Improving Expenditure Processes: Platinum Manufacturing Analysis

This report provides a comprehensive analysis of the expenditure process at Platinum Manufacturing Company. It begins with a summarized overview of the current process, including purchasing, receiving, payment, and treasury stages, and presents a 0-level Data Flow Diagram (DFD) illustrating the existing system. The core of the report identifies several weaknesses within the process, such as manual verification of purchase forms, verbal communication, manual data entry, and offline payment methods. The report discusses the negative impacts of these weaknesses, including potential misinterpretations, data errors, and security risks. To mitigate these issues, the report recommends a series of modifications, including the implementation of barcode scanning, electronic forms, cloud storage, and electronic fund transfers. The report also addresses security concerns and suggests training for employees. The conclusion emphasizes the potential for significant improvement through the integration of advanced technologies.

Running head: ANALYSIS OF THE PROCESS
Accounting Information System
Name of the Student:
Name of the University:
Author Note:

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ANALYSIS OF THE PROCESS
Table of Contents
Introduction......................................................................................................................................2
Summarized version of the process:................................................................................................2
0 level DFD for the existing system:...............................................................................................3
Identification and possible modification of the process within the organization:...........................3
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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ANALYSIS OF THE PROCESS
Introduction
The expenditure of the Platinum Manufacturing Company follows certain steps. These
steps includes different inter departmental ways of communication, which are done verbally. The
whole process is manual in a partial way. The main objective of this article is to identify the
weakness of the entire process and recommending a plan for the improvement and modification
of the entire process.
1. Summarized version of the process:
There are four stage sin the expenditure process of the organization- purchasing,
receiving, payment for the order and treasury process. During the initial stage of purchase, the
purchase form is generated and is sent to the purchasing agents for verification. The choosing of
the possible supplier is done after this stage. The selection of the supplier is done on the basis of
certain parameters. The order is placed after the choosing of supplier (Horlacher, Klarner &
Hess,2016). The purchase order is forwarded to both supplier and the department. The receiving
department acknowledges the receiving form and verbally informs the department about the
receiving of the order (Norta,Grefen & Narendra, 2014). Open purchase form is filled manually
in order to make payment. After the receiving of the vendor invoice, the unpaid invoices are sent
for the payment. The machine signature is done for the cheques under $ 10,000. The signature of
both cashier and the treasures are needed for the cheques above $10,000.

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ANALYSIS OF THE PROCESS
2. 0 level DFD for the existing system:
Figure 1: 0 Level DFD of the Platinum Manufacturing Company
(Source: Created by Author)
3. Identification and possible modification of the process within the organization:
Factors Discussion
a) Identifying the weakness of the organization There are several weaknesses present in the whole
expenditure process within the organization. Each
stages of the process have some flaws that can be

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ANALYSIS OF THE PROCESS
considered as weakness.
Purchasing: The process for verifying the
purchasing form is manual. The manual process of
verification takes much time and there is a chance
that mistake can be happened during the
verification process. The order placement process
is done verbally, which is not desirable (Gureva et
al.,2016). The verbal communication between the
supplier and the organization can lead to
misunderstanding of the attributes and the
confusing over understanding the requirements of
the organization for the suppliers (De Haes et
al.,2017). The documentation regarding purchase
order along opening the purchase file is done
manually. This manual process can be replaced by
the automatic process. Apart from that the verbal
communication is replaced nay system of
communication which is able to keep the proof of
the conversation.
Receiving: The receiving department receives the
order after stamping the order id. The order id is
stamped after the attributes of the orders. This is
also a manual process and it takes much time
(Utesheva, Simpson & Cecez-Kecmanovic,2016).
Moreover there is a chance of human error during
the checking process (Mack & Veil, 2017). The

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ANALYSIS OF THE PROCESS
acknowledgement after the receiving of the order is
also a verbal process which is not desirable for the
company.
Payment Process: The open purchase file in
generated after receiving the order the opening of
the purchasing file is also a manual process which
can be modified by the application of technology.
Apart from that, the filling of the invoice form
takes much time.
Treasure Process: The cheques are classified into
two types- one is for paying bill of $10,000, which
is machine signed and the cheques for paying more
than $10,000 will need the signature of cashier and
the treasurer. There is no need for nay modification
in this process.
b) Impact of weakness There are certain impact of the weaknesses or the
flaws in the system on the organization:
The inter-departmental communication in the
organization is verbal process. In the verbal
communication, there is a chance of
misinterpretation of the conversation. This can lead
to serious trouble for the organization.
Another flaw in the system is the manual insertion
of data and checking of data (Conforti et al.,2015).
The manual process takes much time in the
processing along with that there is a chance of error

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ANALYSIS OF THE PROCESS
that can lead to the mismatch of data.
The information stored in the organization is done
in the offline process (Kane et al.,2015). This can
lead to the misplacement of important records.
The payment made by the company to the suppliers
is done in offline mode (Majchrzak, Markus &
Wareham, 2016). This offline payment of money is
time consuming along with that there are certain
risks associated with the offline transaction.
c) Requires implementation to reduce the risks
in the organization:
Certain steps can be taken in order to mitigate the
identified risks in the organization. The two
identified major issues in the organization are the
manual process of data entry and checking and the
verbal communication among the different
departments of the organization.
The manual process of checking the data of order
id and receiving order along with filing the invoice
can be done in an automated process. This will
reduce the processing time along with that it will
also deliver a cost effective solution. In this case,
the bard code can be used (Hyvönen, 2018). In the
barcode all the information regarding the order.
Scanning the barcode can help to retrieve all the
data automatically. This system helps to reduce the
time and cost of data processing.
The substitution for the verbal communication can

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ANALYSIS OF THE PROCESS
be achieved by using electronic forms. The use of
electronic forms can help to arrange the
communication in a formal way along with that it
also makes the transfer of communication faster in
the organization. The communication can also be
developed using certain user interface in the
system. The system can be connected through
internet or LAN.
The other minor flaws in the organization are the
offline transaction of money and the storage
system.
The organization has large amount of information
to store. To avoid the misplacement of the records,
the cloud storage can be used to store the data.
Cloud provides more secured way of storing data
along with that it also provides large storage space.
The organization can use electronic transaction
system for payment of the money. This will enable
the transfer of money in a more secured way.
d) Recommendations for the reengineered
version implemented din the organization
Recommendations can be made for the Platinum
Manufacturing company so that the implementation
can use the maximum utilization of the IT.
Advanced technologies like barcode scanning, use
of electronic forms and electronic fund transfer can
be utilized in the organization in order to get the

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ANALYSIS OF THE PROCESS
maximum benefit of the advanced technologies.
In order to implement the system, the existing
infrastructure of the organization is needed to be
improvised.
The user interface is needed to be deployed so that
the use of electronic form exchange can be done. In
order to develop this system interface the group of
software experts is needed.
For the barcode scanning, suitable equipment for
scanning and reading the information encrypted in
the barcode is needed to be done.
In order to implement the cloud architecture for the
storage of data, certain cloud vendor is needed to
be chosen (Armada & Martin,2016). The security
issues are needed to be concerned in this matter as ,
the storage security is handled by the cloud
provider.
The security of the modified system is the major
issue. The security of the system is maintained by
the using of passwords (Zimon, 2016). The
passwords should be accessed only for the officials
and doing certain modification of the system can
only be done by the authorized person.
The security gateway during the transaction of the
money is needed to be secured. To protect the
system and network form unnecessary traffic,

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ANALYSIS OF THE PROCESS
firewall is needed to be used in the system.
Periodic backup of the information is needed to be
taken, so that the loss of information can be
eliminated.
The training of the workers and the security staffs
are needed to be carried out, so that they can get
familiar with the newly modified system.
Conclusion
The above discussion helps to identify the exact flaws of the current expenditure system
of the Platinum Manufacturing system. The security issues and issues regarding the
organizational process due to these flaws can be eliminated with the help of the advanced
technology. Certain types of technologies those can be implemented in the organization are
discussed in this article. It can be concluded form the above discussion that flaws of Platinum
Manufacturing Company can be improvised with certain technical changes.
References
Armada, A. A., & Martin, A. (2016). Business model disruption: innovation as a
catalyst. Frontiers of health services management, 33(2), 39-44.