Introduction to Accounts Payable

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. Fiscal Year 2014 • Accounts Payable disbursed $669,817,704 in expenditures. • AP paid 274,054 invoices • AP issued 117,140 checks • Initiated 947 wires • Processed 838 ACH transfers

5. UNIVERSITY BUSINESS & ACCOUNTING SERVICES DIVISION ACCOUNTS PAYABLE DEPARTMENT Manager Jennifer Collins Assistant Manager Andre Simmons Senior Operations Specialist Mark Kent Business Manager II Kim Collins Operations Assistant Paula Fitzgerald Senior Operations Supervisor Hall Gibson Senior Operations Supervisor Patricia Sims Senior Accountant Elena Williams Operations Specialist I Brooke Farmer Operations Specialist I Karen Grubbs Operations Assistant Quincy Kerbo Accountant Sarah Garner Operations Specialist I Joseph Segars Accountant Purvi Patel Operations Specialist I Scott Bonifield Operations Specialist I Shakira Morse Operations Specialist I Jing He Accountant Kathleen Green Operations Specialist I Kacey Humphries Operations Specialist I Westley Bargo Senior Operations Specialist Joy Carrell-Miller Operations Specialist I Kendra Hull Operations Specialist I Alicia Castleberry Operations Specialist I Marilyn Smith Operations Specialist I Perry Humphreys

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 • Account number changes (note: if changing to a restricted account, get C&G approval prior to contacting AP)

7. Vendor Creation/Additions/Revisions • Accounts Payable and Procurement function from one unified vendor database. • Vendor creation requires verification in the IRS TIN Matching Program and clearance from the list of blocked payees maintained by the Office of Foreign Assets Control before the vendor will be available for use. • Vendors have the option to register online at: http://vendors.uga.edu • Original Vendor Profile form can still be submitted: http://www.busfin.uga.edu/forms/vendor_profile.pdf • For foreign vendors/payees, a W-8BEN (individuals) or W-8BEN-E (entities) is required.

8. Purchase Requisitions and Check Requests • Two methods 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. This is important for tax reporting (1099’s,) open records requests, various other reporting requirements. • 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, commitments are identifiable by reference numbers that start with PM.

11. Purchase Requisitions • If no criteria exists to create a commitment, the purchase requisition will flow to Procurement or it will create a purchase order once approved by Travel & Encumbrances (unless the funding source is a restricted account that requires Contracts & Grants approval-this step is automatically built into the UGAMart approvals workflow.) If Contracts & Grants approval is required, the requisition will flow to Procurement or generate a purchase order after Contracts & Grants approval is obtained.

12. Purchase Requisitions When Procurement processes a requisition, a purchase order is generated. The purchase order has an identifying number that will begin with “E.” Funding for a purchase order is obligated or encumbered. An encumbrance sets the money for the order aside from your account’s 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. Life Cycle of a Purchase Order Payment Purchase requisition flows along the approval path established for department Purchase requisition is initiated in UGAMart Travel & Encumbrances Procurement Review/Action Funds are encumbered in Financial Accounting System AP receives invoice & enters in UGAMart Contracts & Grants Review (only certain object codes) PO Issued Matching Exceptions (no two or three-way match, quantities/amounts outside of tolerances). UGAMart checks for match Payment flows into Batch Entry

14. 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 an unrestricted 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.

15. 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.

16. 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

17. 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

18. 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)

19. Check Requests • The second purchasing method that routes through Travel & Encumbrances is the check request. • Check requests are reviewed to make sure the correct object code has been assigned. • Check requests are generated to cover an expenditure that was established on a “charge” basis with the vendor or to reimburse an individual for funds expended. • Encumbrances are not generated from check request expenditures. • Procurement also reviews all CR’s: • CR’s over $10,000.00 • CR’s for services of $2500.00 or more • Reimbursements to individuals that include reimbursement for an item over $99.99 (travel excluded). Typically, items with a value of $100 should be procured via a purchase request.

20. Life Cycle of a Check Request Payment Check request flows along approval path established for account or dept Campus user initiates check request in eCheck system Restricted accounts Contracts & Grants International Tax Coordinator Review Foreign Payee Travel & Encumbrances Item > $99.99 CR > $10,000 Payments to Individuals Payments to Companies Procurement Procurement Individuals Instate Travel Out-of-State Travel Vendors A-L Vendors M-Z Petty Cash & Registrations Batch Entry

21. 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.

22. 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

23. 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

24. 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 that received a fee for services rendered.

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

26. Check Writing Process Check Request Batches from Batch Entry Purchase Order Payments from Batch Entry Batch Jobs Process Check File Produced (combining same vendor remit to addresses) AP prints checks

27. Purchase Order Payment SectionHall Gibson, Supervisor • Once a purchase requisition is processed by Procurement and a purchase order has been created and encumbered, the next step will be payment to the vendor. • 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.

28. 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: • A receiving report is not required for AP to make payment to the vendor on orders $2499.99 or less THAT PROCURE GOODS ONLY. • For orders that total $2500.00 or more, a receiving report is required for payment to be processed. • For ANY order REGARDLESS OF DOLLAR VALUE that procures SERVICES, a receiving report is required. These will be purchase orders with the object code of 72760 or an object code that begins with 75.

29. How to Create a Receiving Report in UGAMart • Demo http://www.busfin.uga.edu/ugamart/UGAmart%20guide%20to%20Receiving_Final%20Feb%202012.htm

30. Comments • The comment feature in UGAMart is essential. This feature allows all communication to be documented and it is 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.

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

32. How to Add Comments in UGAMart Demo

33. Who handles which vendors? • A-F: Kyunghee “Brooke” Farmer (kbfarmer@uga.edu) • G-M: Kendra Hull (kendra28@uga.edu) • N-R: Jing He (jihe@uga.edu) • S-Z: Joseph Segars (josephs@uga.edu) • Airgas, Apple, Bio-Rad, Dell, Sigma-Aldrich, Canon, Gordon Documents, Ikon/Ricoh, Sharp, Docuteam, Xerox : Marilyn Smith (marilyns@uga.edu)

34. Check Request Processing SectionPatricia Sims, Supervisor • Review/Audit check requests payable to individuals, research participants, travelers, petty cash custodians, and companies. • Verify correct approvals have been obtained, proper invoices and other applicable documentation is attached. • Cancel and reissues checks. • Process ACH and Wire Transfers

35. Payments to Individuals

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

37. 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: susanc@uga.edu • Website: www.busfin.uga.edu/payroll/itc/index.html

38. 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.

39. 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.

40. 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.

41. 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 $10,000), 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.

42. 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: http://www.busfin.uga.edu/forms/Research_Participant_Receipt_under.pdf • Payments over $100: http://www.busfin.uga.edu/forms/Research_Participant_Receipt_over.pdf • Research Participant Incentive Payment Procedure: http://www.policies.uga.edu/FA/nodes/view/866 • Research participant payments should utilize the object code 72763 regardless of dollar value.

43. Payments to Students • Federal student aid regulations require all educationally-related financial assistance which UGA students (undergraduate and graduate) receive to be considered and reflected on their financial aid awards. Educationally-related financial assistance includes any benefits provided to students because of their enrollment in post secondary education such as grants, scholarships, waivers of tuition and/or fees, fellowships, assistantships, stipends, and awards. These payments must be processed through the Office of Student Financial Aid.

44. Payments to Companies

45. Vendor Payments • Original invoices should accompany check requests to support the expenditure. Invoices should be readable. Proforma invoices are not acceptable. • UGA will remit payment to the company’s legal business name.

46. Wire Transfers • For International Payments Only • Bank name & address • Account number • Account name • Swift code or ABA# • Type of currency (foreign or US Dollars)

47. Employee/Independent Contractor • The IRS dictates that if an individual is performing work for UGA that is defined as an employee/employer relationship, UGA must pay that person through Payroll and withhold the proper taxes. • Decision Tree: http://www.busfin.uga.edu/forms/Emp_Indep_Contractor.pdf • Call Payroll or Accounts Payable if you need assistance with making the decision. • If the individual has been employed at UGA beforeand is performing services that can relate back to the prior position, more than likely the individual will have to be paid through Payroll.

48. Food Purchases • Reference Chart for Food Purchases: http://www.busfin.uga.edu/accounts_payable/Food_Entertainment.pdf • Policy for Purchasing Food and Business Related Entertainment: http://askuga.uga.edu/default.asp?id=1691&Lang=1&SID= • Reference chart documents what funding sources should be utilized for each purchase. If you are purchasing food, make sure it fits into one of these categories! • Elena Williams (lenadroz@uga.edu) reviews all food purchases for compliance with the policy.

49. Travel http://www.busfin.uga.edu/accounts_payable/travel.html

50. Travel Policy • Travel policy must be adhered to by both employees AND non-employees (this is part of our accountable plan that keeps travel non-taxable) • Policy is located at: http://www.policies.uga.edu/FA/nodes/view/989/Employee-Travel-Effective-July-1-2014 • Expenses must be filed for reimbursement within 45 days from the conclusion of the trip or they are subject to becoming taxable income.