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P-Card transaction cycle changing

The business cycle is changing for the 2,500 University staff members who use the corporate purchasing card (P-Card) program each month.

The change means that purchases made with a MasterCard P-Card will be approved in the M-Pathways Financial System sooner, which allows transactions to appear in financial reports earlier than was possible in the old cycle. The new cycle begins Jan. 15.

"This change solves a problem that's been around for a long time because it reduces the time between when a purchasing transaction takes place and when it appears on the financial statement," says Interim Chief Financial Officer Timothy Slottow.

Preparation for the change includes a longer than usual P-Card transaction period (Period #7) from Nov. 25 to Jan. 14. The new P-Card cycle that begins Jan. 15 will extend from the 15th of each month to the 14th of the following month. The new cycle will allow transactions to be changed in the M-Pathways Financial system until 7 p. m. on the 27th of the month (or the last working day prior to the 28th), and statements and receipts will be due to Accounts Payable by the 5th of the month following M-Pathways Financial System.

The new business cycle also does not resolve other related problems, such as difficulty collecting receipts or securing signatures for travel expenses. Staff members who reviewed the new cycle prior to its implementation said that most reconcilers shouldn't have difficulty adjusting their schedules to meet the new dates, but they pointed out that individuals who also work with the Statement of Activity may be pressed for time because this work will occur during the same time as the P-Card reconciliation process.

Staff consultants from Michigan Administrative Information Services (MAIS) and Accounts Payable are available to help unit reconcilers review and update their P-Card processes and to provide some on-the-job training. Reconcilers should call the MAIS Help Desk at (734) 936-7000 and select option 3, or e-mail maishelpdesk@umich.edu to request assistance. In the old business cycle, some units could not get an accurate picture of funding that is committed to P-Card expenses. These units sometimes use separate internal systems to track P-Card data for encumbrance purposes. Under the new process, the Statement of Activity and other financial reports will reflect a more accurate financial picture because expenses will be accounted for in a more timely manner. This might eliminate the need for an additional tracking system.

Another issue that will be resolved with the new process relates to the posting of transactions at the end of the fiscal year. In the old cycle, only transactions posted by the bank through May 24 were included in year-end reports. Those reports now will reflect transactions occurring through the middle of June. This is especially beneficial to unit administrators who manage Project/Grant funds that are not carried over into the new fiscal year.

Before changing the business cycle, the plan was presented to the Budget Administrators Group, the Financial Unit Liaisons and numerous unit staff members who would be affected bythe change. They noted that while the new cycle provides the same amount of time for reconcilers to submit statements and receipts to Accounts Payable, they have fewer days to review and change transactions in the the close of the P-Card period.

 

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