Additional Acquisition Costs
Goods or services are acquired in accordance with University of Waterloo
Policy 17 "Quotations and Tenders". Once the goods or services are
ordered and delivered there may be additional costs over and above the
item costs. Typically, additional acquisition costs include:
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shipping costs
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brokerage and customs
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self-assessed taxes
The University's business practices for additional acquisition costs are
outlined below.
Shipping Costs
Shipping costs are considered a cost of acquisition and may include
freight, handling, special packaging charges and taxes, if applicable.
A vendor may pass along shipping costs in the following ways:
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include as a product cost
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add as an item on the vendor's invoice
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advise the courier to charge the University of Waterloo for freight costs
Freight costs are negotiated with the vendor during the tendering and negotiation
process. On the purchase order freight terms are denoted as one of
the following:
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collect
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prepay and charge
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prepay
The freight terms indicate whether the vendor or the University is responsible
for the original freight cost and how costs will be passed along to the
University, if applicable.
Brokerage and Customs
For goods imported to Canada a broker clears the goods through customs
and charges the University of Waterloo a brokerage fee. In addition,
the broker assesses the University for the goods and services tax (GST),
if applicable. The Canadian equivalent value of the goods is the
basis for the GST.
Self-Assessed Taxes
It is the University's responsibility to ensure that all appropriate
taxes are paid either to an authorized vendor or the government.
As such, Procurement & Contract Services (formerly known as Purchasing)
indicates the applicable taxes on the purchase order. Typically,
a vendor or broker assesses applicable taxes at the time of invoicing.
In the event that the vendor or broker do not assess the applicable taxes
Finance will self-assess and remit the appropriate tax.
Business Practices
The following are business practices for charging additional acquisition
costs to University of Waterloo accounts:
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all costs are charged to a university account
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costs and any applicable taxes are charged when the invoice is received
from the vendor, courier, and customs broker
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typically, a vendor, courier or broker submits an invoice to the University
of Waterloo within 30 days of delivery
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Finance charges acquisition costs relating to purchase orders to the same
account to which the goods were charged. For reference,
Finance includes the purchase order number, if applicable, in the description
of a courier or brokerage charge.
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When goods not relating to a purchase order are received Central Stores
records the employee to whom the goods are delivered. In such cases,
Finance charges courier costs to the department with which the employee
is associated. Specifically, Finance charges the freight account.
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If an acquisition cost is incorrectly charged to an account please submit
a request for correction in writing to Finance-Accounts Payable.
Any correction $100.00 or less is not processed. When submitting a
request for correction please indicate the month of the original charge,
the vendor's name, invoice number, amount, the correct account and reason
for the correction.
Finance
November 07