is experiencing sustained substandard inventory management and continues to fail in providing its customers with the necessary documentation for their transactions, thus leading to unsatisfied customers. If these problems persist, WBI is threatened by declining sales and worse-off operations.
The Current System
The analysis of the current system focuses on the expenditure cycle which can be divided into two systems, namely:
Purchases System
The various departments and their involvement in the process is as follows (Appendix A):
Purchasing Department
The cycle begins when the purchasing agent, upon discovery of a deficiency in inventory, prepares four copies of Purchasing Orders (POs) where it keeps one copy and sends the rest to the Receiving Department, Accounts Payable Department (AP), and the vendor, respectively. The PO is then filed alongwith the Receiving Report (RR) from the Receiving Department.
Receiving Department
In the usual course of business, goods are received five business days from the delivery of the PO to the vendor. A clerk reconciles the PO with the packing slip attached to the unloaded goods. Afterwhich, receiving reports are prepared in triplicate, with two sent to the Purchasing Department and Warehouse, respectively, while one remains in the Receiving …show more content…
Each check is examined for obvious errors and false vendors or unusual amounts, based purely on the professional judgement of the clerk. After confirming all the details are correct, checked are signed by the clerk using a signature block of the assistant treasurer, Tyler Matthews. Matthews signature is the only requirement to validate the release. For audit trail purposes, the checks are then photocopied, marked as paid, and filed in the cash disbursements department. The original check is then sent directly to the supplier. Lastly, the clerk then creates a journal voucher, which is sent to the G/L department where it serves as a basis to permanently updates the G/L