17. Receiving Equipment, Products and Services
The University’s Financial Rules require that the person that has established that equipment, products and services have been received sign off and date relevant documentation and the receipt is then recorded on the relevant Purchase Order. Usually the goods receiving documents are passed to the College/Corporate Services Departmental Finance Office for the receipt to be recorded. However, when receiving equipment, products and services you are recommended to note the following:
check as much/many of the products delivered as you can while the delivery person waits - if you do not have time to check condition of the products always endorse the Carrier’s Delivery Note and the Supplier’s Delivery Note (if there is one) as “unchecked”. It is important to endorse both documents (where both are presented for signature) in order to protect your rights of rejection;
if there is obvious damage to packaging or obvious shortages you have two choices:
refuse to take the delivery; or
accept the delivery, making the delivery person aware of the damage or discrepancy and provide something in writing that clearly sets out the detail of the damage or shortage.
Generally the delivery note should be endorsed as set out above – but as most couriers and suppliers now use PDA’s to obtain signatures it can be difficult to endorse delivery notes in the manner suggested above. You need to ask the delivery person whether it is possible to accept the delivery with qualifications using the PDA that they present for you to use to sign for the delivery. If it is not then your choice then is to either refuse the delivery or provide something in writing which the delivery person signs and both parties keep a copy;
damage or shortages must be reported to both the courier/delivery company and the supplier immediately. Couriers and suppliers will have time limits for the reporting of such discrepancies (typically 3 elapsed days for the courier and 5 elapsed days for suppliers) – after that it will be at least more difficult and in the worst case not possible to make a successful claim against the courier or supplier;
the same timescales as set out above apply even where there is no apparent damage or shortage – it is important to check products delivered for damage, faults or failures or shortages as soon as possible after receipt. If possible deliveries should be checked for quantity, compliance with specification and damage within 3 elapsed days, and should wherever possible be tested to confirm that they are operational within 5 elapsed days;
for many items of equipment and products, delivery is only one stage of the purchase and the supplier may be required to install the equipment or products, with Acceptance Tests being required. If this is the case then you should ensure that Acceptance Tests are completed in compliance with the terms and conditions of the contract, and within the timescales set out in the contract.
Remember to be aware that products can get lost in transit and never arrive at all. Make a note of the expected delivery date for the products and ensure that you progress chase delivery as appropriate. The University may have accepted that risk of loss or damage passes at the time of despatch and if action is not taken it may not be possible to secure compensation for any products lost in transit.
When equipment of a higher financial value (in excess of £5000) have been delivered you must ensure that the equipment is recorded on the College/Corporate Services Departmental Asset Register. If the value of the equipment is greater than £100,000 including VAT you must notify the University Insurance Office of its acquisition and receipt.
Further information on Insurance can be found at: Insurance
Where you are signing or being requested to sign to confirm the receipt of services you should check that the output of the services meets your requirements and that the services have been provided to the appropriate standards. You should also consider whether the number of hours that may be claimed on a timesheet are accurate and again ensure that you are satisfied that the services have been provided to appropriate standards and that the outputs meet the requirements. The same principles apply for services as they do for equipment and products – if you do not have time to check the accuracy of any delivery documentation presented and there is, or you believe that there is a discrepancy, then endorse the timesheet or delivery note accordingly. This at least provides a basis for discussion with the supplier.
18. Invoicing and Making the Payment
Unless specific arrangements have been made with the Procurement Division and/or the Treasury Management Payments Section, a key principle of the University’s Financial Rules is that a Purchase Order must have been created in order for an invoice to be processed. This principle applies irrespective of the type of payment (advance or staged payment or against a pro-forma invoice) and the only exception is a payment made using the University Credit Card (in which case any invoices received are clearly not processed such that a payment is made).
The University’s preferred method of payment is by BACS transfer – payment by cheque will only be made in special circumstances and by specific request (and cheque payments will take longer).
The only other method of payment generally used is the University Purchasing Card (see section 18) although specific arrangements for other methods can be made (usually these involve additional cost).
Standard payment terms are 30 days from date of invoice – procedurally the University’s Payments Team needs to receive invoices authorised for payment no later than close of business on Tuesday of each week. Properly authorised invoices received on time will then be processed such that the payment reaches the supplier’s bank account by the following Friday. Please note that this process will be affected by Bank Holidays and University Closed Days when different arrangements will apply.
Further information on making payments to suppliers can be found at:
In addition payments to international suppliers need to be processed in a different way to suppliers located in the UK. Further information on these types of payments is available at:
In terms of the invoice authorisation process, the names, specimen signatures and limits applicable to individuals given delegated authority from the respective Head of College/Head of Corporate Services to authorise/sign off invoices for payment is held in Treasury Management – Payments Section of the Finance Office.
By authorising an invoice for payment the authorised person is accepting (and taking the responsibility for confirming) that:
equipment, products and services have been received and are satisfactory;
- prices are correct;
the coding is correct and funds are available to make the payment;
- expenditure is a valid and approved charge;
- calculations are correct;
appropriate records have been made in the College/Corporate Services Departmental Asset Register or stores record (both where appropriate);
the receipt of the products and services has been properly recorded; and
the invoice has not been approved and authorised previously.
On occasions it may be necessary to make payment where it is not possible to confirm that all of the above circumstances prevail. Specific examples include:
Advance Payments to suppliers – these are permitted provided that, in the case of advance payments the amount of the payment is less than £5000 ex VAT. If the amount is greater than £5000 ex VAT the supplier must be requested to provide an on default Bank Guarantee for the full value of the advance payment.
If the supplier is unwilling or unable to provide a Bank Guarantee you should consult with the Procurement Division. It is possible for the University to proceed with an advance payment without a Bank Guarantee and take the risk associated with proceeding – that risk being that if the supplier goes into receivership or administration the advance payment will be lost and the College/Corporate Services Department will have to find the money to purchase the equipment, products or services again. Hence, if you did still wish to proceed with the arrangement the Procurement Division would obtain a credit report on the supplier and if that showed that the risk of proceeding was reasonable, the approval of the Head of College/Corporate Services Department accepting that the College/Corporate Services Department would meet the costs from its own budgets would be required.
Staged payments to Suppliers – are also commonplace for major equipment purchases and on occasions involve payments prior to delivery of the equipment. You should seek the advice of the Procurement Division in regards to these payments as essentially they are advance payments because, though the equipment may have been produced (in whole or in part) the same risks manifest themselves as for an Advance Payment. Bank Guarantees will not generally be sought for staged payments (as they are usually captured within the advance payment) but basically the same provisions as for advance payments applies. Where a staged payment is required in advance of delivery, such payments above £5000 ex-VAT in value can only be made where a Bank Guarantee has been put in place by the supplier, unless specifically agreed otherwise by the Procurement Division.
Payment against Pro-forma Invoices – these are advance payments by another name but with the added disadvantage that there will be little or no knowledge of the supplier and it is unlikely that you will be able to obtain a Bank Guarantee. If you wish to proceed with a payment against a pro-forma invoice, the same principles as those set out in respect of an Advance Payment apply and a Purchase Order must be created and issued before any commitment is made.
19. Using the University Purchasing Card
The University now requires (wherever practical) for staff to use a University Purchasing Card (P-Card) for small one off purchases rather than create supplier records on the Proactis system (which take time and resources to create and then clutter up the system with old supplier records that then require ad-hoc clearing), using the Purchasing Card resolves this problem.
The University P-Card acts in the same way as a “normal” credit card, in that payment can be made for products and services and the amount paid using the Card is recovered from the University by the Card provider by means of a monthly direct debit payment by the University against a statement issued by the Card provider. There is limited time to dispute any payments made against the statement received.
The P-Card can only be used for low value transactions where there is no Approved Supplier available to supply the products or services required.
There is an individual P-Card transaction limit of £520. However, this can be increased to £1000 for a card holder with approval from the Head of College/Head of Corporate Services if this is more appropriate for operational requirements (thus providing greater flexibility). A monthly spend limit of £5000 set also for each Card issued and these limits can only be increased with the approval of the Head of College/Head of Corporate Services (or delegated authority). P-Cards are only made available to staff in Colleges and Corporate Services that have responsibility for purchasing and processing Purchase Orders, no other member of staff is permitted to apply for, or have a P-Card, other than for reasons related to Business Continuity, and colleagues that have a P-Card are not permitted to allow other members of University staff to use or have access to the P-Card or their PIN number.
Those in possession of a P-Card are required to have and maintain a log of transactions undertaken using the Card and a second person in the College or Corporate Services Department (generally from the College or Corporate Services Finance Office) is required to reconcile the transaction log against the print out of transactions provided by the Card Holder.Further information on the Purchasing Card can be found at:https://intranet.birmingham.ac.uk/finance/procurement/I-need-help/eps4.aspx#eighteen
or contact the University Purchasing Card Administrator, Geoff Williams on extn 45947 or email G.N.Williams@bham.ac.uk
20. International Purchases
Essentially purchases from overseas organisations are subject to the same Financial Rules and Procedures and guidelines as those set out in this document for UK/domestic purchases. The complexities arise when decisions have to be made with regard to payment methods and dealing with VAT and Duty.
Purchase Orders must be created for a purchase from an overseas supplier in the same way as for a UK supplier and the procedure for requesting a new supplier to be set up is also the same as for a UK supplier except that you should obtain the supplier’s (or “beneficiary’s”) bank details as set out on the Foreign Payments web pages at: http://www.finance.bham.ac.uk/foreign_pay/
Further information on importing and exporting goods can also be found at: http://www.birmingham.ac.uk/university/governance/policies-regs/Insurance/index.aspx
The headline points to note when purchasing products and services from overseas are:
for low value transactions and for some higher value, higher risk transactions it may be worth using the University P-Card to make payment for the transaction. This may especially apply where an advance payment is required as the use of the P-Card may offer greater protection and opportunities to recover money if things go wrong;
the exchange rate and other charges (such as cross border charges) may, however, mean that the use of the P-Card increases the overall cost of the transaction;
if payment is to be made against an invoice please make sure that all the necessary bank details are obtained and provided to the Payments Section to avoid delays in payment. Bank details must be correct and accurate in order to avoid payments being made to incorrect accounts etc which will again result in additional costs;
avoid “urgent” payments as these attract higher transaction costs which have to be passed on to the College or Corporate Services Department that has requested the transaction;
avoid payment terms such as Irrevocable Letters of Credit – you should contact the Procurement Division if you are required to use any payment process other than standard electronic transfer of funds;
you should alert the Procurement Division or Treasury Management Payments Section if you are about to place a high value or contract/Purchase Order, or series of high value contracts/Purchase Orders in US Dollars (“high value” being USD 10,000 or more) as the University has a policy of “hedging” against movements in the US Dollar/sterling exchange rates in order to “smooth” significant fluctuations and provide budget certainty on major purchases (if the purchase is processed through the Procurement Division it will be automatically picked up and referred for hedging);
always create and issue a Purchase Order ensuring both sides – the front of the Purchase Order and the reverse setting out the University’s Conditions of Purchase – are sent to the supplier. This at least gives the University some limited opportunity to contest that the University’s Standard Conditions of Purchase apply in the event of any dispute (and that if the case were to go to Court, it would be administered through the English Courts);
for higher value/risk purchases (in excess of £25000 ex-VAT) ensure that a contract is in place;
note that where a shipping agent is used (as opposed to a courier) then:
Whichever option applies arrangements will need to be made to make payment promptly to avoid storage and interest charges being applied. Payment can in some cases be made by Purchasing Card (this will need to be arranged with the College/Corporate Services Departmental Purchasing Card holder) or otherwise arrangements will need to be made to process an invoice in the normal manner but accepting that immediate payment is required.
21. Disposal of Equipment and Products
The Head of College/Corporate Services Department is responsible under the University’s Financial Rules for the use and security of assets under their control and this responsibility extends to the disposal of the assets at the end of useful life.
The disposal of many assets is governed by legislation – and as most of the assets requiring disposal will take the form of electrically operated equipment of all types and values the primary legislation that governs disposal is the Waste Electrical and Electronic Equipment (WEEE) Regulations.
A primary source of information on the disposal of waste electrical and electronic equipment is available at: http://www.finance.bham.ac.uk/purchasing/disposal.shtml
More generally the following should be considered when seeking to dispose of equipment and products whether these are formally defined or recognised as “assets” or otherwise: equipment and products whether these are formally defined or recognised as “assets” or otherwise:
the ownership of the asset or retention of interests in the asset by the funding agency that originally provided the funds to purchase the asset must be considered. Some funders retain ownership or an interest in the asset and you may need to obtain permission before you are able to dispose of the asset in any way (including a change of use within the University). You should therefore check the conditions of grant(s) or contract(s) with any funding agencies that provided funding for the original purchase and any subsequent upgrades etc to ensure that you can dispose of the asset without the funder’s prior authority and that the University can retain any proceeds from the disposal;
certain assets (such as photocopiers) are leased and do not belong to the University and it is for the owner of the assets to dispose of this equipment. However, the University may be obliged to remove and return the assets to the owner at the University’s risk and expense. Reference will need to be made to the original contract/lease agreement in these cases;
if you are looking to sell or donate electrically operated equipment to an external third party, that equipment must be tested before its sale to ensure that it is safe to use. Even if you do this and include a disclaimer (see below) there is no absolute guarantee that this will protect the University from being held to be liable in the event of death or personal injury or damage to property – there is therefore always risk when selling electrical equipment in particular to external third parties;23
if electrically operated equipment is to be transferred internally to another College whether for transfer of funding or otherwise, School or Corporate Services Department it must also be tested to ensure it is safe to use prior to the transfer taking place and then after it has been transferred and (where necessary) installed;
the original purchase contract for certain items of equipment may prevent the sale, donation or transfer of such equipment to third parties at all (whether for scrap or otherwise) or may stipulate that the equipment cannot be sold on/exported to certain countries (or nationals of certain countries). This is particularly so where the equipment was originally manufactured in the USA (with export regulations preventing the onward sale, donation or transfer) – again it will be necessary to check the original purchase contract to confirm the situation;
for computer equipment it will be necessary to remove all of the software (except the operating system) and all of the data contained on the computer before it is sold or transferred to any third party (whether scrap or otherwise). The only exception to this is if disposal of computing equipment is undertaken by a specialist organisation that certifies that all software other than the operating system and data will be removed before the equipment is sold on or scrapped. Most software licences are non-transferable (including the standard packages such as Office) and as many of software houses are based in the USA the same restrictions on sale and disposal as set out for equipment apply to software. It is particularly important to ensure that personal data is removed from electronic storage media prior to disposal for legislative (Data Protection Act) compliance reasons;
there should be no issue with transferring computer equipment and software to other Colleges, Schools and Corporate Services departments within the University as the University is the legal entity and the licensee of the software and not individual Colleges, Schools or Corporate Services Departments. However, purchase contracts and software licences in particular should checked that the use of the equipment and software by other areas of the University is permitted;
disposal of all assets as scrap must be undertaken in compliance with all relevant and applicable legislation and University Approved Suppliers should be used where they are available, whether the waste equipment and products requires to be handled by specialists or whether it is possible to place scrap items into a skip (in which case the University’s Approved Suppliers for the hire of skips must be used);
if necessary, any equipment or products placed in a skip should be rendered unserviceable and unusable;
before making any asset available for disposal to any third party (including staff), the asset should be advertised within the University – the Procurement Division has an email facility available for this purpose. Please contact Geoff Williams extn. 45947 or email: G.N.Williams@bham.ac.uk for further information;
if no College or Corporate Services Department expresses an interest in taking the equipment or product:
- computer equipment should be disposed of as scrap either by means of the original equipment manufacturer’s WEEE compliant disposal scheme or by using the University’s Approved Supplier for the disposal of computer equipment;
- other equipment, including furniture, can be made available for sale or donation to an external third party if it is in good condition and, in the case of electrical equipment, it has been tested and confirmed as being safe to use (see previous note on this subject);
- the extent of competition to be sought for the equipment or products will depend on the perceived residual value or the actual value of the equipment or products. You should contact the Procurement Division to obtain advice on the extent of competition that should be sought;
- if any assets are disposed of (by sale or donation) to an external source (irrespective of whether the source is a commercial company or an individual, and irrespective of whether the assets are being sold or donated) a Delivery Note with a standard disclaimer should be issued on University headed paper and a signature obtained from the recipient confirming that the assets are sold as seen with no warranties express or implied.
- if you are considering selling or donating higher value assets it may be necessary to have an express contract of sale – you should contact the Procurement Division for advice;
- where the proceeds of the sale are less than £50, an invoice can be issued for the agreed amount on University letter headed paper and the administration of the purchase is concluded locally; Treasury Management – Credit Control must be requested to raise an invoice for any amounts due in excess of £50 – further information on raising an invoice is available at: http://www.finance.bham.ac.uk/creditcontrol/invoice.shtml
- the delivery note or the invoice must provide for the transfer of ownership to the asset to the third party;
- VAT is chargeable on the sale of any asset to any external organisation and should be shown separately on any invoice;
- the disposal of an asset must be recorded in the College/Corporate Services Departmental asset register by the College/Corporate Services Department. The register must record:
- the date of disposal;
- description of the asset;
- name and address of the recipient;
- amount received;
- account code credited;
- authorised signature
a brief explanation should be included if no competition was sought for the disposal of a higher value asset or the asset was sold or donated to a member of staff;