Payment terms are established by the Purchasing Department and dictate when payments to non-employee suppliers will be made. Generally, the university employs a “Net 45″ payment term meaning that the payment will be issued 45-days from the date of the suppliers invoice. Purchase orders sent to the suppliers reflect these terms and conditions and they apply to all invoices received by the university regardless of whether they are issued against an existing purchasing order or not. Payment terms other than “Net 45″ can only be negotiated by the Purchasing Department. Travel reimbursements and other payments to employees are paid immediately.
Within the PeopleSoft Financials System, payment terms are established for each supplier. Invoices processed by Accounts Payable will reflect those terms and the payment due date will automatically be calculated by the system. Accounts Payable does not designate a payment date as this is entirely system driven. For example, a supplier invoice dated January 4, 2015 is received by Accounts Payable on January 9th and is entered into PeopleSoft on January 10th. Since our standard payment terms are “Net 45″ the system will automatically calculated a payment due date of February 4th. The system is programmed to adjust for weekends and university holidays when calculating due dates. Currently non-employee payments are issued twice weekly (typically Monday and Thursday). The PeopleSoft system is coded to select any invoice for payment that has a payment due date equal to or prior to the check run date. Checks are printed and usually mailed out the same day.
Accounts Payable will make every effort to process invoices in a timely manner to take advantage of beneficial discount terms. Keep in mind that not all discounts offered by suppliers for faster payment are advantageous to the university. The Purchasing Office in conjunction with Treasury Operations are responsible for determining when such supplier discounts are beneficial and recommends when they should be taken.
Generally, the university issues payments upon completion of the service or delivery of the product. Requests by suppliers for pre-payments or deposits can only be approved by the Purchasing Department who will ensure that the pre-payment terms are beneficial to the university and that proper controls have been established to protect Tufts interests.
All questions from suppliers concerning the payment date of a particular invoice should be directed to Accounts Payable for handling.