BTC1110 Lecture Notes - Lecture 7: Intrusion Detection System, Physical Security, Electronic Data Interchange
6 Jun 2018
School
Department
Course
Professor
Week 5 Expenditure Cycle: Purchasing to cash payments
Ordering Goods and services
Receiving and Storing goods and services
Paying Suppliers
1. What to purchases:
-Just-in-time or Material Requirements Planning
-Pushing the wants of the business
Reports to warehouses managers Director to
manufacturing
-Approval of Vendor invoice
-Payment
2. How much to pay
3. When and how much to purchases:
-Economic Order Quantity Model
(Used in very small sub-set of decisions;
As: Economic
≠
Environment works
Can’t use)
Approval:
Vendor: accounts payable
Payment: Treasurer; cashier
Separation of duties
4. Who will purchase from
-Vendor management system (Consider things
outside expenditure cycle)
-Past quality
-Timeliness
-Price
Invoice processing:
Voucher: Every action authorized by a document
Non-voucher: Just posted to supplier records No
special form is created to process to payment
Order Controls
Ensure that we select the right goods at right
quality at right time at right price
Receiving Controls
Payment Control
(1) Ordering items not needed (Wrong item):
-Edit checks on order (accuracy and
completeness check)
-Review and approval
-Perpetual inventory system
(1) Accept unordered items:
-Require approved purchase order
(1) Failure to take advantage of discounts:
-File invoices by due date
-Cash management system:
Invest in security market rather than paying
early
(2) Purchased at inflated prices:
-Price lists
-Competitive bidding (what you are expect to
pay)
-Job rotation in purchase function
(Things un-done if person regularly move to
the other roll; e.g. vocation)
(2) Wrong quantity:
-Inspection and receiving reports
-Require employee to sign the report
-Bar codes
(2) Paying for items not ordered or not received:
-Match documentation from ordering and
receiving steps
-Require receipts for employee receipts
-Use of corporate cards
Document Summary
Week 5 expenditure cycle: purchasing to cash payments. Ordering goods and services: what to purchases: Pushing the wants of the business: how much to pay, when and how much to purchases: Economic order quantity model (used in very small sub-set of decisions; As: economic environment works (cid:198)ca(cid:374)"t use(cid:47): who will purchase from. Vendor management system (consider things outside expenditure cycle) (cid:198) Order controls (cid:198)ensure that we select the right goods at right quality at right time at right price (1) ordering items not needed (wrong item): (cid:47) Edit checks on order (accuracy and completeness check) Perpetual inventory system (2) purchased at inflated prices: (cid:47) Competitive bidding (what you are expect to pay) Job rotation in purchase function ((cid:47)things un-done if person regularly move to the other roll; e. g. vocation) (cid:198) Require approved purchase order (2) wrong quantity: (cid:47) Non-voucher: just posted to supplier records (cid:198)no special form is created to process to payment.
