Presentation on theme: "The Acquisition / Payment Process"— Presentation transcript:
1The Acquisition / Payment Process Chapter 7The Acquisition / Payment Process
2Chapter ObjectivesIdentify the characteristics of the traditional acquisition/payment process and related IT applications.Describe the criticisms of the traditional acquisition/payment process and the IT application architecture.Develop a REAL model of the acquisition/payment process.Identify opportunities to improve the acquisition/payment process and IT applications.
3Strategy and ScopeTo provide needed resources for the organization’s conversion processes when they are needed. This can be broken into several sub-objectives:Purchase items from reliable vendors.Purchase high quality items, or at least items of the desired quality.Obtain the desired items at the best possible price.Purchase only those items that are properly authorized and are for legitimate company purposes.Have resources available and in useful condition when they are needed by the company.Receive only those items ordered, and receive all the items ordered.Control items received so they are not lost, stolen, or broken.Pay for the items received in a timely manner to the appropriate party.
4Overview of Acquisition/Payment Process Request for goods/services (monitor need) eventAuthorize purchase eventPurchase good/service eventReceive goods/services eventDisburse cash eventPurchase return event
5Traditional Automated Acquisition/Payment Process Flowchart - Part 1 Inventory master fileMay be done at time of updatingInitiate purchasesStep 1 - Extract data and print reportInventory reorder listSupplier reference & history fileSupplier evaulation data displaySelect supplier & note on listInventory reorder listPerformed by purchasing department buyersEnter purchase order dataA
6Traditional Automated Acquisition/Payment Process Flowchart - Part 1 Exception and error displayStep 2 - Edit purchase order data & store in fileAPurchase transaction dataSupplier master fileInventory master fileOpen purchase order fileStep 3 - Update files & print updatesListing of purchase ordersPurchase ordersInventory status reportPrinted at end of dayReview and signPerformed by purchasing managerTo purchasing managerTo inventory managerTo supplier
7Traditional Automated Acquisition/Payment Process Flowchart - Part 2 Count & inspect received items; compare to packing slipInitiate supplierPacking slipPerformed by receiving clerkEnter receipt on CRT terminalOpen purchase order fileEdit receipt data & prepare receiving reportException and error displayB
8Traditional Automated Acquisition/Payment Process Flowchart - Part 2 BReceipt transactionReceiving reportInventory master fileTo stores & accounts payableSupplier history fileUpdate master filesOpen purchase order fileReceiving report fileBack-order fileTo supplier
9Traditional Automated Acquisition/Payment Process Flowchart - Part 3 From suppliersSupplier’s invoiceReceiving reportsReceiving reportBatch totalPerformed by accounts payable clerkVerify check & prepare batch totalSupplier’s invoiceException and error displayEnter invoiced amounts & totalEdit entered dataOpen purchase order fileSupplier’s invoiceDReceiving reportUnpaid vouchersApprove for paymentC
10Traditional Automated Acquisition/Payment Process Flowchart - Part 3 Payables data from invoicesSupplier accounts payable master fileStored until end of daySupplier history fileOpen purchase orders fileUpdate payables & other files & prepare vouchersVoucher registry & summaryOpen vouchers fileGeneral LedgerCDisbursement voucherDisplay of batch totals & errorsTo cost control or other resource management departmentTo accounts payable departmentTo report preparation procedureTo accounting clerk
11Traditional Automated Acquisition/Payment Process Flowchart - Part 4 From accounts payable procedureDisbursement vouchersPrepare batch totalBatch totalDisbursement vouchersVouchers fileException & summary reportKey-to-disk and editDisbursement dataA similar report is an output of each computer runRun 1 - Sort by supplier account numberA
12Traditional Automated Acquisition/Payment Process Flowchart - Part 4 Sorted disbursement dataOpen vouchers fileARun 1 - Update accounts payable file; print checks & other outputsSupplier disbursement payables master fileSupplier history fileChecksVouchers file(with vouchers)Summary of cash disbursementsJournal voucher transaction fileCheck numberReview and signDisbursement vouchersTo cash disbursementsTo financial managementTo general ledger procedureTo suppliers
13Traditional, Manual Acquisition/Payment Process Flowchart AccountsPayableControlInventoryPurchasingReceivingGeneralLedgerDr/Cr toG/LPost toFA= AlphabeticalC= ChronologicalN= NumericalReview,sign ck,postGControllerCashier /PurchaseRequisition12345OrderIAcct. PayHABCPrepareOrdersTo vendorP/OBlindCopyGoodsReportNDEUpdateInv.RecordsVendor’sInvoiceCompare& PostPurchasesJournalWhenPaymentIs DuePurch. OrderReceiv. ReportVendor’s InvoiceCheckPull andCashDisburs.Prepared with the assistance of Dr. William Hillison,Arthur Andersen Alumni Professor, Florida State University.
15IBM’s NEDS (National Employee Disbursement Solution) Business-EventProcessor(businessandinformationprocessrules)BusinessDataRepositoryReportingFacilityManagementapprovalsEFTEmployeedepositTravelinformationImpact:393 headcount reduction$291 million savings (10 years)Decreased processing timeIncreased controlsBetter management informationNew role for the accountant
16Christopher, Inc. Aquisition/Payment REAL Model AuthorizingAgent(1,1)OrderRequest& Review(0,*)(0,*)(0,*)(1,1)InventoryClerk(1,1)(0,*)(1,1)PurchasingClerk(0,*)Order Goods from Vendor(0,*)(1,*)(0,*)(1,1)(1,*)(1,1)InventoryVendor(1,*)(1,1)(0,*)(1,1)(1,*)(0,*)(1,1)ReceivingClerk(0,*)(0,*)ReceiveGoods(0,*)(0,*)(1,1)WarehouseClerk(0,*)(1,*)(1,1)(0,*)Accounts Payable Clerk(1,1)(1,1)(0,*)(0,*)(1,1)DisbursePaymentBankCash(0,*)(0,*)(1,1)(0,*)Cashier
17EDI ELECTRONIC DATA FLOWS CUSTOMER (PURCHASES CYCLE)SELLER (REVENUE CYCLE)Internal Data FlowsExternal Data FlowsExternal Data FlowsInternal Data FlowsPurchaseOrderCustomerOrderSalesOrderReceivingReportGoodsShippingDocumentsVendor’sInvoiceSalesInvoiceCheckor EFTCheckor EFT
18Acquisitions/Payment Process Sample Information Customers Top ManagementPurchasing PersonnelReceiving ClerksAccountingTreasury and FinanceVendors
19Christopher, Inc. Acquisition/Payment Process Event Logical Structures:(used to store documentation data about events)PURCHASE REQUESTPurchase Request #, [Inventory Control Clerk Employee #],[Reviewing Supervisor Employee #], Date, Time, Specialrequests or commentsPURCHASE ORDERPurchase order #, [Vendor #], [Purchasing Clerk Employee #],[Purchase Request #], Date, Time, Shipping instructions,Cancel by date, Location of order (e.g., phone, fax, or mail),Shipping expenses, Sales tax, Order confirmation numberRECEIVE GOODSReceipt #,Vendor's Invoice #, [Employee # of Accountspayable clerk who compares vendor's invoice and receiptinformation], [Purchase Order #], [Receiving Clerk Employee#], [Vendor #], [Warehousing Employee #], Date, Timereceived, Shipping cost, Sales tax, Time transferred toWarehousingDISBURSE PAYMENTCheck #, [Cash account #], [Cashier employee #], [Vendor #],[Accounts Payable Clerk Employee #], Date, Time, AmountdisbursedREQUEST/INVENTORY, [Inventory Item #], Quantity requested,Product specificationsORDER/INVENTORYPurchase Order #], Quantity ordered,Negotiated Cost eachRECEIVE/INVENTORY], Quantityreceived, Cost each, Condition commentsRECEIVE/PAYMENT], Amount appliedto this invoice, purchase discounts applicable, purchasediscounts taken