WASBO AP Manual, January 2015 1 - c.ymcdn.comc.ymcdn.com/sites/ · Imprest Accounts and Petty Cash...

WASBO AP Manual, January 2015 1

Presented by Holly Burlingame, CSBA

WASBO Instructor


Background: ◦ The WASBO Accounts Payable Manual was the

brainchild of Cory Plager and Denise Wolff.

◦ First introduced as a concept and a rough draft at the

WASBO Accounts Payable Conference in August 2014.

◦ Holly Burlingame, CSBA, was instrumental in compiling

and preparing the manual.


Others who contributed information, review, and

approval were:

Clark Fletcher, IRS Government Specialist

Scott Matheson, King County Cash Management

Carmen Smith, WA ST Department of Revenue

Kathie Collins, WA ST Dept. of Enterprise Services

Larry Bona, WA ST Dept. of Retirement Systems


Special thanks to Becky Montgomery for adding

the small schools perspective.

Special thanks to DeAnn Wagoner for her editing

skills.


GOALS:

Provide users with an understanding of school

accounts payable beyond data entry.

Provide a training tool for new employees

responsible for accounts payable functions.

Include essential information and resources

specific to accounts payable from RCW, WAC,

the Accounting Manual, IRS regulations, state

agency rules and regulations.


GOALS continued:

Provide 21st Century solutions for school

accounts payable processing.

Bring together the best practices in both small

and large school districts.

Be a companion to the WASBO Purchasing and

Warehouse Handbook.


Completed version can now be accessed on

WASBO’s web site.

Located under Resources/Publications

Or follow the link below:

http://c.ymcdn.com/sites/waasbo.site-ym.com/resource/resmgr/ABC_Committee/Accounts_Payable_Manual.pdf


http://www.wasbo.org/







Contents Overview


Each section contains:

1. Definitions and legal references.

2. Business process options and

recommendations.

3. Minimum requirements for claim forms, invoices,

etc.

4. Accounts payable responsibilities.

5. Checklists for accounts payable review.


Table of Contents

Vendor Payments ……………………………………6

Paperless Invoice Process…………………………12

Imprest Accounts and Petty Cash Funds..……….13

Charge Cards and Procurement Cards ………….15

Employee Travel and Expense Claims …………..17

Expense Claims for Reimbursable Items ………..18


Table of Contents (continued)

Expense Claims for Meals …………………………20

Overnight Travel ……………………………………21

Travel Advances and Travel Charge Cards…...….24

Refunds of Revenue …………………………….....25



From Invoice to Payment………………………….26

Warrant Certification and Approval……………….28

Warrants, Wire Transfers, and Other Payment

Methods …………………………………………..31


These three sections are about completing the

payment cycle.

Internal controls such as batch totals, warrants run

totals.

Legal requirements.

Board certification and approval.

District policy and procedures.

County Treasurer role.



Sales Tax……….…………………………….….…...33

Use Tax …………………………….………………...35

Federal Excise Tax Exemption …………………....36

Public Works and Retainage ………………………37

Internal Controls …………………………………….40

Independent Contractor versus Employee ……….42



IRS 1099 Reporting….…….……………….….…...46

The Accounting and Budgeting Connection…..….49

Inventories and Prepaid Items.…………………....52

Year End Accruals……………………………..……53

Resources/References……………………………..55


Vendor Payment Section


Sections:

1. Definition of a Vendor W9, UBI numbers, etc.

Employees as vendors (or not)

2. New Vendors Internal controls over new vendors

Maintaining your vendor data base

Tips


Vendor Invoice Section:

1. Defines what a vendor invoice is (original, copy,

fax, electronic image, data file, etc.)

2. Minimum requirements of any invoice:

description, detailed pricing, sales tax, freight,

etc.

3. Three-way match: PO to invoice to receiving

document in the traditional purchase to pay

cycle.


Accounts Payable vendor invoice audits checklist:

Three-way match complete

Invoice is not a duplicate

Total is correct

Shipping and handling are correct

Sales tax added at the correct rate

Is this a public works contract requiring retainage

to be held?


Accounts Payable checklist continued:

Current charges with no brought-forward

balances.

Purchase order encumbrance sufficient to cover

the current invoice or within the district’s allowed

variance (example: ten percent over

encumbrance).

Invoice pricing matches quote or bid.



Account code is correct per the district chart-of-

accounts and state account code requirements of

program, activity, and object.

Determine the fiscal year for processing.


Exceptions/alternatives to the three-way match:

1. Direct payments such as small purchases

without a PO.

2. Prepayments for registration fees and deposits.

Examples: sporting event entrance fees and

deposits for event facility.


Prompt Payments

Section on how to calculate a prompt payment

discount such as 2/10, net 30.

Tools for determining whether a discount makes

economic sense.

Late Payments

Maximum allowed is 1% per month under

Washington State law.

How to calculate late payments.


Correcting vendor invoices.

Managing and taking vendor credits.


Paperless Invoice Processing


This section answers the following questions:

Original invoice?

What is an original invoice?

Who can tell the difference between an original

and a copy?

Why do we care?

What is acceptable as a source document in the

21st century?


Invoices are received in your district by the following

methods:

1. Vendor emails an image of an invoice (KCDA).

2. Vendor uploads an invoice to a district’s vendor

portal (new technology developing).

3. Vendor provides a district with a customer

portable to upload invoices (FSA, Fisher

Scientific, Pitney Bowes)


Rather than images, you may also be receiving your

“invoices” by software data files:

1. Upload from purchasing card software.

2. Upload from utility management systems.

Districts may already be receiving up to 50% of

their invoices in an electronic format.


Still getting paper invoices in the US Mail? Here’s

an example of adopting a paperless accounts

payable process for those invoices:

1. Scan invoice on a desktop scanner.

2. Image is named and filed on desktop or service.

3. Image is routed to user for receipt verification.

4. On-line receiving is verified.


5. Invoice image is viewed on one computer

monitor and second monitor is used to enter

invoice data into accounts payable data entry

screens.

6. The scanned invoice image is then attached to

the accounts payable record within the district’s

software.

7. The invoice image is viewed by a drill-down of

the transaction on fiscal reports run to the

screen.


Technology is available today.

Need to complete a DAD application with the

Secretary of State (details in AP Manual).

Paper invoices are thrown away!

Scanned images of invoices are your source

document.

When your auditor selects an accounts payable

transaction for audit, print a copy or email the

scanned image. FYI – SAO is already paperless!


Charge Cards and Purchasing Cards


This section garnered a lot of interest from many

who previewed the manual.

Defines purchasing cards, credit cards, travel and

fuel cards.

Legal references.

Best practices.

Some duplication with the Purchasing Handbook.

Focuses on payment processing and auditing side

in Accounts Payable.


Best Practices to mitigate risk and alleviate

workload in AP: Upload the district’s chart-of-accounts into the bank

software.

Assign default account codes for each cardholder.

Utilize the on-line approval process available in bank

software.

Upload monthly spending activity into the district’s

software.

Upload monthly spending activity in detail, including

merchant’s name.


Accounts Payable checklist:

Verify that all cardholders with current transactions

have submitted the required reconciliations.

Verify all appropriate signatures or on-line

approvals are included.

Verify the account codes are correct per the

district’s chart-of-accounts, person responsible,

and state account code requirements of program,

activity and object.



Verify that original, itemized receipts are attached

for every transaction.

Verify that the items purchased have a clear

district purpose.

Verify that any merchandise shipments went to a

district location.

Verify that sales tax has been paid, if due, and add

use tax if not.



Verify that federal excise tax has not been

charged on gas credit cards.

Determine the fiscal year for processing.


Future Training and Updates


Future Trainings and Presentations

WASBO Annual Conference, May 2015 ◦ Overview presentation

WASBO Accounts Payable Conference ◦ Tentative date is August 5, 2015

◦ In depth training on various sections of the manual

◦ Presentations from content experts from state agencies

◦ Update sections prior to each year’s AP Conference


Available for your use now.

Use for training new staff.

Use as a handy reference for experienced staff.

Use in conjunction with your own district

procedures.

Use to create your own district procedures.

Send suggestions, additional information, or

concerns in writing to the WASBO office at:

[email protected]


Questions?


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