When goods were received, the receiving department prepared a multicopy receiving report and sent one copy to accounts payable and kept the other. The vendor prepared a multicopy invoice and sent a copy to accounts payable. More than 500 people worked in accounts payable matching 14 different data items on the three documents and trying to reconcile all the mismatches. Payments were delayed, vendors were unhappy, and the process was time consuming and frustrating. In Ford's re-engineered system, purchasing agents enter their purchase orders into an online database and forward an electronic copy to the vendor.
Vendors ship the goods but send no invoice.
The computer matches the receiving information with the outstanding purchase order data. If they do not match, the goods are returned. If they match, the goods are accepted and the computer sends an electronic funds transfer payment to the vendor. Centralize and Disperse Data. To achieve economies of scale and eliminate redundant resources, companies centralize operations.