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Material & Disbursement Services (MSD)


Effective Date:  03/01/1998

Last Modified Date:  11/21/2003

Procedure Description

It is occasionally in the best interest of the University and the State to delay payment of outstanding invoices.  These situations typically involve large-dollar-amount procurements for which final receiving and approval for payment (i.e., "contractual acceptance") is contingent upon satisfactory delivery and installation by the vendor.

Procedure Steps

  1. When preparing a Purchase Requistion for an item for which delayed payment is anticipated, state the following clearly on the requisition:
    • the need for a "withhold payment" flag to be placed on the resulting Purchase Order;
    • the criteria for contractual acceptance of the order and removal of the flag; and
    • the name of the contact person in the requesting department.

  2. The purchasing agent creates a Purchase Order as usual and places a "withhold payment" flag on the order in the FRS system.

  3. After the vendor provides the goods or services per the instructions on the PO and forwards all invoices to Disbursement Services, the requesting department's contact person
    • evaluates the vendor's activities for adherence to purchase order criteria for acceptance; and
    • notifies the purchasing agent, by written Change Request, to remove the withhold payment flag.

  4. After the purchasing agent removes the flag, Disbursement Services will issue a check for final payment.

Additional Information

See also

MSD Policy 35, Delayed Receiving/Payment for Special Acceptance Considerations

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