AIS’ purpose is to promote an effective control.

In order to do that, we have Four Main Cycles: Cash Disbursements Cycle, Inventory
Cycle, Cash Receipts Cycle, and Payroll Cycle.
 First is the Cash Disbursements Cycle, the Production Manager will check if there are
needed inventories, if there is, he will issue a purchase requisition slip. The General
Manager will then review and approve it. After approving it, it will be given to the
Finance Manager to provide cash. The production worker will then receive the cash and
will prepare a purchase order. After that, the production worker will receive the order and
will store it. However, the official receipt will be received by the Production manager to
check if the ordered inventories matched the stored inventories. Once verified, the
production manager will record the receipts in the General Ledger.
 Next is the Inventory Cycle, the production worker will be counting the inventories and
will inspect the quality of the finished products. After that, the production worker will
record it in the Inventory Book and will submit a report of products available and goods
rejected. The reports will be submitted to the Production Manager to be verified and a
copy will be given to the Sales Person.
 Next is the Cash Receipts Cycle, The Sales person will check the availability of the
ordered product in the Inventory Report. If available, he will then receive the payment
from the customer and will confirm and record the order in the Order Book. Then, he will
issue an official receipt, the original will be given to the customer and the other to the
accountant to record it in the Cash Receipts Journal and the Sales person must give the
collections to the Finance Manager.
 Lastly, is the Payroll Cycle. The employees will record their time in and out in the
logbook. The general manager will verify their hours and once verified he will encode it
and the Finance manager will then prepare the payroll sheet for the computation of
monthly salaries and deductions. After that, the finance manager will prepare two pay
slips. One will be stored and kept and the other one will be given to the Employee
together w/ the payment.
To be able to have an organized system, internal control is important. Some of our control
processes are:

1. The Purchase Requisition slip, Purchase order, Customer order, and the official receipt will all
be pre-numbered.

2. Only purchase orders signed by the General Manager will be valid.

3. In receiving the goods, the production worker should inspect the goods received.

So, to ensure all the policies are properly practiced, the general manager shall conduct an Internal
Control Audit using the Internal Control Checklist.