1 / 14

Expenditure Cycle

Expenditure Cycle. Small Business Information Systems Professor Barry Floyd. Agenda. Learning Objectives Definition of Expenditure Cycle Data flow diagrams of Expenditure Cycle QuickBooks demonstration. Objectives. Continue with our understanding of ‘business processes’

althea
Download Presentation

Expenditure Cycle

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Expenditure Cycle Small Business Information Systems Professor Barry Floyd

  2. Agenda • Learning Objectives • Definition of Expenditure Cycle • Data flow diagrams of Expenditure Cycle • QuickBooks demonstration

  3. Objectives • Continue with our understanding of ‘business processes’ • Identify activities and documents in the standard ‘expenditure’ / ‘money out’ business process • Discuss how the appropriate design of expenditure cycle tasks can provide value • Identify key reports to assess process and organizational performance in the expenditure cycle • Identify potential business risks (we’ll discuss how to handle them later in the quarter) • See (and know) how to use QB to perform tasks in the expenditure cycle • IN THE NEWS … SAP is moving into the small business space

  4. References • http://en.wikipedia.org/wiki/Enterprise_resource_planning • http://www.quickbooks.com • http://en.wikipedia.org/wiki/Microsoft_Dynamics • http://www.microsoft.com/dynamics/default.mspx • http://highered.mcgraw-hill.com/sites/0072404299/student_view0/chapter9/

  5. Definition: Expenditure Cycle • The set of business activities/tasks that occur regularly to acquire (purchasing) and pay for goods and services. • A primary goal of the Expenditure cycle is to minimize costs in acquiring goods and services …

  6. Key decisions • Optimal level of inventory (should you have inventory?) • Which are the best suppliers (on time, low cost, high quality) • Which invoices to pay to take advantage of discounts. (How much money do we have) • Along the same line, how to manage cash flow • How efficient is the organization in the expenditure cycle activities

  7. Three Key Activities • Ordering goods, supplies, and services • Receiving and storing goods, supplies, and services. • Paying for goods, supplies and services • As we review these activities, think about where Information Technology can play a role to improve efficiency and effectiveness • (Effectiveness = doing the right thing, efficiency = doing the right thing well)

  8. DFD’s of Expenditure Cycle • Expenditure Context Diagram • Expenditure Level 0 diagram • Expenditure Level 1 Receive and Store goods diagram • Expenditure Level 1 Pay for goods diagram

  9. Technology • Take a few minutes and discuss with those at your table, places in this business process where you think technology can play a role to … • Reduce costs. • Add additional value to the supplier. • Provide better information to management.

  10. Business Documents • Purchase Requisition – used internally to request that an item be purchased. Identifies, who, what, how much, when needed, etc. • Purchase Order – formal request to supplier to furnish goods or services. Becomes a contract once supplier accepts it. • Receiving Report – documents details about delivery including date, amount, PO#, who received it, quality check, etc. • Debit Memo – records adjustments to the amount you owe based on your inspecting the shipment you just received (wrong number, damaged, poor quality)

  11. QuickBooks Money Out

  12. QuickBooks Tasks • Add a new Vendor • Add a new product • Buy something? • Enter bill • Pay bills • Enter refund or credit • Cash/check/credit card payments • Review key reports

  13. Reports • What would you want to know about this process to see if it is performing ‘well’? • What metrics are important to you? Why? • Which ones are most important to your business? Why? • What reports does QuickBooks provide? Are they adequate?

  14. Summary • The expenditure cycle is an important cycle to understand. • Understanding the use of technology is important for both reducing costs and for improving your business operations, reducing costs and differentiating your business from your competitors.

More Related