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Karma
Class: | ACIS 3504 - Acct Sys and Controls |
Subject: | Accounting & Information Systems |
University: | Virginia Polytechnic Institute And State University |
Term: | Fall 2012 |
Another Name for the Expenditure Cycle
|
Procure-to-pay cycle |
4 basic activities performed in the expenditure cycel
|
1) Ordering of goods, services, or supplies 2) Receiving and Storing these items 3) approving supplier invoices 4) Cash Disbursement |
Key decision in the expenditure cycle
|
What you need Where you are going to get it from How much you need |
3 Types of Inventory Control Methods are:
|
Economic Order Quantity (EOQ) Just-in-Time (JIT) Materials Resource Planning (MRP) |
Economic Order Quantity
|
1 way of managing inventory. It tells you the most efficient amount to order once you hit the reorder point EOQ = Sq.Rt((2PS/M)) Where P = Ordering Cost Per Unit S = Annual Stockout cost M = Carrying Cost per Unit (Manufacturing cost per unit) |
Reorder Point
|
The level of inventory at which the company should order more inventory. ROP = dL + SS where d = demand in units (not annual) L = lead time SS = Safety stock |
Lead time
|
the time between reordering and receiving of new products. |
Safety Stock
|
a certain inventory amount on hand at any time to prevent stockouts |
Just In Time Manufacturing
|
Highly customizible products
|
Materials Resource Planning (MRP)
|
|
JIT and MRP vs. EOQ
|
JIT and MRP can lead to more cost savings than EOQ |
Purchase Request
|
an INTERNAL DOCUMENT that is a request for an order |
Purchase Requistion
|
a paper doc or electronic form that specifies:
|
When Picking a Supplier, You should consider...
|
Dependability - if they're late, then you are late Price - want to minimize expenditure costs Quality - want the highest quality with the lowest costs |
ISO 9000
|
A quality certification companies must oblige to. |
Evaluate Suppliers and keep track of...what?
|
Purchase Prices Rework or Scrap Costs |
Purchase order
|
a document that formally requests a supplier to sell and deliver a product at specified quantities and prices |
Blanket Order
|
a commitment to buy specified items from a particular supplier for a given amount of time Benefits:
|
IT can help improve efficiency and effectiveness of the purchasing function by:
|
|
Vendor Managed Inventory System
|
(VMI) Vendors have access to inventory and sales data to replenish inventory when necessary |
Reverse Auctions
|
for commodities. Vendors compete for LOWEST bids for selling products |
Pre-Awarded Adits
|
•typically
used for large purchases that involve formal bids by suppliers. They often
identify simple mathematical errors in complex pricing formulas and other
discrepancies that, when corrected, can provide considerable savings |
2 responsibilities of the Receiving department are:
|
deciding whether to accept the items verifying the quality and quantity of the items
|
Receiving Report
|
the primary document used in the recieving and storing goods process
|
debit memo
|
is created if a product is not the right quality, is damaged or is not the correct item
|
Objectives of Accounts Payable
|
Make sure you are only paying for what you actually ordered and received Checks PO and Receiving report |
Non-Voucher System
|
each invoice is paid for separately |
Voucher System
|
Identifies the supplier, lists the outstanding invoices, and indicates the net amount to be paid after deducting any applicable discounts and allowances |
Evaluated Receipt Settlement
|
|
Who pays invoices
|
Cashier |
Who does the Cashier report to?
|
Treasurer |
Voucher Package
|
vendor invoice and supporting documentation, such as purchase order and receiving report. |
Front |
Back |
|
---|---|---|
Another Name for the Expenditure Cycle | Procure-to-pay cycle | |
4 basic activities performed in the expenditure cycel | 1) Ordering of goods, services, or supplies 2) Receiving and Storing these items 3) approving supplier invoices 4) Cash Disbursement | |
Key decision in the expenditure cycle | What you need Where you are going to get it from How much you need | |
3 Types of Inventory Control Methods are: | Economic Order Quantity (EOQ) Just-in-Time (JIT) Materials Resource Planning (MRP) | |
Economic Order Quantity | 1 way of managing inventory. It tells you the most efficient amount to order once you hit the reorder point EOQ = Sq.Rt((2PS/M)) Where P = Ordering Cost Per Unit S = Annual Stockout cost M = Carrying Cost per Unit (Manufacturing cost per unit) | |
Reorder Point | The level of inventory at which the company should order more inventory. ROP = dL + SS where d = demand in units (not annual) L = lead time SS = Safety stock | |
Lead time | the time between reordering and receiving of new products. | |
Safety Stock | a certain inventory amount on hand at any time to prevent stockouts | |
Just In Time Manufacturing | Highly customizible products
| |
Materials Resource Planning (MRP) | ||
JIT and MRP vs. EOQ | JIT and MRP can lead to more cost savings than EOQ | |
Purchase Request | an INTERNAL DOCUMENT that is a request for an order | |
Purchase Requistion | a paper doc or electronic form that specifies:
| |
When Picking a Supplier, You should consider... | Dependability - if they're late, then you are late Price - want to minimize expenditure costs Quality - want the highest quality with the lowest costs | |
ISO 9000 | A quality certification companies must oblige to. | |
Evaluate Suppliers and keep track of...what? | Purchase Prices Rework or Scrap Costs | |
Purchase order | a document that formally requests a supplier to sell and deliver a product at specified quantities and prices | |
Blanket Order | a commitment to buy specified items from a particular supplier for a given amount of time Benefits:
| |
IT can help improve efficiency and effectiveness of the purchasing function by: |
| |
Vendor Managed Inventory System | (VMI) Vendors have access to inventory and sales data to replenish inventory when necessary | |
Reverse Auctions | for commodities. Vendors compete for LOWEST bids for selling products | |
Pre-Awarded Adits | •typically
used for large purchases that involve formal bids by suppliers. They often
identify simple mathematical errors in complex pricing formulas and other
discrepancies that, when corrected, can provide considerable savings | |
2 responsibilities of the Receiving department are: | deciding whether to accept the items verifying the quality and quantity of the items
| |
Receiving Report | the primary document used in the recieving and storing goods process
| |
debit memo | is created if a product is not the right quality, is damaged or is not the correct item
| |
Objectives of Accounts Payable | Make sure you are only paying for what you actually ordered and received Checks PO and Receiving report | |
Non-Voucher System | each invoice is paid for separately | |
Voucher System | Identifies the supplier, lists the outstanding invoices, and indicates the net amount to be paid after deducting any applicable discounts and allowances | |
Evaluated Receipt Settlement | ||
Who pays invoices | Cashier | |
Who does the Cashier report to? | Treasurer | |
Voucher Package | vendor invoice and supporting documentation, such as purchase order and receiving report. |
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