Federal tax and immigration regulations when processing payments to foreign nationals. • Phone: (706) 583-8193 • Fax: (706) 542-6779 • Email: • Website:

  5. Fiscal Year 2012 • Accounts Payable disbursed $635,222,995 in expenditures. • AP paid 254,731 invoices • AP issued 120,915 checks • Initiated 1018 wires • Processed 633 ACH transfers

  6. Travel & Encumbrances Elena Williams, Supervisor • Administrative Functions • Printing Checks Daily • Approving & Encumbering Travel Authorizations • Vendor Creations in the Unified Vendor Database • Review and assign appropriate object codes to UGAMart requisitions and check requests

  7. Vendor Creation/Additions/Revisions • Accounts Payable and Procurement now function from one unified vendor database. • Vendor creation requires approval from both Accounts Payable and Procurement before the vendor will be available for use. • Vendors now have the option to register online at: • Original Vendor Profile form can still be submitted:

  8. Purchase Requisitions and Check Requests • Two “vehicles” for procuring goods flow through Travel & Encumbrances. • Purchase Requisitions: Items that have to be “procured” through the Procurement Office. • Check Requests: “Charge” commitments

  9. Purchase Requisitions • Purchase requisitions come to Travel & Encumbrances for 2 things: • Review object code assigned by department and modify if needed. • Review free balance in account to verify funding exists to support the purchase. Account/Budget Check messages and warnings appear under the history tab in UGAMart. Requisitions will not be approved if funding does not exist.

  10. Purchase Requisitions • “Pre-encumbrances or commitments” are only established if the requisition can be readily identifiable as construction or is for a purchase greater than $50,000. These purchase types often require a lengthy bid process. On status reports, these commitments are identifiable by reference numbers that start with PM.

  11. Purchase Requests • If no criteria exists to create a commitment, the purchase requisition flows to Procurement once approved by Travel & Encumbrances. If the funding source is a restricted account and one of the object codes that Contracts & Grants needs to approve before a purchase order is created, the requisition flows to C&G prior to Procurement.

  12. Purchase Requisitions After Procurement processes the requisition, a purchase order number will be generated. This purchase order number will begin with “E” and the funds for the purchase order will be obligated or encumbered. An encumbrance sets the money for that order aside from your account free balance. The money is held until the goods/services are received and payment is issued. On your status report, these obligations will show under the encumbrance section and will begin with a “PE.”

  13. Liability • The money obligated for a purchase order will remain encumbered until a payment is processed for the order or until action is taken by Procurement to relieve the encumbrance. • If the end of the fiscal year comes and money is still encumbered for a purchase order on a state account, the money will roll into “Liability.” When a PO is transferred into the liability account, a JV will appear on your final fiscal year end account status report. Once that JV is completed, this encumbrance will no longer show on your status report. That does not mean the encumbrance has been paid.

  14. Object Codes • Object codes are how we classify expenditures at UGA. • Object codes allow us to report taxable payments to the IRS. • Object codes allow us to report travel expenditures on the continuous audit for the State. • Object codes allow UGA to query spending information for open records requests and inquiries from the Board of Regents and other various entities.

  15. Common Object Codes for Purchase Requisitions • 71400-Cleaning items, food, educational items, single book (not part of a set) • 71410-General Office Supplies: Toner, Pens, Copy Paper, File Folders • 71430-Laboratory/Research Supplies & Materials: Beakers, test tubes, chemicals, medical/hospital supplies like gloves • 71500-Maintenance • 74300-Non-Inventoried Equipment with costs $100-$2999.99: Furniture, file cabinets • 74306-Computer & Peripherals with costs $100-$499.99: Monitors, computers

  16. More common object codes for Purchase Requisitions • 74328-Computer and Computer Peripherals with costs $500.00-$4,999.99 • 74308-Equipment with costs of $3000-$4,999.99: Furniture, freezers • 74318-Electronic audio/visual equipment and photographic apparatus costing $500.00-$4,999.99

  17. More common object codes for Purchase Requisitions • 84320-Equipment purchases for items over $5000.00 • 84326-Computer and computer peripherals with a cost of more than $5000.00 (servers, etc)

  18. Check Request • The second “vehicle” that comes through Travel & Encumbrances for object coding is the check request. • Check requests are normally generated to cover an expenditure that was established on a “charge” basis with the vendor. • Encumbrances are not generated from check request expenditures. • Procurement also reviews all CR’s over $10,000.00 and all payments to individuals that include reimbursement for an item over $99.99 (travel excluded)

  19. Common Check Request Object Codes • 71430-Laboratory/Research Supplies • 71500-Repairs • 72712-Conference & Workshop expenses (expenditures in connection with holding a conference/workshop.) Examples would be room rental, audio visual charges • 72714-Guest/Visitor travel: Travel for individuals not employed by UGA or receiving a fee for services rendered associated with the trip. Examples include prospective employee travel, speaker travel expenses when the speaker is not receiving a fee/payment.

  20. Common Check Request Object Codes • 72722-Dues & Memberships. Requests for payment should be accompanied by a letter of justification approved by the Department Head/Director and the cognizant Dean or Vice President or Senior Vice President. • 72723-Subscriptions • 72725-Registration Fees • 72732-Freight or Express Shipments: All payments to UPS and FedEx

  21. Common Check Request Object Codes • 72752-Tests & Analysis • 72760-Other Services: Examples include photographer, musician, proofreader, catering services. These can be individuals or companies. • 72763-Research Participant • 74200-Printing: Bel-Jean, FedEx Kinkos • 74201-Advertising • 74203-Advertising-Job Postings

  22. Common Check Request Object Codes • 75210-Reimbursable expenses for non-employees that did receive a fee for professional services (architect, electrician, doctor,etc) associated with their trip. Examples would be lodging and meal expenses for a guest speaker that received $500 for giving a lecture. His meal and lodging expense would be coded 75210. • 75215-Mileage reimbursement for non-employees.

  23. Common Check Request Object Codes • 76910-Internet Service & Pager Service • 76930-Land Lines, Long Distance Charges, Two way radios • 76932-Cellular charges

  24. Purchase Order Payment SectionDavid Manley, Supervisor • Once a purchase requisition works it’s way through Procurement and a purchase order is created and encumbered, the next phase will be payment to the vendor once the goods/services have been received. • PO Payment Section Responsibilities: Match/Review/Approve invoices for payment within UGAMart. • Review outstanding encumbrances and initiate inquiries to determine if purchase order should remain open or be closed.

  25. When to Create a Receipt • If your purchase order is set up to be delivered to Central Receiving, you DO NOT have to complete a receiving report. • If your purchase order is set up to be delivered direct to your department, you will need to create a receiving report before payment can be processed.

  26. How to Create a Receiving Report in UGAMart Demo

  27. Comments • The comment feature is essential in UGAMart. This feature allows all communication to be documented and it effective for correspondence when utilized correctly. • Comments feature can be utilized to send Accounts Payable copies of invoices that have been received by the end user department (sometimes invoices are included with shipments). • Comments feature can be utilized to correspond about PO balances, revisions needed,etc.

  28. Comments • When using the comment feature, you have to indicate a recipient. You have the ability to assign multiple recipients to your message.

  29. How to Add Comments in UGAMart Demo

  30. Who handles which vendors? • A-E: Carol Kainz ( • F-M: Hall Gibson ( • N-S: Jing He ( • T-Z, Ikon/Ricoh, Sharp, Docuteam, Staples: Kathleen Green ( • Airgas, Bio-Rad, Dell, Sigma-Aldrich: Marilyn Smith (

  31. Check Request Processing SectionPatricia Sims, Supervisor • Review/Audit check requests payable to individuals, research participants, travelers, petty cash custodians, and companies. • Verifies correct approvals obtained, proper invoices and other documents are attached. • Handles canceling and reissuing checks. • Processes ACH and Wire Transfers

  32. Payments to Individuals

  33. SSN Removal • Effective January 2013, the eCheck/eTravel System will no longer use social security numbers. • Rather than using SSNs, each record will be identified by a unique vendor number (VN) maintained within the Unified Vendor Database. • VN’s will only be used within procurement and payables processes.

  34. Types of Payments to Individuals:Refunds • Refunds for money paid into a revenue account. Example would be a non-employee that paid for a registration to a conference that UGA was hosting. If the attendee had to cancel and we needed to refund their registration money, this would be a refund. Refund object codes should begin with 4. There is no supporting documentation required to accompany the check request. Adequate description of the expense should be detailed in the description section of the check request.

  35. Types of Payments to Individuals: Cash Reimbursements • To reimburse an individual for a purchase made on behalf of the University. Receipts are required to document the expense and any purchase for an item over $99.99 requires Procurement review and approval. An example would be an employee that purchases ziploc bags to be used in a research lab. AP would require a check request with the receipt from where the ziplocs were purchased as supporting documentation. Adequate description of the charge should be detailed in the description section of the check request.

  36. Types of Payments to Individuals:Entertainment Charges • On occasion, an employee will pay for university related entertainment charges/meals (activities that support the underlying University purpose such as promoting good will, donor cultivation, etc.) and seek reimbursement. Alcohol cannot be purchased using a University account. These check requests for reimbursement should be accompanied by a completed University Related Business Entertainment Form and an itemized receipt. Utilize the Food Reference Chart on Ask UGA to determine appropriate funding sources. Object code should be 71401.

  37. Types of Payments to Individuals: Honoraria Payments • A honoraria is a payment to a non-employee in recognition of acts, awards, or fees and/or expenses for services rendered to the university. • Examples include guest lecturers, consultants (for agreements under $5000), and reimbursable travel expenses • Honoraria form must contain original signature of recipient if there is not an invoice to accompany the request. Date of service(s), current address, and social security number must be included on the form.

  38. Types of Payments to Individuals:Research Participants • Classified into two groups. Payments $100 and under and payments over $100. Payments $100 or under do not require collection of the individuals social security number. Payments over $100 do require the participants social to be collected and provided to Accounts Payable. • Research Participant Payment forms should accompany the check request. • Payments $100 and under: • Payments over $100: • Research Participant Incentive Payment Procedure: • Research participant payments should utilize the object code 72763 regardless of dollar value.

  39. Payments to Companies

  40. Original invoices should accompany check requests to support the expenditure. Invoices should be readable. • UGA will remit payment to the company’s legal business name.

  41. Electronic Check Request System Demo

  42. Travel

  43. Travel Policy • Changes to the UGA travel policy become effective November 1, 2012. • Travel policy must be adhered to by both employees AND non-employees (this is part of our accountable plan that keeps travel non-taxable) • New policy is located at:

  44. Who governs Travel? • State Accounting Office and the Office of Planning and Budget are responsible for establishing the Statewide Travel Regulations. This responsibility was assigned to these organizations through House Bill 293, which was passed into law during the 2005 legislative session.

  45. New changes • Travelers should submit travel expenses for reimbursement within 45 days of completion of travel. Previously, the requirement was 60 days. • In relation to air travel, if there is a charge for checking luggage, reimbursement will be limited to 1 piece of checked luggage. In the event additional bags are needed for business purposes, requests for reimbursement should include a written explanation.

  46. New changes continued • Travelers can upgrade from coach to business class on international flights where the portion of the flight that is non-stop exceeds 10 hours in duration. Written pre-trip approval for the additional expense is required. The 10 hour duration does not include any time spent in between flights during a connection. • Changes to meal per diems as we will outline in a few slides.

  47. Instate or Out-Of-State Travel? • Travel more than 50 miles from the state line of Georgia is considered out-of-state travel and requires a travel authorization (travel authority) to be submitted to the Travel & Encumbrances office prior to the trip taking place. International travel requires the approval of the Office of International Education additionally. Programming has been established in the electronic check request system to obtain these approvals.

  48. Travel Authorities • Travel authorizations are required for out-of-state travel for insurance purposes. This authorization provides the University with documentation that this is a pre-approved business trip. The TA also allows funding to be obligated (or encumbered) and set aside from an account so the traveler will have funding to cover his/her reimbursable expense. • On a status report, travel encumbrances for employees will start with a T followed by 7 numeric digits.

  49. Travel Authorities • Travel authorities can also be submitted for non-employees but only for the amount of airfare that is being direct billed to UGA by one of UGA’s preferred travel agencies. All other non-employee expenses must be handled through the reimbursement process via honoraria. • On a status report, travel encumbrances for non-employees will start with a H followed by 7 numeric digits.