IPSAS PROCURE TO PAY P 2 P TRAINING

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IPSAS PROCURE TO PAY (P 2 P) TRAINING Lebanon March 2012

IPSAS PROCURE TO PAY (P 2 P) TRAINING Lebanon March 2012

Procure to Pay Life Cycle - IPSAS Changes Ø Procurement Catalog Ø UNDP vs.

Procure to Pay Life Cycle - IPSAS Changes Ø Procurement Catalog Ø UNDP vs. Non-UNDP Ø Prepayment Offset Against A/P Voucher Ø A/P Voucher Approval Ø New Inventory Procedures to be covered in separate session Ø Incoterms Ø Due Date Ø Prepayments Ø Attach Supporting Documentation Ø Timely Receipting Ø Incoterms Ø Attach supporting documentation Ø Receipt Accrual Process Ø Physical Receipt Verification Ø Reporting and Monitoring

Procure to Pay Life Cycle - IPSAS Changes Prepayment functionality has been introduced effective

Procure to Pay Life Cycle - IPSAS Changes Prepayment functionality has been introduced effective 1/1/12 which is used in limited cases where a vendor requires and can justify payment prior to goods or services being provided. A prepayment would be made when a supplier requires partial or full payment prior to fulfilling the order. A prepayment voucher for a procurement transaction must only be used to make a payment relating to an approved Purchase Order. The value of the prepayment is systematically recorded as a “Due From” in that the vendor now owes UNDP this amount of goods or services (Account 16065 – Prepaid Expense) When goods or services are provided and invoices are presented to UNDP for payment, the Accounts Payable voucher created for the invoice is linked automatically to the prepayment. This will reduce the amount to be disbursed as the vendor has already received funds via the prepayment. The prepaid asset is reduced by the amount of the accounts payable voucher, and this continues for each accounts payable voucher until the prepaid asset is exhausted. NOTE: Security Deposits are not considered prepayments. They must be paid via Non-PO Voucher and coded to account 13500.

Procure to Pay Life Cycle - IPSAS Changes Prepayments • When a prepayment is

Procure to Pay Life Cycle - IPSAS Changes Prepayments • When a prepayment is required, requestor must complete a Prepayment Voucher Request form providing the following information: Amount of prepayment Reason for prepayment PO# Supporting documentation to validate the prepayment (e. g. Contract, TOR, etc. ) • Note that the reference PO should only contain items where a prepayment is required. Where multiple items/services are being purchased from a vendor but only some of them require a Prepayment, separate POs should be raised. • Supporting documentation and Prepayment Voucher Request form must be uploaded to the Document Management System (DMS) prior to Prepayment Voucher approval. • When approving a prepayment voucher, the approver must check that the prepayment does not exceed the value of the PO. • Advance payment exceeding 30, 000 require bank guarantee (Valid for the duration of the contract) or certified cheque.

Procure to Pay Life Cycle - IPSAS Changes Other Prepayments Relevant Policies: • Transactions

Procure to Pay Life Cycle - IPSAS Changes Other Prepayments Relevant Policies: • Transactions such as Rent, Maintenance, Service Contracts and Insurance Premiums, where contracts are annual and amount relatively stable from month to month and from year to year no prepayment required – Regular PO Vouchers should be used. • For one-off transactions, such as individual contracts, refundable deposits for conference facilities, or startup costs for civil works, a prepaid voucher should be created if the time period between payment and full service delivery extends over a quarter or year end. • Non-Refundable Deposits should be treated as expense and not prepayment. • Security Deposits are not considered prepayments and should be processed via non-PO voucher modality using the account 13500 – Security Deposits.

Procure to Pay Life Cycle - IPSAS Changes Prepayments Impacts Atlas as follows: •

Procure to Pay Life Cycle - IPSAS Changes Prepayments Impacts Atlas as follows: • Account 16065 Prepaid Expense (Current Asset Account), is debited for the amount of the prepayment • Accounts Payable is credited for the amount of the prepayment • Prevents disbursement of funds to a vendor via an AP voucher if the AP voucher amount is less than the prepayment (offsets prepayment against AP voucher) • When a PO-AP voucher is created, the prepaid voucher is automatically offset against the PO-AP voucher, reducing the amount to be disbursed to the vendor.

Procure to Pay Life Cycle - IPSAS Changes Create Prepayment Voucher Step 1: A/P,

Procure to Pay Life Cycle - IPSAS Changes Create Prepayment Voucher Step 1: A/P, Voucher, Regular Entry, Select “Prepaid” Step 2: Enter Vendor ID (Same as PO) Step 3: Input Voucher date and amount for header Step 4: Input Item ID, Quantity, Amount for Line. Step 5: Input Distribution Information – Fund, Operating Unit, Dept. ID, Project Step 6: In Voucher Attributes Tab – Enter PO ID in “Prepayment Reference” Field Step 7: Save & Approve Step 8: Upload supporting documentation to DMS

Monitoring Prepayments: Prepayment Vouchers should be monitored carefully and during the year-end the balance

Monitoring Prepayments: Prepayment Vouchers should be monitored carefully and during the year-end the balance should be certified by the country office. The following query provides a report that shows all aged and outstanding prepayments: UN_IPSAS_PREPAYMENT_RPT

Questions:

Questions:

Thank you…

Thank you…