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2.3.2
Objectives of EC
The
primary
purpose in
the
EC
is
to
minimize the
total
cost
of
acquiring
and
maintaining
inventories, supplies,
and the various services the organization needs
to function (Romney & Steinbart 2006, p. 410). Moreover, to facilitate the
exchange of cash with supplies (vendors) for needs goods (materials) and services
(Wilkinson et al. (2000, p. 469). The objectives within this broad purpose are:
1)
To ensure that all merchandise and services are ordered as needed.
2)
To receive all ordered goods and verify that they are in good condition.
3)
To safeguard goods until needed.
4)
To
determine
that
invoices
pertaining
to
goods
and
services
are
valid
and
correct.
5)
To record and classify the expenditures promptly and accurately.
6)
To
post
obligations
and
cash
disbursements to proper suppliers’
accounts
in
the accounts payable ledger.
7)
To ensure that all cash disbursements are related to authorized expenditures.
8)
To record and classify cash disbursements promptly and accurately.
2.3.3
Documents related to EC
Similarly
with RC, the
whole process
in
the EC consists
of
input,
process,
and
output stage. This process involves documents that are needed in the EC operation.
Wilkinson
et
al.
(2000,
p. 472)
summarize
the
documents
pertaining
to
the EC,
which are:
1)
Purchase
requisition:
the
initiating
form
in
the
EC
that
authorizes
the
placement of an order for goods or services.
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