SDSU Accounting Information Systems MS Television Inc Expe

SDSU Accounting Information Systems MS Television, Inc. Expenditure Cycle Flowchart

MS Television Inc. operates a comprehensive expenditure cycle involving inventory management, purchasing, receiving goods, invoicing, and payment processes. With a small team of four personnel—Maria Gonzalez (purchasing agent), Joe Hunter (warehouse manager), Betty York (accountant), and Jasper Hansen (banking and financing)—the company automates and manual processes to handle procurement effectively. The current process is detailed below, capturing each step from inventory reordering through payment.

Business Process Overview

1. Inventory Reordering

At the end of each day, the company's computerized inventory management system scans inventory data to identify items below their re-order threshold. The system generates a Requisition Report listing items requiring replenishment along with their quantities needed. Joe Hunter reviews this report and approves it, then forwards it to Maria Gonzalez for procurement.

2. Vendor Selection and Purchase Order Creation

Maria reviews the Requisition Report, identifies potential vendors, and negotiates terms including pricing and delivery. Using this information, she creates a three-part purchase order, recording vendor details, item descriptions, quantities, and prices. The purchase order is sent to Jasper Hansen for approval. Once approved, Jasper returns the signed purchase order to Maria. She distributes the original purchase order to the vendor, sends a copy to Betty York, and files the remaining copy electronically sorted by vendor name.

3. Receiving Goods

When goods arrive, Joe Hunter inspects and counts the received items. He records receipt details in the inventory computer system, which updates inventory levels and logs the goods receipt data.

4. Vendor Invoice Processing

Vendors submit invoices, which Betty York receives and reviews. She verifies invoice accuracy by comparing received items, quantities, and descriptions against the purchase order and goods receipt records. Any discrepancies are addressed collaboratively, with adjustments made as needed. Betty records invoice data into QuickBooks to update accounts payable and the general ledger.

5. Payment Processing

Betty uses QuickBooks daily to generate a two-part check for all due payments. The system updates accounts payable and cash disbursements files accordingly. Jasper reviews, signs, and mails the check to the vendor, then cancels the supporting documents and returns them to Betty for filing.

Flowchart and Business Process Diagram

The processes outlined can be visually diagrammed using flowcharts indicating decision points, document flow, and data flow. The flowchart starts with inventory monitoring, progresses through purchase requisitions, approvals, procurement, receipt, invoice verification, and culminates in payment disbursement. Key control points include managerial approval, invoice verification, and cash disbursement authorization.

Conclusion

The current expenditure cycle at MS Television combines automated system alerts with manual review and approval steps, ensuring control and accuracy in procurement and payment processes. Document flowcharts and process diagrams effectively illustrate how functionaries interact across numerous steps, emphasizing the importance of automation to reduce errors and improve operational efficiency. As part of system updates, these visualizations provide a foundation for designing improved, integrated systems that streamline operations and enhance internal controls.

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