Chapter 6

Purchase and Payments

Business Process

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Learning Objectives

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• LO#1 Describe the business activities that comprise the purchase and payment process

• LO#2 Develop an activity model of the purchase and payment process using BPMN

• LO#3 Understand and apply different activity modeling options

• LO#4 Develop business rules to implement controls for the purchase and payment process

• LO#5 Develop structure models for the purchase and payment process using UML class diagrams

• LO#6 Implement a relational database from the UML Class Diagram of the purchase and payment process

Review of Purchases and Payments Accounting

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LO# 1

Sunset Graphics Purchases Process

1. Research prices and product availability 2. Select the best price and availability

combination and send a purchase order to the supplier

3. Receive the items from the supplier (and record the purchase and accounts payable)

4. Pay the supplier according to the credit terms

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LO# 2

Basic Purchases BPMN Activity Model

6-5The basic activity model implements the process steps.

LO# 2

Collaboration Model of the Purchases Process

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The collaboration model focuses on the message flows between the pools.

LO# 3

Adding Swimlanes to Show Functional Responsibility

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Swimlanesshow

functional responsibili

ties

LO# 3

Business Rules Examples for Purchases Process

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LO# 4

Process Steps Intention Partner Authority/Action Access Controls Application Controls

Place Order Order products from reliable suppliers at the best available prices to meet required delivery time

Manager approval required for orders > $5,000; Partner ordering products must not manage inventory

Partners preparing purchase orders cannot modify product inventory records, receive items, or pay suppliers

System must provide purchase order number control, default values, range and limit checks, and create audit trail

Receive Items Record receipt of items promptly and accurately

Partner receiving items must not be same partner that ordered the items

Partners receiving items cannot modify purchase orders or inventory records; they cannot view purchase order quantity ordered information

System must only allow partner to enter the number of items received, subject to range and limit checks on quantities received; date of receipt defaults to current date

Sunset’s Basic Purchases UML Class Models

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LO# 5

1. Purchase Orders are commitments to purchase from the supplier.2. Receipts document the receipt of items from the supplier (when purchases

recognized).3. Cash disbursements pay for one or more receipts

Revised Purchases UML Class Diagram

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LO# 5

Purchase Orders and Receipts collapsed into one Purchases eventsAdded Product Categories type image as defined in Chapter 5Added Supplier Categories type image to show Sunset Partner responsibility for Categories

Implementing UML Diagram in a Database

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LO# 6

Database will contain 8 tables to implement classes and 1 linking table for the relationship between Purchases and Products.

Posting Foreign Keys Example

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SunsetPartner

Purchases

Supplier

1..1

0..*

0..*

1..1

Partner Number posted to Purchases

Supplier Number posted to Purchases

Foreign keys implement links for one-to-many relationships.

Post towards the * and away from the 1

Database Relationships

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Which relationship is missing? How would you implement that?

Did you notice the similarity between the sales process and the purchase process?

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