The purpose of this policy is to define the process to be followed for resolving vendor invoices blocked for payment due to discrepancies in receiving goods or services and to establish responsibilities for resolving issues. All UAMS SAP requisitioners and staff members are expected to comply.
Individual departments are responsible for determining the status of outstanding receipts and reconciling those in the accounting system. A dedicated representative from the Supply Chain Management department will be assigned to work with various department personnel to ensure that invoices blocked due to discrepancies in receiving, per the accounting system, are cleared in a timely manner so that timely payments can be released to vendors.
The Supply Chain Management Analyst responsible for clearing blocked invoices will monitor outstanding receipts and contact department representatives when issues are not timely resolved to provide assistance and instruction.
The steps for clearing invoices blocked due to receiving issues will be:
- The Analyst will generate the accounting system’s blocked invoice report to identify outstanding receiving issues on the first business day of each week.
- The Analyst will investigate the reasons for all blocked invoices.
- The Analyst will contact (phone or email) the department requisitioner to resolve the blocked invoice.
- If the Analyst is unable to resolve the blocked invoice with the requester after two attempts, the Analyst shall contact the requisitioner’s immediate supervisor or business manager of the department for resolution.
- If the blocked invoice remains unresolved after one week, the Analyst shall report the issue to the Assistant Vice Chancellor for Finance, Supply Chain Officer, and Division Head or Dean.
- If the blocked invoice remains unresolved for another week following the Assistant Vice Chancellor (Division Head or Dean) notification, the CFO will be notified and a recommendation to suspend the requisitioner’s rights will be made until the issue is resolved.
Generally accepted accounting principles (GAAP) require documentation of the receipt of goods or services purchased prior to payment of the related invoices being made. Such documentation is one of three conditions that must be met prior to payment of a vendor invoice being appropriate. These three conditions are known in business practice as the “Three Way Match” and refer to the need for the terms of an invoice, purchase order, and evidence of receipt to agree before payment of the related invoice can be paid. This internal control is an important step in safeguarding an organization’s assets.