Mission

The primary responsibility of the Accounts Payable department (“A/P”) is the payment of the College's expenses. To accomplish its established mission within the College's and applicable federal government's guidelines, A/P reviews all invoices from external vendors as well as internal payments to students, faculty and staff that is not payroll related. It is the responsibility of A/P to ensure that each expenditure paid by the College is represented by an authorized source document (traditionally an invoice or purchase order), has a proper account number, and is paid in a timely manner upon receipt in the office. A/P may at times need the assistance of the department incurring an expense to assist in identifying the business purpose or other necessary information if not clearly noted on the invoice by the vendor or the department. In these instances A/P will generally return the invoice to the department to clarify the outstanding issue. A/P will additionally return invoices for departments for other questions including ambiguous payment amounts, services that appear to be outside of business activities, etc.  Unfortunately given the volume in the office, it is not possible to make calls to all departments with questions on invoices and mailing them back is the best alternative.

General Guidelines

The College's general policy is that funds should be expended only for essential College business. The College qualifies as a not-for-profit entity under Section 501(c) (3) of the IRS guidelines and therefore must be diligent in ensuring expenses qualify as a business expense. Additionally, the College receives grants and awards from the federal government and must be in compliance with the terms of the agencies supporting the College. The IRS also has strict guidelines for employee reimbursement requirements that the College must maintain to retain its accountable plan status.  See further details below.

Payment by the College must be supported by a source document, which in most instances is an independent invoice. The original invoice represents confirmation from a third-party that a product or service was provided to the College. Since the College has a decentralized purchasing system, the majority of invoices are received within the department that requested the product or service. All requests for reimbursement must contain the underlying detail that comprises the total expense incurred. (This means items paid by credit card must include the charge receipt and/or statement, and the supporting documentation evidencing the actual payment). Upon receipt of an invoice it is the responsibility of the department initiating the product or service for the following:

  • Assess the validity of the invoice received. (Note: We pay from original invoices only, please mark any faxes or copies that may become necessary to use  as "Use as Original" so we know that the department has verified the authenticity of the invoice). This includes the vendor name and payment address, actual product or service description, delivery dates, terms, cost and mathematical accuracy. Any errors on the invoice must be clearly marked.

  • Have an approved individual of the department sign (original signatures are required), date and encode the invoice/purchase order with the appropriate full general ledger account number, including fund, department and object codes. This approval validates that the invoice represents a product or service with a business purpose.

  • Forward the approved invoice to A/P within an appropriate time to take advantage of offered discounts when applicable or to otherwise meet the minimum terms. An invoice received in A/P signifies that the approving department is validating the business expense and all data on the invoice.

  • Forward the purchase order, where applicable, to A/P attached to the invoice.

It is the general policy of the College to directly mail checks to vendors from the Controller's Office. This policy is to establish effective internal controls over checks and reduce administrative time. 

If a circumstance exists where a copy of the invoice is required to be mailed with payment, this must be clearly marked on the invoice when sent to A/P. It is also the responsibility of the department forwarding the invoice to furnish a copy of the document that must accompany the payment. The original invoice must remain in A/P.

Payment Cycle

In general, it is the policy of A/P to make payments to the College's vendors with sufficient time to either take advantage of offered discounts, or to comply with the terms noted on their respective invoice. This policy is impacted by factors including the timely receipt of a valid, approved invoice in our office. While it is important to comply with the vendor's terms for continued favorable pricing and relationship maintenance, we are also cognizant of fundamental cash management and attempt to limit the time an invoice would theoretically remain “prepaid”. Generally, approval of an invoice and payment should occur after the product/service is received.

Business entities may elect to receive payment electronically by enrolling in Paymode using the following link http://www.paymode.com/amherstfolger.  Otherwise, payment will be made by a paper check. Payments are issued each Thursday during a standard operating week. This schedule may be modified when necessary for business weeks containing a holiday or other events. The office strives to include all invoices received by our office that are currently due into the payment run, however the timing of the receipt of invoices, volume of invoices received in any given week and staffing levels may prevent this at times. Therefore, the receipt of an invoice to our office prior to a payment run does not guarantee its inclusion in that specific week's run. For that reason it is advised that invoices are approved and sent to the office as far in advance of their due date as possible.  Payments made on Thursdays cover all classifications of payees.

New Vendors

The tax status of a vendor must be established prior to making payment. To set up a new vendor, include the appropriate form as described below with the payment request:

  • U.S. Person/Entity:  Obtain from the new vendor a completed IRS Form W-9, Request for Taxpayer Identification Number and Certification.
  • International Person/Entity: If the vendor is an individual who is not a US Citizen or Resident, a Foreign National Information Form and an IRS Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) must be provided.  If the vendor is a business entity, obtain an IRS Form W-8BEN-E Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).

Payment for Services

Any payments made to an independent contractor or an unincorporated vendor for services require the College to prepare and mail an IRS Form 1099 for US persons/entities or an IRS Form 1042-S for International persons/entities performing services in the U.S., after the calendar year-end. Per IRS regulations the College must receive from a service provider either a completed and signed Form W-9 or a Foreign National Information Form to ensure proper tax treatment. The College's Request for Payment of Services Form has a field for a social security number or tax ID. The appropriate tax form must accompany the payment request form that is forwarded to the Controller’s Office, unless a W-9 is already on file for the specific provider. The Foreign National Information Form, if applicable, is needed for each time service is provided. Please see https://www.amherst.edu/offices/controller/accounts-payable/payments-to-vendors/payments-for-services for additional information and requirements for payments exceeding $5,000 and for payments to international visitors.

The form contains a section for notation of whether or not the service provider is a current or former employee of the College. Due to regulations, the College’s Office of Human Resources must determine if the provider should be paid through payroll, with applicable deductions, or though accounts payable. That office will forward the request to the Controller’s Office after review and approval.

Employee reimbursements/expenses

Some expenses, while ordinary and necessary for an employee’s work, are considered personal, living or family expenses and thus cannot be paid or reimbursed as business expenses. Common examples are regular commuting expenses, spousal travel, and reimbursement for certain clothing. Payment of such personal expenses constitutes taxable income to the recipient. Certain de-minimis benefits, defined as any property or service that is provided to an employee that has so little value that accounting for it would be unreasonable or administratively impracticable, may be provided tax free.  Examples include personal use of an office copier machine or an office water cooler.  For a guideline of common reimbursable and non-reimbursable expenses through Accounts Payable, please click here.

The IRS distinction between business and personal expenses can be complex and the following expenses require additional diligence in ensuring that the expense is reasonable and supports a business purpose:

Travel, Meals and Entertainment - Reimbursements for travel and entertainment expenses follow the same general guidelines noted above for payments to vendors. Ensure that a valid business explanation is noted on the request. Generally, first-class, charter travel and fees for early boarding and seat selections are not reimbursable. In the case of reimbursement for meals, ensure that a complete list of individuals covered accompanies the business explanation. The cost of meals, travel and other expenses for partners, spouses, or other companions not affiliated with the College are not allowable requests for reimbursement unless incurred for a valid business purpose.  This pertains to invoices paid directly to the vendor (restaurant) as well.  All requests for reimbursement must contain the underlying detail that comprises the total expense incurred.  For example, reimbursement for meals should contain the receipt from the restaurant detailing the items ordered, if possible. It is important to remember that travel and entertainment expenses should fit into the classification as required for events necessary to administer College business. To comply with these best practices, and at the advice of our auditors, all employees must retain a second review/signature by the Department Head that is in charge of the funds requested.  

The General Services Administration (GSA) provides a useful tool at the following link: http://www.gsa.gov/portal/category/104711 that may be used to identify the current maximum per diem rates in specific areas for both lodging and meals/incidentals. These rates can serve as a guide when incurring lodging and meal costs including local meals incurred when conducting business meetings or other business purposes. Please refer to the Amherst College Employee Travel, Meals and Entertainment Reimbursement Policy for more information.

Meals - The IRS allows for tax-free reimbursement of meals in certain circumstances:

  • Travel meal allowance may be excludible from wages, if the employee is be traveling away from their tax home on their employer’s business.  Traveling away from home typically means traveling away for longer than an ordinary day’s work AND it is necessary to stop for substantial sleep or rest to properly perform their duties.
  • Business meal reimbursements may be provided tax-free if they meet one of the following tests:

          Directly related test
               1. The main purpose of the combined business and meal is the active conduct of business.
               2. Business is actually conducted during the meal period, and
               3. There is more than a general expectation of a specific business benefit at some future time.

          Associated test
               1. Associated with the active conduct of the employers business and
               2. Directly before or after a substantial business discussion.

  • De minimis meals such as a meal provide at Valentine or an occasional overtime meal allowance may be provided tax free.

         Overtime meal allowance
               1. It is provided on an occasional basis
               2. Overtime work necessitates the extension of the employee's normal work schedule, and
               3. It enables the employee to work overtime.

         Employer operated eating facility - Meals are furnished for the convenience of the employer on the employer’s premises.

Clothing including Uniforms- The IRS allows for nontaxable clothing, including uniforms to be provided or reimbursed to employees in limited situations.

  • Working condition fringe benefit:  In general the employee must wear the clothes as a condition of employment and the clothes are not suitable for everyday wear in any situation. Both conditions must be met in order to be treated as tax free.  Examples of items that qualify are safety items, i.e. safety goggles, steel toe work boots and other clothing required by OSHA regulations; and specific uniforms; such as campus police.
  • De minimis fringe benefit: Items of clothing of low value may be treated as non- taxable if provided infrequently to an employee. Examples include t-shirts provided on an annual basis for special events or a single item bearing the College’s name on an employee’s uniform.

The following are generally not considered valid business expenses and are therefore not reimbursable (this list is not meant to be all inclusive):

  • Babysitting
  • Floral arrangements
  • Fruit baskets
  • General gifts for employees, other than those authorized by Human Resources
  • Retirement expenses including dinners, parties or gifts

This policy is subject to periodic modification to coincide with changing business issues and external guidelines or regulations.  Any changes to the policy will be made directly within this on-line document, and only those modifications that are substantive in nature will require additional communication to the college community.

We appreciate your efforts to comply with the above procedures and are available to answer your questions. Please call extension 2803 with any questions that you may have.