2. Posavek Remodeling and Building Supply Company (Centralized Small Business Accounting System) Posavek is a wholesale supplier of building supplies to building contractors, hardware stores, and home- improvement centers in the Boston metropolitan area. Over the years, Posavek has expanded its operations to serve customers across the nation and now employs over 200 people as technical representatives, buyers, warehouse workers, and sales and office staff. Most recently, Posavek has experienced fierce competition from the large online discount stores. In addition, the company is suffering from operational inefficiencies related to its archaic information system. Posavek's expenditure cycle procedures are described in the following paragraphs. Expenditure Cycle Posavek uses a centralized accounting system for managing inventory purchases and recording transactions. The system is almost entirely paperless. Each department has a computer terminal that is networked to the purchases/AP system that is run from a small data processing department All accounting records are maintained on centralized computer files that are stored on a file server in the data processing department. Purchasing The process begins in the purchasing department. Each morning the purchasing agent reviews the inventory levels from his department terminal and searches for items that have fallen to their reorder points and need to be replenished. The purchasing agent then selects the vendors and creates digital purchase orders in the purchase