Process Documentation Form

Subcyle or Cycle / NA “VENDOR DOWN PAYMENTS”
Inputs / Outputs
Excel Request
Requisition / PO
Procurement authorization / Down Payments
Vendor Payments
Clearing Documents
Associated IT applications / Process owner(s)
SAP / Accounts Payable
Procurement Team
Process narrative
  1. Purpose: To establish local guidelines for approval, posting, payments and a proof of expending.
  1. Scope:All companies in LAN, excepting Venezuela as a complement of CCP 85000.00
  1. Definitions:
PO: Purchasing Order
CCP: Corporate Controller Policies
AP: Accounts Payable
GR: Good Receipt
Clearing documents: Down payment cancellation document.
  1. Responsibilities:
All employees need to contact Procurement team before asking for an advance.
Review credit terms
Consider this option as the last possibility of payment.
  1. Narrative:
Requestors’should contact procurement team, they need to have anauthorized PO, justify it and ask to the LAN Procurement Manager for approval.
a)Down payment request should be related to the following cases:
  • Capital Projects: 25% Maximum amount of a PO, depending of the amount we need a bond. Per SOX, before asking for another down payment the first one should be cleared.
  • Utilities, Taxes, Payroll payments.
  • Company Security
  • Custom Agents (Brokers)
  • Hotels
  • Other service not considered in the procedure should be review and approved by the LAN Procurement Manager.
b)Down payment Posting
Once it’s approved, procurement team will send the request in an Excel file with the following information:
  • Purchasing order number
  • % of PO Paying
  • Vendor Name and Number
  • WBS document (Capital Project)
  • Amount
  • Currency
  • Date
  • Justification
  • Responsible
  • Clearing Date
  • Bond (Capital Projects)
  • Invoice number
AP will post and schedule payment, this information should be deliver to procurement team and requestor.

c)Down payment Cancellation
The requisitioner is responsible for checking the advance payment within 48 hours of the commitment date or receiving the good or service. Review the good and service and if it’s correct, user need to go to SAP and create the GR, send the invoice to AP with the PO, GR and advance number.
If the cancellation is not received on the established date, the down payment will be applied in cost center assigned in the purchase order.
The only exception in this procedure is Venezuela, due to economical and political situation. A down payment can be issue without a PO with previous approval form LAN External Reporting & COE Manager. Every payment asked will be reviewed individually.
  1. Reference Documentation:
CCP 85001.00 – Procurement

  1. Historical Review
Review No. / Last update / Made by / Reviewed by / Approved by / Review Reason
1 / 02/04/15 / Martha Bringas
2 / 26/10/15 / Martha Bringas