ACC539: Laurel Pty Ltd Expenditure and Inventory Management Report

This report provides an analysis of Laurel Pty Ltd's expenditure and inventory management processes. It identifies weaknesses in internal controls within the purchasing and accounts payable departments, such as lengthy purchase processes, discrepancies in invoices, and a lack of segregation of duties. The report examines the impact of these weaknesses, including delays in production and supplier inconveniences, and suggests improvements like experienced departmental heads, inventory level checks before ordering, and segregated employee tasks. Furthermore, the report discusses the potential benefits of implementing business intelligence and digital dashboards, particularly in management decision-making and enhancing the efficiency of the manufacturing process by adjusting production times and optimizing inventory carrying costs. The report concludes with a summary of the findings and recommendations for improving Laurel Pty Ltd's operations.

Running head: EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY
LTD
EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
Name of the Student
Name of the University
Author Note

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
Executive Summary
This report focuses on the expenditure and Inventory Management of the Laurel Pty Ltd.
Through this report, Laurel Pty Ltd. Mr. Laurel will get an idea about the measures of an
appropriate internal control. The shortcomings of the inventory management are discussed
and how the process of purchase to manufacturing process can be done better are discussed
with reference to the proper implications of the internal control management. In the later part,
the implication of the business intelligence in the organization is critically evaluated, with the
main areas in consideration are Management decision making and Efficiency of the
manufacturing process.

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Answer to Question 1:................................................................................................................3
Answer to Question 2:................................................................................................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
Introduction
The report mainly presents the identification of the internal control weakness of the
Laurel Pty Ltd.’s inventory management and the expenditure process. As Laurel Pty Ltd. is a
manufacturer of car parts, the CEO of the organization try to expand the business, in that
regards all the weakness of the internal controls is being evaluated in the report. The
processes which the organization used in the organization at the time of managing the
inventory and the gap between the purchase and manufacturing process are analyzed with
reference to controls which can be implemented in the existing procedure. In the later part,
the organizational impact on implementing the business intelligence in that organization is
discussed. The two areas which this report is focuses, based on the use of Business
Intelligence and digital dashboards are Management decision making and Efficiency of the
manufacturing process.
Discussion
Answer to Question 1:
Internal Control Weakness Impact of the weakness Control to mitigate the weakness
 Laurel Pty Ltd is a
manufacturer of the
car parts.
 As it is seen from the
internal weakness that
the number of clerks is
pretty low compared to
 In the purchase department, there are 5
departmental heads. It is important for the
organization to implement experienced
members from the higher authority. It will be

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
 The purchasing
department consists
of 2 full time clerks
and 2-part time
clerks.
 The department
heads consist of 5
members, they made
a purchase
requisition (PR)
when the inventory is
low.
 The purchase process
of the inventory is
very lengthy, and it is
very time consuming.
 The purchasing clerk
will review the
purchase requisition
and after that he will
inform the suppliers
with a purchase
order.
 From the case study,
the departments which
the purchasing head
has.
 The process of ordering
an item for the
inventory is more time
consuming, so that
there can be a delay
happen at the time of
production.
 The process of ordering
an item does affect the
organization as they
have to contact
multiple suppliers from
the list of suppliers
which they have in the
system.
 The impact which the
organization has faced
at the time of receiving
the invoice from the
suppliers is that it some
of the suppliers are
beneficial for the purchasing team to carry the
work more efficiently.
 The department should involve the
management people, so that process should be
more fast. It is seen that for the confirmation
of the item the team received a purchase
requisition.
 The organization should check all the
inventory levels before placing the order for
that item (Azad at el., 2016). All the
outstanding order should be kept on one place
for any requirement
 There should be a team which should only be
concerned with the taking the orders, and deal
with the suppliers (Yang, 2016). It will speed
up the process of the purchase department if
there is a proper segregation of the task of the
employees in the department.
 The suppliers who supply goods to the
organization, should be provided a tender for
a certain period of time, so that at the time of
ordering the goods the purchase officer does
not have to wait for suppliers to give a
quotation on the prices which has been

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
it is seen that
sometimes there is an
overlap happen in the
responsibilities of the
purchasing team.
 At the time of
receiving the supplier
invoice, it is seen that
there are
discrepancies
between the report
which is received and
the purchase order.
 In the receiving
department, for last
18 months, there is a
shortage of the
employee. In place of
6 employees, 3
employees are
working in the
receiving team.
 In the receiving
department, there is
inconvenienced
because of the poor
management of the
purchasing department.
 In the meantime, the
supplies also get
affected and
disappointed because
sometimes they do not
get the offer due to the
other suppliers.
 As the receiving
department has less
employee involved at
the time of working,
the three employees
who are involved have
to do the overtime to
fulfill the gap of the six
employees.
 As there is less
employee, to some
extent there is a delay
in the process of the
ordered by the organization.
 In the receiving department, they should
check the invoice of the goods and the goods
which is provided by the supplier (Barratt,
Kull & Sodero, 2018). It is the duty for the
staffs those who are in the duty to inspect the
quality and the standards of all the goods
which has been given by the suppliers.
 From the case study, it is seen that most of the
employees are not there in the duty hours
(Skaff, 2017). So, it is effecting the
management as the other employees have to
work extra hours, and the work process of the
receiving department is getting affected.
 The staffs should check the invoice numbers
and the purchase order, if only the numbers
matched and after the quality check then only
the staff should receive the goods.
 At the time of checking the inventory, there
should be a continuous monitoring needed so
that at the time of production there should no
shortage of the items which is needed.
 In the Accounts payable department, there is a

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
need for more
employees.
 In the Accounts
Payable system, the
internal controls
which is found form
the case study is
there should be
segregation of
employees.
 The cash
disbursement and the
payment are done by
the Account Payable
manager.
receiving team.
 As all the staffs
involved in the
Accounts Payable
Department does not
have a segregation in
their duties, thus it
delays some of the
process which is
carried in the
department.
need for the segregation of duties (Gupta,
2016).. If the employee has their specific
duty, then it is good for them because they
will become specialized in their duties and
they will perform efficiently which will be
beneficial for the management.
 Sometimes, it became an issue for the
suppliers as only the Accounts Payable
manager can allow the payments to be done.
The Account Payable manager should take
care of the duplicate invoice number. It
happen depending of the situations, as
sometimes there is a large number of invoices
present in the system, so it is difficult of the
account payable clerk to search through all
the files of the vendors.
Answer to Question 2:
a) Business Intelligence is a tool which is used by an organization of the visualization of
the data which displays the information which is related to the organization (Richards
et al., 2019). The information which is shown are key Performance Indicators (KPI),
analytics of the business metrics and the main points of the department of whole
organization or process which it is used.

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
Digital Dashboards on the other hand is used for the visualization of the data, it simplifies
all the data which is complex and provides the users with a simplified version of the data
about the performance of the organization (Amin, Valverde & Talla, 2018). It helps in the
improvement of the information which the organization provides, and it reviews the
information constantly which helps the management for the decision making. The
management accountant plays a greater role as they provide a lot of information about the
organization (Vayre, 2015). It provides the information like the present status of the metrics
and the key performance indicators of the organization.
b) i) Management Decision Making: Through the implication of Business Intelligence
and Digital dashboards, Laurel Pty Ltd will have an advantage because it will collect
all the information which is needed from the raw data of the organization and the
information will be shared as per the division of the related areas (Shollo & Galliers,
2016). The decision making process will be more efficient as in relation to the
inventory management because all the items will be displayed in the digital
dashboard. The business intelligence has a major role in strategic decision making as
the report which is produced is based on the information, through this information the
performance is measured by this process (Wieder & Ossimitz, 2015). It produces the
information with the advanced reports so that the organization can efficiently use the
information and manages in a good way.
ii) Efficiency of the Manufacturing process: In the manufacturing process, business
intelligence usually helps in the adjustment of the production time of the goods. The
key inventory related metrics which is related to the “inventory carrying costs”, it
provides a great help from business intelligence (Tokola et al., 2016). The
manufacturers provide the data to the Business Intelligence which includes all the
structured data and the unstructured data, in the process the intelligence used different

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
types of probability and shows the best outcome which is suitable for the
organization. Through this the managers also gets an idea about the performance of
the employee who is working in the organization. The intelligence also gives analysis
on the environment of the manufacturing unit, and provides the organization with
various growth strategies (Terpenny & Schaefer, 2017). Thus, the managers can
monitor all the information from the business intelligence and by following the
information they can make changes in the workflow of the organization and they can
change some of the components in the manufacturing process through which they can
make their production higher and through more efficient way.
Conclusion
Form the above analysis of the report, in relation to the Laurel Pty Ltd, all the
weakness of the internal control is being evaluated with the recommendations that can be
followed for the betterment of the organization. As it is seen that the organization mainly uses
a manual inventory system, because of this there is a slow process of recording the inventory
as when the Purchase Requisition is received the next clerk which is actioned by the next
available clerk. All the weakness which can be controlled in the internal control of the
organization are discussed, it can be done through a computerized inventory system. In the
second question the benefits which the Laurel Pty Ltd.’s will get by using the business
intelligence and digital dashboards are being discussed. Two areas which the organization is
considered is in Management decision making and Efficiency of the manufacturing process.

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EXPENDITURE AND INVENTORY MANAGEMENT- LAUREL PTY LTD
References
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