My Own Words of Purchasing Cycle + ChatGPT

Misi agan2

Mo share gambaran Siklus Pembelian (Purchasing Cycle) secara umum di Perusahaan dgn kata2 gw sendiri dalam bahasa Inggris dan diKERENIN by ChatGPT!

My Writing

Company send Purchase Requisition to otential suppliers; at least 3 best supplier candidates. Supplier selected mainly due to best price offer; keep in mind mainly but not only. For selected supplier, Company send Purchase Order describing item and amount requested. Supplier send Goods requested furthermore with their Delivery Order document; no unit price nor total unit price in Supplier Delivery Order. Supplier Invoice could be send simultaneously or sent later; not after such a too long time would be wise. Company receives all of them (Delivery Order send by Company to request purchase, Supplier Delivery Order, and Supplier Invoice) by Company Receiving Department. Receiving Department sign Supplier Delivery Order as proof for Supplier that Goods ordered by Company has been received by Company with no flaws at all, and simultaneously as strong base document for later on Supplier could be collecting payment by issuing Invoice to Company. Receiving Report summarize daily receivement of Goods from “can be” many Suppliers, with “a must” copy of Suppliers’ Delivery Orders. Receiving Department send Daily Receipt Summary to Accounting Department to post Receivements in Acconting System; noted that the posting date journal must according to date of Goods actually received by Receiving Department. The accounting journal is Inventory (Dr.) and Account Payable (Cr.); noted that it is recording process and no payment by Company done. After a while, Company need to pay Goods received. Accounting Department, as a control activity to before doing payment, must ensure payment is done for only real transactions, means that no payment done for fictious purchase nor for never received Goods fake transactions. Therefore, as both preventing and mitigating risk activity, Accounting and match and examine consistencies among Company Purchase Order, Receiving Report and copy of Supplier Delivery Order, and Supplier Delivery Order accompanying Supplier Invoice itself. Then after matching and examining, Company do payement. The accounting journal is Account Payable (Dr.) and Cash/Bank (Cr.); noted that the posting date journal must according to date of Cash Payment to Supplier or Bank Transfer to Supplier. Then, a whole Purchasing Cycle activity is done. For additional, Company usually keep unpaid payment documents sorted by date of the documents, althought each would be arrived at Accounting Department in different date of occurences. Because, it is important to pay Suppliers early as possible as mandatory documents completed; first come first serve. And after payment, those mandatory documents or a must requisite documents, filed by Suppliers’ name. Thus, can be recalled by Accounting Department as simple as possible for each Supplier when an accounting department activity regarding those each suppliers’ document must be done. For example, in the worst case, differences occur between Company book and Supplier book.

  

ChatGPT Improvement

STORY style:

The company sends a Purchase Requisition to potential suppliers, targeting at least three of the best supplier candidates. Suppliers are selected primarily based on the best price offer, though other factors may also be considered. For the selected supplier, the company sends a Purchase Order describing the requested items and quantities.

The supplier delivers the requested goods along with their Delivery Order document, which does not include unit prices or total amounts. The Supplier Invoice may be sent simultaneously or at a later date, but it is advisable to avoid delays. The company receives all relevant documents—such as the Purchase Requisition, the Supplier Delivery Order, and the Supplier Invoice—through its Receiving Department.

The Receiving Department signs the Supplier Delivery Order as proof that the goods ordered by the company have been received without defects. This signed document serves as a strong basis for the supplier to later collect payment by issuing an invoice to the company. Additionally, the Receiving Department prepares a Receiving Report summarizing daily goods receipts, which must include copies of the suppliers’ Delivery Orders. The Receiving Department then sends the Daily Receipt Summary to the Accounting Department to record the receipts in the accounting system.

Note: The posting date for journal entries must correspond to the date the goods were actually received. The journal entry for this recording is as follows:

• Inventory (Dr.)
• Accounts Payable (Cr.)

This process is purely for recording purposes; no payment is made at this stage.

When the company needs to pay for the received goods, the Accounting Department performs a control check to ensure that payments are made only for genuine transactions. This involves verifying the consistency among the company’s Purchase Order, the Receiving Report (with copies of Supplier Delivery Orders), and the Supplier Invoice accompanied by the Supplier Delivery Order. Once the documents are verified, the company proceeds with the payment.

The journal entry for the payment is as follows:

• Accounts Payable (Dr.)
• Cash/Bank (Cr.)

The posting date for this journal entry must correspond to the actual date of payment to the supplier, whether by cash or bank transfer.

At this point, the Purchasing Cycle is complete. Additionally, the company organizes unpaid payment documents by their document date, even if they arrive at the Accounting Department on different dates. This system ensures prompt payments on a first-come, first-served basis, as soon as all mandatory documents are received.

After payment, these documents are filed under the respective supplier's name for easy retrieval. This filing system simplifies future activities involving the suppliers' documents, such as reconciling discrepancies between the company's records and the supplier's records.

 

ChatGPT Improvement

POINTS style:

Purchasing Cycle Flowchart

1. Purchase Requisition (Company)
• Action: Send Purchase Requisition to potential suppliers.
• Output: At least three supplier candidates.
2. Supplier Selection (Company)
• Input: Supplier quotes.
• Action: Select the supplier (based on price and other criteria).
• Output: Best supplier chosen.
3. Purchase Order (Company)
• Action: Send Purchase Order to the selected supplier.
• Output: Describes requested items and quantities.
4. Goods Delivery (Supplier)
• Action: Deliver goods with a Delivery Order (no prices listed).
• Output: Goods and Delivery Order received by the company.
5. Receiving Goods (Receiving Department)
• Action: Verify and sign the Delivery Order.
• Output: Proof of receipt and Receiving Report.
6. Accounting Entries (Accounting Department)
• Input: Documents from Receiving Department.
• Action: Post inventory receipt with journal entry:
• Dr.: Inventory
• Cr.: Accounts Payable
7. Payment Verification (Accounting Department)
• Input: Match and verify consistency among:
• Purchase Order
• Receiving Report
• Delivery Order
• Invoice
• Action: Ensure payment for genuine transactions only.
8. Payment Processing (Company)
• Action: Pay supplier via cash or bank transfer.
• Output: Payment made, journal entry posted:
• Dr.: Accounts Payable
• Cr.: Cash/Bank
9. Document Filing (Accounting Department)
• Action: File documents by supplier name.
• Purpose: Easy retrieval for reconciliation or review.