Creighton University

Accounting Procedures


Payment Processing - Purchase Order-Related




APPL 01, APPL 02, APPL 03, APPL 04, APPL 08, APPL 09


July 1, 1993


October 1, 1997


This procedure provides guidelines for processing invoices received in situations where a purchase order was previously issued to a vendor for goods or services. It is assumed that budget availability was previously checked during the purchasing process.


Invoice Approval Form (IAF)


Typically, vendors should be advised to send invoices directly to the attention of Accounts Payable. If an invoice has been received directly by the department, certain steps can still be taken to help speed up processing. First, verify that the purchase order number referenced on the invoice is the same number issued to the vendor for those goods or services. Second, verify that the goods or services on the invoice have been received and that the price charged is the price previously agreed upon. Third, sign and date the invoice, marking it as "OK TO PAY" on its face. And, finally, attach any applicable notes regarding such items as the possible issuance of a credit memo related to this purchase in the near future, changes in the quantity or amount shown on the invoice based upon what was actually received, or any other special information that would be of assistance to the Controller's Office in processing the invoice (including any supplemental supporting paperwork). Please be aware that it may be necessary for the Controller's Office to return a copy of this invoice to the department for additional information if error conditions occur during processing on the computer system.

Invoices of $500 or more received directly in the Controller's Office will be set up for payment under the University's standard payment policy (see APPL 03). Copies of an IAF ("Goldenrod") and the invoice will be sent to the appropriate department contact for exception review. The IAF will have the scheduled payment date noted on it. If the invoice is valid for payment, the invoice and Goldenrod copies need not be returned to the Controller's Office and the invoice will be paid as scheduled. This process will be followed regardless of the invoice amount ($500 or $50,000), therefore, a timely review of the invoice and goldenrod copies is very important.

If, upon receipt of the invoice and Goldenrod copies, the department has a problem with the related goods/services, they need to contact the Controller's Office in writing prior to the scheduled payment date to put a hold on the invoice until the issue is resolved. Once the issue is resolved the department must contact the Controller's Office so the invoices can be released for payment.

In the situations in which we have other processing issues to resolve, the actual invoice will be sent to the department with a IAF noting the corrective actions needed. The department personnel should take any and all corrective actions noted and return the documents to the Controller's Office as quickly as possible.

Payment processing responsibility in the Controller's Office has been assigned based upon the first letter of the vendor's name. If there are questions regarding the status of the invoice's processing, the Contacts List in Section II of this manual indicates which processor should be contacted.

Tolerance Levels for Change Order Requests

If the number of units and/or price of the units exceeds the purchase order specifications by specified tolerance levels, the accounts payable clerks will request a change order for an increase to the purchase order. The tolerance levels are based upon each commodity line. Therefore, if one commodity line exceeds tolerance levels but the entire purchase order still has a balance, an increase will still be requested because that balance has been allocated to other commodities which have not yet been invoiced.

Current tolerance levels are set at the lesser of 10% or $50. The accounts payable clerks have the ability to override tolerance on an invoice by invoice basis. Examples of occasions where tolerances will be overridden include: deviations in freight, shipping or handling charge estimates, deviation in units or pricing when the entire invoice is less than $50, small deviations in pricing exceeding 10%, i.e., an item was ordered for $2.25 and it cost $2.75.