4.6.3 Payments - Accounts Payable

A. Purpose

The purpose of this policy is to explain requirements for the payment of invoices and bills at
The University of Texas at Tyler (“University”).

B. Persons Affected

This policy applies to all departments at the University that receive invoices, bills, statements or collection reminders.

C. Definitions

Accounts Payable: Short-term liabilities reflecting amounts owed for goods and services received by the institution but for which the institution has not made payments. (Reference: UTS142)

D. Policy and Procedures

Accounts Payable at the University is decentralized. University departments are responsible for originating and approving electronic payment documents based on supporting documentation received.

The originating department must stamp or write “date received” upon receipt of the invoice and match it with the applicable purchase order and receiving report. All supporting documentation must be retained in departmental files according to retention requirements.

Upon approval by the budget authority, the electronic payment document automatically routes to Central Accounts Payable in Financial Services for final review and approval.

  1. Invoices

    To ensure prompt payment, all invoices for goods or services provided to the University must be addressed to the requisitioning department as indicated on the purchase order issued to a vendor. (Texas Government Code 2251.002 (4)).

    1. Invoice Delivered to Central Accounts Payable Department

      1. Any invoice, bill, statement or collection reminder received by the Central Accounts Payable department shall be forwarded to the requisitioning department for initiation of payment processing.

      2. The purchase order number or requisition number should be noted on the invoice.

    2. Invoice Disputes

      The requisitioning department shall notify a vendor of an error in an invoice submitted for payment by the vendor not later than the 21st day after the date the invoice is received. If the dispute is resolved in favor of the vendor, the vendor is entitled to receive interest on the unpaid balance of the invoice submitted by the vendor beginning on the date that the payment for the invoice is overdue. If a dispute is resolved in favor of the requisitioning department, the vendor shall submit a corrected invoice that must be paid within thirty (30) days of receipt. (Texas Government Code 2251.042)

  2. Prompt Payment Act

    Texas' "prompt payment law" establishes when some types of payments are due. The law says that payments for goods and services are due thirty (30) days after the goods are provided, the services completed, or a correct invoice is received, whichever is later.
    This law requires state agencies to schedule the timing of their payments so that the state receives the most benefit.

    This means that state agencies are not allowed to pay vendors before the payments are actually due unless the invoice is less than $5,000 or the state has a business reason for paying early. For example, agencies are allowed to make early payments to vendors if the vendor and the agency already have an agreement to make a payment at a certain time, or if the vendor gives the agency a substantial discount for paying early.

    All funds held by the University are subject to the Prompt Payment Act. Goods and/or services will be considered received when they have been accepted as usable or complete by the end user. The University’s accounting system automatically calculates and schedules payments to pay on “Net 30”.

  3. Sales Tax

    The University does not pay Texas State Sales Tax. Texas Sales Tax Exemption Certificates may be obtained from Financial Services.  The University is not exempt from other state’s sales tax.  Interstate purchases may be appropriately subject to sales and use tax.  When placing an interstate order, the cardholder must require itemized receipt documentation whether or not sales tax was included in the total cost and receive hard copy verification (by email, by fax or in the shipment).

E. Responsibilities

See Policy and Procedures.

F. Review

This policy shall be reviewed by Financial Services every five years or as legislation changes.

ORIGINALLY APPROVED:  12/01/2001 

LAST AMENDED:  04/15/2016