MicroLink IT college

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Microlink It College
ACCOUNTS AND BUDGET SUPPORT LEVEL III

Learning Guide
Unit of Competence Process Payment Documentation
Module Title Processing Payment Documentation
LG Code: BUF ACB3 07 0812

TTLM Code: BUF ACB3M 07 0812

INTRODUCTION

Welcome to the module “Process Payment Documentation”. This learner’s

guide was prepared to help you achieve the required competence in “Accounts and
Budget Support Level III”. This will be the source of information for you to
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acquire knowledge attitude and skills in this particular occupation with minimum
supervision or help from your trainer.

Summary of Learning Outcomes

After completing this learning guide, you should be able to:

Lo1:- Enter data to system
Lo2:- Verify payments against documentation
Lo3:- Create payment facility
Lo4:- Verify payments against documentation
Lo5:- File documentation

How to Use this TTLM

o Read through the Learning Guide carefully. It is divided into sections

that cover all the knowledge, skills and attitude that you need.
o Read Information Sheets and complete the Self-Check at the end of
each section to check your progress
o Read and make sure to Practice the activities in the Operation Sheets.
Ask your trainer to show you the correct way to do things or talk to
more experienced person for guidance.
o When you are ready, ask your trainer for institutional assessment and
provide you with feedback from your performance.

Kj
Lo1:- Enter data to system
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In common usage, an expense or expenditure is an outflow of money to another

person or group to pay for an item or service, or for a category of costs. For a
tenant, rent is an expense. For students or parents, tuition is an expense. Buying
food, clothing, furniture or an automobile is often referred to as an expense. An
expense is a cost that is "paid" or "remitted", usually in exchange for something of
value. Something that seems to cost a great deal is "expensive". Something that
seems to cost little is "inexpensive". "Expenses of the table" are expenses of
dining, refreshments, a feast, etc.

In accounting, expense has a very specific meaning. It is an outflow of cash or

other valuable assets from a person or company to another person or company.
This outflow of cash is generally one side of a trade for products or services that
have equal or better current or future value to the buyer than to the seller.
Technically, an expense is an event in which an asset is used up or a liability is
incurred. In terms of the accounting equation, expenses reduce owners' equity. The
International Accounting Standards Board defines expenses as

...decreases in economic benefits during the accounting period in the form of

outflows or depletions of assets or incurrence of liabilities that result in
decreases in equity, other than those relating to distributions to equity
participants.

Bookkeeping for expenses

In double-entry bookkeeping, expenses are recorded as a debit to an expense

account (an income statement account) and a credit to either an asset account or a
liability account, which are balance sheet accounts. An expense decreases assets or
increases liabilities. Typical business expenses include salaries, utilities,
depreciation of capital assets, and interest expense for loans. The purchase of a
capital asset such as a building or equipment is not an expense.

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Information SHEET Cash flow

In a cash flow statement, expenditures are divided into operating, investing, and
financing expenditures.

 Operational expense – salary for employed employee a

 Capital expenditure – buying equipment
 Financing expense – interest expense for loans and bonds

An important issue in accounting is whether a particular expenditure is classified

as an expense, which is reported immediately on the business's income statement;
or whether it is classified as a capital expenditure or an expenditure subject to
depreciation, which is not an expense. These latter types of expenditures are
reported as expenses when they are depreciated by businesses that use accrual-
basis accounting, which is most large businesses and all C corporations.

The most common interpretation of whether an expense is of capital or income

variety depends upon its term. Viewing an expense as a purchase helps alleviate
this distinction. If, soon after the "purchase", that which was expensed holds no
value then it is usually identified as an expense. If it retains value soon and long
after the purchase, it will be viewed as capital with life that should be
amortized/depreciated and retained on the Balance Sheet.

Accounting Basics: Types of Expense Accounts

Many basic accounting rules and conventions apply to categorizing accounts
identically for all businesses. At times, other account titles or categories might be
industry- or company-specific. Most of the balance sheet categories, assets, liabilities,
and owners' (or stockholders') equity, are common to almost all businesses, except
non-profits, educational institutions, and governments. Income and expense
categories, while primarily using common account titles, may contain company-
specific differences. There are, however, three primary expense categories common to
most businesses.

Cost of Goods Sold

A manufacturing business or any business that sells products has a cost of goods sold
category. These expense accounts typically include beginning and ending inventory
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valuations, freight and shipping of product, bad debts created by sales and non-
payment, and other costs that directly relate to the items sold by the company. Some
organizations also include compensation expenses that are directly related to the
products made and/or sold, e.g., sales compensation or direct labor.

Operating Expenses
Usually the largest expense category (by the number of accounts, at least) are
operating expenses, which identify all normal costs that relate to the day-to-day
necessities of the organization. In this category, basic accounting rules specify the
inclusion of compensation, benefits, local, state, and federal payroll taxes, office
expenses, supplies, postage, travel and entertainment, advertising (amounts not
included in the cost of goods sold category), repairs and maintenance, depreciation
(the non-cash expense of writing "down" the cost of some assets over time), mortgage
or rent of facilities, utilities (telephone, electricity, heat, and air conditioning), and
professional fees (accountants and attorneys).

Non-Operating Expenses (or Other Expenses)

This category typically includes all other expenses that the organization deems outside
of operations. For example, corporate income taxes are often placed in this category.
Companies identify federal and state corporate income taxes after they determine their
net income (or net profit) for the fiscal or calendar year. Unlike compensation, travel, or
repairs, income taxes are not calculated (or paid) until after all operations for the accounting period
have closed.

Employee and Officer Expense Accounts

Accounting expense account classifications should not be confused with employee
and officer expense accounts, which are usually operating expenses. Employee and
officer expense accounts are not typically specified in the income statement (profit
and loss statement) for a good reason. These accounts are designed to categorize
amounts spent by employees, management, and/or board of director members for the
efficient performance of their duties. For example, travel and lodging is often a major
component of expense accounts. However, on the income statement, the total for all
forms of travel and lodging will correctly appear in the travel or travel and
entertainment account on the income statement.

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The first time you go through the costs to start up your new business, you do not
need to be particularly precise. You can just "ball park" the amount to get a rough
idea of your expected start-up costs. As you refine your business idea and shop
around for the various items you need to make it happen, you will be continually
narrowing down your estimates, and eventually you'll arrive at the actual dollar
figures.

Here are the common kinds of startup expenses that most small businesses face:

Research and development costs. Whether you hire a market research firm or do
research by yourself, you need to budget for costs involved in knowing more about
your market. Interviewing potential customers or suppliers, checking the Yellow
Pages, or photocopying trade publications and articles about your business all
involve costs.

Business Plan Preparation. If you are preparing your business plan yourself, the
only cost to you is your time. However, there are entrepreneurs who need help in
developing their business plans. If you are one of those business owners, you need
to input the costs of hiring consultants or business plan writers into your initial
budget

OPERATION SHEET 1: Describe team role and scope

Purpose:
This learning outcome aims to provide trainees with the knowledge, skill and
attitude teamwork. Understanding the concept of teamwork helps to make easy the
daily work activity.
Equipment, Tools and Materials:
 Computer
 Projector
 White board
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 White board marker &Duster

 Lecture room
 Printer

Condition:

Students and trainer’s are legally required to lock the health and safety of trainer.
This applies to all organizations and including voluntary organizations.
 Students must provide safe working environment.
 Students must not put themselves or others at risk.

Procedure:
 Need to establish a team
 Identify the team objective
 Prepare effective common plan
 Apply practicall

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Lo2:- Verify payments against documentation

Product Development and Beginning Inventory. This will be your most significant start-up
cost. To get a better estimate, you can ask potential suppliers for required inventory levels for
your type of business. Some entrepreneurs, particularly those who create their own products, take
years of product development before a prototype can be launched. You need to factor in the
length of time that will take you to develop your first products.

Information SHEET Advertising and Marketing Promotion Expenses. You can chose to
have some 'buzz' for your business, even before you officially open. Some entrepreneurs do a
pre-launch campaign to generate interest for their products or services. You can also plan for a
"grand opening" promotion as well. The cost, of course, will depend on how simple or elaborate
your pre-launch activities will be.

Cash. This refers to the amount of cash that you need to run your cash register. One thing that
your business should never be caught without is cash.

Cost of Financing. You also need to allocate some funds to help you cover your cost of
financing, whether you got your funds from the bank or from your credit card. Be

prepared to pay the interests of your loans, particularly if you used your credit cards to finance
your business.

Remodeling and Decorating. This will include physical and cosmetic improvements to the new
business facility. Solicit bids from contractors or interior designers, even if you decide to do
everything later on, to give you an idea of how much these jobs cost.

Fixtures and Equipment. The fixtures and equipment needed for your new business are
normally substantial, depending on your kind of business. A restaurant business, for example,
will need modern kitchen equipment, chairs and tables, tableware and utensils. On the other
hand, a home business will require significantly less in terms of fixtures and equipment.
Computers, fax machines, modems are some of the most important equipment that you would
need. In addition, you should provide some budget for the costs of installing all the fixtures and
equipment and making sure that these are ready for use.

Hiring employees. Allocate a few months' salary for the payroll of your new employees. While
employee costs will not actually start until you are open for business, some entrepreneurs hire a
few employees even before the business is launched to help in the initial groundwork.

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Insurance Costs. You will need liability and property insurance to protect yourself and any
business assets. Some other businesses also require workers' compensation, health, life, fire,
product liability and professional malpractice insurance. Check what you need for the kind of
your business.

Lease Payments. These include amounts that must be paid for equipment and facility leases
before opening. Expect to pay several months' worth of lease payments even before you open
your doors for business.

Licenses and Permits. This amount will include all fees charged by the local, state and federal
agencies. The more regulated your industry, the higher the fees and charges. Various states also
have a different licensing requirements and fee structure. If your business is based in California,
for example, expect to spend for putting a legal announcement in the newspaper to announce
your new business. In Virginia, there are no such requirements.

Professional Fees. You will probably need the assistance of a lawyer in drawing up the proper
documents and filing them with the state if you are forming a partnership, Limited Liability
Company or corporation. You can opt to incorporate your own business yourself, as long as you
understand each form and requirements. Part of the professional fees you need to budget include
the accountant's fees, should you decide to outsource your record keeping or accounting tasks.

Signage costs. The signs for your business establishment can leave a significant dent on your
budget. Obtain bids from sign companies, depending on how elaborate you plan your signs to be.

Supplies. This is the part of your budget for all the office, cleaning and employee supplies that
your business needs in its first few months. To help you save, try buying wholesale if you can
meet the minimum order requirements.

Cost of Web Site creation. If you are planning to supplement your brick-and-mortar business
with online operations, you need to budget for the costs of creating a web site. These include
web-hosting fees, web designer, e-commerce components (shopping cart, merchant account, etc).
You also need to allocate some amount to cover the marketing and promotion expenses of your
online business.

Unanticipated expenses. The rule of thumb is to allocate about 10 percent of your total start-up
budget for contingencies and other unexpected expenses

Information Sheet

Process documents relating to goods and services received

Procurement
Procurement is the acquisition of goods or services. It is favorable that the goods/services are
appropriate and that they are procured at the best possible cost to meet the needs of the purchaser
in terms of quality and quantity, time, and location( Weele 2010) . Corporations and public

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bodies often define processes intended to promote fair and open competition for their business
while minimizing exposure to fraud and collusion.

Overview

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit,
and price fluctuations. Procurement generally involves making buying decisions under
conditions of scarcity. If good data is available, it is good practice to make use of economic
analysis methods such as cost-benefit analysis or cost-utility analysis.

An important distinction is made between analyses without risk and those with risk. Where risk
is involved, either in the costs or the benefits, the concept of expected value may be employed.

Direct procurement and indirect procurement

TYPES
Direct
Indirect procurement
procurement
Capital
Raw material and Maintenance, repair,
goods and
production goods and operating supplies
services
Quantity Large Low Low
F Frequency High Relatively high Low
E
A Value Industry specific Low High
T
U Nature Operational Tactical Strategic
R Crude oil
E Examples Crude oil in Lubricants, spare parts storage
S petroleum industry
facilities

Based on the consumption purposes of the acquired goods and services, procurement activities
are often split into two distinct categories. The first category being direct, production-related
procurement and the second being indirect, non-production-related procurement.west y

Direct procurement occurs in manufacturing settings only. It encompasses all items that are part
of finished products, such as raw material, components and parts. Direct procurement, which is
the focus in supply chain management, directly affects the production process of manufacturing
firms. In contrast, Indirect procurement activities concern “operating resources” that a company
purchases to enable its operations. It comprises a wide variety of goods and services, from
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standardized low value items like office supplies and machine lubricants to complex and costly
products and services like heavy equipment and consulting services.

Procurement vs acquisition

The US Defense Acquisition University (DAU) defines procurement as the act of buying goods
and services for the government.[2]

DAU defines acquisition as the conceptualization, initiation, design, development, test,

contracting, production, deployment, Logistics Support (LS), modification, and disposal of
weapons and other systems, supplies, or services (including construction) to satisfy Department
of Defense needs, intended for use in or in support of military missions.[2]

Acquisition is therefore a much wider concept than procurement, covering the whole life cycle of
acquired systems. Multiple acquisition models exist, one of which is provided in the following
section.

Acquisition process

The revised acquisition process for major systems in industry and defense is shown in the next
figure. The process is defined by a series of phases during which technology is defined and
matured into viable concepts, which are subsequently developed and readied for production, after
which the systems produced are supported in the field.[3]

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Lo3:- Create payment facility

Model of the Acquisition Process.Error: Reference source not found

The process allows for a given system to enter the process at any of the
development phases. For example, a system using unproven technology would
enter at the beginning stages of the process and would proceed through a lengthy
period of technology maturation, while a system based on mature and proven
technologies might enter directly into engineering development or, conceivably,
even production. The process itself includes four phases of development:[3]

 Concept and Technology Development: is intended to explore alternative

concepts based on assessments of operational needs, technology readiness,
risk, and affordability.
 Concept and Technology Development phase begins with concept
exploration. During this stage, concept studies are undertaken to define
alternative concepts and to provide information about capability and risk that
would permit an objective comparison of competing concepts.
 System Development and Demonstration phase. This phase could be entered
directly as a result of a technological opportunity and urgent user need, as
well as having come through concept and technology development.
 The last, and longest phase is the Sustainable and Disposal phase of the
program. During this phase all necessary activities are accomplished to
maintain and sustain the system in the field in the most cost-effective
manner possible.

Procurement systems

Another common procurement issue is the timing of purchases. Just-in-time is a

system of timing the purchases of consumables so as to keep inventory costs low.
Just-in-time is commonly used by Japanese companies but widely adopted by
many global manufacturers from the 1990s onwards. Typically a framework
agreement setting terms and price is created between a supplier and purchaser, and
specific orders are then called-off as required. Shared services

In order to achieve greater economies of scale, an organization’s procurement

functions may be joined into shared services. This combines several small
procurement agents into one centralized procurement system.
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Information SHEET Procurement process

Procurement may also involve a bidding process i.e.,Tendering. A company may

want to purchase a given product or service. If the cost for that product/service is
over the threshold that has been established (e.g.: Company X policy: "any
product/service desired that is over $1,000 requires a bidding process"), depending
on policy or legal requirements, Company X is required to state the product/service
desired and make the contract open to the bidding process. Company X may have
ten submitters that state the cost of the product/service they are willing to provide.
Then, Company X will usually select the lowest bidder. If the lowest bidder is
deemed incompetent to provide the desired product/service, Company X will then
select the submitter who has the next best price, and is competent to provide the
product/service. In the European Union there are strict rules on procurement
processes that must be followed by public bodies, with contract value thresholds
dictating what processes should be observed (relating to advertising the contract,
the actual process etc.).

Procurement steps

Procurement life cycle in modern businesses usually consists of eight steps:

 Information gathering: If the potential customer does not already have an

established relationship with sales/ marketing functions of suppliers of
needed products and services (P/S), it is necessary to search for suppliers
who can satisfy the requirements.
 Supplier contact: When one or more suitable suppliers have been
identified, requests for quotation, requests for proposals, requests for
information or requests for tender may be advertised, or direct contact may
be made with the suppliers.
 Background review: References for product/service quality are consulted,
and any requirements for follow-up services including installation,
maintenance, and warranty are investigated. Samples of the P/S being
considered may be examined, or trials undertaken.
 Negotiation: Negotiations are undertaken, and price, availability, and
customization possibilities are established. Delivery schedules are
negotiated, and a contract to acquire the P/S is completed.
 Fulfillment: Supplier preparation, expediting, shipment, delivery, and
payment for the P/S are completed, based on contract terms. Installation and
training may also be included.
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 Consumption, maintenance, and disposal: During this phase, the company

evaluates the performance of the P/S and any accompanying service support,
as they are consumed.
 Renewal: When the P/S has been consumed or disposed of, the contract
expires, or the product or service is to be re-ordered, u
 company experience with the P/S is reviewed. If the P/S is to be re-ordered,
the company determines whether to consider other suppliers or to continue
with the same supplier.
 Additional Step - Tender Notification: Some institutions choose to use a
notification service in order to raise the competition for the chosen
opportunity. These systems can either be direct from their e-tendering
software, or as a re-packaged notification from an external notification
company.

Procurement performance

In July 2011, Ardent Partners published a research report that presented a

comprehensive, industry-wide view into what is happening in the world of
procurement today by drawing on the experience, performance, and perspective of
nearly 250 Chief Procurement Officers and other procurement executives. The
report includes the main procurement performance and operational benchmarks
that procurement leaders use to gauge the success of their organizations. This
report found that the average procurement department manages 60.6% of total
enterprise spend. This measure commonly called "spend under management" refers
to the percentage of total enterprise spend (which includes all direct, indirect, and
services spend) that a procurement organization manages or influences. The
average procurement department also achieved an annual savings of 6.7% in the
last reporting cycle, sourced 52.6% of its addressable spend, and has a contract
compliance rate of 62.6%.[4] Public procurement

Main article: Government procurement

Public procurement generally is an important sector of the economy. In Europe,

public procurement accounts for 16.3% of the Community GDP.[5]

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Green public procurement

In Green public procurement (GPP), contracting authorities and entities take

environmental issues into account when tendering for goods or services. The goal
is to reduce the impact of the procurement on human health and the environment. [6]

In the European Union, the Commission has adopted its Communication on public
procurement for a better environment, where proposes a political target of 50 %
Green public procurement to be reached by the Member States by the year 2010.
[7]
Alternative procurement procedures

There are several alternatives to tendering which are available in formal

procurement. One system which has gained increasing momentum in the
construction industry and among developing economies in the Selection in
planning process which enables project developers and equipment purchasers to
make significant changes to their requirements with relative ease. The SIP process
also enables vendors and contractors to respond with greater accuracy and
competitiveness as a result of the generally longer lead times they are afforded.

ROSMA is a procurement acronym created by ATkearney.{Procurement Solutions

Division} It stands for Return on Supply Management Assets and endeavors to
quantify not only procurement but every piece of the procurement process
including strategic resource management. { }

Procurement frauds

Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding

an obligation or causing a loss to public property or various means during
procurement process by public servants, contractors or any other person involved
in the procurement.[8]

The University is committed to

sound fiscal stewardship of
University funds. This policy
provides guidelines for the timely
payment of goods and services,
internal controls, and required
documentation in order to comply
with state and federal laws.

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Policy Summary:

Agency responsibilities
It is the responsibility of the agency head, or authorized
designee, to certify that all expenditures/expenses and
disbursements are proper and correct.

Agencies are responsible for processing payments to

authorized vendors, as defined in Subsection 85.32.15,
providing goods and services to the agency. Goods and
services include but are not limited to products, services,
materials, equipment, and travel reimbursements.

Agencies are to establish and implement procedures following

generally accepted accounting principles. At a minimum,
agencies are also to establish and implement the following:

1. Controls to ensure that all expenditures/expenses and

disbursements are for lawful and proper purposes and
recorded in a timely manner . Procedures to ensure
prompt and accurate payment of authorized obligations,
and

2. Procedures to control cash disbursements.

Special definitions

Vendor - An entity selling a good or service to the State.

Vendors include, but are not limited to, retail businesses,
consultants, contractors, manufacturers, credit card companies.
A vendor may be an individual, corporation, non-profit
organization, federal government, or federal agency, local
government or local agency, another state or another state
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agency, a Washington state agency, or Indian nation. For

travel reimbursement purposes, a vendor may include an
employee, a board member, or volunteer.

Statewide Vendor - A vendor with a common vendor record

maintained by the Department of Enterprise Services that can
be used by any agency making a payment to that vendor. A
Statewide Vendor (SWV) code is required for certain payment
types (Inter-Agency Payments (IAP) and AFRS Automated
Clearing House (ACH) payments to nonemployees).
Expenditure authorization
Information Sheet

Goods and services are not to be ordered, contracted for, or

paid for unless they are provided by authorized vendors and
within the limitations prescribed by the Department of
Enterprise Services, Contracts and Legal Division (RCWs
43.19.190 and 39.29.065), or other statute.

Prior to payment authorization, agencies are to verify that the

goods and services received comply with the specifications or
scope of work indicated on the purchase or contract
documents. Authorized personnel receiving the goods and
services are to indicate the actual quantities received, services
provided, deliverable submitted, etc. Refer to Chapter 15
Personal Service Contracts and Chapter 16 Client Service
Contracts. Refer also to Chapter 20 for guidance related to
internal control procedures.
Agency heads or authorized designees are responsible for
authorizing all expenditures/expenses.

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Unless otherwise required by federal or other contractual requirement,

where funding is available from both appropriated and nonappropriated
sources for the same purpose, agencies are to chyarge expenditures in
siikuch a ratio as will conserve appropriated funds. This requirement
does not apply to institutions of higher education, except during the
2011-13 biennium.
Unless otherwise provided by law, federal or other contractual
requirement, if state moneys are appropriated for a capital project and
matching funds or other contributions are required as a condition for
receipt of state moneys, state moneys shall be expended in proportion to
and only to the extent that matching funds or other contributions are
available for expenditure, except during the 2011-13 biennium.

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Lo4:-

at me it's joked against documentation

Payment processing documentation

Information Sheet

At a minimum, payment processing documentation should

include evidence of authorization for purchase, receipt of
goods or services, and approval for payment. Agencies may
utilize paper or electronic forms. The following
documentation, or equivalent, is to be maintained:

Journal Voucher (A7-A) - This form can be used for

interagency payments between treasury and/or treasury trust
accounts, and to allocate or transfer costs between accounts,
programs, and to record accruals and other adjustments to
account balances, etc. The Journal Voucher is also used to
process non-AFRS Automated Clearing House (ACH)
payments through the Office of the State Treasurer to outside
vendors. Instead of Form A7-A, agencies are encouraged to
use one of the A19 forms (refer below) with the Inter-Agency
Payment (IAP) process. Refer to Subsection 85.36.20.

Purchase Requisition (A15-A) - A form used by agencies to

request the Department of Enterprise Services, Office of State
Procurement to order materials, supplies, and equipment or to
request an amendment of a previous requisition. This form is

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used when an agency does not have general or specific

authority to make the purchase or when the item does not fall
within the statewide contracts. This form is available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.

Purchase Order (A16, A16-A) - A form issued by the

Department of Enterprise Services, Office of State
Procurement to order items approved on a purchase requisition
(A15-A). This form is used by agencies to encumber, liquidate,
and authorize payment for such purchase requisition requests.

Declaration of Emergency Purchase (A16-E) - A form used

by agencies for emergency purchases under RCW 43.19.200
made for goods and services under the authority of the
Department of Enterprise Services in response to unforeseen
circumstances beyond the control of an agency which present a
real, immediate, and extreme threat to the proper performance
of essential functions and/or may be reasonably expected to
result in excessive loss or damage to property, bodily injury, or
loss of life. Written notification must be submitted within three
days of the purchase to the director of Enterprise Services. This
form is available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.

Field Order (A17-A, A17-1A) - A purchase document or

order issued by an agency to a vendor in accordance with
authority to make a delegated purchase. This form is used by
agencies to encumber, liquidate, and authorize payment for
such purchases. This form is available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html

Receiving Report - Partial Delivery (A18, A18-A) - A form

used by agencies to document and authorize payment for
partial deliveries of goods or services ordered by a single
Purchase Order (A16-A) or Field Order (A17-A).

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Invoice Voucher (A19-1A) - A form used by agencies to

substantiate and authorize payment when a Purchase Order
(A16-A) or Field Order (A17-A) is not involved and where
vendor invoices are not employed. The Invoice Voucher is to
be signed by the vendor on the space provided. This form is
used to produce warrants, pay by means of AFRS ACH, or to
create payments through the IAP process. Refer to Subsection
85.36.20. This form is available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.

Voucher Distribution Form (A19-2, A19-2A) - A form used

by agencies to substantiate and authorize payment when a
Purchase Order (A16-A) or Field Order (A17-A) is not
involved but where vendor invoices are employed. This form is
used to produce warrants, pay by means of AFRS ACH or to
create payments through the IAP process. Refer to Subsection
85.36.20. A voucher distribution form is available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.

Refund Voucher (A19-3) - A form used by agencies to

process refunds of revenues received in excess of the amount
owed or received in error by the state.
Travel Expense Voucher (A20-A, A20-2A) - Form A20-A is
used by agencies to substantiate and/or authorize payment of
travel costs for state employees. In the absence of a vendor
relationship, this form can also be used to substantiate and/or
authorize payment of travel costs for non-state employees such
as prospective employees; individuals who serve on boards,
commissions, councils, committees, and task forces; volunteers
and other individuals who are authorized to receive travel
expense reimbursement. When a vendor relationship exists and
the A20-A is used by non-state employees to substantiate
travel costs, it must be attached to an Invoice Voucher (A19-
1A) to authorize payment. A travel expense voucher form is
available online at:

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http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.

Form A20-2A is only used for reimbursing travel expenses of

commission members who are reimbursed on a per diem basis.

Agencies may use an electronic travel reimbursement system,

such as the Travel & Expense Management System (TEMS),
as long as it provides information equivalent to that provided
on a travel expense voucher.

Printing Requisition A form used by agencies to order,

encumber, liquidate, and authorize payment for goods and
services from the Department of Enterprise Services. This form
is available online at: http://www.prt.wa.gov/.
Copy Center Request Form (A24) - A form used by agencies
to order, encumber, liquidate, and authorize payment for copy
services from the Department of Enterprise Services. This form
is available online at: http://www.prt.wa.gov/.

Purchasing documents used internally by agencies having local

purchasing authorities are to meet the criteria of the forms
noted above. There is no standard internal purchase request
form; however, agencies are encouraged to develop and utilize
an internal request form to enhance internal control over
requisitions. Refer to Chapter 20 of this manual for internal
control procedures.
Payment processing
Information Sheet

The following information, at a minimum, is to be indicated

either on the disbursement documentation or in an automated
system for compliance with federal regulatory agencies and
internal control policies:

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 Payee name and address in compliance with U. S. postal

regulations,

 Unified Business Identifier (or other vendor approved

identifier), as applicable,

 Taxpayer ID Number (TIN) as per IRS publication 1220

and IRS Bulletin 1990-31, as applicable,

 Voucher number,

 Appropriate account code distribution,

 Date the goods were received or the services were

provided,

 Signature of receiver or contract manager approval,

 Receipt date of invoice,

 Invoice number, if available,

 Total amount of invoice,

 Invoice date,

 Discount or other terms, and

 Date of payment.

Agencies are to establish procedures which verify the

mathematical accuracy of all documents and ensure that
charges are properly recorded to the appropriate accounts.
Disbursement documents should be reviewed for the
following, as applicable:

 Written approval by the agency head or authorized

designee authorizing payment appears on the

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disbursement document.

 The payment is being processed to the correct vendor.

 Quantities indicated on the invoice agree with those

documented as received on the receiving report.

 Unit prices on the invoice agree with those indicated on

the disbursement document.

 Contractor rates agree with the contract document.

 Extensions and footings are correct.

 Correct account code distributions are indicated.

 Interest for late payment, upon billing, is properly

documented and computed.
Disbursement documents approved for payment are to be
arranged in a batch for warrant and warrant register processing
within the following constraints:

 The documents are to be assigned sequential voucher

numbers.

 A batch header, document transmittal, or equivalent

which includes the total amount of the payments should
be prepared and approved.

Encumbered balances associated with any expenditures are to

be appropriately liquidated. Refer to Subsection 85.42.20.b for
an illustrative entry.

Balances in GL Code 6505 "Accrued Expenditures/Expenses"

associated with any cash expenditure disbursements are to be
appropriately reversed.

The number of payments to a vendor is to be kept to a

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minimum by processing the maximum number of invoices

with a single payment.
Agencies can use petty cash imprest accounts where effective
in complying with prompt payment requirements and
efficiency of operation can be demonstrated. Refer to
Subsection 85.50.50 for petty cash policies and procedures.

Lo5:- File documentation

Timing of payment
Information Sheet

Agencies are to establish procedures to ensure timely,

accurate, and cost effective payment of obligations to vendors.
An agency's payments will be considered timely when its
records show that the agency pays 95 percent or more of its
obligations to vendors by the due date defined below.
Agencies are to maximize effective cash management by
paying as close to the due date as workable. Special attention
is to be given to the following:
 Due Dates - Vendor payments are to be made by the
due date. Due dates for payments are established by the
terms of the purchase document, invoice, or contract
between the agency and vendors. If the purchase
document or contract is silent concerning terms or there
is no written authorizing document, the terms are net 30
days. The 30 days, or other terms, begin upon receipt of
the goods or services or a properly completed invoice,
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whichever is later.

As prescribed in RCW 39.76, agencies are required to

pay interest at the rate of one percent per month on past
due amounts when invoiced and there are not other
exceptions. Due dates are postponed in the case of
disputes. Refer to disputes below.

 Discounts - Discounts offered by vendors are

considered in evaluating competitive bids; failure to
earn such discounts through prompt payment increases
the effective price to the state. Agencies are to pay all
obligations in time to take advantage of the maximum
discounts offered by vendors.

 Partial Payments - When agencies accept partial

delivery of goods or services without reservation,
prompt payment is to be made for the goods or services
received upon receipt from the vendor of a properly
completed invoice or in accordance with purchase
document or contract terms covering the partial
delivery.

 Disputes - Prompt and proper notification to a vendor of

receipt of unsatisfactory goods or services or an
incorrect invoice defers the due date. The due date is
recalculated from the date the problem is resolved.
Proper authorization is required when material changes
are made.

Maintenance Services Contracts - Pursuant to RCW

43.88.160(5), under certain conditions, payments for
equipment maintenance services may be made up to twelve
months in advance.

Postage, Books and Periodicals - Pursuant to RCW

42.24.035, agencies may make payment for the costs of
postage, books and periodicals in a manner consistent with
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normal business practices, but in the case of subscriptions, for

periods not in excess of three years.
Rapid invoice processing
Information Sheet

The use of Rapid Invoice Processing (RIP) is encouraged to

reduce the costs of processing payments for small and/or
routine transactions. With RIP:

 Confirmation of the receipt of goods and services is kept

at a decentralized location instead of being forwarded to
the payment office to be filed with the payment
documents.
 Requests for payments are processed centrally and
scheduled for payment.

 The risks associated with using RIP are mitigated

through compensating controls, such as providing the
decentralized location the opportunity to intervene in the
payment process prior to the scheduled payment date.
The level/type of payments subject to RIP procedures is to be
established carefully at the agency level to ensure that a more
positive system of control, such as centralized matching of
signed receiving reports with requests for payment, exists to
cover large and/or non-routine transactions.

Advance written authorization is to be obtained from the

Office of Financial Management for the use of RIP. Requests
for authorization should identify the level and type of
payments proposed for RIP procedures and the processes that
will be used to mitigate the risks of using RIP.
Purchase card

State law, RCW 43.19.185 and 28B.10.029, authorizes

agencies to use credit cards and similar devices to make
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purchases under specific terms and conditions. Refer to

Chapter 45 for purchase card policies.
Waste recycling procedures

Agencies are to record receipts and disbursements resulting

from agency operated waste reduction and recycling programs
not operated through the Department of Enterprise Services
(refer to RCW 70.95c.110), as follows:

Revenues derived through an agency operated recycling

program are to be deposited into the account that supports the
recycling effort as either a miscellaneous revenue or a
recovery of expenditures to the extent of expenditures for the
program.

When the revenues exceed the expenditures identified with the

recycling program, they are to be allocated on a proportional
basis to the accounts that originally purchased the recycled
materials.

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