Disbursement Voucher CERTIFICATION COURSE. Town Hall Meeting

Transcription

1 Disbursement Voucher CERTIFICATION COURSE Town Hall Meeting

2 Introductions Presenter Tracey Mui, Training & Documentation Specialist, FMS Q&A Panel Subject Matter Experts Accounts Payable, FMS: Charlie Sinex University Tax Services, FMS: Jeremy Becker, JoAnn Clune Purchasing, Procurement Services: Dawn Bodle Travel Mgmt, Procurement Services: Tammy Bean

3 About DV Certification Objective To increase awareness of policy and procedure in order to: Decrease some of the most common processing errors, Mitigate financial loss to the university, and to Maintain positive business relationships with our vendors Requirements 1. Training live session or online course 2. Quiz pass with 80% or better Deadline for completion: Sunday, August 31 st, 11:59 pm!

4 Course Outline Introduction General Usage Guidelines Vendor Types Foreign Vendors and Tax Considerations Payment Reasons and Object Codes Supporting Documentation Routing Support Q&A with Expert Panel

5 General DV Usage Guidelines Purpose of the DV IRS Accountable Plan Rules Reimbursement Restrictions

6 General Guidelines: Purpose To request payment to: Reimburse employees and non-employees for expenses incurred while conducting university business, and Compensate vendors for performing services or providing material goods for the university in accordance with both IRS guidelines and university policies and procedures.

7 General Guidelines: IRS Accountable Plan Applies to: IU business expense paid in connection with performance of services by employees, volunteers or independent contractors. This includes travel payments and reimbursement of out of pocket expense Purpose: Allows us to reimburse employees, volunteers and independent contractors tax-free, as long as certain rules are followed: Reimbursement is for business expense only Substantiated with appropriate receipts Substantiation is received within 60 days of the end of the travel or within 60 days of incurring the expense

8 General Guidelines: Types of Reimbursements Reimburse Out of Pocket Expense Reimburse individuals for out-of-pocket expenses on behalf of departmental business operations due to an emergency, or a situation where the regular procurement procedures cannot be followed. Single reimbursements are limited to $500. Moving Reimbursement Reimburse a new employee for certain eligible moving expenses. Single moving reimbursements limited to $10,000. More restrictions: Moving Expenses Policy: FIN-ACC-I-310 Moving Expenses Presentation by University Tax Services

9 General Guidelines: Types of Reimbursements Travel Payment for a Nonemployee Reimburse a non-employee for travel expenses incurred for the purpose of conducting university business. See Non-Employee Checklist, Travel Management Services

10 General Guidelines: Disbursement Voucher or Purchase Order? 1. Consult your online resources: Purchasing web page: Disbursement Vouchers FMS DV User Documentation Still unsure? 2. Call Purchasing Help Desk: Call your campus purchasing representative

11 Disbursement Voucher Compensation for Services $1000 and under Paying a PO vendor for: Subscriptions w/o contract Royalties Tuition payments Settlements Employee reimbursements Purchase Order Compensation for Services, any amount Paying a PO vendor for goods and services, unless for: Subscriptions w/o contract Royalties Tuition payments Settlements Installment payments Items from the restricted items list

12 Vendor Types: An Introduction Five types of vendor records and when to use them Searching for vendor records during initiation Resources for creating new vendor records

13 Vendor Types Employee PO Vendor DV Vendor Refund Vendor Participant Payment

14 Vendor Types Employee (non-vendor) Automatically generated by KFS for every active employee. Should be used when an employee is paid on a DV, except when that individual is being compensated for services not related to their IU employment (e.g., freelance work). Most often used on DVs with the payment reason: Reimbursement for Out of Pocket Expense. Employees should not process DV payments to themselves. DV payments to a Vendor with a Tax ID matching the Tax ID of a current active IU employee will now route to University Tax Services for approval.

15 Vendor Types Purchase Order (PO) Vendor May be used on both DVs and POs. The creation of a PO vendor requires that you collect more information from the entity than would be required for a DV vendor setup; however, the PO vendor record allows for greater flexibility in making payments. Create if you anticipate making payments for goods or services in excess of $1000. DVs with PO Vendor records will route to the Purchasing Office for review and approval.

16 Vendor Types DV Vendor Record For use on disbursement vouchers only - not on purchase orders. May be created if you do not expect to pay the vendor on a PO in future. Special Notes: IU employees should be paid against employee (non-vendor) records only, unless being paid for goods or services not related to their IU employment.

17 Vendor Types Refund Vendor Only created for use on two DV payment reasons: Refund to Individual/Agency, Reimbursement for Out of Pocket Expense. Do not create a Refund Vendor record if a vendor record already exists. Refund Vendors cannot be IU employees. Creating Refund vendors does not currently require tax information, such as W-9 or W-8BEN.

18 Vendor Types Participant Payment Record Only permitted on DVs with the payment reason Payment to Research Participant. A Participant Payment record may be created for this purpose if you expect to only process research participant payments to the payee, and when there is not an existing vendor record for the payee.

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27 Vendor Types Resources for Creating New Vendor Records FMS Accounts Payable DV Vendors & Refund Vendors Research Participants Or visit FMS Accounts Payable Disbursement Vouchers web page for procedures and guides Procurement Services Purchase Order Vendors Or visit the Procurement Services Purchasing Training web page for training guides and videos

28 Foreign Vendors and Tax Considerations Payments to foreign vendors: additional steps Why additional documentation is necessary Which documents to send to University Tax Services Overview of online resources

29 Payments to Foreign Vendors: Additional Steps Additional documentation for tax purposes required when: Compensating a non-employee for services Compensation for Services Payments for Contractual Agreements Reimbursing a non-employee for travel Travel Payment for a Nonemployee every single time!

30 Why the extra work for foreign vendors? Foreign nationals are subject to a different tax code Services performed in the U.S. and certain travel payments may require tax withholding Helps University Tax Services determine the tax and the University s reporting requirements Continued on next slide

31 Why the extra work for foreign vendors? continued If tax withholding is required, they need to know if the payment will be reduced or if the department wishes to cover it Answer this on the Tax Coversheet; otherwise, the default is to withhold Preplanning and setting expectations ensures a smooth visit! Inform the visitor in the invite letter Collect documents during the visit not after!

32 Next, ask yourself Where was the service provided: outside the U.S. or inside the U.S.?

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34 Send your documents to the right place! Tax Coversheet for International Visitors: Send to University Tax Services Passport or I-94: Send to University Tax Services W-8 BEN: Send to vendor workgroup Do not include any of these documents with your DV Supporting Documentation file.

35 What about Travel Reimbursements? Collect the following documents: Tax Coversheet for International Visitors Fax to University Tax Services Passport with entry stamp, or I-94 departure card Fax to University Tax Services Form W-8BEN Fax to DV Vendor or PO Vendor workgroup for setup or update

36 Overview of Online Resources Go to: fms.iu.edu

37 Payment Reasons and Object Codes Purpose of payment reasons and object codes Appropriate use of taxable object codes Object code restrictions by payment reason

38 Payment Reasons Your selection drives: Which vendor record types are allowable for the payment Possible dollar limits for your payment Object code restrictions Which additional DV fields/tabs are required The types of supporting documentation you must submit Where the DV routes for review and approval

39 Object Codes The smaller picture: Departments use object codes to budget and track expenditures and revenues The bigger picture: Improper use of taxable object codes can result in inaccurate Forms 1099-MISC for vendors Non-employee compensation is a high area of risk Indiana University is subject to fines from the IRS

40 1099-MISC and Reportable Object Codes Demonstration of Resources: University Tax Services

41 Payment Reasons and Object Codes Demonstration of Resources: FMS Training

42 Supporting Documentation Defining Supporting Documentation Examples of appropriate supporting documentation Special forms Redacting Critical Information Submitting Supporting Documentation

43 What is Supporting Documentation? Audit Documentation Validates the reason for the payment Supports the expenditure Provides evidence that the expenditure was: Necessary Appropriate to the occasion Serving a bona fide university purpose Basic Requirements DV Coversheet Justification and itemization Receipts for reimbursement: vendor name, date of purchase, itemization, proof of payment Invoice or Payee Certification Form for compensating for services Other appropriate documentation that supports the expenditure

44 Examples of Supporting Documentation Reimbursement for Out of Pocket Expense DV Coversheet Receipt of purchase with full itemization and store name Proof of payment if it is not on the receipt (e.g., credit receipt) Compensation for Services DV Coversheet Vendor invoice Payee Certification Form, collected in advance

45 Examples of Supporting Documentation Travel Payment for a Nonemployee DV Coversheet Payee Certification Form Collected in advance (Travel Management allows estimated amounts) Itemized receipts No food receipts. If paying per diem, this covers expense of meals

46 Special Forms Payee Certification Form Compensating non-employees who do not provide invoices All non-employee travel payments Collected in advance (Travel Management allows estimated amounts) Initiating Organization Form Department chooses to maintain supporting documentation audit file Submit this form with DV Coversheet in place of full supporting documentation file Should only be used when there are privacy concerns, such as HIPAA-protected or some research participant payments

47 Special Forms Travel Exception to Policy Form Required for any travel payments for which you are requesting an exception to IU policy, such as: Travel DVs that violate the 60-Day Rule Missing an original receipt for non-employee travel reimbursement

48 Redact Critical Information Critical data that should be redacted: Foundation donor information SSN Passport number Credit card number HIPPA protected info Restricted data: DOB Citizenship Home mailing address Home phone

49 Submitting Supporting Documentation STEP 1 Collect and scan all required documentation and submit your DV. STEP 2 Combine supporting documents into a single PDF, making sure the DV Coversheet is the first page. STEP 3 Upload the supporting documentation PDF using the Accounts Payable Upload Tool. Continued

50 Submitting Supporting Documentation continued Need further assistance? Contact the Disbursement Voucher Help team Call (812) Do not attach your supporting documentation file to the Notes and Attachments section of the DV.

51 Routing Route Log Anatomy Required Routing Conditional Routing

52 Know your route log Route Log Anatomy Required Routing Conditional Routing

53 Required Routing KFS Image Attachment node AP attaches supporting documentation to the correct DV Allow 4 business days for processing at this node Before contacting AP, make sure your supporting documentation was submitted properly Check the Notes and Attachments section for notes Account node Each fiscal officer needs to approve Campus/Travel node: supporting documentation review Accounts Payable reviews all non-travel DVs Allow 5 business days before contacting fmsdvhlp@indiana.edu Travel Management Services reviews all travel DVs Allow 7 business days before contacting travelbl@indiana.edu

54 Conditional Routing Purchasing Node Award Node Tax Node Payment Method Node Other Routes to Purchasing when paying a PO Vendor. Routes to Office of Research Administration when using a C&G account. Routes to University Tax Services when: paying foreign vendor, paying vendor w/ tax ID that matches an employee tax ID on a Compensation for Services DV Moving Reimbursement is payment reason, unless IN chart Routes to IUPUI Accounting Services if Moving Reimbursement is payment reason and you are in the IN chart. Routes to Treasury if paying via wire transfer. Routes to AP when paying via foreign draft. Customized routing by chart, organization, or department.

55 Support for IUPUI Budget Office (317)

56 Support Financial Management Services Accounts Payable Supporting documentation attachment and review DV Vendor creation Web: University Tax Services Foreign Vendor tax review Travel Management Services Payment reason Moving Reimbursement tax review DVs paying vendor payees who are also IU employees IRS Accountable Plan rules Web: Customer Service General DV Questions Web: Contact:

57 Support Office of Procurement Services Purchasing PO Vendor creation PO vs. DV questions Procurement process Web: Travel Management Services Travel DV questions Web:

58 Support Other Office of the Treasurer Wire transfer questions Web: Office of Research Administration C&G accounts on DVs Web: the account s grant administrator