VENDOR INVOICING AT UC DAVIS AN OVERVIEW OF KEY TOPICS DECEMBER 14, 2015

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1 VENDOR INVOICING AT UC DAVIS AN OVERVIEW OF KEY TOPICS DECEMBER 14, 2015

2 Key Components for Purchasing Required Data Payment Terms Line item details Provide copy of PO to vendor Provide PO # to vendor 2

3 Vendor Invoicing Required Data Vendor Name, Remit Address, and Contact Info Invoice Date and Number UC Davis Purchase Order Number Delivery address Contact information of person who placed the order Payment Terms and Due Date Item details, include tax and shipping Bill To Invoices should be ed as a PDF document to: invoicing@ucdavis.edu 3

4 Payment Process (Standard) 1. Invoice received by AP Invoicing via , either from Vendor or Department 2. AP Invoicing processes Kuali Payment Request and attaches the PDF invoice The invoice can be submitted if the invoice total is no more than $100 greater than the related Purchase Order s remaining balance 3. The Payment Request will route for Fiscal Officer approval if: The invoice total is greater than $1000, or The related Purchase Order required line item receiving 4. The Payment Request will route for Central Accounts Payable approval if: The invoice total is greater than $ Settlement will occur based on the payment terms 4

5 Payment Process (Exception) 1. Invoice received by AP Invoicing via 2. AP Invoicing attempts to processes Kuali Payment Request, but encounters an issue Duplicate invoice submission Payment terms do not match the PO Purchase Order number is invalid or missing Invoice details do not match Purchase Order 3. Issue is logged for follow up by Exception Processing 4. The invoice is reviewed by the Exception Processing team, which tries to confirm and resolve the issues Simple issues are resolved in real time and the invoice is processed Complex issue may take several days to resolve, and require contacting the vendor and/or requesting department 5. If processed as a Payment Request, the invoice follows the same routing rules as the Normal Process. 5

6 Common Exceptions Duplicate Invoice Submission Exception team will review the payment history to confirm if a duplicate If a duplicate, the invoice is deleted and the vendor is flagged for follow-up If not a duplicate, the invoice is processed in Kuali Payment Terms Do Not Match Exception team will process the invoice using the more advantageous terms If the Invoice terms are used, the Exception team will also request a PO Amendment to eliminate future exceptions Purchase Order Number Is Missing Or Invalid Exception team will confirm the PO # is missing or invalid and return the invoice to the vendor for correction Invoices cannot be paid without a valid UC Davis PO # Invoice Does Not Match Purchase Order If the variance between the invoice amount and the remaining PO amount is greater than $100, the Exception team will follow up with the vendor and person who placed the order to determine the next steps If less than $100, the invoice will be processed in Kuali 6

7 Standardized Payment Terms Settlement Terms Description PaymentPlus NET DUE Disbursement issued as soon as invoice is received and approved. Settlement through one-time credit card number. ACH (paper check) ACH (paper check) ACH (paper check) ACH (paper check) 2% / 10 NET 45 (60) 1.50% / 15 NET 45 (60) 1.25% / 20 NET 45 (60) NET 45 (60) Payment processed within 10 days of invoice received date, including 2% early payment discount. If no discount taken, payment will be processed within 45 days (via ACH) or 60 days (via paper check). Payment processed within 15 days of invoice received date, including 1.5% early payment discount. If no discount taken, payment will be processed within 45 days (via ACH) or 60 days (via paper check). Payment processed within 20 days of invoice received date, including 1.25% early payment discount. If no discount taken, payment will be processed within 45 days (via ACH) or 60 days (via paper check). If supplier transmits invoices electronically through SciQuest portal, payment will be processed within 45 days (via ACH) or 60 days (via paper check). (This option is not currently available at UC Davis) If none of the above are acceptable, UC Davis offers NET 60 terms with no discount and settlement made by paper check. 7

8 Settlement Options Payment Plus (preferred) Vendor receives an from US Bank with a link to a one-time credit card number Vendor benefits from faster receipt of their money UC Davis benefits through US Bank incentives and more efficient processing ACH w/ discount (preferred) Vendor receives direct deposit into their bank account from an Automated Clearing House (ACH) Vendor benefits from faster receipt of their money UC Davis benefits from early payment discounts and more efficient processing Paper Check (discouraged) Vendor receives a paper check in the mail Costly for vendor, as they have to deposit checks and wait for money Costly for UC Davis, as we have to print and mail checks 8

9 Payment Plus How It Works 1. After final approval of payment, UC Davis notifies US Bank that disbursement is authorized 2. Vendor receives an from US Bank with credentials and link to website 3. Vendor logs in and retrieves a one-time credit card preauthorized for any invoices included in the current remittance 4. Vendor processes credit card for amount due using their point-of-sale system 5. US Bank bills UC Davis for prior day transactions through a daily batch job, with payment remitted via ACH 9

10 Early Payment Discounts When Discounts Apply Discounts are applied if the payment is approved within the number days allowed by the payment terms selected on the Purchase Order (Approval Date) (Invoice Date) <= Discounts Days Allowed The Disbursement Date, or payment date, is the maximum allowed to receive a discount, or the maximum allowed by the payment If the Purchase Order and the Invoice have conflicting payment terms, UCD will take the more advantageous terms when processing payment What is Discounted? Early payment discounts apply to the entire order, less shipping or freight charges Sales tax is calculated after discounts are applied Example: $100 invoice line, $10 shipping, 7.5% tax rate, 2% discount $100 x.02 = $2 discount = $98 line amount after discount $98 x.075 = $7.35 sales tax $100 line + $7.35 tax + $10 shipping - $2 discount = $ net 10

11 Matching Standard Matching Rules Invoice is considered matched if Invoice total is less than or equal Purchase Order s remaining balance, or Invoice total is no more than $100 greater than Purchase Order s remaining balance Fiscal Officer Approval Invoice only requires Fiscal Officer approval when Invoice total is over $1000, or Related Purchase Order requires line item receiving 11

12 Receiving Requirements Line Item Receiving is required when: 1. Purchasing a capital asset commodity when the individual item exceeds $5000, or 2. Purchasing a quantity-based order when the order total exceeds $10,000, or 3. The optional Require Receiving checkbox is selected when entering a quantity-based requisition, regardless of total If Line Item Receiving is required, sufficient quantity must be received before the Fiscal Officer can approve the Payment Request document 12

13 Sales Tax Campus versus City of Davis UC Davis campus is not considered part of the City of Davis, and thus only has a 7.5% sales tax rate The Kuali System determines the 7.5% by the 4-digit suffix added to the postal code (ex: ) If a vendor invoices the incorrect tax rate, the invoice will either be short-paid or over-paid, depending on the proper rate based on the deliver address The vendor will notified of the discrepancy by a Check Stub note added to their remittance A corrected invoice is not necessary if the mistake relates to City versus Campus tax rates Any other discrepancy with tax rates should be corrected by the Exception Team prior to processing the invoice 13

14 Contacts Contracting Services TBD name TBD Accounts Payable Accounts Payable Help Desk Shared Services Center SSC Help Desk 14