C1 Making Payments (Procure to Pay)

Background

The 'Procure to Pay' cycle consist of 4 stages: Ordering, Receipting, Matching and Effecting Payments.

Ordering - There are multiple valid types of activities which require payments to be made by DFID. Whether Accountable Grants (AGs), Memorandum of Understanding (MOUs), staff expenses or invoices for goods and services. The first step of the 'procure to pay' process is to identify the need to procure. Once the need has been identified, the transaction is initiated by raising a requisition on ARIES. On approval of the requistion request, ARIES automatically creates a purchase order using the information included in the requisition.

Receipting - The type of goods and services which require payment and the mechanism through which the transaction was initiated will dictate the activities undertaken during the receipting phase of the 'procure to pay' cycle.

The basic steps of receipting are:

• Receipt the goods or service and prepare an appropriate 'Goods Received Note' (GRN); or
• Receive, review and approve relevant documents in relation to disbursement
  Update receipting on ARIES.

Matching - The matching phase is the equivalent to payment authorisation. The authorisation to make a payment for goods and services received is an automated process. The authorisation to make a payment is encapsulated in the approval of a purchase order. On registration of the invoice (or similar documentation), ARIES automatically seeks to match the details of the invoice with the approved purchase order and GRN. If all the details match then the invoice is automatically cleared for payment. This is called 'Three way Matching'.

The basic steps of matching are:

• Receipt of documentation (invoice, expense claim, MOU, request for payment etc.)
• Scanning documentation
• Registering documentation (this step could be considered consistent with inputting data)
• Resolving mismatches between purchase order, GRN and invoice
• Effecting the Payment - Is the process of releasing the funds from DFID. All UK payments are processed through Financial Management Group (FMG) in Abercrombie House (AH). Overseas payments are effected by localised Accounting Departments. Details of the 'Make a Payment' process are included in the Processes and Tools section - ARIES manual.