Purchase to Pay (P2P) Policy

Transcription

1 Purchase to Pay (P2P) Policy Glasgow Airport only Date: May 2012 Prepared by: Kevin Robertson Status: Issued

2 1. Purpose The purpose of this document is to; Describe and communicate the policy for purchasing goods, works or services from approved Glasgow Airport suppliers Ensure that Glasgow Airport are compliant in all aspects of P2P procedures and governance Ensure requesters use the correct processes and systems Ensure payment in respect of such goods, works and services is made to suppliers appropriately. 2. Overview The P2P policy sets out the minimum set of key controls required, as standard across the P2P processes and systems, for the purchase of goods, works and services from suppliers. The P2P policy ensures that Glasgow Airport purchases items from pre-approved suppliers, at pre-negotiated prices consistent with quality products/services, in a timely manner and in conjunction with the guidelines set out within the HAHL Delegated Financial Authority (DFA) Policy. This results in financial and commercial approval being sought and secured, from a cost centre manager or an appropriate approver, for purchases before an order is placed with the supplier. In addition, in order to ensure compliance to existing contracts and suppliers, Delegated Purchase Approval (DPA) may also be required for purchases. It is the responsibility of every P2P user to ensure that there is compliance at every level and stage in order to maximise purchase value for Glasgow Airport. Non compliance to this policy can lead to the exposure of Glasgow Airport to high risk, fraud and non compliance to both internal and external regulations. The P2P policy should be communicated in the form that it is presented and shall be published on the Glasgow Airport Procurement Hub Pages, visible to all P2P users and any relevant 3rd parties. All requisitioners should complete online training via Oracle UPK (User Productivity Kit) and sign off against Glasgow Airports Procurement Guidance policy to signify that they understand the policy and the consequences of breaching this.. Except in those circumstances specifically detailed within this document, any deviation from this policy shall not be permitted unless so justified and authorised in writing by the Head of Procurement. 3. Scope This guidance applies to all P2P users with requisitioner authority that use P2P processes and systems. Glasgow Procurement P2P Policy

3 The purpose of this policy is to ensure that Glasgow Airport operates a consistent P2P governance programme, comprising e-purchasing, e-payables and purchasing cards, and strives to achieve its goal of purchasing compliance through authorised suppliers and routes to market. This policy is developed and owned by Glasgow Airport Procurement. This policy will therefore set out the requirements of P2P users to: Ensure that all purchases are aligned to our business needs and strategies Ensure that there is approval for spend prior to commitment with suppliers and, that these approvals are made in accordance with DFA policy Ensure that all purchases are supported by a Purchase Order, except where specifically exempt or as agreed specifically by the Head of Procurement Ensure accurate and timely payments of invoices to suppliers Ensure that the P2P process is transparent and supports audit and regulatory requirements Ensure that there is adequate management information in relation to purchasing activity that supports the business. Ensure that all governance and controls are adhered to in order to reduce risk and potential fraudulent activity Clarify P2P stakeholder roles and responsibilities 4. Document Change Control Issue Version Description Date Author 1.0 Draft May 2012 Kevin Robertson 1.1 Issued June 2012 Kevin Robertson 5. Subject Matter Experts Review Name Position Date Maureen Jamieson Head of Procurement Glasgow Airport May 2012 Julie Dyet P2P Delivery Manager BSC June 2012 Nicola Bromby Head of Procurement Process and Systems - Heathrow 6. Document References Glasgow Procurement P2P Policy

4 Successful application of this policy shall require all users to understand and comply with the related documents referenced below. HAHL Delegated Finance Authority Glasgow Airport Code of Conduct HAHL Purchasing Card Policy Glasgow Airport Procurement Guidance Glasgow Airport Sustainable Procurement Guidelines 7. P2P Definitions Supplier Definitions Category Purchase to Pay (P2P) Employees Suppliers Preferred A preferred supplier is a supplier operating within an approved Glasgow airport contractual agreement for defined goods and/ or services. Approved An approved supplier is a supplier that has been approved for use by Glasgow Airport Procurement against criteria including capability, quality and financial stability. Approved suppliers are normally suppliers that provide infrequent supply or where the supply isn t in place or cannot be provided via the preferred supplier listing. These suppliers are expected to have a short/medium-term relationship with Glasgow Airport. Use of approved suppliers is monitored by Glasgow Airport Procurement, who identify and measure trends in expenditure. Glasgow Airport Procurement will then identify potential benefits that could justify tendering the goods, works or services in question in order to create additional preferred suppliers. Regulatory Suppliers that are generally extensions of the State, or controlled, licensed or regulated by the State where there is little choice in respect of which Supplier can be used i.e. police, NATS, HMRC & local authorities. Subscription Suppliers to who Glasgow Airport pay subscriptions for a periodical or specified period of time for a series of services (corporate publications). This does not include professional fees for individuals who should be expensed in accordance with the company rules and regulations. A category is the logical grouping of similar expenditure items, such as spend on advertising agency services or IT hardware Purchase to Pay is a series of tools and processes that support Glasgow Airport to purchase goods or services from a supplier in a compliant way, enabling payments to be made using the agreed method and timing as stated within the terms of contract Individuals employed directly or indirectly working for or on behalf of Glasgow Airport Third party suppliers providing goods, works or services to Glasgow Airport Glasgow Procurement P2P Policy

5 Delegated Financial Authority (DFA) Delegated Procurement Authority (DPA) Oracle iprocurement isupplier Segregation of Duties Requisition Purchase Order Catalogue Smart Form DFA is attached to a role rather than an individual and governs the role holders ability to approve Purchase Requisitions and, indirectly, Purchase Orders. Delegated Procurement Authority (DPA) concerns the limits within which the role holder may contractually commit the company through purchase transactions - both capital and revenue Oracle iprocurement is the self-service requisitioning application that controls employee spending. This is located within MyAirport. Oracle iprocurement provides a web-based shopping system that allows employees to create, manage, and track their own orders while the procurement department retains central control. The isupplier portal enables suppliers to review their account status, view, manage and print purchase orders and submit invoices to Glasgow Airport for payment. Segregation of duties (SoD) is a key concept of Oracle internal control. In essence, SoD implements an appropriate level of checks and balances upon the activities of individuals for prevention of fraud and errors A requisition is a formal request to make a purchase on behalf of Glasgow Airport. A purchase order (PO) is a formal document issued by Glasgow Airport to its suppliers. It is commitment to purchase. It indicates type, quantity, and agreed prices for products or services for the supplier to provide. A catalogue is a customised list of supplier products and services with agreed pricing that allows electronic ordering by business users. A type of non-catalogue request template for specific items/requirements where fields can be pre-defined for business users: Provides default values for fields Can restrict category selection by smart-form Can restrict supplier selection by category by smart-form e-invoicing Glasgow s goal is that 100% of all invoices to be processed via e- Invoicing. isupplier provides an electronic hub for suppliers to submit invoices. RBS e-invoicing solution is the 2 nd connection method and is ideal for high volumes of invoices. IOH GRNI (Invoice on Hold) Invoices that cannot be processed for payment because of incomplete information or activity e.g. no goods receipt or in dispute. (Goods Received Not Invoiced) Occurs where a purchase order has been receipted and invoices have not been received for the full receipted value. 8. Compliant Routes To Purchasing Glasgow Procurement P2P Policy

6 There are two compliant routes to purchase and pay for goods, works or services from Glasgow Airport suppliers: 1. Oracle iprocurement 2. Visa Purchasing Card 9. P2P Policy It is the responsibility of all employees to ensure that they comply with the following: Approval of spend is required prior to any financial commitment being made with a supplier Prior to commencement of any work or delivery of any goods or services, a formal and auditable commitment must be issued to the supplier (where possible referencing the contract) via one of the compliant P2P routes Requisitioners must promptly confirm receipt of the goods or services when received 10. Mandatory P2P Training All individuals requesting access to become a requisitioner on i-procurement must complete the mandatory training on Oracle UPK (User Productivity Kit) and read / sign in to the P2P policy and related policies, procedures and documents. 11. Raising a requisition within Oracle iprocurement Employees must never commit to make a purchase before a Requisition has been raised, approved and the associated PO is created within Oracle If the purchase is made using a Visa purchasing card (P-Card) a different set of rules and controls will apply, which can be found with in the P-Card policy. Where Glasgow Airport have a contract with a supplier, the values quoted on the requisition must be consistent with those stated in the contract and the PO must be tied off against the corresponding CPA. Requisitions should only be raised with suppliers listed on the Glasgow Procurement Hub These suppliers may have catalogues through which requisitions can be made. Where a supplier catalogue is not available within Oracle a non-catalogue requisition can be raised. When raising a requisition, you must create a separate line item for each request. Multiple goods or services or cost centres must not be bundled into a single line item as they may relate to different categories which must be classified and reported accordingly. A meaningful justification must be stated for the approver to be able to make an informed decision. This includes referencing the Contract Number (where known), that this is a budgeted item and for what purpose the items are required. All requisitions will be raised without value added tax (VAT) as the supplier will include the appropriate VAT on their invoice. When raising foreign currency invoices please not that any international tax or duty must be added to the PO value. Glasgow Procurement P2P Policy

7 Where relevant, freight and delivery charges should also be included within the requisition. Be sure to check with the supplier if these additional costs are included. A requisition can only be raised by the Oracle operating unit (OU) that is assigned to the requisitioner and not across different OUs. All line items must be allocated to the correct cost centres or project codes and procurement category (applicable only to non-catalogue items).the category assigned must be appropriate to the items being purchased. A spreadsheet list of all categories is available on the Glasgow Procurement Hub. A requisition must not be raised with a combination of project and non-project lines or across multiple projects. 12. Obtaining Approvals and raising a Purchase Order Requisitions will go through an approval process that may include one or all of the following; Technical approval - Some procurement categories are subject to technical approval which means that requisitions go through an additional approval route. Delegated Procurement Approval (DPA) Procurement approval may be required in order to ensure that Glasgow Airport are achieving the best value for the business. DPA value thresholds are supplier specific. DPA goes through an approval hierarchy. Delegated Financial Authority (DFA) - DFAs are assigned automatically by the system (Oracle iprocurement) in line with the HR organisation hierarchy (line management structure). Requisitioners cannot approve their own requisitions. Employees with a DFA who are approving requisitions are responsible for ensuring that the expenditure is in line with Glasgow Airports business requirements and planned for within their budgets. Specific considerations required as part of the approval process are to: Check whether the proposed expenditure has been allocated budgeted Decide whether the item(s) on the requisition need to be purchased Technical approval will check for quality and governance, amongst other indicators, to ensure that we are purchasing in line with applicable policy. Specific considerations that are part of these approvals process are to: Ensure compliance with all relevant legislation and contracts Ensure appropriate terms and conditions are in place and referred to where or if appropriate Procurement will check for quality and governance, amongst other indicators, to ensure that we are purchasing in line with applicable policy. Specific considerations that are part of these approvals process are to: Ensure that appropriate annotation is given in the Note to Approver field if further justification is required. Ensure that Glasgow Airport is achieving the very best value for money Ensure the PO is being placed with an approved supplier where appropriate 13. Receipting the Purchase Order Glasgow Procurement P2P Policy

8 HAHL operates a 3-way matching process. This means that before an invoice is paid, it must have a valid purchase order number and confirmed goods receipt in Oracle iprocurement. To ensure that there is no delay in the payment of invoices, the goods, works or services must be receipted as soon as the goods, works or services have been received and the quality satisfied. There are a few exceptions where 2-way matching is performed (no receipt in Oracle i- procurement). These are pre-approved and agreed by procurement prior to implementation. Where goods, works or services are received or managed centrally, (the person confirming receipt of the goods, works or services is different from the requisitioner) the requisitioner is still responsible for obtaining confirmation from the central team that the goods, works or services have been received in line with the quality expected. This must occur before receipting the item in Oracle iprocurement. If the goods, works or services provided or performed do not meet the standard, specification or quality level expected, you must not confirm receipt in Oracle iprocurement. Receipting should only be made for items which you are satisfied have been adequately performed or received. If goods are found in any way to be unsatisfactory they should be returned immediately to the supplier and if necessary the procurement department informed. Where goods have been received, it is the responsibility of the requisitioner to ensure that the type and quantity and quality of goods received match the delivery note and, for the delivery note to be filed as proof of receipt. Glasgow Airport operates a partial receipting process which means that it is possible to only pay for the goods, works or services that have been received, checked and confirmed. The supplier can therefore invoice and receive payment for that portion of receipted goods, works or services. It is the requisitioners responsibility to ensure they receipt against the correct PO. If a requisitioner is leaving Glasgow Airport or transferring to a new role or department, it is their responsibility to complete a PO transfer approval form (available on the Glasgow Procurement Hub) which will allow their PO s to be transferred to a new requestor, if known, if not known then all PO s should be transferred to their line manager. 14. Invoices and Payments Glasgow Airport will only pay invoices which meet a set criteria, including PO number and details of PO line items. Invoices that do not meet the set criteria will be considered noncompliant, will be rejected and returned immediately to the supplier without payment. All invoices must be submitted to BSC for processing. It is Glasgow Airport s preference for suppliers to use e-invoicing. Suppliers registered for isupplier can submit electronic invoices as soon as confirmation of goods, works or services has been received. All compliant invoices will be processed and paid in accordance with the supplier payment terms as defined within the contract. Where invoices are processed but cannot be released and paid, a notification will be sent to the Requisitioner confirming the reasons why the invoice is placed on hold (IOH). It is the Glasgow Procurement P2P Policy

9 responsibility of the requisitioner to ensure that the invoice on hold is released for payment as soon as possible in order to avoid delay in supplier payment. Where an invoice has been submitted incorrectly or refunds are due to Glasgow Airport, suppliers must submit a credit note in all such instances. Refunds, discounts or anything else must not be agreed with suppliers outside of contracts or the normal payment process. As stated above, it is Glasgow Airports preference for suppliers to use e-invoicing, where this is not feasible paper (manual) invoices should be issued directly by the supplier to the BSC for processing. The invoice must be invoiced to Glasgow Airport Limited, as per the instructions on the PO. Failure to adhere can result in severe HMRC penalties in the event that VAT is reclaimed incorrectly. Suppliers must quote the PO number on all invoices and credit notes sent to the BSC in order for the invoice or credit note to be processed. Only the BSC are authorised to process supplier invoices or credit notes. All invoices will be paid, providing the associated PO has been receipted and once the due date for payment has been reached. All payments will be made to Glasgow suppliers by BACS on a Monday. All invoices should be paid in line with the payment terms agreed in a contract or purchase order. However, where there urgent payments are required in order to respond to business critical incidents or manage reputation damage, exceptions may be made to expedite urgent payments. A business justification must be submitted to Head of Finance at the BSC, Treasury and the relevant Head of Procurement, two days prior to a payment run as funds need to be cleared with Treasury. 15. Direct Debits Direct debits are not a preferred method of payment for Glasgow Airport and all efforts should be made to use the alternative approved payment methods as described within this policy. In exceptional circumstances where direct debits are required to fulfil payment, procurement are the only persons authorised to define and approve the creation of these for suppliers. Once created, these suppliers will be subject to quarterly reviews by the BSC P2P Delivery Manager as a minimum to check validity. 16. Disputed Invoices If you dispute an invoice, you must inform the supplier and the Accounts Payable Team at the BSC (by to bscpayables@baa.com) immediately. It is your responsibility to proactively close this down, however it is worth while noting that placing an IOH on dispute will not prevent Oracle generating hold notifications to requisitioners or their line managers. If the requisitioner is unable to reach a resolution with the supplier, they should also contact the procurement department for additional support. 17. Retrospective Invoices Ordering goods or services from suppliers prior to issuing a purchase order is contrary to this policy. All such cases are recorded and will be escalated to the appropriate line manager. Glasgow Procurement P2P Policy

10 There are few situations when a requirement to raise a PO with the 3rd party supplier may be waived. Examples include; During a business recovery situation For urgent Health & Safety reasons To allow the continued operation of the airport. If the goods and/or the provision of services is required to support regulations. In these exceptional circumstances every effort must be made to obtain authorisation from the appropriate business head. If this cannot be achieved the Head of Procurement must be informed so that they can make the necessary authorisations. As soon as possible thereafter a PO order should be raised and issued to the supplier. 18. Sundry Payments Process Sundry payments may be made in the rare case where no other payment method is available and the supplier does not exist on Oracle. Sundry payments should be used for the following payment types; Charitable Donations Road Tax Listing Fees Non Executive Director Expenses Inland Revenue Payments Customer Refunds Augmentation of Benefits Presentation Cheques Legal Payments Corporate Subscriptions Court Fees Way Leavers & Rents Passenger Claims Doctors Verifications Employee Final Expenses Please note that where a supplier exists or existed the supplier should be re-activated and a PO raised. Where applicable an invoice should be requested from the supplier and attached to the sundry payment request for VAT purposes The Sundry Payment Request template can be found on the Glasgow Procurement Hub pages. 19. Changes to Suppliers Details All changes to suppliers should be submitted in writing to the BSC. This includes supplier address, contact and bank account changes. Glasgow Procurement P2P Policy

11 Changes to supplier details must be validated by requesting a copy on the supplier s headed paper. 20. Catalogues Catalogues will be audited to ensure they are consistent with the contract, especially where Glasgow Airport operate Punch Out (externally hosted) Catalogue. 21. Variations to Purchase Orders For the purpose of approval for variations, the amount will be the cumulative sum of the original purchase order and the addition of any amended order value, which will be used to ascertain the required approval limit. Where a PO is for a distinct piece of work and the same supplier is required to carry out additional activities outside of the original scope, this must be covered by a new PO. PO variations must be raised, approved and executed in a timely manner and must be completed prior to the commencement of the works, services, or delivery of goods by the supplier. Where a PO has been raised with the incorrect cost code, it should be closed and re-raised. Variations to POs may only be made by amending the requisition through iprocurement. If the requisition has since been closed you will need to complete the Request to Open Purchase Order form (available on the Glasgow Procurement Hub Pages) to request that this is reopened by the BSC. If you are not the original requestor, you will need to complete a Transfer Ownership of Requisition/PO s form for submission to the BSC (available on the Glasgow Procurement Hub Pages) 22. Compliance Failure to comply with this policy could lead to disciplinary action. 23. Oracle iprocurement Notifications Oracle iprocurement notifications are the mechanism by which the system communicates with users. Some notifications are for information only where as others require an action to be taken If an Oracle user is absent due to unplanned absence, their line manager must send an request to the BSC Data Management team to create a holiday rule. 24. Use of Oracle iprocurement by Contractors Glasgow Procurement P2P Policy

12 Under no circumstances should any contractor or agency staff member have any involvement in the raising of requisitions or the receipting of PO s that are in any way related to a 3 rd party with which they may be associated. Businesses facing such issues or conflicts should contact procurement in the first instance to establish an appropriate method to be put in to place to support its operations. 25. Requisitioner Responsibilities The requisitioner is responsible for ensuring that; The procurement function is involved in the development of any procurement strategy as soon as a requirement is identified Requirements are planned in order to ensure sufficient time is built in for the approvals process No commitments are made to purchase goods, works or services from suppliers without first raising a requisition in Oracle iprocurement Receipt of goods, works or services is performed as soon as these have been delivered by the supplier The correct cost centres are used for requisitions and the spend has been adequately budgeted Formal close out of all PO s following an expiry or termination of any PO 26. Procurement Responsibilities Procurement are responsible for ensuring that; Contracts are in place with preferred suppliers PO terms are only used when appropriate Alternative suppliers are available where a requisition has been rejected Maintaining accurate and current records for the preferred and approved supplier list. Maintaining the category structure 27. BSC Accounts Payable Responsibilities The BSC are responsible for; Processing and paying invoices in line with the payment terms Notifying the business and the suppliers of any rejected invoices in order that they can action accordingly. Communicating any changes to invoice requirements and payment processes Setting up new suppliers Responding to supplier and business queries Operating appropriate P2P controls. 28. Responsibility Matrix RACI: R (Responsible) A (Accountable) C (Consulted) I (Informed) Glasgow Procurement P2P Policy

13 Activity Teams/Stakeholders Requisitioner Business Procurement BSC Supplier Raise a requisition R A I I I Approve a requisition (Financial) I R/A I I I Approve a requisition (Technical) I R/A I I I Approve a requisition (Supplier) I I R/A I I Issue Purchase order I I /A R I Confirm goods/service receipt R/A I I I I Submit invoice I I I I R/A Approve invoice I I I R/A I Change Purchase Order (Variation) R/A I I Close Purchase Order R/A I I I I Manage product categories I C R/A II I Manage Approved supplier list I I R/A I Issue purchasing card I A I R Approve purchasing card spend C R/A I I Receive purchasing card statement I R I R A Reconcile purchasing card statement A A I? R Make invoice payments I A R I Manage invoice disputes R A C I I Glasgow Procurement P2P Policy