Vendors - Reviewing Vendor Information

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Vendors - Reviewing Vendor Information: Flowchart

Scope

This procedure covers reviewing new vendors added to the database.

This procedure does not cover removing vendor payment holds. Refer to Vendors - Clearing Payment Holds.

System References

Vendors - Entering Additional Information

Vendors - Reviewing Vendors

Vendors - Merging Vendors

Policy

Vendor information is maintained by the Vendor File/1099 Coordinator who cannot also process invoices.

Invoices for new vendors will remain on payment hold until the AP Vendor File/1099 Coordinator ensures all vendor information is received and valid, and removes the payment hold.

All new vendors are placed on hold until they provide a completed Tax Verification Information letter or documentation of their Tax Identification Number (TIN).

The Prompt Payment Act (Code of Virginia, Article 2.1) requires that all state agencies pay at least 95% of all invoices within 30 days. Agencies must report their prompt pay status to the State Comptroller on a monthly basis.

The University's standard payment terms:

are 30 days from receipt of a valid invoice or receipt of goods or services, whichever is later.
are always "Net 30" unless Procurement Services establishes a pre-agreed-upon contract with a vendor.
are established by the Vice President for Budget and Management in accordance with the state's Prompt Payment Act
are reflected on every payment, unless pre-agreed upon terms are established by a contract
can be changed only with the appropriate approvals
always take precedence over the terms reflected on the vendor's invoice

IRS 1099-MISC forms (1099s) are required for certain payments to individuals and partnerships, specifically:

royalty payments to individuals (of $10 or more), or to companies (of $600 or more)
rent payments (except to real estate agents)
prize or award payments
backup withholding
all attorney fees
payments to physicians and health care providers (including corporations of health professionals)
nonemployee compensation
payments for services greater than $600 to all vendors unless their tax status states they are exempt

Payments for which an IRS 1099-MISC form is not required include:

payments to corporations (refer to the latest IRS codes for exceptions) except for medical corporations
payments for merchandise for resale
rent paid to real estate agents
travel reimbursements paid to employees

All new vendors are placed on hold until they provide a completed IRS W-9 form or documentation of their Tax Identification Number (TIN).

Vendors must be in the vendor file to get paid.

Vendors are also called suppliers in Integrated System documentation.

Responsibility

The Director of Procurement Services is responsible for:

ensuring that standard payment terms are used
communicating standard vendor payment terms
approving all changes and exceptions to the standard payment terms

The AP Administrator is responsible for:

approving all Vendor Maintenance forms
ensuring the accuracy of the vendor database

The AP Vendor File/1099 Coordinator is responsible for updating vendor information in the database, and removing vendor payment holds.

Distribution

Director of Procurement Services

AP Administrator

AP Vendor File/1099 Coordinator^*

Ownership

The Director of Procurement Services is responsible for ensuring that this document is necessary, reflects actual practice, and supports University policy.

Activity Preface

This activity is performed after new vendors are added to the database.

Vendors are placed on payment hold until the review by the AP Vendor File/1099 Coordinator is complete.

Vendors who have not supplied required IRS 1099-MISC information are placed on payment hold until they provide a TIN. Refer to Vendors - Adding.

AP Vendor File/1099 Coordinator

1. Run the Vendors on Hold report in Discoverer to see all new vendors added to the database.

2. Find the Vendor you want to review.

Refer to Vendors - Reviewing Vendors.

Payables
N ® Suppliers ® Entry
Suppliers

3. Review the information for the new vendor.

Ensure that the new vendor is not a duplicate of an existing vendor.
Review the vendor's information in the vendor file to ensure completeness and accuracy.
Ensure that the Taxpayer Identification Number (TIN) or Social Security number entered for the vendor is correct.
Ensure that data was entered using the established naming conventions.

If the new vendor is a duplicate of an existing vendor, goto task #4. Otherwise, goto task #5.

4. Merge the duplicate vendor with the appropriate existing vendor.

Refer to Vendors - Merging Vendors

Payables
N ® Suppliers ® Supplier Merge
Supplier Merge

5. Verify the vendor's federal Taxpayer Identification Number (TIN) status.

Determine whether the University is required to complete an IRS 1099-MISC form on payments to the vendor.

Refer to University policies regarding 1099-MISC requirements and to the current IRS codes. Refer to the IRS Website

Check whether the vendor has provided:

a social security number
a completed W-9 indicating a TIN

Verify that required IRS 1099-MISC information and documents are provided.

If any vendor information is missing, goto task #6. Otherwise, goto task #8.

6. Obtain the missing information.

7. Send Vendor Package, including W-9 form and information on terms, etc to the vendor.

8. Enter additional required vendor information.

Refer to Vendors - Entering Additional Information.

Payables/Purchasing
N ® Suppliers ® Entry
Suppliers

9. File any paper documents.

File the Supplier Maintenance form in the supplier maintenance file, sequenced supplier number.

End of activity.

Effective: 08/13/04

Revision: 2

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