Admas University

Meskel campus

Accounting and Finance Level III

Learning guide
Unit of Competence: Process Payment Documentation
Module Title: Processing Payment Documentation
TTLM Code : LSA ACF3 M06 1221
LO1. Enter data to system
LO2. Create payment facility
LO3. Verify payments against documentation
LO4. Effect payments
LO5. File documentation
LO6. Authorized payment

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Occupational Standard: Accounting and Finance Level III
Unit Title Process Payment Documentation
Unit Code LSA ACF3 06 1221
Unit Descriptor This unit describes the performance outcomes, skills and knowledge
required to identify payments for processing and accurately process
financial payment documents.

Elements Performance Criteria

1. Enter data to 1.1 Data is entered into systems without error and within time
system requirements as specified in relevant organization policy and
procedures
1.2 Data is allocated to correct systems and accounts and related
systems are updated
1.3 System controls are maintained to ensure the integrity and security
of client and payee database
2. Create payment 2.1 Payment facility is processed accurately in accordance with
facility organization policy and procedures
2.2 Documentation is maintained in a secure manner to protect the
privacy and interests of all parties
3. Verify payments 3.1 Authorization for payment is confirmed with information on
against payment facility matching approved documentation
documentation 3.2 Discrepancies are identified and followed up promptly
4. Effect payments 4.1 Payments are made within agreed credit arrangements in
accordance with organization policy and procedures and industry
and legislative requirements
4.2 Payment instruments are signed in accordance with relevant
authority levels and related systems updated promptly to ensure that
the integrity of accounting systems are maintained
4.3 Primary documentation associated with payment is cancelled or
noted to ensure multiple payments are not made
5. File 5.1 Documentation is filed promptly in accordance with organization
documentation policy and procedures
5.2 Location of filed documentation is easily accessed and traced
6. Authorized 6.1 All payments are authorized accurately and according to
payment organization policy and procedures
6.2 Funds are not released prior to authorization of payment in
accordance with organization procedures
6.3 Payment authorizations are used within relevant authority levels and
follow relevant organization policy and procedures and industry and
legislative requirements

Variable Range
Organisation policy May include but not limited to :
and procedures  computer system documentation
 internal control guidelines
 operations manuals

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Related systems May include but not limited to :
 assets system
 claims
 commissions and fees
 holding/suspense accounts
 receivables
 reinsurance
 tax related
Systems controls:  protect against the corruption of payee:
 name
 address
 bank account details
Payment facility May include but not limited to :
documentation  authorisation slips
 batch records
 cheque cancellations
 confirmation of receipt
 delivery dockets
 invoices
 payment requests
 periodic approvals
 signature verifications
 stop payments
Industry and  Relevant Financing laws
legislative  Trade practice and consumer protection proclamation
requirements may  industry codes of practice
cover:  occupational health and safety (OHS) guidelines
 relevant Insurance laws
 Taxation law

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LO1: Enter data to system
1.1.Entering data into systems without error and within time requirements
1.2.Allocating data to correct systems and accounts and updating related systems
1.3.Maintaining system controls to ensure the integrity and security of client and payee database

1.1 What is Data?

(1) Data is distinct pieces of information, usually formatted in a special way. All software is divided
into two general categories: data and programs. Programs are collections of instructions for
manipulating data.

Data can exist in a variety of forms -- as numbers or text on pieces of paper, as bits and bytes stored
in electronic memory, or as facts stored in a person's mind.

Strictly speaking, data is the plural of datum, a single piece of information. In practice, however,
people use data as both the singular and plural form of the word.

(2) The term data is often used to distinguish binary machine-readable information from textual
human-readable information. For example, some applications make a distinction between data files
(files that contain binary data) and text files (files that contain ASCII data).

(3) In database management systems, data files are the files that store the database information,
whereas other files, such as index files and data dictionaries, store administrative information,
known as metadata.

1.2 Input
Whatever goes into the computer. Input can take a variety of forms, from commands you enter from
the keyboard to data from another computer or device. A device that feeds data into a computer,
such as a keyboard or mouse, is called an input device.
The act of entering data into a computer
Data entry
The process of entering data into a computerized database or spreadsheet, Data entry can be
performed by an individual typing at a keyboard or by a machine entering data electronically.

1.3 Entering Data into the System

There are some limitations to what you can enter in fields.

 The system does not allow you to type beyond the length limit of a field (this may be more
characters than can be displayed in the field).
 The system uses uppercase text for most fields, even if you enter lowercase text.
 Do not begin or end a value with spaces. The system removes these spaces.
Note
The following characters include an embedded space when entered in the key fields:
o ~ (tilde)
o @ (at sign)
o ^ (caret)

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 o + (plus sign)
o = (equals sign)
 Do not use the pound sign (#) and the asterisk (*) in the Version field.
 In the Password field, use only key field characters and lowercase a-z letters.
 Except for the Description and Comments fields, do not use the following characters in field
values:
o & (ampersand)
o ’ (apostrophe)
o * (asterisk)
o / (slash)
o \ (backslash)
o : (colon)
o , (comma)
o > (greater than)
o < (less than)
o % (percent sign)
o ? (question mark)
o " (quotation marks)
Note
The percent sign (%), the question mark (?), and the asterisk (*) are permitted but these characters
are primarily used as wildcard characters. The asterisk (*) is also the name of the global site. Do not
use quotation marks (") in the Comments fields, however, you can use quotation marks (") in the
Description fields.

Entering Dates and Times

There are several places in the system where you can view and enter dates and times. For example,
the Production Operator Dashboard (POD) displays the time and date an SFC number was started in
the Active Work list. Many system reports allow you to enter dates to limit your search.

The system displays dates and time in your browser, according to your time zone settings. It stores
dates and times in the database in Greenwich Mean Time (GMT, also called UTC and Z-time).
When you enter a date and time, or the system displays a time, the system converts the GMT date
and time back and forth to the corresponding date and time of the server’s time zone. When
displaying a date and time, it also converts the data and time to the format of the time zone of the
server.

Entering Dates
When you enter dates in the system, you should use time zone conventions. For example, if your
time zone displays the month first, enter month/day/year. If your time zone displays the day first,
enter day/month/year.
 The forward slash (/) separates the day, month, and year. You can also use the hyphen - or
the underscore (_).
 Enter two digits for the day. For example, you can enter the first day of the month as 01.

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  Enter two digits for the month. For example, you can enter July as 07.
 Enter two or four digits for the year. For example, you can enter 11 or 2011.
Entering Time
Enter time in the following format:
hh:mm:ss
In this format, hh is the two-digit hour, mm is the two-digit minute, and ss is the two-digit second.
The system uses this format to display time.

1.4 Maintaining process control systems

The performance of your process control system may gradually decline over time because your
operators override the system, or your equipment and plant develop faults. You may not be aware
that the system is performing badly because maintenance schedules don't always include the right
checks to identify problems. If your system is poorly-maintained, your processes won't be operating
efficiently and your energy costs will be higher than necessary.

Indications that your system isn't performing well may include:

 operators setting controllers to manual when they should be on automatic mode

 inefficient operation
 too much variability
 frequent calls for repairs and maintenance

The maintenance approach itself may be the cause of many problems. If 'quick fix' breakdown
maintenance is carried out in response to equipment failure, underlying problems may never be
sorted out and can become permanent. A planned preventive maintenance strategy involves
carrying out maintenance tasks regardless of whether a machine has broken down. This can also
help you identify opportunities to enhance or upgrade your system.

1.5 Produce a maintenance manual and use a log book

If you have a good maintenance manual, you will be able to keep process control systems working
well and make sure that you don't overlook routine maintenance tasks. You should include in the
manual:

 details of all maintenance tasks, who is responsible for them, and how often they must be
done
 schematic diagrams of all equipment and controls
 operating instructions including emergency shutdown procedures
 contact details for equipment manufacturers, and installation and maintenance technicians

You should always make sure the key parts of the system are working correctly. Carry out regular
checks on:

 instruments - get faulty instruments repaired or recalibrated by qualified personnel

 measurement devices - correct problems caused by poor installation of sensors

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  valves - check for 'sticky' valves which increase energy consumption

You should also keep detailed records of all your maintenance activity in a log book. This will help
you when:

 dealing with problems that keep happening

 improving process control - for example by training operatives or replacing manual controls
with automatic ones
 upgrading your equipment if it has reached the end of its useful life

1.6 Maintaining High Performance Control Systems

We rely on control systems to monitor and manage our building systems. For the most part it’s been
assumed that once the control system is installed and configured it will work for years with little
attention and minimal maintenance. Some systems may be trouble-free, but the majority of them
will need regular attention and maintenance. Over time hardware will fail, software parameters and
versions change and slowly the control system will ―drift‖ from its original configuration and
performance.

The role of control systems is somewhat undervalued. When you examine the most complex
system in most buildings, the HVAC infrastructure, you find that it’s the HVAC control
system, not the HVAC equipment, which produces the most operational issues and is the leading
cause of inefficient energy use. Lawrence Berkley National Laboratories examined 60 buildings and
found the highest frequency of common problems with HVAC was in the control system. Texas
A&M research determined that of the operational and maintenance measures that could produce
significant energy savings, 77% of the savings were from correcting control problems.

Maintaining a high performing control system involves regular maintenance, software and data
management and organizational policies. The issues that can cause problems with a building control
system are the same challenges all of us have had at one time or another with our computer or smart
phone: problems related to software, hardware, communications networking and ―user‖ mistakes.
What follows is an overview of some of the typical control system issues and recommendations as
to how to keep it performing at a high level.

Communications Issues
Assuming that the software and hardware of a control system is properly working, network
communication problems will usually involve cabling faults, improper cabling, excessive network
traffic or the interface into IT network equipment. Cabling can get damaged and network
connections can become loose resulting in a loss of signal across a communications span. If you’re
using wireless technology you can possibly lose contact if you’re using an unlicensed frequency
and other equipment using the same frequency is introduced into the space, causing interference.

The interface of a control system into the client’s IT network is another potential source of
communication issues. It involves not only cabling into an IT network switch, but possibly

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additional equipment such as a gateway that may be needed to translate the control systems
protocol and data format into an acceptable format and protocol for the IT network.

With field controllers where the controller uses an analog signal to communicate with the field
device such as temperature sensor the issue is calibration. A typical sensor may signal their output
via a range over a DC current (4mA to 20mA is a common example, identifying zero level and
maximum level of the output of the device). These analog communication links need to be
calibrated, configured and validated to ensure the controller is getting accurate data.
Steps to Take
Inventory and document your control systems. Identify the location of all
equipment and the version of the components and software.

Recalibrate your sensors as well as the analog signals to the field controllers.

1. Gather and manage data related to the control systems such as as-built
control drawings and points a list. Don’t wait for an emergency and
then have to scramble
to find everything.
2. Audit and evaluate the existing controllers for parts availability,
service, and overall capability.
3. Develop a step-by-step methodology for troubleshooting. For
example, you may start with the information from the BMS, check
the controllers and any IT network involved, which should help in localizing the problem.
After that you may need some instrumentation to check cables, communications signals, and
voltage or current between a field controller and a sensor or actuator.
4. Assess the needs of the building owner and operators. If you are dealing with a portfolio of
buildings, get a BMS system that can provide an enterprise-wide solution rather than
managing buildings individually.
5. Identify the software applications required. At a minimum you’ll need energy management
and an analytic application, such as fault detection and diagnostics.
6. Evaluate whether an upgrade is justified. Take into account maintenance cost on the older
control system and the energy savings and potential utility rebates and incentives on the new
control system.

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LO2 Create payment facility
2.3 Processing payment facilities accurately in accordance with organization policy and procedures
2.4 Maintaining documents in a secure manner to protect the privacy and interests of all parties

2.1 Payment Facility

While availing any of the payment method/s available on the Website, we will not be
responsible or assume any liability, whatsoever in respect of any loss or damage arising
directly or indirectly to You due to:
1. Lack of authorization for any transaction/s, or
2. Exceeding the preset limit mutually agreed by you and between "bank/s", orHow we collect
and use that information.
3. Any payment issues arising out of the transaction, or
4. Decline of transaction for any other reason/s
All payments made against the purchases/services on Website by you shall be compulsorily in
Indian Rupees acceptable in the Republic of India. The Website will not facilitate transaction
with respect to any other form of currency with respect to the purchases made on Website.
Buyer's arrangement with Issuing Bank
All valid credit / debit/ cash card/ and other payment instruments are processed using a credit
card payment gateway or appropriate payment system infrastructure (―Payment Facility‖)
and the same will also be governed by the terms and conditions agreed to between the Buyer
and the respective issuing bank (―Issuing Bank‖) and payment instrument issuing company
(―Payment Facility Policies‖).
All online bank transfers from valid bank accounts are processed using the gateway provided by
the respective Issuing Bank which supports Payment Facility to provide these services to the
Users. All such online bank transfers on Payment Facility are also governed by the terms and
conditions agreed to between Buyer and the respective Issuing Bank.
Payment Terms
Before shipping / delivering your order to you, the seller (―Seller‖) may request You (the
―Buyer‖) to provide supporting documents (including but not limited to Govt. issued ID and
address proof) to establish the ownership of the payment instrument used by you for your
purchase of a product (―Product‖). This is done in the interest of providing a safe online
shopping environment to Our Users.
All purchase of products or services (―Transactions‖), the price (―Transaction Price‖) and all
commercial terms such as delivery (―Delivery‖), dispatch of Products and/or services
(―Dispatch‖) are as per principal to principal bipartite contractual obligations between Buyer
and Seller and the Payment Facility is merely used by the Buyer and Seller to facilitate the
completion of the Transaction. Use of the Payment Facility shall not render Xiaomi liable or
responsible for the non-delivery, non-receipt, non-payment, damage, breach of
representations and warranties, non-provision of after sales or warranty services or fraud as
regards the products and /or services on the Website.

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 You have specifically authorized Xiaomi or its service providers to collect, process, facilitate
and remit payments and / or the Transaction Price electronically or through cash on Delivery
to and from other Users in respect of Transactions through the Payment Facility. Your
relationship with Xiaomi is on a principal to principal basis and by accepting these Terms of
Use you agree that Xiaomi is an independent contractor for all purposes, and does not have
control of or liability for the products or services that are listed on the Website that are paid
for by using the Payment Facility. Xiaomi does not guarantee the identity of any User nor
does it ensure that a Buyer or a Seller will complete a Transaction.
Payment terms for Buyer
1. You, as a Buyer, understand that upon initiating a Transaction, You are entering into a
legally binding and enforceable contract with the Seller to purchase the Products and /or
services from the Seller using the Payment Facility, and You shall pay the Transaction Price
through Your Issuing Bank to the Seller using the Payment Facility.
2. You, as a Buyer, may agree with the Seller through electronic communication and electronic
records and using the automated features as may be provided by the Payment Facility on
any extension / increase in the Dispatch and/or Delivery time and the Transaction shall stand
amended to such extent. Any such extension / increase of Dispatch / Delivery time or
subsequent novation / variation of the Transaction should be in compliance with the terms
and conditions of the Payment Facility Policies.
3. You, as a Buyer, shall electronically notify the Payment Facility provider using the
appropriate Website features immediately upon Delivery or non Delivery within the time
period as provided. Non notification by You of Delivery or non Delivery within the time
period specified in the Payment Facility Policies shall be construed as a deemed Delivery in
respect of that Transaction. In case of cash-on-delivery Transactions, Buyer is not required
to confirm the receipt of Products or services.
4. You, as a Buyer, shall be entitled to claim a refund of the Transaction Price (as Your sole
and exclusive remedy) in case You do not receive the Delivery within the time period
agreed in the Transaction or within the time period as indicated, whichever is earlier. In case
you do not raise a refund claim using the Website within the stipulated time than this would
make you ineligible for a refund.
5. You, as a Buyer, understand that the Payment Facility may not be available in full or in part
for certain category of products and/or services and/or Transactions and hence You may not
be entitled to a refund in respect of the Transactions for those products and /or services.
6. Except for cash on Delivery transaction, refund, if any, shall be made at the same Issuing
Bank from where Transaction Price was received.
7. For cash on Delivery transactions, refunds, if any, will be made via demand draft in favor of
the Buyer (As per registration details provided by the Buyer)
8. Refund shall be made in Indian Rupees only and shall be equivalent to the Transaction Price
received in Indian Rupees.
9. For electronics payments, refund shall be made through Payment Facility using NEFT /
RTGS or any other online banking / electronic funds transfer system approved by Reserve
Bank India (RBI).
10. Refund shall be conditional and shall be with recourse available to it in case of any misuse
by Buyer.

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 11. Refund shall be subject to Buyer complying with the Terms of Use.
12. It reserves the right to impose limits on the number of Transactions or Transaction Price
which it may receive from on an individual valid credit/debit/ cash card / valid bank
account/ and such other infrastructure or any other financial instrument directly or indirectly
through payment aggregator or through any such facility authorized by Reserve Bank of
India to provide enabling support facility for collection and remittance of payment or by an
individual Buyer during any time period, and reserves the right to refuse to process
Transactions exceeding such limit.
13. It reserves the right to refuse to process Transactions by Buyers with a prior history of
questionable charges including without limitation breach of any agreements by Buyer with it
or breach/violation of any law or any charges imposed by Issuing Bank or breach of any
policy.
14. It may do such checks as it deems fit before approving the receipt of/Buyers commitment to
pay (for cash on Delivery transactions) Transaction Price from the Buyer for security or
other reasons at the discretion of it. As a result of such check if it is not satisfied with the
creditability of the Buyer or genuineness of the Transaction / Transaction Price, it will have
the right to reject the receipt of / Buyers commitment to pay Transaction Price.
15. It may delay notifying the payment confirmation i.e. informing Seller to Dispatch, if it
deems suspicious or for Buyers conducting high transaction volumes to ensure safety of the
Transaction and Transaction Price. In addition, it may hold Transaction Price and may not
inform Seller to Dispatch or remit Transaction Price to law enforcement officials (instead of
refunding the same to Buyer) at the request of law enforcement officials or in the event the
Buyer is engaged in any form of illegal activity.
16. The Buyer and Seller acknowledge that it will not be liable for any damages, interests or
claims etc. resulting from not processing a Transaction/Transaction Price or any delay in
processing a Transaction/Transaction Price which is beyond control of it.
Transaction Terms
1. All commercial/contractual terms are offered by and agreed to between Buyers and Sellers
alone. The commercial/contractual terms include without limitation price, shipping costs,
payment methods, payment terms, date, period and mode of delivery, warranties related to
products and services and after sales services related to products and services. it does not
have any control or does not determine or advise or in any way involve itself in the offering
or acceptance of such commercial/contractual terms between the Buyers and Sellers.
2. it does not make any representation or warranty as to specifics (such as quality, value,
salability, etc) of the products or services proposed to be sold or offered to be sold or
purchased on the Website. it does not implicitly or explicitly support or endorse the sale or
purchase of any product or services on the Website. it accepts no liability for any errors or
omissions, whether on behalf of itself or third parties.
3. It is not responsible for any non-performance or breach of any contract entered into between
Buyers and Sellers. it cannot and does not guarantee that the concerned Buyers and/or
Sellers will perform any transaction concluded on the Website. it shall not and is not
required to mediate or resolve any dispute or disagreement between the Buyers and Sellers.

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 4. It does not make any representation or warranty as to the item-specifics (such as legal title,
creditworthiness, identity, etc) of any of its Users. You are advised to independently verify
the bona fides of any particular buyer or seller that you choose to deal with on the Website
and use your best judgment in that behalf.
5. It does not at any point of time during any transaction between Buyer and Seller on the
Website come into or take possession of any of the products or services offered by Seller
nor does it at any point gain title to or have any rights or claims over the products or
services offered by the Seller to the Buyer.
6. At no time shall it hold any right, title or interest over the Products nor shall it have any
obligations or liabilities in respect of such contract entered into between the Buyers and
Sellers. it is not responsible for unsatisfactory or delayed performance of services or
damages or delays as a result of Products which are out of stock, unavailable or back
ordered.
7. The Website is only a platform that can be utilized by Users to reach a larger base to buy and
sell products or services. it is only providing a platform for communication and it is agreed
that the contract for sale of any of the products or services shall be a strictly bipartite
contract between the Seller and the Buyer.
8. You release and indemnify it and/or any of its officers and representatives from any cost,
damage, liability or other consequence of any of the actions of the Users of the Website and
specifically waive any claims that you may have in this behalf under any applicable law.
Notwithstanding its reasonable efforts in that behalf, it cannot take responsibility or control
the information provided by other Users which is made available on the Website. You may
find other User's information to be offensive, harmful, inconsistent, inaccurate, or deceptive.
Please use caution and practice safe trading when using the Website.

2.2 Defining and Maintaining Payables Payment Documents

Use the Payment Documents window to define payment documents for an internal bank
account. Examples of payment documents are checks or electronic payments. You must
create at least one payment document before you can use a bank account to create invoice
payments. You can create an unlimited number of payment documents for an internal bank
account.
When you define payment documents, you can only select payment formats that use the same
currency as the bank account currency. If the bank account is a multiple currency bank
account, you can choose foreign currency payment formats or multiple currency payment
formats.

2.3 Defining Payment Documents

To define a payment document:
1. In the Bank Accounts window, query a disbursement bank account. Choose Payables
Documents to navigate to the Payment Documents window.

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 2. Enter a Name for the payment document that is unique for the bank account. Select a
Disbursement Type and Payment Format. Enter in the Last Document Number field the last
payment document number you used on a payment document. In the Last Available
Document Number field, enter the last payment document number available for a payment
document.
3. In the Additional Information region, enter the number of Setup Checks you want Payables to
print at the beginning of each automatic payment batch or Quick payment.
If you are using the sequential numbering feature, optionally assign a Document Category.
If you have enabled Oracle Cash Management integration for reconciliation, optionally override
the GL Accounts in the GL Accounts region.
If you are using the Automatic Clearing for Future Dated Payments utility, optionally enter the
number of Clearing Days.
If you select a format that uses Future Dated Payment Method, optionally override the Cash
Clearing Account in the GL Accounts region.
4. Save your work.

2.4 How to process and pay every invoice on time

Lexmark invoice processing software automates the scanning, interpreting and filing of invoice
data. No matter how invoices enter your organization – on paper or in any electronic format – the
software intelligently extracts the important information and validates it according to a pre-defined
set of rules. To simplify set-up, Lexmark offers country-specific profiles, programmed with region-
specific criteria, such as VAT rates, date formats and currency characters. It’s an easy-to-install,
out-of-the-box invoice processing solution that’s still adaptable to your business's invoice
management requirements.

Many companies suffer through manual accounts payable processing even though proven process
automation has been available for more than a decade. Here are ten great reasons to automate.

Key features and benefits

 Accurate invoice processing in less time and with fewer human resources
 No invoices lost or paid twice
 Eligibility for early-payment discounts from suppliers
 visibility of invoice status
 Self-learning capture technology that continually increases recognition capabilities
 Timely and accurate financial reports
 Seamless workflow integration with SAP, Oracle E-Business Suite, Microsoft Dynamics
AX and with other ERP systems through partners
 Proven invoice process automation solution based on best practices gathered from years of
experience in accounts payable (AP) automation

2.5 Process payment documentation

 Enter data to system: Data is entered into systems without error, data is allocated to correct
 Systems and accounts, and related systems are updated.

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  Create payment facility: Payment facility is processed accurately, all documentation is
maintained
 in a secure manner to protect the privacy and interests of all parties
 Verify payments against documentation: All Information on payment facility matches
approved
 documentation
 Effect payment: all payments are made within agreed credit arrangements, all payment
instruments
 are signed in accordance with relevant authority levels, and all related systems are updated
 promptly to ensure that the integrity of accounting systems are maintained
 File documentation: All documentation is filed promptly.

2.6 Payment Documents

What is an e Form?
•We recently implemented a paperless payment process using software called Image Now. We use
Image Now to process payments for a large variety of items used by departments on a day-to-day
basis. Non-employee & student travel as well as food purchases are also processed this way. In
order to obtain all the information we need, an electronic form – or e Form – is completed within
Image Now
•This electronic process is also utilized for purchases less than $5000 to meet the small day-to-day
needs of those departments that are large users of a variety of different items. The Account Listing
indicates whether or not a transaction can be processed on an e Form. Please refer to the Account
Listing to obtain this information.

Payment Documents what is a PO PAYMENT?

•Under University of North Dakota policy, purchases greater than or equal to $5000 and those that
fall under certain Accounts require that a Purchase Requisition be obtained from the Purchasing
Office. The Account Listing should be reviewed to ascertain whether or not a given Account
requires a Purchase Requisition. The Purchase Order number that is obtained may be used in
connection with a Blanket Purchase Order or standard Purchase Order.
•When an item that meets the above criteria for a Purchase Order number has been ordered by a
department within the university, the item will generally be shipped to Central Receiving. Central
Receiving delivers the merchandise to the department.

What is a BLANKET PURCHASE ORDER?

•Blanket purchase order payments are utilized for recurring purchases from the same vendor that
would normally require a purchase order. Under University of North Dakota policy, all Blanket
Purchase Order payments are to be processed with an e Form.

•A Blanket Purchase Order number is obtained from the Purchasing Office by completing a
Purchase Requisition.

•If the invoice is received by the department it should be forwarded to Accounting Services to enter
into the Image Now process.
What is a PURCHASING CARD?

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•The purchasing card is a credit card issued in the name of the UND employee, to employees
designated by UND management, to make purchases <$5000 for official UND business needs. The
purchasing card will enable employees to purchase goods and services more efficiently and
eliminate the preparation of eForm payment requests to make these purchases.

•The purchasing card payment system is an individual bill / central payment system. The cardholder
receives a monthly account statement for information and reconciliation purposes only. UND
Accounting Services obtains a consolidated electronic billing file and makes payment to the
purchasing card vendor on behalf of all cardholders. Expenditure transactions are processed and
posted to the appropriate departmental fund that has been reallocated by the cardholder in Payment
Net or using the default account code string assigned to each purchasing card.
The following lists are some of the vendors that only accept payments on the PCard:
•BEST BUY
•OFFICEMAX
•SAM’S CLUB
•TSC - TRACTOR SUPPLY COMPANY
•TARGET
•UNIVERSITY BOOKSTORE
•WAL-MART
Payment Documents
•Detailed step by step instructions for each type of payment are available on our web site. Look for
the ―How to Process‖ under each type of payment.
Payments should include the following:
•Proper departmental approval. This is documented within ImageNow using a department approval
stamp.

•The approver should be on the Departmental Signature Authorization List for the funding
department. If more than on department is funding the payment, a stamp from each funding
department is required.

•When reimbursing someone for expenses incurred, someone other than the person being
reimbursed should authorize payment for the department.
•Sufficient funds should be available in the fund to cover the expenditure.
Accounting Services will process the payment and mail the payment to the address listed on the e
Form, unless departments specifically request that the payment be held for pickup, by marking
s should be made from vendor statements.

North Dakota.
Account(s), Program Number(s) and Project
Number(s).

Payment requests that have a total payment amount of $1.00 (one dollar) or less

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The vendor name and address on the e Form should be the same as on the invoice. If it does not
match, please contact Accounting Services.
•A completed W-9 is required for all new vendors.
•Purchases exceeding $5000 may not be submitted on multiple payment requests to comply with the
$5000 limitation.
•For payments to organizations, the full name of the organization should be given, not just the
initials (no acronyms). A federal ID# is required for all payments for services, rentals or awards.
Refer to the Account Listing for additional information.
•If there is an error on an invoice from the vendor, the department should contact the vendor and
either gets a corrected invoice or approval from the vendor to change the invoice. If the invoice is to
be changed, there should be a notation/sticky note on the invoice stating the name of the person at
the company who approved the change and the date the change was approved. If an item has been
returned or removed from the invoice, a credit memo from the vendor should accompany the
invoice.
•Freight should be included as part of the cost of the item.
•Compliance with all University Policies pertaining to expenditure of funds should be followed.
Payment requests that include food purchases should include the following information:
•Type of function
•Location of function (city and state)
•Date of function
•Meal served (breakfast, lunch, dinner, break)
•Number attending
•List of those attending
•Itemized, original receipt/invoice; credit card slip or statement is not acceptable
•Any food purchases in excess of 125% of the per diem, need to have written justification for the
excess spending.
•Group Meals Policy

2.7 Payment Documentation Requirements

An international manager must be able to identify major documents utilized in international trade. It
is also necessary to know when and how these documents may be applied, who is responsible for
creating the documents, and who uses the documents.

Purchasing and Supplier (Vendor) Files

Files(s) containing supplier (vendor) and purchasing documentation must be maintained at

operating locations. Operating locations are encouraged to maintain files on an award basis.
Operating locations can also maintain additional files such as files for specific suppliers (vendors).

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Note: Operating locations can combine purchasing and supplier records with accounts payable
records in a supplier record file.

Disclosure of Purchasing Documentation

Office of Management and Budget Circular A-110 requires that procurement documents (e.g.,
solicitations) be made available upon request when certain conditions exist.

Documentation Guidelines
Each operating location is responsible for the development and maintenance of records that
document procurement and payment activity. While the content and structure of the file(s) may vary
at individual operating locations, these records should include sufficient and relevant purchasing
and payment documentation to support decisions made or actions taken. Depending on the type of
expenditure and/or dollar amount, there may be additional documentation necessary for compliance
with federal and sponsor requirements. Refer to the "Additional Information" section of this
procedure.
Purchasing Documentation
Purchasing documentation should include the following:
 approved requisition
 sponsor approval of specific purchases
 basis for vendor selection
 Competitive price solicitation or bidding (Refer to the "Solicitation Documentation" section
of this procedure for more information.)
 single/sole source justification
 suspension and debarment form
 cost or price analysis
 approved purchase authorization
 basis for award cost or price
 copies of vendor contracts and subcontracts
Payment Documentation
Payment document should include the following:

 An invoice, receipt, or equivalent documentation for expenditures that includes the amount,
date, place, business relation, purpose, and parties involved,
where applicable.
 an approved payment authorization; and
 A receipt of the goods and services.
Solicitation Documentation
Documentation for all solicitations should generally include the same information, with additional
requirements for the solicitation of sealed bids or proposals.
Verbal Bids or Proposals
Documentation for the solicitation of verbal bids or proposals should include the following
information:

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  purchasing agent name
 supplier name
 date of contact
 item description
 quantity
 price
 delivery date and other terms of purchase
 reason for vendor selection

Written Bids or Proposals

Documentation for the solicitation of written bids or proposals should include the same information
as that required for verbal bids or proposals, which should be found in copies of the solicitation and
vendor responses.
Sealed Bids or Proposals
Documentation for the solicitation of sealed bids or proposals should include the same information
as that required for written bids or proposals, with the following additional requirements:
 minutes of the meeting in which the bids are opened
 documentation of the evaluation process (with the reason for vendor selection)
Additional Documentation
Certain types of expenditures have additional review and documentation requirements. The
following table identifies types of expenditures and indicates where additional information on the
topic can be found:
For more information on . . . Refer to . . .
Requirements for Miscellaneous Income Payments to U.S.
miscellaneous income
Citizens and Resident Aliens
independent contractors Engaging Independent Contractors
honoraria Honoraria Policy
RF-owned vehicles Personal Use of Research Foundation Vehicles

LO3: Verify payments against documentation

3.3 Confirming authorization of payment with information on payment facility
3.1 Identifying and following up discrepancies promptly

3.1 Payment against documents

Arrangement under which a buyer can get the delivery (shipping) documents only upon full
payment of the invoice or bill of exchange.
Payment
1.Compensation, discharge or performance of an obligation, or reimbursement, by giving over
something that is of satisfactory value to its recipient, such as money.
2. An amount that is paid or payable.
Payment advice note
A note sent to a vendor or buyer that outlines the methods of payment that will be accepted. For
example, a customer who subscribes to a free trial copy of a magazine may receive a payment

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advice note after the free trial is complete. The note could indicate that the customer could purchase
a full subscription by paying with a check or with a credit card.
Payment confirmation statement a physical or electronic receipt of payment for a product or service,
Also called payment confirmation note
Process control systems for energy efficiency
Documents against Payment
A terms of payment arrangement in which an exporter entrusts the ownership documents of an asset
to his/her bank, which then presents them to an importer only after the bank has received payment
for the asset. Essentially, the bank holds hostage the ownership documents, which the importer
needs to take possession of the merchandise, until the bank, and, by extension, the exporter, are
paid. A risk for the exporter is the possibility that the importer will refuse to pay, and, while he/she
will not be able to take possession of the merchandise, the exporter has little legal recourse. The
terms of this agreement are set between the importer and exporter at the time of the sale.
Documents against payment (D/P)
An arrangement under which an exporter instructs the presenting bank to hand over shipping and
title documents (see document of title) to the importer only if the importer fully pays the
accompanying bill of exchange or draft. Also called cash against documents

3.2 Maintaining process control systems

The performance of your process control system may gradually decline over time because your
operators override the system, or your equipment and plant develop faults. You may not be aware
that the system is performing badly because maintenance schedules don't always include the right
checks to identify problems. If your system is poorly-maintained, your processes won't be operating
efficiently and your energy costs will be higher than necessary.
Indications that your system isn't performing well may include:
 operators setting controllers to manual when they should be on automatic mode
 inefficient operation
 too much variability
 frequent calls for repairs and maintenance

The maintenance approach itself may be the cause of many problems. If 'quick fix' breakdown
maintenance is carried out in response to equipment failure, underlying problems may never be
sorted out and can become permanent. A planned preventive maintenance strategy involves
carrying out maintenance tasks regardless of whether a machine has broken down. This can also
help you identify opportunities to enhance or upgrade your system.
LO4 Effect payments
4.4 Making payments within agreed credit arrangements
4.5 Signing payment instruments in accordance with relevant authority levels and updating relate
systems promptly to ensure that the integrity of accounting systems are maintained
4.6 Cancelling primary documents associated with payment to ensure multiple payments are not
made

4.1 Payment instrument

"Payment instrument" means any electronic or written check, draft, money order, traveler's check or
other electronic or written instrument or order for the transmission or payment of money, sold or

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issued to one or more persons, whether or not the instrument is negotiable. "Payment instrument"
does not include any credit card voucher, any letter of credit or any instrument that is redeemable
by the issuer in goods or services.

A cheque (or check in American English) is a document that orders a bank to pay a specific amount
of money from a person's account to the person in whose name the cheque has been issued. The
person writing the cheque, the drawer, has a transaction banking account (often called a current,
cheque, chequing or checking account) where their money is held. The drawer writes the various
details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their
bank, known as the drawee, to pay that person or company the amount of money stated.
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money,
either on demand, or at a set time, with the payer named on the document. More specifically, it is a
document contemplated by or consisting of a contract, which promises the payment of money
without condition, which may be paid either on demand or at a future date. The term can have
different meanings, depending on what law is being applied and what country it is used in and what
context it is used in.
Examples of negotiable instruments include promissory notes, bills of exchange, banknotes, and
cheques
Because money is promised to be paid, the instrument itself can be used by the holder in due course
as a store of value. The instrument may be transferred to a third party; it is the holder of the
instrument who will ultimately get paid by the payer on the instrument. Transfers can happen at less
than the face value of the instrument and this is known as discounting; this may happen for example
if there is doubt about the payer's ability to pay.

4.2 Cancelling primary documents

A travel document that is to be physically cancelled should be examined thoroughly to ensure that it
has not been altered in any way before cancellation.

Where there is suspicion that a travel document has been altered or is counterfeit the document
must not be returned to the holder or physically cancelled. Instead, the matter must be referred to
the Passport Fraud Section and is to be handled in accordance with their instructions.

When travel documents are cancelled the document must be defaced to ensure it can't be used again
as a primary identity document for travel purposes. This is done by cutting off and disposing of:

 the machine-readable zone (from the bottom of the inside bio-data page); and
 The part of the front covers corresponding to the MRZ.

4.3 Returning cancelled passport to holder

On request, a physically cancelled passport may be returned to the holder, unless it is suspected that
it has been obtained fraudulently, in which case it is to be forwarded to Passport Fraud Section.

The same applies to an Emergency passport that is cancelled

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Valid visas in cancelled passport

If the passport has valid visas that the client wishes to continue to use, the client should be advised
to contact the appropriate foreign embassy/consulate to ensure the visas in a cancelled passport will
continue to be honored if presented with a newly issued passport.

Regardless of any valid visas, the MRZ and the corresponding part of the front cover must still be
cut off to show that the travel document has been cancelled.

Expired travel documents: cancelling

Whenever staffs are presented with expired travel documents that have not been physically
cancelled, they must also cut off the MRZ and the corresponding part of the front cover.

It is not an option to leave a replaced or expired passport physically un-cancelled under any
circumstances.

Deceased person’s travel document: cancelling

Staff should be sensitive to the feelings of the next of kin when cancelling the passports of deceased
Australians, particularly to ensure that the photo is not cut.

It is not an option, however, to leave a deceased person’s travel document un-cancelled under any
circumstances - the MRZ and the corresponding part of the front cover must be cut off.

4.4 Reason to cancel a travel document

The authorized bodies may cancel the travel document in the following circumstances:

 If the document is still valid at the time when a person applies for, or is issued with, another
travel document,
 The document has been lost or stolen including where a travel document has been handed in
and the holder has not responded to correspondence within 60 days,
 The person dies;
 Where the person has lost countries citizenship and this has been confirmed by the
Department of Immigration and Citizenship (DIAC);
 A competent authority makes a refusal/cancellation request in relation to the person,
 In accordance with section 22(2)(e) or (f) of the Act; where the Minister becomes aware of a
circumstance that would have required or permitted the Minister to refuse to issue an
passport or travel-related document to the person, for example:
o Where a person holds more than one valid travel document without proper
reason, or
o If it is suspected or known that the travel document has been obtained by
fraudulent means;

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  The document is sufficiently damaged so as to render it unusable for its intended purpose
(i.e. international travel). This includes where the document has been tampered with.
 Before repatriation to Australia at government expense (a restricted validity travel document
is normally issued for a one-way journey in these cases);
 The document is being held by a person other than the rightful holder,

Request to cancel a child’s travel document

A request to cancel a child’s travel document will be considered where:

 An court order has been issued preventing the child from travelling internationally
 The requestor can provide evidence that the Minister was not aware of a circumstance that
would have prevented the issue of a travel document when the decision to issue was made
Credit Agreement'
Credit Agreement' A legal contract in which a bank arranges to loan a customer a certain amount
of money for a specified amount of time. The credit agreement outlines all the rules and regulations
associated with the contract. This includes the interest that must be paid on the loan.
A legal contract in which a bank arranges to loan a customer a certain amount of money for a
specified amount of time. The credit agreement outlines all the rules and regulations associated with
the contract. This includes the interest that must be paid on the loan.
A credit agreement can be a lengthy and detailed document that explains all the terms of the
contract. For the most part, all types of loans (ranging from credit cards to mortgages) have some
sort of credit agreement, which must be signed and agreed upon by both the bank or lender and the
customer - the contract does not come into effect until the document has been signed by both
parties.

4.5 Inactivating Payment Documents

To inactivate a payment document:
1. Query the Bank. Choose Bank Accounts and query the bank account in the Bank
Accounts window.
2. Choose Payables Documents to navigate to the Payment Document window.
3. For the payment document you want to inactivate, enter an Inactive Date, the date on
which this payment document will no longer be available for use. When you create a
payment on or after this date you will no longer see this payment document in a list of
values.
4. Save your work.

To void a range of payment documents:

1. Query the Bank. Choose Bank Accounts and query the bank account in the Bank
Accounts window.
2. Choose Payables Documents to navigate to the Payment Document window. In the
Document Information region, choose Void Unused Payment Documents.
3. Enter the range of documents you want to void, and enter a Void Date. These documents
will no longer be available for use.
4. Save your work.

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4.6 Cancellation of Billing Documents
You can use the cancellation functions for billing documents to cancel billing documents that have
been created and release them for billing again. You can cancel individual billing documents in
dialog processing or cancel all billing documents created in a collective billing document
processing run.
When you cancel billing documents, the system creates a corresponding cancellation document for
each canceled billing document. The cancellation document contains the data from the reference
document. The following cases are possible according to billing document transfer:
 If the billing document has already been transferred, the system transfers an offsetting entry
to Financial Accounting.
 If the billing document has not been transferred to Financial Accounting, the corresponding
cancellation document is also not transferred.
When canceling, you can decide whether or not billing is to be repeated for the orders for the
canceled invoice. If billing is to be repeated, the system generates a new billing index for the billing
period for all orders affected.
You can cancel credit and debit memos like billing documents. When you do this, the plus or minus
sign preceding the amount is reversed.
Integration
When you create orders, the system creates a billing index for each order item. The billing index is
an entry in a system table that ensures that the order is included in billing. When a billing document
has been canceled, billing can only be repeated for the order if a new billing index is created for it.
For this reason, the system displays a message asking if billing will be repeated later for the
canceled billing document when you save each cancellation document. If you answer the question
with Yes, the system creates a new billing index for the sales document. You can recompile the
billing index later using a separate function or delete it.
Prerequisites
The possible cancellation reasons for billing documents must be defined
Features

Log button)
 Cancellation of collective billing document processing (in SAP background processing)
o Specification of collective processing number and a cancellation reason
o Execution of the function in background processing (without displaying the
cancellation documents)
o Generation of an error log for the procedure
Compelling Reasons to Automate Accounts Payable
 Manual processing has its
 Drawbacks: It’s slow. It’s obscure...
 and you lack control - you don’t
 really know where invoices are in
 the process or what outstanding

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  Liabilities are involved. It takes a
 lot of manpower, and there is
 Always a risk for clerical errors.
 Still, an overwhelming number of
 companies suffer through traditional
 accounts payable processing in spite
 of the fact that well-proven process
 automation has been available for
 More than a decade. Here are ten
 Very good reasons to change.
Visibility and Control
 You have all invoice information at your
 fingertips: supplier data, amount to be
 paid, taxes, line item details, workflow
 Status, audit trail and invoice images.
Improved Bottom Line
 Reduced headcount, and early payment discounts
 in combination with the elimination of late payment
 penalties, double payment and fraudulent invoices make a
 Substantial contribution to your bottom line.
Timely and Correct Financial Reports
 You have immediate access to every kind of statistic you
 require, in charts, graphs and tables, such as discount
 Reports, production volume report, and lead time report.
SOX Compliance Support
 Invoice automation provides the complete audit trail which is
 Fundamental for compliance with the Sarbanes-Oxley Act.
Reduced Headcount
 Advanced OCR eliminates the need
 For manual keying. Manual input is only
 required for verification of the few
 Invoices where there are discrepancies.
No Late Payment Penalties
 Automated accounts payable workflow
 typically reduces the invoice cycle time by
 50 to 80%, which gives you ample time to
 Work within payment terms.
 Early Payment Discounts
 With automated approval of most
 purchase order invoices and a smooth
 workflow for the rest, chances are that
 you can negotiate a number of favorable
 Payment terms and price lists.
Improved Cash Flow

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  Management
 Visibility and control, along with timely
 And accurate reports facilitate healthy cash flow decisions.
 Late payments penalties can be avoided while early
 Payment discounts can be capitalized.
Fewer Errors
 Automated input eliminates errors. Automated
 determination of invoice amounts will highlight any clerical
 Error on the part of the supplier. A check against the
 Purchase order in your database will pinpoint any deviation.
Reduce Fraud
 Since every invoice is checked against AP data, no unknown
 Supplier will have a chance to slip by. Invoice number
 Control stops any invoice from being entered twice.

4.7 Document processing: Software products

Products for automating document processing scan capture and validate the data from all document
types and formats, regardless of source. With high-quality data capture and two-way
communication with your target systems, they take the manual, error-prone work out of invoice
processing (on-premises and in the cloud) and forms processing. Document process automation
improves both data quality and the efficiency of processing your business-critical information.
Read Soft Invoices
Automatically transfer invoice information straight into your ERP system. Besides providing a
positive impact on your bottom line, Read Soft Invoices improves your financial control, supplier
relations, and employee satisfaction.
Read Soft Online
Process invoices in the cloud—efficient and secure. Read Soft Online is a cloud-based service for
processing invoices regardless of source and format. You minimize manual work and have all your
invoices immediately accessible on the web.
Read Soft Collector
Automatically input PDF email attachments straight into your document processing flow. Read Soft
Collector reduces handling costs, speeds up your processing, and improves control.
Read Soft Reporter
Access all your valuable invoice processing metrics the smart way. With Read Soft Reporter, you
can find out exactly what’s going on with your invoice automation processing to boost production
system planning and improvement. You get customized information by specifying the parameters
you want to see in a dynamic, immediately updated reporting interface.
Read Soft Forms
Automate information extraction from structured documents, such as order forms and surveys.
Whether on one PC or in a network, or from small surveys to country-wide censuses, Read Soft
Forms saves you time and money, improving your data quality along the way.

4.8 How to Process Payment Documentation

How do I receive access to PeopleSoft?

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Coding of Purchases
•When making a purchase, the first step is to classify the expense.
•Account number listing
•Account number description
•Appendix A of the NDUS Accounting Manual (page 87)
•The Account number determines if the purchase requires a Purchase Requisition, can be processed
with an e-Form in Image Now, or charged on the Purchasing Card.
Awards and Prizes
•Awards to employees are subject to tax withholding and should be processed through the Payroll
Office.
•Awards to UND students that are considered financial assistance should be processed through the
Student Financial Aid Office
•The following information should be provided for all recipients of cash awards, cash equivalent
awards (gift cards/gift certificates) or merchandise prizes:
•The purpose of the award
•Name and home address of the recipient
•Last four digits of Social Security Number or EMPLID of the recipient
•This information will be filed with the payment document and is necessary for compliance with
Internal Revenue Service reporting requirements.
Employer-Employee Relationship
•All payments for services where an employer/employee relationship exists will be processed
through Payroll. This will include payments to current staff and faculty members providing services
to other university departments where an employer/employee relationship exists. Payments to
individuals for services such as guest lecturer, discussion leader, etc., including appropriate travel
reimbursements, may be processed on an e Form through the Accounting Services Office provided:
•The individual is not currently employed by the university.
•The individual has not been employed during the calendar year.
•The individual is receiving a one-time total payment for these services.
LO5 File documentation
5.3 Filing documents promptly in accordance with organization policy and procedures
5.2 Easily filing the location documents for accessible and traceable

5.1 What is documentation?

In computer hardware and software product development, documentation is the information that
describes the product to its users. It consists of the product technical manuals and online
information (including online versions of the technical manuals and help facility descriptions).
Documentation is a set of documents provided on paper, or online, or on digital or analog media,
such as audio tape or CDs. Example are user guides, white papers, on-line help, quick-reference
guides. It is becoming less common to see paper (hard-copy) documentation.

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1.Technical: Manuals, instructions, tutorials, procedures, specifications, etc., that accompany a
piece of equipment or software, and provide guidance for its proper use and maintenance.
2.Trading: Preparation of a set of commercial and financial documents that record or support a
business transaction. International trade documentations include air waybill, bill of exchange, bill of
lading, certificate of inspection, certificate of insurance, certificate of origin, commercial invoice,
and consular invoice.

5.2 Documented procedure

Written description of a prescribed course of action or process
Documentation risk
Probability of loss that a legal agreement may turn out to be incomplete, insufficient, or otherwise
unenforceable
Here are some ways that we can do filing documents
1. Keep documents that are waiting to be filed in trays, do not leave them lying about on desks
or shelves.
2. File documents away at least once a day, or if your organization is very small you can do it
once a week.
3. Do not put too much in files or folders.

5.3 Why are the File Plans Important?

Day-to-day, it is your key to better files. It will help you avoid the "subject file trap" by enabling
you to:

 Document your program's activities effectively.

 Identify records consistently.
 Retrieve records quickly.
 Link to the records schedules.
 Retire records to the Federal Records Center easily.
Arrangement
There is no one arrangement scheme that is best for all records. Here are some basic suggestions on
the major ones. For more information, consult any records management text book, or contact the
National Records Management Program for a bibliography of what is available in the records
management collection.

 Chronological
Arranged by date. Most useful for small files and for records that have a very short life span
so that you can destroy older materials without difficulty.
 Numeric
Arranged by number. In its simplest form, a serial arrangement beginning with the lowest
number and proceeding, but more complex systems can be used for large series. Best for
case files of one type or another, permits, and forms where numbers have already been
assigned.
 Alphabetical
Arranged in alphabetical order from A-Z. This is the basic arrangement for most subject
files. There are books written on both how to assign the titles that are put in alphabetical

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 order, and how to alphabetize the folder (Do you file University of Maryland under
University or Maryland?). Alphabetical subject files are difficult to manage unless they are
very focused, and the filing and identification of folders is consistent. If you have a folder
that concerns the publication of a Federal Register notice concerning a regulation on a
specific chemical, do you file it under Federal Register Notices, regulations, or the name of
the chemical? Best used for small files or very consistent ones where the folder titles are
easily determined -- e.g., a file of all outgoing correspondence arranged by addressee.
 Alpha-numeric
Arranged according to an identifier made up of letters and numbers. Whenever possible, the
alphabetic and numeric parts of the identifier should mean something rather than being
arbitrarily assigned.

Arranging the Records within the Series

The second stage of the file plan is to determine how to arrange the folders or documents within the
series. There are four basic ways to arrange records within a series:

 By date (chronological)
 By some assigned number (numeric)
 In alphabetical order by folder title (alphabetic)
 According to a code made up of letters and numbers (alpha-numeric)

5.4 Choosing the Arrangement

The obvious question is which arrangement scheme to choose for each series of records. You need
to think about how the records will be used, what characteristics the staff use to identify the records,
how the records are requested, and whether they will be indexed. Let's look at each of these issues
in turn.

 How will the records be used?

If your office is responsible for permit files and each staff person is assigned the permits of
a State, it makes sense to arrange the permits first of all by State so that each staff person
doesn't have to search the entire file to find the ones for his or her State. If, on the other
hand, permits are assigned to staff in a random way, some other arrangements such as
permit number, facility name, facility number, etc., would be better.
 What characteristics do the staffs use to refer to the records?
Continuing with the permit files example, programs may use the facility name, the permit
number, or a facility ID to identify files. Any of these can be used for the primary
classification scheme, although standardized numbers may simplify cross-media analysis.
The best advice is to use whatever identifier the staff currently use. There is no reason to
arrange the files by permit number when staff looks for them by facility name or vice versa.
 How are the records requested?
Perhaps you have a correspondence series of outgoing letters signed by various staff
members. There are a number of ways to arrange the outgoing letters. If someone asks you
to find a letter, what do they say? If it's "I wrote a letter..." maybe the series should be

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 arranged by author or signer. If it's "About three weeks ago..." chronological may be the best
bet. If it's "Didn't we send a letter to so-and-so..." the arrangement should be by addressee.
Finally, if it's "Have we ever had a letter asking about..." then a subject file might be best.
Pick the arrangement that will enable you to respond to the most requests most easily. If the
series is an important one, you should think about indexing it to simplify searching in
multiple ways.
 Will the records be indexed?
If the records will be indexed, the questions are a lot simpler. Generally, modern automated
indexes offer a number of search fields, and the physical arrangement of the records is less
important. If the records will be indexed, the series should be physically arranged in
whatever way makes the filing simplest, usually chronologically or numerically, depending
upon the type of records.

5.5 Different Ways to File Documents in a Filing Cabinet

Quick access to your important business records increases productivity and it might help you
survive a tax audit. Two of the most important considerations for designing a system for documents
in your filing cabinets are your daily and long-term information needs. At the same time, your
document filing system should not be so complicated that hardly anyone in your office can use it
properly.

Alphabetical
Filing your documents alphabetically is a simple and time-proven system. The name of each file
folder corresponds to the name of each document. Many businesses use hanging file folders with
tabs or sturdy preprinted file drawer dividers to separate the folders under each alphabetical
heading. A key drawback of an alphabetical system is that it is often necessary to have an index to
keep track of a large number of documents.
Category
Use your business divisions and functions as the foundation for a category or topical filing system.
Consider starting with four or five main functions, such as personnel, finance, administration,
marketing and customer data. With a categorical system, you can have sub-topics such as current
personnel and inactive personnel. You might subdivide your finance category into expenses and
income, or receivables and payments.
Date
Filing your documents by date lets you find information generated at a specific time. Yearly file
sections are the foundation of a date-based filing system, and each month of the year is a subsection
of this system. With this method, businesses commonly keep the freshest files in the front of both
the yearly section and the monthly sections. When you use this system, you need some way to keep
track of which documents correspond to what month and year.
Numerical
Businesses that mainly generate numbered documents, such as invoices, often create a numerical
filing system that stores files using the assigned document numbers. With this file system, a crucial
element is labeling each file cabinet drawer with the sequence of numbers it contains. This system
might also require an index for quick access.

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Combinations
The common drawbacks of simple alphabetical, chronological or categorical filing system might
hamper retrieval of your documents. To achieve the desired efficiency, businesses often combine
elements of two or more filing systems. You can improve a categorical system by creating
alphabetical or date subsections. Subtopics or categories that fit the main functions of your business
might improve the efficiency of a chronological filing system.
Considerations
Regardless of which system you implement, consider creating an archived documents area to
separate current and frequently used documents from those you are retaining for reference. For
business security and disaster recovery, you might also want to keep the originals of important
legal, contract and tax documents in a secure offsite storage facility. To facilitate quick reference,
scan these documents. Restrict unauthorized access to your digital versions with passwords and
encryption.

5.6 How to Simplify Your Filing System

Does your filing system include stacks of paper, or is your ―To Be Filed‖ folder overflowing?

If you have trouble with filing your documents, you may need to find a way to simplify your
filing system to keep yourself organized.

Filing is something many people have a problem with — you’re not alone. But organization can not
only make you more productive, it can simplify your life and make it less stressful.

Being organized doesn’t take a complicated system for filing. It simply requires that you have a
place for everything, and get into the habit of things where they belong right away.

Whether you’ve got a complicated filing system you’d like to simplify, or whether you have no
filing system at all, let’s take a look at how to simplify the system and keep things perfectly
organized.

1. Reduce before organizing. The first rule to organizing is that you should eliminate the
unnecessary before organizing at all. If you’ve got a filing drawer that’s overflowing, or stacks of
paper that need filing, it’ll take forever to organize — and even then, it’ll be hard to find stuff.

Here’s how to simplify your papers and files before you organize:

1. Put everything in one big pile. If it can’t all go in one pile, make more than one, but look
at them as continuations of the first pile. If you have folders that are a mess, take them out
and add them to the stack. I recently did this with my home filing system and reduced the
files by two thirds. It took about an hour.
2. Go through them, one at a time. Pick up each document or folder and decide what needs
to be done with them. If you can’t see yourself needing it in a couple of months, toss it.
Default to toss (or shred, or recycle). Get rid of as much as you can. I’ve never regretted
tossing a document.

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 3. Route. If you can’t toss something, try to route it to someone else. Get it off your desk.
4. File. If a document is absolutely critical, and you’re sure you’ll need it again, then it needs
to be filed. Let’s take a look at how to set up a simple system for doing that.

2. Simple filing. I agree with David Allen’s Getting Things Done, which recommends that you use
a simple, alphabetical filing system. Just use plain manila folders with labels (you can buy a label
maker if you like), creating a file for each client, vendor and/or project.

I believe that most people only need one drawer for filing. Now, I’ll admit that there are some jobs
that require much more than this, but for the average employee (or self-employed person), one
drawer is all you need. And if you limit yourself to one drawer, you force yourself to toss out
unnecessary files when the drawer gets full.

Don’t over think this. Just create a file, and file it alphabetically. Keep it simple.

3. File immediately. The key to keeping your filing system up to date is to file things right away.
When you’re processing your inbox, and you run across something that doesn’t require action but
that you might need to file later, don’t put it in a pile to be filed later. Don’t put it in a folder labeled
―To File‖ or ―Miscellaneous‖.

Just open your filing drawer (it should be close on hand), pull out the appropriate folder, put the
document in it, and file it. That takes about 5 seconds, and then you’re done. If you don’t do it now,
it will start to pile up, and stacking just doesn’t work.

Why stacking doesn’t work: Because it just piles up and then the pile gets a little intimidating and
then before you know it you’ve got a huge pile that you never want to go through. Then you can’t
find anything when you need it, and now you no longer have a filing system. I know some people
think that their piles are organized into a kind of system, but piles are inefficient (if you’re not
working on them at this moment) because you constantly have to re-factor what pile is for what and
which documents are in each pile, and when you need a document, it takes too long to find it. Plus,
it clutters up your desk, distracting you from your work.

4. Have materials on hand. Always have a big supply of manila folders and labels on hand. If you
have a document that needs to be filed for future reference, but no file exists for it yet, you will put
the filing off until later if you don’t have the materials on hand. You don’t feel like getting up to get
a manila folder or label every time you need to file something, so you’ll put it off. And that will
create piles.

So instead, just have the materials in a drawer, for easy access. When you need to make a new file,
just put a label on, sticks the document in, and file it alphabetically.

5. Reduce your needs over time. Over the last year or so, I’ve consciously been reducing my filing
needs so that I now barely use my filing drawer. Sure, at least once a week I’ll pull open the drawer
to look at a file, but I file many fewer documents than I used to. I recommend that you do the same,
slowly and consciously reducing your filing needs. Here are a few tips for doing that:

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  Store reference information online. Now when I need to look something up, I press a
hotkey combination and the appropriate document opens up with all the info I need.
Contacts, budget information, ideas, logs, and much more are all online, so I no longer need
hard copies of them and don’t need to file them.
 Reduce incoming paper. Ask people to email you instead of faxing or sending a document
by post. In this age, everything is created on computer, and sending hard copies is outdated.
Insist on digital. Also take steps to stop paper versions of newsletters, magazines and other
such regular documents.
 Stop printing stuff. Lots of people still print out email or documents they receive, or even
documents they create themselves. But then you have two copies of it, you’re killing trees,
and you now have to file the paper version as well as the digital. And it’s much easier to
search for digital information when you need it.
 Analyze other incoming docs. Every time you file something, ask yourself if you really
need a hard copy version of it. Is it available online? Does it really need to be sent to you? Is
it better to scan it and store it digitally? Is there any way to eliminate the need for this
document? And slowly, one by one, reduce your need for all the incoming stuff.

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