Please have all outstanding invoice issues for your areas resolved with Purchasing and Accounts Payable as soon as possible. We need your help in order to provide a complete and accurate account of our expenses for the year and to prevent FY2011 expenses from carrying over into FY2012.
We are telling you this now because invoices for goods that have line items that have not been received in the Lawson system or invoices with unanswered inquiries from Purchasing, as examples, are at risk for being expensed in FY2012 if outstanding issues are not resolved by June 20. This applies to invoices initiated by purchase order and by check request.
The practice of substituting a similar item for that which was originally ordered, in order to create the accrued receipt for an item where the actual product ordered cannot be delivered and received in Lawson by June 30, is unacceptable and will not be permitted. Nor will receiving an item absent having taken physical possession of it be permitted.
The following should be considered during the review of your area:
E-mail & V-mail Inquiries – Purchasing contacts departments regularly regarding open purchase order (PO) status, to include receiving issues, along with invoicing issues identified by Accounts Payable (AP) during payment processing. Please check your desk and mailbox for those inquiries that have been overlooked and follow up accordingly.
Invoices Not Received / INR Report – Payment for an invoice in Lawson cannot be made and expense cannot be recognized for a “goods” purchase until the PO lines associated with the invoice have been marked as “received” for the appropriate quantity in Lawson. The receipt, the invoice and PO line information must match in the system prior to final expense recognition and payment. The INR report lists open PO lines that have invoices entered into Lawson AP associated with it but the lines have NOT been marked as received in the Lawson System. The INR report and applicable instructions are located at the following address: http://intranet.unchealthcare.org/hospitaldepartments/matmgmt/lawson/lawopenpo/index_html
As a reminder regarding expense recognition, the expense associated with a PO set up as a “Goods PO” is recognized in the month the good is received into the Lawson System, not when the invoice is entered. The expense recognized at this point is equal to the quantity entered as received in Lawson times the unit cost listed on the PO. This is in contrast to a PO set up as a “Service”. The expense associated with a “Service PO” is recognized when the invoice is entered and matched successfully to the PO. We are generally not billed until a service is provided so payment is assumed to be due and the liability recognized by the Lawson AP System when the invoice for a service is entered and matched to the PO.
Invoices Not Received for Service Contracts – Departments occasionally enter into service contracts for projects that last an extended amount of time. A manual accrual may need to be made by General Accounting in situations where a contractor has completed work in a department but billing/invoicing for the work has been delayed. We do not accrue all such occurrences due to volume but services provided and earned by a contractor estimated to be a large dollar amount should be accrued manually via a journal entry if these services have not already been invoiced or otherwise accrued via the Lawson System. Elizabeth “Liz” Theora / Contracts Accountant can be reached at 966-0402 and will be glad to assist you if you have questions regarding these situations.
Thanks in advance for your assistance in resolving the open issues in your department(s) which will facilitate an accurate accounting of our expenses for the year.