Accounts Payable ProcessingPart 1 – Basic Data EntryInvoices & Credit MemosCourse 2 in Standard Curriculum

Learning ObjectivesoUnderstand the Accounts Payable (A/P)Business ProcessoIdentify Accounts Payable Transactions in FISoProcessing Invoices (under 10,000) andCredit MemosoUnderstand the University’s unique taxtreatment and rebatesoUnderstand the Cheque Production andDeposit CycleLink to Course Material

Housekeeping –All FIS Courses and WorkshopsExpectations for FIS Courses: Must be able to complete all assigned exercises in the SAPQT1[HANA] training application. If you are having technical issues, and cannot complete theexercises in class, you have 1 week to complete them. Ifextensions are necessary, please contact me. The instructor will review all exercises. Must attend most of the class. If you miss 20 minutes or more ofclass you will not be eligible for course credit.All FIS courses are recorded and will receive a copy of the recordingfor their record.

Review : Components of FISThe Financial InformationSystem (FIS) is made up of 3components that have FinancialAccounting(FI)Each component has unique account codes, such as G/Laccounts, and Funds Centers that departments enter whenprocessing in FIS.

Accounts Payable at UofTRefers to transactions where the University owes money/pays anorganization or individual. It also refers to credit memos related topreviously paid invoices, and transactions where a cheque is generated.Most Common Transactions: Invoice payments to vendors Expense reimbursements Credit memos Petty Cash/Imprest Bank Account ReimbursementsLink to Accounts PayableDocumentation & Support

What is the Standard Accounts PayableBusiness Process?Step 1Get approval for the payment.Step 2Obtain/determine the FIS account information(e.g., FC, CC/IO, G/L)Step 3Process the invoice transaction in FISStep 4Note the system generated document number onthe source document (e.g., invoice, expense reportform) and if required, notify other impacted parties.Step 5File document(s) in accordance with UofT File PlanLink to Accounts PayableDocumentation & Support

How does FIS Identify Transactions?FIS uses document numbers (i.e. 9 or 10 digits in lengths), and two letterdocument types to identify transactions.For example:Document TypeDescription in FISDocumentNumber seriesInvoice notrequiring aPurchaseOrderCredit MemoExpenseReimbursement(cheque)Petty CashReplenishmentImprest AccountReplenishmentKNKGKEKCKIA/P VendorinvoiceVendor CreditExpenseReimbursementPetty Cash FundImprest xxxxxxxTake a look at this list of FISdocument types and number.

The University’s Unique Tax TreatmentAs a broader public sector organization, and being in part funded by theprovincial government, the University is eligible for partial rebates onpurchases.These rebates are applied immediately, and vary depending on: Whether HST/Provincial Sales taxes (PVAT) was charged by thevendor Where the goods/services were consumed/rendered What type of good/service was purchasedLearn more about the GTFM Policy governing HSTfor Purchases and Payments to Vendors.

Calculating the Tax RebateThe tax rebate is a blended rate that combines federal and provincial rates.Example:Regular HST RateUofT Tax RebateUofT Tax RateGST5%67%1.65%OVAT8%78%1.76%Total13%72.5% average3.41%Link to Tax Code Summary Table

How does FIS know what Tax Rebate to apply?To apply the applicable tax treatment, the University uses 2-charactertax codes (e.g. E1) to code the rebate and ensure that the accounts(i.e. Funds Center or FC/Fund) is only charged the after-tax-rebateamount.Tax Code HintsExpense Tax CodesUse G/L acct.’s in 8xxxxx seriesRevenue Tax CodesUse G/L acct.’s in 7xxxxx seriesJ9Internal Use Only; HST exemptInternal expense transfers and corrections (G/L acct. 8xxxxx)S9Internal Use Only; HST exemptInternal sales/recoveries and corrections (G/L acct. 7xxxxx)Link to Tax Code Summary Table

Sample Tax Rebate CalculationExample: Invoice for 113 ( 100 13%) for goods “consumed” in Ontario.Tax Code: E1Cost: 100.00HST (8% OVAT 5% GST):Invoice total (amt. paid to vendor): 13.00 113.00OVAT Rebate @ 78%:- 6.24GST Rebate @ 67%:- 3.36Net Amount Charged to FundsCenter OR FC/Fund:Link to Tax Code Summary Table 103.41Unsure about the tax code to use?Email: [email protected] OR yourFAST Team Faculty Representative

ProcessingInvoices in FIS

Exercise Expectations1. Open the Course Material page2. Open the “In Class Material” Exercise – ReferenceGuide/Simulation3. Follow the menu path to the FB60 – Invoice Screen4. Complete the Exercise and put a “thumbs up”.Link to Course Material page.

FB60 – Enter Invoice ScreenThe FB60 – Enter Invoice screen is used to process anumber of FIS transactions, such as: Invoice payments to vendors(under 10,000 and not Purchase Order related) Expense Reimbursement for non-employees(i.e. non-ERDD) Petty Cash & Imprest Bank Account Reimbursements Refunds for refundable deposits(e.g., room key deposits)Link to Course Material page.

FB60 – Invoice Create Entry ScreenCertain fields will be defaulted.The Invoice transaction(default): "Transactn" “Invoice” "Document Type" “KN" line items “Debit"All FIS transaction screens haverequired and optional fields tocomplete.Use the reference material to guide youthrough how to complete thetransaction.*Any field that is NOT included in thereference guide should be ignored.Link to Reference Guide page.

Vendor AccountsCompanies who are set up in FIS will have a 6-digit vendornumber assigned to them.Characteristics of Vendor Accounts: Vendors may have multiple accounts if they havedifferent addresses for receiving payments vs. purchaseorders/contracts.The first digit of the vendor number identifies theCURRENCY they want to be paid in (i.e. 1xxxxx CAD,3xxxxx USD, 4xxxxx all other currency).NOTE: Some vendors may have multiple accounts in differentcurrencies, regardless of where they are located.Watch this simulation to learn how tosearch for commercial vendors in FIS.Commercial Vendor Numbers/MasterRecords are set-up by Procurement Services.Visit to learn more

Searching for Vendor AccountsClick in the “Vendor” field for theMatch Code Search buttonUse the available criteria tofilter for the company’s vendoraccount, such as: Partial vendor name(use * *) Partial vendor number Postal codeWatch this simulation to learn how tosearch for commercial vendors in FIS.

Vendor Search ResultsWhen selecting a vendor, ensure theappropriate "A/P only" or "A/P AND PO"vendor (see Search Terms column)Example: Search for a vendor whose name includes *grand*.Result:

Exercise Scenarios1. Process a Standard Accounts Payable Invoice2. Process an Invoice using the Alternate Payee function3. Process an Invoice using a generic OTA vendor4. Process a Credit MemoLink to Course Material page.

Exercise 1 – ProcessInvoiceInstructions (approx. 15 minutes)Login into the SAP-QT1 [HANA] application andprocess a standard invoice.Reference Guide forprocessing an Invoice

Using the Alternate Payee Function whenProcessing an InvoiceIf a company has a vendor account in FIS, user can use the AlternatePayee function to: Ensure that the check reaches a specific person/department atthe company (i.e. “CC” or “Attention to”) On an infrequent basis, if the cheque needs to be redirected to adifferent address that what is in the Vendor Master Record (VMR)Note: If the vendor address has changed permanently, please [email protected] to Course Material page.

Exercise 2 – ProcessInvoice with AlternativePayeeInstructions (approx. 15 minutes)Login into the SAP-QT1 [HANA] application andprocess an invoice using the alternative payeefunction to redirect to cheque to a specificperson or address.Reference Guide for processingan Alternative Payee Invoice

When to Use the Generic One-Time Account (OTA)VendorIf a company does not have a vendor account in FIS, users can chooseto either: Complete the New Supplier Account form, and send a request [email protected] to create a vendor account OR Use the generic OTA vendor account (i.e. 99-series)You should use an OTA vendor when all of the following conditions exist: A vendor account does not exist Transaction does not exceed 9,999 (before tax) You do not anticipate using the vendor more than once in a fiscal year.Learn More in our KnowledgeCentre article.

Exercise 3 – Process anInvoice using a GenericOTA Vendor AccountInstructions (approx. 15 minutes)Login into the SAP-QT1 [HANA] application andprocess an invoice using a 99-series genericOne Time Account (OTA).Reference Guide forprocessing an OTA Invoice

Understanding Credit MemosIf a cheque has been issued and cashed, credit memos are processedwhen: Goods delivered needed to be returned to the vendor The University overpaid in the invoiceWhat occurs when you process a Credit Memo in FIS? The department receives a credit immediately to their Funds Center orFC/Fund for the after-tax-rebate amount that was previously charged. The next payment to the vendor will be reduced by the value of the credit,including any applicable taxesLearn more in the FB65 – Credit Memoreference guide.

Exercise 4 – Process aCredit MemoInstructions (approx. 15 minutes)Login into the SAP-QT1 [HANA] application andprocess a credit memo as a result ofoverpayment or returned goods.Reference Guide for processing aCredit Memo

Understanding the Cheque Production ScheduleOnce the invoices have been processed, the cheques or drafts areprocessed by Central Financial Services and issued during theappropriate cheque production cycle.The address for the cheque is taken from either the: Address in the Vendor’s Master Record (e.g. exercise 1) Manually entered address if using an Alternate Payee OROTA Vendor (e.g. exercise 1 and 2)

When are Cheques/Drafts Produced?All cheques and drafts are produced on Wednesday for the following: CAD and USD dollar cheques Foreign currency drafts Expense reimbursement chequesCheques and drafts are permitted for certain currencies.Learn more about which currencies in this KnowledgeCentre article.Note: For payments outside of these currencies, exploreusing Outgoing Wire Transfers. Learn more in this article.

How is a Cheque/Draft Selected forInclusion in a Cheque Production Cycle?System looks at 2 pieces of information: Invoice (document) date Payment termsExample:A document has an invoice (document) date ofJune 1 and the payment terms are YT05 (35days).Explanation:The cheque will be produced during the cheque runscheduled on or immediately before July 6 (June 1 35 days). If the document was entered after thedue date (i.e., July 6), the cheque will be producedin the next cheque run.

Learning ObjectivesoUnderstand the Accounts Payable (A/P)Business ProcessoIdentify Accounts Payable Transactions in FISoProcessing Invoices (under 10,000) andCredit MemosoUnderstand the University’s unique taxtreatment and rebatesoUnderstand the Cheque Production andDeposit CycleLink to Course Material

Contact Information & Additional ResourcesooooFAST General Mailbox – [email protected] FAST Team Representatives ListGTFM Policy – Purchasing & Payments to VendorsKnowledge CentreDocumentation & SupportWe are always looking for ways to improve.Click here and take a moment to complete our courseevaluation.

What is the Standard Accounts Payable Business Process? Step 1 Get approval for the payment. Step 2 Obtain/determine the FIS account information (e.g., FC, CC/IO, G/L) Step 3 Process the invoice transaction in FIS Step 4 Note the system generated document num