Finance

Procurement

Procurement needs to be well managed throughout the project. If costs are being met by an institution then the rules and regulations of the institution need to be followed; otherwise, you risk delays or even not being able to pay suppliers leading to a real loss of reputation as well as a lot of aggravation and potential personal liability. Thus, some due diligence here can pay dividends. Have a meeting with your institutional finance people, talk to them about some of the lines in your Budget and get their view on how they should be managed.

Here are some common points that can appear during such conversations:

  • All institutions will have a procurement process that you will need to follow. This typically involves determining your requirements for the service or goods, obtaining quotes, choosing and confirming the supplier and creating purchase orders.

  • Institutions will also have limits on the amount of financial liability that they will allow you to take. This is effectively the amount that you can “borrow” from them to pay suppliers before you have received the income from the event. If you are running a large event, you will want to discuss this with your finance contacts, as well as considering taking out event insurance - most institutions will have a preferred insurance broker/supplier.

  • It is good practice to get multiple quotes before choosing a particular venue and venue related services (e.g. catering).

    • Most institutions will ask for three quotes, though this might be relaxed for smaller value items or specialist items with few suppliers. The level of documentation will increase with the value of the service or goods being procured.
    • In the UK, purchases over £50,000 (including multiple payments for the same service) require a formal invitation to tender process - consult your finance team. Purchases in excess of the EC limit (currently £172,514) require formal advertisement.
  • Suppliers need to be registered with an institution before a purchase order (PO) can be created. If they are not already registered as a supplier this should be done as soon as possible, as part of the process of generating a Purchase Order (PO).

    • Sometimes one-off use of a supplier can be done using a different mechanism that does not require registration; check to see if this is an option.
  • A Purchase Order (PO) sets out the detail of the goods or services you’re buying from the supplier along with the price and is created once the supplier has been chosen and the details confirmed. This must be done before the date on which the goods/services are supplied, and must be done before an invoice can be paid.

    • Make sure you understand whether the purchase is liable for VAT. Some small suppliers may be VAT exempt, and some activities are zero VAT. Consult your finance team for help if you are unsure.
    • Note that POs are not always used for foreign suppliers - in this case, an agreement or contract is normally used instead.
  • Once the goods or services have been delivered, the supplier will send an invoice. This should quote the matching purchase order (PO), with any discrepancy in value explained.

    • Ensure that invoices are processed promptly as many institutions have specific deadlines for payment runs
    • In some cases, e.g. venue hire, you may be asked to pay a deposit in advance. These should be associated with the same PO, to avoid double payment.

There may be other, non-procurement, requirements from an institution relating to the use of suppliers. These can include Data Protection Impact Assessments, e.g. when personal information will be passed to or provided by a supplier and whether suppliers have a statement detailing their approach to the problem of Modern Slavery.

Income

If the financials are being run through an institution, it is also important to think about how income is handled.

Some considerations include:

  • How is sponsorship best claimed

    • Will it go into an existing project related code or are there special codes that can be used to hold the money (e.g. ones that might allow greater flexibility)?
    • Does your institution have ethical policies around fundraising and sponsorship that you need to comply with (e.g. requiring due diligence on modern slavery)?
  • Does your institution take a cut on any income from events (e.g. for processing payments or running registration services)?

  • Will other automated income (e.g. via Eventbrite for registration) be routed correctly? Most institutions will require information about the exact amount of income, the source and a reference to be able to route it properly.

  • What is the support for chasing people who paid by a purchase order, who will be able to raise the appropriate invoices?

  • Are there any tax implications for income (e.g. needing to charge VAT on non-exempt events - typically non-research events)?

Again having good connections with the financial staff at the institution which is where the budget is held is necessary to make sure the procedures are clear and known.

A final consideration is understanding when your institution’s financial year end falls, and what the implications are for running events. It is not recommended to run an event that takes place across two financial years, and you should ensure that paperwork is done as early as possible if the event is taking place in the last month of the financial year.