Purchase to Pay Expenditure Cycle

The expenditure cycle begins with a decision to make a purchase and ends when the payment is made for the goods or services purchased. The department with the need begins the purchase to pay process. The department is also responsible for the steps including but not limited to budget checks, creating requisitions, receiving goods, etc. The Office of Contracting & Procurement handles the approval of the requisition and conversion to a purchase order. The vendor’s role is to provide quotes, goods/services, and invoices to the various departments. The Accounts Payable department will receive the invoice directly from the vendor and process payment.

The Expenditure Cycle document is a graphical representation of Rowan University’s purchase to pay process. It outlines the full procurement life cycle including creating the requisition, budget review, the creation of a purchase order, receipt of the item, and final payment to the vendor. Select the Expenditure Cycle button below for a printable version:

Purchase to Pay Flyer

Invoice Process

Department

1. Request PO or Standing Order from the Office of Contracting & Procurement (see Procurement website for procedures)
2. Place the order
3. Provide PO to the vendor and request it be referenced on the invoice
   Reminder from the AP policy: The University requests that vendors send invoices referencing a valid purchase order directly to Accounts Payable via the dedicated inbox invoices@rowan.edu. When the department receives an invoice directly from the vendor, it is the responsibility of the department to submit that invoice to Accounts Payable (email to invoices@rowan.edu with the PO number) as quickly as possible and to expedite any other steps necessary to process the invoice for payment. 
4. Receive ALL goods/services in Banner at the time the goods arrive/services are performed

Accounts Payable Department   

1. Distribute the invoice/s from invoices@rowan.edu inbox to the appropriate AP personnel
2. Audit the invoice/s
3. Process the invoice/s in Banner via the PO
   Reminder: AP does not process payment from quotes, order confirmations, performa invoices, statements, etc. Additionally, AP only utilizes valid Rowan purchase orders and standing orders and will not process from requisitions or receiver codes.

Banner System

1. Issue an automated workflow notification to the requisition creator on all processed documents (invoice, Non-PO, travel encumbrance, etc.)
2. Complete a three-way match (PO, invoices & receiving code) on purchase orders, not standing orders
3. Release payment on the payment due date or once the three-way match is complete if the due date has passed

View PO Activity & Balance in Banner

The Banner form FGIENCD 'Detail Encumbrance Activity' displays detailed transaction activity for an original encumbrance entry and all transaction activity against the encumbrance. 

Steps to view PO activity and balance:

1. Open the form FGIENCD (Detail Encumbrance Activity)
2. In the Encumbrance field enter the PO
3. Click Go

• Description (vendor name) 
• Status (open or closed)
• Date Established
• Balance of the PO
• Vendor (Banner ID and vendor name)

Review the following information under the Encumbrance Detail header:
Encumbrance details display each FOAPAL not each commodity

• Fiscal Year
• FOAPAL
• Encumbrance (total amount of the PO, including change orders)
• Liquidation
• Balance

Review the following information under the Transaction Activity header:

• Initial amount of the PO
• Invoices processed
• Credits processed
• Change orders processed
• Closed date & status

Request a change order from Procurement

Banner Procedure - Goods Received / Services Performed

PURCHASE ORDER - One-Time Order

Banner requires a three-way match of the purchase order, goods receipt, and vendor invoice. The purpose of the three-way match is to avoid paying an incorrect and perhaps fraudulent invoice.

Receiving in Banner

In order for an invoice to be paid, receiving must be completed in Banner (9 Administrative Pages) in screen FPARCVD by the end-user. This action should only be performed once the goods/services have arrived and/or have been achieved.

Receive by quantities

• 1 Book at $20.00 - Receive the quantity of 1
• 10 Books at $20.00 - Receive the number of books received

 Note: Change order lines and freight lines will need to be received for payment to be released.

Examples of Incomplete Three-Way Match in Banner

STANDING ORDER - Reoccurring Order

Banner does NOT require a three-way match of the purchase order, goods receipt, and vendor invoice. 

Receiving in Banner

Although Banner does not require receiving to release payment, receiving must be completed in Banner (9 Administrative Pages) in screen FPARCVD by the end-user to document when the goods/services have been received/performed. This action should only be performed once the goods/services have arrived and/or have been achieved.

Receive by dollar amounts

• Yearly service amount $1,000.00 - Receive the dollar amount of the individual services at the time of service
• Yearly supplies amount $100.00 - Receive the dollar amount of the individual supply orders at the time supplies arrive
  
  

Banner Receiving Directions 

Directions on how to complete the Receiving process in Banner (9 Administrative Pages) can be found in the following link: https://irt.rowan.edu/service-catalog/support/training/resources under Receiving - Training Resources called: "Quick Reference Guide"

After Receiving in Banner (9 Administrative Pages), go to screen FOIDOCH of Banner (9 Administrative Pages) to confirm the Receiving Code is complete. All completed Receiving Codes will have a status of " C "

Steps to confirm a receiving code is complete:

1. Go to FOIDOCH (Document History Screen).
2. The Receiving Code should have a status of " C " indicating it is complete.
3. If the status of the Receiving Code is blank, it is an incomplete receiving. See Find and Remove an Incomplete Receiving Code at https://irt.rowan.edu/service-catalog/support/training/resources.
4. The Invoice field should have a status of " A " for approved.
5. If the Invoice field has an " R " next to it, receiving needs to be completed.

Note: Completing receiving in the Banner system does not generate a vendor's invoice for payment. Verify all invoices for the purchase order have been sent to Accounts Payable for processing before requesting to close the purchase order.

Delete Banner Receiving

Banner does not allow completed receiving documents (Y number) to be deleted.

Invoice Documentation

What is an invoice?

An invoice is a document submitted to a customer, identifying a transaction for which the customer owes a payment to the issuer. This document represents an asset of the issuer and a liability of the customer.

 Information typically identified on an invoice:

• Invoice number
• Name and address of the seller
• Name and address of the buyer
• Date of shipment or when services were provided
• Remit to address
• PO number
• A description of the items purchased
• Quantities and total costs of the items purchased
• Any sales taxes owed
• Total owed
• Payment terms

Can invoice documentation be altered?

New Jersey and Florida state sales tax are the only charges that can be deducted from an invoice. If the invoice total is incorrect or a shipping charge was added in error an adjusted invoice or credit memo should be requested from the vendor.

Document security is paramount to businesses sharing information over a network. For an electronic document to be admissible in a court of law, it must be created in a file format that cannot be altered without leaving an electronic footprint.

“Falsifying documents” involves altering, changing, or modifying a document for the purpose of deceiving another person. It can also involve the passing along of copies of documents that are known to be false. In many states, falsifying a document is a crime punishable as a felony.

Which documents are required to be processed by the Accounts Payable department? 

All invoice and credit memo documents will need to be processed in order to have a paper trail of all products shipped to and from the university.

In the case of damaged items, returns, double shipments, etc. all invoices need to be processed in order to be removed from Rowan's accounts. First, the vendor should be contacted by the end user and made aware of the issue. Second, the vendor will send a credit memo for the damaged or returned item. Lastly, Accounts Payable will process the credit against the original PO to remove the charge from the account.

Forms of Payments

The University prides itself in helping the environment “go green” by providing several electronic forms of payment. Suppliers will have the option to select one of the following accelerated payment methods:

ACH (automated clearing house) - Automated Clearing House (ACH) is a secure payment transfer system that connects all U.S. financial institutions. The ACH network acts as the central clearing facility for all Electronic Fund Transfer (EFT) transactions that occur nationwide, representing a crucial link in the national banking system. ACH payment is a type of electronic funds transfer (EFT). ACH is faster than a check but slower than a wire. 

Accounts Payable is responsible for approving, releasing, and funding ACH payments on behalf of the University and for the movement of funds from University bank accounts. The process allows recurring payments to be paid electronically through the Automated Clearing House (ACH) network. Regarding the management of activities and procedures of the Automated Clearing House (ACH), this document is subject to revision in conjunction with the current NACHA Operating Rules and Guidelines, also referred to as ACH Rules. This is the preferred method of payment for vendors, employees and others authorized to do business with Rowan University. Automatic deposit of Rowan University vendor payments is processed by the Accounts Payable department.

Check - A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer. The person or entity writing the check is known as the payer or drawer, while the person to whom the check is written is the payee. The drawee, on the other hand, is the bank on which the check is drawn.

All checks are issued by the Accounts Payable Department. Disbursements of the University may be “facsimile”—signed by an authorized officer of the University utilizing a laser printer. Accounts Payable monitors paper issued checks and constantly sends out reminders to vendors encouraging direct deposit. A review and a second signature are required for checks greater than $15,000. Check discrepancies are addressed by the Supervisor of Accounts Payable via email.  

Wire Transfer - Method of payment in the form of an electronic transfer of funds (EFT) between the payer (the company) and the recipient (the vendor). A wire transfer is a way of moving money electronically between two banks. A traditional money wire goes from one bank to another using a network such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) or Fedwire. A Wire transfer is faster than ACH but more expensive.

A wire transfer can be initiated by the submission of a Wire Transfer Request Form. Payment by wire transfer is appropriate under specific conditions, such as payment of a foreign vendor, tax remittances, and when no other source of payment is accepted. Wire transfers may only be initiated with an appropriately authorized invoice as supporting documentation. Use a currency converter report when submitting paperwork for foreign payments. It is recommended to use Oanda.com for currency conversion. All wire transfer requests are handled by the Director of Accounts Payable and Accounting Services.

Payment Verification

The following two screens will assist with the payment verification process.

FOIDOCH 'Document History'
FAIVNDH 'Vendor Detail History' 

The Banner form FOIDOCH 'Document History' displays the processing history of purchasing and payment documents. It identifies and provides the status of all documents in the processing path for the type of document selected.

Most common document codes to view:

• Requisition – REQ
• Purchase Order – PO
• Banner Invoice – INV
• Check – CHK
• Receiver – RCV

Once an invoice has been processed, use the PO number or the Banner “ I “ number to look for the payment information.

Steps to confirm payment information:

1. Open the form FOIDOCH (Document History screen)
2. In the "Document Type" box, enter the code PO
3. Tab over to the "Document Code" box to the right of the screen
4. In the "Document Code" box, enter the PO number of the order
5. Click on Go
6. All the documents (requisition, invoices, receiving codes, & check numbers) associated with the PO will appear on this FOIDOCH form
7. Review the Document numbers and the Status of each
   • Receipt Required = Either electronic receiving was not done on a PO, or there may be an issue with the receiving document (Y number). Complete receiving
   • Open = The document must be deleted or completed for approval.
   • Approved = Direct pay or invoice is approved but payment has not yet been disbursed
   • Paid = Payment has been disbursed
     • There will be a corresponding check disbursement document (CHK #)
8. Drill into the individual document by selecting the Document Number
9. Click Related (top right)
10. Query Document
11. Click Go
12. Next block through the screens of the document
    
    

The Banner form FAIVNDH 'Vendor Detail History' provides an online list of vendor invoice/credit memo/payment transactions for all vendors in the system including terminated vendors.

Steps to confirm payment information:

1. Enter the vendor Banner ID in the Vendor field
2. Enter the fiscal year to review in the Fiscal Year field
3. Select GO
4. View the search results
   • Vendor Invoice
   • Banner Invoice
   • Approved (received) Status
   • Vendor Invoice Amount
   • Due Date
   • Check Date
   • Check Number
5. Filter results if necessary
   • Select filter (top right)
   • Enter the information in the field to filter
   • Select Go
6. Use Advanced Filter to filter on partial information
   • Select Advanced Filter (top left)
   • Choose Vendor Invoice from the dropdown
   • Choose Contains from the dropdown
   • Enter invoice information in the open field
   • Select Go

Search for vendor ID:

1. Select the three dots next to the Vendor field
2. Select Entity Name/ID Search (FTIIDEN)
3. Select Advance Filter (top left)
4. Select Contains in the drop-down next to Last Name
5. Enter the name of the vendor in the Last Name field (enter the most unique part of the name to get a more condensed list)
6. Select Case Insensitive Query (bottom left)
7. Select Go
8. View the list of names
   • There may be multiple pages
   • Some vendors may be terminated (Vendor column)

Fiscal Year End Information

1. All documents (invoices & credit memos) are required to be processed by Accounts Payable before the cutoff date.
2. Accounts Payable receives a large volume of documents starting around May, therefore:
   • Confirm the POs and FOAPALs have available funds to process and pay the invoices.
   • Send only invoice or credit memo documents. Other documents (statements, proforma invoices, order confirmations, packing slips, etc.) will not be processed.
   • Verify in the Banner system the invoice has not been paid. Helpful Banner Screens: FOIDOCH (Document History) & FAIVNDH (Vendor Detail History)
   • Reminder: If an invoice does not get processed before the cut-off date the funds will come out of the budget for the new fiscal year.
3. Purchasing is also working with a high volume this time of year.
   • Send the change order requests with ample time.

Fiscal Year End Receiving Tips

1. To be charged to the current fiscal year budget, the goods or services must be received and invoiced on or before 6/30.
   This means that the goods must be physically received or the services performed (backdating in Banner is not acceptable) in order to be paid from a current purchase order. “Invoiced” in this context means the vendor must provide the documentation required by Accounts Payable to process payment.
2. Goods & services received/performed on or after 7/1 will be charged to the following fiscal year budget.
   This means that if for some reason the vendor cannot provide the requested product or service prior to the end of the fiscal year, cancel the PO and wait for the opening of the new budget to enter a new requisition.

For more information on fiscal year end visit the Fiscal Year End section of the Accounts Payable website.

Contact Information

Please send ALL invoices and credit memos to invoices@rowan.edu for processing. In order to execute the requests quickly and efficiently please DO NOT cc AP personnel. The requests will be forwarded promptly and appropriately.

When emailing invoices:

• Only send invoices for processing. Quotes, order confirmations, packing slips, statements, etc. will not be processed for payment.
• Send all pages of invoices &  backup documentation if required
• Send invoices only once to AP
• Send invoices with PO numbers
• Send one vendor per email
• Use PDF format

Reminders:

• Give vendors the PO number at the time of ordering
• Update all vendors with the departments current standing order PO numbers
• AP processes all invoices and credits to keep accounts current
• Food purchases require an Entertainment/Official Reception Request
• Email all invoices to invoices@rowan.edu and they will be distributed accordingly

Please continue to email questions and copy requests to invoices@rowan.edu.