Learning Guide: Nefas Silk Poly Technic College

Training, Teaching and Learning Materials
ACCOUNTS AND BUDGET SUPPORT LEVEL III
NEFAS SILK POLY TECHNIC COLLEGE

Unit of CompetenceProcess Payment Documentation
Module TitleProcessing Payment Documentation
LG Code: BUF ACB3 07 0921
TTLM Code: BUF ACB3M 07 0921
Learning Guide
1
TTLM Development Manual Date: september,2021
Complained by Accounting and Business department
INTRODUCTION
Welcome to the module “Process Payment Documentation”. This learner’s guide

was prepared to help you achieve the required competence in “Accounts and Budget
Support Level III”. This will be the source of information for you to acquire knowledge
attitude and skills in this particular occupation with minimum supervision or help from your
trainer.
Summary of Learning Outcomes
After completing this learning guide, you should be able to:

Lo1:- Enter data to system
Lo2:- Verify payments against documentation
Lo3:- Create payment facility
Lo5:- File documentation
How to Use this TTLM
o Read through the Learning Guide carefully. It is divided into sections that cover
all the knowledge, skills and attitude that you need.
o Read Information Sheets and complete the Self-Check at the end of each section
to check your progress
o Read and make sure to Practice the activities in the Operation Sheets. Ask your
trainer to show you the correct way to do things or talk to more experienced
person for guidance.
o When you are ready, ask your trainer for institutional assessment and provide you
with feedback from your performance.
2
Lo1:- Enter data to system
In common usage, an expense or expenditure is an outflow of money to another person or group

to pay for an item or service, or for a category of costs. For a tenant, rent is an expense. For
students or parents, tuition is an expense. Buying food, clothing, furniture or an automobile is
often referred to as an expense. An expense is a cost that is "paid" or "remitted", usually in
exchange for something of value. Something that seems to cost a great deal is "expensive".
Something that seems to cost little is "inexpensive". "Expenses of the table" are expenses of
dining, refreshments, a feast, etc.
In accounting, expense has a very specific meaning. It is an outflow of cash or other valuable
assets from a person or company to another person or company. This outflow of cash is generally
one side of a trade for products or services that have equal or better current or future value to the
buyer than to the seller. Technically, an expense is an event in which an asset is used up or a
liability is incurred. In terms of the accounting equation, expenses reduce owners' equity. The
International Accounting Standards Board defines expenses as
...decreases in economic benefits during the accounting period in the form of outflows or
depletions of assets or incurrence of liabilities that result in decreases in equity, other
than those relating to distributions to equity participants.
Bookkeeping for expenses
In double-entry bookkeeping, expenses are recorded as a debit to an expense account (an income
statement account) and a credit to either an asset account or a liability account, which are balance
sheet accounts. An expense decreases assets or increases liabilities. Typical business expenses
include salaries, utilities, depreciation of capital assets, and interest expense for loans. The
purchase of a capital asset such as a building or equipment is not an expense.
Information SHEETCash flow
In a cash flow statement, expenditures are divided into operating, investing, and financing
expenditures.
 Operational expense – salary for employees

 Capital expenditure – buying equipment
3
 Financing expense – interest expense for loans and bonds
An important issue in accounting is whether a particular expenditure is classified as an expense,

which is reported immediately on the business's income statement; or whether it is classified as a
capital expenditure or an expenditure subject to depreciation, which is not an expense. These
latter types of expenditures are reported as expenses when they are depreciated by businesses
that use accrual-basis accounting, which is most large businesses and all C corporations.
The most common interpretation of whether an expense is of capital or income variety depends
upon its term. Viewing an expense as a purchase helps alleviate this distinction. If, soon after the
"purchase", that which was expensed holds no value then it is usually identified as an expense. If
it retains value soon and long after the purchase, it will be viewed as capital with life that should
be amortized/depreciated and retained on the Balance Sheet.
Accounting Basics: Types of Expense Accounts

Many basic accounting rules and conventions apply to categorizing accounts identically for all
businesses. At times, other account titles or categories might be industry- or company-specific. Most
of the balance sheet categories, assets, liabilities, and owners' (or stockholders') equity, are common
to almost all businesses, except non-profits, educational institutions, and governments. Income and
expense categories, while primarily using common account titles, may contain company-specific
differences. There are, however, three primary expense categories common to most businesses.
Cost of Goods Sold

A manufacturing business or any business that sells products has a cost of goods sold category.
These expense accounts typically include beginning and ending inventory valuations, freight and
shipping of product, bad debts created by sales and non-payment, and other costs that directly relate
to the items sold by the company. Some organizations also include compensation expenses that are
directly related to the products made and/or sold, e.g., sales compensation or direct labor.
Operating Expenses
Usually the largest expense category (by the number of accounts, at least) are operating expenses,
which identify all normal costs that relate to the day-to-day necessities of the organization. In this
category, basic accounting rules specify the inclusion of compensation, benefits, local, state, and
federal payroll taxes, office expenses, supplies, postage, travel and entertainment, advertising
(amounts not included in the cost of goods sold category), repairs and maintenance, depreciation (the
non-cash expense of writing "down" the cost of some assets over time), mortgage or rent of
facilities, utilities (telephone, electricity, heat, and air conditioning), and professional fees
(accountants and attorneys).
4
Non-Operating Expenses (or Other Expenses)

This category typically includes all other expenses that the organization deems outside of operations.
For example, corporate income taxes are often placed in this category. Companies identify federal
and state corporate income taxes after they determine their net income (or net profit) for the fiscal or
calendar year. Unlike compensation, travel, or repairs, income taxes are not calculated (or paid) until
after all operations for the accounting period have closed.
Employee and Officer Expense Accounts

Accounting expense account classifications should not be confused with employee and officer
expense accounts, which are usually operating expenses. Employee and officer expense accounts are
not typically specified in the income statement (profit and loss statement) for a good reason. These
accounts are designed to categorize amounts spent by employees, management, and/or board of
director members for the efficient performance of their duties. For example, travel and lodging is
often a major component of expense accounts. However, on the income statement, the total for all
forms of travel and lodging will correctly appear in the travel or travel and entertainment account on
the income statement.
The first time you go through the costs to start up your new business, you do not need to be
particularly precise. You can just "ball park" the amount to get a rough idea of your expected
start-up costs. As you refine your business idea and shop around for the various items you need
to make it happen, you will be continually narrowing down your estimates, and eventually you'll
arrive at the actual dollar figures.
Here are the common kinds of startup expenses that most small businesses face:
Research and development costs.Whether you hire a market research firm or do research by
yourself, you need to budget for costs involved in knowing more about your market.
Interviewing potential customers or suppliers, checking the Yellow Pages, or photocopying trade
publications and articles about your business all involve costs.
Business Plan Preparation. If you are preparing your business plan yourself, the only cost to
you is your time. However, there are entrepreneurs who need help in developing their business
plans. If you are one of those business owners, you need to input the costs of hiring consultants
or business plan writers into your initial budget
OPERATION SHEET 1: Describe team role and scope

Purpose:
5
This learning outcome aims to provide trainees with the knowledge, skill and attitude teamwork.
Understanding the concept of teamwork helps to make easy the daily work activity.
Equipment, Tools and Materials:
 Computer
 Projector
 White board
 White board marker &Duster
 Lecture room
 Printer
Condition:
Students and trainer’s are legally required to lock the health and safety of trainer. This applies to
all organizations and including voluntary organizations.
 Students must provide safe working environment.
 Students must not put themselves or others at risk.
Procedure:
 Need to establish a team
 Identify the team objective
 Prepare effective common plan
 Apply practicall
6
Product Development and Beginning Inventory.This will be your most significant start-up
cost. To get a better estimate, you can ask potential suppliers for required inventory levels for
your type of business. Some entrepreneurs, particularly those who create their own products, take
years of product development before a prototype can be launched. You need to factor in the
length of time that will take you to develop your first products.
Information SHEETAdvertising and Marketing Promotion Expenses. You can chose to

have some 'buzz' for your business, even before you officially open. Some entrepreneurs do a
pre-launch campaign to generate interest for their products or services. You can also plan for a
"grand opening" promotion as well. The cost, of course, will depend on how simple or elaborate
your pre-launch activities will be.
Cash. This refers to the amount of cash that you need to run your cash register. One thing that
your business should never be caught without is cash.
Cost of Financing. You also need to allocate some funds to help you cover your cost of
financing, whether you got your funds from the bank or from your credit card. Be
prepared to pay the interests of your loans, particularly if you used your credit cards to finance
your business.
Remodeling and Decorating. This will include physical and cosmetic improvements to the new
business facility. Solicit bids from contractors or interior designers, even if you decide to do
everything later on, to give you an idea of how much these jobs cost.
Fixtures and Equipment. The fixtures and equipment needed for your new business are
normally substantial, depending on your kind of business. A restaurant business, for example,
will need modern kitchen equipment, chairs and tables, tableware and utensils. On the other
hand, a home business will require significantly less in terms of fixtures and equipment.
Computers, fax machines, modems are some of the most important equipment that you would
need. In addition, you should provide some budget for the costs of installing all the fixtures and
equipment and making sure that these are ready for use.
Hiring employees. Allocate a few months' salary for the payroll of your new employees. While
employee costs will not actually start until you are open for business, some entrepreneurs hire a
few employees even before the business is launched to help in the initial groundwork.
Insurance Costs. You will need liability and property insurance to protect yourself and any
business assets. Some other businesses also require workers' compensation, health, life, fire,
product liability and professional malpractice insurance. Check what you need for the kind of
your business.
TTLM Development Manual Date: November ,2020

Compiled by Accounting and Business Department
Lease Payments. These include amounts that must be paid for equipment and facility leases
before opening. Expect to pay several months' worth of lease payments even before you open
your doors for business.
Licenses and Permits.This amount will include all fees charged by the local, state and federal
agencies. The more regulated your industry, the higher the fees and charges. Various states also
have a different licensing requirements and fee structure. If your business is based in California,
for example, expect to spend for putting a legal announcement in the newspaper to announce
your new business. In Virginia, there are no such requirements.
Professional Fees. You will probably need the assistance of a lawyer in drawing up the proper
documents and filing them with the state if you are forming a partnership, Limited Liability
Company or corporation. You can opt to incorporate your own business yourself, as long as you
understand each form and requirements. Part of the professional fees you need to budget include
the accountant's fees, should you decide to outsource your record keeping or accounting tasks.
Signage costs. The signs for your business establishment can leave a significant dent on your
budget. Obtain bids from sign companies, depending on how elaborate you plan your signs to be.
Supplies. This is the part of your budget for all the office, cleaning and employee supplies that
your business needs in its first few months. To help you save, try buying wholesale if you can
meet the minimum order requirements.
Cost of Web Site creation. If you are planning to supplement your brick-and-mortar business
with online operations, you need to budget for the costs of creating a web site. These include
web-hosting fees, web designer, e-commerce components (shopping cart, merchant account, etc).
You also need to allocate some amount to cover the marketing and promotion expenses of your
online business.
Unanticipated expenses. The rule of thumb is to allocate about 10 percent of your total start-up
budget for contingencies and other unexpected expenses
Information Sheet
Process documents relating to goods and services received

Procurement
Procurement is the acquisition of goods or services. It is favorable that the goods/services are
appropriate and that they are procured at the best possible cost to meet the needs of the purchaser
in terms of quality and quantity, time, and location( Weele 2010) . Corporations and public
bodies often define processes intended to promote fair and open competition for their business
while minimizing exposure to fraud and collusion.

Overview
Almost all purchasing decisions include factors such as delivery and handling, marginal benefit,
and price fluctuations. Procurement generally involves making buying decisions under
conditions of scarcity. If good data is available, it is good practice to make use of economic
analysis methods such as cost-benefit analysis or cost-utility analysis.
An important distinction is made between analyses without risk and those with risk. Where risk
is involved, either in the costs or the benefits, the concept of expected value may be employed.
Direct procurement and indirect procurement

TYPES
Direct
Indirect procurement
procurement
Capital
Raw material and Maintenance, repair,
goods and
production goods and operating supplies
services
Quantity Large Low Low
F
E Frequency High Relatively high Low
A
Value Industry specific Low High
T
U Nature Operational Tactical Strategic
R
E Crude oil
Crude oil in
S Examples petroleum industry Lubricants, spare parts storage
facilities
Based on the consumption purposes of the acquired goods and services, procurement activities
are often split into two distinct categories. The first category being direct, production-related
procurement and the second being indirect, non-production-related procurement.
Direct procurement occurs in manufacturing settings only. It encompasses all items that are part
of finished products, such as raw material, components and parts. Direct procurement, which is
the focus in supply chain management, directly affects the production process of manufacturing
firms. In contrast, Indirect procurement activities concern “operating resources” that a company
purchases to enable its operations. It comprises a wide variety of goods and services, from
standardized low value items like office supplies and machine lubricants to complex and costly
products and services like heavy equipment and consulting services.

Procurement vs acquisition
The US Defense Acquisition University (DAU) defines procurement as the act of buying goods
and services for the government.[2]
DAU defines acquisition as the conceptualization, initiation, design, development, test,

contracting, production, deployment, Logistics Support (LS), modification, and disposal of
weapons and other systems, supplies, or services (including construction) to satisfy Department
of Defense needs, intended for use in or in support of military missions.[2]
Acquisition is therefore a much wider concept than procurement, covering the whole life cycle of
acquired systems. Multiple acquisition models exist, one of which is provided in the following
section.
Acquisition process
The revised acquisition process for major systems in industry and defense is shown in the next
figure. The process is defined by a series of phases during which technology is defined and
matured into viable concepts, which are subsequently developed and readied for production, after
which the systems produced are supported in the field.[3]

Lo3:- Create payment facility
Model of the Acquisition Process.[3]
The process allows for a given system to enter the process at any of the development phases. For
example, a system using unproven technology would enter at the beginning stages of the process
and would proceed through a lengthy period of technology maturation, while a system based on
mature and proven technologies might enter directly into engineering development or,
conceivably, even production. The process itself includes four phases of development:[3]
 Concept and Technology Development: is intended to explore alternative concepts based

on assessments of operational needs, technology readiness, risk, and affordability.
 Concept and Technology Development phase begins with concept exploration. During
this stage, concept studies are undertaken to define alternative concepts and to provide
information about capability and risk that would permit an objective comparison of
competing concepts.
 System Development and Demonstration phase. This phase could be entered directly as a
result of a technological opportunity and urgent user need, as well as having come
through concept and technology development.
 The last, and longest phase is the Sustainable and Disposal phase of the program. During
this phase all necessary activities are accomplished to maintain and sustain the system in
the field in the most cost-effective manner possible.
Procurement systems
Another common procurement issue is the timing of purchases. Just-in-time is a system of timing
the purchases of consumables so as to keep inventory costs low. Just-in-time is commonly used
by Japanese companies but widely adopted by many global manufacturers from the 1990s
onwards. Typically a framework agreement setting terms and price is created between a supplier
and purchaser, and specific orders are then called-off as required. Shared services
In order to achieve greater economies of scale, an organization’s procurement functions may be

joined into shared services. This combines several small procurement agents into one centralized
procurement system.
Information SHEET Procurement process
Procurement may also involve a bidding process i.e.,Tendering. A company may want to
purchase a given product or service. If the cost for that product/service is over the threshold that
has been established (e.g.: Company X policy: "any product/service desired that is over $1,000
requires a bidding process"), depending on policy or legal requirements, Company X is required
to state the product/service desired and make the contract open to the bidding process. Company
X may have ten submitters that state the cost of the product/service they are willing to provide.
Then, Company X will usually select the lowest bidder. If the lowest bidder is deemed
incompetent to provide the desired product/service, Company X will then select the submitter
who has the next best price, and is competent to provide the product/service. In the European
Union there are strict rules on procurement processes that must be followed by public bodies,
with contract value thresholds dictating what processes should be observed (relating to
advertising the contract, the actual process etc.).
Procurement steps
Procurement life cycle in modern businesses usually consists of eight steps:
 Information gathering: If the potential customer does not already have an established
relationship with sales/ marketing functions of suppliers of needed products and services
(P/S), it is necessary to search for suppliers who can satisfy the requirements.
 Supplier contact: When one or more suitable suppliers have been identified, requests for
quotation, requests for proposals, requests for information or requests for tender may be
advertised, or direct contact may be made with the suppliers.
 Background review: References for product/service quality are consulted, and any
requirements for follow-up services including installation, maintenance, and warranty are
investigated. Samples of the P/S being considered may be examined, or trials undertaken.
 Negotiation: Negotiations are undertaken, and price, availability, and customization
possibilities are established. Delivery schedules are negotiated, and a contract to acquire
the P/S is completed.
 Fulfillment: Supplier preparation, expediting, shipment, delivery, and payment for the
P/S are completed, based on contract terms. Installation and training may also be
included.
 Consumption, maintenance, and disposal: During this phase, the company evaluates
the performance of the P/S and any accompanying service support, as they are consumed.
 Renewal: When the P/S has been consumed or disposed of, the contract expires, or the
product or service is to be re-ordered, company experience with the P/S is reviewed. If
the P/S is to be re-ordered, the company determines whether to consider other suppliers
or to continue with the same supplier.
 Additional Step - Tender Notification: Some institutions choose to use a notification
service in order to raise the competition for the chosen opportunity. These systems can
either be direct from their e-tendering software, or as a re-packaged notification from an
external notification company.
Procurement performance
In July 2011, Ardent Partners published a research report that presented a comprehensive,
industry-wide view into what is happening in the world of procurement today by drawing on the
experience, performance, and perspective of nearly 250 Chief Procurement Officers and other
procurement executives. The report includes the main procurement performance and operational
benchmarks that procurement leaders use to gauge the success of their organizations. This report
found that the average procurement department manages 60.6% of total enterprise spend. This
measure commonly called "spend under management" refers to the percentage of total enterprise
spend (which includes all direct, indirect, and services spend) that a procurement organization
manages or influences. The average procurement department also achieved an annual savings of
6.7% in the last reporting cycle, sourced 52.6% of its addressable spend, and has a contract
compliance rate of 62.6%.[4]Public procurement
Main article: Government procurement
Public procurement generally is an important sector of the economy. In Europe, public

procurement accounts for 16.3% of the Community GDP.[5]
Green public procurement
In Green public procurement (GPP), contracting authorities and entities take environmental
issues into account when tendering for goods or services. The goal is to reduce the impact of the
procurement on human health and the environment.[6]
In the European Union, the Commission has adopted its Communication on public procurement
for a better environment, where proposes a political target of 50 % Green public procurement to
be reached by the Member States by the year 2010.[7]Alternative procurement procedures
There are several alternatives to tendering which are available in formal procurement. One
system which has gained increasing momentum in the construction industry and among
developing economies in the Selection in planning process which enables project developers and
equipment purchasers to make significant changes to their requirements with relative ease. The
SIP process also enables vendors and contractors to respond with greater accuracy and
competitiveness as a result of the generally longer lead times they are afforded.
ROSMA is a procurement acronym created by ATkearney.{Procurement Solutions Division} It

stands for Return on Supply Management Assets and endeavors to quantify not only
procurement but every piece of the procurement process including strategic resource
management. { }
Procurement frauds
Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an obligation

or causing a loss to public property or various means during procurement process by public
servants, contractors or any other person involved in the procurement.[8]
The University is committed to sound

fiscal stewardship of University funds.
This policy provides guidelines for the
timely payment of goods and services,
internal controls, and required
documentation in order to comply with
state and federal laws.
Policy Summary:
Agency responsibilities
It is the responsibility of the agency head, or authorized designee, to
certify that all expenditures/expenses and disbursements are proper and
correct.
Agencies are responsible for processing payments to authorized

vendors, as defined in Subsection 85.32.15, providing goods and
services to the agency. Goods and services include but are not limited to
products, services, materials, equipment, and travel reimbursements.
Agencies are to establish and implement procedures following generally

accepted accounting principles. At a minimum, agencies are also to
establish and implement the following:
1. Controls to ensure that all expenditures/expenses and

disbursements are for lawful and proper purposes and recorded
in a timely manner . Procedures to ensure prompt and accurate
payment of authorized obligations, and
2. Procedures to control cash disbursements.
Special definitions
Vendor - An entity selling a good or service to the State. Vendors

include, but are not limited to, retail businesses, consultants,
contractors, manufacturers, credit card companies. A vendor may be an
individual, corporation, non-profit organization, federal government, or
federal agency, local government or local agency, another state or
another state agency, a Washington state agency, or Indian nation. For
travel reimbursement purposes, a vendor may include an employee, a
board member, or volunteer.
Statewide Vendor - A vendor with a common vendor record

maintained by the Department of Enterprise Services that can be used
by any agency making a payment to that vendor. A Statewide Vendor
(SWV) code is required for certain payment types (Inter-Agency
Payments (IAP) and AFRS Automated Clearing House (ACH)

payments to nonemployees).
Expenditure authorization
Information Sheet
Goods and services are not to be ordered, contracted for, or paid for
unless they are provided by authorized vendors and within the
limitations prescribed by the Department of Enterprise Services,
Contracts and Legal Division (RCWs 43.19.190 and 39.29.065), or
other statute.
Prior to payment authorization, agencies are to verify that the goods and
services received comply with the specifications or scope of work
indicated on the purchase or contract documents. Authorized personnel
receiving the goods and services are to indicate the actual quantities
received, services provided, deliverable submitted, etc. Refer to Chapter
15 Personal Service Contracts and Chapter 16 Client Service Contracts.
Refer also to Chapter 20 for guidance related to internal control
procedures.
Agency heads or authorized designees are responsible for authorizing
all expenditures/expenses.
Unless otherwise required by federal or other contractual requirement, where

funding is available from both appropriated and nonappropriated sources for the
same purpose, agencies are to charge expenditures in such a ratio as will conserve
appropriated funds. This requirement does not apply to institutions of higher
education, except during the 2011-13 biennium.
Unless otherwise provided by law, federal or other contractual requirement, if state
moneys are appropriated for a capital project and matching funds or other
contributions are required as a condition for receipt of state moneys, state moneys
shall be expended in proportion to and only to the extent that matching funds or
other contributions are available for expenditure, except during the 2011-13
biennium.

Payment processing documentation

Information Sheet
At a minimum, payment processing documentation should include

evidence of authorization for purchase, receipt of goods or services, and
approval for payment. Agencies may utilize paper or electronic forms.
The following documentation, or equivalent, is to be maintained:
Journal Voucher (A7-A) - This form can be used for interagency
payments between treasury and/or treasury trust accounts, and to
allocate or transfer costs between accounts, programs, and to record
accruals and other adjustments to account balances, etc. The Journal
Voucher is also used to process non-AFRS Automated Clearing House
(ACH) payments through the Office of the State Treasurer to outside
vendors. Instead of Form A7-A, agencies are encouraged to use one of
the A19 forms (refer below) with the Inter-Agency Payment (IAP)
process. Refer to Subsection 85.36.20.
Purchase Requisition (A15-A) - A form used by agencies to request
the Department of Enterprise Services, Office of State Procurement to
order materials, supplies, and equipment or to request an amendment of
a previous requisition. This form is used when an agency does not have
general or specific authority to make the purchase or when the item
does not fall within the statewide contracts. This form is available
online at: http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.
Purchase Order (A16, A16-A) - A form issued by the Department of
Enterprise Services, Office of State Procurement to order items
approved on a purchase requisition (A15-A). This form is used by
agencies to encumber, liquidate, and authorize payment for such
purchase requisition requests.
Declaration of Emergency Purchase (A16-E) - A form used by
agencies for emergency purchases under RCW 43.19.200 made for
goods and services under the authority of the Department of Enterprise
Services in response to unforeseen circumstances beyond the control of
an agency which present a real, immediate, and extreme threat to the
proper performance of essential functions and/or may be reasonably
expected to result in excessive loss or damage to property, bodily injury,
or loss of life. Written notification must be submitted within three days
of the purchase to the director of Enterprise Services. This form is
available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.
Field Order (A17-A, A17-1A) - A purchase document or order issued
by an agency to a vendor in accordance with authority to make a
delegated purchase. This form is used by agencies to encumber,
liquidate, and authorize payment for such purchases. This form is
available online at:
http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html
Receiving Report - Partial Delivery (A18, A18-A) - A form used by
agencies to document and authorize payment for partial deliveries of
goods or services ordered by a single Purchase Order (A16-A) or Field
Order (A17-A).
Invoice Voucher (A19-1A) - A form used by agencies to substantiate
and authorize payment when a Purchase Order (A16-A) or Field Order
(A17-A) is not involved and where vendor invoices are not employed.
The Invoice Voucher is to be signed by the vendor on the space
provided. This form is used to produce warrants, pay by means of
AFRS ACH, or to create payments through the IAP process. Refer to
Subsection 85.36.20. This form is available online at:
Voucher Distribution Form (A19-2, A19-2A) - A form used by
agencies to substantiate and authorize payment when a Purchase Order
(A16-A) or Field Order (A17-A) is not involved but where vendor
invoices are employed. This form is used to produce warrants, pay by
means of AFRS ACH or to create payments through the IAP process.
Refer to Subsection 85.36.20. A voucher distribution form is available
online at: http://www.ga.wa.gov/PCA/SL/ExternalForms/index.html.
Refund Voucher (A19-3) - A form used by agencies to process refunds
of revenues received in excess of the amount owed or received in error
by the state.
Travel Expense Voucher (A20-A, A20-2A) - Form A20-A is used by
agencies to substantiate and/or authorize payment of travel costs for
state employees. In the absence of a vendor relationship, this form can
also be used to substantiate and/or authorize payment of travel costs for
non-state employees such as prospective employees; individuals who
serve on boards, commissions, councils, committees, and task forces;
volunteers and other individuals who are authorized to receive travel
expense reimbursement. When a vendor relationship exists and the
A20-A is used by non-state employees to substantiate travel costs, it
must be attached to an Invoice Voucher (A19-1A) to authorize payment.
A travel expense voucher form is available online at:

Form A20-2A is only used for reimbursing travel expenses of

commission members who are reimbursed on a per diem basis.
Agencies may use an electronic travel reimbursement system, such as

the Travel & Expense Management System (TEMS), as long as it
provides information equivalent to that provided on a travel expense
voucher.
Printing Requisition A form used by agencies to order, encumber,

liquidate, and authorize payment for goods and services from the
Department of Enterprise Services. This form is available online at:
http://www.prt.wa.gov/.
Copy Center Request Form (A24) - A form used by agencies to order,
encumber, liquidate, and authorize payment for copy services from the
Department of Enterprise Services. This form is available online at:
http://www.prt.wa.gov/.
Purchasing documents used internally by agencies having local
purchasing authorities are to meet the criteria of the forms noted above.
There is no standard internal purchase request form; however, agencies
are encouraged to develop and utilize an internal request form to
enhance internal control over requisitions. Refer to Chapter 20 of this
manual for internal control procedures.
Payment processing
Information Sheet
The following information, at a minimum, is to be indicated either on

the disbursement documentation or in an automated system for
compliance with federal regulatory agencies and internal control
policies:
 Payee name and address in compliance with U. S. postal

regulations,
 Unified Business Identifier (or other vendor approved

identifier), as applicable,
 Taxpayer ID Number (TIN) as per IRS publication 1220 and

IRS Bulletin 1990-31, as applicable,

 Voucher number,
 Appropriate account code distribution,
 Date the goods were received or the services were provided,
 Signature of receiver or contract manager approval,
 Receipt date of invoice,
 Invoice number, if available,
 Total amount of invoice,
 Invoice date,
 Discount or other terms, and
 Date of payment.
Agencies are to establish procedures which verify the mathematical

accuracy of all documents and ensure that charges are properly recorded
to the appropriate accounts.
Disbursement documents should be reviewed for the following, as
applicable:
 Written approval by the agency head or authorized designee

authorizing payment appears on the disbursement document.
 The payment is being processed to the correct vendor.
 Quantities indicated on the invoice agree with those documented

as received on the receiving report.
 Unit prices on the invoice agree with those indicated on the

disbursement document.
 Contractor rates agree with the contract document.
 Extensions and footings are correct.

 Correct account code distributions are indicated.
 Interest for late payment, upon billing, is properly documented

and computed.
Disbursement documents approved for payment are to be arranged in a

batch for warrant and warrant register processing within the following
constraints:
 The documents are to be assigned sequential voucher numbers.
 A batch header, document transmittal, or equivalent which

includes the total amount of the payments should be prepared
and approved.
Encumbered balances associated with any expenditures are to be

appropriately liquidated. Refer to Subsection 85.42.20.b for an
illustrative entry.
Balances in GL Code 6505 "Accrued Expenditures/Expenses"
associated with any cash expenditure disbursements are to be
appropriately reversed.
The number of payments to a vendor is to be kept to a minimum by
processing the maximum number of invoices with a single payment.
Agencies can use petty cashimprest accounts where effective in
complying with prompt payment requirements and efficiency of
operation can be demonstrated. Refer to Subsection 85.50.50 for petty
cash policies and procedures.
Lo5:- File documentation

Timing of payment
Information Sheet
Agencies are to establish procedures to ensure timely, accurate, and cost

effective payment of obligations to vendors. An agency's payments will
be considered timely when its records show that the agency pays 95
percent or more of its obligations to vendors by the due date defined
below. Agencies are to maximize effective cash management by paying
as close to the due date as workable. Special attention is to be given to
the following:
 Due Dates - Vendor payments are to be made by the due date.
Due dates for payments are established by the terms of the
purchase document, invoice, or contract between the agency and
vendors. If the purchase document or contract is silent
concerning terms or there is no written authorizing document,
the terms are net 30 days. The 30 days, or other terms, begin
upon receipt of the goods or services or a properly completed
invoice,whichever is later.
As prescribed in RCW 39.76, agencies are required to pay

interest at the rate of one percent per month on past due amounts
when invoiced and there are not other exceptions. Due dates are
postponed in the case of disputes. Refer to disputes below.
 Discounts - Discounts offered by vendors are considered in

evaluating competitive bids; failure to earn such discounts
through prompt payment increases the effective price to the
state. Agencies are to pay all obligations in time to take
advantage of the maximum discounts offered by vendors.
 Partial Payments - When agencies accept partial delivery of

goods or services without reservation, prompt payment is to be
made for the goods or services received upon receipt from the
vendor of a properly completed invoice or in accordance with
purchase document or contract terms covering the partial
delivery.
 Disputes - Prompt and proper notification to a vendor of receipt

of unsatisfactory goods or services or an incorrect invoice defers
the due date. The due date is recalculated from the date the

problem is resolved. Proper authorization is required when

material changes are made.
Maintenance Services Contracts - Pursuant to RCW 43.88.160(5),

under certain conditions, payments for equipment maintenance services
may be made up to twelve months in advance.
Postage, Books and Periodicals - Pursuant to RCW 42.24.035,
agencies may make payment for the costs of postage, books and
periodicals in a manner consistent with normal business practices, but in
the case of subscriptions, for periods not in excess of three years.
Rapid invoice processing
Information Sheet
The use of Rapid Invoice Processing (RIP) is encouraged to reduce the

costs of processing payments for small and/or routine transactions. With
RIP:
 Confirmation of the receipt of goods and services is kept at a

decentralized location instead of being forwarded to the payment
office to be filed with the payment documents.
 Requests for payments are processed centrally and scheduled for
payment.
 The risks associated with using RIP are mitigated through
compensating controls, such as providing the decentralized
location the opportunity to intervene in the payment process
prior to the scheduled payment date.
The level/type of payments subject to RIP procedures is to be

established carefully at the agency level to ensure that a more positive
system of control, such as centralized matching of signed receiving
reports with requests for payment, exists to cover large and/or non-
routine transactions.
Advance written authorization is to be obtained from the Office of

Financial Management for the use of RIP. Requests for authorization
should identify the level and type of payments proposed for RIP
procedures and the processes that will be used to mitigate the risks of
using RIP.

Purchase card
State law, RCW 43.19.185 and 28B.10.029, authorizes agencies to use

credit cards and similar devices to make purchases under specific terms
and conditions. Refer to Chapter 45 for purchase card policies.
Waste recycling procedures
Agencies are to record receipts and disbursements resulting from

agency operated waste reduction and recycling programs not operated
through the Department of Enterprise Services (refer to RCW
70.95c.110), as follows:
Revenues derived through an agency operated recycling program are to
be deposited into the account that supports the recycling effort as either
a miscellaneous revenue or a recovery of expenditures to the extent of
expenditures for the program.
When the revenues exceed the expenditures identified with the
recycling program, they are to be allocated on a proportional basis to the
accounts that originally purchased the recycled materials.


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Training, Teaching and Learning Materials

ACCOUNTS AND BUDGET SUPPORT LEVEL III

NEFAS SILK POLY TECHNIC COLLEGE

Welcome to the module “Process Payment Documentation”. This learner’s guide

Summary of Learning Outcomes

After completing this learning guide, you should be able to:

How to Use this TTLM

Lo1:- Enter data to system

In common usage, an expense or expenditure is an outflow of money to another person or group

Bookkeeping for expenses

Information SHEETCash flow

 Operational expense – salary for employees

 Financing expense – interest expense for loans and bonds

An important issue in accounting is whether a particular expenditure is classified as an expense,

Accounting Basics: Types of Expense Accounts

Cost of Goods Sold

Non-Operating Expenses (or Other Expenses)

Employee and Officer Expense Accounts

OPERATION SHEET 1: Describe team role and scope

Lo2:- Verify payments against documentation

Information SHEETAdvertising and Marketing Promotion Expenses. You can chose to

TTLM Development Manual Date: November ,2020

Process documents relating to goods and services received

TTLM Development Manual Date: November ,2020

Direct procurement and indirect procurement

TTLM Development Manual Date: November ,2020

DAU defines acquisition as the conceptualization, initiation, design, development, test,

TTLM Development Manual Date: November ,2020

Model of the Acquisition Process.[3]

 Concept and Technology Development: is intended to explore alternative concepts based

In order to achieve greater economies of scale, an organization’s procurement functions may be

Information SHEET Procurement process

Procurement life cycle in modern businesses usually consists of eight steps:

Main article: Government procurement

Public procurement generally is an important sector of the economy. In Europe, public

Green public procurement

ROSMA is a procurement acronym created by ATkearney.{Procurement Solutions Division} It

Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an obligation

The University is committed to sound

Agencies are responsible for processing payments to authorized

Agencies are to establish and implement procedures following generally

1. Controls to ensure that all expenditures/expenses and

2. Procedures to control cash disbursements.

Vendor - An entity selling a good or service to the State. Vendors

Statewide Vendor - A vendor with a common vendor record

Payments (IAP) and AFRS Automated Clearing House (ACH)

Unless otherwise required by federal or other contractual requirement, where

Lo4:- Verify payments against documentation

Payment processing documentation

At a minimum, payment processing documentation should include

TTLM Development Manual Date: November ,2020

Form A20-2A is only used for reimbursing travel expenses of

Agencies may use an electronic travel reimbursement system, such as

Printing Requisition A form used by agencies to order, encumber,

The following information, at a minimum, is to be indicated either on

 Payee name and address in compliance with U. S. postal

 Unified Business Identifier (or other vendor approved

 Taxpayer ID Number (TIN) as per IRS publication 1220 and

TTLM Development Manual Date: November ,2020

 Appropriate account code distribution,

 Date the goods were received or the services were provided,

 Signature of receiver or contract manager approval,