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Policies and Procedures

Policy 703 – Advance Payments for Vendors

Effective
April 1, 2000
Last Updated
October 6, 2014
Last Reviewed
October 6, 2014
Responsible University Officer
Director of Systems and Operations
Responsible Unit
Procurement Services

Policy Statement

Goods and services purchased by the University must be received before payment can be made.

Reason for Policy

The University is required by the State of North Carolina to maintain due diligence in the safeguarding of the University’s assets. Making payments prior to receipt of goods and services violates good internal control and places the University’s assets at risk.

Exclusions

Prepayments increase the risk to the University of loss due to the potential for non-fulfillment or non-performance under the contract. However, prepayment can be allowed under the following conditions:

1. The vendor will not ship the merchandise until payment is received; i.e. a new subscription to a publication, ordering items from an agency that does not permit billing, the service will not be performed without a deposit.

2. An item is being custom manufactured for the department and the vendor is the sole supplier of the item. A quote and statement of work must accompany the requisition in addition to the sole source letter.

Special Situations

Subscription and membership renewals are advance payments to vendors however they may be submitted on a Campus Voucher if accompanied by either an invoice or renewal notice from the vendor.

Procedures

  • 703.1 - Making Advance Payments to Vendors

Additional Information

Frequently Asked Questions

Q: My department needs to order 200 pamphlets for my class and the vendor will not ship them without a check. How do I get a check to accompany the order?
A: Create an ePro requisition as a “check with order,” and attach a PDF of your order form to the purchase order. Once the check prints, it will be mailed to the vendor along with a copy of the purchase order and your order form.

Q: I need to renew the membership in a professional organization for my dean. Does he need to pay it first and be reimbursed to be in compliance?
A: No, a campus voucher payable to the organization is appropriate. The check will be mailed with the renewal form.

Q: The dean is planning a catered reception for a new faculty member in our department. The caterer requires a deposit and then will bill us after the event for the balance due. How do we obtain a check for the deposit?
A: You must submit an ePro Requisition requesting the amount of the deposit on line 1. Line 2 of the requisition should reflect the estimated balance to be paid after the event. A PDF of the quote/estimate from the vendor showing the details of the order must be attached to the Requisition.

 

A: You must submit a Purchase Requisition requesting the amount of the deposit on line 1. Line 2 of the requisition should reflect the estimated balance to paid after the event. The requisition must be included by a quote/estimate from the vendor showing the details of the order.

Related Data

Contact

Risk Management Services for assistance with risk assessment.

Contacts

SUBJECT CONTACT TELEPHONE FAX E-MAIL
Advance Payments Systems and Operations 919-843-5098 919-962-2356 operations_team@unc.edu

History

Revised:
October 1, 2014: Updated information on ePro requisition process.
June 24, 2010
July 27, 2007