Staff > Accounting > Purchase Orders

End of Current Fiscal Year Purchase Order Procedures

❖ The Business Office will email end of year closing procedures in the month of April, indicating deadlines for current year check runs

❖ Accounts Payable will pay invoices in line with the following procedures:

  • Under the accounting rules for accrual accounting, a liability is established when:
    • (1) a purchase order has been issued
    • (2) goods have been received, and
    • (3) an invoice has been received, but not yet paid. 

Therefore, if a requisition has been created in the current fiscal year, and all of the above three criteria have been met by the end of the year (June 30th), the expense will be charged to this year’s (current year’s) budget. 

  • If a requisition has been created in this fiscal year and either
    • (a) goods have been received, but an invoice has not been received, or
    • (b) an invoice has been received, but goods have not been received,

then the expense will be charged to next year's budget (next fiscal year).  

June 30th is the cut-off date for determining whether the criteria for establishing a liability has been met. 

If there are any open purchase orders in the accounting system and there is no liability by definition, the purchase order will be closed and not reopened.

  • An open purchase order will meet the criteria, and a liability will be established, if we receive an invoice with the proper approval for payment, dated no later than June 30th of the current fiscal year.  

Accounts Payable will allow departments one week processing time to forward such invoices to the Business Office until close of business; such date will be listed in the year end email (Example: Invoice dated June 30, 2015, will have a cutoff date of July 8, 2015).

❖ If a department needs to expense remaining funds for the current fiscal year, the Business Office recommends ordering immediatelyand requesting rush delivery when appropriate, in order to meet the requirements above.  Indicate to the vendor that invoices, with applicable shipping costs, are required ASAP.

❖  In order to establish a clear channel of communication for year end procedures, please send all correspondence related to open purchase orders through the Associate Principal's Office at your building.