JOUNTA ENTERPRISE

Jounta Enterprises is a wholesaler that purchases consumer merchandise from many different suppliers. Jounta then sells this merchandise to many different retail chain stores. The following paragraphs describe the expenditures processes at Jounta:

Warehouse employees constantly monitor the level of each merchandise item by assessing how many remaining boxes of items are on warehouse shelves. When a warehouse worker sees the need to order a particular product, he fills out a postcard-size order requisition form with the product name and item number. The number is Jountas item number.

When the purchasing department receives a requisition from the warehouse employee, a buyer looks up the last purchase of that item and completes a purchase order to buy the item from that vendor. The manager of the purchasing department approves the purchase order before it is mailed to the vendor. One copy of the purchase order is mailed to the vendor, one copy is filed in the purchasing department, one copy is forwarded to the receiving department, and one copy is forwarded to the accounts payable department.

When the receiving department receives an order, it compares the packing slip with the purchase order. If no purchase order exists, the item is returned to the vendor. A receiving report is prepared for the number of items indicated on the packing slip. One copy of the receiving report is filed in the receiving department, one copy is forwarded to the purchasing department, and one copy is forwarded to the accounts payable department. Items received are then transported to the warehouse.

When the accounts payable department receives an invoice from the vendor, an employee in the accounts payable department compares the purchase order, receiving report, and invoice. If the three documents match correctly, a cash disbursement voucher is prepared. If it does not match, the employee contacts the vendor to try to reconcile the differences. The cash disbursement voucher is reviewed by the manager of the accounts payable department. If it appears correct to her, she writes a check and forwards the check to the treasurer to be signed and mailed to the vendor.

Required:

1. Review Jounta Enterprises and prepare a proposal to management to address:

1. List concerns and possible weaknesses in the system;
2. Provide a list of possible recommendations to mitigate each risk or weakness without going into full detail;
3. Describe any benefits that Jounta may receive by installing a new system, without going into full detail;
4. Item 4: Upload Invoice (your billable rate x the hours spent). Make any assumptions to support your recommendation. Try to limit your memo to approximately 250 words. No penalty if more or less is written.