Chart of Accounts
The new account numbers are different from the account numbers you have been using. The most significant difference is a longer string of digits, which aid in helping you manage your budgets.
The new chart of accounts also includes analytical accounting, a new functionality that allows you to code your revenue and expenses in a more detailed way. For more information, see our Chart of Accounts..
Purchase requisitions are now be entered online instead of through the old paper process. As part of the business workflow, the first step to creating an order request is for the system to check the availability of budget dollars. Essentially, do you have the money for what you wish to purchase? This budget check will be done at the summary level account codes (i.e., the “X600” level referenced above).
If funds are available, your order may proceed forward. If funds are not available, you will need to defer your purchase or contact the person responsible for managing your budget to have funds redistributed to the functional area where you need to make your purchase.
The new FIS system encumbers your funds as soon as an order request has been completed. With an encumbrance being a commitment within an organization to use funds for a specific purpose, we are essentially reserving the funds to make your requested purchase when a purchase requisition has been finalized.
When a purchasing requisition is processed, funds are placed aside for that transaction. Those funds are no longer available for your use in other transactions. The system keeps track of this and stop an order that does not have sufficient budget dollars available.
Encumbrances do not show up in the “actual” expense balance on your expense reports because a payment has not yet been generated and the funds have not physically left the University. However, the encumbrance balance appears on financial reports so you can track money that is expected to be spent. The encumbrance disappears once the invoice has been paid. The purpose of encumbrance accounting is to avoid budget overspending.
Electronic Purchase Requisitions
In the new FIS system, purchase requisitions are entered online and electronically routed to the proper individuals for approval. The routing sequence is based on the University business rules. Approvals are sent to the appropriate individuals through the email notification system.
The originator of the requisition can track his or her request through the system and know at any point in the process where the requisition is located. Entering the request into the FIS system will replaces the old paper process. You also are able to attachment documents and quotes with your requisition; these supporting documents are available electronically as well.
All requisitions end in the Purchasing department as the final step of the process. This is where the purchase requisition officially becomes a signed and authorized purchase order, and thus a binding contract for the University. Everything is time- and date-stamped in the system so you have an accurate record of your completed transaction.
Electronic Approvals of Purchase Requisitions
A tiered approval structure for each department is based primarily upon the dollar amount of the requisition in the new FIS system. The list of approvers has been prepared from information provided to Finance and Administration from the deans of each College or School. In addition to the dollar amount of the requisition, other factors that will determine additional approvals for your requisition, such as:
- Is there grant funding involved?
- Is capital or computer equipment being requested?
- Does the request include a contract that will need review by our legal counsel and signed by the CFO?
- Should University Communications be aware of this request?
While this might sound like a slow process, expect purchase orders to be transmitted the same or next day. Planning ahead is always recommended and encouraged.
Receiving and Invoicing
After your purchase order has been sent to the vendor and you have received your goods or services, you are required to go into the FIS system and acknowledge that the proper amount of goods were delivered and in good condition and/or you are satisfied with the services performed. This is the confirmation step of the process. Previously, invoices were mailed to the department and a department signature was confirmation that the goods or services have been received.
Vendors are instructed to mail all invoices directly to the University’s Accounts Payable department for processing and payment. Accounts Payable processes the invoice after validating that a purchase order was issued (authorization step) and validating that a receiving number has been assigned (confirmation step). If the invoice matches the request that was authorized and confirmed, Accounts Payable will process and mail a check to the vendor (payment step).
Verbal purchase orders placed with vendors are unauthorized and not acceptable. Invoices received from a vendor without a valid purchase order issued by the Purchasing department will be considered an unauthorized purchase.