Question

What are the significant differences between a basic technology purchasing system and an integrated purchases processing system?

Answer 1

The basic technology purchasing system begins when the purchase requisition is printed by the inventory clerk. The clerk accesses the purchase requisition file. It should be noted that the purchase requisition file was created when the inventory level dropped to pre-determined reorder point. The requisition is received by the purchasing department and records are added to the open purchase order file.

In an integrated purchase processing system, unlike the basic technology purchasing system, many tasks are performed automatically. For instance in an integrated purchase processing system identification of items to be ordered and sending orders to vendors are performed automatically. Secondly in case of a basic technology purchasing system there is no integration of accounting and other business functions. However in case of integrated purchases processing system there is clear and full integration of accounting functions with other business functions. Thirdly in case of an integrated purchase processing system cash disbursements are also integrated and due items are automatically paid. However in case of basic technology purchasing system it is the accounts payable department that authorizes the payments.