Business Process: Vendor Payment Process - PO Invoices
Vendor invoices from purchase orders arrive at
the mail desk. The Accounts Payable mail clerk sorts the invoices
into categories. The processing and posting of these invoices,
described below, depends on the category assigned to the invoice.
- Invoices arrive via US mail.
Categorize and distribute invoices
- Accounts Payable mail clerk sorts invoices into categories.
- If the invoice is for one of the following, go to Distribute
- a subcontract with a ten digit number that starts with a
- a Blanket Purchase Order with a ten digit number that
starts with a "55"
- a regular purchase order with a ten-digit number that
starts with a "45" which is for an amount greater than $500
- a DAPO (Department approved purchase order) with a six
digit number greater than $500.00
- If the invoice is for one of the following, go to Enter an
- a regular purchase order with a number that starts with a
"45" with an amount less than $500.00
- or a DAPO with an amount less than $500
- Invoices are distributed to Accounts Payable Operators.
- An Accounts Payable Operator determines the responsible
person's name and MIT address using system task Display
Mailing Address for Authorization of Incoming Invoices.
Obtain departmental approval
- The invoices are forwarded to the responsible individual in
the department for approval.
- The Department approves the invoice(s), makes a copy, and
returns the original(s) to Accounts Payable via interdepartmental
- Interdepartmental mail clerk receives department-approved
invoices, date stamps and sorts invoices by amount, and
distributes invoices to appropriate Accounts Payable Operators.
- An Accounts Payable Operator verifies the approval signature
on the invoice greater than $500.00 through the VAPS system.
- If the signature on the invoice is not authorized, go to
Obtain departmental approval.
- If the invoice is for an amount greater than $4999 or for a
sensitive item, go to the next step. Otherwise, go to Enter an
- The invoice is forwarded to the Accounts Payable supervisor
for review and resolution.
Enter an invoice
- An Accounts Payable Operator enters the invoices in the SAP
system using system task Post an Invoice
Against a Purchase Document.
Note: If the invoice is for a subcontract that is 90% complete,
conduct closeout procedure.
- SAP performs edit checks for balance, duplicate invoices,
delivery tolerances, etc. If problems exist, the system returns a
warning or an error message. The system automatically blocks for
payment any invoices with variances.
- If other problems exist (e.g., the date the goods or services
were received is after or before the project start or expiration
date), go to next step. Otherwise, go to Manage paperwork.
- Invoices are resolved and released using system task Release
- File original invoices.
Note: For regular orders/DAPO invoices with an amount less than
$500, copy the invoice, and forward to the appropriate department
- Generate accounts payable reports to monitor payments.
Vendor Payment Process
- Requests for Payment (RFP) and Non-PO Invoices
Last updated: May, 1999
Copyright © 1999, Massachusetts Institute of Technology. All