Role Definitions CUS REQ

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1 Welcome The University s Procure-to-Pay (P2P) initiative is designed to make it easier to conduct business at Penn. This guide to using purchase orders, and the more in-depth P2P website, are part of a long-term commitment to streamlining Penn s financial processes and providing clear guidance for the Penn community and our suppliers. Making the University s financial processes transparent to all participants in the P2P process will result in greater purchasing efficiency, less time spent on paperwork, and stronger relationships with our suppliers. The purchase order (P.O.) method outlined in this guide is used for more than 80% of all purchases at the University. It is the least time- and paperwork-intensive method to procure and pay for products and services. A P.O. streamlines the typical transaction by requiring a requisitioner to be specific when ordering; legally committing the University to funding the purchase; allowing a supplier to deliver as requested; and, ultimately, when matched to a supplier invoice, enabling the University to pay the supplier within 30 days. The Procure-to-Pay process can be viewed as a series of linked steps in which different participants play a role. The chart to the left provides an overview of who participates in each step, and the color-coded listing to the right provides a definition for each role.

2 Each participant in the P2P process plays an important role in making a transaction proceed smoothly a customer s informed purchasing behavior, a P.O. manager s accuracy and vigilance, and a supplier s cooperation in sending invoices directly to Accounts Payable, all facilitate the transaction. Role Definitions CUS Customer refers to any member of Penn s faculty or staff, or an authorized student, who determines that a certain product or service is needed, at a specific time and place. REQ The requisitioner acts as agent for the customer and initiates the purchase request by entering all purchase specifications and details in the University s business and financial system (BEN Financials). PO The P.O. manager verifies all purchase information in BEN, identifies the funding source, seeks approval for the purchase with the appropriate approval authority, and creates the P.O. PUR Purchasing Services is responsible for approving P.O.s higher than $5,000, for reviewing and approving all contracts and lease agreements, and for assisting with all purchasing and supplier questions. SUP Supplier refers to an approved company or individual who provides the University with necessary products and services; the majority of suppliers can be found in Penn Marketplace or on the preferred suppliers list in BEN. AP Accounts Payable receives invoices directly from suppliers and enters them into BEN, where the system automatically matches them with the P.O. and approves and processes invoices for payment within terms. MGT Management refers to senior business administrators and senior managers who use P2P performance metrics to track and improve business processes at the University.

3 1 STEP 1: Identify Need 2 STEP 2: Initiate Purchase The Procure-to-Pay (P2P) process begins when a member of Penn s faculty or staff, or an authorized student, decides a product or service is needed at that moment, he or she becomes the customer. A customer is expected to make an informed purchasing decision in line with the University s financial policies and authorized buying methods, typically a purchase order (P.O.), to ensure that: transactions proceed smoothly the correct products or services are delivered to the right place at the right time suppliers are paid on time To play the role of customer, you need only convey the specifications of a product or service you need such as what, when, where, and for what project or activity to your departmental business administrator (B.A.) or local authorized staff. The B.A. or staff member will use those details to create a request for purchase (requisition) and P.O. in the University s financial system (BEN Financials). Remind your suppliers that in order to receive payment in 30 days, they must have an approved P.O. before attempting delivery, their invoice must match the P.O. specifications, and they must send the invoice directly to Accounts Payable. The requisitioner acts as the agent for the customer to ensure that a purchase is initiated correctly in the University s business and financial system (BEN Financials) and that it adheres to University procurement and disbursement financial policies. It is crucial for the requisitioner to determine the authorized buying method purchase order, the purchasing card, C-form, or T&E reimbursement, of which the purchase order is primary. The customer, in most cases, will have provided the basic specifications for the purchase. The requisitioner adds other details such as line types (for non-catalog orders), sourcing and funding information (if known), special instructions, and/or unique requirements for equipment, hazardous materials or lab animals needed to submit and process the request for purchase, which is necessary to create a purchase order in Step 3. For your convenience and protection against personal liability, assistance is only a phone call or away. For example, Purchasing Services will provide assistance with competitive bidding requirements and must review and approve all contracts and leases prior to final approval of the P.O. University Laboratory Animal Resources (ULAR) will assist with any purchases related to animals. For further guidance and in-depth information on initiating a purchase in the P2P process, visit: For further customer information and support, visit:

4 3 4 STEP 4: STEP 3: Issue Purchase Order Take Delivery/Create Receipt The University s financial and legal commitment to purchase the requested products or services is formalized through a purchase order (P.O.) to a supplier. Once a P.O. is issued, a School or Center is committing its funds and agreeing to pay the supplier within the specified terms (usually 30 days). A supplier should not respond to a request for products or services until the P.O. has been received. The supplier s invoice cannot be processed and paid in a timely manner without a corresponding P.O. As the P.O. manager, you are responsible for following up on a request for purchase initiated by the requisitioner in the University s business and financial system (BEN Financials) in Step 2, in order to verify or enter the funding source, ensure that sufficient funds are available, review all information related to the purchase, and approve the P.O. Once approved, the P.O. will automatically be transmitted to the supplier via Electronic Data Interchange (EDI) or fax, or forwarded to the next approver in the approval hierarchy. In accordance with University financial policies, Purchasing Services is responsible for approving all P.O.s with a total aggregate cost of $5,000 or more. For additional information and resources, visit: The delivery of the requested products or services marks a transition from Purchasing activity to Accounts Payable (A/P) activity. Upon successful delivery, the supplier sends an invoice directly to A/P for payment. The customer or requisitioner takes delivery of the order, and, if necessary, the P.O. manager creates a receipt for the order in BEN Financials. Receipts are required in two cases: a purchase is over $5,000, or the requisitioner or P.O. manager has requested a receipt. As the customer or requisitioner, you are expected to inspect, verify, and sign for satisfactory delivery or, in the case of unsatisfactory delivery or performance, to initiate a return and/or a claim directly with the supplier. (Be sure to retain and forward any documents associated with your claim to your business office.) Once the products or services have been received in good order, it is important to notify your departmental business administrator or local financial staff so that the supplier s invoice can be processed and paid in Steps 5 and 6, respectively. For more resources and information on taking delivery and receipting, visit:

5 5 6 STEP 5: Process Invoice STEP 6: Pay Invoice processing and payment activities are automated in the University s business and financial system (BEN Financials), not handled manually by Accounts Payable (A/P) personnel. Therefore, the extent to which the customer, requisitioner, P.O. manager, and supplier adhere to the University s preferred business practices and policies directly determines A/P s ability to process and pay a supplier invoice within negotiated terms. When all participants in the P2P process follow University policy, supplier payment becomes straightforward: a supplier invoice is sent directly to A/P, entered into the A/P system either electronically or manually, matched with its corresponding P.O., and placed in a queue for payment in Step 6. Exceptions are invoices not submitted directly to A/P and invoice holds. Invoice holds are created for a variety of reasons (missing information, price or quantity variances, etc.) and must be released by a P.O. manager before an invoice can be processed for payment. For further information, including details on invoice holds and releases, visit: Once an invoice is entered into the University s business and financial system (BEN Financials) in Step 5 and placed in the queue for payment, payment activities in Step 6 are completely hands-off. A/P personnel do not physically touch invoices or affect the payment process. Each night, the system selects invoices eligible for payment (invoices not on hold) based on the invoice date and supplier terms typically 30 days for non-edi suppliers, 7 days for EDI suppliers, or other terms negotiated and approved by Purchasing Services. A University check is produced for those invoices and is sent the next day. Mindful purchasing behavior and adherence to University policy as described in these simple steps will ensure that products and services are delivered when and where needed, and suppliers are paid on time. Exceptions to the process (e.g., processing orders placed by phone, invoices sent to the customer s department, etc.) are not acceptable. They create unnecessary invoice holds, which consume scarce resources, delay payment, and damage the University s relationships with its suppliers. That s why Step 7, which details the reporting metrics built into the P2P process to track and continually improve performance, is so important. For additional information on A/P assistance and A/P policies and procedures, visit:

6 7 STEP 7: Track and Improve To ensure that the Procure-to-Pay process is functioning according to design, measurements are essential. Continual process improvement can be guided by meaningful metrics such as compliance with requisitioning requirements, reduction of invoice holds, use of preferred suppliers, and percentage of payments made within terms. Monitoring and resolving unnecessary process exceptions will reduce administrative time and costs for both the University and our suppliers. P2P Process monitoring Key performance metrics identify exceptions in the P2P process for School/Center managers and their P.O. managers. Supplier issues Exceptions resulting from supplier order fulfillment or invoicing should be communicated to Purchasing Services for resolution. System issues Exceptions due to BEN system issues should be documented and reported through the BEN support network to be addressed and corrected. Expectations for School/Center P2P representatives and senior B.A.s are responsible for using the P2P reports to identify and reduce or eliminate exceptions. Expectations for central services Central services (Purchasing, Accounts Payable, Comptroller, and Financial Systems) will work with Schools/Centers to design and implement corrective actions for process exceptions. Making it easier for the University community to conduct business by making financial activities more streamlined, efficient, and transparent. For detailed information about P2P metrics and reports, visit: