purchasing process pertemuan 15 – 16 – 17 matakuliah: f0204 / sistem akuntansi tahun: 2007

Purchasing ProcessPertemuan 15 – 16 – 17

Matakuliah : F0204 / Sistem AkuntansiTahun : 2007

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Process Definitions and Functions1. The purchasing process is an

interacting structure of people, equipment, methods, and controls that is designed to accomplish the following primary functions:

2. Handle the repetitive work routines of the purchasing department and the receiving department

3. Support the decision needs of those who manage the purchasing and receiving departments

4. Assist in the preparation of internal and external reports

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Internal Perspective of Purchasing Process

1. Purchase requisition sent from inventory control department to purchasing department

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Internal Perspective of Purchasing Process

2. Purchase requisitions from various other departments sent to purchasing department

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Internal Perspective of Purchasing Process

3. Purchase order sent to vendor

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Internal Perspective of Purchasing Process

4. Purchase order notification sent to various other departments or to inventory management process

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Internal Perspective of Purchasing Process

5. Purchase order notification sent to receiving department

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Internal Perspective of Purchasing Process

6. Purchase order notification sent to accounts payable process

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Internal Perspective of Purchasing Process

7. Good and services received from vendor

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Internal Perspective of Purchasing Process

8. Receiving notification sent to accounts payable and general ledger processes

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Internal Perspective of Purchasing Process

9. Receiving notification sent to purchasing department

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Goal Conflicts and Ambiguities in the Organization

• Individual managers’ goals may not be in congruence with organizational objectives– Purchasing may buy large quantities of inventory for quantity

discounts and to reduce ordering costs– This may drive up costs of receiving, inspecting, and carrying

inventory• Ambiguity often exists in defining goals and success in meeting goals.

– A purchasing goals might be to select a vendor who will provide the best quality at the lowest price by the promised delivery date

– Realistically, one vendor probably will not satisfy all three conditions

• Prioritization of goals is necessary in choosing the best solution given the various conflicts and constraints placed on the process– Trade-offs are made in prioritizing among the goals that conflict– If the market is sensitive to satisfying customer needs, the

company may pay higher prices to ensure that it is procuring the best quality goods and obtaining them when needed

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Inventory Reorder Methods

• Reorder point analysis – each item is assigned a reorder point based on its

sales rate

• Economic order quantity – order quantity based on costs of ordering and

carrying inventory

• ABC analysis a technique for ranking items in a group based on the output of the items– ABC analysis can be used to categorize inventory

items according to their importance

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Data Stores Used in the Purchasing Process

• Inventory master data– A record of each item stocked or regularly ordered

• Vendor master data– Stores information about approved vendors including

vendor performance

• Purchase requisition data– Data on all purchase requisitions

• Purchase order master data– Open PO information including status of items on order

• Purchase receipts data– Lists items received

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Purchasing Process Systems Flow Chart

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Purchasing Process Systems Flow Chart, Cont’d.

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Fraud and the Purchasing Function

• Many frauds involve manipulation of purchasing because it involves the payment of cash– The typical cases included in this category of

process exploitation are instances in which:• An employee (e.g., a buyer, purchasing manager, or

other person) places purchase orders with a particular vendor in exchange for a kickback, secret commission, or other form of inducement from the vendor.

• An employee has a conflict of interest between his responsibilities to his employer and his financial interest—direct or indirect—in a company with whom the employer does business.

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Purchasing Control Matrix

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Control Matrix, Cont’d.