1.

The name of the business investigated was

LEENGATE CONSTRUCTION
2. Three source documents used by the business

1) Credit note
 A credit note is a source document used by a business or organisation to
correct an overcharge and it is also used for sales returns.

2) Cash voucher
 It is the source document used for writing up petty cash book. Receipts,
bus tickets are attached to each petty cash voucher.
3) Receipt
 This is a source document used for cash or cheque transactions. It is
mainly used for transactions of large amounts of money.

4) Challenges faced by the business on the use of these source documents.

 The source documents are not possible for all transactions – Businesses
usually operate on a large scale and collecting and procuring a source
document for each transaction is cumbersome and practically
impossible.
 Time consuming – Manual recording of these documents is time
consuming since a lot of paper work has to be done when transferring
these documents from one employee to the other.
 Losing the document – If documents are being filed manually, there is
always a chance of human error creeping into the process which leads to
documents being filed under the wrong name or being lost altogether.
 Security problems – These business documents may contain sensitive,
confidential information that needs to be held securely. However
 manual processes have virtually no security cover, so it’s very easy for
burglars to break in and retrieve the proprietary information that can, in
some cases, prove detrimental to the functioning of the business.
 Editing challenges – Paperwork is not amenable to multiple edits as
each time an edit is made, a reprint is needed to record the final version
of a document. This is a waste of business time and resources on top of
being harmful to the environment.
 Accessibility challenges – If a team member is not available at the time,
source documents that need their sign-off to proceed further may not
be accessible to the next individuals.
 They are difficult to store – Physical source documents are challenging
to keep due to their large number and lack of appropriate storage
facilities.
 Risk of information being permanently distorted – Some information
may be edited or changed.
 There is risk of not posting to the correct books of accounts – Some
entries are not posted to the books of accounts because most
accountants do not have the knowledge about relationship between
source documents and subsidiary books.
 Unable to understand and interpret documents – Some accountants
may have not completed their studies and they are unable to record
some entries in the correct books of accounts.
5) Recommendations on the challenges
 Introducing electronic ways of recording and transferring data on
source documents
 Storing information on flash disks or hard drives.
 Use of automated financial platform that does the math for you and
alerts you when form fields are left vacant.
 Educating accountants on the interpretation of source documents.
 Having consistent updated data across all system by having an
enterprise resource planning system to tie it all together.
 Conducting systems integration.
 Going paperless and eliminating piles of paper invoices.
 Hiring highly skilled, professional accountants who have finished their
studies and have had at least two years of experience.
 If information is stored in computers it prevents it from being
accessed by burglars.
 Doing regular business audits to see the progress of the company.