The expenditure cycle consists of the ordering of goods and services from suppliers and consequent payments to the suppliers. The generic transaction flow in the expenditure cycle can be described as follows: inventory control reviews inventory records to determine order requirements. A purchase requisition(s) is created and forwarded to the purchase department. The requisition contains details of items and quantities required. The purchase department selects suppliers by using the approved list of suppliers or any other standard operating procedure established by the organization. The supplier is selected and a purchase order is created and forwarded to that supplier. Another copy of the purchase order goes to the inventory control department to notify it that goods are on order. The supplier ships goods to the warehouse, and a receiving report is created. The receiving report is forwarded to inventory control and accounts payable. Inventory control updates inventory records based on the receiving report.