1. Accounting Information Systems, 9e Gelinas ►Dull ► Wheeler
Chapter 11: The Billing/Accounts Receivable/Cash Receipts (B/AR/CR) Process
Accounting Information Systems, 9e
Gelinas ►Dull ► Wheeler
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2. Order entry/sales (OE/S) Process
Manual:
Requires paper work  time consuming
Cost $60 to $200
Easy to make errors  increase cost
Computerized
Speed up process  less time consuming
Save 70 percent of cost ($18 to $60)
Not just less errors but provide essential and value added information (essential in information age)

3. Order entry/sales (OE/S) process
The order entry/sales (OE/S) process includes the first four steps in the order-to-cash process.
pre-sales activities
sales order processing
picking and packing the goods
shipping
Billing and processing the customer payment, are included in the billing/accounts receivable/cash receipts (B/AR/CR) process.

4. Process Definition and Functions
Order entry/sales (OE/S) process: an interacting structure of people, equipment, activities, and controls that is designed to achieve certain goals. The primary function of the OE/S process is to create information flows that support the following:
Repetitive work routines of the sales order department, credit department, and shipping department by capturing, recording, and commutating sales related data.
Support decision needs of those who manage various sales and marketing functions.

5. Horizontal View of the OE/S Process

6. Description of Horizontal Information Flows

7. Vertical Perspective of the OE/S Process: key players involved in MKTG function

8. The OE/S Process – Context Diagram

9. OE/S Process–Level 0 Diagram
Better idea to name data flow between process and data store
Match goods with picking ticket
Enter quantity picked

11. Rules in DFD Building ...
Rule 4 : Shaded corner must appear in ALL occurrences of a duplicated symbol in a same diagram
CUSTOMER D3
Accounts Receivable
CUSTOMER D3
Accounts Receivable

12. The OE/S Process–Diagram 1
Purchasing Dept.

13. OE/S Process–Level 0 Diagram
Better idea to name data flow between process and data store
Match goods with picking ticket
Enter quantity picked

14. SAP Sales Order Inquiry Screen

15. The OE/S Process—Diagram 2
Reject: (1) products pulled from the shelf may not be those indicated on the picking ticket (2) no sufficient products to satisfy the request

16. OE/S Process–Level 0 Diagram
Better idea to name data flow between process and data store
Match goods with picking ticket
Enter quantity picked

17. The OE/S Process—Diagram 3

18. OE/S Data Stores
Customer master data: record of every authorized, regular customer.
Inventory master data: record of each item that is stocked in the warehouse or regularly ordered from a vendor.
Marketing data: repository of a variety of sales- oriented data from presales or sales activities.
Sales order master data: created on completion of a sales order and updated when goods have been shipped.

19. Entity-Relationship (E-R) Diagram for the OE/S Process

20. Selected Relational Tables (Partial) for the OE/S Process

21. Billing/accounts receivable/cash receipts (B/AR/CR) process
The billing/accounts receivable/cash receipts (B/AR/CR) process is an interacting structure of people, equipment, activities, and controls designed to create information flows and records that accomplish the following:
Support the repetitive work routines of the cashier, and the credit and accounts receivable departments.
Support the problem-solving processes of financial managers.
Assist in the preparation of internal and external reports.

22. OE/S vs. B/AR/CR
OE/S
Processing customer order
Shipping products to customer
B/AR/CR: complete the order-to-cash process by accomplishing:
Billing customer
Managing customer accounts
Securing and recording payment for products/service sold

23. Horizontal View of the B/AR/CR Process

24. Description of Horizontal Information Flows

25. Optimizing Cash Resources
Having the B/AR/CR process produce invoices automatically helps ensure that invoices are sent to customers shortly after the goods have been shipped.
Treasurer’s goal: make funds available to acquire assets, make investments, or reduce interest charges.
Billing’s goal: get invoices to customers quickly, hopefully reducing the time it then takes to obtain customer payments.

26. B/AR/CR–Context Diagram

27. B/AR/CR–Level 0 Diagram
Better idea to name data flow between process and data store

28. B/AR/CR Process–Diagram 1

29. Perform Billing
Major output of the billing process is the invoice, a business document used to notify the customer of an obligation to pay the seller for the merchandise (or service) ordered and shipped (or provided, if a service).

30. Sample SAP Invoice Data Screen

31. B/AR/CR Process–Diagram 2

32. B/AR/CR–Level 0 Diagram
Better idea to name data flow between process and data store

33. Sample Accounts Receivable Aging Report

34. B/AR/CR Process–Diagram 3

35. B/AR/CR–Level 0 Diagram
Better idea to name data flow between process and data store

36. B/AR/CR Logical Data Descriptions
Accounts receivable master data: Repository of all unpaid invoices issued by an organization and awaiting final disposition.
Two types of accounts receivable systems exist:
Balance-forward
Open-item

37. B/AR/CR Event Data Stores
Sales event data store: invoice (sales) records. Is a sales journal in a manual process.
Accounts receivable adjustments events data store: records from sales returns, bad debit write-offs, estimated doubtful accounts, etc.
Cash receipts event data store: details of customer payments.

38. E-R Diagram (Partial) for the B/AR/CR Process

39. Selected Relational Tables (Partial) for the B/AR/CR Process

40. Selected Relational Tables (Partial) for the B/AR/CR Process (cont’d)