Chapter 8-1 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
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Chapter 8-1
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
Chapter 8-2
Introduction
Business Processes Sales and Purchasing Resource Management, Production, and Financing
Information Needs Typical AIS requirements Specialized information
Chapter 8-3
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
Chapter 8-4
Human ResourceManagement 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
Chapter 8-5
Personnel Function Flowchart
Chapter 8-6
Payroll Function Flowchart
Chapter 8-7
Human ResourceManagement 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
Chapter 8-8
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 ResourceManagement Outputs
Chapter 8-9
Human ResourceManagement 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
Chapter 8-10
Human ResourceManagement Summary
Chapter 8-11
All of the following activities are common to the Human Resource Management function except:
A. Hiring, training, and employing workers
B. Reporting on payroll deductions
C. Maintaining employee earnings records
D. Certified financial planning for employees
Study Break #1
Chapter 8-12
All of the following activities are common to the Human Resource Management function except:
A. Hiring, training, and employing workers
B. Reporting on payroll deductions
C. Maintaining employee earnings records
D. Certified financial planning for employees
Study Break #1 - Answer
Chapter 8-13
Fixed Asset Management
Fixed Asset Management Function Long-term Assets Purchase, maintenance, valuation, disposal
Enterprise Asset Management System Automate management of assets
Chapter 8-14
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
Chapter 8-15
Fixed Asset Management Function Flowchart
Chapter 8-16
Fixed Asset Management Inputs
Purchase Requisition Requires approval by management
Receiving Report Identifies receipt of fixed asset
Supplier Invoice Sent when asset is shipped
Chapter 8-17
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
Chapter 8-18
Fixed Asset Management Outputs
Financial Statement Information
Fixed Asset Register Identification numbers Location
Depreciation Register Depreciation Expense Accumulated Depreciation
Chapter 8-19
Fixed Asset Management Outputs
Repair and Maintenance Reports Current period expenses Historical expenses
Report on Retired Assets Disposal of fixed assets
Chapter 8-20
Fixed Asset Management Summary
Chapter 8-21
What is the objective of the fixed asset management function?
A. To track purchases of fixed assets
B. To manage the purchase, management, valuation, and disposal of an organization’s fixed assets
C. To record maintenance and depreciation of fixed assets
D. To keep a current listing of approved vendors
Study Break #2
Chapter 8-22
What is the objective of the fixed asset management function?
A. To track purchases of fixed assets
B. To manage the purchase, management, valuation, and disposal of an organization’s fixed assets
C. To record maintenance and depreciation of fixed assets
D. To keep a current listing of approved vendors
Study Break #2 - Answer
Chapter 8-23
Why do companies use BPM solutions for the fixed asset management function?
A. Decrease machine downtime and maintenance costs
B. Reduce inventory
C. Integrate data and coordinate logistics
D. All of the above
Study Break #3
Chapter 8-24
Why do companies use BPM solutions for the fixed asset management function?
A. Decrease machine downtime and maintenance costs
B. Reduce inventory
C. Integrate data and coordinate logistics
D. All of the above
Study Break #3 - Answer
Chapter 8-25
The Production Process
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
Chapter 8-26
Production Process Flowchart
Chapter 8-27
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
Chapter 8-28
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
Chapter 8-29
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
Chapter 8-30
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 Evaluate performance measures
Chapter 8-31
Non-Value-Added Waste
Chapter 8-32
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
Chapter 8-33
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
Production Process Inputs
Chapter 8-34
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
Chapter 8-35
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
Chapter 8-36
Production Process Summary
Chapter 8-37
Which of the following automated systems help minimize inventory costs?
A. JIT systems
B. ABC systems
C. Job order costing systems
D. Process costing systems
Study Break #4
Chapter 8-38
Which of the following automated systems help minimize inventory costs?
A. JIT systems
B. ABC systems
C. Job order costing systems
D. Process costing systems
Study Break #4 - Answer
Chapter 8-39
Lean accounting is:
A. An AIS that is generally considered low cost (i.e., an entry-level system)
B. Designed to support traditional financial performance measures
C. New performance measures that support decision-making by managers and operational improvement leaders
D. None of these
Study Break #5
Chapter 8-40
Lean accounting is:
A. An AIS that is generally considered low cost (i.e., an entry-level system)
B. Designed to support traditional financial performance measures
C. New performance measures that support decision-making by managers and operational improvement leaders
D. None of these
Study Break #5 - Answer
Chapter 8-41
The Financing Process
Process 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
Chapter 8-42
The Financing Process
Chapter 8-43
Financing Process Objectives
Effective cash management Lockbox systems and electronic funds transfer
Cost of capital optimization
Earn maximum return on investments
Project cash flows
Chapter 8-44
Benefits of a Lockbox System
Chapter 8-45
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
Chapter 8-46
Financing Process Outputs
Financial Statement Information
Cash Budget
Investment Reports
Debt and Interest Reports
Financial Ratios
Financial Planning Model Reports
Chapter 8-47
Financing Process Summary
Chapter 8-48
Business Processes inSpecial 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
Chapter 8-49
Professional Service Organization Bill
Chapter 8-50
Business Processes inSpecial 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
Chapter 8-51
Mini-based Hospital System
Chapter 8-52
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
Chapter 8-53
Copyright
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Chapter 8-54
Chapter 8
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