Pre-Payment Requests

A pre-payment is a payment made to a supplier before goods are delivered or services are rendered. Rutgers permits pre-payments only when they are supported by the associated purchase order, executed agreement, applicable payment terms, and University policies.

Pre-Payment Request Forms must be submitted through Marketplace and are subject to review by Accounts Payable and Procurement before payment can be processed.

Before Submitting a Request

Departments requesting a pre-payment must provide:

• A completed Pre-Payment Request Form in Marketplace
• A supplier invoice or pro forma invoice
• The applicable purchase order number
• Documentation demonstrating that advance payment is required or permitted

The supplier information on the invoice must match the purchase order, and sufficient funding must be available.

How Pre-Payment Requests Are Reviewed

1. Accounts Payable Review

Accounts Payable reviews the request for completeness and verifies that:

• An invoice or pro forma invoice is attached
• The invoice indicates a pre-payment, deposit, or advance payment requirement
• A purchase order number is provided
• Supplier information is accurate
• Funding is available

Incomplete requests may be returned to the department for correction.

2. Procurement Review

Accounts Payable routes the request to Procurement for a compliance review. Procurement reviews the applicable:

• Purchase order
• Executed agreement, when applicable
• Payment terms
• Submitted invoice

The review determines whether the requested advance payment is consistent with the University's contractual obligations.

3. Procurement Determination

Following review, Procurement will determine whether the request is approved, rejected, or requires an exception review.

Approved requests generally include circumstances in which the agreement or purchase order expressly requires or permits advance payment.

Requests may be rejected when:

• The agreement requires invoicing after services are performed
• Payment is tied to completion of specific deliverables
• The agreement requires monthly or periodic billing
• The requested pre-payment conflicts with the applicable agreement or payment terms

Exception review may be required when there is a documented business justification for advance payment, but the agreement or purchase order does not expressly support it. These requests are referred to Procurement management for a final determination.

4. Payment Processing

Once Procurement approves the request, Accounts Payable processes the invoice in accordance with University procedures.

If the pre-payment is not supported by the purchase order, agreement, or applicable payment terms, the request will be rejected. Requests requiring an exception will remain on hold until Procurement management completes its review.

Once invoice processing is complete, Accounts Payable approves the Pre-Payment Request Form.

Examples of Acceptable Pre-Payments

Pre-payments may be appropriate for:

• Conference registrations
• Hotel deposits
• Venue deposits
• Required supplier deposits
• Agreements that specifically require or permit advance payment

Examples of Pre-Payments That Are Generally Not Permitted

Pre-payment is generally not appropriate when:

• A department requests advance payment, but the supplier agreement does not support it
• Services are billed monthly under the agreement
• Hourly services are billed after work is performed
• Payment is tied to deliverables that have not yet been completed
• The agreement is silent regarding advance payment

Departments should review applicable purchase order and contract terms before submitting a Pre-Payment Request Form.