ACCOUNTING INFORMATION SYSTEMSBASIC CONCEPTS & CURRENT ISSUES

Chapter 9

Acquisition / payment process

McGraw-Hill/IrwinAccounting Information Systems © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Porter’s value chain

8-2

9-3

Acquisition / payment steps

1. Request goods / services based on monitored need

2. Authorize a purchase

3. Purchase goods / services

4. Receive goods / services

5. Disburse cash

6. Process purchase returns as necessary

9-4

Documents

• Purchase requisition• Purchase order• Receiving report• Invoice from Vendor• Check (to vendor)

9-5

Documents

• Purchase requisition• Requests that the

purchasing department order goods / services

• Originates in an operating department

• Terminates in the purchasing department

• Purchase order• Specifies items ordered,

shipping terms and other information about the purchase

• Originates in the purchasing department

• Terminates with vendor

9-6

Documents

• Receiving report• Ensures that ordered

goods have been received in good condition

• Originates in receiving department

• Terminates in various departments

• Vendor invoice• Requests payment from

buying organization• Originates with vendor• Terminates in accounting

department of buyer• Check

• Pays the vendor• Originates in accounting• Terminates with vendor

9-7

Internal controls

• Inventory monitoring system• Justification for unusual goods• Conflict of interest policy• Criteria for supplier reliability and quality of

goods• Strategic alliances

9-8

Internal controls

• Document matching• Receiving reports with purchase orders• Receiving reports and purchase orders with

invoices• Insurance and bonding• Internal audit department

9-9

Internal controls

• Separation of duties: custody, recordkeeping, authorization

• Employee monitoring systems• “Paid” stamps• Information technology, such as radio

frequency identification (RFID)

9-10

Information technology

• Online vendor payments• Bar codes• Vendor lists• Inventory status checks• Transaction recording in the AIS

9-11

Acquisition / payment stepsInventory database

Inventory information

1.0Requisition inventory.

2.0Prepare purchase order.

Requisition data

Vendor database

Vendor information

vendor

Purchase order

3.0Receive inventory.

Order information

Receiving information

4.0Disburse cash.

Authorization information

A / P database

Payment information Purchase

information