C. The Purchasing Process c.

1 Process definition and functions (Narrative description of the process)

Para 1

Line Text 1 2 3 4 5 6 Shemberg Biotech Corporation orders its materials for the Carageenan processing from both the local and international suppliers. It has already established a relationship with their suppliers and already maintains them. The company has two extraction production departments, the Raw Materials and Engineering Department. Following are the procedures followed by the company in their purchasing process. The two departments production managers make a purchase requisition and pass it to the purchasing department. The purchasing agent checks it and looks in the list for the respective suppliers of the items and the amount that will be paid when ordering on the offline computer. She then makes a purchase report and passes it to the Accounting department which serves as the Budgeting committee. Once approved, the agent makes a purchase order and is passed first to the accounting department before the Assistant VP Finance for approval. The approved purchase order is returned to the purchasing agent. She then emails the selected supplier for the purchase order. A notification will be sent to her through email for the acceptance of the order. A shipping advice also is sent to the agent from the supplier. Once delivered, the two departments prepare a receiving report for the correct items received. The agent receives the invoice and matches it with the receiving reports. She then passes these together with the purchase order to the Accounting Department for payment and update of the books.

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

c.2 Process Flowchart Requisitioning Department Purchasing Department

Purchase Requisition
Looks for the vendor in a list

Accounting Department
Purchase Report

Assistant VP-Finance

Supplier

Need for supply and materials

Approves PO

Emailed Purchase Order

Makes purchase report Makes PO Make purchase requisition

Approve Purchase

Approved Purchase Order

Purchase Order Approved PO Approves PO Emails PO Acceptance Notification

Sends notification

Sends shipping advice

Receives delivery

Shipping Advice Delivers items Receiving Report Purchase Invoice Order Receive invoice

Prepares RR

Receiving Report Purchase Order Invoice

Send invoice

Receiving Report

Matches and passes

Invoice

c.3 Organizational Setting of the Process Finance, Admin, Purchasing Division

Purchase Report

Operations Division
Receiving Report

Requisitioning Department Purchase Requisition

Purchasing Department

Production Department

Purchase Order

Shipping Advice

Vendor Invoice Vendor Purchase Approval

Accounting Department

c.4 Technologies, including e-business and enterprise systems used to implement the process As of now, the Shemberg Biotech Corporation is still developing the system that they will use in implementing their Purchasing process. The company is using the system of sending and contacting their vendors through email using the internet. For local suppliers specifically in Cebu and Bohol they sometimes used telephones to purchase items since they have only distinct materials needed. There is no need for further clarification of specifications of the items. Since they have maintained already their suppliers the basic data about them are stored to an offline computer. The purchasing agent retrieves information about them through that. For the foreign suppliers, basic information can be found in the internet but if they want more, they can send some questions (prices) through email again. Still, the company maintains the security associated with the present system they are using. c.5 Decision making supported by the information The Shemberg Biotech Corporation supports their decisions with some information found in the Purchasing process. It can help them by looking to the

c.6 Control Goals Effectiveness of Operations: Shemberg Biotech Corporation maintains the effectiveness of their operations by securing that their workers are making the right thing. They always orient the different processes to be conducted by them to the office workers. This is to let them fully understand the operations of the company. This can help them to successfully do their responsibility. Since they have only a few employees working in the office, they still make sure that they are fulfilling their tasks specifically the accounting department. With regards to the purchasing process, the purchasing manager has the sole responsibility to secure that there are enough raw materials and supplies to be used in the production. In making the purchase requisition, she checks if the desired inventory amount to be ordered is correct before giving it to the purchasing department to avoid any errors. The company has already maintains regular suppliers both local and international. The work of the purchasing agent is mainly to contact them by their order. There is no further complexity since she already knows who the supplier is. The accounting department which serves as the budgeting committee approves the purchase order to make sure that there is no excessive items are ordered. Also, the best control they have is the check and approve. All transactions are to be passed to the chief accountant and the assistant VP finance for checking and approval. Efficient Employment of Resources

The company has few office workers. Some of them are multitasking to do the companys paper and office works. Accordingly, they have only 8 staffs in the accounting department which serves as the budgeting committee, the bookkeepers, the financial analysts, the cashiers and also the treasury. In that way, the company can save more funds since they have few office workers to be paid. Another thing is few computer units are used since there are only small number of users. Notwithstanding the fact that they dont have even the accounting system, there is no need to secure an IT specialist. The company also does not maintain a receiving department. The goods are directly received by the requisitioning department. By that, they can save for the cost of having one. Resource Security The company does not maintain big amount of funds since most of its customers are from other countries so the payment is directly deposited in their bank account-East West Bank. For the local customers, the payment is also paid in their bank account. There is really security of resources by the way company handles their money. Sometimes they still accept cash payment in their doorsteps and there is still no problem since the amount is minimal. Also, only the assistant VP finance is authorized to sign checks. In receiving the items delivered, the requisitioning department makes sure that correct items are delivered. This is a good thing also because they know more about the materials than having a receiving department. Thereby, the right resources are delivered. D. The Accounts Payable/ Cash Disbursement Process d.1 Process definition and functions (Narrative description of the process)

Para 1

Line Text 1 2 3 4 5 6 7 8 9 10

11 12 13

The Shemberg Biotech Corporation uses the following procedures for the processing of payments for the acquisition of goods and other expenses incurred by the company. The accounting clerk receives the receiving report, purchase order and original invoice sent by the purchasing clerk. She matches the three documents and updates their books manually. She passes it to the chief accountant for verification. Once verified, the chief accountant then

makes a voucher payable and passes it to the assistant VP finance for approval for the payment. Once approved, the clerk makes a check for the payment to the suppliers

bank. Again the chief accountant checks it whether it has the correct name of payee, date and amount in words and in figures. Lastly, the assistant VP finance signs the check and the Accounting clerk disburses the check to the suppliers bank. The accounting clerk then updates the book manually for the payment.

d.2 Process Flowchart Accounting Clerk

Purchasing Clerk Verifies the documents Approves the payment

Chief Accountant

Assistant VP Finance

RR Invoice Purchase Order

Makes Voucher Payable

Matches the RR, Invoice, PO

Updates the Books and Ledgers

Voucher Payable

Makes Check

Check

Rechecks the check

Signs the Check

Disburses check

Suppliers Bank

Updates the Books and Ledgers