1. Accounting Information Systems and Business Processes - Part II
Chapter 11

2. Chapter 11: 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

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

4. Human Resource Management
Personnel function
Hire, train, and employ appropriately qualified employees
Business Process Management Software Packages
Automate the core processes
Payroll Processing Information Systems
Process payroll activities and reporting

5. 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

6. Personnel Function Flowchart

7. Payroll Function Flowchart

8. 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

9. 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

10. 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

11. Human Resource Management Summary

12. 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

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

14. 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

15. Fixed Asset Management Function Flowchart

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

17. 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

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

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

20. Fixed Asset Management Summary

21. Study Break #2
What is the objective of the fixed asset management function?
To track purchases of fixed assets
To manage the purchase, management, valuation, and disposal of an organization’s fixed assets
To record maintenance and depreciation of fixed assets
To keep a current listing of approved vendors

22. Study Break #3
Why do companies use BPM solutions for the fixed asset management function?
Decrease machine downtime and maintenance costs
Reduce inventory
Integrate data and coordinate logistics
All of the above

23. 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

24. Production Process Flowchart

25. Production Process Objectives
Track purchases and sales of inventories
Monitor and control manufacturing costs
Control inventory
Control and coordinate the production process
Provide input for budgets

26. Cost Accounting Subsystem
Job Costing Information System
Tracks costs for specific “jobs”
Raw materials, labor, and overhead
Process Costing Information System
Used for manufacturers of homogeneous products
Produced on a regular and continuous basis
Activity-based Costing Systems
Emphasis on cost drivers of business processes

27. Just-in-Time Inventory Systems
A make-to-order inventory system
Attempts to minimize inventory at all levels
Dependent upon AIS
Timely and accurate processing of information
Ensure continuous work flow by providing adequate raw materials

28. Lean Production/ Manufacturing
Concept
Eliminate waste throughout the organization
Focus on reduction of non-value-added waste
Lean Accounting
Necessary in order to have lean manufacturing
Data collection

29. Non-Value-Added Waste

30. Production Process Inputs
Material Requisition Form
Request to acquire materials from storeroom or warehouse
Bill of Materials
Identifies types and quantities of parts needed
Master Production Schedule
Displays quantities of goods needed to meet sales demands

31. Production Process Inputs
Production Order
Authorizes the manufacture of goods
Incorporates data from sales projections and inventory levels
Dictates the production schedule
Job Time Card
Identifies the distribution of labor costs to specific jobs or production orders

32. Production Process Outputs
Financial Statement Information
Details of the costs and pricing
Materials Price List
Prices charged for raw materials
Periodic Usage Report
Provides information on use of raw materials
Inventory Reconciliation Report
Reconciles physical inventory with book balances

33. Production Process Outputs
Inventory Status Report
Allows managers to monitor inventory levels
Production Cost Report
Details the actual costs for production items
Production operation, cost element, and/or separate jobs
Manufacturing Status Report
Provides information about the status of various jobs

34. Production Process Summary

35. Study Break #4
Which of the following automated systems help minimize inventory costs?
JIT systems
ABC systems
Job order costing systems
Process costing systems

36. Study Break #5 Lean accounting is:
An AIS that is generally considered low cost (i.e., an entry- level system)
Designed to support traditional financial performance measures
New performance measures that support decision-making by managers and operational improvement leaders
None of these

37. 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

38. The Financing Process

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

40. Benefits of a Lockbox System

41. 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

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

43. Financing Process Summary

44. Business Processes in Special Industries
Professional Service Organizations
Accounting, Law, Engineering, Consulting
Utilize time and billing information systems
Tracks billable hours and creates client bill
Not-for-Profit Organizations
Provide services for the betterment of society
Emphasize fund accounting systems
Utilize budgetary AIS for evaluation measures

45. Professional Service Organization Bill

46. Business Processes in Special Industries
Health Care Organizations
Provide health care to patients
Emphasize third-party billing
Standardized codes provide efficiency in billing
Rely on AIS to maintain patient information

47. Mini-based Hospital System

48. Business Process Reengineering
Purpose
Inefficient or ineffective processes exist
Redesign to improve efficiency and effectiveness
Potential Failure of Reengineering
Unrealistic expectations
Employee resistance to change
Lack of top management support