Purchase Order Invoices

The purchase of goods and services at the University of Toronto can be made using a number of different methods, depending on the type of purchase and the value. Please refer to How to Purchase Goods and Services.A purchase order is required for goods and services of $10,000 or more. For purchases of goods and services under $10,000, you have the following options:

  • uSOURCE
  • Use your departmental Purchasing Card
  • Issue a departmental purchase order. (Note: This type of purchase order will not be reflected in FIS through the normal purchase order process)
  • Place your order with the vendor and request an invoice for payment (see Certified Invoices)
  • Use your Petty Cash fund for purchases up to $100
  • Use your Imprest Bank Account for purchases up to $500

Note: Any internal University of Toronto-related purchases will be processed via the internal revenue and expense recovery transaction in FIS by the buying department. An exception to this would be purchases from MedStore where the purchasing card may be used. For more information on internal purchase/sale transactions, refer to the section Internal Revenues and Internal Expense Recoveries.

See How to Purchase Goods and Services on the Procurement Services website which shows the options and requirements available based on the amount of the transaction to comply with U of T’s Procurement Policy.

This section deals with those purchases where a purchase order is required, resulting in a purchase order related invoice from the supplier.

Authorizing Purchase Order Related Payments

Receiving Reports

Invoice Amount Exceeds Purchase Order Amount

Returning Goods to Suppliers

 

Authorizing Purchase Order Related Payments

The preconditions for issuing payment to a supplier for goods and services are:

  • the goods and/or services have been received,
  • the buying department is satisfied with the goods and/or services,
  • the invoice for these goods and/or services is accurate with respect to items, quantities and prices, and
  • written or electronic approval has been obtained.

When a purchase order has been issued to a supplier, a purchase order reserve (budget commitment) is established in the funding source being charged, and the purchase order is recorded in the Purchasing and Funds Management modules of FIS.

Typical Cycle

When goods or services are received satisfactorily and/or in good condition, the department will process a goods receipt in FIS. The goods receipt or packing slip should be signed by the individual receiving the goods. When processing the goods receipt online, the system-assigned number should be provided to the individual processing the invoice. The vendor should then issue an invoice to the department that issued the PO. When the purchase order invoice is received, if quantities and prices agree with the purchase order in all material respects, i.e. the invoiced amount does not exceed the purchase order amount by more than 10%, the department will process the invoice in FIS. The system-assigned goods receipt document number should be noted on the invoice with the document number of the invoice receipt. The department purchasing the goods/services has a duty to ensure that the University only pays for items received/consumed.

When an overpayment or incorrect payment has been made to a supplier using an OTA (one time only) account, the supplier should be contacted and a refund cheque requested. A credit note is not acceptable. If in doubt, consult with Accounts Payable via email. The supplier should be instructed to identify the purchase order number and the name of the receiving department along with the refund. When the department receives a refund cheque, deposit the cheque and process the vendor refund in FIS.

Receiving Reports

A hard copy receiving report (or packing slip) is recommended when the invoice is $5,000 or more, or when the person receiving the goods or services does not enter the goods receipt transaction into FIS.

Exception: In the case of leases, when payment exceeds $5,000 a receiving report is required for the first payment only. The initial payment makes the lease legal and binding. See Payments Associated with Contractual Agreements.

Departments at University of Toronto Mississauga and University of Toronto Scarborough should refer to related procedures at those campuses.

In the absence of a packing slip, a receiving/material return report can be used as the hard copy of a receiving report. Departments may design their own forms, which should show at a minimum the following information:

  • Supplier’s name and address
  • Receiving location (e.g. department’s street address, building, room number)
  • Date shipment is received and inspected
  • Quantity received
  • Description of all items received
  • Signature (and printed name) of the individual who inspected the goods
  • Purchase order number
  • Is this a partial shipment?
  • Indication that the goods have been received in good condition OR indication that the goods are being returned to vendor, and if so, providing a short explanation as to reason for the return
  • Document number provided by the system once posting of the goods receipt has been completed

For entry into FIS, refer to the reference guide Goods Receipt Create.

Invoice Amount Exceeds Purchase Order Amount

The department or division has the authority to process an invoice which exceeds the purchase order amount.

If the invoice is incorrect:

the department should:

  • not adjust the invoice,
  • contact the supplier for a correct invoice,
  • ask the supplier to send a replacement invoice directly to the department.

If the invoice is correct and it exceeds the purchase order amount by less than 10%:

FIS will:

  • post the transaction

The department should:

  • follow its own procedures for approval of the excess amount,
  • process the invoice for payment.

If the invoice is correct and it exceeds the purchase order amount by 10% or more:

FIS will:

  • issue a warning message,
  • automatically block the invoice from further processing,
  • allow the invoice to be processed when the block is removed.

The department should:

For entry into FIS, refer to the appropriate FIS Purchasing Reference Guide

 

Returning Goods to Suppliers

When goods are unsatisfactory, and the supplier is unable to replace them in a timely manner with satisfactory goods, departments will return goods to the supplier for credit. Hint: Consider a full refund from the supplier.

The procedure for returning goods is:

  • confirm with the supplier that the supplier is unable to replace the unsatisfactory goods with satisfactory goods in a timely manner,
  • obtain permission from the supplier to return the goods, including shipping or pick-up instructions,
  • complete a material returned report. Refer to the above section Receiving Reports for information that should be included on the material returned report.
  • enter a goods returned transaction in FIS. For instructions, see the FIS Reference Guide Goods Receipt Reverse,
  • ship the goods back to the supplier, or notify the supplier to have the goods picked up,
  • take whatever steps are necessary to cancel the purchase order, and/or to reissue a new purchase order. See the various FIS Reference Guides relating to Purchasing,
  • Caution: goods shipped across borders may result in unexpected excise tax charges.

Last revision June 2020