You are on page 1of 82

FI113 Umoja Accounts Payable

Overview

Umoja Accounts Payable Overview Version 11


Last Modified:
Copyright
United14-Aug-13
Nations

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

Course Overview
The purpose of the Umoja Accounts Payable Overview course is to explain how Accounts
Payable functions and invoice processing in general are affected by the implementation of
Umoja.
Prerequisite Review
You should have completed the following prerequisite courses:
Umoja Overview
Umoja ECC Navigation
Umoja Master Data & Coding Block Overview

Course Duration: 2 hours

Copyright United Nations

Course Objectives
After completing this course, you will be able to:
Describe how invoices are processed within Umoja
List the key roles and responsibilities in Accounts Payable
Describe the key changes and benefits of Umoja Accounts Payable
Describe when non-Purchase Order (PO) invoices are applied

Copyright United Nations

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

Module 1 Objectives
After completing this module, you will be able to:
Define the key terms related to Accounts Payable
Describe the park and post functionality and when it is used
Explain how Logistics Invoice Verification is used

Copyright United Nations

Key Terminology
Key Term
Invoice
Three-way Matching
Goods Receipt
Workflow

Invoice Tolerance
Payment Block

Description
It is used in Umoja to refer to all payment documents. It is
created in Umoja even in cases where no physical commercial
invoice is received.
It is a functionality within Umoja that compares an invoice to the
appropriate PO and the amount of goods or services received.
It is a document in Umoja that is created to acknowledge the
receipt of goods, referencing one or more POs.
It refers to invoices or other financial/procurement documents
being automatically routed to the appropriate approvers based
on the delegations of authority.
It is the maximum amount by which an invoice may differ from
the relevant PO for a three-way match to pass ($4000 USD or 10%
of PO line item, whichever is lower).
It is a block that ensures that the payment for an invoice will not
be processed until the payment block is removed.

Copyright United Nations

Key Terminology
Key Term
Down Payment
Chart of Accounts

Subsidiary Ledger

Description
It is an advance payment to any entity. These payments may
require a Funds Commitment/PO depending on the type (for
example, commercial down payment and salary advance).
It is a catalogue of all General Ledger (G/L) accounts available in
the Umoja accounting environment.
It is a secondary ledger that sits under the G/L, to which all
operational transactions are recorded or performed.

Reconciliation Account

It refers to accounts within the G/L that are automatically


modified when posts are made to subsidiary ledgers.

Special GL Indicator

It indicates when a transaction should post to a different


reconciliation account than indicated for a particular Business
Partner Group (used for down payments, for example).

Copyright United Nations

Roles & Responsibilities


The following Umoja Enterprise roles are involved in the Umoja Accounts Payable (A/P)
process:

Financial Accounting
User (A/P)

Creates vendor invoices and vendor credit memos within


the A/P sub ledger. This entails:
Adding VAT
Changing payment terms, if needed
Adding a payment block, if needed
Reducing the invoice, if needed
Requesting that PO be modified, if needed
These documents are subject to workflow approval

Financial Accounting
Approver (A/P)

Reviews and approves vendor invoices and credit


memos created by the Financial Accounting User (A/P)
within A/P sub-ledger

Copyright United Nations

Roles & Responsibilities


The following Umoja Enterprise roles are involved in the Umoja Accounts Payable (A/P)
process:

Financial Accounting
Senior User (G/L /
A/R / A/P / CO)

Creates and maintains the cost accounting allocation


rules, including the statistical key figures used for
allocations
Runs the batch that posts billing documents that come
from the Sales and Distribution module
Inserts a long-text description (occasionally) for
incoming payments for voluntary contribution
Creates and posts G/L documents that are not subject
to workflow, such as accruals, reversals and recurring
entries
Clears G/L, Accounts Receivable (A/R) and A/P
documents

Copyright United Nations

10

Key Benefits & Changes of Umoja


As a result of Umoja, the major changes and benefits to the A/P process are as follows:

Integration Across
Areas

Three-Way Matching

Copyright United Nations

One Integrated
Company Code in
Umoja

11

Integration Across Areas


As a result of Umoja, the major changes and benefits to the A/P process are as follows:

Integration Across Areas

Three-Way Matching

One Integrated Company


Code in Umoja

Integration across areas allows business documents to be linked.


A single document gives an end-to-end trail (For example, a user can see if goods
have been received from a PO)
The system checks and informs the user if a down payment to the vendor has
already been processed. After the invoice is posted, the down payment is settled.
Any amount that needs to be retained as a performance guarantee (for example
for construction contracts) will be withheld from payment

Copyright United Nations

12

Three-Way Matching
As a result of Umoja, the major changes and benefits to the A/P process are as follows:

Integration Across Areas

Three-Way Matching

One Integrated Company


Code in Umoja

Three-way matching is used to automatically check consistency of documents.


When entered into Umoja, the invoice amount is checked against the PO and
Goods Receipt. If they do not match, appropriate action may need to be taken
(for example reduce invoice or issue credit memo)

The system allows payment processing to move forward if the invoice amount is
within the set tolerance of the PO and the amount of goods received
Differences between the amount of goods received and amount invoiced do not
accumulate because they are automatically reconciled

Copyright United Nations

13

One Integrated Company Code in Umoja


As a result of Umoja, the major changes and benefits to the A/P process are as follows:

Integration Across Areas

Three-Way Matching

One Integrated Company


Code in Umoja

One integrated company code in Umoja replaces multiple instances of Sun/IMIS.


Provides consolidated reports and faster access to information from a central
source
Decreases manual effort in obtaining information from multiple sources
Integrated Vendor Master Data allows the same vendor to be used across
missions, eliminating duplication of records

Copyright United Nations

14

Umoja Main Ledgers


Each module also maintains a ledger and generates documents that make use of the
coding block elements. These are the four main ledgers of Umoja:
General Ledger (maintained in the FI module)
Controlling Ledger (maintained in the CO module)
Funds Management Ledgers (maintained in the FM module)
Grants Ledger (maintained in the GM module)

General
Ledger (G/L)

Controlling
Ledger

FM Ledger

Grants
Ledger

G/L only records


actual postings. Every
financial transaction
conducted in Umoja
has a corresponding
posting within the
G/L.

The Controlling ledger


records postings used
for cost and
management
accounting.

The FM ledger records


budget-relevant
transactions such as
budget, consumption,
budgetary resources,
etc., and provides
budget availability.

The Grants ledger


records grant-relevant
transactions (trust
funds).

Copyright United Nations

15

General Ledger in Umoja


G/L is the central accounting record for Umoja. It contains the balances of all offsetting
credit and debit accounts. Every financial transaction conducted in Umoja has a
corresponding posting within the G/L.

G/L accounts form the basis of segregating financial data into the following accounting
groups (IPSAS elements of financial statements):

Assets

Liabilities

Income

Expenses

Fund
Balances

Transactions that are performed in external legacy systems are brought into Umoja via an
interface. These transactions are then posted to the G/L. For example, payroll is performed
in Progen, then uploaded into Umoja via an interface.

Copyright United Nations

16

General Ledger (G/L) Accounts


A consolidated list of all G/L and subsidiary ledger accounts housed in Umoja is stored in
the systems Chart of Accounts. Account numbers and corresponding accounts used in
Umoja are listed below:
1xxxxxxx Current Assets
2xxxxxxx Non-current Assets
3xxxxxxx Current Liability
4xxxxxxx Non-current Liabilities

5xxxxxxx Net Assets


6xxxxxxx Revenue
7xxxxxxx Expenses
88xxxxxx Memo Accounts + Excluded from F/S
To make a posting in Umoja, a posting key is used for each line item to define:
Side of the account the line item is posted to, debit or credit
Type of account the line item is posted to
Fields contained in the entry screens
Copyright United Nations

17

Financial Accounting Module in Umoja


In Umoja, the Financial Accounting (FI) module is designed to capture UNs business
transactions in a manner that will satisfy external reporting requirements.
A consolidated list of all Umoja G/L accounts housed in Umoja is stored in the systems
Chart of Accounts.

Note: Budget-relevant transactions


are recorded in a separate budgetary
ledger in the FM module, parallel to
the G/L.

General Ledger
Umoja Chart of Accounts
G/L
Accnt 1

G/L
Accnt 2

G/L
Accnt 3

G/L
Accnt 4

G/L
Accnt 5

G/L
Accnt 6

G/L
Accnt 7

G/L
Accnt 8

G/L
Accnt 9

G/L
Accnt
10

G/L
Accnt
11

G/L
Accnt
12

Copyright United Nations

18

General Ledger vs. Subsidiary Ledgers


The subsidiary ledger is a supporting ledger that provides detailed information about
individual accounts, which are not stored at the detailed level in the G/L.

Subsidiary ledgers divide financial data into distinct and more manageable categories.
The total of all individual account balances in the subsidiary ledger equals the balance of
the reconciliation account in the G/L.

General
Ledger

Postings to Reconciliation Accounts

Copyright United Nations

Subsidiary
Ledgers

19

A/P Subsidiary Ledger


The A/P subsidiary ledger (or sub ledger) is one of three sub ledgers in Umoja.

General
Ledger

Accounts
Receivable (A/R)

Accounts
Payable (A/P)

(Contains customer
accounts)

(Contains vendor
information)

Copyright United Nations

Fixed
Assets (F/A)
(Contains assets not
recorded in Galileo)

20

Reconciliation Accounts
Umoja uses reconciliation accounts to reconcile financial information contained in the
subsidiary ledgers in real time. The entries in the reconciliation account can only come
from a subsidiary ledger. Direct postings are not allowed in G/L.

For example, fuel purchased from a vendor will be recorded in G/L as follows:
A/P Subsidiary Ledger

General Ledger

A/P- Reconciliation Account


Journal Voucher
Vendor Account
Debit Fuel
2000
Credit Vendor 2000

2000

In the A/P subsidiary


ledger, the vendor is
credited with the amount
due

Copyright United Nations

Expenses

2000

2000 Fuel

In G/L, the A/P reconciliation


account has a corresponding
credit entry to reconcile with
the A/P subsidiary ledger.

21

G/L Accounts used for Accounts Payable

Entries in the A/P


Sub-Ledger

Entries for
Revaluation of
Monetary Balances

Entries for late


audit adjustment

G/L Account

Reason

Reconciliation accounts

Ensures that the sub ledger is


always reconciled with G/L

Revaluation accounts

Revaluation entries cannot be


posted to the reconciliation G/L
accounts

Manual Adjustment accounts

Should be recorded at the G/L


level since the sub ledger may
be closed earlier than the G/L

Copyright United Nations

22

Recording A/P Entries in Umoja G/L Accounts


For each Business Partner Group, Umoja provides a standard numbering convention for
each type of G/L account:
Account Type

Ending with Digits

Reconciliation account

10

Manual Adjustment account

20

Revaluation account

99

Copyright United Nations

23

Business Partner Groups in Umoja

Member States

Non-member
States

Other
Governmental
Entities

UN Agencies,
Funds and
Programs

Individuals
(Staff Members,
Retirees and
Survivors)

Individual
Consultants and
Contractors

NGOs

Commercial
Vendors

Copyright United Nations

24

G/L Accounts for Accounts Payable


For standard invoice transactions, the following G/L accounts (current liability) are
automatically derived by Umoja based on the Business Partner Group:

Business Partner Group

Reconciliation G/L Account

Member States

33201010

Non-Member States

33201110

Other Governmental Entities

35101210

UN Agencies, Funds, and Programs

35101310

Non-Governmental Organizations

35101410

Commercial Vendors

35101510

Individuals (Staff Members, Retirees,


Survivors, etc.)

35101610

Individual Contractors and Consultants

35101810

Copyright United Nations

25

Special GL Indicators
Special GL Indicators (SPGL) are used to identify transactions that should be recorded to
alternate G/L accounts instead of the automatically derived Reconciliation account. In
Umoja, the following SPGL are used for A/P:

Transaction

SPGL

Down payments to commercial vendors

Advances to implementing partners

Travel advance

Salary advance

Security deposits

Loans receivable

Note: In Umoja, SPGL are used in conjunction with the Down Payment functionality, which
is covered later in the course.
Copyright United Nations

26

Balancing FI Dimensions Through Document Splitting


Umoja contains a specific functionality that assists users in managing the G/L. One key
functionality is document splitting.
Umoja performs document splitting for all inter-fund entries to ensure that these
entries are balanced at the fund, business area, grant and segment level. Document
splitting achieves this balance by automatically generating additional line items for
transactions that must be divided amongst multiple dimensions.
There are four splitting dimensions for Umoja as shown in the diagram below:

Fund

Business
Area

Grant

Copyright United Nations

Segment

27

Document Splitting in Umoja


The concept of document splitting is demonstrated in the tables below:
A vendor invoices $100 for a service provided for two separate UN missions. The
payable appears in the G/L as one line item because one invoice was provided by the
vendor for the service delivered.
Account

Mission/Fund

Vendor Payable

Amount
(100.00)

Using document splitting, the first line item is separated into two separate line items,
each assigned to the appropriate fund for the amount due from that fund.
Account

Mission/Fund

Amount

Payable

0001

(40.00)

Payable

0002

(60.00)

Copyright United Nations

28

Touch Points
The Umoja system is an integrated system and its modules integrate with each other to
complete a process. Touch points refer to these integration points across Umoja modules,
processes and activities.

Treasury

Controlling

General Ledger

Grant/Fund
Management

Accounts
Receivable

Accounts
Payable

Asset
Accounting

Sales and
Distribution

Real Estate

Material
Management

Copyright United Nations

29

Learning Checkpoint 1
Invoices are parked by the ____________.

Fill in the blank with the correct option.


A.

Financial Accounting User (A/P)

B.

Financial Accounting Approver (A/P)

C.

Cashier

D.

Financial Accounting Senior User (G/L, A/R, A/P and CO)

Copyright United Nations

30

Learning Checkpoint 1
Invoices are parked by the ____________.

Fill in the blank with the correct option.


A.

Financial Accounting User (A/P)

B.

Financial Accounting Approver (A/P)

C.

Cashier

D.

Financial Accounting Senior User (G/L, A/R, A/P and CO)

Option A is the correct answer. Invoices are parked


by the Financial Accounting User.

Copyright United Nations

31

Learning Checkpoint 2
Which of the following transactions require a Special GL Indicator?

Select all that apply.


A.

Commercial Invoice

B.

Commercial Down Payment

C.

Salary Advance

D.

Travel Advance

E.

Security Deposit

Copyright United Nations

32

Learning Checkpoint 2
Which of the following transactions require a Special GL Indicator?

Select all that apply.


A.

Commercial Invoice

B.

Commercial Down Payment

C.

Salary Advance

D.

Travel Advance

E.

Security Deposit

Options B, C, D and E are the correct answers.


Only commercial invoices do not require a Special
GL Indicator.

Copyright United Nations

33

Module 1 Summary
The key points covered in this module are listed below:

G/L is the central accounting record for Umoja

A consolidated list of all Umoja G/L accounts housed in Umoja is stored in the
systems Chart of Accounts

Reconciliation accounts are used to reconcile (update in real time) the G/L based
on postings to the A/P sub ledger

Special GL Indicators are used to make postings to accounts outside of the


standard Reconciliation account (for example for down payments)

Business Partner Groups in Umoja each have their own set of Reconciliation
accounts

Copyright United Nations

34

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

35

Module 2 Objectives
After completing this module, you will be able to:
Identify the effect of tolerances on invoice processing
Describe when non-PO invoices are applied
Describe how credit memos and down payments are implemented in Umoja

Copyright United Nations

36

Key Terminology
Key Term

Description

Goods Receipt/Invoice
Receipt (GR/IR) Account

It is the temporary payable account used to compare


goods/services received versus invoice (or amount) received.
This account is credited when goods are received. When the
invoice is posted, this account is debited and the
corresponding line items are cleared.

Credit Memo

It is a document used to adjust the amount due to a vendor as


a result of damaged goods, errors or allowances. These are
sometimes referred to as credit notes.

Payment Retention

It is a payment that can be applied when a pre-determined


portion of an invoice is retained until a defined due date and
until confirmation that conditions for retention have been met.

Special GL Indicator

It is assigned to certain A/P and A/R transactions to segregate


postings through the use of alternative Reconciliation
accounts. For example, these are used for specific types of
down payments, such as a salary advance.

Copyright United Nations

37

Key Terminology
Key Term

Description

Invoice Reduction

It is used to lower the amount of an invoice due to a vendor in


comparison to the physical invoice received (in case of
missing/damaged goods or invoice error).

Unplanned Charges

It is used to add charges to an invoice that is not captured in


the Goods Receipt or PO (in case of unplanned delivery/freight
charges for example).

Copyright United Nations

38

Accounts Payable Document Types


In Umoja, most transactions output a specific type of document, such as an invoice,
with a unique ID. Below are the different document types relevant for A/P in Umoja:
Document Type

Code

Description

Invoice (with PO)

RE

A/P document that links to a PO and matches against


Goods Receipt using Logistics Invoice Verification (LIV)
Credits A/P sub ledger vendor account

A/P document used for non-PO payables


Credits A/P sub ledger vendor account
Entered manually or through an Excel file

Non-PO Invoice below $4000


USD with Certification

KR

Non-PO Invoice with


Earmarked Fund

KH

Non-PO Invoice above $4000


USD without Certification

KE

Down Payment Request

KA

Used for advance payments


May or may not reference a PO

Vendor Credit Memo

KG

A/P document to reduce amount payable to a vendor


or record amount recoverable from a vendor
Debits A/P sub ledger vendor account

Created when goods or services are received in Umoja

Goods Receipt

WE

Copyright United Nations

39

Accounts Payable Document Types


Document Type

Code

Description

Outgoing Payment

KZ

Vendor Clearing Document KC

Automatically created by Cash Management when


payment is sent
Debits A/P sub ledger vendor account
Clears a payable document (KR, KG, RE) with an
Outgoing Payment (KZ)

Copyright United Nations

40

Processing an Invoice
Although the general process for managing invoices remains the same under Umoja, the
following distinctions can be highlighted:
Financial Accounting User (A/P) enters/types the invoice in Umoja, attaching a
scanned copy

Workflows reduce the need to follow up manually with individual approvers

Invoices are generally posted after Goods Receipt (GR) has been entered for each
invoiced item. They can also be posted before the Goods Receipt. In this case, the
invoice is parked and sent to the Certifying Officer who will process the invoice
after the GR is entered. The invoice will then be approved by the Approving Officer
Three-Way Match links the invoice to the PO and Goods Receipt to ensure there is
no mismatch. The process ensures payment for more than goods received is not
made until all three documents match
Copyright United Nations

41

Invoices without PO's


Umoja introduces the concept of creating invoices with reference to a Funds Commitment
instead of a PO. This applies in the following scenarios:

Consultants/Individual Contractors

Grants process for implementing partners

Official Travel

Entitlement Travel

Miscellaneous Obligating Documents

Fellowship Study Tour

Education Grant

Self-Insurance (unless treated as special PO)

Appendix D Claims All Fund Types

PK Local TCC / PCC payments

Copyright United Nations

42

Invoice Transactions in Umoja


There are two main transactions within Umoja ECC to enter an Invoice:
MIR7 is used for standard invoices for goods and services in reference to a PO
FV60 is used in cases when there is no PO. Invoices processed with FV60 may refer
to a Funds Commitment

MIR7

FV60

Invoice entered with reference to a PO

Invoice entered without reference to a PO

Line items are derived automatically

Line items must be entered manually or


through an Excel file

Saving the document as Complete will


automatically post the invoice if three-way
match is successful

Saving the document as Complete will


forward the invoice to be approved and
posted by A/P Approver

Parking the document will trigger


workflow and send to A/P Approver for
review

Parking the document will save for later


completion but will not trigger workflow

Holding the document will save for later


completion but will not trigger workflow

No Hold functionality

Copyright United Nations

43

Invoice Processing Scenarios


Three-Way Match
Standard
process for
goods/services

Purchase Requisition/
Shopping Cart

Low Value Purchase Order


Under $4000 USD

Purchase
Order

Goods
Receipt

Invoice

Purchase
Order

Goods
Receipt

Invoice

Non-PO Invoices
Over $4000 USD
Non-PO Invoices
Under $4000 USD

Earmarked Funds
Document (if required)

Manual
Invoice
Manual
Invoice

All POs over the low value threshold of $4,000 originate from a Shopping Cart created
in the Umoja SRM system. Invoices are then entered against these POs.
For requisitions less than the threshold, a Low Value Acquisition can be created instead,
eliminating the need for a Shopping Cart.
Copyright United Nations

44

Three-Way Match
Financial Implications
Umoja ECCs automated Three-Way Match enables the cross-check of PO, Goods
Receipt and invoice
If the documents cannot be matched within the Invoice Tolerance, the system
automatically blocks the payment
If the documents do match or are within the Invoice Tolerance, payments are
automatically processed according to payment terms
If physical discrepancies (for example physical damage) are found during Goods Receipt,
a blocked status can be placed on the goods, resulting in no financial posting.

Umoja ECC
performs
three-way
matching

Goods Receipt

Invoice

Umoja
ECC

Copyright United Nations

Purchase Order
45

Three-Way Match
Umoja Three-Way Matching process allows the comparison of quantities, price per unit,
terms, etc. that appear on the vendors invoice with the information on the PO and
Goods Receipt.
Purchase Order

Goods Receipt (GR)

Invoice

Item 1
Material: -------Quantity: --------

Item 1
Material: -------Quantity: --------

Item 1
Material: -------Quantity: --------

Item 2
Material: -------Quantity: --------

Item 2
Material: -------Quantity: --------

Item 2
Material: -------Quantity: --------

Contract terms

Contract terms

Contract terms

Copyright United Nations

46

Three-Way Match
The Three-Way Match process is used to match goods/services received with invoices.
The GR/IR account is credited when good are received and debited (that is cleared) when
the relevant invoice is posted.
The LIV process is depicted in the following diagram:
Purchase
Request

Purchase
Order

Goods
Receipt

FI Posting

GR/IR
X

Invoice
Verification

FI Posting

Vendor
Payment

FI Posting

Expense
X

A/P
X

GR/IR
X

Cash
X

Copyright United Nations

A/P
X

47

Invoice Tolerances
Invoices can be posted by the User (A/P) only if there is
a successful Three-Way Match. The match is not
successful:

If the Invoice is within Tolerance


If the invoice is within the Invoice
Tolerance ($4,000 USD or 10% of the
PO Line Item, whichever is lower), the
User (A/P) may enter an invoice
reduction, credit memo or
unplanned charges

If the Invoice is Incorrect


If the difference between the
documents is more than the Invoice
Tolerance, the User (A/P) will not be
able to post the invoice and must send
for review using automated workflows

Copyright United Nations

48

Workflow Approvals
Workflows are used to forward financial documents for review to the appropriate
Approvers. Certain documents (credit memos, down payment requests) require the
Approver (A/P) to approve before they can be posted.
In the example below, Umoja automatically routes the document to the appropriate
certifying and approving officers based on the account assignment. The approvers
will see the invoice in their inbox in Umoja after it is ready for review.

The User (A/P)


Saves the
document as
Complete

The Approver
(A/P) approves
the document

Copyright United Nations

The document is
posted.

49

VAT Process
If an invoice is received with Value Added Tax (VAT), there are three possibilities
based on the host country:

The UN is exempt from taxes altogether and the vendor is


informed of the exclusion.
The Financial Accounting User (A/P) chooses a tax code
for non-reimbursable tax.
The Financial Accounting User (A/P) chooses a tax code for
reimbursable tax.

Copyright United Nations

50

VAT Process: Example


In the example below, the invoice has been posted with the full amount and the
appropriate VAT tax code selected.
The full amount (that is` amount including VAT) is credited to the Vendor Reconciliation
account. The net amount is debited to GR/IR and VAT amount to VAT Recoverable. Both
these amounts are calculated by Umoja depending on the VAT code selected.
GR/IR
1000

VAT
Recoverable

Automatically posted
by selecting
the VAT code

200

Vendor
1200
Copyright United Nations

51

Credit Memos
Credit Memos reduce the amount payable to a vendor or record amount recoverable
from a vendor as a result of damaged goods, errors or allowances.
Credit memos are entered by the User (A/P) with or without reference to a specific
PO
All credit memos must be submitted for approval through workflow. The Approver
(A/P) reviews the credit memo and approves or rejects as necessary
Upon approval, the credit memo will be picked up in the next Payment Run made
to the vendor. The credit amount will be automatically subtracted from the
amount being paid to the vendor

Copyright United Nations

52

Down Payments
The following steps explain how down payments are processed in Umoja:
1

The Financial Accounting User (A/P) creates a down payment


request in Umoja.
2

The Financial Accounting Approver (A/P) approves or rejects


the request.
3

If approved, the payment is made on the Due Date specified


in the original request.
4

When the next invoice against the vendor is entered in Umoja,


the system will remind the user about the down payment. The
user can apply/clear the down payment against the invoice.

Down payments are processed using Special GL Indicators (SPGL). The Financial
Accounting User (A/P) uses the Special GL Indicator in Umoja to designate which type
of down payment is being used. (for example SPGL A = Commercial Down Payment).

Copyright United Nations

53

Down Payments: Budget Consumption


There are several types of down payments applied to payables in Umoja. Amongst
these, some down payments consume budget while some down payments do not
consume budget.

Down Payment Types that


Consume Budget
Commercial down payment
Travel advance
Advances to implementing
partners

Down Payment Types that do not


Consume Budget
Salary advance
Security deposit
Loan receivable

Copyright United Nations

54

Payment Retention
The process for entering payment retention begins when a retention percentage is
entered in the PO. The full invoice is posted at the time of processing.
The retention amount may be automatically posted by a certain date or manually
after certain retention requirements are met.

Copyright United Nations

55

Invoice Processing without a PO


Invoices can also be parked and posted without
reference to a PO. For example, invoices for
travel claims and daily allowance of troops can
be parked and posted without reference to a PO.

Example: Travel Claims


Certain types of Non-PO invoices,
such as Travel Claims, require a
special type of Earmarked Funds
Document called a Funds
Commitment*.

Note: For further explanation of Earmarked Funds Documents, please see the Funds
Management Overview course.
Copyright United Nations

56

Touch Points
The Umoja system is an integrated system and its modules integrate with each other
to complete a process. Touch points refer to these integration points across Umoja
modules, processes and activities.

Treasury:
Outgoing
Payments

Processed
Invoice
If Three-Way Match is successful the
invoice is automatically approved and
passed to Treasury for payment.

Copyright United Nations

At this stage the approved invoice


is scheduled for payment.

57

Learning Checkpoint 1
Invoices can be parked for approval (that is posting) if the invoice is within ______or
______of the PO at the line item level, whichever is lower.
Fill in the blank with the correct option.
A.

$3,000 USD; 20%

B.

$4,000 USD; 20%

C.

$1,000 USD; 10%

D.

$4,000 USD; 10%

Copyright United Nations

58

Learning Checkpoint 1
Invoices can be parked for approval (that is posting) if the Invoice is within ______or
______of the PO at the line item level, whichever is lower.
Fill in the blank with the correct option.
A.

$3,000 USD; 20%

B.

$4,000 USD; 20%

C.

$1,000 USD; 10%

D.

$4,000 USD; 10%

Option D is the correct answer. Invoices can be


parked for approval (that is posting) if the invoice is
within $4,000 or 10% of the PO, whichever is
lower.

Copyright United Nations

59

Learning Checkpoint 2
Which of the following down payment types require a Funds Commitment?
Select the correct option.
A.

Travel Advance

B.

Salary Advance

C.

Security Deposit

D.

Loan Receivable

Copyright United Nations

60

Learning Checkpoint 2
Which of the following down payment types require a Funds Commitment?
Select the correct option.
A.

Travel Advance

B.

Salary Advance

C.

Security Deposit

D.

Loan Receivable

Option A is the correct answer. A travel advance is


a down payment type that consumes budget.

Copyright United Nations

61

Learning Checkpoint 3
An Umoja user wishes to purchase goods worth $1,500. Which is the correct order of
activities that must take place?
Select the correct option.
A.

Good received > Manual Invoice entered

B.

Shopping cart created in SRM > Invoice entered

C.

Low value acquisition PO created in SRM > Goods Received > Invoice entered

D.

Shopping cart created in SRM > Low value acquisition created > Invoice entered

Copyright United Nations

62

Learning Checkpoint 3
An Umoja user wishes to purchase goods worth $1,500. Which is the correct order of
activities that must take place?
Select the correct option.
A.

Good received > Manual Invoice entered

B.

Shopping cart created in SRM > Invoice entered

C.

Low value acquisition PO created in SRM > Goods Received > Invoice entered

D.

Shopping cart created in SRM > Low value acquisition created > Invoice entered

Option C is the correct answer. For requisitions


less than $4,000, a Low Value Acquisition can be
created, eliminating the need for a Shopping Cart.

Copyright United Nations

63

Module 2 Summary
The key points covered in this module are listed below:
The Three-way Matching process is used to match goods received with
invoices received for both goods and services. The GR/IR account is
credited when goods are received and debited when the relevant invoice is
posted
Invoices can be parked for approval (that is posting) if the invoice is within
$4,000 or 10% of the PO, whichever is lower

There are several types of down payments applied to payables in Umoja


out of which some down payments consume budget while others do not
consume budget
Invoices can also be parked and posted without reference to a PO

Copyright United Nations

64

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

65

Module 3 Objectives
After completing this module, you will be able to:
Describe the Local Troop Payment process in Umoja
Identify the role played by A/P in the Petty Cash process
Explain the steps to make a payment to another UN agency
Explain the steps to make a payment on behalf of another UN agency outside of
Umoja

Copyright United Nations

66

Key Terminology
Key Term
Cash Journal

Description
It is an online tool in Umoja for recording cash disbursements
and cash or cheque receipts. It is used to track petty cash and
imprest accounts.

Copyright United Nations

67

Local Troop Payment Process


The following process is used to cover the daily allowances and leave allowances for
local troops:
1

Financial Accounting User


(A/P) creates and parks an invoice
without a PO but with reference to a
Funds Commitment.

Payments are made through local bank.


2

Financial Accounting Approver (A/P)


reviews and posts the document.

After posting, the payments are


processed by Treasury/Cashier.

Copyright United Nations

68

Payments to UN Entities outside of Umoja


For payments made by other UN entities outside of Umoja (not including UNDP), the following
process is followed:
1. Umoja Entity Procures Goods The Umoja entity follows the standard Procurement
process, sending a PO to a Third-party vendor
2. Goods are Received and an Invoice is posted The invoice is posted as per a standard
commercial payment
Debit: GR/IR

Credit: Vendor
3. Inter-Office Voucher (IOV) is created In Umoja, the IOV Financial Authorization
document references the PO number. This document notes the entity that will be making
the payment
4. Credit Memo is created The Credit Memo is used to clear the credit from the Vendor
account
Debit: Vendor
Credit: Special A/R IOV Clearing account for entity

5. No Payment is made While the non-Umoja entity will pay the vendor, the amount owed
to them will be held in the designated Clearing account until the entity is brought onto
Umoja
Copyright United Nations

69

Payments made by UNDP


There are two main scenarios for when the United Nations Development Programme
(UNDP) may make a payment on behalf of a UN entity on Umoja:

Procures and Acts as Pay Agent

Acts as Pay Agent

UNDP assists with the acquisition


of goods and/or provision of
services to support technical
cooperation or other
Peacekeeping operations that are
administered by UN. Following
the acquisition of goods and
services, UNDP pays the vendor.

UNDP only acts as pay agent. In


this case, the procurement
process is performed by UN.
However, UNDP pays the invoice.

For all UNDP payments, an advance (down payment) is required to be made to UNDP.
This is then drawn down for all payments made on behalf of the Umoja entity.
Copyright United Nations

70

UNDP Procures and Acts as Pay Agent


UNDP Procures and Acts as Pay Agent

1. PO created (Vendor is UNDP)


2. IOV Financial Authorization created for UNDP
3. Goods Receipt posted
4. Monthly process of capturing UNDP service fees and adjustments in
Service Clearing Account (SCA). This occurs automatically via interface
5. Down payment is made again to UNDP to replenish funding for future
purchases

Copyright United Nations

71

UNDP acts as Pay Agent Only


UNDP acts as Pay Agent only

1. PO created (to actual Third-party vendor)


2. Goods Receipt posted
3. Invoice is posted with a special payment method. Since UNDP is
paying the vendor this will credit a specific temporary G/L account
instead of the Vendor account
4. IOV Financial Authorization created for UNDP
5. Down payment is made again to UNDP to replenish funding for future
purchases

Copyright United Nations

72

Learning Checkpoint 1
________ creates and parks a payable document to the contingent paymaster.
Fill in the blank with the correct option.
A.

Cashier

B.

Financial Accounting Approver (A/P)

C.

Financial Accounting User (A/P)

D.

Treasury

Copyright United Nations

73

Learning Checkpoint 1
________ creates and parks a payable document to the contingent paymaster.
Fill in the blank with the correct option.
A.

Cashier

B.

Financial Accounting Approver (A/P)

C.

Financial Accounting User (A/P)

D.

Treasury

Option C is the correct answer. The Financial


Accounting User (A/P) creates and parks a payable
document with the contingent paymaster.

Copyright United Nations

74

Module 3 Summary
The key points covered in this module are listed below:
The Local Troop Payment process is used to cover the daily allowances and leave
allowances for local troops

There are several scenarios in which another UN agency outside of Umoja may
provide services to the secretariat
The two main scenarios when UNDP may make a payment on behalf of a UN entity
are procures and acts as pay agent and acts as pay agents

Copyright United Nations

75

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

76

Course Summary
The key points covered in this course are listed below:
The G/L is the central accounting record for Umoja
A consolidated list of all Umoja G/L accounts housed in Umoja is stored in the
systems Chart of Accounts
Reconciliation accounts are used to reconcile (update in real time) the G/L based
on postings to the A/P sub ledger
Integration across A/P areas allows business documents to be linked and decreases
manual effort in obtaining information
The Three-way Matching process is used to match goods received with invoices
received for both goods and services. The GR/IR account is credited when goods
are received and debited when the relevant invoice is posted

Invoices can also be parked and posted without reference to a PO for


non-commercial payments

Copyright United Nations

77

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

78

Course Assessment
Now that you have completed all the modules in this course, you can test your
knowledge by completing the Course Assessment.

To receive credit for completing this course, you must pass this assessment with a
minimum score of 90%.
To complete the assessment you must return to the Learning Management System:
1. Log into Inspira
2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning
3. Search for the name of the course under the My Learning Activities section

4. Click the Start link of the course assessment


5. Click the Submit button once you have completed the assessment

Copyright United Nations

79

Agenda
Course Introduction
Module 1: Financial Accounting in Umoja
Module 2: Invoice Processing
Module 3: Other Accounts Payable Activities
Course Summary
Course Assessment

Course Survey

Copyright United Nations

80

Course Survey
Your feedback is important to the continuous improvement of our training program.
Please complete the Survey for this course using the following steps:

1. Log into Inspira


2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning
3. Search for the name of the course under the My Learning Activities section
4. Click the Start link of the course survey
5. Click the Submit button once you have completed the course survey

Copyright United Nations

81

Congratulations! You have successfully completed the


Accounts Payable Overview course.

Copyright United Nations

82