Strategic Information Systems for Business and Enterprise

Strategic Information
Systems for Business and
Enterprise

Table of Contents
INTRODUCTION...............................................................................................................3
MAIN BODY.......................................................................................................................3
System Flow of Expenditure Cycle................................................................................3
System Flow of Conversion Cycle.................................................................................4
Analysis of physical internal control weaknesses in the expenditure cycle...................5
Analysis of the risks exist in the conversion cycle and the changes needed to reduce
the risks..........................................................................................................................6
CONCLUSION...................................................................................................................8
REFERENCES..................................................................................................................9

INTRODUCTION
Strategic information system which is information system developed for business
initiatives in the organisation. Strategic information system is intended to ensure
competitive advantage for the business organisation. Strategic information system also
ensures that information flow is effective and flow of information system through which
information can be transferred timely. This report will discuss about information system
at Paradise Industries which is based at Adelaide and is a manufacturer of high-
precision machine tools. In context of its information system Paradise Industries
employs a centralised computer system with distributed terminals in the department.
This report will discuss about expenditure cycle of Paradise Industries and Conversion
cycle of Paradise Industries. Expenditure cycle is concerned with inventory and
purchase requisition whereas conversion cycle is concerned with production in the
Paradise Industries.
MAIN BODY
System Flow of Expenditure Cycle
Expenditure cycle is a process which involves placing the order or can be said
ordering required material and goods. Another step in this is receiving the material
which has been ordered and lastly paying for the items which has been order and
received. This is first phase of production as this initiates the production by collecting
and receiving all the required material for the production (Moser and et.al., 2019).
Paradise Industries is a manufacturing industry and this is why this expenditure cycle
plays important role in overall success of the manufacturing process.
Expenditure cycle starts from the time when inventory falls on recorder point.
This automatically generates purchase requisition and prints a copy at the terminal of
purchase department. After selection of supplier purchasing clerk prepare purchase
order and this is sent to supplier and to receiving department. Purchasing clerk then
adds record to the open/close purchase order file through update program in the data
processing centre.
After receiving delivery from supplier clerk reconciles packing slip and purchasing
order. After receiving the order receiving clerk prepares a hard copy of the items which
has been received along with quantity and quality of the goods which has been
received. The report of receiving is then given to warehouse and receiving department.
Later this record is added to digital receiving report file through departmental terminal.
This is followed by automatic closure of purchasing report. Warehouse clerk updates
inventory subsidiary ledger on receiving the order through warehouse terminal.
After arrival of suppliers’ invoice accounts payable clerk adds record to the suppliers
invoice file and this automatically adds liability in the accounts payable subsidiary ledger
based on the financial information in the invoice. This is followed by updating all
affecting ledger accounts.