Procedure PC2007 - Pay Vendor Invoice Unless Otherwise Notified
Auxiliary & Business Services - Procurement Services
Policy Steward facilitating procedure: Associate Vice President for Auxiliary & Business Services
Table of Contents:
- AUDIT COORDINATION - FINANCIAL AND PROCEDURAL
- RECORD RETENTION, DISPOSITION AND DESTRUCTION
- CONTACT INFORMATION
- CROSS REFERENCES
In order to expedite vendor invoice payments in time to capitalize on all discounts available, invoices for all eBuy+ transactions and Limited Purchase Orders initiated at University Park locations through the Department of Purchasing Services will be handled in the following manner. Vendor invoices that would result in payments in foreign currency ( CR2067 - Processing Foreign Currency Drafts ) and invoices for consulting services ( CR2008 - Instructions for the procurement and payment of External Consultants ) are excluded from this procedure, as those payments require more specialized processing.)
Upon completion of an eBuy+ transaction, the eBuy+ system generates an email to the purchaser confirming the purchase. If an order is placed with a catalog vendor, a shipping notification email will also be generated to the purchaser. The ordering department will retain the email until receipt of the material or services.
Authorized individuals from the departments are granted access to eBuy+ to confirm the receipt of goods and payment of invoices by Purchasing Services through the eBuy+ Invoice Confirmation function.
If the invoice is UNDER $5,000, the eBuy+ system will generate an email notification to the ordering department that an invoice is available. This email is known as a shipping confirmation. Unless the Ordering Department notifies Purchasing Services otherwise, the invoice is processed for payment according to the terms of the invoice. The invoice will sit in the queue for five days giving the department time to notify Purchasing Services that the invoice should not be paid. On days four and five the department will receive an email warning that the invoice will be paid unless otherwise noted. On day six the invoice will auto-confirm and will be paid according to the terms of the invoice.
If the invoice is for $5,000 or more (face amount, ignoring discounts and freight), normal processing takes place in Purchasing Services. The ordering department must declare confirmation of receipt of goods and authorize payment of the invoice. Email notifications will continue to generate until confirmation and authorization is received.
The cumulative payments to a vendor cannot exceed a variance of the lesser of $1,000 or 10% of the purchase order value without an approved purchase order change form from the department.
If there is a PROBLEM with the order whereby the invoice is NOT to be paid, the ordering department must notify Purchasing Services BEFORE day 5 when the invoice will auto-confirm.
In all cases, after the situation has been resolved, the vendor invoice copy, and any memos or notes concerning problems and resolutions, will be retained in eBuy for auditing purposes.
- If the ordering department receives the invoice directly from the vendor in error, the invoice must be forwarded to Purchasing Services via email ( firstname.lastname@example.org ). Please reference the PO number and PA Code on the subject line or send via inter-office mail (101 Procurement Services Building, Attn: Payables).
- If a department receives an " INVOICE NOTIFICATION " email that they believe does not apply to them, Purchasing Services should be notified immediately so the invoice can be redirected properly. Using this process in no way negates any UCC regulation covering the receipt of damaged material.
- If the ordering department notices that they have not confirmed an invoice within thirty (30) days of receipt of order, they should email Purchasing Services ( email@example.com ) with a note of explanation referencing the eBuy+ order number.
Purchasing Services will, upon receipt of the invoice from the vendor, perform the normal auditing functions on the invoice, assure that the vendor invoice is the correct payee, and determine the dollar amount of the invoice. Purchasing Services will retain the original invoice for one year from date of invoice and then it will be shredded.
If the ordering department notifies Purchasing Services that there is a problem with an order or an invoice, Purchasing Services will investigate and rectify the situation to the satisfaction of the ordering department, vendor, and Penn State.
Accounting Operations receives an electronic file from eBuy+ twice per day listing PO numbers and their subsequent invoice numbers, amounts, and budgets to be charged. The vendor, and corresponding vendor number, is obtained/assigned from the vendor file in the IBIS financial system after Accounting Operations has verified, updated, and created vendor addresses. The payment voucher is approved once all information is verified to be correct for that payment. A check is generated the following morning.
Auditing may examine invoice copies, maintained electronically in Accounting or Purchasing, as required to verify receipt of material.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.
Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management , and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
- Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
For questions, additional detail, or to request changes to this procedure, please contact the Director, Procurement Services.
- Policy AD22 - Health Insurance Portability and Accountability Act
- Policy AD35 - University Archives and Records Management
- Procedure CR2067 - Processing Foreign Currency Drafts
- Procedure CR2008 - Instructions for the procurement and payment of External Consultants
- Blue/White Shredding Program
Date Approved: 10/26/2015
Most recent changes:
- Revision 3 - Dated 10/1/15; Revised to reflect operational changes
Revision History (and effective dates:)
- Revision 2 - Dated 2/16/00; Revised to reflect operational changes and updating of associated forms
- Revision 1 - Dated 10/9/97; Revised to clarify processing and reflect current operations
- Original - Dated 01/13/95