Requisition and Purchase Order Basics

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Procurement is Purchasing and Paying – Purchasing is the process of awarding the purchase order and/or contract of specified goods or services to a vendor in order to obtain the best value. This process is administered by the University’s Central Purchasing Office, and often requires issuance of a Purchase Order, negotiation of an Agreement or use of a Purchasing Card (P-Card) in processing a transaction. – Payments and disbursements are administered by Accounts Payable – Vendor Management maintains the vendor file utilized for Purchasing and Accounts Payable transactions. – When buying and/or paying for goods, you are required to comply with University Policies and Govt. Regulations.

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Pay as You Order: •

University P-Card can be used for many business-related, small-dollar

purchases under $2,500, with certain exceptions - please refer to P-Card Policy at: http://policylibrary.columbia.edu/files/policylib/imce_shared/PCard_Policy_Revised_February_2014_Final.pdf

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Pay with own funds (or Amex), then get reimbursed (for CU travel/business expenses ONLY)

Order Now, Pay Later: • • • •

Auto Sourced or Central Purchase Order* Staples (Office Supplies) PSS/McKesson (Clinical Medical Supplies) Voucher Only (pay invoice, no PO needed*) *Pursuant to Purchasing Mechanism Guide 3

A Purchase Order (PO) is a contractual document that obligates the University to purchase the requested goods and/or supplies, while protecting the University’s interests through clearly defined terms and conditions. There are two types of Purchase Orders: 1. Central-Issued Purchase Order 2. Auto Sourced Purchase Order

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 Yes if: • Purchase is over $500* • Purchase cannot be paid on a P-Card • Purchase is for an on-site service which requires a COI • Good/Service falls under the “Direct PO” (also known as Auto Sourced PO) or “Central PO” columns within the Procurement Mechanism Guide: http://finance.columbia.edu/procurement/purchasing *Excludes Offset Printing, Promotional Items, Consultant Services, Equipment Leasing, & Restricted Commodities such as: Animals, Hazardous Material-related Items, Lasers, Narcotics, etc. 5

Purchasing Power – United We Stand The University Spends More Than $1 Billion Per Year On Goods And Services 24%

29%

12%

2% 4% 4%

7%

8%

10%

Engineering and Research and Technology Based Services Financial and Insurance Services Healthcare Services Management and Business Professionals and Administrative Services Building and Construction and Maintenance Services Public Utilities and Public Sector Related Services

By leveraging our collective purchasing power, the University community in any size department, can gain from the greatest value – as long as we work together

Information Technology Broadcasting and Telecommunications Laboratory and Measuring and Observing and Testing Equipment Other

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UwPAs (University-wide Purchasing Agreements)

are competitively bid, negotiated contracts, with the goal of maximizing the University’s buying power. These agreements are put in place to make the purchasing process easier for Schools and Departments. The benefits of using UwPAs include:     

Reliable Quality of Products and Services Meets University’s Standards (Fire Code Safety, Sustainability, etc.) Delivery Terms are fixed and Insurance documents are on file Best overall savings and value for the University Minimum documentation requirements for purchasing

The University currently maintains 100+ UwPA contracts http://finance.columbia.edu/purchasing-guide

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When purchasing from a UwPA, the department issues the requisition and it is AUTO SOURCED (also known as “Direct PO”) in ARC, meaning it bypasses Purchasing. Therefore:  NO competitive bids are required, Requisition only requires UwPA vendor’s quote  NO Certificate of Insurance (COI) required  NO Single/Sole Source Justification Form required  NO dollar ($) threshold

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• A valid UwPA Vendor ID + associated Category Code will ensure the requisition is Auto Sourced • If an incorrect Category Code issued, the requisition will route to the Central Purchasing office for review and approval, which delays the process • The Proposal/Quote number must be referenced in the comments section of the requisition and the “Send to Vendor” box must be checked • ARC does not send a copy of the Proposal/Quote with the PO

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• • • •

In ARC, proceed to Procurement Contracts > Add/Update Contracts Click on “Find Existing Value” then click In column called “Vendor Name” and the list will alphabetize Next, click on desired UwPA Vendor to identify associated category codes

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Vendor ID

Status

Description

Category Codes

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Prior to issuing an ARC Purchase Requisition: • Refer to Checklist handout • Refer to the Competitive Purchasing Policy http://policylibrary.columbia.edu/files/policylib/imce_shared/Competitive_Procurement.pdf

• Refer to the Purchasing Website link to find Category Codes, the Purchasing Mechanism Guide, Forms, etc. http://finance.columbia.edu/procurement/purchasing

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After logging into ARC:

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1. “Define Requisition” / HEADER PAGE

Sole/Single Source Category Codes Modify Bill To Address

Vendor ID

Ship To

Bill To Location

ChartString

Modify Onetime Address

Attention

When using multiple category codes or ChartStrings, enter on LINE item, not in the Header 14

1. “Define Requisition” / VENDOR SEARCH Vendor must be pre-approved by Vendor Management and valid for requisition use (contact Vendor Management directly for questions) • Click on in the “Vendor” field

• Vendors may have similar names, use the “Short Vendor Name” to search for possible choices and confirm you have selected the correct vendor • When using a UwPA, check the Purchasing website or ARC Contract Module for correct vendor ID and corresponding category code(s) 15

1. “Define Requisition” / CATEGORY CODES • Requisition Header vs. Requisition Line entry (Header, applies to all lines) • UwPA transaction – use associated category code • All requisitions must contain category codes for each line & must accurately reflect requested purchase • Category code drives minimum documentation required • Drives natural Account and Prior Approval • If the incorrect category code is used your requisition will be rejected

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1. “Define Requisition” / ADDRESS MODIFICATION

Click on in the “Ship to” and “Bill To” field to select the address

Click on the “Modify One Time Address” and “Modify Bill to Address” links to update the required fields • •

Building: Include your Department & Building name Floor: Include Floor, Suite, Room number

Type the name of the person RECEIVING the delivery/service(s) in the “Attention” field 17

1. “Define Requisition” / CHARTSTRING Requisition Header vs. Requisition Line entry • When entering a ChartString, it is important that only one of the two following entries is selected: i. If there is only one ChartString, input via Header, will maintain it throughout requisition ii. If using multiple ChartStrings, input ChartString for each line • Category Code drives the Natural Account • There must be a valid budget for the respective Natural Account, and the valid budget is driven by the Department/Project combination • The valid ChartString must include the correct Natural Account that matches the Category Code associated with the purchase • Below is a completed, valid ChartString:

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1. “Define Requisition” / SOLE/SINGLE SOURCE

The purchase process for Columbia is that ALL purchases and engagements are competitively purchased and conducted within the policy guidelines titled: COMPETITIVE PROCUREMENT http://policylibrary.columbia.edu/competitive-procurement

If your purchase cannot qualify as Competitive Procurement, use the Single/Sole Source as the exception 19

2. “Add Items and Services” Special Item • Generally for goods related requisitions, including software • Quantity is an important part of the order

Fixed Cost • Any requests that have a start and end date (e.g. Consultants, service agreements, and leases) • First line Fixed cost only, all others must categorized as Special Item (e.g. Multi-year POs ) • Amount Only flag should be used (if applicable) • If not selected when required, the Requisition will be DENIED

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2. “Add Items and Services” / FIXED COST & SPECIAL ITEM

Not Valid choices – non functioning

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2. “Add Items and Services” / LINE DETAIL • Line Item Description should describe goods & services being purchased • Requisitions should be itemized to match line items on quote • A Proposal/Quote Number should be referenced in the “Add/Edit Comments” (at Line Item) or the “Comments” section (check “Send to Vendor”) • Additional Information box can also be used for any other information you want to convey to the vendor such as your Customer or Account number

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2. “Add Items and Services” / LINE DETAIL

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2. “Add Items and Services” / LINE DETAIL

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2. “Add Items and Services” / LINE DETAIL

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3. Review and Submit

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CHECK BUDGET BEFORE selecting either SAVE & SUBMIT or SAVE & PREVIEW APPROVALS 31

AD HOC APPROVERS

NEVER INSERT AD HOC APPROVERS BELOW Departmental Approval

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Fixed Cost

03/01/2015

Core Facility Mgmt. tool will allow monthly reporting, compliance & tracking workflow.

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3. Review and Submit / AMOUNT ONLY

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3. Review and Submit / AMOUNT ONLY (continued)

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3. Review and Submit / AMOUNT ONLY (continued) • The Amount Only Flag is used when there is a quantity of 1 on the line of the Requisition and more than 1 payment is anticipated • If the Amount Only Flag is not selected, the PO transaction will close after the first (1st) payment • The Amount Only Flag tells ARC to focus on the $ value instead of the quantity • Examples: Consultants, Services, Steelcase Furniture • Select Amount Only when requisition is not itemized by products (ex. Dell & Apple)

• If you already have a Purchase Order but need to modify to indicate Amount Only: • A Change Order is required to change PO to “Amount Only” prior to processing the first invoice 36

Multi-Year Requisitions

The Multi-Year Requisition Job Aid can be found using this link: http://finance.columbia.edu/files/gateway/content/purchasing/Job%20ai d%20-%20multi%20year%20requistion%2004252013.doc

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2. “Review and Submit” / MULTI-YEAR REQUISITION Expand selections for line items #2, 3, 4, 5 and 6 to update the encumbrance for each budget year Click on Budget Information tab for Budget Date

If “amount only” is required, select here for each line and check the amount only flag

By selecting “amount only”, you will be able to make multiple payments from each line

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• 2. “Review and Submit” / MULTI-YEAR REQUISITION

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Approvers Checklist    

Verify Whether it is Special Item vs. Fixed Cost Review Line Detail for Accuracy Verify Whether it is Amount Only Correct & Complete ChartString – Grant Expiration & Natural Account

    

Check Budget Validity Category Code Matches Purchase & Natural Account – Restricted Commodity Prior Approval if Applicable Correct Purchasing Process – According to Policy & Mechanism Guide Supporting Documents match Requisition & are uploaded correctly

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How To Upload Documents https://procurement.columbia.edu/documents/purchasing • After the Requisition number is assigned, an email is sent within 24 hours to the Requisition Requestor (if different from the requisition initiator) • Email contains the EDM link, which auto populates the Requisition # • Informs Requisitioner of core document requirements, based on Category Code

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How To Upload Documents

Upload all documents individually Ensure all core documentation is included Select correct document type Only upload once Do not upload “live” documents (e.g. Word or Excel), convert to PDF • Do not upload unnecessary documentation (including documents labeled “Requisition”) • • • • •

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Reasons Why Requisitions Are Denied • Invalid budget, for any line item • Single/Sole Source is not selected and form is not comprehensively filled out • Incorrect Category Code • Incorrect Vendor ID • Expired Proposal/Quote • Fixed Cost vs. Special Item • Contract Dates • Non-responsiveness to communication from Purchasing system • Expired Grant accounts Important: • Check Budget before resubmitting a DENIED requisition to ensure all lines have been retriggered for approval

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• Use the “Additional Comments” field to relay instructions or information to Purchasing, an Approver or the Vendor

• Do not edit a requisition once it is pending Central Purchasing review • Grant-related expiration issues must be submitted well in advance • NEVER INSERT AD HOC APPROVERS BELOW Departmental Approval

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How To Copy A Requisition Via “Manage Requisitions”

• If you frequently create similar requisitions • Be aware, you will still need to re-enter the vendor ID, Modify onetime Ship to/Bill to addresses, confirm ChartString accuracy and confirm budget dates if it is a multi-year requisition

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Activity Summary • • •

Once PO is issued, it will be emailed along with a fully executed contract if applicable (Proposal/Quotes are NOT emailed) An Auto Sourced PO for a UwPA will only dispatch if a Proposal/Quote is uploaded to EDM Review Activity Summary if a change order is required, if receiving is required or before making a payment

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Activity Summary

No activity

Use tabs to review further detail

Do not Receive if a Change Order is required

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Change Orders 1. Understand Tolerances – before submitting a Change Order

2.

Change Orders • • • • •

Increase quantity, value Due Date Cancellation of PO ChartString modification (Financial Change Order, difficult when using multiple ChartStrings) Justification (mandatory)

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Change Orders

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Vendor Setup

Purchasing

Requisition

Purchase Order

Accounts Payable

Receiving

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DO:

DON’T:

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Refer to Requisition Preparation Checklist

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Never sign a contract

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Check Grant and Contract expiration dates

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Verify ChartString’s budget validity

Never select “Receiving” as it is driven by the Category Code

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Determine whether the first line of the Requisition should be Special Item or Fixed Cost

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Never add Central Purchasing as Ad Hoc Approver

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Determine whether Requisition should be Quantity-Based or Amount-Only

Do not insert any Approvers below the Central Purchasing Approval line

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Ensure Requisition amount matches quote/SOW total

Never upload the printed “Requisition” form into EDM

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Never touch requisition once it is in pending in Central Purchasing

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Never fax or email the Purchase Order to a Vendor

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Provide vendor email address

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Properly upload all documents individually

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Inquire via ARC & EDM for Requisition approval and PO status

Verify PO/Requisition Status in ARC & EDM prior to contacting Purchasing with questions

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