Authorizing Vendor Payments

Once a Purchase Order has been issued and goods or services received, the University must pay the vendor invoice. Accounts Payable will only pay a vendor invoice against a Purchase Order, when the ordering department has authorized the payment. Payment authorizations can be in the form of a completed receiver, a written approval to pay for services or a pre-payment authorized by the Purchasing Department.

a. Receiving

i. Regular Purchase Orders

Regular Purchase Orders are only paid when a three-way match between the PO, Invoice and Receiving Document exists in the Banner system. Departments are required to complete a Banner Receiving Document for all shipments received against Regular Purchase Orders in order to authorize payment to the vendor.

When damaged or duplicate shipments are received, immediate action is necessary to protect the University’s legal rights. The following notifications must be made within fifteen (15) days.

Damaged Shipments

  • Note in writing any and all discrepancies on the carrier’s delivery receipt before you sign it as received. Be specific in your notations and do not hesitate to make an exception, no matter how minor you feel it may be.
  • Have the delivery driver initial and date any notation or exception you make on the delivery receipt.
  • Sign the delivery receipt by noting company name, your name, date received and number of packages received.
  • Immediately phone the delivering carrier’s Overage, Shortage and Damage department (OS&D) and requires an inspection for damage. This must be done within 15 days. Have the following information ready: carrier’s name, carrier delivery receipt number, shipper’s name, items damaged, nature of damage (i.e. broken, crushed, etc.), invoice value of damaged items and location where damaged items are being held for inspection.
  • Make a notation of your request for inspection on the packing list that accompanied the shipment. Note the date requested and who at the carrier’s OS&D department you spoke to.
  • Important – Do not dispose of the carton or the inner packaging from items waiting for inspection. Retain everything and move damaged carton and merchandise to a safe, out of the way location. The carrier will not process the claim unless the merchandise and its carton are inspected together. If potentially hazardous substances are involved, contact the UNM Department of Safety and Risk Services.
  • After an inspection has been requested, the carrier has five (5) working days to make the inspection; otherwise they waive the right to inspect. Many times because of the small dollar amount of damage, the carrier will voluntarily elect to waive their right to inspect. When this happens, request a standard claim form from the carrier. If the carrier elects to inspect the damage they will make out an inspection report and give you the original. The carrier’s local office can assist you with any questions you may have when filling out your claim form. These same guidelines apply for concealed damage, which mean no evidence of damages of any kind was apparent at the time of delivery. It is imperative that you request inspection of the damaged merchandise promptly.

Duplicate Shipments

  • If you wish to return the unordered items, contact the vendor and request a Return Goods Authorization (RGA) number and instructions for returning the unwanted items. After the items have been returned, the vendor should issue a credit memo that cancels any previous charges for the returned items.
  • If you want to keep the excess items, prepare a Change Order Request form to change the original Purchase Order as necessary to include the items.

Short Shipment

  • Shipments that do not include all the items indicated as shipped on the packing slip must be brought to the vendor’s attention immediately. Request that the missing items be shipped using the original Purchase Order number. The ordering department and Accounts Payable must make certain the vendor does not invoice twice for the same items.

Important – If the department experiences continued delay or other problems resolving a damaged, duplicate or short shipment the Purchasing department should be contacted.

ii. Standing Purchase Orders

Standing Purchase Orders do not require a Banner Receiving Document. When the Accounts Payable department receives an invoice against a Standing Purchase Order a Banner Invoice is created and the vendor's invoice is scanned and e-mailed to the department contact listed on the PO. The e-mail requests the contact to review the vendor invoice and reply to the e-mail either approving the invoice for payment or disapproving it and giving the reason. A/P will either pay the invoice or hold it until approval is received. The department's reply will be scanned and indexed to the Banner Invoice and will be viewable in Banner. If the vendor's invoice is received in the department, the approver can write "approved for payment" and sign the approval.