St. Lawrence University: Financial Services

Purchasing Card Policies and Procedures

What is a purchasing card? A purchasing card is a MasterCard charge card issued by HSBC Bank to University employees or departments for purchasing business related goods and services, excluding travel. If a card is issued to a department, someone in the department is assigned responsibility for the card as the departmental coordinator. The card is intended for small dollar purchases and should only be used for purchases that are $1,500 or less. Some of the benefits of using a purchasing card are listed below.

- Reduce the paper and costs associated with purchasing.
- Provide departments with more flexibility in purchasing.
- Improve merchant relationships through reduced billing and more timely payment.

How does the card work?

The purchasing card is presented to a merchant for payment for face-to-face transactions. The card account number may be provided to a merchant for purchases made by phone or internet. The merchant will process the transaction as they would any other credit card transaction and funds will be deposited to their bank account within two days. Once a month, the University will be billed for all purchases made with purchasing cards and issue a single payment to HSBC.

Billing Cycle

On approximately the 25th of each month, HSBC will send bills to all cardholders and a consolidated bill to the Business Office for all transactions posted in the previous 30 days. The due date for payment to HSBC will be 25 days from the billing date; accordingly, cardholders and departmental supervisors will have 25 days to approve the transactions posted to their purchasing card accounts. Transactions will be approved electroniclly by logging on to SMART DATA ONLINE, a web site developed and maintained by MasterCard and HSBC. At the same time that St. Lawrence University pays HSBC, the transaction data will be downloaded from SMART DATA ONLINE to Colleague, the University's accounting system.

On-line Approvals

When a cardholder or departmental coordinator logs on to SMART DATA ONLINE, they can view the transactions posted to their card account. A default university account and object code is assigned to each purchasing card and these account numbers will be displayed for each transaction. These codes may be changed before approving a transaction. The cost of a transaction may be split among several accounts. Freight and shipping costs should be separately charged to expense code 53010.

Since the University is required to pay all card charges on a monthly basis, not approving a transaction does not prevent the University from paying HSBC. Transactions not approved by the payment due date will be downloaded to Colleague with the default account code. Approving a transaction simply approves the accounting and ensures the charge is posted correctly in Colleague. For this reason, if an item purchased with a purchasing card is returned, the cardholder/department coordinator must ensure that a credit is issued and coded to the same account as the original purchase. The cardholder/department coordinator should also try to resolve an incorrect charge directly with the merchant. If this is not possible, the purchasing card coordinator (see next section for more information on this topic) should be contacted for assistance.

More information and training on the use of SMART DATA ONLINE will be provided by the University’s purchasing card coordinator and/or assistant when a purchasing card is issued.

The University’s Purchasing Card Program is administered by the Business Office. The purchasing card coordinator is Mary Cosmo at X5564 and she is assisted by April Wells at X5896. Departments with a large number of cardholders will designate a department coordinator to oversee their purchasing card transactions as well.

Responsibilities of Cardholders and Departmental Coordinators

The card should be stored in a safe place and the account number kept confidential. The card is not to be lent to or shared with another department. Lost or stolen cards should be reported to HSBC immediately by calling 1-800-914-5274.

Merchants should be informed that purchases are exempt from state sales tax when a purchase is made. Merchants will generally only require the University’s exempt organization number which is printed on the card. Some merchants, however, may require a copy of the New York State Sales Tax Exemption Certificate ST 119.1 which may be obtained from the Business Office.

An original receipt must be obtained from the merchant for each transaction posted to a purchasing card. The Colleague account number to be charged should be written on the receipt and all receipts maintained for a minimum of 3 years. Personnel in the Business Office will periodically review transactions posted to an account and all supporting receipts. Card privileges may be revoked if supporting receipts are not provided when requested.

Transactions must be reviewed and approved on SMART DATA ONLINE within 25 days of billing. Any incorrect transactions posted to an account should be resolved by contacting the merchant directly and, if necessary, the purchasing card coordinator.

What Kinds of Purchases are Authorized?

Most purchases of goods and services less than $1,500 that comply with the University’s Purchasing Polices may be made with a purchasing card. Goods and services that may not be paid for with a purchasing card are travel costs, payments to independent contractors for consulting or honorarium, and capital equipment. Capital equipment is defined as equipment with an expected life of more than 2 years and value of $500 or more.

There are restrictions on the card that will not allow transactions to be processed by certain types of merchants such as airlines, hotels, restaurants, and liquor stores. If such a merchant tries to charge a purchase to a purchasing card account, the merchant will be notified by MasterCard that authorization for the charge is denied.

The card may only be used to purchase goods and services for the University. It may not be used to purchase any items for personal use.

A purchasing card may be requested by completing a Cardholder Agreement Form and forwarded to April Wells in the Business Office.