Tamaribuchi Heavy Manufacturing Concern (Tamaribuchi) is a medium sized, privately owned manufacturing business with a plant based in Australia. They are the manufacturer of Mr. Sparkle cleaning products and supply these products to retailers across Australia. As they grow, Tamaribuchi have hired you to review their expenditure in an endeavour to improve efficiencies in this area. Before your firm can make any recommendations, you must first understand the current process being undertaken within the cycle. A file note of your interview with the CEO is provided below.

File Note

Last year the Tamaribuchi purchased over $13 million worth of office equipment under its ‘special ordering’ system, with individual orders ranging from $3,000 to $30,000. Special orders are for low-volume items that have been included in a department manager’s budget. The budget, which limits the types and dollar amounts of office equipment a department head can requisition, is approved at the beginning of the year by the board of directors. The special ordering system functions as follows:

Purchasing—A purchase requisition form is prepared by the department head and sent to the purchasing department. Upon receiving a purchase requisition, one of the five purchasing agents (buyers) verifies that the requester is indeed a department head. The buyer next selects the appropriate supplier by searching the various catalogues on file. The buyer then phones the supplier, requests a price quote, and places a verbal order. A pre-numbered purchase order is processed, with the original sent to the supplier and copies sent to the department head, receiving, and accounts payable. One copy is also filed in the open purchase order file. When the receiving department verbally informs the buyer that the item has been received, the purchase order is transferred from the open to the filled file. Once a month, the buyer reviews the open purchase order file to follow up on open orders.

Receiving—The receiving department gets a copy of each purchase order. When equipment is received, that copy of the purchase order is stamped with the date and, if applicable, any differences between the quantity ordered and the quantity received are noted in red ink. The receiving clerk then forwards the stamped purchase order and equipment to the requisitioning department head and verbally notifies the purchasing department that the goods were received.

Accounts payable—Upon receipt of a purchase order, the accounts payable clerk files it in the open purchase order file. When a vendor invoice is received, it is matched with the applicable purchase order, and a payable is created by debiting the requisitioning department’s equipment account. Unpaid invoices are filed by due date. On the due date, a cheque is prepared and forwarded to the treasurer for signature. The invoice and purchase order are then filed by purchase order number in the paid invoice file.

Treasurer—Cheques received daily from the accounts payable department are sorted into two groups: those over and those under $10 000. Cheques for less than $10 000 are machine signed. The cashier maintains the cheque signature machine’s key and signature plate and monitors its use. Both the cashier and the treasurer sign all cheques over $10 000.

Task requirements:

Using the interview file note and an applicable system tool, create a Context Data Flow Diagram and Level 0 Data Flow Diagram to document the existing system for their expenditure process, from ordering to payment.

A system tool includes software such as Word, Excel, Smartdraw or Edraw. There are many tools that are available to trial for free on the internet.

RATIONALE

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This task will assess the following learning outcome/s:

• be able to record business transactions using computerised accounting information systems.
• be able to analyse and evaluate business processes and model them using systems documentation.

Answer rating: 100% (QA)

TREASURER 6 Sends Red ink order to PURCHASING check Maintains Signature DEPARTMEN... View the full answer