Purchase Order The following purchase procedures were obtained from Selamat, a warehouse executive. Periodically, he reviews the inventory cards and lists all products for reordering purpose. He decided on the purchases based upon the minimum inventory needed for each product together with the minimum order quantity specified by the vendors to determine the ordered quantity. Selamat then refers to the 'Suppliers' file for identifying the vendor to deliver the ordered inventories. He then manually prepares a pre-numbered purchase order (three copies), He notifies the respective vendors on the purchase order details via e-mail/fax. The purchase order forms are then filed in 'Incoming Purchase Order' file by date while waiting for the delivery. The vendor fulfils the order and delivers the ordered inventories to SESB's receiving dock. Your team was then invited to observe the handling of vendors' delivery in the receiving dock area. The receiving dock is an open platform located beside the warehouse entrance in which the lorry drivers will unload the inventories. The operation employees handle the receiving process. When the delivery arrives, the employee takes out the respective purchase order copies from the 'Incoming Purchase Order' file. Next, the employee inspects the inventories received for possible damage, verifies that the inventory description and the stated quantity on the vendor's delivery note are consistent with the information in the purchase order. In several instances, a considerably high number of deliveries made by the vendors in a day causing the operation employee struggles to handle the incoming deliveries. As you observed during the visit, in several deliveries, the operation employee seems to simply verify the quantity received as per delivery note without physically inspecting and counting the number of inventories arrived. The operation employees further mentioned that in case of no discrepancies found on the order received, the operation employee signs the designated section for receiving information in the purchase order form and specifies the receiving date in the purchase order copy. The employee then keeps the purchase order copies together with the vendor's delivery note into a 'Closed Delivery' file by the date of receiving. From time to time, Selamat reviews 'Closed Delivery' file for all completed purchase orders. For each delivered order, he updates the quantity received onto the respective inventory card. Then, he forwards the original copy of the purchase order to accounts unit. Meanwhile, the second and third copies of the purchase order and vendor's delivery note is kept accordingly in Closed Delivery' file.Accounts Payable and Cash Disbursement Lissa describes as follows of how she handles the cash payment to the SESB's vendors, specifically on the purchase of inventories. Upon receiving the purchase order copy, Lissa temporarily files the purchase order (by supplier name) in 'Incoming Supplier's Invoice' while waiting for the invoice to arrive from the vendor. When the vendor's invoice arrives, she takes out the respective purchase order copy that matches the vendor's invoice. The supplier invoice details are reconciled with the respective purchase order. Lissa gets into SESB's accounting system and records the vendor's invoice by keying-in the reseller's ID. A computer program then reads the vendor's master file and displays the vendor's details on screen, She then records the vendor's invoice details onto the system. A next computer program edits and checks the invoice details entered for possible data entry errors, Upon saving the transaction, the computer program records the transaction into the purchase file and updates the respective vendor's file and subsequently the general ledger master file. She then prints the accounts payable summary and files together with the purchase order copy and vendor's invoice by the invoice's due date into an 'Open Invoice' file. When asked about the payment procedures, Lissa elaborated as below: On every Monday, she checks on the "invoice for payment file' for any outstanding invoices that are becoming due within that week. For all invoices becoming due, she takes out the invoices with the attached purchase order copy and enters the vendor's details into the SESB's accounting system (account payable cash payment module). Upon entering the vendor's details, a computer program retrieves the respective vendor's record from the vendor's master file and displays all pending invoices on screen. She then chooses the invoices for payment and records the payment details. The computer program records the transactions into a cash disbursement file and creates a payment voucher register file. Consequently, the computer program updates the vendor's master file and general ledger master file for all transactions entered. Next, she prints a payment voucher for the respective invoices due for payment. She later forwards the payment vouchers to Jason, the account manager for payment processing. The account manager makes a payment using online banking to the respective vendors as per the payment voucher. The payment slip is then given back to her for filing purpose. Finally, she attaches the purchase order, vendor's invoice, payment voucher and the payment slip into the "Paid Invoice' file based on the payment date. When asked for any specific reports prepared at the end of each month, Lissa indicated that she produces a report from SESB accounting system comprising of purchase summary, accounts payable summary, and total cash disbursement of the month. The reports are forwarded to the general manager