Accounts Payable DFD
Santa’s Helper is an independent retailer of children’s toys. The Accounts Payable department is located at the company headquarters. The department consists of two full-time clerks and one supervisor. They are responsible for processing and paying approximately 2,000 payments via EFT each month. The accounts payable process begins with the receipt of a purchase order from the purchasing department. The purchase order is held until a receiving report and the vendor’s invoice have been forwarded to accounts payable.
At that time, the purchase order, receiving report and invoice are matched together by an accounts payable clerk. Payment and journal entry information are input into the computer. Payment dates are designated in the input, and these are based on vendor payment terms. The company policy is to take advantage of any cash discounts offered. If there are any discrepancies between the purchase order, receiving report and invoice then they are forwarded to the supervisor for resolution.
After resolving any discrepancies the supervisor returns the documents to the appropriate clerk for processing. Once the documents are matched and payment information is input, the documents are stapled together and placed in a temporary file (awaiting payment) by payment date until the payment is processed.
EFT payments are automatically processed once a week based on the payment date. Batch totals are checked and vendor payments reconciled to the payment list generated prior to the supervisor authorising the payments. Remittance slips are automatically emailed to the vendors once the payment run has completed. All matched purchase orders, receiving information and invoices that have been paid are filed in the paid file by payment date.
Question – Business Process Modelling:
You have been hired by a toy retailer, Santa’s Helper, to review their Accounts Payable Department. The organisation is looking to improve efficiencies in this area. To make any recommendations, you must first understand the current process being undertaken. A transcript of your interview with the Accounts Payable supervisor is located above. Using that transcript and an applicable system tool, create a Level 0 logical data flow diagram to document the existing system for the accounts payable process.
A system tool includes software such as Word, Excel, Smartdraw or Edraw. There are many tools that are available to trial for free on the internet.