300-41: Advance Payments for Vendors

Questions? Contact Campus Administrative Policies


On making advance payments to vendors and the proper documentation needed in order to protect the financial interests of UCSF.


This policy covers when it is appropriate to make advance payments to vendors and the proper documentation needed in order to protect the financial interests of UCSF.


Advance payment/prepayment:  Full or partial payment for goods and services before they are received by the University in good order or rendered satisfactorily.



A. General

Generally, goods and services provided to the University are paid for after receipt. On occasion, it may be necessary to provide a known and reputable vendor with an advance payment (prepayment).

However, under specific circumstances (listed below in C.) and with prior approval (listed below in B.), advance payments are permissible.

B. Approval

Before advance payments may be made, they must be approved by an authorized individual.

1. Advance payments for items listed in C. below:

  • Authorized department approval required for advance payments
  • Designated Central Procurement Buyer approval is required for advance payments ≥$10k.

2. Exceptions Not Listed Below: Designated Procurement Director approval is required for all advance payments that are outside the scope of those listed in C. below.

C. Specific Instances where Advanced Payments are Permissible (with proper approval):

  • High-cost equipment manufactured to meet functional specifications
  • Books, periodicals and newspapers, including special order items for trade and professional publications
  • Customized goods/services that cannot be re-sold to others once work has started
  • Facilities/hotel deposits
  • Caterers for food and beverage service for large official functions where caterer requires a deposit
  • Research abroad: including deposits or expenses related to the research
  • Principal investigators and other research personnel who conduct research using human subjects and pay the subjects a small amount (check for entire amount is paid to the investigator or experiment controller)
  • Maintenance service contracts
  • Honoraria
  • Membership dues
  • Seminar and colloquia registration fees
  • Performing artists, when contract requires payment before performance begins

D. Purchase Order

Include the advance payment in the total purchase order amount and provide a full description of the refund policy with the purchase order.

Note: Any advance payment originating from a BearBuy PO should be paid using the BearBuy PO number in order for the lien to be relieved.

E. Documentation

  1. PO advance payment: Companies to whom an advance payment is issued must provide an invoice for the full amount of the advance payment and reference the PO number, prior to the issuance of the advance payment.
  2. When using a Check Request or Payment Request Form, an advance payment must be supported by documentation indicating the business need for the advance payment (or written confirmation of total cost, including tax, freight, & handling).
  1. Operational Procedures:  Advance Payments
  2. Advance Payment Required Documentation
  3. Advance Payment ≤$100,000: Debit expense & credit cash when payment made.
  4. Advance Payment >$100,000: Accounts Payable will debit the pre-payment account, Vendor Advance Payments and Credit Cash, and regularly monitor and clear all advance payments as appropriate by fiscal yearend. When the advance payment is recorded in the receivable account, a lien will be placed against the expense to which the charge eventually will be made.


This policy on Advance Payments for Vendors applies to all UCSF departments.

A. Departments

  • Departments will need to obtain approval from a designated Procurement Central Buyer of any advance payments ≥$10k and those not listed in Section III.B. In addition, departments will need to notify Accounts Payable when it’s time to move pre-payment to the appropriate expense account.
  • Departments are responsible for ensuring goods/services associated with the advance payment are satisfactorily received.

B. Central Procurement
Supply Chain Management (SCM) is the campus authority on PO and Non-PO advance payments and CPC will review POs to ensure advance payments are identified.

C. Controller’s Office – Accounts Payable
Controller’s Office Accounts Payable will forward check request advance payments not related to purchase orders to Procurement for review and approval.


UCOP Accounting Manual Chapters:

  • Disbursements: Honorarium Payments (D-371-35)
  • Official Documentation In Support of University Financial Transactions, (A-000-7)

Business and Finance Bulletin: