2/28/2017. Best Practices & Efficiencies in Purchasing and Accounts Payable. Purchasing Remember the day when. Online Requisitions & Preferred Vendors

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1 Best Practices & Efficiencies in Purchasing and Accounts Payable The Oconomowoc Area School District s purchasing and payment evolution. Purchasing Remember the day when Purchasing was paper intensive with multi-part forms Forms were shuffled from person to person Authorizations were manually Long timeline from request to receipt Purchase Orders 3-part NCR forms Teachers/staff completed by hand Signed by Principal/Administrator Sent to A/P via school mail Accounts Payable Printed 3 copies on different colored paper Mailed to vendor Teacher/staff reimbursements 2-part expense reports Signed by Principal/Administrator Sent to A/P for payment w/ receipts attached Purchasing process was costly and inefficient: (1) efforts were duplicated by different staff, (2) forms were often lost/buried, (3) process took a long time, and (4) paper, files, forms, and storage boxes were costly. Online Requisitions & Preferred Vendors Reduce use of paper and forms Improve process efficiency Automate authorization and approval Provide purchasing timeliness Expand product selection Negotiate vendor pricing 1

2 Online Requisition Process Setup Requisition entered directly into Skyward by AA or teacher Online approval Electronic notification and reports Ecommerce or Traditional Requisition Skyward access and clearance must be set up. User must be put into a Purchase Order group. User must have an Account Clearance group. This grants access to only specific locations or departments, purchase order numbers, and general ledger accounts. Auto-approval and online approval Auto-approval can be set up. Approvers receive an when requisitions are waiting for approval. AA, Principal, or Directors approve or decline requisitions entered by staff. Auto-approval can be set-up with minimum thresholds to ensure timely approval. Notifications and Reports Process tracking and notifications are generated. Status reports can be generated for Work-in-Progress, Waiting-for-Lower-Level- Approval, and Approved/Declined purchase orders. notifications are sent to approvers with requisitions needing action. Confirmation is sent to originator upon approval/denial of requisition. Account Clearance Groups Requisition/Purchase Order Groups 2

3 Approvers and Auto-Approval Rules Online Requisition Process Teachers enter their own requisitions. Pick the vendor Enter a description Online Requisition Process Enter the items to be ordered 3

4 Online Requisition Process Select a mock account code Submit for approval Designate Preferred Vendors Efficient Processes Trusted by Teachers Accept Pcard Fast and/or Free Delivery Ecommerce Vendors Amazon Reliable Vendors w/ Good Communication Power in Your Vendors Options Try to create as many vendor contracts as possible Cost Matters Request special pricing or shipping arrangements deals Work with sales representatives for price matching Economy of Scale Use the power of consortiums and cooperative purchasing groups TCPN (with Office Depot), V.A.L.U.E., State contracts 4

5 Skyward Ecommerce Vendors Skyward Ecommerce Vendors Ecommerce Vendors in Skyward Ghost pcard Consistent User/Approval Process Skyward link Log-in, password, punch-out link, order link Vendor s website set up with discounts applied at checkout MCC codes are limited Account code set up is the same for each entry Wire transfer payment is used in Skyward to post to accounts and close the purchase order Order process is the same for teachers except they are punched-out to the vendor website Approval process is the same Skyward Ecommerce Vendor Setup Work with Skyward and Vendor Obtain necessary login/links Test the punch-out and check-out processes 5

6 Punch-out to Ecommerce Vendor Website Shop online and fill shopping cart Pricing reflects negotiated discounts / contract pricing Check-out into Skyward Purchase Order Check-out brings purchase into Skyward, including each detailed line item Purchase Orders Saves time and money (envelopes and postage) To Setup Send a form along with faxed copy of purchase order When purchase orders are updated - include the vendors that need to have something ordered Send all the purchase orders that have addresses If there are vendors who don t have an in the system, call and request an address before sending 6

7 Purchase Orders Purchase Orders confirmation and a copy of the purchase order can be sent to a designated person to ensure it was sent by Skyward Expense Reimbursements Employee spent personal money for mileage and travel related purchases Employee completed 2-part NCR expense form, attached receipts, and requested manual signature approval Form submit to A/P, processed, and paid with check 7

8 Online Expense Reimbursements Employee Access Online Expense Reimbursements System Set-up Turn-on Expense Reimbursement in Employee Access Product Setup, Employee Access Online Expense Reimbursements Configuration Financial Management, Accounts Payable 8

9 Online Expense Reimbursements Reimbursement Entry Option Online Expense Reimbursements Automated Notifications Online Expense Reimbursements Approval Options 9

10 Expense Reimbursement Codes Codes can be general Meals, types of travel, mileage out-of-district Codes can be specific In-district mileage set to specific # of miles between sites A code can t be deleted once used! Expense Reimbursement Codes Fields can be altered to give end-user rights to modify quantity or amount OR limited to allow no changes Expense Reimbursement Code Set-up Limit employee groups for reimbursement codes By adding or limiting employee groups to reimbursement codes, you limit who has access to use the codes 10

11 Expense Reimbursement Code Set-up Employee groups default to see account codes they have access to OR you can limit access to specific account codes Online Expense Reimbursements Input similar to requisitions Documentation scanned or sent to A/P Paid with normal weekly ach run AP reviews documentation for accuracy and compliance with travel policy Online Expense Reimbursements 11

12 Field Trip Transportation Purchase Orders- Historical Teachers completed a paper form that went through manual approvals Forms were often inaccurate and incomplete An employee couriered the forms to the bus company Bus company would check for availability Complete and accurate information Prompt Estimate Improve Efficiency and Timeliness Better use of staff time Fillable Form didn t work Online Field Trip Transportation Purchase Orders Set-up Created a generic bus company Skyward account with limited access User name and password provided to bus company personnel approving and booking the transportation for field trips Put the bus company in the organization chart so that requisitions could be sent to them in the approval process Online Field Trip Transportation Purchase Orders Process Select bus company as the vendor Teacher enters an online requisition Enter info for the field trip: Date, # of students, Place, Pick-up location Enter a generic dollar amount Requisition goes through online approval process Bus company is set up as an approver Bus company invoices district Purchase order number is included on the invoice to facilitate matching / reconciliation 12

13 Online Field Trip Transportation Purchase Orders Process A/P ACH Payments Who? Employee, Vendors, Athletic officials/referees What? Change payment method from check to ach Why? Check payments are costly Personnel time to print, fold, and mail checks Check stock Envelopes Postage Lost in mail Reconciliation issues outstanding checks ACH Payments Employee Set-up When setting up employee as a vendor, there is a checkbox to use direct deposit info 13

14 Contact Vendor Benefits of ACH Update Skyward 2/28/2017 ACH Payments Vendor Set-up Sent form w/ paper check requesting change to ACH Verify banking and contact information collected Faster payment Reduced errors Paperless processing Bank information is more secure Input data collected from vendor response Process a payment to ensure accurate banking info ACH Payments Officials and Referees District Benefit Officials Benefit Set-up process similar to other vendor ach s ACH paid weekly, paper checks for officials cut only 1x per month Reduce # of small dollar checks No issues or delay with mail Improve efficiency - Incorrect addresses resulted in lost or returned checks Money is in account no need to cash check Streamlined bank reconciliation fewer outstanding checks Better control over cash flow ACH Payments Process ACH check run is almost the same as a paper check run Use a separate batch number when entering ACH invoices ACH vendors will automatically populate check type with ACH when entering an invoice Check updating process is the same as a paper check, except the last step Need to click UPDATE 14

15 Pcard Program Program Implemented in A/P card and small pilot program group Good internal controls Cardholders 100+ cardholders Administrators, teachers, custodians, administrative assistants, club advisors, coaches Department cards Pcard Program Set-up Know upfront that the set-up will be timeconsuming and challenging Start small with a pilot program to identify and resolve the glitches Think through the entire process Get key player buy-in Board, B&G, A/P, Administrative Assistants, etc. Do it right the 1 st time it will be hard to change the program once established Pcard Program Internal Controls Card Spend Limits Monthly transaction limit Per transaction limit MCC Code Limits Sales Tax Exemption Restrict where/how card is used Exclude: jewelers, liquor stores, art galleries, medical facilities Different groups for different cards Wisconsin Seller s exemption # put on card 15

16 Pcard Program Internal Controls Audit Each card audited twice per year Spend volume or merchant types Non-compliance or Types of use Accidental Personal Use Board Approval Excel report of monthly transaction detailed Finance committee reviews just like check register Pcard Program Month End Process Cardholder - statement Print and Review statement against purchase receipts Staple receipts to statement, sign and date Store in monthly accordion folder Cardholder - online Log into online system (Smartdata) Enter a detailed description of the purchase Select a GL account code. Click Cardholder Reviewed Business Office 2X per month download reconciled transactions Modify for Skyward format Upload transactions via a journal entry into Skyward Pcard Program Smartdata (online) Transaction Detail 16

17 Pcard Program Smartdata (online) General ledger codes are limited to user s authority Pcard Program Department Cards Why? Limit Cash Requests Alleviate AA Work What? Pilot Department Cards Athletics, Summer School, 1 Elementary School Where next? Grants Drama Department Robotics OHS Clubs, including Student Council, Art And Why? Improved recordkeeping Consolidated documentation Limit cash purchases by employees and parents Benefits of Pcard Program Cash Flow Management / Prediction Bank Reconciliation Ease Payment Process Efficiency Risk of Fraud Reduced Internal Control Improvement More Meaningful Work Job Satisfaction Time Efficiency Pcard Rebate End-user Empowerment Cost reduction 17

18 6, ,072 $20,747,786 0 $0 $0 3,885 $18,854,653 $0 $2,215, ,098 $17,343,837 $0 $4,152, $18,717,037 2,855 $66,540 $3,615, $20,188,360 2,827 $85,664 $4,214, $20,061,253 2,596 $93,232 $4,258,643 1,104 $15,798,409 $3,447,556 $4,578,998 2,068 1,511 $14,609,247 $5,484,798 $5,173,934 1,825 1,708 $9,317,997 $7,443,719 $4,687,715 1,657 1,756 $7,205,926 $10,320,398 $4,292, ,060 $3,626,754 $4,910,335 $2,477,481 2/28/2017 Evolving Payment Types % 100% 89.49% 90% 80% 70% 60% Percent of Total $ 80.68% 83.56% 82.44% 82.17% 66.31% 57.82% 50% 40% 30% 20% 10% 0% 43.44% 47.30% 44.58% 33.03% 32.93% 34.70% 19.32% 19.22% 20.48% 19.68% 16.14% 17.21% 17.44% 21.71% 21.85% 22.49% 10.51% 14.47% 0.00% 0.00% 0.00% 0.00% 0.30% 0.35% 0.38% Checks Pcard ACH Payment Method Change-Checks & ACH 8,000 Total Quantity 7,000 6,000 5,000 4,000 3,000 2,000 1, Checks ACH Annual Payments ($) by Payment Type $25,000,000 Yearly Total Dollars $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ $20,747, $24,413, $21,069, $23,824, $21,496, $25,267, $22,398, $21,449,431 AP Checks ACH Pcard 18

19 Amount Earned 2/28/2017 Pcard Rebate: 2007 through 2016 Rebates Earned $ $72,244 $58,762 $63,866 $66,386 $77,914 $93,308 $84,833 $79,261 $4,727 MAR 07 TO MAR 08 TO MAR 09 TO MAR 10 TO MAR 11 TO MAR 12 TO MAR 13 TO MAR 14 TO MAR 15 TO FEB 08 FEB 09 FEB 10 FEB 11 FEB 12 FEB 13 FEB 14 FEB 15 FEB 16 Year Earned 19