Determine Funds Availability
Before a commitment to spend is made, the departmental budget manager should determine the availability of funds. These must be available in the account to be charged prior to committing to an expenditure.
Initiate Purchase Order
Fill out and obtain approval on a purchase order in accordance with separate instructions issued by Purchasing Manager for all purchases of $1000 or more. In some cases, a Contract Abstract form with accompanying contract proposal will be required in lieu of a purchase order.
Place order with vendor
Place order with vendor directly or through Purchasing Manager. Be sure to tell vendor to send the purchased items and the invoice to your attention. Check items received to see that they are correct and complete.
Check and forward Invoice
An invoice is a description and the amount of goods or services purchased. Only original invoices will be accepted by Accounts Payable. Duplicate or photo copies are not acceptable unless the department head explicitly certifies on the copy that the original copy was never paid and that payment should be made from a duplicate copy. Compare invoice with original order. Determine that only items received have been billed to you and that prices are correct. No sales tax should be added on purchases of materials installed or used by University personnel for University purposes. Make corrections, if necessary, on face of invoice to remove sales tax. Have authorized person sign (not just initial), date and put full 10 digit account number (XXXXXX-XXXX) to be charged on face of original invoice. Each invoice must be individually approved. Make a copy for your files, and forward the original to Accounts Payable for processing. Make sure the invoice is submitted in time to take advantage of any discounts.
Disbursements may be approved by the departmental budget manager, department head or his or her designee in compliance with the contract policy (See “Special Items"). An approval signature must show at least one initial of the first name and the last name in full. Rubber stamps or copies of signatures are not acceptable. Only one approval signature is required for payments to vendors, prospective employees or other guests of the University due reimbursement. Two signatures–one approval signature and a signature of the person requesting payment are required for reimbursements or authorization for advances to employees. The approval signature must be that of the requester’s superior and should never be the same person as the requester. Only the party directly responsible for the procurement of the goods or services should sign as the requesting employee. Honorariums require the Provost's approval. For approvals related to contracts, see the Provost's contract authorization policy.
Normal Processing – The bulk of the university’s disbursements are mailed after l0 A.M. each Tuesday. Items to be paid by 10:00 a.m. each Tuesday must be submitted to Accounts Payable by 12:00 noon on Wednesday of the preceding week. Payments to your suppliers will be made in a timely manner, with all cash discounts taken, if you submit invoices when received, rather than accumulating them. Payments to vendors are paid according to the invoice terms.
Many vendors allow a “cash discount” if payment is made within a specified period, usually by the tenth day of the month following the date of the invoice. In order for the University to realize the maximum benefit from this practice, it is imperative that all such invoices be submitted to Accounts Payable as soon as possible after departmental receipt and processing. Your budget benefits from the cash discount or suffers the loss from paying too late.
Exception Processing – Sometimes items must be paid prior to the regular Tuesday payment day. In these cases, invoices received for immediate payment will be paid within two days. Since these checks require special handling and disrupt the university’s cash management plan, you are strongly encouraged to keep them at a minimum.
All accounts payable checks should be mailed either by the US Postal Service or the SPO. Pickup at the Cashier’s counter will be available only when delivery time requires it. This procedure should be avoided if at all possible. Only under rare circumstances will Accounts Payable send a vendor or employee check back to the originating department. Sound business practice dictates that the checks be mailed directly by the Treasurer’s Office. If it is necessary to include related correspondence with the check, please include it with the invoice when you submit it for payment. Accounts Payable will enclose it with the check when it is mailed. Packages of goods to return to a vendor should be mailed by the returning department and should not be sent to Accounts Payable.
A credit memo is a notice of credit or refund against prior charges and purchases. It reduces the amount owed on past or subsequent invoices. All credit memos must be promptly approved, account-coded, and sent to Accounts Payable for processing.
Although the dollar amount may appear small, a discount term of “2/10, n/30” provides the opportunity for the university to realize a 36% per year savings in paying its obligations. If the discount is missed due to slow handling of the invoices, the effective cost far exceeds that of the current cost of borrowed funds. Please do all you can to see that your budget and Sewanee take advantage of as many cash discounts as possible.
It is the responsibility of the departmental budget manager to avoid sending invoices for processing which have previously been paid. Please devise your own system to ensure that second submissions are not sent to Accounts Payable.
Do not alter the amount of an invoice for goods or services received. If the amount is overstated because of a math error or incomplete shipment, contact the supplier and request a credit memo. Send the invoice and credit memo to Accounts Payable together and both will be processed to correct the mistake. You may, however, subtract any sales tax charges.
Late Invoice Submission
If an old invoice (more than 30 days) is submitted, please state on an attachment that it has not been paid and the reason for which it is late.
Purchasing Card (University MasterCard) Statement
All Mastercard statements should be submitted to Accounts Payable as quickly as possible after they are received. The cardholder should a) sign the statement, and have his or her supervisor approve it; and b) attach paid itemized (showing details of purchases) receipts, including hotel bills, airline tickets, meal receipts, etc. Be sure to include the purpose of the trip/entertainment in order to comply with IRS requirements for charges $75 or more. All statements should be sent to Accounts Payable before the 10th of the month.
MasterCard should be used for travel and entertainment expenses and minor purchases where invoicing is not possible. Any purchases for equipment or other major items should be coordinated through the Purchasing Office, and therefore should not be charged with the MasterCard. Under no circumstances should an employee charge personal expenses to the corporate MasterCard.
Requests for reimbursement of payment of moving expenses should be sent to the Director of Human Resources for handling in accordance with federal income tax laws.
There are specific IRS rules relating to payments to non-resident aliens (non-employees) when payments are being requested for services: flat amounts for travel or food, honorariums, payments for performances by musicians, athletes, or anything that would be considered taxable. The following forms must be received before payment can be processed:
- Form 8233 “Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual”
- U.S. tax identification, copies of visa and passport
- Additional Statement (for certain professions), if applicable
Having the appropriate tax form submitted with the request for payment would be ideal, but if that can not be accomplished, it will be necessary for us to request the form from the payee to determine taxability of the income before a check can be written. Appropriate taxes must be withheld from the check and transmitted to the IRS, if applicable. As you can see, there could be a delay in getting the check processed.
Any requests for payments to which this rule would apply should be promptly sent to Accounts Payable to allow them to determine the taxability and proper withholding, if appropriate. If you have questions, you may call:
- Connie McBee, Accounts Payable Manager: ext. 1306
- Cindy Greer, Accounts Payable Specialist: ext. 1771
Because of the above IRS regulations, please expect payments to nonresident aliens to be delayed until the necessary paperwork is obtained.
Personal Vehicle Reimbursement - Non-Employee Only
The purpose of the Personal Vehicle Reimbursement Form is to initiate payment to non-employees for use of their personal vehicle while on University business. Expenses are reimbursed on a rate per mile basis, which is set annually. This reimbursement rate is designed to be sufficient to cover gas, insurance, and general upkeep of the automobile. University insurance does not cover non-employees while using personal vehicles on University business.
Request for Payment (Form 19)
The purpose of the Request for Payment–Form 19 is to initiate payment of advances (indicate destination and dates of trip), honoraria and awards, refunds, petty cash reimbursement (attach receipts), and similar transactions where a document (such as an invoice) is not available. Please use the original document if one is available. Please note that personal reimbursements require two signatures, one from the requester and one from his or her supervisor. All receipts should be attached. Travel advances must be approved by the individual’s supervisor. Submit a Travel and Business Expense Report promptly upon returning from your trip in order to clear the advance.
Journal and magazine subscriptions are often billed on a renewal form which must be returned to the vendor. This is one situation wherein approval should be made on a photocopy of the invoice (renewal notice) so that the original can be sent to the vendor. Both the approved photocopy and renewal form should be submitted to Accounts Payable for processing.
Travel and Business Expense Reports
When traveling on university business, you may request a travel advance for your estimated expenses. Requests should be submitted on a Request for Payment Form-Form 19. This request requires two signatures–yours and your supervisor’s. All travel advances should be submitted to the Accounts Receivable Department. You will be given a Travel and Business Expense Form to complete and return when your trip is finished. When your approved expense form is turned in to Accounts Payable, with your itemized (showing details of purchases) receipts attached, your office budget will be charged for the actual expenses and any moneys owed to you will be reimbursed. Travel advances need to be cleared within five days of your return.
Travel expenses without an advance may be submitted for payment using the same Travel and Business Expense Form and itemized (showing details of purchases) receipts. Reimbursements are processed by Accounts Payable via direct deposit. Direct Deposit forms are available online or you can request one from Accounts Payable.
Remember to keep copies of your expense reimbursement requests.
Please note that the Internal Revenue Service requires that you provide information on the amount, time and place, attendees, and business purpose of requests for reimbursement for travel or entertainment.
Itemized (showing details of purchases) receipts with documentation regarding purpose and attendees are required. Without proper documentation, the IRS can deem the reimbursements to be taxable income to the payee.
The general policy of the University is to not reimburse an employee for personal entertainment and alcoholic beverages while traveling on University business. Per diems are not paid. Certain expenses are reimbursable for the entertainment of special guests of the University. Your supervisor will make the determination if entertainment of guests is allowable, but the business purpose and attendees must be documented.
A vendor statement is a listing of charges and credits transacted with a given vendor for a period of time, normally one month. Accounts Payable does not pay from vendor statements except for certain vendors who bill by monthly statement. The departmental budget manager should utilize the statement of account to check the accuracy of invoice billings, payments and other credits. All statements should then be sent to Accounts Payable for review and vendor communications.
Payment for personal services
With rare exception, payments for services rendered by University employees and University students must be added to the individual’s paycheck. Accordingly, no requests should be made of Accounts Payable to pay an employee or a student for services rendered unless independent contractor status has been determined. All requests for service compensation should be addressed to the Director of Human Resources, must be signed by the employee or student, and must be approved by the employee's department head.
Independent Contractor Payments
The following factors will assist in determining independent contractor status. An independent contractor:
- The permanency of the relationship
- The degree of skill required
- The worker's investment in equipment or materials
- The worker's opportunity for profit or loss
- The degree of alleged employer's right to control the manner in which the work is performed
- Whether the service rendered is an integral part of the alleged employer's business
If in doubt, request a determination of contractor status by the Assistant Treasurer who will make a determination in consultation with Human Resources.
Requests for payment to independent contractors should be submitted to Accounts Payable. Approved methods for requesting payment are copies of contract, invoice, or Request for Payment (Form 19). A performer must accept our check to contract for a University function. Employees may not pay contractors for services rendered through their individual travel advances, petty cash vouchers, or employee reimbursements.
When arranging for services with an independent contractor, call extension 1306 or 1771 to see if all necessary tax information is on file. If not, the contractor will be required to complete a W-9 tax form and because of the 2012 State of Tennessee Employment Act, a copy of their driver's license is also required.
Include this paperwork with the request for a check. Please do not send tax information and pay request separately. Please include the payee mailing address on all requests.
Failure to follow the procedures may cause delays in getting the vendor paid timely.
For Chrome River Assistance: