SGHE Banner Finance Understanding Three way Match

2 What is Three Way Match? The issuance of a Purchase Order that is matched with an Electronic Receiving Document for goods received along with the Invoice from the vendor –Issuance of a Purchase Order encumbers funds –Receiving of Goods, while not generating accounting entries, does indicate specific quantities of goods received for a specific Purchase Order –Invoice entered against a Purchase Order that has been received will liquidate the Purchase Order and charge Year-to-Actual expense and mark the Invoice ready to pay

3 Where is the security in this? The client has electronic proof of the fact that goods were ordered, received, and paid for-Purchase Order, Receiver, Invoice resulting in a check. No check can accidentally be cut where a receiver was required but not provided. Is this “Receiving” mandatory? It is up to the client to decide and activate the Rule to make it so.

4 What is the alternative? Obviously, it is to not require electronic receivers but rather rely on a verbal “okay” from the person who should have received the goods Can this “okay” be written? Of course, but usually this slows down the payment process while written confirmation is requested and received and then often the marking is a scribbled set of initials Either of these methods can fail and a Purchase Order be paid without properly being received Auditors typically encourage Colleges to implement three way matching for better Internal Control

5 Okay, my College wants three way match, BUT… At our College, we can think of exceptions where “Receiving” doesn’t really make sense…. –Some POs are for such small amounts….. –Some POs are issued for services and ‘receiving’ these services does not seem appropriate (Utilities, travel, etc)…. –Our College doesn’t have a Central Receiving area…. –The people doing the receiving really aren’t “reliable”.. Sometimes we really, really need to get a payment out to a vendor and an electronic “Receiver” just is not going to happen

6 Okay, so can Banner accommodate such exceptions? In a word, Yes Exceptions can be built easily into the Rules based on Dollar value of the item being purchased. This permits low value POs to bypass receiving Individual users who create POs can be granted capability to turn off requirement for individual POs being created Individual users who enter Invoices for payment can be granted override authority to bypass receivers Audit trails exist that show which users exercised such authority

7 Once Receiving is activated: Check can not be cut against a Purchase Order, even if Invoice is entered Receiver document must be entered FABMATC process must be run prior to check run (if not more often) to actually match POs, Receivers and Invoices. –This process will point out Invoices missing Receivers and Receivers missing Invoices

8 What else must we know? Training must be developed for the staff that will be doing receiving Some delay in paying some invoices may occur until all are on board with this concept Some payments may be made sooner on some invoices as receivers are entered promptly – no calls needed from Accounts Payable group

9 Let’s take a look at the related forms in Banner FOASYSC (with $100 PO and above requiring receipt) FOMPROF (does Purchase Order creator user have authority to Override Receiver being needed when creating PO – P3CGB) FOMPROF (does Receiver creation person have authority to receive more than Purchase Order amounts) FPARCVD - Receiver form (Y3CBG) FAAINVE - Invoice form (I3CBG) FABMATC and FOIDOCH

10 Do you have questions?

11 Thank you Mickey Hughes, SGHE Finance Consultant