CHECK VENDOR Payments

Use this payment option when you need to issue a check to a vendor or individual that is not the actual vendor that provided services; received a permission or royalty payment; or received an award or prize payment that needs to have the transaction recorded in their payment/vendor history for year end 1099 (tax reporting) processing.

Reimbursing Individuals

When you reimburse an individual for payment for services; permission or royalty payments; gift card, award or prize payments; or other tax reportable payments, you will need to make sure that both the individual being reimbursed and the vendor that the individual purchased services from are set up in Banner.

When entering the reimbursement, first enter the vendor number of the entity that provided the service, in the VENDOR field.  After you enter Next Block, and get to the invoice header, enter the invoice/receipt date, hit tab.  Enter the transaction date, hit tab.  Immediately below these two date fields is a field called the CHECK VENDOR field.  In this field enter the individuals 95X number or Vendor number.  The entity in the CHECK VENDOR field is the entity who will receive the actual reimbursement check when it is mailed.  The payment history; however, will be recorded under the original entity that provided the services or other 1099 tax reportable payment, etc.  When using the CHECK VENDOR function you DO want to use the tax reportable account code that best describes the payment.  The reason we use the CHECK VENDOR function is so that we can use the tax reportable account codes.

Example:  Comet Duckcall (950119413) requested a reimbursement for a FedEx (V00011210) receipt for $93.12 for shipping some handouts to a conference location where he was presenting.  (Note: Express mail and other such services are tax reportable services and normally should be arranged to be direct billed to the department).  In the VENDOR field, enter V00011210. In the CHECK VENDOR field enter 950119413.  Complete the payment as you would any other reimbursement.  The payment history will be recorded under FedEx, but Comet Duckcall will receive the actual reimbursement check.

Paying Vendors for tax reportable gift cards given to US citizen prize winners:

Example:  John R. Smith, a non-employee, (V00011205) won a $100 UO Bookstore (V00000525) gift card as a prize for participating in a contest.   (Note: All gift cards and certificates are considered cash equivalents and are tax reportable to the recipient).  The department received an invoice for the gift card from the UO Bookstore.  In the VENDOR field, enter V0000011205. In the CHECK VENDOR field enter V00000525.  Complete the payment as you would any other invoice payment.  The payment history will be recorded under John R. Smith, but the UO Bookstore will receive the actual payment for the invoice.  For employees code to 20168.  For students (who are not student employees) or non-employees use account code 20169.

Note: If you have an invoice for $400 to the UO Bookstore for multiple gift cards (say 4 gift cards for $100 each for 4 recipients) you would enter a $100 payment under each recipient’s 95X or V# and then use the UO Bookstore vendor number (V00000525) in the CHECK VENDOR field under each 95X.  Please note how to make each Banner invoice unique so the UO Bookstore can apply the payment properly.  In the invoice field you would put:

Recipient                         Invoice field

   1                                   IN004569 11-MAY-2016 Part 1

   2                                   IN004569 11-MAY-2016 Part 2

   3                                   IN004569 11-MAY-2016 Part 3

   4                                   IN004569 11-MAY-2016 Part 4

Paying Vendors for tax reportable gift cards given to NON-REDISENT ALIEN/NRA (International) prize winners:

Example: Paris Barse is an international student (Non-Resident alien/NRA).  She won a $100 gift card to the UO Bookstore as a prize for a photography contest held by a department.  The University is required to withhold 30% of the prize given to Non-Resident Aliens for tax purposes.  For this reason it would be best to buy the gift card after determining who the winner is as anyone who is a Non-Resident Alien will need to have taxes withheld on the prize.  By determining NRA status in advance of purchasing the prize gift card it can be explained why the value of the card will be less since taxes will be withheld.  The actual amount of the gift card they would receive would be $70.00.  When the department pays the UO Bookstore for the gift card, they actually will enter the $100.00 value under Paris Barse’s 95X number and then enter into the CHECK VENDOR field the UO Bookstores vendor number (V00000525).  The department will then need to enter the $100 amount and a negative line distribution of $30.00 in both commodity and accounting lines so that the net payment paid to the UO Bookstore reflects the $70 value of the gift card purchased.  Joy Germack (6-0782) will need to be notified of the transaction so she can capture the $30.00 negative line distribution for the taxes for the $100.00 prize for Paris Barse on the 1042 report and make sure the taxes are sent to the IRS.

If the winner is not known before purchasing the $100 gift card, then the UO will not be able to withhold the 30% in taxes prior to purchasing the gift card.  If the $100.00 gift card has already been given to a Non-Resident Alien, then the department will need to gross up the payment so that the taxes can still be withheld.  Under these circumstances, the department pays the UO Bookstore for the gift card, they actually will enter the grossed up amount of $142.86 (for both gift card and taxes) under Paris Barse’s 95X number and then enter into the CHECK VENDOR field the UO Bookstores vendor number (V00000525).  The department will then need to enter the $142.86 amount and a negative line distribution of $42.86 in both commodity and accounting lines so that the net payment paid to the UO Bookstore reflects the $100 value of the card purchased.  In this scenario because it is being paid after the fact (after the card was already given), the department ends up paying taxes of $42.86 on the $100 gift card so that what was given to the student $100 gift card is as promised. Joy Germack (6-0782) will need to be notified of the transaction so he can capture the $42.86 negative line distribution for the taxes for the actual $142.86.00 prize for Paris Barse on his report and make sure the taxes are sent to the IRS.

The Non-Resident Alien can apply for a US tax payer identification number as they will receive a 1042-s and need it to file tax forms each calendar year.

If you are issuing a prize or award to any Non-Resident Alien, then please contact either Carmela Kortum 6-3126 or Joy Germack at 6-0782 so they can provide guidance.

Paying Vendors who have sold or assigned their invoice payments over to a different vendor:

Example 1:  JHL Industries, (V00011208) has sold and assigned its invoices to Bibby Financial Services (CA) Inc (V00011209).  The department received an invoice from JHL Industries directing customers to remit payment to Bibby Financial Services (CA) Inc.  In the VENDOR field, enter V00011208. In the CHECK VENDOR field enter V00011209.  Complete the payment as you would any other payment.  The payment history will be recorded under JHL Industries, but Bibby Financial Services (CA) Inc. will receive the actual payment for the invoice.

Example 2: We did business (advertising) with American Council on the Teaching of Foreign Languages/ACTFL.  This is who we need to do the tax reporting on because they are providing the services of advertising coded to account code 24612.  ACTFL (V00005563); however has instructed us to mail the payment to Boxwood Technologies Inc. (V00040852) for processing.

This means you should have used the CHECK VENDOR function.  In the VENDOR field, enter V00005563. In the CHECK VENDOR field enter V00040852.  Complete the payment as you would any other payment.  The payment history will be recorded under ACTFL, but Boxwood Technologies Inc. will receive the actual payment for the invoice.

For any questions on how to use the check vendor function, please call Carmela Kortum (6-3126) for assistance.