1. Before and After: Looking at the Changes in Business Processes

2. The University’s procurement, travel, accounts payable, and payment processes have changed considerably over the past ten years. Prior to fiscal year 1998, requisitions were processed using a paper form that was manually routed for a signature approval. Once the paper requisition was received by the Purchasing Office, a three-part paper purchase order was created. This form was then mailed or manually faxed to the vendor. This form was in turn manually entered into the University’s accounting system. This process was very paper intensive and time consuming. Once the invoice was received in Accounts Payable, a copy of it was sent to departmental users for negative confirmation (where departmental users were given 30 days to inform Accounts Payable to NOT pay the invoice). After the allotted time period, the invoice was paid. Invoices were sent to the Disbursing Office to be matched up with the payments. Vendors may not receive their payment for upwards of 60 days. BASIS (Business and Administrative Strategic Information Systems) was established to design and develop to provide an integrated, customized suite of software modules to the Business and Administrative needs of the University.

3. Requisition Process ManualBASIS Approximately 36,000 paper requisitions were processed in FY 1997. Requisitions required a manual signature of the cost center manager. Requisitions were often “walked-through” so they would be processed sooner. ALL requisitions for goods and services are entered electronically by the campus community. Requisitions are routed electronically for management’s approval. Requisitions can be tracked throughout the approval process. Users can control the tolerance amount allowed on the purchase order.

4. Purchase Order Process Manual BASIS Approximately 36,000 purchase orders were created in FY 1997. Buyers created the purchase order by entering the paper requisition information into a stand alone system that printed the PO on a three-part form. The paper PO was mailed or manually faxed to the vendor. The PO was manually entered into MSA (the University’s accounting system). Encumbrances were posted via nightly batch process. Blanket PO’s had to be created every fiscal year. Any PO change had to have a paper form received before the buyer could process. Purchase orders are created from approved requisitions. Each buyer has an electronic inbox. Requisitions meeting established criteria have the PO automatically generated. PO’s are faxed to vendors automatically via the fax server. No additional data entry required. Encumbrances are posted as soon as the PO line is opened. Blanket PO’s are available until the user closes them. Any PO change (such as cost center distribution, closing or re-opening, increasing PO maximum, etc.) is processed electronically. Buyers can modify information associated with the PO, but cannot increase the cost.

5. Purchase Orders by Type and Fiscal Year

7. Purchase Order Amounts by Type and Fiscal Year

8. Receiving Process Manual BASIS After invoice was received in Accounts Payable, a copy of it would be sent to the department. The departmental users had 30 days to respond if they didn’t want the invoice to be paid. Receiving is performed at the departmental level. There are two types of receiving: dollar and quantity. System maintains an audit log of who performed receiving. System allows multiple receiving entries per PO line. Expensing and AP liability are based upon the receiving date.

9. Accounts Payable Process Manual BASIS Invoices were entered into the accounting system. Copies of invoices were mailed to departments for negative confirmation. Use tax had to be manually calculated. Invoices were filed with the voucher after the check was issued. Invoices are entered for payment against the lines of the PO. Invoices must match the receiving entry. System calculates use tax, if applicable. All invoices are logged and imaged for easy retrieval by users and auditors.

10. Invoices Processed by Type and Fiscal Year

11. Invoice Amounts by Type and Fiscal Year

12. E-Commerce e-Commerce Partners are vendors with whom the University of Arkansas has established a relationship which allows pre-approved University of Arkansas employees the ability to purchase goods via a Procurement Card or other form of purchaser identification as defined by the e-Commerce Partner. As purchases are made, the charges for those purchases made by individuals are electronically transmitted. Once charges have been downloaded to the BASIS system, departments have the ability to approve the charges along with redistributing the cost to other 'pre- defined' cost centers as desired. Disputed charges may be identified as such, but regardless, payment will still be made to the e- Commerce Partner. Having the ability to electronically receive this data has alleviated the need to issue purchase orders for these items. This process also combines all the charge activity for a month so that one payment to the bank is issued rather than numerous checks to numerous vendors.

13. E-Commerce cont. In fiscal year 2003, the University implemented an electronic commerce process. Staples was our first partner. Our departmental users are able to purchase office supplies via the Staples website. The supplies are delivered to the department the next day via the University’s Bookstore. Business Affairs is able to electronically download the invoices on a daily basis. Our procurement card process was also implemented in FY 2003. The credit card allows our users to purchase from a variety of vendors reducing the need for blanket PO’s. Our travel card process was implemented in FY 2004. This credit card allows our administrative users to purchase airfare for travelers within their department reducing the need for a travel related PO or an out-of-pocket expense for our travelers. In FY 2006, the administrative card was expanded to allow charges for rental cars and registrations. In FY 2007, we have begun a process where select travelers are allowed to use the travel card during their trip for lodging and meal expenses.

14. E-Commerce Transactions by Type and Fiscal Year

15. E-Commerce Amounts by Type and Fiscal Year

16. E-Commerce and AP Invoice Transactions

17. E-Commerce and AP Invoice Amounts

18. Travel Claim Process ManualBASIS The travel claim reimbursement was a paper document filled out by the departmental user or traveler. The paper form had to be signed by the traveler with additional signatures for management’s approval. Once the Travel Office received the form, they would have to manually check per diem and mileage calculations. If there were errors on the form, it was mailed back to the department for correction and new approvals. Departmental users would have to call the Travel Office to find out the status of the travel claim. The departmental users must submit an electronic travel claim via BASIS. The travel claim is routed to the cost center manager’s for approval. The system calculates the maximum meals and mileage allowed for the trip. Departmental users can track the travel claim throughout the process form creation to payment. A paper copy of travel claim is printed via the web for the traveler’s signature. We are required to have the signature of the traveler as well as certain receipts such as lodging and miscellaneous expenses over $25.00. The traveler can also process their own travel claim via the web that also routes for the appropriate approval.

19. Travel Claim Reimbursements

21. AP Check Process ManualBASIS Checks generated in a nightly batch run. Checks had to be manually matched to multi-page voucher. Invoices were matched to the check and voucher. Invoices were filed with the voucher. If one of the invoices on a payment had a problem, the check had to be cancelled and all invoices re-entered into the system for another payment. It could take up to two weeks to process a batch of checks before they could be mailed. Could not take advantage of any discounts. One person was dedicated to stapling the invoices to the voucher. Another person was dedicated to answering departmental and vendor phone calls. Checks can be produced during the day and on-demand. Three way match (PO, invoice, and receiving) before check is produced. Paper vouchers are obsolete. If there’s a problem with one of the invoices on a check, only the problem invoice is canceled so a new check can be processed. Checks are mailed out the same day. Utilizes the payment and discount terms set up for a vendor. Departmental users can track invoices and payments in BASIS. Departmental users can even see if the check has cleared our bank. Vendors can view the status of their payments by going to a BASIS website. Certain information is required for security purposes such as their TIN and an invoice or PO number.

22. Number of AP Checks Processed

23. Dollar Amount of AP Checks Processed

24. Invoices Paid on Time by Fiscal Year

25. Accounts Payable Discounts Taken by Fiscal Year

26. The travel claim reimbursement process is the last area where our users are required to submit a paper form for entry by the Travel Office. Beginning FY 2007, our departmental users can electronically submit the travel claims for their area via BASIS. The travel claim routes to the appropriate cost center manager’s for approval. We also allow our travelers to submit their own travel claim via the web that routes to the appropriate cost center manager’s for approval. Business Affairs is also identifying new e-commerce vendors which will decrease the amount of paper invoices Accounts Payable has to process. BASIS is also working on an electronic payment process that will automatically deposit personal and travel reimbursements into our employee’s bank account. What’s next