1. Resource Business Processes
Procurement and Human
Resource Business Processes
Chapter 8

2. Describe the procurement
Learning Objective 1
Describe the procurement
business process.

3. Overview Procurement is the business process of selecting a
source, ordering, and acquiring goods or services.
Obtained internally
Purchased

4. The Procurement Business Process
Requirement
determination
Issue
purchase order
Selection of
source
Receipt of
the goods
Request for
quotation
Invoice
verification
Selection of
a vendor
Vendor
payment

5. The Procurement Business Process
ERP (enterprise resource planning)
systems are capable of storing and
processing a vast amount of
information pertaining to the
procurement business process.

6. The Procurement Business Process
SAP R/3 supports procurement in
its materials management module.
Documents in R/3 are
“online documents.”
Documents may also be printed
and exchanged manually.

7. The Procurement Business Process
Procurement Documents Available in R/3
Purchase requisition
Request for quotation
Quotation
Purchase order
Outline agreements
Contracts
Scheduling
agreements
Purchasing information
records

8. The Procurement Business Process
All procurement documents are
assigned a document type code.
This code determines the fields that
are displayed on video screens.
It also controls the range of unique
numbers that are assigned to
particular document types.

9. Master Records Master records are created in R/3 for the
“objects” that reflect the organizational
structure and business processes of the company.
The coding system incorporates fields that
identify company, plant, storage location,
purchasing organization, and purchasing group.

10. Inventory Management The IM component of R/3 records both
the value and quantity of inventory.
Enter and check goods movement.
Manage inventory stocks.
Take a physical inventory.

11. Illustrate controls that
Learning Objective 2
Illustrate controls that
apply to procurement.

12. Stores (Requisitioning)
Prepare
requisition
Verify
goods
Delivery
Receiving
report
Receiving
Purchase
database
Goods
receipt
processing
Requisition
processing
Purchase
requisition
Receiving
report
Purchasing
Accounts
payable

13. Purchasing Select vendor Purchase requisition Invoice Prepare order
Competitive bidding
Vendor
Invoice
Purchase
database
Prepare
order
Order
processing
Invoice
verification
Purchase
order
invoice
Accounts
payable
Vendor

14. Receiving Delivery Match to purchase order Blind count Enter receipt
Vendor
Purchase database
Delivery
Match to
purchase
order
Blind
count
Enter
receipt
Order
processing
Delivery
Receiving
report
Stores
Stores

15. Accounts Payable Purchase requisition order Receiving report Invoice
Prepare
voucher On
due
date
Accounts
payable
Voucher
register
Voucher
processing
Journal
voucher
Voucher
check
Retrieve
documents
General ledger
Purchase
database
Cash disbursements

16. Cash Disbursements Voucher check Sign checks Voucher check Post
Accounts
payable
Cancel
voucher
after
signing
check
Voucher
check
Post
Check
register
Control
total
Voucher
check
General
ledger
Forward
direct to
payee

17. General Ledger Control total Journal voucher Compare post General
Cash
disbursements
Accounts
payable
Compare
post
General
ledger
processing
General
ledger
Journal
voucher
Control
total

18. Internal Audit Cancelled checks Bank reconciliation Bank statement
Independent of
cash disbursements
Bank
reconciliation
Bank
Bank
statement
Check
register
Bank
reconciliation

19. Additional Control Features
Purchasing does not control the actual goods.
Receiving is separate from
final custody of the delivery.
Accounts payable handles only documents.
Purchase requisitions should
be independently reviewed.

20. Integrity of the Procurement Business Process
Purchase orders and receiving reports
control individual purchases.
They do not directly exercise control
over the procurement business process.
Control centers on the integrity
of the buyer-vendor relationship.

21. The Attribute-Rating Approach to Vendor Selection
selection is appropriate whenever an
objective evaluation of the opinions of
several independent evaluators is desired.

22. The Attribute-Rating Approach to Vendor Selection
Steps:
Identify and list the attributes to
be included in the evaluation. 1
Assign a weight to each attribute, based
on relative importance and objectivity. 2

23. The Attribute-Rating Approach to Vendor Selection
Steps:
Have individual evaluators rank
each vendor on each attribute. 3
Total the individual evaluations. 4

24. Describe the cash disbursements
Learning Objective 3
Describe the cash disbursements
business process.

25. Cash Disbursements Business Process
The CDBP Controls...
Check disbursements
Cash disbursement

26. Cash Disbursements Business Process
What is an imprest fund?
It is a fund maintained at a specified,
predetermined amount.
The imprest fund concept is not
restricted to petty cash control.
Imprest payroll funds and imprest charge or
expense funds are common in systems design.

27. Voucher Systems The major control features over disbursements
are the use of a voucher system.
It supports the drawing of checks,
the separation of approval from payment,
and an independent bank reconciliation.

28. Voucher Systems Accounts payable Cash disbursements General ledger
Internal audit

29. Voucher Systems The real control over disbursements
is a final review of documents
evidencing the entire transaction prior
to the authorization for payment.

30. Voucher Systems Authorization:
Physically signing off on a voucher package
Preparing a document to authorize
an entry in the voucher register
Entering data into a computer device

31. Voucher Systems Accounts payable generally refers to trade accounts.
A vouchers payable system
encompasses all expenditures.
Vouchers can take several forms, ranging
from a simple form or envelope to a
voucher-check combination.

32. Voucher Systems When are invoices to be posted to vouchers payable?
After invoices have been approved for
payment, they may be held until the due date.
They may be booked at the time of approval.

33. Voucher Systems What are built-up voucher systems?
These systems accumulate several
invoices from the same vendor
and pay them with a single check.
Three files are necessary to
maintain useful information.

34. Voucher Systems What are these files?
1. a file of approved but unpaid invoices
2. a file of paid invoices
3. a vendor file showing both paid and
unpaid amounts, ordered by vendor ID

35. resource business process.
Learning Objective 4
Describe the human
resource business process.

36. Human Resource Management Business Process
The HR system should provide tools for
the setup and maintenance of information
pertaining to the organizational structure.
A listing of jobs that exist in an organization
A listing of job descriptions
A listing of any qualifications
that are required for a job

37. HR Processing in SAP R/3 HR data is immediately available
to anyone who has authorization
to use it because HR data is online.
The HR component can be implemented
standalone or it can be integrated
with other modules.

38. HR Processing in SAP R/3 1 2 Modules: Personnel Administration
module (HR-PA) 1 2
Personnel Planning and Development
module (HR-PD)

39. HR Processing in SAP R/3 Components: Time Management Payroll
Travel Expense

40. The HR data structure contains three elements.
HR master data
HR data organization
HR objects

41. Illustrate controls that apply
Learning Objective 5
Illustrate controls that apply
to payroll accounting.

42. Transaction Cycle Controls in Payroll Processing
Payroll processing is very complex.
Why?
All levels of government impose payroll taxes.
Regulations and rates are constantly changing.
The payroll system requires frequent modifications.

43. Transaction Cycle Controls in Payroll Processing
Payroll processing is one area in which
the law imposes not only a fine but a
jail sentence for willful negligence
in maintaining adequate records.

44. Transaction Cycle Controls in Payroll Processing
Timekeeping
Payroll
Personnel
Job time
summary
Authorization,
notification
Authorization,
notification
Reconcile
Employee hiring,
terminations,
raises, and
deductions
Employee
time cards
Employee
time cards
Payroll
register
Paychecks

45. Transaction Cycle Controls in Payroll Processing
What is an independent paymaster?
The person who distributes the
pay is independent of personnel,
timekeeping, and payroll preparation.

46. Payroll Processing Requirements
Numerous files must be
maintained in a payroll system.
What are some examples of these files?
Basic employee information
Government reports
Payroll register or journal
Tax tables

47. Payroll Processing Requirements
Social security and other tax legislation
impose several taxes based on payrolls.
(FICA) old-age, survivors,
disability, and hospital insurance
Federal unemployment insurance
State unemployment insurance
Income taxes withheld

48. End of Chapter 8