1. The Acquisition/Payment Process
CHAPTER 7
The Acquisition/Payment Process

2. The acquisition/payment process includes the business events associated with buying, maintaining and playing for goods and services needed by the organizations.
Objective of the acquisition/payment process is to provide needed resources for the organization’s conversion processes when they are needed.
Organizations acquire a variety of goods and services. These include inventory, supplies, human labor, property, plant, equipment and fixed assets.

3. Request for Goods/Services (Monitor Need) Events
Event description
Event risks
Events Documentation Real Data Maintenance
Examples of Information Outputs
Purchase Goods/Services Events
Event Description
Events Risk
Event Documentation
Real Data Maintenance
Receive Goods/Services Events
Event Risk

4. Decision Support Requirements of The Acquisition/Payment Process
Disburse Cash Event
Event Description
Event Risk
Event Documentation
RAL Data Maintenance
Examples of Information Outputs
Decision Support Requirements of The Acquisition/Payment Process
Traditional information customers for a typical acquisition/payment process include top management, buyers, receivers, accounting, treasury and vendors.
The primary internal agents who perform the work of this process are buyers, receivers and disbursement clerks.
Selecting the vendor is perhaps the most critical aspect of the buying decision
Continuous improvement ideas relating to the acquisition/payment process

5. Traditional Automated Sales/Collection Process Flowchart-Shipping
EXHIBIT 6-4
Traditional Automated Sales/Collection Process Flowchart-Shipping
From mail
room
Picking list
(amended)
Performed
by shipping clerk
Packing list
Edit data
concerning picked
goods
Shipping
file
Packing slip 2 1
Bill of lading
To carrier and customer
To billing
File
shipping notice
Enter data concerning goods delivered to shipping
Print shipping document
Pack goods with packing slip enclosed and ship
Performed by shipping clerk
Error and exception display
Reference C

6. Traditional Automated Sales/Collection Process Flowchart-Cashier
EXHIBIT 6-7
Traditional Automated Sales/Collection Process Flowchart-Cashier
From mail
room
Checks 1
Remittance list
Compare
Performed by cashier
Check
From other
Sources
Enter data from checks
Add new check data to file and prints output
Cash receipts
file 3 2
Deposit slip
Cash receipts
Listing
(journal)
C/R File C

7. Traditional Automated Acquisition/Payment Process Flowchart-Receiving
EXHIBIT 7-3
Traditional Automated Acquisition/Payment Process Flowchart-Receiving
From Customer or salesperson
Performed
by sales order clerk
Receiving reports
Receipt transaction
To accounts payable procedure
To stores and accounts payable
Update master file
Error and exception display
Open purchase order file
Receiving reports file
Packing slip
Count and Inspect received items; compare to packing slip reconciliations
Edit receipt data and prepare receiving report
Enter receipt on CRT terminal
Merchandise inventory master file
Supplier history file

8. IBM’s NEDS (National Employee Disbursement Solution)
EXHIBIT 7-7
IBM’s NEDS (National Employee Disbursement Solution)
Employee travels
Employee enters
reimbursement
request
Supervisors reviews
and electronically
approves request
Funds are electronically
transferred to employee’s
bank account
Computer edits and audits
reimbursements data as it
is entered
Impact :
393 headcount reduction
$291 millions savings (10 years)
Decreased processing time
Increased controls
Better management information
New role for the accountant

9. EXHIBIT 7-8 EDI Data Flow CUSTOMER (PURCHASE CYCLE)
order
Vendor’s
Invoice
Receiving
report
Check of
EFT
Sales
Customer
Shipping
documents
Goods
Internal data flows
External data flows
CUSTOMER (PURCHASE CYCLE)
SELLER (REVENUE CYCLE)

10. Purchasing Disburse Payment Cash Bank EXHIBIT 7-9
Christopher, Inc. Acquisition/payment REAL Model (Without relationship semantics)
Authorizing
Agent
Inventory
clerk
Purchasing
Vendor
Receiving
Clerk
Order
request &
Review
goods from
vendor
Disburse
Payment
Cash
Bank
(1,1) (0,*)
(1,1) (0,*)
(1,*)
(0,*) (1,1)
Receive
Goods
(0,*)
Warehouse
Cashier
(1,1)
(0,*) (1,1)
(0,*) (1,1)
(1,*) (0,*)
(1,*) (0,*)
Account
payable