Transaction departments

Purchasing Department

• Initiates the buying process

• Contacts vendors, creates purchase orders (POs)

• Ensures the company gets goods or services on agreed terms

Receiving Department

• Receives goods or services delivered

• Inspects and documents quantity and condition via receiving reports

• Confirms what was actually received matches the PO

Accounts Payable Department

• Manages vendor invoices

• Matches vendor invoice to PO and receiving report

• Approves payment if everything matches (three-way match)

Treasury Department

• Custody of cash and financial assets

• Authorizes and issues payments (e.g., signs and mails checks)

• Manages cash flow, bank relations, and investment decisions

• May have authority functions like approving write-offs of receivables

Accounts Receivable Department

• Records and manages customer accounts and incoming payments

• Applies cash receipts to customer accounts based on remittance advices

• Maintains subsidiary ledger for receivables

Cash Receipts Department / Cashier

• Handles actual cash or checks received

• Prepares deposits and ensures proper custody of cash assets

Accounting Department

• Posts summary data to the general ledger, including control accounts

• Performs reconciliations between subsidiary ledgers (e.g., accounts receivable) and control accounts

• Provides independent review and oversight

Payroll Department

• Processes employee payment based on time records and approved payroll

• Prepares payroll checks or electronic payments, but custody/payment is often managed by treasury