The accounts payable function is a critical business process through which the University manages its payable obligations effectively. Accounts payable is the amount owed to vendors/suppliers for the goods and services received. Typically, a vendor sends an invoice to the University after they deliver the product or service.

Accounts Payable

Primary Policy: FI0505 – Accounts Payable

This section addresses a department’s role in the accounts payable process and the procedures to be followed when invoices are approved for payment. Departments are responsible for ensuring that payments are processed accurately, timely and in accordance with applicable policies. Proper controls and separation of duties must exist to ensure that all transactions are business related, correct, authorized, and properly classified.

Preparing Invoices for Approval and Payment

The University requires that all invoices be billed to The University of Tennessee and include the vendor’s name and address, transaction date, itemized description of the goods or services purchased including unit price and transaction total.

Most paper invoices should be scanned and uploaded into IRIS by departments. (Be aware of exceptions for invoices with amounts in a foreign currency and invoices to non-resident aliens.) Electronic documents saved in IRIS are considered original records.

In late 2019, UT began accepting electronic invoices (e-invoicing) from certain vendors for orders placed in the UT Market Place (additional vendors have been onboarded since then.) E-invoicing provides paperless transactions, improved controls, and significantly reduced departmental efforts in processing payments to these vendors. Departments can no longer enter invoices in IRIS for these vendors. E-Invoicing information and training resources can be found at

Invoice Approval

Approval of invoices indicates that University funds are being expended properly for goods and services appropriately relevant to University business. For sponsored projects, the approval of transactions also signifies that charges are allowable and allocable according to the award document, sponsor requirements, and the Office of Management and Budget (OMB) Uniform Guidance if applicable.

Take appropriate steps to ensure:

  • Invoices are from known vendors who provided the goods or services identified.
  • Pricing and quantities are correct and have been verified against purchase orders, receiving documents, etc.
  • Duplicate payments are not made.
  • Prompt payment discounts are taken.
  • Tennessee sales tax is not charged or is deducted.
  • Additional information/forms are completed for movable or sensitive minor equipment and entertainment expenses.
  • Invoice is approved by an authorized approver.

Separation of Duties

Regardless of the type of payment that is being processed, it is essential that the duties of processing payments and performing the monthly reconciliation of the department’s cost center or WBS elements are separated as follows when staffing permits:

  • Payment processor must not also place orders or receive goods.
  • Payment approval (manual or through IRIS)
  • Ledger Reconciliation – an employee who has no responsibility for requisitioning, receiving, or entering invoices in the accounting system should reconcile the department’s accounts payable documentation to the departmental ledgers each month.
  • Ledger approval – The authorized approver for the department must review the reconciled ledgers and document their approval (manually or electronically in IRIS.) See Policy FI0115 – Reconciling and Reviewing Departmental Ledgers for additional guidance.

Payments Subject to Additional Policies and Restrictions

Be aware of these expenses and the policies that govern them:

  • Entertainment, group arranged events and food for University conferences – FI0715
  • Bookstore purchases – FI0425
  • Memberships and subscriptions – FI0435
  • Retirement receptions – FI0720
  • Moving allowances – FI0450
  • Employee gifts – FI0717
  • Cellular telephones and other wireless devices – FI0730
  • Advance payments to vendors – FI0510

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Your Role in Accounts Payable

You have certain oversight responsibilities in the accounts payable process to ensure that your department makes accurate and prompt payments to vendors and contractors and provides good stewardship over budgeted funds, as noted below.

  1. Ensure that staff are trained appropriately in IRIS procedures and that they read and abide by fiscal policy requirements on receiving materials and processing and paying invoices.
  2. Assign responsibility for processing invoices to appropriate staff. Ensure that separation of duties is maintained.
  3. Approve invoices for payment or ensure that you delegate your approval authority only to an appropriate employee(s). See Policy FI0150 for guidelines.
  4. Establish at least one substitute approver in IRIS. A substitute approver is important to ensure the continuity of business processes.


Remember: It is your job to ensure that the department’s financial transactions are appropriate, accurately described and properly recorded.
Lesson Learned

An employee procured office furniture for her home without permission and charged it to the department.

Proper scrutiny of purchases by the department head would have detected this action in a timely manner.

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