Professional Documents
Culture Documents
18 ACCOUNTING INFORMATION
SYSTEMS:
A STUDY OF THE DISBURSEMENT CYCLE OF
PRECISION MACHINIST CORPORATION (PREMACOR)
Group Members:
Bacolod, Maria Aime V.
Bagto, Novelina C.
Caaveral, Jean Yvon P.
Cortes, Jannine B.
Dupay, Johanna Marie A.
Duyag, Rosalyn C.
Class Schedule:
MWF 1:00 2:00 pm
PART 2
Enterprise (CITE), making his factory a sort of finishing school for these young people
before they leave for better opportunities outside the country.
Now enjoying financial stability, he advises Filipino families to embrace
entrepreneurship as a means to improve their economic status. He believes that
entrepreneurship is the answer to poverty alleviation and should be inculcated at a
young age. Starting a business does not entail a lot of money as proven by Jose
Morales. A person only needs to specialize in a small area of the industry and make
money out of it. Morales showed that as soon as an entrepreneur makes a name for
himself by providing a track record for good quality products and excellent service, he
will attract bigger clients. Not only has Morales proven that anyone can overcome
poverty through entrepreneurship, but that supplying the needs of companies in Cebus
economic zones is good business.
COMPANY PROFILE
The company has been in existence since 1980, servicing at first the machine
parts needs of the beverage, shipping and mining industries. PREMACOR was
incorporated in 1984 to become a high precision machine parts manufacturer to service
local and overseas customers. In 1987, the company changed direction towards
precision engineering and started servicing companies at the Mactan Economic Zone
(formerly Mactan Export Processing Zone).
Through the years, PREMACOR has acquired the capability and know-how
necessary to produce metal components within 5 micron accuracy, from ordinary heat
treated toolsteel or ferrotic to the most difficult to cut tungsten carbide. The company
currently manufactures high precision Plastic Injection Moulds, Vacuum Forming
Moulds, Stamping Dies and Semicon Tooling Components. PREMACOR operates a
well-equipped air-conditioned tool room. Its workshop is stocked with the latest model,
high-grade machinery made by some for the worlds best-known manufacturer, a
number of which are capable to achieve single digit tolerances.
PREMACORs best assets are the competent and highly trained men who are
specialists in all machining disciplines and trained by foreign experts both locally and
abroad. These dedicated workers provide the highest quality of service for each
customer. The vision of PREMACOR is to be at the forefront of the metalworking
industry, maintaining updated and state-of-the-art machineries and equipment, run by
competent, highly skilled and dedicated individuals with an intense desire to produce
excellent services and goods.
CURRENT STANDING
Defect-free Products
On-time deliveries
Cost Effective
Continuous Skills Upgrading
Maximize Man-Machine Uptime
There is a need for every entity to provide the best quality possible for it
determines the entitys market share. Quality products would be a good determinant of
how the entity operates. By achieving such quality, the entity would gain an edge over
its competitors.
PRODUCTS
PRECISION MACHINIST CORPORATION (PREMACOR) is an ISO 9001:2008
certified company providing quality metal products and components since year 80s. They
can do runs from prototype to production. They are committed in providing the best quality
products and services that meet customer satisfaction and continuously improve the system
to exceed customer expectation toward quality excellence.
The company was primarily founded for purpose of catering the automotive
industry. Later on, PREMACOR expanded its horizon to cover other industries focusing
on low-priced, high quality products. The company maintains a potent workforce of
competent, highly skilled and trained individuals who recognize and understand
customers needs and requirements. It has acquired a variety of press machines
ranging from 2 tons to 100 tons. From machine pressing, machining to packing every
step in its processes is guided by one principle maintain quality for total customer
satisfaction. In the present, they have been serving different industries within or outside
the Philippines such as:
Automotive
Ship-Building
Semiconductor
Medical
Beverage
Mechanical
Commercial
COMPETITIVE/OPERATIONAL CHALLENGES
In every business endeavour, certain risks are always involved. It is inherent for
such endeavours to face different challenges which are caused by different factors
present in the environment.
Precision Machinist Corporation is not an exception. The entity itself finds it hard
to overcome such challenges especially at times of recession. An important indicator of
this is found in the international economy. Considered as an indirect exporter and an
importer at the same time, their market share in the international market plays an
important factor in their daily operations.
The presence of competition is normal in any economic setting. An identification
of such competitors would be very much significant for the entity especially in their
decision making as to how they would do their part in the business world. With this, the
following are the competitors identified by the entity itself:
NSB Engineering
Machine System
G&S Machine Shop
Ebecor Engineering
Aside from the challenges found in their external environment, one challenge that
they consider as important is maintaining their stand regarding the quality that they
provide to the market. By such, continuous development of existing practices is a
necessity. Innovation, being the key to this, would help the entity to overcome this
particular challenge.
maximization of the companys available cash for investments and debt payments.
Thus, the payroll in charge ensures that cash is disbursed only upon proper
authorization of management, for valid business purposes, and that all disbursements
are properly recorded.
Photographs of setting in which cash disbursements process are used:
Bundy Clock
Vouchers and
documents.
other
source
Normally just what like any other company, PREMACOR devotes most of their
cash for investment and acquisition of new equipment, machineries and other materials
which would improve the quality and efficiency of their production. They usually import
materials from other countries due to the fact that several of the materials needed are
costly and limited if bought within the country. They usually purchased in bulk to save
cost of importation and other costs. This utilization of available cash for investment as
stated above would help the company retain or improve its name in the industry, as well
as be more capable of competing towards its entrants.
Information technology has impacted accounting processes in a very good way. It
is difficult to find anybody doing manual accounting with paper and pencil these days.
Since accounting is about dealing with information, primarily business information, any
advances in this area will have a positive impact in the accounting department, from the
old days of the battery operated calculator to the fast computers of today. Besides the
equipment, accountants appreciate the software. Software can help accountants in their
daily tasks, such as paying bills, recording transactions and reporting. The program
keeps all data organized and in a centralized location.
Based on the observations of the proponents, the client uses different database
software in every department such as, Human Resources Management System
(HRMS) for payroll section and Peachtree for accounting department. The client used
desktop as their hardware type but there were no specific brand used. Furthermost of
the desktops used is the boxed-type one. The operating system used for all of their
computer units is Windows XP. However, there was no commercial enterprise system
used by the client. Just like any rationalized company the client is using internet since
they are paying their taxes electronically and this serves as their medium of
communication to their suppliers abroad. Thus, internet helps the company to reach out
and be known to their prospective customers through the portfolio placed in the
companys website, as well as be updated of the current issues affecting the operation
of their company.
The client has been using HRMS for payroll for convenience since 2010. It was
purchased for P120, 000.00 per unit. The payroll clerk find the system very appropriate
since the payroll could be processed accurately with lesser time consumed. HRMS
serves as one of the clients internal control since employees couldnt conceal and
manipulate their absences and late easily.
In the accounting department, Peachtree has been used as the accounting
system of the company for almost 13 years. It was on 2002 when the company decided
to shift their accounting system from Mytech to Peachtree. This system was been
outsourced. Like any accounting system, it would keep the department be updated for
their dues and payables, as well as organized the documents.
machine. Similarly upon swiping out, swipe cards are given to the on duty guards for
safe keeping. The company has three schemes of paid-employees which are weekly
payment, every 5th or 20th day of the month payment and every 15 th or 30th day of the
month payment. Cut-off period for payroll will be done one day before the payment
period. On the cut-off date, the payroll in-charge uploads its logs or time-ins
information to the accounting software which is the Human Resource
Management System (HRMS). This will be accompanied with the form TRE15
which will be generated directly to the software folder and automatically endorse
it to the Daily Time Record. Then, the software will generate a ledger which
accumulates all the information regarding the employee records such as leaves,
absences, overtimes, under-times and so on. Afterwards, it will be compute which
includes mandatory deductions such as Phil Health, Pag-ibig and SSS. Finally,
the software produces a payroll register. The payroll register will be checked by
the Human Resource department. After which, this document will be submitted to
the accounting manager for approval. Lastly, the salaries will be paid in cash.
Loan from a Bank:
For investment purposes, the company obtain a loan from a bank, Metrobank.
Loans are initiated by the Board of Directors for the purpose of acquiring machineries
to be used in business operations. With regards to the loans payment, the accounting
manager will receive a statement from the Metrobank attached therewith the bill
for the period. The accounting manager will send check for payment as approved
by VP Finance; otherwise, send a documents stating thereto the automatic debit of
the companys account.
Petty Cash Disbursement for Miscellaneous Expense:
Petty cash fund is established for little expenses incurred by the company.
However, per internal control of the company, an expense greater than five hundred
pesos (500.00) shall be made with check payments. A designated employee prepares
a prenumbered voucher, which is recorded with detailed information and authorized
by a separate designated employee to ensure segregation of duties. Here, both
preparer and authorizer rely on supporting documents (e.g., bills, invoices, and
receipts) to justify the expense. The voucher is forwarded to the petty cash
custodian who verifies the voucher and supporting documents to ensure
authenticity and dual authorization and then disburses the cash under
acknowledgment. In the case of advance payments, invoices and receipts would
arrive after payment has been made and be reconciled to the amounts advanced.
If any unused cash remains from the paid petty cash voucher, it is added back into
the petty cash fund by issuing a prenumbered and approved replenishment
voucher. The petty cash custodian signifies the cash has been received and is
included in the petty cash. Once a week, petty cash is replenished. All vouchers are
sorted and summed up with respect to each type of expense and recorded in the
system. At this point, the suspense account and physical cash should be equal. The
petty cash fund is replenished by the amount of total expenditures incurred during the
month.
Accounts Payable
Internal expenses are one of the scope of our work. Some of these internal
expenses are paid in cash and others are paid in some future time thus incurring a
liability, specifically accounts payable. As we gather information about the operations of
the business, the researchers found out that the company uses Peachtree accounting
software for their system. Since, the task involves the observation of the operation flow
of the system with respect to disbursement, the process below will discuss right away
about it. The accounts payable disbursement process starts from the moment the
vendor/supplier send its vendor's invoice to the company as well as receiving the
billing statements of the utilities used. The Accounts payable in-charge will enter
the vouchers to be ready for the matching process with the documents such as
voucher, purchase order and receiving report. These will then be submitted to the
accounting department for review and match the documents stated. Afterwards, the
accounting manager will then approved and paid the transactions.
ENTITIES
PARA
Suppliers / Vendors
Employees
ACTIVITIES
101
Payroll in-charge
9. Prepares
the
necessary
vouchers before sending those
to the petty cash custodian.
and
like
and
Accounts Payable
Officer
Purchasing Manager
Accounting Manager
1
Human Resource Head
Board of Directors
Payroll Flowchart
Time-In
PAY
END
YES
Upload the Logs
Approved?
NO
Process the Folder
According to
Payment Scheme
Submit a copy to
Accounting Department
Review and
Recheck
Generate Payroll
Register
Approved?
NO
Submit a copy to
Human Resource
START
Attach the
following:
Fill-In the
Reimbursement
Form
1. Receipts
2. Receiving
Report
3. And other
relevant
documents
Submit a copy to
Accounting for
Approval
Approved?
YES
REIMBURSE
END
NO
Review and
Recheck
Resubmit for
Approval
Billing
Statement from
Metrobank
Submit a copy to
Accounting Manager for
Payment Scheme
Payment Terms
Cash
Automatic Debit
from Savings
Account
START
Invoice from
Supplier and
Utilities Bill
END
Accounts Payable
Flowchart
END
PAY
Voucher
Entered
Voucher
YES
Matched?
Matching
Process
Purchase
Order
Receiving
Report
NO