Chapter 12 Accounting information system applications
Revenue cycle → set of business activities & related information → processing
operations →associated w/ providing g&s to cust → and collecting cash in payment
for those sales.
Primary objectives → Provide right product in the right place at the right time. HOW
TO ACHIEVE THAT? Management make key decision.
– How much inv should be carried, how should merchandise be delivered to
cust, what are the optimal prices for each product, should credit be
extended to cust, how cust payment be processed to maximize cash flow,
what extend can & should product be customized to individual cust NEEDS
& DESIRE
How to answer those question? Org perform 4 basic revenue cycle ( sales order
entry, shipping, billing, cash collection)
General issues revenue cycle.
All revenue cycle is depend on the integrated database → contains all the data
about cust, inventory, pricing. General threat
1. Inaccurate / invalid master data→ could result shipping in wrong location,
delays collecting payment, make sales to cust that EXCEED the credit limits.
How to handle? Using various processing integrity control.
2. Unauthorized disclosure of sensitive inform (e.g : pricing policies, personal
inform cust). → important to limit employee ability to used the system
data. SENSITIVE DATA → encrypted in storage → prevent IT employees
3. Loss or destruction of master data. → employ the backup and disaster
recovery procedures (pemulihan bencana)
Sales order entry
Sales department reports to the vice president of marketing, but cust typically
perform sales order by themselves using companys web.
Taking customers order → record on sales order document.
Process :
Order missing or innacurate. → creates inefficiencies & effect cust perception >>
effect future sales.
how to mitigates?
– Using ERP & completeness check >> ensures all required data already
entered.
– Automatic lookup reference data >> stored in the cust master file.
Legitimacy of orders → company ship merchandise to cust, but cust denies having
placed orders. How to mitigate ? breakdowns sales by sales person, region, product
provide, to evaluate sales order entry efficieny & effectiveness.
Credit approval
Credit limit → max allowable account balance >> management wishes to allow cust
>> based on cust past credit history & ability to pay.
Flag orders → require specific authorization >> bcs exceeds cust preapproval credit
limit.
Account receivable aging report → list cust account balance >> by length of time
outstanding. → useful fot projecting timing future cash inflows, deciding increase
credit limit, estimating bad debts,
Checking inventory availability
