Section 5: Vendor Invoice Processing
Overview
This section addresses processing of vendor invoices and applies
to payment for goods and services procured through purchase orders
and not to grants procured through the TxDOT Traffic Safety Division-Behavioral
Traffic Safety Section’s (TRF-BTS’s) annual request for proposal
process. Vendors include marketing firms and consultants who provide
goods and services in support of the Texas Behavioral Traffic Safety
Program.
In processing invoices for purchase orders, TxDOT will follow
steps necessary to comply with the 30-day Prompt Payment Law (Texas
Government Code, Chapter 2251). These standard operating procedures
were developed in order to comply with TxDOT’s policy to pay all
vendors within the required 30-day time period.
The Prompt Payment Law
On September 1, 1999, the Texas Comptroller of Public Accounts
implemented new payment requirements centered on the 30-day period
for payment. The law states that payments must be made to vendors
within 30 days from the latter of:
- The date the vendor completes its services.
- The date the agency receives the goods under contract.
- The date TxDOT receives the invoice for the goods or services.
When a state agency’s payment is defined as overdue on the
31st day, an automatic payment of interest is assessed to the vendor.
The Comptroller must automatically calculate any interest that an agency
owes a vendor for late payment of goods received and/or services
performed and must include that interest payment with the principal
payment to the vendor.
Receiving and Date Stamping Vendor Invoices
According to the TxDOT Purchase Order language, vendor invoices
should be mailed or e-mailed to the Financial Management Division’s
(FIN’s) Voucher Processing Section. If the vendor sends the invoice
via e-mail, it is recommended that they “carbon copy” the TRF Purchasing
Manager or the TRF-BTS Program Manager in the e-mail, to expedite
the review process. The following will serve as the invoice’s “receipt
date” and the beginning of the 30-day prompt payment deadline:
- If the vendor mails a hard copy invoice to FIN, the first TxDOT date stamp on the hard copy invoice is the “receipt date.”
- If the vendor submits the invoice electronically, preferably by sending an e-mail to FIN_INVOICES, but on rare occasions TRF may receive an e-mail directly from the vendor, the date on the e-mail is the “receipt date.”
If TxDOT fails to date stamp an invoice, FIN must use the
vendor’s invoice date to calculate the 30-day payment due date.
The invoice date is usually three to five days earlier than the
actual receipt date, so this reduces the time TxDOT is entitled
to review, approve, and make payment on an invoice.
If the vendor submits their invoice via e-mail to FIN_INVOICES,
one of the following two steps will occur:
- If the TRF Purchasing Manager or TRF-BTS Program Manager is copied on the vendor e-mail to FIN_INVOICES, FIN personnel will not send a separate e-mail to TRF to start the invoice review process.
- If the TRF Purchasing Manager or TRF-BTS Program Manager is not copied on the e-mail to FIN_INVOICES, FIN will sort the invoices by services and commodities, and the invoices are assigned to certain individuals in FIN for tracking purposes. The responsible party in FIN will send an e-mail to TRF to include the vendor invoice plus all attachments.
This process, where FIN e-mails the invoice or date stamps
and sends the hard copy invoice to TRF, should take no more than
two working days.
FIN e-mails all vendor invoices to the TRF Purchasing Manager.
The TRF Purchasing Manager date stamps and logs all services invoices
into a tracking spreadsheet. Information entered into the spreadsheet
includes vendor name, PO number, invoice number, dates of services
rendered, invoice amount, date received by FIN, date received by
TRF, and date sent to the TRF-BTS Program Manager.
The TRF Purchasing Manager will forward the originals to the
appropriate TRF-BTS Program Manager for review and approval. The
TRF Purchasing Manager will include a date that the TRF-BTS Program
Manager should submit the approved invoices back to the TRF Purchasing
Manager. The TRF Purchasing Manager’s process should take no longer
than two working days.
TRF-BTS Program Manager Review
The appropriate TRF-BTS program manager is responsible for
reviewing the invoice to ensure the following items are correct:
- All services were actually performed and/or all goods and supplies were received.
- All services were performed and/or all goods and supplies were received within the appropriate time frame indicated on the invoice.
- All unit costs, quantities, and total costs that TxDOT will pay from the invoices are correct and match the PO.
- All attachments (i.e. for vendor’s detailed travel expenditures) are verified according to PO requirements.
Some TRF-BTS program managers may also require Traffic
Safety Specialists (TSSs) to review parts of the invoice. In these
cases, the TRF-BTS Program Manager should immediately email the
appropriate parts of the invoice to the TSS, with a due date when
the TSS should submit the approved invoice to the TRF-BTS Program
Manager.
After ensuring the invoice is correct, the TRF-BTS Program
Manager will sign the first page of the invoice to note that he/she
has reviewed the invoice and it is now ready for payment. If the
TRF-BTS Program Manager discovers any errors in the invoice, it
should be immediately handled as outlined in the subsection entitled
“How to Handle an Invoice Discrepancy” below.
Some TRF-BTS program managers may need to identify chart fields
(charge information) on the invoice as part of their approval process.
The chart field should include the following:
- Department.
- Account.
- Appropriation Year.
- Appropriation.
- Fund.
- PC Business Unit.
- Project.
- Activity.
- Source.
If a single invoice will be charged to more than one chart
field, the TRF-BTS Program Manager should specify on the first page
of the invoice the exact amount to be charged to each detail number.
The TRF-BTS Program Manager should submit the signed and approved
invoice to the TRF Purchasing Manager (inclusion of attachments
is optional).
The TRF-BTS Program Manager’s entire review process should
take no more than 10 calendar days.
How to Handle an Invoice Discrepancy
Government Code §2251.042 requires a government entity to
notify a vendor of an error in an invoice submitted for payment
by the vendor no later than the 21st day after the date the entity receives
the invoice. This means that the TRF-BTS Program Manager should
not wait until the last possible day to review the vendor’s invoice
packet. As soon as the TRF-BTS Program Manager has identified an
error, he/she should notify the vendor and request they submit a
corrected invoice.
Just as the vendor is required to submit their original invoice
directly to FIN, any revised and corrected invoices should also
be submitted to FIN. The same process will be followed (as stated
in the “Receiving and Date Stamping Vendor Invoices” subsection)
with any revised invoices, and the most recent receipt date will
be used for the purposes of calculating the 30-day payment due date.
In summary, if the original invoice proves to be incorrect,
the payment clock starts when a corrected invoice is received. After
further review and/or discussion with the vendor, if the original invoice
is determined to be correct, the clock starts on the date the invoice
was first received by TxDOT. In other words, TxDOT does not get
a reprieve on the payment due date for “debating” with the vendor
on questionable costs, if in fact the original invoice is eventually
processed.
If, for some reason, the TRF-BTS Program Manager and vendor
decide to manually revise the original invoice, lining through the
incorrect charges and agreeing to pay a reduced amount on the invoice,
the Program Manager should retain complete and thorough documentation
of the agreed-upon revisions. This information would be best documented
through e-mail instead of verbal conversations. All documentation/e-mails
should be printed and filed with TRF’s copy of the approved invoice.
In the case that the vendor’s original invoice is manually
revised, a new date should be assigned for the purposes of calculating
the 30-day payment due date. TRF should forward all e-mail documentation
to FIN and then work with FIN personnel in determining the appropriate
due date.
FIN will not typically pay a partial invoice to a vendor,
so all receipt discrepancies must be resolved in a timely manner
to avoid late penalty charges.
Receipt Entry Into the Enterprise Resource Planning (ERP)/Oracle PeopleSoft (OPS) System
The TRF Purchasing Manager will use the approved invoice to
perform the receipt function in OPS.
For services, enter the last day of the service period
(i.e. July 31, 2019) as the receipt date in OPS.
Once the receipt is completed in OPS, the TRF Purchasing Manager
will make a notation on the first page of the invoice that the receipt
has been completed and include the completion date.
The TRF Purchasing Manager will notify FIN via the notify
function in OPS that the receipt has been completed and the invoice
is ready for payment processing.
The TRF Purchasing Manager will retain a copy of the invoice
with full notations in the purchasing/contract files. The Purchasing
Manager is not required to retain the attachments.
There is no need for the TRF Purchasing Manager to send the
signed/approved invoice back to FIN because the receipt in OPS serves
as approval to pay.
Verification of Payments Made to Vendor
The TRF Management Support Section’s Resource Management Analyst
will verify payments have been made to the vendors in the appropriate
time frames, utilizing the Uniform Statewide Accounting System (USAS)
access.