As fiscal year end approaches, it is important to clarify the procedures that we follow in processing invoices at the end of the year. The INVOICE DATE is used to determine which fiscal year that invoice is charged against regardless of the year of the PO creation. The invoice date is the date presented on the first page of an invoice that has been assigned by the vendor.
All invoices received by AP up to and including Thursday, July 5 with an invoice date of June 30 or before will be processed in the Fiscal Year 2018 accounting books. Invoices dated July 1st or later will be processed in the Fiscal Year 2019 accounting books.
KFS utilizes a post-back logic that books Fiscal Year 2018 expense for invoices dated June 30 or before and processed by Thursday, July 5. The post-back period ends on July 5. General ledger expenses book to Fiscal Year 2019 regardless of the invoice date beginning July 6.
June or prior invoices billing service and/or maintenance contracts with period begin dates of July 1, 2018 or later will be processed as received. Similarly, membership billings for Fiscal Year 2019 memberships that expect payment in advance of June 30, 2018, will be processed as received. Accounts Payable will tabulate the invoice and accounting detail so that a financial reporting adjustment can be made to the Fiscal Year 2018 reports.
Beginning with invoice processing on July 1, 2018 the billings referenced in paragraph four will be processed by the following procedure if the purchase order is encumbered for FY2019.
- The invoice date on the payment request document will be entered as July 1, 2018 if the actual invoice date is June 30, 2018 or prior. KFS will book the expense to FY19.
- The pay date will be populated based on billing invoice date and defined procedures. For example, a June 1, 2018 membership billing of a FY19 PO with Net 30 Day payment terms will be processed with invoice date of 7/1/2018 and pay date 7 days from processing.
Here is a reminder for subscription and membership payments from the Financial Management Services Newsletter, March, 2016. (Note procurement card payments are permitted in addition to DV payment processing. Check with Purchasing if you have questions.):
- Subscriptions should be processed on a DV (unless they require a contract signature or are software subscriptions). The billing notice is typically generated through a renewal reminder rather than through an invoice; therefore, a DV is the appropriate method for payment.
- Memberships should be processed on a DV if the membership does not require an agreement or ongoing services/data sets (such as Cloud) which would require a security review.
The $1,000 limit on Disbursement Voucher transactions applies to "Compensation for Services" and "Payments for Contractual Agreements" and not to subscription / membership payments.
As an additional reminder, units requesting memberships in External Organizations are required to submit a membership application to University Administration. Detail for Sponsorship & Membership Applications is located on the Indiana University Brand Guidelines webpage.
The procedure documented above has been followed for the past six fiscal years.
Goods, or merchandise, are rarely pre-billed. If you order equipment or supplies in the month of June and ask for a delivery of July 1 or later, the vendor may ship your product early and issue an invoice on the date shipped. In this case, the invoice will be processed in FY18. Please keep this in mind when placing orders for products that you do not wish to take delivery of until after the fiscal year end.
Funding Recurring Purchase Orders:
At times throughout the year, but especially at fiscal year end, recurring Purchase Orders (POs) could run out of encumbered funds. You must encumber funds for all billing expected to be paid on your recurring order through the end of the fiscal period so that payment processing is not delayed.
KFS PURAP does not allow the processing of invoices against a PO that is not funded. Indiana University receives invoices that must be paid but the payment is delayed until funds are encumbered on the PO.
The practical result of the recurring Purchase Orders being unfunded is:
- Multiple communication occurs between Accounts Payable and the Department and Purchasing; and
- Payment delays are created at no fault of the vendor.
To avoid these consequences, please review all recurring POs to ensure funds are available.
Guide to Accounts Payable Liability Object Code 9041
Accounts Payable object code 9041 is the offset object code for invoice expenses, credit memo credits, and cash disbursements. Reports are written and published in IUIE to study 9041 activity and status throughout the year as well as at fiscal year-end. The Guide to Accounts Payable Liability Object Code 9041 explains the reports available and their use.