Frequently Asked Questions - Accounts Payable
- What is Accounts Payable Responsible for?
- What is required to initiate a payment to a vendor?
- What is a tax invoice?
- What is an ABN?
- What happens if a vendor is not able to provide a valid ABN?
- Does a supplier have to charge GST?
What is Accounts Payable Responsible for?
Accounts Payable is responsible for all creditor functions within the University (individuals or organisations to whom the University owes money). It processes authorised invoices for payment and draws cheques for issuance to the respective vendor.
What is required to initiate a payment to a vendor?
In order to pay a vendor, the University must possess the original invoice. Approval to pay the claim will then be sought from the person who requested the Purchase Order before a cheque is issued.
In the situation where a Purchase Order was not raised prior to an invoice being received, a Purchase Requisition must be completed and forwarded to the Purchasing Section accompanied by the invoice. This will be processed and passed directly to Accounts Payable for a cheque to be drawn.
What is a tax invoice?
A tax invoice is a claim for payment which complies with certain legislative requirements introduced with the GST and is required in order for the University to claim GST tax credits.
In general terms, this would include details such as the supplier's name and ABN, the words 'tax invoice' and reference to the GST component of the amount due.
What is an ABN?
An Australian Business Number (ABN) is an eleven digit number assigned by the Taxation Office to persons or entities registered under the New Tax System. It must be quoted on all invoices.
Does a supplier have to charge GST?
In certain circumstances vendors can possess an ABN without being registered for GST. The ABN must still be quoted on the invoice however the supply is free of GST.
Supplies of goods and servics such as food and medical items are non-taxable and therefore do not attract GST.
What happens if a vendor is not able to provide a valid ABN?
The University prefers to deal only with persons and organisations who are registered with an ABN. Payments to non-registered suppliers are subject to withholding tax whereby the University is legally obligated to withhold 48.5% of the payment and remit this amount to the Taxation Office.
In situations where goods or services are provided by a vendor who, for example, is not engaged in business but does so in a non-profit capacity, they may elect to complete a Statement by Supplier form which allows the University to pay the amount in full without the need to withhold.