NUMBER: 8.2.01
DATE: 10/15/96
REVISION: 3/2/04



The purpose of this policy is to notify departments within the University of Arkansas for Medical Sciences (UAMS) of the procedures involved in processing invoices, so they understand the steps necessary to generate payment to a vendor. Disbursement Services must follow Arkansas State regulations regarding the payment of vendors for goods and services to UAMS departments.



Disbursement Services must have an invoice from a vendor that displays the correct price and quantity of each product ordered. Although the Accounts Payable Technician (AP Tech) can enter an invoice where the invoice price exceeds the purchase order price, or where the invoice quantity is for more than the purchase order quantity, the SAP system will “block” that invoice and prevent its payment until the difference(s) is resolved.  The individual receiving the goods should enter the goods receipt in the SAP system, or arrange to have it entered.



1.                   Billing for regular Purchase Orders, excluding Service Orders and Check With Order (see definitions at end of this policy), should be mailed by the vendor to Disbursement Services.

2.                   Departments that receive an invoice directly from the vendor should sign and forward the invoice to Disbursement Services once the goods have been received. Likewise, departments receiving direct delivery should arrange for receipt of the goods in the SAP system, and maintain the package slip for audit purposes.

3.                   When Disbursement Services receives an invoice against an existing Service Order for which a signature is required for payment, a Request for Information form will be sent to the department to be signed and returned to the AP Tech.

4.                   Upon receipt of an invoice referencing a valid UAMS purchase order, the AP Tech will compare that invoice against the purchase order lines in the SAP System to validate that there is proper pricing and quantities received.  Once this is accomplished, the AP Tech will enter the invoice into the system. If the PO is setup to require a “Goods Receipt”, the invoice will not pay until the goods receipt is applied to the PO line that satisfies the invoiced quantity. 

5.                   As an efficient way of handling minor differences, a price variance or tolerance (currently $1.00 per invoice line item) will be allowed and not block payment.

6.                   When discrepancies arise concerning the invoiced description, or unit of measure, the AP Tech will communicate this problem to the respective buyer using a “Difference Notice.”  Once the problem is resolved, the buyer will notify the AP Tech with the information necessary for entry of the invoice.  This problem-solving will usually involve the departmental requisitioner being contacted by the buyer. 


    Invoices that arrive in Accounts Payable that cannot be identified –not having a valid purchase order number, or some other indication of department, buyer, etc. cannot be processed and will be sent back to the vendor via a form letter stating the problem. This step will be avoided if possible, because of the resulting delay.





7.                   Disbursement Services gives priority to processing invoices which have been issued at a discount price. Departments receiving discounted invoices directly from the vendor should process them quickly in order to assure that they receive the discount. Most discounts can only be granted if payment is received by the vendor within the time period specified.


8.                   If Disbursement Services receives the invoice from the vendor, and an approval is required before processing – such as “S” service orders –an attempt will be made to obtain verbal or email approval from the department if the time frame is critical.




9.                   Discrepancies regarding product quality or returns that are disputed by the vendor should be managed by the department and the buyer.

10.                If the department receiving the goods discovers a discrepancy after having signed off on the receipt, but before payment has been made to the vendor, the department may call Disbursement Services and attempt to stop payment.

11.                Credit Holds – issues within the procurement/payables processes (as noted in 9 and 10, above) may end up causing a credit hold to be placed on UAMS by the vendor. Many times if the vendor is aware that UAMS has a problem with the goods or services billed and that payment will not be made until there is final resolution to that problem, they will not impose a credit hold.  Most credit holds cause disruptions in service to all UAMS departments served by the vendor even though only one invoice/delivery is involved.




12.                SAP will not allow payment of an invoice that exceeds the Purchase Order quantity or exceeds the Purchase Order Price by more than the price tolerance.  Departments that receive shipments directly must examine the merchandise carefully to make sure they have received the exact quantity and quality they ordered. Vendors sometimes will send duplicate shipments of the same order, or will send only a partial shipment. Departments should refuse duplicate shipments if they do not wish to revise their Purchase Orders.

13.                State Procurement regulations have restrictions placed under mandatory State or University Contracts, and items that must be procured by bidding procedures. If departmental verbal approval has been granted for items which need further action from the Procurement Department, then payment cannot be made until the appropriate action has been taken by Procurement Services.

14.                Departments must notify Disbursement Services of all department employees responsible for ordering and for approving the payment of goods and services. This will save Disbursement Services time when they call the department.




"Service Order" shall mean those orders which are set up once a year for recurring expenses such as utilities, monthly leases, rentals, contractual   orders, and regular orders to a particular vendor.


"Check With Order" shall mean payment issued for those situations in which a department or end user obtains a good or service from a vendor before a Purchase Order has been issued. Check With Orders are issued for membership dues, periodicals, subscriptions, and other such instances in which the good is sent directly to the department and billing is understood. Appropriate documentation confirming the indicated cost must be included with the Purchase Requisition.


1 UAMS Procedure 5.3.04
2 UAMS Procedure 5.2.07
3 UAMS Procedure 5.1.04
4 UAMS Procedure 5.1.06 and 5.1.01 (2,3,4)