Accounts Payable-Business Office
Accounts Payable Department pays vendors for goods and services, and reimburses employees or students for expenses.
It is important to know that the College does not have a central purchasing department. Purchasing is distributed among the departments.
Vendors with questions about payments should call either their contact at the College, or Gail Joyce at 847-735-5033.
Below are mostly internal procedures.
Requesting a Check
In order to get a check issued from the College for reimbursement or for paying a vendor, you must submit the request to the Accounts Payable Assistant with appropriate documentation and authorization. A check will be prepared in 3-5 working days – you must plan ahead! Remember, reimbursements for $100 or less can be paid out in cash at the cashier counter and do not need to go through the AP process. A check request form is available, but is not required, see attached Accounts Payable link for various forms. Please make sure that the following information is clearly marked on the invoice or on a separate request memo.
- To whom the check should be payable
- Mailing address
- Account number to be charged
- Signature of person authorizing and date signed
If the check should be returned to you via campus mail, make sure that this is obvious in the request. Please write “return to department” at the bottom of the request.
Receipts for reimbursement:
Original receipts are required, NOT photocopies. The College maintains these receipts on file for 5 years, and you are not required to keep your own duplicate copies. When the original receipt is not available, you will need to supply a written statement to that effect and describe the purchase. In the case of credit card purchases made over the Web, appropriate documentation will consist of a printed confirmation of the purchase with price shown and a printed description of the item purchased. Charge card statements and credit card processing receipts are not sufficient without other written evidence or approval from a higher level of authority.
Department Managers have signing authority for their departments as delegated by the President’s Staff member within the limits of that department’s budget allocation. The Business Office maintains authorization forms with sample signatures.
All contracts over $10,000 or contracts involving multiple years must be approved by the Vice President of Business, except as waived in specific repetitive situations. Students are not authorized to sign contracts.
You are required to document your efforts to get the best possible value for the College in your purchases. For purchases $500 and above, the College expects that you would research alternative vendors and made the best decision, taking into account price, quality and delivery. Appropriate documentation would include name and contact information of the rejected vendors and the price quoted. If a decision is made on a basis other than cost, the reason must be clearly stated and justified.
In certain situations, the College advances funds to employees or students for use in paying vendors. The most common situation for this is traveling on College business. Advances are also sometimes given if credit has not been established with a vendor and payment is required up front. The advance must be pre-approved by the Business Office and is recorded as a debt in the name of the employee or student until appropriate documentation is filed. The documentation must be submitted to the AP Assistant.
Cell Phone Reimbursement
The college has established a policy to reimburse certain college personnel for business use of their personal cell phones. These persons have been identified as having a significant business purpose outside of the college. Some examples of this purpose include 24/7 emergency, significant business travel, recruiting and weekend job responsibilities, etc. Rather than ask the employee to maintain two cell phones, one for business and one for personal use, the college will reimburse employees one of two ways (outlined in the Cell Phone Reimbursement Policy and Form). For those selected employees, a new policy form is required annually, and should be completed and submitted to the business office (Accounts Payable Assistant) by June 1 of each year. The Internal Revenue Service has ruled these as non-taxable.
Special note: Most states have prohibited individuals using a cell phone while operating a motor vehicle. It is the employee’s responsibility to comply with all regulations regarding cell phone use. Under no circumstances will the college pay fines, costs or damages related to cell phone misuse.
Credit with Vendors
The College has established credit with many vendors. Sometimes vendors will require that we establish credit with them before they will invoice the College, as opposed to requiring you to pay up front. You may check with the AP Associate for recommendations of vendors. If you need to establish credit with a new vendor, be aware that this sometimes takes many days. The AP Assistant will take care of the paperwork and references required.
Gift cards, as ruled by the Internal Revenue Service, is considered taxable income to the recipient. The College requires that you seek approval first from your budget manager before giving someone a gift card. Because they are taxable, you must disclose to the Business Office the recipient’s name, date of receipt, and amount. We do not recommend that these be purchased on the the College’s purchasing card, but rather be processed through Accounts Payable.
Invoices from vendors in most cases should be mailed directly to the authorizing person in order to prevent delays caused by routing mail. Please make sure that the vendor puts your name and/or a purchase order number on the invoice and on the shipping label so that we can identify the person responsible for the purchase. After approving the payment, forward the invoice to the Accounts Payable Assistant in the Business Office. In order to prevent duplicate payments, the Business Office prefers in all cases to have an original invoice - not a photocopy or a faxed copy. If there is no original invoice, then there should be a non-duplicated invoice number or purchase order number assigned to the invoice.
Fiscal Year 2012-2013
Mileage Rate = $.555 per mile
Effective Date: June 1, 2012 through May 31, 2013
Fiscal Year 2011-2012
Mileage Rate = $.51 per mile
Effective Date: June 1, 2011 through May 31, 2012
Office Max (Office Supplies Contract)
OfficeMax is our preferred vendor for office supplies. Access for ordering supplies online is available by requesting a username and password from the Associate Controller or Accounts Payable Assistant. The contract with OfficeMax provides for discounts of over 40% off of catalog prices.
Payment for Services (Compensation or Honorarium)
Whether a person is an Independent Contractor or and Employee will depend upon the nature of the work performed. Any payment for compensation requires IRS involvement. If the payment is going to someone already on the College’s payroll, whether student, staff or faculty, the payment must go through Payroll and not through Accounts Payable. This will insure that the taxes are handled appropriately.
If the person is not on the payroll, than we must determine whether he or she should be on the payroll or whether the person can qualify as an independent contractor (see below). If the person qualifies as an independent contractor, then the Business Office must have on file a signed W9 Form for U.S. citizens or residents, which requires the person supplies their social security number. Any U.S. or resident person who earns $600 or more from the College will be reported to the IRS and receive a 1099 postmarked the end of January. For non-U.S. citizens receiving honoraria will need to complete a W8-Ben Form. See forms and instructions on the Accounts Payable page.
Whether a payee qualifies as an Independent Contractor versus an Employee will depend upon several factors: These factors include whether the the payee is proficient, requires minimal to no instructions about when, where and how to perform his duties, his/her business depends upon the performance of certain services and expertise, and the service is not of the control of Lake Forest College, then the person is considered an Independent Contractor.
The College’s current purchasing card program is JPMorgan Chase Bank. Certain individuals are approved by the Business Office for the JPMorgan Chase cards..The recipient of this card is required to submit original receipts and statement to the Accounting Assistant by the 15 of each month.Be sure to obtain the detailed restaurant receipt. The other credit card program is with American Express. These are primarily for travel and entertainment, but in some cases have been approved for use as purchasing credit cards. Contact the Associate Controller or Controller for more information. We do not advise using the college’s purchasing cards to purchase gift cards, etc., without the approval of the budget manager; see gift card section above.
Purchase orders are used to match shipments and invoices to the buyer. The College does not require that you obtain a purchase order number, but a vendor may require that you give them one. You may call the AP Assistant to get a purchase order number for your use. Having a purchase order number does not imply authorization for purchase; you must still meet the authorization rules above as for approving payments.
Sales Tax Exempt Purchases
The College is exempt from paying Illinois State sales tax on purchases that pertain to College operations. Student activities as part of Student Government or Greek organizations may not use the tax exempt status.
In order to make a tax exempt purchase, you will need to obtain a copy of the tax exempt letter from the AP Assistant or purchase from a vendor where status has already been established.
Sales Tax Exempt other States
Sales tax may be exempt in other states. Please see Sales Tax Exempt Tab.
There are special rules for documenting expenses that could be considered of personal benefit to employees. The IRS wishes to make sure that you are traveling and entertaining on College business, and that you are naming the other people benefiting from the entertainment. So, for food, travel, and entertainment, please always list names and purpose of event. For full policy details, please click link to access the Administrative Travel and Business Policy under Business Office Documents and Forms, Administrative Business and Travel Policy.
If a check is no longer needed or is incorrect, it must be voided by the Business Office. Please do not hold on to checks that will not be used. Please do not destroy them on your own. Return the check to AP and indicate the reason it will not be used.
Year End Issues (Fiscal Year End- May 31)
Expenses to be recorded in the fiscal year must have been incurred prior to May 31st. For material purchases that mean that the item must have been physically received at the College by May 31st, not just ordered. For services, this means that the service has taken place by May 31st, not just been paid for. Examples of services include airline tickets and conference registrations.
Invoices or check requests received after May 31st must have the appropriate fiscal year clearly indicated on them. If no invoice has been received by the middle of June, you will need to notify the AP Assistant in order to encumber previous year’s funds to pay the invoice when it arrives. Otherwise, the expense will automatically fall in the new year.