Process Controls - Purchase to Pay

Purchase to Pay Introduction Identify Need for Goods or Services Purchasing Equipment over £100k Identify Potential Suppliers Check Correct Payment Route Tenders and Quotations Establish Purchasing Route No Purchase Requisition Order via Marketplace Payment Requests Receive (or Reject) Goods or Services Manage Invoices for Payment Open POs/Invoices on Hold Process Controls

The controls that are embedded in the Purchase to Pay process are listed below. When following the Purchase to Pay process, staff should ensure that all of these controls take place and genuine business need is identified before the purchase of any goods/service.

  1. Subject to approved exceptions, purchase requisitions are raised for all purchases and appropriately authorized before making a commitment to a supplier, and specifically before invoices are received.
  2. On physical receipt of goods or delivery of services, the quantity, suitability, quality, etc, are checked and receipted on iProcurement.
  3. Invoices are received, date stamped and input promptly to iProcurement or authorized and forwarded to the Finance Division.
  4. The Departmental Administrator or other senior officer reviews invoices on hold for the department on a weekly basis.
  5. All contracts for the purchase of goods and services with a cost greater than £100k excluding VAT are managed by the University Purchasing Department. The department should plan ahead for large purchases and discuss these with the University Purchasing Department when the plans are ratified. For all contracts for the purchase of goods and services with a cost between £25k and £100k excluding VAT, the Department always uses a tender process strictly following the guidance published on the Finance Division website or consults with the Purchasing Department, or applies to the Purchasing Department for an exemption. Where a preferred supplier cannot be used, a minimum of two quotations are always obtained for contracts for the purchase of goods and services with a cost between £1k and £25k excluding VAT.

Segregation of Duties

One of the key financial control principles to be adopted in all processes is the need to ensure no one member of staff in the University completes all stages of any particular process. The principle requires an adequate 'segregation of duties' when designing work flows. As an example in the purchase to pay process:

  • The three stages of the purchasing process, that is requisition preparation, requisition approval and receipting, should be separated between a minimum of two people. If this is not possible, the UO Purchase to Pay Audit report should be used as a compensating review control.

For further advice on this subject please contact Financial Assurance Services.