Bradmark Wholesale General Supply

Bradmark is a wholesale general supply company that ships to business customers throughout Northeast Pennsylvania, New York state, and Southern Connecticut Bradmark has developed a competitive edge by o!!ering a wide variety o! "uality products at competitive prices #he company$s products range !rom paint to watering cans Bradmark is a publicly owned company, whose board o! directors has retained your !irm to conduct the annual audit You are the in%charge auditor who is currently e&amining Bradmark$s revenue and e&penditures procedures and related accounts Bradmark$s main o!!ices are in its 'llentown, P' warehouse #he !ollowing describes your client$s system con!iguration and business procedures System Overview and Background Bradmark$s in!ormation system is a recently purchased application that runs on a client% server network con!iguration (ames Walker, a systems designer in Bradmark$s )# department, played a central role in implementing and modi!ying the system to meet Bradmark$s speci!ic needs Because o! Walker$s !amiliarity with the system, he was asked by top management to temporarily oversee the initial running o! the new system to ensure a smooth transition !rom the old legacy system '!ter several months, (ames Walker was o!!ered a promotion to Warehouse *anager and given permanent responsibility !or product purchasing Sales and Cash Receipts Procedures #he !lowchart in +igure , and the record layout in +igure - .see the related PowerPoint !ile !or !igures/ illustrate Bradmark$s sales and cash receipts procedures Sales Department Customer orders are received by mail or !a& in the sales department 0ne o! the sales sta!! accesses the customer record and reviews the available credit be!ore creating a Sales )nvoice record +or customers with insu!!icient available credit, the clerk submits the order to the credit manager !or approval )! granted, the credit manager verbally authori1es the clerk to increase the customer$s line o! credit accordingly +or approved sales, a record is added to the Sales )nvoice !ile #he system automatically assigns an )nvoice Number, which is the primary key !or the record #he clerk manually enters the remainder o! the order data Warehouse Based on input !rom the sales invoice, the warehouse terminal automatically prints a stock release document, which the warehouse sta!! uses !or picking the goods #he goods are sent to the Shipping 2epartment along with the stock release document 0nce the goods have le!t the warehouse, the clerk con!irms to the system the "uantity sold and it automatically updates the 3uantity on 4and !ield in the respective inventory record

Shipping Department #he shipping department receives the goods, prepares them !or shipment, selects a carrier and prepares the packing slip and bill o! lading .B05/ 0nce the goods are shipped, the clerk adds a record o! the shipment to the Shipping 5og !ile Billing 't the end o! the day the system automatically searches the Sales )nvoice and Shipping 5og !iles !or items shipped and prepares a hard copy customer invoice, which is mailed to the customer the !ollowing morning #he current date is then placed in the 2ue 2ate !ield o! the Sales )nvoice !ile Cash Receipts *ary, the cash receipts clerk, receives the customer checks and remittance advises directly !rom the customer She records this transaction by entering the )nvoice Number .taken !rom the remittance advice/ into the system #he system automatically creates a Cash 6eceipts record )t assigns a 6emittance Number as the primary key and adds this number to a !ield in the related Sales )nvoice record #he )nvoice Number !rom the Sales )nvoice is also added to the remittance record as a re!erence *ary then manually adds the customer number, amount, and payment date to the Cash 6eceipts record 't the end o! the day she prepares a deposit slip and sends the checks to the bank She !iles the remittance advice in her o!!ice Purchasing/Payment Procedures #he !lowchart in +igure 7 and the !ile structure diagram in +igure 8 illustrate the purchasing9payment procedures at the central warehouse Warehouse :ach morning Walker reviews an automatically generated inventory status report !rom his o!!ice terminal 4e determines the items that need replenishing and selects suppliers !rom the ;endor !ile Walker then adds a record to the purchase order !ile #he system assigns each new record a uni"ue number .P0 Number/ as the primary key Walker manually enters the date, the product to be ordered, order "uantity, e&pected unit cost .the e&tended cost is automatically calculated by the system/, and the )2 number o! the selected vendor #he purchase orders are then printed on Walker$s terminal, signed by him, and mailed by his secretary to the respective suppliers Receiving When the products are received at the receiving dock, a receiving clerk counts and inspects them #he clerk adds a record to the 6eceiving 6eport !ile !rom the terminal in the receiving area #he system assigns a uni"ue key .66 Num/ to each record #he clerk manually enters the purchase order number, product number.s/, "uantity received, vendor )2 number, and the date o! receipt #he receiving system is not particularly user !riendly )! errors are made during data entry, the clerk must void the receiving report and begin over with a new receiving report record #he voided record is then automatically purged

!rom the 6eceiving 6eport !ile and the system assigns the ne&t 66 Number in se"uence to the revised receiving report 's a result, se"uence gaps e&ist in the receiving report !ile indicating the missing records #he products are then sent to the warehouse where they are secured 't the end o! the work shi!t, the receiving clerk prints a hard copy o! the receiving report listing o! the day$s receipts .including any voided receiving reports/, which is sent to (ames Walker$s o!!ice !or his review Warehouse '!ter *r Walker has reviewed the receipts he manually adds the system%assigned 66 Number to the corresponding Purchase 0rder record to indicate that the product has been received #he system automatically updates the 3uantity on 4and !ield in the )nventory !ile !rom the 3uantity !ield in the Purchase 0rder record Accounts Payable Sybil (ohnson, the 'ccounts Payable clerk, receives the vendor$s invoices <sing the P0 number !rom the invoice as a search key, she matches the invoice with the corresponding purchase order9payment record She veri!ies that the items invoiced have been received by observing that a 66 Number has been placed in the Purchase 0rder record She then adds a record to the ;oucher Payable !ile #he system assigns a uni"ue key .;oucher Number/ to each record Sybil enters manually the !ollowing data directly !rom the supplier$s invoice= purchase order number, vendor number, supplier invoice number, !ull amount due, discounted amount due, and due date #he due date is selected to take advantage o! purchase discounts +inally, Sybil !iles the vendors invoice in her o!!ice !iling cabinet Cash Disbursements :ach day, Sean 0$Connell in the Cash 2isbursements department reviews the ;oucher Payable !ile !or items due to be paid that day +or each item due, he adds a record to the Check 6egister !ile #he system assigns it a uni"ue key .Chk Number/ and Sean manually adds the !ollowing data to the Check 6egister record= voucher number, vendor number, amount o! payment, and date #he system automatically places the check number in the appropriate ;oucher Payable record to indicate that payment has been made #he checks are printed in Sean$s o!!ice and then reviewed and signed by )rving Stern, the department manager