Purchasing Process

The first process of the purchasing process will start by Order Placement where at this
point, the company officially places the order and creates a binding purchase agreement between
the company and the supplier. So the management will create a journal entry in the goods
purchase and accounts payable and record in the company’s procurement software where in the
purchasing of materials and maintaining the inventory of goods automates the process. The next
process is the Receiving and Inspection Process where in for material goods, arriving shipments
are inspected for completeness and integrity, with any shortages and broken goods marked to be
credited back to the supplier. The invoice is either included with the goods or sent separately by
the supplier however, Inventory management is handled automatically by the procurement
software, which links the shipping documentation to the original purchase order, invoice, related
correspondence, and other documents for data analysis and auditing purposes and to ensure that
the goods receive are equivalent to the goods ordered. The next process is the payment of the
goods ordered where in the invoice is reviewed for accuracy against the purchase order, invoice,
and other documentation. Depending on the terms established for the supplier and the approval
of the reviewing party, payment is issued (usually within 30, 60, or 90 days). The last process in
the purchasing process is the Management Records where in businesses still using manual
systems follow up by updating their inventory totals and purchasing ledger. Purchasing software
automates this step, as documents are cross-connected and update automatically across all
departments. So in addition with recording in management, the accounts payable balance on the
general ledger are to be debit out since the goods ordered are receive and already paid.

Receiving Process

The first process in receiving process will start by the sales order of the customer, so the
company must keep a record on a software the sales generated by the order of the customer.
Convenience and Advantages of using Accounting System

Electronic record-keeping ensures greater accuracy and can free up your time. Most
accounting programs have built-in reporting functions, invoice templates, automatic backups and
other useful features. Plus, they reduce or eliminate human error and can handle large amounts of
data. The advantages of a computerized system include faster and more efficient record-keeping,
access to real-time financial data, automated invoicing and cost savings. For example, most
programs used in accounting can automatically issue invoices, receipts and credit notes. This
means you won't have to spend hours preparing these documents manually. Instead, you can
focus on the core aspects of your business.

Computerized accounting programs are synchronized with your bank account, so you'll
have access to your financial data in real-time. Furthermore, your information may be stored in
the cloud, depending on the program used. This allows you to check your accounts anytime and
give your staff access to the information they need, regardless of their location. Since all the
calculations are performed by a computer, you'll have more time for prospecting clients and
improving your marketing strategy. In addition, Computerized accounting systems may also help
improve customer service. However, setting up a secure electronic backup system is important to
ensure the records are safely stored and regularly backed up. Daily backups are recommended,
particularly for important records. Make sure the backup copies are stored in a separate location
to your business in case of fire, theft or a natural disaster.