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Accounts Payable

New User Course Manual


Finance Training

Contents
1. 2. 3. 4. 6. 7. 8. 9. Accounts Payable overview ....................................................................................................... 3 Entering a Batch ........................................................................................................................... 4 Entering invoices that have no purchase order ................................................................... 6 Matching an Invoice to a Purchase Order ............................................................................ 14 Processing a purchase invoice where there is more than one rate of VAT ................ 19 Processing a purchase invoice from an EC Supplier ....................................................... 20 The purchase of services from overseas ............................................................................. 22 Paying an invoice from another department ....................................................................... 24

10. Other common invoice scenarios .......................................................................................... 27 11. Entering Employee Expenses ................................................................................................. 29 12. Entering a Simple Credit Memo .............................................................................................. 32 13. Matching Credit or Debit Memos to Invoices ...................................................................... 34 14. Finding Invoices and Balance Owed ..................................................................................... 37 15. Releasing Holds on Invoices ................................................................................................... 38 16. Month-End Guidance ................................................................................................................. 40 Appendix A: Appendix B: Appendix C: Appendix D: Invoice Types ........................................................................................................... 43 Pay Groups ............................................................................................................... 44 VAT Guidance ......................................................................................................... 45 Reference Guides & further information ........................................................... 46

Manual Icons

More information Look at in more detail Be aware of

Refer to a colleague or helpdesk.

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1. Accounts Payable overview


1.1 Overview
The Accounts Payable module of UFS deals with the payment of all suppliers, both internally and externally, as well as payments to staff for expenses. Departments are responsible for recording details of invoices received from suppliers onto the system and matching them to purchase orders when appropriate. The Accounts Payable Team based in the Finance Division at The Old Schools will process the payment runs. Invoices and credit notes entered onto the system can be matched where appropriate to purchase orders, approved on line and will automatically reverse out the commitment originally generated by the purchase order. The main processes involved in Accounts Payable are discussed below.

1.2

Suppliers

Invoices can only be processed if they relate to a supplier already set up on CUFS. Supplier set up is undertaken centrally.

1.3

Invoice Entry

All invoices are entered onto UFS using a batching system, with different batches for different invoice types, e.g. external and internal suppliers. The header allows you to set control totals and if these control figures do not correspond with the actual amounts the system will highlight this.

1.4

Matching Purchase Invoices to Purchase Orders

All invoices relating to approved purchase orders must be matched successfully before invoice approval and payment is possible. The system will place a hold on invoices that fail the invoice matching tolerances (the system matches a purchase order, a system receipt and an invoice if three-way matching was selected when the Purchase Order was raised) and this will require action by accounts and/or buying staff.

1.5

Approving Purchase Invoices

All invoices must go through two levels of approval before payment is possible. This involves on screen checking by an individual who is set up with approval responsibilities. To approve invoices you must have AP Invoice Manager Responsibility and in order to have this responsibility on LIVE you must have completed the on-line Secondary Invoice Approval training.

1.6

Entering and Approving Expenses

Staff expense claims will require a manually completed form. The details from this form will then be entered on to the system and approved through the standard invoice entry route. Modified payroll expenses will be entered into accounts payable from the existing payroll system using an electronic link between the two systems.

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Overview of Entering an External Supplier Invoice


Navigate: Entry > Invoice Batches
It is particularly important if you a

Enter control totals and the batch name using the standard naming convention
DEPT CODE/INITIALS/DD/MM/YR/UNIQUE REF

Click on Invoices

Matching to a PO? Select PO Default as invoice type, enter the PO Number and click OK

Not matching to a PO? Keep invoice type as Standard Enter Supplier name/number

pt. that you must enter your Dept Code in here.

Enter the Invoice details: date, number, amount, VAT and description Review how payment will be made

Matching to a PO? 1. Click on Match 2. Ensure the PO number appears in the Find Purchase Order window. If it doesnt, enter it manually into the Number field 3. Click on Find 4. Tick the Match box for each line you wish to match. 5. If necessary, overtype the Qty and Unit Price fields to reflect what appears on the invoice 6. Click the Match button 7. Click on Distributions 8. Review accounts charged to Not matching to a PO? 1. Click on Distributions 2. Enter the net amount of the item/s and specify tax code/s. 3. Allocate to correct departmental GL account or grant. 4. If the item is over 2,000, tick the Track as Asset box

If the item is over 2,000, tick the Track as Asset box Click on Calculate Tax. Close the Distributions window.

Validate the invoice by clicking Actions 1, tick the Validate box and click OK. Click on the Holds tab to ensure secondary approval hold is placed on the invoice.

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2.

Entering a Batch

All invoices are entered onto the system in batches, even if it is only a batch of one invoice. Different batches should be used for different types of invoices, e.g. sterling, foreign invoices and credit notes. Responsibility: AP Invoice Entry/ Manager Navigate: Entry Invoice Batches

In the batch header most of the fields are optional but you must enter the following. 1. Batch Name Each batch should have a unique name. The standard naming convention for batches used University wide is
DEPARTMENT CODE/YOUR INITIALS/DD/MM/YY/UNIQUE NUMBER e.g. AG/OJH/31/03/09/01

This must be in upper case and this name will appear on your reports and will help you and others locate the batch online. 2. Control Count Enter the physical number of invoices that you are going to enter as part of this batch. Enter the total gross value of all the invoices (i.e. inclusive of VAT) that you are going to enter as part of the batch

3. Control Amount

4. Save 5. Click on Invoices


Control values are manually calculated before you start entering invoices into a batch. As invoices are entered, the system will compare the running totals with what has been entered initially as a control. This is the function of the Actual count/ amount and the count/amount difference columns. If there is a discrepancy, the system warns you when you exit a batch but it does not prevent Approval and payment of the individual invoices within a batch. You can make a correction immediately, or you can adjust the invoice batch later.
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3.

Entering invoices that have no purchase order

Each line in the Invoices window represents a separate invoice within the batch. There are four stages involved in entering an invoice for which the system does not have a purchase order.
Transfer details from the invoice to the system Review how the invoice is to be paid Specify the charge account/project that it is to be allocated to

Validate

Step 1:

Transferring Invoice details to the System

1.

Accept Standard as the Type

When entering a basic invoice select Standard from the drop-down list.
See Appendix A for details of other types

2.

Enter either the Supplier Name or number

If you enter one of these identifiers the system should default in the other field for you. This is where you the invoice payment will be sent. If the site does not default in, you must select the relevant site from the list of options.
Check what is specified on the invoice

3.

Check the Site

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4. 5.

Enter the Invoice Date Enter the Invoice number

As per the invoice As per the suppliers invoice.


The system will warn you and will not accept duplicate invoice numbers for the same supplier.

Enter the Invoice Amount

This is the total amount of the invoice including tax. Enter the VAT amount into the box that will pop up automatically. If no VAT has been charged on the invoice you must enter zero in this box.
Do not include any amounts that are not UK VAT, e.g. an overseas tax.

Click in to the VAT amount field

8.

Review Cheque destination if the supplier is not being paid electronically (see Payment Methods in the next section).

The default option S is for the cheque to be posted straight out to the supplier by the Finance Division. Alternatively select D f the cheque needs to be returned to your department instead.

9.

Select Tax Name

Pick the appropriate tax name from the list of values e.g. SR20%, EC20%, ME0%
or NO-UK VAT see Appendix C for more guidance on VAT

10. Type in a Description

Type in a description of the purchase. This field is vital for reporting purposes and is used in the Fixed Asset Module.

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Step 2: Review how the invoice is to be paid


Continue on the same line but scroll along to the right.

Review the GL Date

The system defaults in the current date.


You may need to change this after month end if you need to post the expenditure back into the previous accounting period. You have three working days at the beginning of every month to do this.

7.

Review the Payment Terms

This defaults in from the supplier set up and is normally End + 30 days.
If an invoice is processed within 20 calendar days of the invoice date, payment will be made to the supplier closer to 30 days. Payment terms do not need to be changed.

Review the Payment Method

Payment method cannot be updated by departmental users from the default for that supplier. Many suppliers are paid electronically via BACS.
Contact the AP Helpdesk if the method is not appropriate

Review the Payment Group

This field tells the system which payment run to include the invoice on. There are several types: for sterling supplier invoices the system default of Supplier will normally default in.
See Appendix B for more details on Payment Groups The default should not be changed without first taking advice from AP helpdesk.

10

Consider the Pay Alone tick box

. Only tick if you require a separate cheque for this particular invoice.
If you want the cheque returned to your department to you will also need to change the Cheque destination field as mentioned previously.

Accounts Payable helpdesk: Telephone: 66888 Email: UFS_AP@admin.cam.ac.uk

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Step 3: Specify where to charge the invoice


1 After clicking on the Distributions button at the bottom of the Invoices window you will see the following window displayed.

Complete the Amount field

Enter the VAT exclusive amount that you want to charge to a particular account or project From the List of Values select the code relevant for the item
eg. SR20%, EC20%, ME0%, NO-UK VAT.

Complete the Tax Name field

Enter the correct accounting codes for these items in your department

See the next pages for detailed steps on how to: Code to a GL charge account Code to a Project account Assets are items such as equipment, machinery, furniture, vehicles that the University is likely to keep for more than a year.
If in doubt it is better to tick the Track as Asset box than to leave it blank or contact the Fixed Assets helpdesk.

Tick the Track as Asset box if you are buying an asset costing over 2000

If buying an asset from a research grant ensure that you complete the project information fields first and save before you tick the track as asset box. Otherwise when you Calculate Tax the asset ticks will be removed.

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Save To code the invoice against more than one GL charge account or project simply repeat the process outlined in steps 2- 6 above. Click on the Calculate Tax button

The relevant tax lines will be created - do not delete any tax lines with nil values.
In certain scenarios these may require amending section ??? gives more details of these.

Check that the Invoice Total and Distribution Totals agree at the top of the screen.

Close the Distribution screen

You are now ready for Step 4 - Validating your invoice.

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To code an item to a GL Charge Account


a In the Account field type U and then press the tab key. Click OK to the Alias field message. This will take you straight to the Accounting Flex field box. If you are unsure of any of the codes then click on the list of values for the relevant field and search for appropriate options

department code the cost centre the source of funds

Your two digit CUFS department code Often these will have been hand written on the invoice by whoever has manually authorized the invoice to say that the goods or services have been received.
If you still have doubts as to which cost centre or source of funds code to use please speak to either your head of accounts or the person who ordered the items.

the transaction code

Use the list of values to find an appropriate transaction code to describe the items purchased. This will normally start with an E or very occasionally a F. The spare is always four zeros. You will return to the Distribution window.

d e

Enter 0000 as the Spare code Click OK

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To code an item to a Research Grant/Project


Ensure that the account field is blank

The system will populate this later with a GL mapping code that summarises the Grants information and therefore this field must be blank for it to do this.

Scroll along to the right hand side of the line until you reach the Project field. Enter the Project number that you wish to allocate the cost to. This will start with your 2-letter department code. You can either type it straight into the field or select it from the list of values. Often it will have been hand written on the invoice by whoever has manually authorized the invoice to say that the goods or services have been received.
If you still have doubts as to which project to use please speak to either your head of accounts or the person who ordered the items.

Select the Task from the list of values. Click on the list of values in the Award field.

This is linked to the Project you have selected -select the appropriate one. If there is only one award linked to that project it will default in, otherwise search the List of Values. Select an appropriate category from the list of values. This is your department - enter your 2-letter department code in the field and press tab on the keyboard. This is the date of expenditure. If nearing the end of the project ensure that you enter the date that the goods were delivered or services performed. In other cases the invoice date or todays date will suffice.

Complete the Expenditure Type

Complete Expenditure Organization

Enter Item date

Click on Save

The GL grant mapping code will now populate into the Account field

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Step 4: Validating your Invoice


1 Close out of the Distributions screen Click on Actions 1. button Click in the box for Validate. Click OK Invoice Status should be Needs Revalidation. The Invoice actions screen display

2 3 4 5

the Click Holds tab

It should state Awaiting Secondary Approval.


If there is a hold other than Awaiting Secondary Invoice Approval, please refer to the Releasing Holds section in the manual.

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4. Matching an Invoice to a Purchase Order


When you enter a supplier invoice for which a CUFS purchase order was raised, you should match it to the order to remove the commitment from your departmental accounts.

Pre-requisites:
Your purchase order must have been generated on CUFS; The purchase order must be approved and open; The invoice must be for the same supplier and currency as the purchase order.

Transfer details from the invoice to the system

Review how the invoice is to be paid

Match to the PO

Check Assets and Calculate Tax

Validate

AP Invoice Entry/ Manager Responsibility Navigate: Entry Invoice Batches Invoices

Step 1: Transfer invoice details to the system


1 In the invoices window, change the invoice type to PO Default A small window will appear for you to enter your Purchase Order number The system will insert the details of the relevant supplier from the purchase order. When matching to an Internal Order please leave the type as Standard and follow the process detailed in section 9 instead. 3 Enter the following information from the invoice: ~invoice number ~invoice date ~total invoice amount ~total VAT ~description Following the same procedures as given in section 3 for a standard invoice.

When matching an invoice to the order, there maybe times where the Track as Asset box is already ticked. This will have been completed at the Purchasing stage.

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Step 2: Review how the invoice will be paid


4 Review how the invoice will be paid: ~Cheque destination ~Payment terms ~Payment methods ~Pay Groups ~Pay Alone check box As per the guidelines given in section 2.

Step 3: Match to the purchase order


5 Click on the Match button

Ensure that the PO number appears in the Num field.

Click on Find

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The matching window will open.

This displays the item lines from the purchase order.

Tick the Match box for each order line that you wish to match to the invoice. Compare against the invoice and amend if necessary: ~Qty invoiced ~Unit price The default values are those from the order. To match however, the quantities and amounts must reflect what appears on the invoice; therefore you may need to overtype some of the fields here.

10

Note: The item description field is not automatically visible in the matching window. Scroll across to the right to find it and drag it back over to left hand side of the window. You may find it easier to set up a folder so that the item description field always appears in view. Instructions can be downloaded from: http://ufs.admin.cam.ac.uk/reference/quickref/general/folder_tools.pdf

11

Click the Match button .

You will return to the invoice window ready for the next step.

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Step 4: Check Assets and Calculate Tax


12 The system will have automatically created the item distributions for you, based upon what was entered on the purchase order. It will not have calculated VAT.
The Invoice total inc VAT

13

Click on the

Value excluding VAT from the PO Distributions button.

For each item that you have matched from the purchase order the following details will have been pulled through: ~the original GL account/ project code ~Tax name ~item description.

Buying a fixed asset? 15 Save then click Calculate Tax.

Tick the Track as Asset box If you fail to remember to click the Calculate Tax button your distribution total will not equal your Batch or Actual totals.

16

Check that the Invoice Total and Distribution totals now agree

If you have Calculated Tax and the totals still dont agree then this could be due to: ~the invoice relates to more than one order; ~there is an item on the invoice that wasnt on the order e.g. a delivery charge ~there is a tax-rounding error ~the wrong VAT rate was used on the order ~some other mistake

17

Close the distributions window and validate the invoice in the normal way via Actions 1
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Accounts Payable Manual v7.7 Finance Training

5.

Processing an invoice where there is no VAT (but not including Internal invoices)

The process is essentially the same as that for a standard rated VAT invoice given above except that you need to select a different VAT rate in the 'Tax Name' box. When selecting the tax name, there is a variety to choose from, however, a new tax name has been created which covers a number of tax codes. NO UK VAT: EC0.0% Exempt Outside Scope ZR0.0% If it is a medical exempt item then please select ME0.0%. In the Invoices screen a) Enter the invoice Tax name as either: ~No UK VAT ~ME0.0%. b) Enter the 0.00 in the VAT amount box.

In the Distributions screen c) d) Enter your item line as normal Ensure that you enter the correct VAT rate for each item in the Tax Name box.

If you have not completed this information and ask the system to either calculate the VAT or validate, it will assume it is standard rated. You can still click on the Calculate Tax button although this is not required as there is no tax to calculate.

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6.

Processing a purchase invoice where there is more than one rate of VAT

The process is essentially the same as that for standard rated VAT given previously In the Invoices screen a) Enter the invoice Tax name as SR20% if there is any standard rated VAT on the invoice Enter in the VAT amount box the total amount of VAT shown on the invoice.

b)

In the Distributions screen c) Enter your item lines as normal You will require at minimum a separate item line for each different tax type As tax is calculated based on the information entered in the amount and the tax name fields, it is essential that this is correct.

d)

For each item line select the appropriate VAT rate in the Tax Name box.

e)

Click on the Calculate Tax button.

f)

Validate your invoice in the usual way and check holds.

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7.

Processing a purchase invoice from an EC Supplier

Goods purchased within the EC are subject to special international rules set by the government to ensure fair trade across all the EC member states. When processing these invoices, we add a self assessed tax charge equivalent to 20% if we are buying items that would have been standard rated for VAT in the UK. This is to ensure that there is no tax advantage in buying items from an EC supplier rather than a UK supplier. In the invoices screen 2 Enter invoice header and invoice information as with a standard invoice. Check that no foreign VAT is charged by the supplier, e.g. a French supplier does not charge TVA (the French equivalent of VAT) on the invoice. 3 Check the Invoice Currency Make sure that this reflects the currency on the invoice, if not change it. The system may well put in EC20% for you automatically. This is correct for the majority of these invoices. However, select NO UK VAT if you are purchasing items that would have been zero rated in this country, e.g. books, periodicals. If the item is subject to medical exemption in this country select ME0.0% and process in the normal way. 5 Calculate what the VAT charge would have been if you had brought the items in the UK: EC20%: multiply the total of the invoice by 20% (or 0.2). EC0% : 0.00 6 Enter this calculated value into the VAT Amount field NB. The invoice total should still be the amount shown on the invoice; not this amount plus the additional VAT charge.

In the tax name box enter the appropriate EC VAT rate: ~EC20% ~EC0%

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In the Distributions screen 7 Code the item line as normal, but select the correct EC rate in the Tax Name box. Click on the Calculate tax button.
Reminder: If the item is not subject to UK VAT, then you must select NO UK VAT as the tax name unless it is medical exempt.

The tax lines will appear, together with a negative line called Acquisition Tax. This line is necessary for the University VAT calculation and should not be amended or removed.

Validate your invoice in the usual way and check holds.

The supplier will be paid as per the value of their invoice.

The Acquisition tax line is created as However, unless you have a negative entry. This is correct and charged the items to GL accounts/projects which are VAT should not be amended or deleted.

recoverable, the self assessed tax will be an additional cost to your department in the same way that VAT is normally.

10

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8. The purchase of services from overseas


When a department buys a service from overseas (either from within the EC or beyond) it will need to self account for VAT at 20% on that service. A tax rate has been created in CUFS to deal with this change. The following example illustrates how the tax will apply.
The Finance Division buys tax advice from a French tax advisor for 1,000. The French tax advisor is given our VAT number and therefore does not charge French VAT. The invoice is entered on to CUFS and the new tax code is chosen. This code generates two entries one of which calculates a VAT amount (at 20% of the invoice value) to be paid to HM Revenue and Customs and the second an equivalent amount chargeable to the department (except where the charge is made against a VAT reclaimable account). The total cost to the department, assuming no reclaim, is 1,200. The payment to the supplier will be 1,000.

This process is essentially the same as buying taxable goods from the EC. In the invoices screen 1 Enter invoice header and invoice information as with a standard invoice. Check that no foreign VAT is charged by the supplier, E.g. a French supplier does not charge TVA (the French equivalent of VAT) on the invoice. 2 Invoice Currency Make sure that this reflects the currency on the invoice, if not change it. Select the option Services Tax
Unless it is one of the following purchases (made overseas) which are not liable to this charge, but will continue to attract local tax where applicable: accommodation; catering; transport; services relating to land; hire of goods.

Tax name

Thus for these services you will still select the tax name NO UK VAT if the supplier hasnt charged you VAT

Calculate what the VAT charge would have been if the service had been provided the UK

Multiply the total of the invoice by 20% (or 0.2).

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VAT Amount

Enter this calculated value


NB. The invoice total should still be the amount shown on the invoice; not this amount plus the additional VAT charge.

6.

Click on either the Distributions or Match button as appropriate.

Services Tax rate must be selected

In the Distributions screen 7 Tax Name Code the item line as normal, but select Services tax
Reminder: If its one of the services listed in step 4 then you would select NO UK VAT as the tax name.

Click on the Calculate tax button.

The tax lines will appear, together with a negative line called Serv_Offset Tax.
This line is necessary for the University VAT calculation and should not be amended or removed.

Validate your invoice in the usual way and check holds.

The supplier will be paid as per the value of their invoice.


However, unless you have charged the items to GL accounts/projects which are VAT recoverable, the self assessed tax will be an additional cost to your department in the same way that VAT is normally.

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9. Paying an invoice from another department


Overnight any printed sales invoices generated within the Accounted Receivable module to another department are automatically transferred by UFS to the AP module of the department they were addressed to. Therefore Internal AP Invoices are already on the system -do not manually re-enter them; you just need to locate them and specify which of your departmental accounts you wish to charge the items to. NB. This process should not occur if the Sales department is an Associated Body. Any invoice from an Associated body should be processed in the same way as external supplier invoice, as these are separate entities to the University.

Locate the Internal invoice within your AP module that corresponds with the hard copy that you have just received in the post 1 2 Navigate: Entry > Invoices Click on Find. Enter the invoice number This will take you into the relevant invoice.
If you cannot locate it, please contact the Accounts Payable Helpdesk for further assistance on (7)66888.

Review the Invoice and specify to which of your departmental accounts you would like it charged to 3 4 5 6 7 Review the invoice on the screen VAT amount Tax name. Invoice Description Click on the Distributions button. Please leave the Invoice Type as Standard even when matching it to a Purchase Order. Enter 0 Select Internal Update to something more meaningful. The AP Invoice will have automatically allocated the payment to a default account code within your department.
NB, This default code is always wrong

Ensure that the cursor is in line 1, click on the Reverse 1 button at the bottom of the screen.

This will automatically create a negative value (shown in brackets) line.

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9 If this invoice does not relate to a PO

Manually enter a new line, allocating the payment to the GL account code or project of your choice.
As there is no VAT attributed to internal invoices there is no need to click Calculate Tax in the distributions screen, however, if you wish to do so, the system will generate the tax lines for you but with a zero value.

If this invoice relates to a PO

Then close down the distributions screen, Click on Match and match as normal.
Your account code will then pull through from your Purchase Order to the distribution screen and will not need to be amended unless you wish to use a different code.

Is it an asset?

Go back into Distributions and tick the Track as Asset tick box.

10. Validate and SIA the invoice as normal

Unprocessed Payments All unprocessed internal trading invoices are monitored by the Finance Division. Periodically you may be contacted by the Finance Division asking you to process all remaining internal invoices. This is most likely to happen at year end. Procedure for disputed items Where disputes regarding price, quantity or quality cannot be resolved between the purchasing department and the supplying department, arbitration will take place by the Central Accounting section of the Finance Division. The disputing department has the ability to place an AP invoice on hold. The Hold Name Internal Dispute should be chosen from the List of Values. In a situation where a sales invoice is in dispute, an additional hold can be put on the Accounts Payable invoice. Selecting the Holds button in the Invoices window can do this.

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In the Invoice Holds window an additional hold to the Secondary Approval hold can be selected in the Hold Name field (i.e., Internal Dispute). The Hold Reason field will automatically be entered.

Monitoring will be performed by the Finance Division to ensure invoices are validly placed in dispute. This would form part of their arbitration role and include the use of a central report highlighting all unapproved purchase invoices which are on a dispute hold and are over 14 days old.

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10. Other common invoice scenarios


13.1 Invoices with a trade discount

If you receive an invoice with a trade discount, the VAT shown on it would have been calculated on the discounted amount. Therefore, there should be no difference between the amount you would put in the Tax Amount box and the amount the Calculate Tax button will produce in the Distributions screen. The only time you will get a difference is if the trade discount was not taken into account on the purchase order and hence when you match you will need to adjust on the distributions screen the values pulled through to ensure that it agrees with the actual invoice.

13.2

Dealing with VAT rounding errors

In a small number of cases you may experience differences between the calculated tax and the invoiced VAT when dealing with small monetary amounts, as the system only works to 2 decimal places e.g. if you entered a standard rated item for 25.61 the VAT would be 5.12. However, the system would round the VAT up, so you would need to manually adjust one of the Tax lines to get the invoice and the distributions to balance. Please overtype the highest value tax line.

13.3

Processing invoices that contain other taxes as well as VAT

Occasionally, an invoice may show another form of tax other than VAT such as Insurance Premium Tax (IPT), import duty, foreign taxes or Airport Tax. These taxes should not be included in the VAT boxes. For example, if an invoice is received for insurance for 300 plus IPT of 15, in the 'Batch Header' screen, the value of the invoice should be shown as 315. In the invoice screen the Tax name should be shown as NO UK VAT and the VAT amount of zero entered into the Tax Amount box. In the 'Distributions' screen, the full value of the invoice including IPT should be put into the item line and the Calculate Tax button then clicked.

13.4
Invoice Screen

Common mistakes
Always enter the VAT amount shown on the invoice in the VAT Amount box Once you have entered your item lines you will need to click the Calculate Tax button. Tax lines will be created. If these do not equal the VAT entered into the invoice screen, check no basic errors have been made in the item lines. Should the items lines be correct, amend the highest value VAT line to ensure the VAT amount is correct. The Invoice total should then equal the Distributions total. If a basic error has been made, manually amend the item line and then manually amend the VAT line. The Calculate Tax line does not work twice.

Distributions Screen

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Tax Lines

When clicking the Calculate Tax button you may get more than one tax line due to using different tax rates, and also due to the different recovery rates of VAT those different transactions attract. Even if you do not see a reason for a particular VAT line to be present, do not delete the line. You can only click on Calculate Tax once, therefore if you subsequently notice an error in your item line, you will need to manually adjust the VAT line, VAT will not be adjusted if you click Calculate Tax again.

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11. Entering Employee Expenses


Expenses claims are to be entered onto the system in the same way as external suppliers invoices, as all members of staff are listed as suppliers. The rates of travel and subsistence allowances are available on the Finance Divisions website and are sent out to all Departments on an annual basis. All claims for reimbursement of personal expenses must be supported as appropriate by receipts or other evidence and calculated in accordance with the University travel and subsistence rates approved by the Finance Committee. The Head of Department is responsible for ensuring the accuracy of claims and for complying with the University travel regulations. Claims for reimbursement must be made on the official University claim forms, available from the Finance Division web site. 1 Start to enter the invoice as normal. Supplier Accept Standard as the Type

Enter either the employees surname or their Employee number.


To assist in the selection of the correct supplier, especially when entering expenses claims, additional fields are now visible: supplier type; employee number; active employee.

Employees Site

Select the site for the address that you wish CUFS to print out on the cheque remittance advice.
As standard Finance will send all employee cheques back to the Department to distribute.

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4 5

Invoice Date Invoice number

Enter the expenses claim date. Accept the default (todays date) by using the [Tab] key to move to the next field
NB. The system will not accept duplicate invoice numbers for the same supplier

Tax Name

A rate of NO UK VAT should normally be chosen.


See below if the claim includes a VAT invoice made out to the University

7 8

Description Click on the Distributions button

Complete appropriately Allocate the total expense claim amount to the appropriate expense accounts.
NB. Travel and subsistence transaction codes start ET??

Click on the Calculate Tax button.

The system will generate various tax lines depending on the relevant tax rate of the expenses.

10. Validate and SIA as normal.

Where to find an employees number on an individuals payslip via the CHRIS system running an Account Analysis report in the General Ledger for the Cost CentreSource of Funds combination to where an individuals salary is charged

Claims including invoices E.g. You have an expense claim of 145.00 made up of mileage at 25 and a hotel bill of 100 plus 20 VAT- the hotel bill is a valid VAT invoice made out to University of Cambridge. Enter 145.00 as the invoice amount with a 'Tax name' of 'SR20%'. In the Tax Amount box enter the VAT of 20.00. In the distributions screen, enter the
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hotel charge as an item at 100 with a tax name of SR20%. Enter the mileage as a separate item at 25 with a tax name of NO UK VAT. Click on Calculate Tax.

Visiting Lecturers/researchers There are particular rules and potential tax implications that need to be considered when reimbursing the travel expenses of visitors if they can be regarded as being employed by the University by HMRC.

If you have any queries regard this contact the Tax Team within the Finance Division with regard to whether the individual is classed as employed by the University or self employed. If classed as employees contact Payroll as they will need to be paid via the Modified Payroll system. If not employees they will need to be set up on CUFS as a supplier.

Students Will also need to be added as suppliers before a payment can be made.

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12. Entering a Simple Credit Memo


1. Start a new batch. Navigate Entry Invoice Batches Ensure that credit memos are in their own batch and that all amounts are entered as negative values.

Note the amount is in negatives

2. 3. 4.

Click on the Invoices button Type Invoice number Select Credit Memo from the list of values Enter the Credit Memo Number from the suppliers document.
NB. The system will not accept duplicate invoice numbers for the same supplier.

5.

Invoice Amount

Enter the total value of the credit including tax as a negative figure. Select the appropriate VAT code from the list of values Enter the VAT amount from the credit note as a negative figure. If there is no VAT on the credit note enter zero in this box.
Do not include any amounts that are not UK VAT, e.g. overseas tax, or duty.

6.

Tax Name

7.

Tax amount

8.

Description

In the description, ensure a reference is made to the invoice number to which the credit relates if you are not matching it to original invoice.See the next section on how to match it to the invoice.
NB. This field is vital for both reporting purposes and the Fixed Asset Module.

9.

Terms

Change terms to Immediate.

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10. Click on Distributions

11. Enter item amount as a negative. 12. Account/Project Ensure the credit is coded to the same account /grant as the original invoice.

13. Description 14. Click on Calculate Tax

Ensure a reference is made to the invoice number to which the credit relates. Ensure Invoice and Distribution totals agree.

15. Save and validate in the normal way

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13. Matching Credit or Debit Memos to Invoices


Matching a credit note to an invoice on the system is usually undertaken to provide a clear audit trail and to ensure that the credit is coded back to the same account that the invoice was coded to. It also re-opens the relevant purchase order line if the invoice was matched to a purchase order. Matching credit notes to invoices on the system can be a difficult process if you are not dealing with a simple, few line only invoice. Therefore, it is not recommended unless you are likely to be re-invoiced for the goods and you wish to re-open your purchase order so you can then match your newly received goods. 1. Enter the batch header details and credit memo details in the same way as the section Entering a simple credit note but do not click on Distributions Go to the Match button Select Invoice from the drop down menu attached to the match field.

2.

3.

Enter the Invoice number you wish to match the credit note to and click Find.

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4. 5.

Check the Match tick box Enter the Credit Amount Input the gross amount (item plus tax) as a negative value. This allows you to select the individual invoice lines to which you wish to match your credit. Input the relevant credit amounts again working in negatives.

6.

Click Distribute

7.

Check the match tick box for both the item line you wish to credit together and its related tax line

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In the above example it is relatively simple to determine the related tax lines. However, if this is not the case the following procedure should be followed: Calculate the amount of tax relating to the credit. If only one item line is being credited, this will be the VAT amount from the credit note. Look for a corresponding tax line for this amount that has the same coding as the item line. If no such line exists, or, if this amount only partially covers the credit, you may need to return to the original invoice and use the Allocate facility or view the recovery rate in the distributions screen to determine which tax line is related to the credit you are trying to Distribute.

8.

Click on Match

Once the matching process is complete you will be returned to the invoice header screen where you At this point you can return to the distributions screen to review your entries if you wish.

9.

Save and validate in the normal way.

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14. Finding Invoices and Balance Owed


AP Invoice Entry/Manager Responsibility Navigate: Enquiry Invoices

1.

You can enter multiple search criteria by entering information in one or more fields

2.

Click on the Find button

You will be provided with a list of invoices that match the criteria.

How to calculate the amount that your department currently owes to a supplier
1 2 Enquiry>Invoices Complete the Name field for the relevant supplier.

Click on Calculate Balance Owed.

Click on Calculate The system will calculate the amount owing to the supplier and provide you with the number of invoices that make up this amount.

4. If you wish to view the unpaid invoices, click on the Invoices button and you will be provided with a list on screen.

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15. Releasing Holds on Invoices


There are many reasons why the system may put a hold on an invoice and prevent it being approved for payment. These can be split into four main types The purchase order, the receipt and the invoice do not match. Each has its own way of being dealt with

If there is a matching problem some of the holds will require you to go back and correct a document (e.g. receipt the goods) others need to be manually released
NB. Before releasing holds you should liaise with the person who placed the order first and get authorization.

An individual somewhere has manually put a hold on paying this invoice for particular reason. It is awaiting Secondary Invoice Approval (SIA).

Find out why they have put it on hold.

This is normal and the hold will automatically be released once it has been secondary approved.

Manually Releasing Holds on an invoice


Select the invoice which has a hold(s) on it. Click on the Holds button Review the holds that have been put in place for this invoice

1 2

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Is it a Quantity Received hold?

Check with the buyer whether the items have actually been received. Items received. Get them to receive the items within iProcurement. Once they have done this you can re-validate the invoice and the system will lift the hold.
NB. If this is not done, the purchase order will remain open and commitments may stay on a grant.

Items not received. Leave the invoice on hold and do not pay until the items are delivered. Its a service where we have to pay in advance (e.g. to attend a conference) Manualy release the hold as detailed below 3 Click in the Release Name box next to a particular hold. Pick the most appropriate release name from the list of values and the system will automatically enter the Release Reason for you.

Alternatively Click on the Release 1 button Again select from the list of options available.
NB. The system will make a note every time you manually release a hold, and various reports can be obtained showing who has released what holds.

Has an individual manually stopped payment by putting it on hold within the schedule payments tab?

To remove this, simply untick the hold box and Save.

NB: Remember that the Secondary Approval hold is normal and will be released automatically once your secondary approver has approved the invoice.

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16. Month-End Guidance



Validate all AP invoices for the month (this is ongoing). Review supplier statements and check all invoices are secondary approved/or current (i.e. not due for payment). Review employee expense claims/advances to ensure they are up-to-date and processed. Review credit card statements to supporting receipts/vouchers and journal expenditure from the department suspense account to relevant cost centre. Run Invoices on Hold (CAPSA) Report to list invoices placed on hold and then action all holds, as necessary.

Invoice on hold report


This report shows all the AP invoices on hold within your department listed by hold name. These invoices will not be paid until the hold is resolved and/or overridden.

AP Invoice Entry/Manager Responsibility Navigate:


1. 2.

Other Requests Run


The Submit Request screen displays. A list of reports will display simply select the Invoices on hold report from the list and click OK Leave fields blank when running report at year-end. But fields can be used when running the report as a house-keeping tool

Click OK to a Single Request Enter Inv in the Name field and press Tab. .

3.

Enter the required parameters

4.

Click on Submit

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Action points from this report


All invoices on this report should be investigated. Once all holds have been released, the report should be run again to ensure all invoices are processed prior to the financial year end. Where the holds are valid and current, efforts should be made to enable the invoice to be released from hold. Holds for any other reason are to be released to enable the invoice to be paid or the invoice should be cancelled.

The following are some of the most common holds found on invoices within Accounts Payable.

Hold Name
Credit Note

What does it mean? Your invoice is on hold awaiting a credit note Internal Trading Invoice that is being disputed The quantity you have been billed for on your invoice exceeds the quantity you have received on the system The tax name on your PO is different to that on your invoice Tax amount varies from that expected The price of the invoice is different or exceeds the price that was on the PO The quantity that you have been billed for on the invoice exceeds the quantity that was originally ordered.

How did I get it? Someone in your department has manually put this hold on your invoice Someone in your department has manually put this hold on your invoice Maybe you have only partreceived this order. Or some items have been sent back.

Over ride? Yes you can manually over ride this hold

Internal Dispute

Yes you can manually over ride this hold

Qty Rec.

Tax Difference

Either the wrong tax name was entered on the PO or the invoice

Tax Amount Range Price

You may have needed to manually adjust the VAT Either the wrong price was entered onto the PO or the invoice is wrong.

Need to receive the goods on the system if the receipt has been overlooked. Get a credit note if goods sent back or no longer required. You can manually over ride this hold. You will need to check and amend the invoice distributions. You can manually over ride this hold. Check tax figures. You can manually override this hold Check with the Buyer and/or Supplier. You can manually over ride this hold. Check with the Buyer. Match against other POs if necessary. You can manually over ride this hold.

Qty Ord

Was the invoice for several POs and only been matched to one? The original PO may have been incorrect.

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Final Matching

There is a Final Match hold on this invoice The invoice is awaiting secondary approval There is a problem with the tax distribution lines, which do not calculate correctly Your invoice distribution lines do not total the invoice amount that you have entered.

You ticked the Final Match box in the Match screen.

Secondary Approval

Someone in your department has completed the primary approval. It may be that not the entire invoice is taxable. Or that the tax amount was different on the PO.

Tax Variance

Contact The Accounts Payable Helpdesk. This hold can not be over ridden. Secondary Approve the invoice for payment. This hold can not be over ridden. Amend the distribution lines accordingly and then over ride the hold.

Dist Variance

Either the invoice amount has been incorrectly entered or you have calculated the distribution lines wrongly. The distributions may have been wrong on the PO.

You must amend the distribution lines so that the invoice amount and the total of the distribution lines are equal. This hold can not be over ridden.

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Appendix A: Invoice Types


When processing invoices there are various invoice types: Standard invoice defaults in automatically and this is to be used to enter an invoice from a supplier for whom a CUFS purchase order was not raised. Credit memo -select this to enter credit notes received from a supplier. Debit memo - this is an invoice you generate to send to a supplier representing a credit amount that the supplier owes to you. A debit invoice can represent a quantity credit or a price reduction. Expense report - The University do not use this type. PO Default this should be selected if you want to match an invoice to a purchase order. Quick match also used when matching an invoice to a purchase order, but should only be used when you know that the invoice and the purchase order match exactly. Mixed - The University do not use this type. Prepayment this is where you pay an advance to a supplier or employees before you receive the invoice/claim form.

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Appendix B: Pay Groups


Supplier
This is the main pay group for the standard weekly supplier payment run. It is split into two Payment methods; either cheque or BACS (Electronic). BACS payments are sent directly to the suppliers bank account. A remittance advice will be sent via e-mail to the supplier listing all the invoices the payment relates to. Payment Terms End of Month + 30 days and Payment Method of Electronic cannot be changed. If there is a valid reason for wanting to pay the supplier on different terms, you must contact the AP helpdesk. If the payment method defaults in as Check (American spelling), this means that we do not currently have the suppliers bank account details on file and therefore they will be paid by cheque.

Internal

This is purely for internal trading purposes and should only appear on screen when dealing with an invoice from another University department, e.g. Department of Plant Sciences. The Employee pay run reimburses staff expenses and provides staff advances in relation to expenses. This payment run is made every Monday. All employee pay group cheques are returned to the department.

Employee

If you require a single cheque for a particular invoice you must also tick the pay alone tick box on that line. NB: The tick box is vital as the payment process is not sub-ledger secure. If another department has entered an invoice on the account you are wishing to pay, and only the pay group has been selected then x number of invoices will be amalgamated into one cheque. The AP department will be unable to return the cheque to your department.

Citibank

The University currently has 3 bank accounts (sterling, US Dollars and Euro). All other foreign payments are made via Citibank. If you require a foreign payment to be made (other than EUR or USD) you must select this pay group; otherwise CUFS will not select the invoice(s) for payment. All Citibank, USD and EUR cheques are returned to the department. This is specifically for the University Library. Use the Supplier pay group for Euro and USD cheques (non-Citibank).

Citibank Library Euro and US Dollar

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Appendix C:

VAT Guidance

Reclaims of VAT by the University


Normally a business that is VAT registered can: Reclaim from Revenue and Customs the VAT that it has been charged by its suppliers
as long as

the purchases it is making relate to the VATable supplies (or sales) that the business provides to its

customers.

Many of the services that the University supplies to its various customers are not Vatable supplies (eg we make medically exempt, exempt or outside the scope sales) and therefore we are not able to reclaim much of the VAT that we have been charged by our suppliers. In order to reclaim as much VAT as we possibly can, the Tax Team within the Finance Division have set up, on UFS, various VAT tables and VAT recovery rules that are linked behind the scenes to every account code and research grant. Each of these rules specifies whether the University can reclaim from HM Revenue and Customs none, all, or a percentage of the VAT they have been charged. Any VAT that cannot be reclaimed is absorbed by the department as an additional cost of purchasing the item and therefore the system automatically codes it to the same account as the item itself. Therefore when looking at your distributions you will see one of three possibilities: If the university can not reclaim the VAT it will be coded back to the department, the same code as the item line. If the university can reclaim the VAT it will be coded to the VAT reclaim account U.00.0000.0000.VCBA.0000. If the University can reclaim only part of the VAT it will be coded in part to the VAT reclaim account and in part to the same code as the item line.

Zero Tax Lines


Sometimes the percentage of VAT that can be reclaimed is so small that although the recoverable VAT line is displayed the amount to be recovered is less than 1p and hence not recorded. In this instance you will still get a second Tax line (the recoverable VAT line) but the monetary value will be zero. Do not delete this line.

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Appendix D: Reference Guides & further information


ACCOUNTS PAYABLES HELPDESK
Telephone: (7)66888 Email: UFS_AP@admin.cam.ac.uk

REFERENCE GUIDES
The following reference guides are available for you to view or print; Processing a purchase invoice where there is prompt discount available Processing a VAT only invoice Scheduling payments Entering prorated freight and miscellaneous charges Getting a list of invoices in date order Processing an Internal Trading Invoice Entering an Invoice Invoices on Hold Matching an Invoice to a Purchase Order

These guides and further detailed information can be found via:

http://ufs.admin.cam.ac.uk/reference/quickref/

FINANCE TRAINING
Information on all finance courses available can be found via:

http://www.admin.cam.ac.uk/offices/finance/training/

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