Revenue Cycle: Recurring set of business activities and related information processing operations associated with providing goods

and services to customers and collecting cash payment for those sales. Three basic Functions of AIS Revenue: Capturing and processing data, storing and organizing that data to support decision making, and providing controls to ensure the reliability of data and the safeguarding of organizational resources. Four Business Activities in the Revenue Cycle: Sales order entry, shipping, billing, cash collections Sale order Steps: Taking customer order, checking and approving credit, and checking inventory availability, Respond to customer inquiries Sales Order: customer order data recorded on sales order document, contains information about item numbers, quantities, prices, and other terms of sale. (Salesperson) Revenue Cycle Primary Objective: Provide the right product in the right place at the right time for the right price. Choiceboards: Interactive sales order entry to system to allow customers to customize products to meet their exact need Vendor-Managed Inventory: Retailers provides supplier with access to data from retailers POS system. Monitors inventory data to replenish when the fall under specified levels. Electornic Data Interchange: Sales order link directly with customers, send orders directly to AOE sales order system in format that would eliminate the need for data entry Credit General Authorization: For existing customers below their credit limit who don't have past-due balances, Limit vary based on past history and ability to pay, checking the customers master file to verify account status Credit Specified Authorization: New customers, past-due balances, placing orders that would exceed credit limit. Authorized by Credit Manager, reports to Treasurer Back Order: In the event that inventory isn't sufficient to complete order..Manufacturing - notify production, Retail - notify purchasing Picking Ticket: Authorizes inventory control function to release merchandise to the shipping department.(Lists quantities of each item that customer ordered) Customer Inquiries: May occur before or after order is placed, the quality of this customer service can be critical to company success. Customer Relationship Management: Organizes customer data to facilitate efficient and personalized service. Provides data about customer needs and business practices so they can be contacted proactively about the need to reorder. Goal of CRM: Retain customers, tool to improve the level of customer service and encourage loyalty. (Enriching Relationship) Not a way to keep them off your back. Packing Slip: lists the quantity and description of each item included in the shipment. (Copy of Picking Ticket) Bill of Lading: legal contract that defines the responsibility for the goods in transit. (Frieght Bill - Customer pay shipping charges, seperate document)) Sales Invoice: notifies customer of the amount to be paid and where to send payment. Large customers receive invoices via EDI, rather than snail mail.) Open-Invoice Method: customers typically pay according to each invoice (2 copies, 1 to customer, 1 - return with payment) Remittance Advice: The turnaround document - copy that is returned with the payment Balance-Forward Method: Pay according to the amount on a monthly statement. Cycle Billing: montly statements are prepared for subsets of customers at different times. Open-Invoice Adv.: Conductive to offering early-payment discounts, more uniform flow of cash collections. Open-Invoice Dis.: more complex to maintain Balance-Forward Adv: More efficent and reduces costs, more convenient to make one monthly remittance Cycle Billing Adv: Produces more even cash flow, more even workload, doesn't tie up computer for several days to print statements Exception Procedures: Account adjustments and write-offs. (returns, allowance for damaged goods, write-offs as uncollectible) Adjustments handled by: Credit Manager, then issues credit memo Credit Memos: One copy to A/R, one to customer. Collection of payments fails, issue a credit memo to write off account (copy will not be sent to customer) Lock box: a postal address to which customers send their remittances Remittance List: Mailroom personnel prepare a document that includes the name and amount of all customer remittances and send it to accounts receivables Electronic Lock Box: bank electronically sends the company information about the customer account number and the amount remitted as soon as it receives and scans checks Electronic Funds Transfer: electronic bill payment service, customers send their remittance electronically to the company's bank and thus eliminate the delay associated with the time the remittance is in the mail system. Expenditure Cycle Decision Needs: -Determine the optimal level of inventory -select suppliers -determine cash availability for discounts -select storage locations -manage payments to maximize cash flow What are the Expenditure Cycle business activities?: 1. ordering goods, supplies and services 2. Receiving and storing goods 3. pay for goods and services 4. Pay approved invoices EOQ (economic order quantity0: calculates an optimal order size to minimize the sum of ordering, carrying and stockout costs MRP (Materials Requirement Planning): seeks to reduce inventory levels by scheduling production rather than estimating needs Alternative inventory control methods: 1. economic order quantity 2. materials requirement planning 3. just-in-time (JIT) Just in time: attempts to eliminate (*or at least minimize) both carrying and stockout costs Evaluated Receipt settlement (ERS): ERS is a business process between trading partners that conduct commerce without invoices. In an ERS transaction, the supplier ships goods based upon an Advance Shipping Notice (ASN), and the purchaser, upon receipt, confirms the existence of a corresponding purchase order or contract, verifies the identity and quantity of the goods, and then pays the supplier. Nonvoucher system: pay a specific invoice voucher system: pay several invoices with a single check Voucher package: Matched vendor invoice with receiving report and purchase order >> approves invoices for payment. purchase requisition: contains the identity of the requisitioner, delivery location, date needed, products, quantities, and prices. Approved by the requisitioning department's supervisor [threats] requesting unnnecessary iemms: C: accurate perpetual records, approved requisitions [threats] inflated prices: C: solicit bids -approved suppliers -approved Purchased Orders -budget controls [threats] inferior quality: c; monitor vendor performance, -approved suppliers, -approved PO's -budget controls [threats] stock outs, excess inventory: C: inventory counts, inventory control system, -bar codes, -perpetual records [threats] unauthorized suppliers: C: restrict access to master file, approved Purchase orders [threats] kickbacks: vendor audits, rotation f purchase agents, disclosture of financial intersts procurement card: a corporate credit card that employees can use to purchase specific kinds of items. [threats] unordered goods: C: valid purchase order [threats] counting errors: C: bar coding -document employee performance -incentives for accurate accounts [threats] stealing inventory: C: physical access controls -periodic counts -reconciliation to records -document all transfers [threats] failture to catch errors in vendor invoices: C: ERS, independent check, training of AP staff [threats] paying for goods not received: C: pay only if supporting receiving report, ERS, budget controls

[threats] failing to take discount: C: cash flow budgets, filing invoice by due date [threats] paying invoice twice: C: pay only if supported by orignal voucher package, ERS [threats] recording, posting errors: C: various data entry and processing edit controls [threats] misappropriating cash, checks, EFTs: C; restrit access to blank checks, Segregate AP and cashier duties, independent bank reconciliation [threats] loss or unauthorized disclosure of data: C: physicial and logical access controls, backup and disaster recovery plans [threats] poor performance: C: preparation and review of performance reports

production cycle: recurring set of business activities and related information processing operations associated with the manufacture of products bill of materials: document lists the components needed to manufacture a specific, final product; specifies the part number, description, and quantity of each component operations list: specifies the sequence of steps to follow in making the product, which equipment to use, and how long each step should take MRP-11 manufacturing resource planning: extension of materials resource planning (CH11) that seeks to balance existing production capacity and raw materials needs to meet forecasted sales demands; push manufacturing because goods are produced in expectation of customer demand; plan 12 months ahead; predictable demand and a long life cycle lean manufacturing: extends the principles of JIT (CH11) to the entire production process to minimize or eliminate inventories of raw materials, work in process, and finished goods; pull manufacturing because goods are produced in response to customer demand; plan 2 weeks ahead; short life cycles, unpredictable demand, and frequent markdowns of excess inventory MPS master production schedule: specifies how much of each product is to be produced during the planning period and when that production should occur, uses info about customer orders, sales forecasts, and finished goods. production order: authorizes the manufacture of a specified quantity of a particular product materials requisition: authorizes the removal of the necessary quantity of raw materials from the storeroom to the factory location where they will be used; based on the bill of materials move tickets: subsequent transfers of raw materials throughout the factory; identifies the parts, location, and time of the transfer CIM computer-integrated manufacturing: using various forms of IT in the production process, such as robots and computer-controlled machinery job-order costing: assigns costs to specific production batches, or jobs, and is used when the product or service being sold consists of discretely identifiable items process costing: assigns costs to each process, or work center and then calculates the average cost for all units produced (e.g., breweries) job-time ticket: collects data about labor activity-- know how much time a worker spent on each specific job task; captures info about labor used in production manufacturing overhead: manufacturing costs that are not economically feasible to trace directly to specific jobs or processes (water, power, rent, miscellaneous supplies, etc.) RFP request for proposal: A request by an organization or department for bendors to bid on hardware, software, or services ABC activity-based costing: Cost system designed to trace costs back to activities such as grinding or polishing; refines both job-order and process costing cost driver: Anything that has a cause-and-effect relationship on costs. For example, the number of purchase orders processed is one cost driver of purchasing department costs. throughput: (1) total amount of useful work performed by a computer system during a given period of time (2) A measure of production efficiency representing the number of "good" units produced in a given period of time HRM/Payroll cycle: cycle associated with effectively managing the employee workforce time card: record the employee's arrival and departure times for each work shift (for hourly paid employees) payroll register: report that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format deduction register: lists the miscellaneous voluntary deductions for each employee earnings statement: lists the amount of gross pay, deductions, and net pay for the current period and year-to-date totals for each category flexible benefit plans: each employee receives some minimum coverage in medical insurance and pension contributions, plus additional benefit credits that can be used to acquire extra vacation time or additional health insurance payroll service bureau: maintains the payroll mast file for each of its clients and performs the payroll processing activities professional employer organization (PEO): not only processes payroll but also provides HRM services such as employee benefit design and administration payroll clearing account: general ledger account that is used in a two-step process to check the accuracy and completeness of recording payroll costs and their subsequent allocation to appropriate cost centers journal voucher: form documenting journal entries updated to the general ledger; shows the individual journal entries used to update the general ledger trial balance: report that lists the balances for all general ledger accounts responsibility accounting: reporting financial results on the basis of managerial responsibilities within an organization; correlated reports that break down the organization's overall performance by specific subunits XBRL: eXtensible Business Reporting Language; variant of XML that is used to communicate the content of financial data general journal listing: report that shows the details of each entry posted to the general ledger; indicates if the total debits equal the total credits posted to the general ledger audit trail: depicts the path of a transaction through the accounting system; traces all changes made to the general ledger balanced scorecard: report that provides a multidimensional perspective of organizational performance reflecting 4 perspectives: financial, customer, internal operations, and innovation and learning data warehouse: contains both detailed and summarized data for a number of years and it used for analysis rather than transaction processing data marts: smaller warehouses business intelligence: process of accessing data contained in a data warehouse and using it for strategic decision making online analytical processing (OLAP): using queries in which the user guides the investigation of hypothesized relationships in the data data mining: using sophisticated statistical analysis to "discover" unhypothesized relationships in the data