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Accounts Payable Procedures

Payment of Non PO's - Check Request
Bank Drafts in Foreign Currency
Petty Cash Payments
Business Meal Reimbursements
Stop Payment/Cancelled Check
Campus Store Purchase Orders
Change Funds

Exemption from Sales/Use Tax
Payment of Freight Invoices
Travel Advances and Reimbursements
Payment of Moving Expenses
Library Purchase Order Payments
Fellowship Payments


Purpose

This chapter contains policies and procedures relating to the payment of all invoices for the University, including both purchase order and non-purchase order items. These policies are intended to be guidelines for processing all expenditure documents through Accounts Payable. The responsibility to observe these guidelines is that of both the employee and the department dean/director/chair who approve such expenditures. 


Scope

The material in this chapter pertains to all employees and departments of the University, regardless of the index to be charged. 

This material is not all inclusive, but is intended to cover those policies and procedures which should be referenced on a more than casual basis by a significant portion of the University community. If you cannot find policies and procedures in this chapter that relate to your situation or if you need interpretative assistance, please contact the General/Auxiliary Accounting area or the Director's office, as appropriate.


Policy

Accounts Payable is responsible for accurate and timely payment of all invoices for the University. This includes all payments on purchase orders, blanket purchase orders, check requests, travel advances and travel expense vouchers, petty cash, freight bills and fellowship payments. 

Inquiries from vendors regarding the status of unpaid invoices are generally handled by Accounts Payable personnel. If invoices have been sent directly to the department by the vendor, or have not been returned to Accounts Payable with the necessary information (index, acct, PO number, signature) the department will be expected to respond to inquiries from the vendor. It is extremely important for the University to maintain a satisfactory credit standing with vendors and prompt payment ensures this.


Payment of Non PO's - Check Request

Certain types of items can be purchased without a university purchase order. Listed below are items which are normally paid on a check request. 
  • Conference/seminar registration fees 
  • Fellowships 
  • Honorariums 
  • Inter-library loan 
  • Lodging deposits 
  • Lodging expenses for non-employees 
  • Memberships 
  • Postage 
  • Refunds/overpayments 
  • Royalty payments 
  • Agency fund expenditures (student organizations/payroll deductions) 
  • Petty cash replenishment requests
PROCEDURE
  1. The department completes a check request with the following information:
    • Name of individual/company/organization to whom the check is payable
    • Payments to individuals must include a social security number or federal ID number
    • Complete mailing address.
    • Checks can be sent to university departments but a mailing address is still required
    • Indicate special mailing instructions such as "Hold for Pickup" or "Send to Department"
    • An explanation/purpose of the payment
    • Index and account code to be charged
    • Authorized signature
  2. Supporting documentation (registration forms, order forms, remittance advice, receipts, invoices ) must be securely fastened to the check request. Any reimbursement must include proof of payment such as a paid invoice or credit card statement, or receipt. 
  3. Indicate if enclosures must be sent with the check.

Check requests can be also be processed on the web. Click here to get there.


Exemption from Sales/Use Tax

Michigan Technological University, as an institution of the State of Michigan, is exempt from the payment of sales and use taxes on purchases of tangible property and applicable rentals. However, the University is liable for the collection and payment of the tax on sales and rental transactions to non-exempt individuals and organizations. 

Use of the University's sales and use tax number for personal use is prohibited. 

Generally payment or reimbursement of Michigan sales and use tax will not be made. The University is also exempt from the payment of sales tax in Wisconsin and Florida.


Bank Drafts in Foreign Currency

Accounts Payable processes foreign currency bank drafts when vendors require payment in foreign currency. 

PROCEDURE

  1. The department initiates a purchase order or check request and supporting documentation (invoice, registration forms,) indicating payment in foreign currency. 
  2. Accounts payable requests the foreign draft from the bank. There may be a small charge to the index referenced on the purchase order/check request for this service. 
  3. Requests for foreign drafts should be submitted a week prior to the date the check is needed to allow adequate processing time.

Payment of Freight Invoices

Accounts Payable receives and pays freight invoices. When items are being returned, it is essential for the department to instruct the carrier to include a university index, purchase order number or employee name on the freight bill. If a freight bill does not include an index or purchase order number, it is extremely difficult to process the invoice for payment. 

If prepayment is required, a check request must be received in Accounts Payable at a minimum of five business days prior to the check being needed.


Petty Cash Payments

A department may establish a petty cash fund to purchase minor supplies when it would be otherwise impractical to purchase items through the usual purchasing methods. A check request and original receipts must be sent to Accounts Payable for replenishment of petty cash funds. 

Click here for PROCEDURE


Travel Advances and Reimbursements

Individuals traveling on University business may be reimbursed for necessary and reasonable expenses incurred. A cash advance may be requested by submitting a Request for Advance of Funds to Accounts Payable prior to traveling for those employees who do not have an American Express Corporate Card. A Travel Expense Voucher with original receipts must be sent to Accounting Services to request reimbursement of incurred travel expenses. 

Click here for PROCEDURE


Business Meal Reimbursements

All business meals and banquet costs incurred by University employees hosting these events should be paid directly by the employee, unless the event is held at University facilities. Reimbursement requests are processed on a Business Meals and Banquet Report Requires Adobe Acorbat Reader with original receipts attached and submitted to Accounts Payable. Events held at University facilities are interaccount billed by the facility.


Payment of Moving Expenses

The University may reimburse new employees for allowable moving expenses, limited to the amount of one month's salary. Current employees who are assigned to a remote work area on behalf of the University may also be reimbursed for allowable moving expenses up to $6,000. Reimbursement is requested by submitting a travel voucher and original receipts to Accounts Payable. 

Click here for PROCEDURE


Stop Payment/Cancelled Check

Occasionally checks may be lost, stolen or incorrect which requires a stop payment and reissue of the check. Accounts Payable is responsible for issuing a replacement check. 

PROCEDURE

Departments requiring a stop payment on an operating/accounts payable (non-payroll) check should contact the Manager of Banking Operations and Auxiliary Accounting immediately upon realizing a check is lost or stolen. If a stop payment is required on a payroll check, Payroll Services must be contacted. 

Accounting services issues the stop payment with the bank. A replacement check will be issued. Generally, if a non-student check is reissued 30 days after the date of the check, there is no fee. However, if the reissue is prior to 30 days from the check date, there will be a fee. If a student refund check is reissued after 15 days from the date of the check, there is no fee. If the reissue is prior to 15 days from the date of the check, there will be a fee. 

Accounts Payable is also responsible for maintaining the check cancellation function. If a check must be canceled due to an inaccurate amount, an incorrect vendor name, or an incorrect address and a replacement is not needed, the check must be sent to Accounts Payable with a note indicating the check must be canceled.


Library Purchase Order Payments

The JR Van Pelt Library issues purchase orders directly to vendors due to the unique nature of the items (books, journals, subscriptions, periodicals, etc.) being purchased. Accounts Payable receives the invoices from the Library and processes them for payment.


Campus Store Purchase Orders

The Campus Store and University Images also issue purchase orders directly to vendors due to the nature of their business. It is practical and efficient since items being ordered are for retail sales. Invoices are entered by these units into their point of sale system and interfaced to accounts payable for payment. Checks are distributed by Accounts Payable.


Fellowship Payments

Fellowship checks are distributed monthly by Accounts Payable to be available at the beginning of each month. 

PROCEDURE

Departments enter student fellowship information into the Banner system by the 11th of each month. The registration status, index and any withholding requirements are verified by Accounting.

The University is required by federal law to withhold taxes on fellowships payments to some nonresident alien students depending on their visa status and tax treaties. The withholding requirements are determined by the University tax accountant.

Accounts Payable distributes the fellowship checks to the departments. They are normally available on the 24th of the month. Check requests may also be processed for fellowship payments.


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This page created by Bryon Freeman.