IPC Assignment 2 Q2
The major issue in current purchasing and account receivable system would be time-
consuming. The proposed system specific to the account payable system would focus on
effectiveness and efficiency.
Major Strengths:
It gets rid of excessive paper documents that all operations are sent to computer for data
processing. Eliminating paper document, the business will benefit using half-automated
system considerably. With no paper handling, shuffling, filing, storage or retrieval, the
proposed system not only cuts the cost, but also reduces the risks of lost or misfiled papers,
which improves data quality with fewer errors, enhancing the completeness (event) and
accuracy. Moreover, It precludes duplicate payments with a daily reconciliation. Compared
with this proposed system, manual system contains large number of errors.
On the other hand, the time lag resulting from handing the paper from one place to another,
as well as, the lag between validation of invoices and payments negatively affect the payment
process. Through simply keying in PO number and receipts number, these time lags will be
wiped off. In addition, there would have timely updates of all the master data and make the
process more efficient. At the mean time, this timely recording of invoices leading to faster
and more accurate accruals and cash flow forecasting.
In terms of profitability, the proposed system facilitates cash planning and optimizes cash
discount, which ensures the cash liquidity of the company. The computer generates ordered
invoices to be paid depending on due dates and payment terms, and make it possible to close
the invoices before discount expiry date and make the most benefit.
Weakness:
