Accounting Information Systems

Accounting Information Systems

Identify the important business events that occur within Larkin's purchase/payment process.

In analyzing the Larkin University case study, the following are the important business events that occur during the college's purchase and payment process. Clearly what emerges from an analysis of this case study is that even with a manually-oriented system the segregation of buyers by department name they are purchasing for, and Accounts Payable being organized by vendor name is a major disconnect, and when these two specific events are combined, there will be much confusion in reconciling purchase orders and invoices from suppliers. Another major event is the role of Central Receiving acting as a distributed fulfillment hub for the Purchasing, Accounts Payable, and Accounting. Another event is down-process from the Central Receiving function, where receiving clerks file one copy of the Receiving report, send one to the Purchasing Department, and forward a third copy to Accounts Payable. This is a significant event in that it should be one that verifies and creates an audit trail for the entire purchasing process.

What changes would you suggest to the current process to take advantage of information technology?

First, the entire series of processes that comprise the workflow would be re-defined and re-mapped as part of a business process re-engineering effort across all departments who use purchasing, the purchasing department itself, accounting, receiving, and the suppliers. Using a Service-Oriented Architecture (SOA), Web Services would be created to replace the manual and often conflicting systems and processes in place today. As part of this SOA platform development, business process management (BPM) workflows would be created and then later optimized to make each process in total system as efficient as possible. Hammer (2003) also states that the need for making BPM-based strategies successful is in allowing those using the system the majority of the time to have the greatest say in its development. As the complete re-vamping of these manual, and today conflicting, systems is completed, a series of design sessions that focus on the needs of the departments would be completed to make sure their requirements were reflected in the final system. Only after re-aligning the system to users' needs and making the entire series of processes more focused on delivering results than in being designed for department-by-department efficiencies would the automated system be turned on and used.