State of Minnesota MAPS Replacement Project Prepared by STA Process

State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Process Identifier: AP Sub-Process: Invoice - Direct, Purchase Order, Sub-Process Identifier: AP-01 Expenditure Correction Sub-Process Scope: To process invoices submitted manually or electronically for unencumbered and encumbered purchases of goods or services. To-Be Vision Statement: The actual process for payables is relatively consistent across software packages. The benefits gained from the new system are expected to enhance the overall payment process for all involved, particularly for the procurement/payables relationship. In addition to the expanded functionality inherent to the new system, the following enhancements have been identified: • Streamline processing of transactions - data entered on requisitions, purchase orders (or contracts) and receipts are carriedforward seamlessly from those documents to the purchase order invoice in the accounts payable module • One point of entry for all (encumbered and unencumbered) payable transactions • Tighter internal approvals/controls, in addition to workflow • Full integration across all procurement and financial modules • Flexible payable transactions, one-to-one, one-to-many, many-to-one (e.g., one invoice for one vendor payment; multiple invoices for one vendor payment; multiple POs for one vendor payment) • Electronic submission of invoices by vendors • The ability to attach supporting documentation, as needed • The ability to associate expenditure corrections to the original transaction (e.g., purchase order, payment voucher) • Agencies can interface payments referencing a valid PO in the system, which will correctly liquidate the encumbrance. In the new system, agencies will process all payments through the new accounts payable module, either through direct entry, agency subsystem interfaces and/or electronic invoicing. The point of entry for all payable transactions occurs in the same physical location on the system. However, the type/style distinguishes the various invoice payments. Regardless of the type (encumbered or unencumbered) entered, based on security levels and agency defined approval needs, workflow will route the transactions appropriately. Upon successful completion of system processes, the transaction will be posted and accounting entries created and posted to General Ledger. Payments will be generated and processed (e.g., mailed, routed for deposit) from the invoice information entered. Invoice and payment data will be exported to a data warehouse for use in ad hoc querying and reporting. Purchase Order Invoices Purchase order invoice documents can be created via a batch process or manually created by a user from the receiving document, AP-01 Invoice To-Be Final rvsd20061130 Page 1 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction Process Identifier: AP Sub-Process Identifier: AP-01 purchase order document, or invoice submission (via a self-service portal). At the time of entry for purchase order invoices, users will be able to substitute accounting distributions on the transaction, if needed. Upon successful edit, budget check, matching, approval and posting, encumbrances will be liquated and the appropriate expenditure accounting entries created and posted to general/subsidiary ledgers. Expenditure Corrections In the new system, transactions for expenditure corrections have the same point of entry as the direct and purchase order invoices. Users, with proper security, will enter expenditure corrections associating them to the original transaction. In cases where the original transaction is a purchase order, the system will be able to restore the encumbrance, if budget permits, to the original purchase order. Sub-Process Trigger(s): • Receipt of goods or service • Receipt of invoice • Desire to make payment Key Sub-Process Participants: • Vendors • Agencies Improvement Opportunities: # 1. 2. Description Ability to perform substitute accounting at the time of payment (change any chart of account). Ability to add accounting lines to a transaction for additional cost. If transaction is a purchase order invoice, the additional lines will not liquidate the encumbrance, but will reduce the available budget. More accurate reporting, as there will be one single source system to report from. # 20. 21. Description Ability to calculate applicable sales tax – state, county and local. Ability to correct various errors (e.g., reinstate cancelled encumbrances, closed or cancelled POs, etc.) with expenditure corrections. An integrated procurement and financial system allows the elimination of the current interface between procurement and accounting. 3. 22. AP-01 Invoice To-Be Final rvsd20061130 Page 2 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction 4. 5. 6. Ability to reference/pay multiple invoices on one voucher (for same vendor). Ability to reference/pay multiple vendors on one voucher. Ability to reference/pay multiple POs on one voucher (for same vendor). Ability to receive and process electronic invoices. Ability to upload spreadsheets for various payable tasks. Process Identifier: AP Sub-Process Identifier: AP-01 23. 24. 25. Ability to use effective dating logic when entering the rules used to generate local taxes. The ability to automatically calculate the appropriate prompt pay and schedule pay dates for all payments of goods and services. Streamline the payment process for grants by not requiring input of extraneous information (i.e., prompt pay or scheduled pay dates). Appropriately apply discounts to payments (do not apply discounts if the payment is late). The ability to accurately record the receipt of goods or services if received before encumbrance is made. This functionality would require a reason code. Retain the ability to change vendor location at time of payment. Ability to change the accounting distribution of a direct payment without having to re-establish payment. Ability to schedule recurring payments. Expanded functionality to prevent payment of duplicate invoices (i.e., edit check on a combination of fields such as invoice date, invoice number and vendor). 7. 8. 26. 27. 9. 10. 11. 12. Ability to finalize purchase order invoice transactions at the line level. The ability to track retainage (at the expense budget level). Associate credit memos with the original transaction and realize the debt appropriately. Gain stronger approval controls through the use of workflow. 28. 29. 30. 31. AP-01 Invoice To-Be Final rvsd20061130 Page 3 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction 13. 14. Eliminate miscellaneous agency/user systems for reporting/tracking. The ability to allocate at the distribution level at the time of payment. The ability to link expenditure transfers to original POs or payment. Ability to interface agency subsystem PO invoices to AP by referencing the PO established in the procurement module, where applicable. Simplified and streamlined direct pay process for emergency procurement payments. Process Identifier: AP Sub-Process Identifier: AP-01 32. 33. Ability to identify taxable/non-taxable payments at time of payment. Ability to “partialize” a final payment, even if the payment has been disbursed, provided remaining funds are available. Ability to prevent the change of a vendor at the time of payment for PO invoices; only allow vendor changes at the encumbrance level. Eliminate handling of paper copies of documents and rekeying of information. Automatic matching of purchasing and accounts payable documentation before a payment voucher is created. This must support both two-way matching of the purchase order and invoice and three-way matching of the purchase order, receiving information, and invoice, according to agency policy. Automatic budget check and funds availability check prior to payment processing. 15. 34. 16. 17. 35. 36. 18. 19. The ability to track and identify agency vendor account numbers, as well as specify the agency’s vendor account number on the payment (e.g., cell phones, Pitney Bowes). The ability to process one-time non-vendor payments, where no vendor setup is needed (e.g., fees/refunds). 37. High-level Functionality Needed to Achieve Vision: # 1. Functionality The system will support combining multiple purchase orders and/or invoices for same vendor. AP-01 Invoice To-Be Final rvsd20061130 Page 4 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Process Identifier: AP Sub-Process Identifier: AP-01 The system will support various methods of entering purchase order invoices. At minimum, vouchers are automatically created (voucher build process) or user created (manual entry using receipt or purchase order documents) The system will support the state’s need to calculate and disburse taxes at the time of payment The system will support uploading spreadsheets for various payable tasks (e.g., expenditure corrections, large volume invoices) The system will support a Vendor/Customer self- service portal, so customers can submit electronic invoices. The system will support capturing of commodity information when entering direct (unencumbered) invoices. The system will support capturing contract information on direct (unencumbered) invoices The system will support purchase order references on agency subsystem interfaces. The system will support the ability to denote/mark an invoice transaction for warrant intercept process or special handling. The system will support associating POs to expenditure transfers The system will support automatically calculating state, county and local taxes; and accurately record/report them The system will support recording reason(s) for late payments The system will support applying discounts to the whole invoice or at individual lines The system will support performing withholding, as required by law (e.g., 3% federal withholding) Description MAPS Point of Entry will need to be changed to reflect the appropriate document style/type given the transaction being processed. The ability to accept electronic invoices, in lieu of original hard copies, may require some law or policy change (further research is required). Suggested Changes to Statute, Regulation, and/or Policy: Reference NA NA Key Integration Points: # 1. 2. 3. Integration Point Accounts Payable is fully integrated with all financial and procurement modules CITA - interfaces from agency subsystems Accounts Payable data exported to the information data warehouse Eliminated Non-core Systems: # 1. System Description Various agency/user subsystems AP-01 Invoice To-Be Final rvsd20061130 Page 5 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction 4. Vendor self-service portal to AP Process Identifier: AP Sub-Process Identifier: AP-01 Notifications, Approvals, and/or Workflows: Change Management Concerns: # 1. 2. Concern The restraints associated with stronger controls (e.g., approvals, audits) may possibly create processing bottlenecks New functionality will necessitate additional end-user training for a larger user population (e.g., self-servicing) Electronic invoice submissions without paper forms and/or manual signatures. Audit trail/purchasing concerns associated with adding accounting distributions at time of payment that do not reference the purchase order nor carry commodity information. The majority of workflow decisions should remain at the agency level. CrossRef # 1. 2. 3. 3. 4. 4. Description If voucher build is used, workflow of purchase order invoice is submitted to the appropriate staff for review and approval. If Vendor self-service is used, notifications, approvals and workflow will need to be defined based upon the functions available in the new system. If batch scheduling is used for matching, notification of match exceptions must be provided to the appropriate staff for further action. Direct or purchase order invoice workflow to approvers for payment approval at the agency level. Approval and workflow rules are needed for expenditure correction transactions at the agency level. CrossRef 5. 5. Key Assumptions: # 1. 2. 3. Assumption If taxes are encumbered at the time of payment they will be disbursed appropriately, based on agency, commodity and “ship to” location. The system will allow optional chart of accounts at the time of payment. The system will allow allocations to occur at the time of payment, not changing funding, but percentage and amounts. AP-01 Invoice To-Be Final rvsd20061130 Page 6 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Invoice - Direct, Purchase Order, Expenditure Correction 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Process Identifier: AP Sub-Process Identifier: AP-01 Discounts can be taken at the time of encumbrance or payment. Scheduled due date is determined by the prompt pay date, but can be overrode with a given reason code and proper security Security will be established for different functions aligned with separation of duties and/or as defined by agencies. Audit and historical information is captured for all AP and related procurement activities (and accessible – online, query or report) All procurement processes (e.g., requisitions, purchase orders, contracts and receiving) will be performed in the new system for all agencies. If agencies interface purchase order invoice, the purchase order must be valid/active in the new system. Payments will only include local and county taxes, if and only if state taxes are applicable. Direct invoices will capture commodity information when applicable. Processes related to invoices or payments (e.g., edit, budget check, posting, payment creation, GL entries) can be batch scheduled or user initiated with appropriate security. System provides standard in/out-bound interfaces for processing transactions to/from programmatic subsystems (e.g., SEMA4, IWP, and CITA). AP-01 Invoice To-Be Final rvsd20061130 Page 7 of 7 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Process Identifier: AP Sub-Process: Disbursements Sub-Process Identifier: AP-02 Sub-Process Scope: To capture in one system all tasks related to disbursements, including producing and processing vendor payments from payment vouchers entered in the accounts payable module or IWP (Interface Warrant Print) files received from agencies, and canceling payments or warrants as needed. To-Be Vision Statement: In the new system, the disbursement method will be established at the vendor level. The method of payment will be defined on the vendor’s remittance location record as a warrant or EFT. Disbursements will be generated based on the scheduled or requested pay date entered on the direct, purchase order, and/or CITA invoices entered in the accounts payable module or via IWP files received from agencies. Once those transactions are successfully processed (e.g., budget checked, approved, posted) in the accounts payable module, the transactions will be available for the payment process. The payment cycle process will produce payments real-time and on-demand. If the disbursement method is EFT, the process automatically prepares the file for the bank, which will eliminate the current process of DOF formatting the EFT file in MS Access. The appropriate accounting entries will be generated, posted and update the General/Subsidiary Ledgers, as are all other accounting transactions entered in the system. The integration of the financial modules in the new system allows users to easily identify and/or link to associated documents (e.g., payments to payment voucher or vice versa) across modules. Interface Warrant Print (IWP) The new system will allow agencies to continue to process IWP files to produce payments. The system’s functionality lends agencies more flexibility and control of their payments generated. Agencies currently cannot denote IWP transactions for special handling, but will be able to do so in the future. Additionally, one of the current MAPS limitations for IWP is the inability to record multiple dates (e.g., scheduled pay date, requested pay date) for each payment transaction line. The increased functionality allows agencies to input multiple dates to be used for system processing and reporting. Cancellations (Payments/Disbursements) The new system will provide streamlining opportunities for the overall payment cancellation process, as there’s one single point of entry to perform the cancellation. Agencies will be able to place a payment on hold or cancel by line or the entire payment. For canceled lines or whole payments, reversing accounting entries are automatically generated and posted to the appropriate ledgers, with the ability to re-open prior initiating documents (e.g., reopen a closed purchase order to restore the encumbrance) if elected. DOF will still maintain the control of cancelling warrants and/or EFTs, however, the ability to automate this process is an added benefit for the state. The cancellation process will be initiated or requested by agencies via workflow routed to DOF for review and approval. Upon approval, DOF will route requests to the Treasury to process accordingly. The ability to perform all tasks related to disbursements in one system delivers powerful inquiry and reporting capabilities within individual agencies or collectively across all agencies. AP-02 Disbursements To-Be Final rvsd20061130 Page 1 of 4 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Disbursements Sub-Process Trigger(s): • Direct Invoices • PO Invoices • CITA payments • IWP • Need to disburse payments for agency warrant subsystem • Need to cancel a disbursement before or after it’s generated • Need to cancel payment of a line item Process Identifier: AP Sub-Process Identifier: AP-02 Key Sub-Process Participants: • Agency • DOF • Treasury • Bank • Central Mail Unit Improvement Opportunities: # 1. 2. 3. 4. 5. Description Ability to reference encumbrances on CITA files. Ability to print the PO number on the disbursement to assist vendors in identifying the purpose of the payment(s). Ability to provide scheduled pay dates at the line level for CITA and/or IWP payments. Ability to allow special handling (print order) for IWP. Ability to attach documents (e.g., copy of warrant with forged signature). # 6. 7. 8. 9. 10. Description Eliminate the manual process of formatting EFT files. More accurate reporting, as there will be one single repository that captures all payment activities. Ability to choose to have the funds restore the encumbrance or the budget at time of cancellation. Ability to “partialize” a final payment, even if the payment has been disbursed, provided remaining funds are available. Ability to cancel an inter-agency payment referencing a receivable, allowing the funds to go back to an encumbrance or a budget, and re-opening (reestablishing) the receivable. High-level Functionality Needed to Achieve Vision: # 1. Functionality The system will support IWP processing – accept file of warrant information to be printed, as well as create/record the expenditure correctly. Page 2 of 4 November 20, 2006 AP-02 Disbursements To-Be Final rvsd20061130 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Disbursements 2. 3. 4. 5. 6. 7. Process Identifier: AP Sub-Process Identifier: AP-02 The system will support the ability to consolidate multiple payments for the same vendor on one warrant and itemize the invoices on the remittance advice. The system will support the ability to consolidate (or choose not to consolidate) multiple invoices for the same vendor on one warrant and itemize the invoices on the remittance advice. The system will support attaching documents to the payment record. The system will support the ability to schedule and request payments at the line level for CITA and IWP payments. The system will support the ability to track pending payments by scheduled payment date. The system will support end-user correction of errors on-line prior to processing a payment (e.g., voucher balance, account number, data error). Description Suggested Changes to Statute, Regulation, and/or Policy: Reference None. Key Integration Points: # 1. 2. 3. 4. 5. Integration Point Accounts Payable is fully integrated with all procurement and financial modules. Interfaces to/from agency subsystems (e.g., CITA, IWP) Payment data exported to the information data warehouse EFT transmittals to the various banks Payment data interfaced to/from Treasury CrossRef Eliminated Non-core Systems: # 1. System Description None. Change Management Concerns: # 1. Concern Having agencies convert from IWP to CITA process when the vendor is active and stored in the system would require modifications to their interfaces. Notifications, Approvals, and/or Workflows: # 1. Description Electronic approval and workflow for special handling (pull warrants) process. CrossRef AP-02 Disbursements To-Be Final rvsd20061130 Page 3 of 4 November 20, 2006 State of Minnesota MAPS Replacement Project Prepared by: STA Process: Accounts Payable Sub-Process: Disbursements 2. Limited user accessibility (e.g., connectivity, equipment) for approvals. If agencies use CITA instead of IWP, may require additional online approvals, which could create processing bottlenecks. Process Identifier: AP Sub-Process Identifier: AP-02 2. Workflow process to support agencies requesting warrant or EFT cancellations from DOF, with the ability to route request from DOF to Treasury. 3. Key Assumptions: # 1. 2. 3. 4. Assumption IWP will only be used for non-vendor payments. Users will have the ability to hyperlink from the payment voucher directly to the disbursement. Payments cannot be cancelled if disbursement has occurred; in this instance, the disbursement would have to be canceled. The process of canceling payments will still be the agency’s responsibility. AP-02 Disbursements To-Be Final rvsd20061130 Page 4 of 4 November 20, 2006