1. Information flow Diagram

2. Information Flow The following diagram illustrates the information flow within typical manufacturing and wholesaling organisation.

3. Factory Warehouse Purchasing Accounting Suppliers Sales Retailers Order details Delivery notes Requisitions Re orders Copy Delivery notes Purchase details Invoices Payments Despatch notes Orders Payments Invoices Credit limits Sales details Copy Delivery notes

4. The diagram shows that each functional area is dependent on one or more other area for the information it needs to operate. For example: to charge the retail outlet (customers) for the goods supplied, the Accounting function requires the necessary sales information, which is supplied by the Sales function. Refer back to the diagram.

5. With this information the Accounting function can prepare the necessary invoices to send to the customers. Similarly, Purchasing must be kept informed by the Warehouse (stock control) of raw materials which need re-ordering from suppliers to replenish stocks.

6. A customer order is generated when a customer orders goods Credit limit details flow from Accounting to Sales, when a customer order is checked An invoice is raised when goods are despatched to a customer A payment to a supplier is triggered when the invoice payment falls due