System Flow Chart

This report provides a brief explanation regarding the system flowchart of the purchases system, cash disbursement system, and payroll system. It also discusses internal management issues and the importance of accounting information system.

Running head: SYSTEM FLOW CHART
SYSTEM FLOW CHART
Name of the Student
Name of the University
Author note

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Executive Summary
This report provides a brief explanation regarding the system flowchart of the purchases
system. This report also discusses about the system flowchart of the cash disbursement
system. Proper discussion regarding system flowchart of the payroll system is also provided.
Proper discussion regarding the internal management issues present will also be stated.
Proper discussion regarding the Accounting Information system is also provided in the report.
Importance of accounting information system is also provided along with the different kind of
systems that are in use.

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Table of Contents
Introduction........................................................................................................................2
System flowchart of purchases system.............................................................................2
System flowchart of cash disbursement system...............................................................4
System flowchart of payroll system...................................................................................5
Description of internal control weakness in the following systems...................................6
Conclusion.......................................................................................................................10
References.......................................................................................................................11

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Introduction
This report will be discussing about the system flow chart of the purchases system.
Proper discussion regarding the cash disbursement system is also made in this report.
Discussion regarding the system flowchart of payroll system is also stated. Description of the
internal management issues are also well discussed in this report.
System flowchart of purchases system
Figure 1: System flow chart of Purchases system
(Created by author)
The process starts with the process of the purchasing clerk checking the subsidiary
ledger. After checking of the subsidiary ledger the main question that arises includes whether
the quantity of then product is high or low. This will be ensuring that proper analysis of the
present quantity of the product will be maintained. In case the quantity is high the entire
process ends. Again in case the quantity is low a new process begins. In this case selection

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of the vendor from the catalogue. After performing proper selection of the vendor, digital
purchase process is prepared. This acts as a major step and hence wise order is placed after
this section. After this process 2 hard copies of the purchase order is printed. The 2 files are
sent to 2 different sections. One copy is sent to the vendor and the other copy is sent to the
purchasing department. After this process the purchase record is made.
After this stage the receiving stage starts. The first stage is bothered with the
inspection of the items. After inspection of the items, proper checking of the product is
performed. Whether the product that is chosen is correct or not is decided. If the answer is no
the phase shifts backwards and the process starts from the beginning. In case the product
that is selected is correct, preparation of 2 hard copies are made. In this case one hard copy
accompanies with the goods and the other copy is sent to the account department or the
payment department. For the hard copy that is sent with the goods, the clerk prepares a
received report after receiving the same. The stage in which another hard copy is sent to the
payment department, the account payable department files the product. After this stage
printing of the receiving report is performed. After this stage, the clerk updates the digital
account that is payable in the subsidiary ledger. After this section the clerk sends the invoice
to the receiving report and hence wise purchase order copy as per the cash disbursement
department is also done. After completion of all these steps the project ends.

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System flowchart of cash disbursement system
Figure 2: Cash Disbursement System
(Created by author)
In this case the entire process starts with the clerk filing the documents. After this
stage, a decision making case scenario arises. The decision making is made as per whether
the payment is due or not. This will also check whether the due date has arrived or not. There
are two possibilities that can arise. This will be ensuring that if the due date has not arrived
the task needs to wait for the due date to arrive. Again if the due date of the task has already
arrived, cheque is prepared and is sent to the treasurer. After this process, the treasurer signs
it and sends it to the vendor.
Again in the receiving section, the cheques are updated in the register, account in
which the cheque is to be paid is also considered in this case. Subsidiary ledger and the
account payable is also well stated in this case. Hence forth, invoice is filed along with the
report and the cheque copy. After completion of this process the entire process ends.

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System flowchart of payroll system
Figure 3: System flowchart of payroll system
(Author note)
The entire project starts with Adam & Co employees records the time card and the
work time on daily basis. After this process, the supervisor will be checking the time card and
the correctness of the entry. After checking the correctness of the data, the same is submitted
to the payroll.
There is a separate work function that will be going in in the payroll company. In this
process, the payroll checks the input of data in the very initial stage. The payroll clerk checks
the input of the data. After this section, the hard copy will be printed as well. After this
process, 2 copies of the payroll register is made. After making of 2 copies of payroll register,
the copies are sent to the digital employee record. After this section the payroll clerk collects
the files. After collecting the file, 2 copies of the employee pay cheques to various supervisors
are made. After this a decision making stage arises. In this case, if the data is collected, it
gets distributed to the respective department. Hence forth the entire process will be ensuring
that the payroll clerk sends the data and 2 copies are made. The 1st copy is sent to the

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account payable department and the 2nd copy of the data is sent to the payroll department.
After this stage, the clerk posts general ledger and hence wise files voucher. After this phase
the task ends.
Description of internal control weakness in the following systems
In case of the purchases system, the main internal control weakness that was present
is that the clerk was excessively pressurized regarding the functional process. The entire
process was performed by him in manual manner. Analyzing of the quantity of the product left
and hence wise decision making process is performed manually in this case. The internal
management issues that might arise due to this problems include inaccuracy in decision
making and hence wise proper execution of the task might be at stake. Another major issue
that can be stated is that the transaction process is highly complex and in case of missing of a
single step might be creating a major problem in the project execution process. Again manual
interference is also very high, leading to increase in chances of mistakes.
In case of the cash disbursements system, the main issue that is present is that the clerk
checks if the due date has arrived or not. In this case, the main aspect that is considered is
that the clerk might be missing the due date and forget the due date, the entire process will be
lagging.
In case of the Payroll system, the main issue that is present is that there is manual
filling of the data. This manual filling of the data might be decreasing the accuracy of the
system. In case the data that are entered by the workers might be wrong. In case the data
that are provided are wrong in nature the entire functioning of the payroll system will be
getting wrong. Again the main issue in this case is that the entire process is performed
manually. This manual treatment will be reducing the accuracy of the system.

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Risks associated with the above system
The major risks associated with the above scenarios are as follows: -
 The time that will be taken for completion of the stated case will be very high
 The complexity in the functioning process is high as well.
 Accuracy of the functional process can also be questioned at times.
Recommendation for the above problem
The best way to mitigate these issues is by implementing Accounting information system.
 There are 2 major types of Accounting Information System. The types includes the
likes of Manual Account Information System and Legacy Account Information System.
Manual accounting system is mainly concerned with the small businesses. These
businesses includes the fact that gathering of source data along with general ledger
and general journal is performed. This leads to the fact that better assessment of the
subsidiary journals are also included. This is the main reason that this type of Account
Information system is generally used in the small scale businesses. In case of the
manual account information system, the main aspect that is considered is that the
transactions are properly maintained (Schaltegger and Burritt 2017). This leads to the
fact that proper assessment of the error rate can also be provided. This is the main
reason that manual rolled up system is well provided as the journals and the
transaction process gets performed in a proper manner. This is the main reason that
the financial statements are provided. This provisioning of the financial statement will
ensure that reduction in error rate can be performed. But the major issue that is seen in
this case is that despite reduction in the errors in the financial statement, there are
errors present in the functional process. The speed of functioning is also much slower

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than the expected rate (Susanto 2016). This leads to the fact that usage of this
technology has not been very high.
 Usage of the legacy system accounting information system will also be beneficial in
nature. These are the systems that are in use by the existing business organization.
These information system was mainly focused with old fashioned accounting
information system (Alewine, Allport and Shen 2016). It has been seen that the legacy
accounting information system has the potentiality of constant evolvement as per the
requirement of the business and hence wise customization gets easier. The major
disadvantage that this process has is that no proper documentation is present in the
system.
 There is a proper replacement of legacy system. This system is mainly concerned with
removing the legacy system and updating the same with the up to date system. In this
case the major aspect that is considered is performing screen scraping ( Collier 2015).
Despite the fact that this system is highly expensive in nature, this alteration can be
made at any point of time. With the help of screen scraping the major advantage that
will be enjoyed is that the data that is displayed on the screen gets translated in a form
that the newer application reads it. Setting up of the enterprise application is also an
important act of the replacement of legacy system (Libby 2017). Activities namely
inventory and payroll will also be acting as the major advantage of implementing these
technique.
The benefits that will be enjoyed after implementation of the accounting information system
are as follows: -
 Accounting Information system is a computerized accounting program that takes into
consideration the need of records handling and transaction process. The information

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that are entered in the system are structured by the account information system. These
technology can be used for performing proper detailed information about the financial
statements and the financial transaction. There are few sections that gets benefitted in
the functional process. The sectors include Business Transactions, Account Payable,
Account Receivable, Financial statements and provide proper analysis of data
regarding the Year End Closing (Budiarto et al, 2018).
 It is considered that Accounting Information System provides its maximum utility in the
business transaction section. The Accounting information system is mainly concerned
with the record all the data that are being transacted. This insists the fact that the data
that are entered in the system stays in the system and can be re used. The transaction
process also performs in a manner that the sectioning of the data that are collected are
done (Susanto 2015). This ensures that structuring of the data gets easier.
Transactions are hence wise posted in the respective departments correspondingly.
 Proper gathering of the accounting information system is also provided. This ensures
that the payment process gets easier. This ensures that proper assessment of the
business management regarding account related data are made. Another benefit that
is received is that the data regarding the accounting details are provided in a precise
manner and hence wise gaining access to the data as per the entry date gets easier
and this increases the efficiency of the entire process.
 Proper allocation of the accounts payable is also well stated. This process also helps in
proper generation of the bills and hence wise proper allocation of bills is also
performed. Generation of bills gets easier and hence wise the entire functioning
process of the clerk. This will be increasing the efficiency of the entire project ( Prasad
and Green 2015).

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 Creation of financial statements is also another benefit that is performed by the
Accounting information system. In this case the dates are entered in the system and
the entire data sets that are present are provided. The system has the capability of
producing reports regarding the client. This will also provide data regarding the data of
different periods. This is the main reason that gaining annual data gets easier and the
accuracy of the data transacted gets higher.
Conclusion
From the above discussion it can be stated that the accounting information system is
one of the major technology that can be implemented for mitigation of the issues that are
detected in the process. With proper implementation of the accounting information system
issues that might arise due to complexity in framework can be mitigated as well.

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References
Alewine, H.C., Allport, C.D. and Shen, W.C.M., 2016. How measurement framing and
accounting information system evaluation mode influence environmental performance
judgments. International Journal of Accounting Information Systems, 23, pp.28-44.
Budiarto, D.S., Prabowo, M.A., Djajanto, L., Widodo, K.P. and Herawan, T., 2018, May.
Accounting information system (ais) alignment and non-financial performance in small firm: a
contingency perspective. In International Conference on Computational Science and Its
Applications (pp. 382-394). Springer, Cham.
Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for decision
making. John Wiley & Sons.
Libby, R., 2017. Accounting and human information processing. In The Routledge
Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Prasad, A. and Green, P., 2015. Organizational competencies and dynamic accounting
information system capability: impact on AIS processes and firm performance. Journal of
Information Systems, 29(3), pp.123-149.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Susanto, A., 2015. What factors influence the quality of accounting information. International
Journal of Applied Business and Economic Research, 13(6), pp.3995-4014.
Susanto, A., 2016. The effect of internal control on accounting information
system. International Bussiness Management, 10(23), pp.5523-5529.