VPF Accounts Payable: Service and Reliability

The Accounts Payable (AP) team works behind the scenes to support all of the experiments, innovations, and discoveries at MIT. By ensuring accurate and timely payments, AP plays an important role in keeping many activities of the Institute moving forward.

AP is responsible for processing vendor payments, travel reimbursements, independent contractor payments, and more. In fiscal-year 2011, the number of unique invoices and Requests for Payments (RFPs) processed through AP exceeded 275,000. That is the equivalent of 754 transactions per day.

Today, over half of those transactions are managed and monitored electronically. AP has adopted sophisticated digital tools to streamline the buy-to-pay process that supports MIT travelers, vendors and out of pocket expense reimbursements.

John Larkin, Manager of Accounts Payable says AP’s commitment to digital processes began in 2003. That is the year that AP introduced Paymode to allow vendors to be paid electronically through direct deposit. Since then, a host of digital solutions and processes have been integrated to manage the large number of transactions moving through AP each year. The suite of digital systems in the 2011 buy-to-pay process has grown to include ePayables, SAPweb, eCat, and Paymode, just to name a few.

John knows first-hand about the transformation that has occurred in AP since 2000. He has worked at MIT for 22 years and has managed AP for the last 11.

“A lot has happened to AP in those years,” says John. “The paper based systems have evolved, everything is becoming more efficient.”

Digitizing the RFP

As a cornerstone of the digital modernization in VPF, the AP group introduced the Electronic Request for Payment (eRFP) process in 2010. The project represented a significant effort by VPF and the MIT community to streamline a manual, paper based process. Through the modernized eRFP system, expenses are now submitted electronically and reimbursements are directly deposited. In FY 2011, over 45,000 transactions were processed through the new eRFP system. That accounts for 95% of all RFPs at MIT.

In July, 2011, the eRFP reimbursement options were expanded to allow for greater flexibility. The new options include email notifications, direct deposit options, and mailing preferences. All of the expanded options were driven by community feedback and suggestions.

Presumed Receipt, $3,000

AP has recently implemented a new procedure for invoices exceeding $3,000. As of August 15, standard purchase order invoices less than $3,000 are approved by AP without routing them to the DLC for approval and signature. Accounts Payable “presumes receipt” by the DLC of the goods or services on the invoice.

This new policy reduces the paper handling burden on DLC administrators, increases the efficiency of AP services, and assures prompt payment to vendors. Additionally, the new policy reduces the possibility of vendors placing orders on hold pending payment for other MIT orders.

Best Method for Purchases

AP continues to improve and streamline the buy-to-pay process and encourages best practices across the Institute. John points out that the most cost effective methods for making MIT purchases is to use e-Cat or the Procurement Card (P-Card). Through e-Cat, vendors ensure the best pricing and the delivery time is quick. If e-Cat is not an option for a particular item, John says, “The P-card is really the way to go. On a per-transaction basis, it is the most economical way to make a purchase.”

Customer Service

All of the AP staff members are subject matter experts who routinely field questions from the MIT community. In particular, Assistant Manager of Accounts Payable Cathy Cherico has been integral in the evolution of eRFPs and helping to train the MIT community. Cathy collaborates with John and the AP team to ensure quick turnaround and accuracy of payments.

Questions can be directed to buytopay@mit.edu or 617-253-2750. Additionally, a compilation of AP FAQs and Hermes Answers are kept current online as additional resources.