Presentation on theme: "Vanderbilt Procurement Processes How to purchase the stuff you need."— Presentation transcript:
Vanderbilt Procurement Processes How to purchase the stuff you need
Introduction to Procurement Vanderbilt shops... What do we buy? How much do we spend annually? How do we purchase items?
Overview I.Procurement Mission & Roles II.Procure-to-Pay Process Flow Chart III.Methods of Purchasing IV.Steps in the Process a.eProcurement and PMM b.P-card c.Requisitions V.Details of Requisitions VI.Internal Controls VII.Special Programs VIII.Resources
I. Procurement Services Mission Support all purchasing activities via: –Medical Supply Sourcing –Procurement Services Execute purchasing transactions Negotiate contracts on your behalf for –Volume discounts –Strong supplier relationships –Best products and service available Manage supplier programs
I. Procurement Services Mission In other words, we help you to… buy what you need get the most for your money get the best product quality from suppliers get the best service from suppliers purchase items in the most timely, efficient manner possible help Vanderbilt keep accurate records and data on spend
I. Procurement Services Roles What is a Purchasing Agent? Your buyer information, quotes by commodity paperwork execution – places the order exception resolution How do we do this? With Purchasing Agents and Sourcing Officers… What do they do for you?
I. Procurement Services Roles How do you work with purchasing agents? Use the website contact list of buyers Use the commodity list to find buyers Know the location of the two offices Use online reporting for answers If need assistance, call purchasing agents directly More details on this topic later!
I. Procurement Services Roles What is a Purchasing Agent? Your buyer information, quotes by commodity paperwork execution – places the order exception resolution What is a Sourcing Officer? Your strategist Research by commodity Strategies for commodity purchases Negotiations by commodity How do we do this? With Purchasing Agents and Sourcing Officers… What do they do for you?
I. Procurement Services Roles How do you work with Sourcing Officers? Ask if we have contracts for what you are purchasing - These are recorded in our Vandy Contracts Database System and the PMM Contract Manager. Ask if we have preferred suppliers Find this info on our website Check supplier list for active vendors before using New Vendors if possible – but let us know about those which interest you
II. Procure-to-Pay Process
III. Methods of Purchasing Prime methods to order products & services: 1.eProcurement or PMM online order process 2.Purchase or Procurement Credit Card (P-Card) or AmEx Corp Card 3.Purchase Requisitions (paper form) General purchases (A Req) (pg 4 of appendix) Capital Requisition (C Req) (pg 8 of appendix) Consultants (S Req) (pg 9 of appendix) Small Purchase Order (SPO) (pg 14 of appendix) See forhttp://www.vanderbilt.edu/procurement/ Preferred Purchasing Methods by commodity
IV. Steps in Purchasing 1.Determine product/service needs 2.Identify or select supplier 1.Engage Procurement Services as needed 3.Follow procedure for best method for the product: 1.Order online with eProcurement or PMM; or 2.Purchase with a Pcard; or 3.Fill out appropriate Requisition Form
eProcurement New online requisition and ordering system Fast, flexible and paperless Automates the Dept. approval process Standard process for buying supplies up to $25,000 Select from products from 3 different sources: –VU eCATalog of high volume everyday products –Punch Out suppliers –Over 500+ free form suppliers Most orders go directly to the supplier
Pathways Materials Management (PMM) Online ordering and inventory control system used for Medical / Surgical Supplies Contract Management Module Electronic PO transmission (EDI) and (FAX) Automated Electronic price updates (832) Par Level and Template Forms Approximately 2800 active vendors Anyone requesting a PMM login should contact the Help Desk:
Purchase Card (P-Card) JP Morgan Chase Credit Card Issued to specific users approved by Dept. Limits set by Dept. Used for miscellaneous purchases Advantages: –Widely accepted by merchants –Convenient; allows for internet ordering –Reduces paperwork and need for SPOs and Demand Checks –More accurate record keeping –Insures timely payment to suppliers
V. Filling out Requisition Forms The process is the same for all types of Requisitions 1.Specify Account & Center Numbers 2.Obtain required approval signatures 3.Indicate Supplier/product/prices and terms 4.Route copy to appropriate Procurement Office, keep a copy 5.Procurement executes purchase order with supplier
Purchase Requisition (A Req) Primary method used to purchase more complex goods & services Generally used for orders >$500 3-part sequentially numbered form Requirements: –Dept information –Valid Account and Center Numbers –Authorized signatures per your Dept. procedures –Specific customer information Pg 4 of Appendix
Purchase Requisition (A Req) Other Requirements: Supplier contact information If a new supplier: Federal Tax ID Number W-9 data Remit to Address Itemize products/services & prices If no supplier provided, Procurement will select or competitively bid requirements For one-time orders, service contracts and blanket purchase orders
Purchase Requisition (A Req) Fill the form in well…. –Slows process if poorly written, wrong or contains omissions –We send the form back if not complete or legible –Be explicit in describing items – attach forms, etc. with a note See attached Keep your copy; send in only top copy to Procurement Send to us to order – do not order items yourself. If someone has inadvertently placed the order, please note the following on the Req: –Confirmed and order has been placed – if someone in the department placed the order –Be sure they did not give the Req number to the vendor as a PO number. And very important….
Capital Requisitions (C Req) Only used for Capital Equipment purchases Capital Equipment defined as: –Durable products w/ life expectancy >2 years –Purchase Price >$3000 Rest of process same as A-Requisition Pg 8 of Appendix
Consultants (S Req) Rules of engagement are complex –Office of Contract & Grants Accounting (OCGA) sets policy Use 20 Rule Test to determine relationship If spend <$5000; Demand Check If spend >$5000; Purchase S Req Pg 9 of Appendix
Special Requirements Sole Source Justification –For orders >$25,000 University Policy requires: Competitive bidding process, or Documentation justifying no-bid awards Dept. Management signature Requirements printed on reverse of General Purchase A Req & Capital Requisition C Req Forms Pg 5 & 10 of Appendix
Special Requirements HIPAA Guidelines –Health Care Insurance Portability & Accountability Act (Federal Statute) –Applies to products/services that directly impact protected patient information –May require the supplier to sign VU Business Associates Agreement (BAA) –Requirements printed on reverse of new Requisition Forms (A,C,S) Pg 5 of Appendix
Forms How do I get these forms? Purchase forms on eProcurement
Small Purchase Order (SPO) Pre-approved purchase orders –(222 / 255 prefix) For miscellaneous purchases <$500 in total value Certain products & services excluded (list) Disadvantages: –Paper intensive process –Some suppliers wont accept –Cant be used for internet ordering eProcurement is a more efficient means to order supplies Pg 14 of Appendix
VI. Internal Controls for Purchasing Foundation is the adequate segregation of duties. Reduces the likelihood that errors (intentional or unintentional) will go undetected: –by providing separate processing by different individuals at various stages of a transaction –by independent reviews of the work performed No employee or group should be in a position both to perpetrate and to conceal errors or fraud in the normal course of their duties.
Segregation of Duties The principal incompatible duties to be segregated are: The same person generally should not process a transaction and record or report the transaction. Authorizatio n or approval of tran sactions related to those assets Custody of asset Execution of the transaction or transaction activity Recording or re porting of related Transactio ns
VII. Campus Travel Management Travel Tutorial First Time Users Flights Rail and Bus Hotels Colleague Reciprocity Travel Marketplace Travel Agencies Airport Parking Car Rental Internal Resources Meeting/Event Spaces Visitors Travel Portal Travel Resources Faculty and Staff Travel Portal The Vanderbilt Travel Portal
VIII. Procurement Resources Comprehensive information about Procurement Services is on the web page: Procurement Services Medical Supply Sourcing eProcurement P-Card Program Policies and Procedures Request invoice copies to work on exceptions Request purchase order copies Request an encumbrance removal Travel Program Contacts Supplier Directory FAQs
What is Disbursement Services? Responsible for review and disbursement of the University's funds in accordance with its policies and procedures Manages the Accounts Payable function –Reconciliation of vendor statements –Distribution of checks and document imaging of purchase orders and invoices for both the University and Medical Center –Processing and payment of all invoices
What is Disbursement Services? Manages the ACH, wire transfer and 1099 tax reporting functions for the institution Maintains the University Central demand check function –Travel advances and reimbursement –Expense reimbursement –Student refunds –Stipend payments –Payments for non-purchase order items. Now responsible for the PCard program
Statistics 30 management and staff Total funds disbursed annually: $1.8 billion PCard transactions: 182,000 annually totaling $49.6 million Exception vouchers resolved: 36,000 annually Xbatch invoices resolved: 7,000 annuallyCustomer service calls resolved: 50 daily 9,700 new vendors setup 10,000 vendor records updated annually
What is Accounts Payable? Primary responsibility: processing and payment of all invoices for purchases made against purchase orders (A-reqs, S-reqs, C-reqs, SPO, e-procurement, PMM) for both the University and Medical Center
What is Accounts Payable? Additional functions: –Collection of credit for over payments or returned goods –Vendor statement reconciliation –Process Vendor Refund Checks –Process Return Checks –Recurring Vouchers - Equipment lease payments –Payment of Fed Ex & UPS freight charges
What is Accounts Payable? Types of invoices that Accounts Payable receives and processes –Paper Invoices –Electronic Invoices Type of invoices that Accounts Payable does not process as these are not valid invoice types –Order Confirmation –Quotes from Vendor –Delivery or Packing Slips –Requisition and/or Purchase Order copies
What is Accounts Payable? Types of payments that Accounts Payable processes –Physical Paper Checks –EFT – Electronic Payments –ACH – Electronic Bank Transfers –Wire Transfers – Foreign & Domestic
How does AP invoice processing work? Department initiates purchase by issuance of a purchase order (following procurement services procedures) to a vendor Vendor ships goods/performs services. Vendor sends invoice to Disbursement Services. PO number must be referenced on invoice. Disbursement Services enters invoice against PO into Peoplesoft system.
–Disbursement Services verifies PO number Vendor name Vendor payment terms Invoice date Invoice number Invoice amount Remit Address Each night the Peoplesoft system runs a process to match the detail of the invoice against the detail of the PO. If all items are <= the PO then the invoice will be set to pay, if not then an exception will occur.
Matched invoices are set to pay from the invoice date based on terms negotiated for that vendor. –Vanderbilts standard terms are net 45 days. Since the system only matches the invoice to the PO (two-way match) the department is responsible for verifying that the goods/services were received and acceptable. –When shipment arrives compare packing list to shipment verifying completeness
–Compare Departmental Invoice Report, Internal PO Copy and Packing List verifying all goods were received and billed as ordered (three-way match). If there is a problem with the billing and/or goods department should contact Disbursement Services to have invoice put on hold until discrepancy can be resolved. Disbursement Services cuts checks for payments against POs each Tuesday night. Checks are reviewed and mailed to vendors each Wednesday.
Departmental Invoice Reports (DIR) Currently: departments receive paper Departmental Invoice Reports (DIR) for use in the three-way match process. –Now also obtainable on-line from the PDS Reports for Departmental Use available on the Procurement website. –Effective April 6, 2009 the reports will only be available on-line.
How can I check my invoice (DIR)? Click on PDS Reports for Departmental Use at the top of the page to access your reports Halfway down the page under How to Find the Reports click on Business Objects InfoView XI Login Run the PO Detail (Multiple POs) and the Invoice Detail (Multiple Departmental Invoice Report, DIR) for your centers and the desired time frame.
OR Run Invoice Summary Report for the centers and period of time desired
Click any underlined voucher id on the Invoice Summary Report to bring up the Departmental Invoice Report (DIR) for that voucher
Click on match exceptions exist on the Departmental Invoice Report (DIR) to bring up the PO Invoice Activity Status report for that voucher
Detailed Explanation of Online Invoice Invoice contains information such as: –Vendor name –Amount –Date –Voucher Number –Invoice Number –Invoice Date –Po Number –Match Status
Does a Match Exception exist? Identify the type of discrepancy –If there are quantity or pricing discrepancies- contact Procurement to authorize correction or payment hold –If there is a duplicate invoice, credit due, or other issue- contact Disbursement Services –If merchandise was returned- call vendor for credit memo
Match Rules Quantity/Price Check Qty + tol, Unit Prc tol Accept qty=Vchr, Unit Price Amount plus tolerance Small Purchase Orders Unit Price Each Voucher <= Blnkt PO Price
PDS Reports Training Information Online Training to Access PDS Reports via Business Objects InfoView –Click on PDS Reports for Departmental Use at the top of the page to access the Business Objects page –Scroll three quarters down the page to see the Training section
VICE Squad For Exceptions and Past Due invoice inquiries and resolution contact: (suppliers are listed alphabetically reading from left to right- ex. Alan Smith and A Matter of Taste are both listed in the A's) Suppliers A-C Kevin Ward (615) Suppliers D-K Jamillah Allen (615) Suppliers Q-Z Wanda Graves (615) Suppliers L-P Charlotte Lawson (615)
How can I help the process? Use the preferred purchasing method When ordering, verify that the vendor has the correct PO number to keep payments on track Submit purchase orders to Procurement as soon as possible Submit completed purchase orders to vendors
How can I help the process? Always keep departmental copies of purchase orders Instruct vendors to mail invoices directly to Disbursement Services Review DIRs on a regular basis- per departmental policy or monthly at a minimum Promptly contact procurement or disbursements for discrepancy resolution
Shipping Account Setup Who are the approved Shippers for Vanderbilt? –Federal Express –U P S Benefits of using approved Shippers –Volume discounts –Electronic invoicing –Late deliveries are automatically researched and adjusted –Online air bills, supply orders, and reporting
Setting up a Fed Ex/UPS account as a Vanderbilt department Under Disbursement quick links click on Request FedEx/UPS Account Setup
Setting up a Fed Ex/UPS account as a Vanderbilt department to opens In the subject line of the type FedEx Setup or UPS Setup and in the body of the request a setup form for the account that needs to be setup Sylvia Graham will then fax or a Fed Ex/UPS set up form which will need to be returned to her in order to receive a Fed Ex/UPS account number On this form type your contact information, department name, US mailing address, phone number and cost center and account number Fax completed form to Sylvia Graham or scan/ form to
Demand Check Processing Check Requests Travel Forms External Consultant Forms Stipends Wire Transfers
Check Requests Payments to Individuals or Partnerships who perform a service to the University –Caterers, Accountants, Attorneys, Photographers, Banks, Speakers, Honoraria, Subject Participants, etc. –Must include full name, Social Security or Employer Identification Number and a complete mailing address for federal reporting purposes. –"Payment to External Consultant" Form or "Requisition for Services" Form must be used in lieu of the Check Request to pay consultants. –Payments for services performed in the U.S. made to individuals who are not U.S. citizens or permanent residents will be made through Human Resources to comply with federal regulations
Check Requests Reimbursements for business expenses. Membership dues to professional organizations and associations Magazines, brochures, and professional trade journals Postage Petty Cash reimbursements Advertisements Requests for payment of registration fees to attend conferences, workshops, etc. –Check requests should charge the departmental account/center number Refunds
What is a vendor? A vendor is how we identify any payee that is not a Vanderbilt employee or student. It can be a business or an individual.
Request comes into Disbursements - then what? Requests marked "RUSH" –Drop in the RUSH tray at reception desk. –Sign into the Rush Log next to the rush tray. –11am deadline for next day turn around –Emergency nature only –Should include a brief statement indicating the nature of the emergency requiring expedited handling of the payment. –Requires department head approval.
Regular requests –Dropped in tray at reception desk. –Normal turn around is 3-5 business days for complete requests payable to Vanderbilt employees or students –Vendor payments are processed within 3-5 business days and payment is released according to Vanderbilts standard vendor payment terms Request comes into Disbursements - then what?
All requests –Collected –Time stamped –Delivered to the UDCK supervisor for initial review –Forwarded to a processor –Thoroughly reviewed for accuracy, complete supporting documentation, and approval signatures –Also checked to ensure the request is in compliance with various Vanderbilt policies and IRS regulations Request comes into Disbursements - then what?
If everything is complete they are entered into our system and assigned a voucher number Checks are cut overnight and delivered to disbursements the next morning Checks are then distributed via US mail, campus mail, picked up by department personnel, or sent FedEx Request comes into Disbursements - then what?
Processing the Forms Is Payee US Citizen or Permanent Resident? –Due to IRS regulations all payments to persons other than US Citizens/permanent residents require additional review by the HR International Tax Office. –Additional paperwork may be required by HR International Tax. –To find out more about this process: m
Processing the Forms Payee Name and Address Including Country and Phone Number –Regardless of check distribution include a full legal name and a current mailing address. Social Security, Tax ID, or VU Employee ID Number Business Purpose –A valid business reason for the expense. Account/Center Information
Processing the Forms US Dollar Amounts (may be foreign currency for Wire Transfers) –If receipts are in foreign currency convert them into US Dollars and include the conversion chart (specific to the date on the receipt) with the check request Supporting Documentation –Original complete back-up documentation and/or invoice.
What is considered appropriate supporting documentation? Business Meal –Date –Place –Identities of the persons who took part –Nature and duration of the business discussion or activity (if not otherwise apparent) –Business purpose for the expense or the business benefit gained or expected to be gained. –Original cash register or credit card receipts for all meals greater than $25 Check our website
What is considered appropriate supporting documentation? Alcoholic beverage costs are generally considered personal expenses –If reimbursement is approved, charges must always be classified separately as entertainment expenses and coded to account number regardless of the funding source for the trip
What is considered appropriate supporting documentation? Honorarium –Something showing payees name, date, event, and business topic such as a printed program, flyer, or written communications with the third party Reimbursement –Original cash register or credit card receipts for any expense over $25.00
What is considered appropriate supporting documentation? Travel reimbursements –Non-VU personnel reimbursements VU employees travel: should be submitted on the Travel Expense Report form VU students travel: should be submitted on STU form –Itemized hotel statement showing check-in / check-out dates, room charges, taxes and fees, total amount paid and method of payment Training module and travel manual available on our website
What is considered appropriate supporting documentation? Travel reimbursements –If applicable receipts must be converted from foreign currency to US dollars, include a conversion chart showing the date and rate attached –Airline tickets should show the travelers name, beginning location and ending destination, total amount paid and method of payment
Can I submit my credit card statement in place of all my receipts? No: a credit card statement does not usually provided required details However, if you have a receipt that got lost and cannot obtain a duplicate then you can submit a CC statement showing the charge You also need to include a description of what was purchased and an explanation that the original was lost and will not be used for future reimbursement
Processing the Forms Authorized Signature(s) –Minimum of two original ink signatures required for all requests –Approval signature: someone authorized to sign for the designated amount and center on the request –If signature is a copy or of someone not authorized for that center, the request will be returned to the department for additional signatures –Authorizing signature cannot be the same as the requestor and cannot be the payee
Check Request Approval Signatures Demand checks may be requested by faculty or staff Requested by and approved by lines of the check request must be signed by two different individuals Individual approving the Check Request must be an authorized signer Stamped signatures will not be accepted
Check Request Approval Signatures Check Request cannot be "made payable to" and "approved by" the same individual Reimbursements must be approved by an individual with higher authority than the payee All check requests must have proper authorized approval – all authorized signatures for each center number must be on file in the Office of Financial Affairs
Processing the Forms Special Handling/Mailing Instructions –Pick up checks: available to VU employees and students only –Checks payable to parties external to Vanderbilt cannot be picked up by departments or mailed to departments. –If an exception to this policy is needed, note the reason for the exception on the check request form. The exception is subject to approval from disbursements management.
Processing the Forms Remittance Advice –Two copies must be provided First remains with request for imaging and documentation purposes Second is included with check –Mark Remittance Attached on form
How are checks distributed? Regular US mail US mail with a remittance included Campus mail Pick Up (payable to a VU employee of student) Federal Express Shipping High dollar checks (anything over $100,000) require an additional signature on the check prior to mailing
What could cause a delay? Any requests over $3000 from a restricted center require additional approval and time Any requests over $1000 from a 9 center require additional approval and time Any requests that are incomplete in any way will be delayed until completed If your request is missing signatures, it will be returned to the department If your request is missing supporting documentation, you will be contacted via then phone –If we are unable to resolve the problem the request might be returned to the department until it can be resubmitted complete
What could cause a delay? Any request payable to anyone who is not a US Citizen or Permanent Resident could require further review and additional approval from HR International Tax –If your request needs to be forwarded to HR International Tax for additional approval you will be notified via A new payee who needs to be set up in our system could require additional paperwork and take longer to get processed
What if a person has never been paid before? Requests forwarded to vendor maintenance for set up in the payables system –Sometimes this can require additional paperwork and time If payment is payable to a vendor for services provided and the vendor is new to the system –Social security number for an individual or W-9 for an organization/company will be required –Having this information attached to the check request will prevent possible delays
What if their name has changed since last being paid? Vendor: copy of a legal document (drivers license, W-9, etc.) should be included with the request so the name can be updated in our system Vanderbilt employee: include full legal name and employee ID Vanderbilt student: full legal name and social security number
Travel Advances 4-part carbon copy forms RE: registrations (blue) –ALWAYS charged to the department account and center as registrations are never advanced to a persons GAR account - they are paid up front HD: hotel deposits (yellow) –Acct 14010, Center , & linked to a GAR Acct # SS: super savers (gold) –Acct 14010, Center , & linked to a GAR Acct # TA: travel cash advances (pink) –Acct 14010, Center , & linked to a GAR Acct #
What is a GAR account? General Accounts Receivable: account numbers issued for employees or students for official University business Super savers, hotel deposits, and cash advances are tracked through the GAR account Any excess money advanced over expenses incurred need to be returned to the University, referencing the GAR number in order to clear the account GAR statements are ed monthly to the account holders It is the travelers responsibility to clear the account in a timely manner Outstanding advances (more than 90 days) are considered due and may be subject to payroll deduction
How do I get a GAR account? Contact Office of Financial Affairs to have one set up prior to advances being processed Form and instructions are available online
How do I complete the travel report? Brand new travel manual and training modules –Step by step walk through the travel report –Covers everything you should need to know and is available on our website
External Consultant Contract and Payment Form Payments for services that will not total $5000 or more If travel expenses are being reimbursed but original travel receipts are not attached, the reimbursement is considered reportable All signatures on the payment (bottom) portion must be original ink signatures for each payment –No additional supporting documentation for services is required as long as the form is complete and has a detailed description of services
Do you still process stipends? Yes: Disbursement Services now processes undergraduate stipends only –They should be submitted on the usual pink form with the award letter attached –All other stipends are processed through HR Processing. –See for more information and to download the appropriate forms. – Questions regarding this new form/process should be directed to or call HR Processing at
What if I need payment sent via wire/bank transfer? We process through an international broker (They also can provide draft checks in foreign currencies) Bank transfers in either foreign or US currency Priority status May require additional approval from HR International Tax Additional fees apply
What if I need payment sent via wire/bank transfer? Payee on the request should be the payee due the money and not the bank receiving the funds –All banking information needs to be supplied from the payee, included within the supporting documentation and not hand written by the department requesting payment
How can I get a status on my request? Once a voucher has been processed it will show in Business Objects in the Demand Check Payment Status Report. 1.Go to 2.Navigate to the InfoView login: Business Objects InfoView XI Login 3.Set Authentication Type to LDAP, enter your VUnet ID and e-password, and click Log-On 4.Under Public Folders, expand APPO, and then click Prod Reports. The list of available reports will be listed.
If your request does not show after 5 days and you have not been notified of any reason for delay you can send a status request to You should get a status within hours.