Approval Processing and Batch Payables

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The accounts payable approval process facilitates communication between personnel who enter payable records and those who review these records for approval. Until a payable distribution item is fully approved, the item is stored in a batch file which, in many cases, was created by the person who originally entered the payable.

Using the Batch Accounts Payable option, payable entry personnel can keep track of the records they submitted for your review. Furthermore, until a payable item is denied or fully approved, the appropriate personnel can make changes to the record as long as they have the correct security resource.

Since changes to a payable undergoing review are likely to affect whether the item is ultimately approved or denied, the best practice is to develop standards for how AP approvers work with payable entry personnel. This section describes key issues to consider before using AP approval. Included is a procedural example illustrating how you can communicate with payable entrants during the approval process.

Accounts Payable Approval Pages

When working with the Approve/Deny Purchase Orders option, you use the following pages:

The sub-sections that follow provide procedures and fields sections for both approval pages.

Initial Planning

Before your site implements the accounts payable approval feature, approvers and payable entrants should discuss and reach a mutual understanding on how to handle changes to records undergoing approval review. Following are several issues to consider, along with ideas on how you might handle each issue:

Should we only allow changes to payables with a Hold Status of In Review/Correction?

• For payable entrants who have the appropriate security resource, the system allows updates to records in review with a secondary Hold Status of Open, Partly Approved, or Correction.
• To simplify the approval process, you and your colleagues could agree only to change a payable undergoing review if an approver has indicated that the item needs correcting.
• Following this procedural standard, it would be the payable entrant's responsibility to review each batch record carefully before submitting it for approval processing. If a mistake is noticed after a record is submitted, the entrant can always delete the batch record, create a new one, and then post it for approval.
• Furthermore, payable entrants would know to leave records alone unless an approver uses the Approve/Deny Payables option and marks a specific item for correction.
• This is only an example of how you could handle updates to payables in review. A more liberal approach would be to allow entrants to change records at their discretion, in which case the next question becomes especially important.

Should we require approval to be restarted for a payable item whenever it is changed?

• Each time a payable entrant saves a change to a record that is in review, the system asks whether it should restart the approval process for that item. If approval is restarted, then the item's existing approval records are deleted. The record will not be available for your review until it is resubmitted by the payable entrant.
• This raises the question of whether a change to a payable in review always necessitates removing it from the approval process and starting over. The answer merits discussion before your site starts using AP approval.
• One reasonable standard might be to require an entrant to restart approval if changes are made to a record that is either Partly Approved or needs Correction. That way, all approvers would get to base their decisions on the most up-to-date information.
• You could also consider requiring approval to be restarted only if the entrant changes specific fields designated by your accounts payable staff. The decision depends on what makes for the most efficient and meaningful exchange of information between you and your colleagues.
• Also note that approval must be restarted if an item was marked for Correction. As soon as an approver indicates an item needs correction, the payable record is taken out of the approval process.

How should we handle communication at different stages in the approval process?

• Fund Accounting provides indicators for payable entrants and approvers to help them communicate during the approval process. For instance, the Action Bar's Approval Status item is available for approvers in the Payable Detail page and for entrants in the Batch Accounts Payable detail page. Similarly, if you decide a payable needs correction, you can provide specific feedback regarding the changes required.
• However, colleagues may want to keep one another informed throughout the approval process, especially when an approver requests a correction or an entrant restarts approval for an item. This way, the entrant knows to access the appropriate record in the Batch Accounts Payable option. Along the same lines, the approver knows not to be concerned if an item is missing from search results in the Approve/Deny Payables option.

Procedural Example

The following example details the steps for processing the approval of a payable that requires a correction. The procedure shows how this scenario works logistically within Fund Accounting, outlining the process in terms of the actions taken by both the payable entrant and AP approvers.

Consider this example, and compare it to the way you envision a similar situation where you work.

1. A staff member adds an accounts payable record to a batch file using the Batch Accounts Payable option. The record includes three line items.
2. From the Batch Accounts Payable page, the entrant releases and posts the batch containing the payable.
   Approval records are created for the payments against the record's line items. Based on the payable's approval group, you are the only person required to approve the line items.
3. You use the Approve/Deny Payables option to search for and list the payable.
4. You select the payable in the Approve/Deny Accounts Payables page and click OK to display its line items in the Payable Detail page.
5. You use the Action Bar's Approve item to approve Line Item 1 and 3.
6. For Line Item 2, you notice the amount is missing. In this case, you use Needs Correction to indicate the payable item needs to be changed and you enter a Line Item Comment explaining the amount is needed.
7. In the Approve/Deny Accounts Payables page, you click OK to submit your approval decisions. The Accounts Payable Approval/Denial report shows the following results:
   • Line Items 1 and 3 are posted to Fund Accounting and are now available for vendor check processing.
   • Line Item 2 has a status of Correction and awaits action in the Batch Accounts Payable option. At this point, you may want to inform the payable entrant that the line item needs correcting.
8. Using the Batch Accounts Payable option, the payable entrant accesses the line item in the Batch Accounts Payable detail page.
9. The payable entrant clicks Approval Status on the Action Bar to review the comments you provided on the correction needed.
10. The entrant returns to the detail page and adds the payment to the record. Upon saving the change, the entrant chooses to restart approval processing for the payable item.
11. The user posts the batch record, thereby recreating the line item's approval record.
12. You repeat Steps 3-7 to approve the line item and post it to Fund Accounting.