PURCHASE AND PAYMENT CYCLE - Coggle Diagram
PURCHASE AND PAYMENT CYCLE
The ordering of goods, the receiving of goods and Recording of Good.
Requisitions, list of approved suppliers,POs,
DN, GRN, supplier invoice, purchase journal, credit notes etc
:all recorded purchases are valid & supported by proper documentation.
: all purchases are authorised according to company policy
: all purchase transactions are correctly recorded
: purchase transactions recorded in the correct reporting period.
: e.g re-order level system or purchasing policy must be in place.
2. Payment cycle
Functions: Payments to creditors/payables
remmitance advices, cheque, bank statement
cash payment journal etc
: All valid payment transactions are recorded and nothing is left out.
: Payments are made at the correct amount and is arithmetically correct.
: All payments classified to the correct creditor's account
Internal controls: All calculations are reviewed by an independent person. All payments made to creditors done by means of a cheque requisition which is
authorised by a senior official.