Accounts Payable - Policies, Procedures, & Guidelines

The Purpose of the Accounts Payable Department is to ensure that all disbursements of university funds are done in accordance with generally accepted accounting principles. This means providing external, as well as, internal customers with the most efficient, precise, and prompt service. The responsibility of the Accounts Payable Department is to assess and prepare reimbursements, corporate travel cards, cash advances, travel expenses, petty cash, and make payments on goods and services rendered by individuals and vendors. These are paid by operating or restricted funds. 

PAYMENT TO VENDORS

American University is required to meet the regulations of the Internal Revenue Service for payments to individuals. To be in compliance, all new vendors must have proper documentation (W9 Form) on file and be entered in Datatel before requisitions can be entered into the system.

Datatel Requirements

  • All requisitions must include a vendor code. 
  • Reimbursements, direct payments, and PSAs require W9 Form documentation.
  • All requisitions for goods and services exceeding $500 should be entered into Datatel before the purchase.
  • All items less than $500 may be purchased using the AU One Card, or by sending the invoice signed by the approved person within the department. 
  • The General Ledger Account Number should be charged to Accounts Payable. 

NOTE: All Vendors who submit invoices for payment must supply the University with a completed W9 form.  Accounts Payable will be unable to process any payments without the proper documentation.

Reimbursements, direct payments and PSA's will also have the same requirement. Accounts Payable will be unable to process any payments without the proper documentation.

The University is exempt from paying sales taxes which may appear on invoices or on personal reimbursement requests from MD, DC, and VA.

It is the policy of the Office of the Controller to pay only on original invoices which easily identify the goods or services sold to the University or requesting departments. It does not pay statements that are issued by vendors.

As per Sarbanes-Oxley, Accounts Payable must have all invoices, expense reports, and disbursement requests submitted as soon as they are approved for payment. This is especially crucial at the end of our fiscal year (April 30).

Invoices must be received directly by Accounts Payable. Otherwise, outstanding payables may go overlooked. This can become a significant problem with our external auditors during the annual audit of the University's financial statements.  

Payments to Individual for Services (Disbursement Request & Contract Required)

  1. The University may obtain the services of an independent contractor. The definition of independent contractor, is one who is responsible for payment of his/her self-employment taxes; who is not subject to the control of another as to the means and methods for accomplishing the work, but only as to the results; who engages in the pursuit of independent practice to the public; who pays their own expenses.
  2. University employees are not authorized to enter into contracts with individuals without a contract signed by the authorized officer of the University in the Finance office. 
  3. Payment to individuals for services performed must be made through the Payroll office or the Accounts Payable department. It must be paid through the Payroll office if the individual is currently being paid, or has been paid previously during the current calendar year, by the Payroll office. Payment for all other services performed by individuals must be made through the Accounts Payable department and submitted on a Disbursement Request form.
  4. Request for payment to independent contractors (as defined by IRS) must include be accompanied by a valid contract signed by the Assistant VP Finance (signing for the administrative part of the University) or the Dean of Facilities (signing for faculty and research contractors), using object code 51208. 
    Request for payment to a speaker must use object code 51210 (non-employee compensation).
  5. Petty Cash

  6. All departmental deposits will be accepted at the Capital One on-campus branch through the teller windows. We have begun distributing Capital One Bank deposit forms to the individual departments and/or school business offices and have attached the new AU Departmental Deposit Form to this e-mail. Capital One Bank will capture the departmental deposit forms in a drop box located behind the teller line. An accountant from the Office of Student Accounts will pick up the previous day’s deposits each morning and will continue to process the back-end cashier activities by recording the data on the forms on the general ledger.
  7. Credit card transactions that had previously been brought to the cashier’s office by individual departments will now be processed within the School and/or department business office. Treasury Operations is working with the Schools to provide a merchant account and ID, the appropriate credit card equipment, and training to handle these transactions by the transition date. Many schools are already taking their own credit card payments, so this process will now include all schools and departments.
  8. Petty Cash Reimbursements 

  9. Cash reimbursements for miscellaneous employee expenses (referred to as Petty Cash reimbursements) will no longer be processed at the cashier window.  Departments have been asked to either obtain a Petty Cash fund to reimburse their own employees or for employees to accumulate receipts until they reach at least $25, at which point the Accounts Payable department will process an expense reimbursement. The Petty Cash reimbursement process had been lacking controls, since cashiers could not verify approvals when receipts were presented, therefore, this process should improve controls around these types of reimbursements.
  10. Student Tuition Payments

  11. Students needing to pay their account by check at the AU Central office will be given a pre-printed envelope and directed to drop their payment in the tuition drop box within the AU Central office. Please see the attached PDF document which further details the procedures necessary to properly process these transactions. Additionally, you should contact your school business/budget officer or myself if you have any questions regarding the transition.