Why After-the-Fact Purchases Create Problems
When a vendor starts work before the appropriate purchasing method is in place, the problem often shows up later—when the invoice arrives.
Without a valid purchase order, the invoice may not have the information needed to route and match correctly in Digital Mailroom (DMR). That can leave Accounts Payable trying to determine who ordered the goods or services and where the invoice belongs.
An after-the-fact purchase can result in:
- Invoice delays. The invoice may sit unresolved while AP researches the purchase.
- Additional follow-up. AP may need to contact departments to identify the purchaser, obtain documentation or determine the correct PO.
- Late vendor payments. The vendor may be waiting while the underlying purchase is corrected.
- More work for everyone. Departments, Procurement Services and AP may all become involved in resolving a transaction that could otherwise have been processed normally.
- Lost opportunity for review. Pricing, contract terms, competition and other requirements may not be reviewed until after VCU is already committed.
- Compliance concerns. Payment may not be approved in some circumstances, and serious or recurring issues may require additional review or corrective action.
- Exposure to Legal and Financial Liabilities. Bypassing any formal legal review of terms may inadvertently appear as VCu agree to the vendor’s standard online terms or “click-wrap” agreements. These often contain clauses illegal for public institutions, such as mandatory binding arbitration, out-of-state governing law, or waivers of sovereign immunity.
The key point
A purchase order is not just procurement paperwork. It authorizes the purchase and helps the resulting invoice get to the right place and get paid correctly.
Need help?
Contact University Purchasing at [email protected] before authorizing work if you are unsure which purchasing process applies.
Categories Procurement Services