Chapter 8: Accounting Information Systems and Business Processes - Part II Introduction The Resource Management Process The Production Process The Financing Process Business Processes In Special Industries Business Processes Reengineering

Introduction Business Processes Information Needs Sales and Purchasing Resource Management, Production, and Financing Information Needs Typical AIS requirements Specialized information

Human Resource Management Objectives Hiring, training, and employing workers Maintaining employee earnings records Complying with regulatory reporting requirements Reporting on payroll deductions Making timely and accurate payments to employees Providing an interface for personnel and payroll activities

Personnel Function Flowchart

Payroll Function Flowchart

Human Resource Management Inputs Personnel Action Forms Documents hiring or changes in employee status Time Sheets Tracks hours worked Payroll Deduction Authorizations Authorization to deduct certain amounts Tax Withholding Forms Authorization to withhold appropriate tax amounts

Human Resource Management Outputs Financial Statement Information Employee Listings Current employees May contain employee-specific information Paychecks Final documents; subject to strict internal controls Check Registers Used to make journal entries for salary and payroll tax expenses

Human Resource Management Outputs Deduction Reports Summaries of deductions for employees as a group Payroll Summaries Used to analyze expenses Tax Reports Government required information Income tax, social security tax, unemployment tax

Human Resource Management Summary

Study Break #1 All of the following activities are common to the Human Resource Management function except: Hiring, training, and employing workers Reporting on payroll deductions Maintaining employee earnings records Certified financial planning for employees

Study Break #1 - Answer All of the following activities are common to the Human Resource Management function except: Hiring, training, and employing workers Reporting on payroll deductions Maintaining employee earnings records Certified financial planning for employees

Fixed Asset Management Fixed Asset Management Function Long-term Assets Purchase, maintenance, valuation, disposal Enterprise Asset Management System Automate management of assets

Fixed Asset Management Objectives Tracking purchases of fixed assets Recording fixed asset maintenance Valuing fixed assets Allocating fixed asset costs (recording depreciation) Tracking disposal of fixed assets

Fixed Asset Management Function Flowchart

Fixed Asset Management Inputs Purchase Requisition Requires approval by management Receiving Report Identifies receipt of fixed asset Supplier Invoice Sent when asset is shipped

Fixed Asset Management Inputs Construction Work Order If asset is built by company Fixed Asset Change Form Transfer of fixed asset Locations, sale, trade, or retirement Repair and Maintenance Form Notification to update expense and asset accounts

Fixed Asset Management Outputs Financial Statement Information Fixed Asset Register Identification numbers Location Depreciation Register Depreciation Expense Accumulated Depreciation

Fixed Asset Management Outputs Repair and Maintenance Reports Current period expenses Historical expenses Report on Retired Assets Disposal of fixed assets

Fixed Asset Management Summary

The Production Process Begins with request for raw materials Ends with transfer of finished goods to warehouses Primary Objectives Converting raw materials to finished goods efficiently Collecting and reporting of information

The Financing Process Process Acquisition How a company acquires and uses financial resources Cash, other liquid assets, investments Acquisition Sales of goods and services Borrowing cash or selling ownership shares

The Financing Process

Financing Process Objectives Effective cash management Lockbox systems and electronic funds transfer Cost of capital optimization Earn maximum return on investments Project cash flows

Financing Process Inputs Remittance Advices Accompanies a customer’s payment on account Deposit Slips Documents account deposits Bank Statements Used to reconcile company balance with bank balance

Financing Process Outputs Financial Statement Information Cash Budget Investment Reports Debt and Interest Reports Financial Ratios Financial Planning Model Reports

Financing Process Summary

Chapter 8