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    Karen Cael
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    The document discusses the revenue cycle process and how it has been transformed through technology. Key points include: 1) The sales order process has been streamlined through real-time processing which shortens the cash cycle and allows for better inventory management. 2) Cash receipt processing has been reengineered through scanning technology which reduces human intervention and uses AI to read handwriting on remittance documents. 3) Accounting systems have increasingly moved to computer-based and online platforms like EDI and internet-based ordering, improving efficiency by reducing paper and expediting transactions.

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    CHAPTER 4

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    The document discusses the revenue cycle process and how it has been transformed through technology. Key points include: 1) The sales order process has been streamlined through real-time processing which shortens the cash cycle and allows for better inventory management. 2) Cash receipt processing has been reengineered through scanning technology which reduces human intervention and uses AI to read handwriting on remittance documents. 3) Accounting systems have increasingly moved to computer-based and online platforms like EDI and internet-based ordering, improving efficiency by reducing paper and expediting transactions.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    28 views1 page

    Chapter 4

    Uploaded by

    Karen Cael
    The document discusses the revenue cycle process and how it has been transformed through technology. Key points include: 1) The sales order process has been streamlined through real-time processing which shortens the cash cycle and allows for better inventory management. 2) Cash receipt processing has been reengineered through scanning technology which reduces human intervention and uses AI to read handwriting on remittance documents. 3) Accounting systems have increasingly moved to computer-based and online platforms like EDI and internet-based ordering, improving efficiency by reducing paper and expediting transactions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    CHAPTER 4 - manual procedures and physical documents are

    “The Revenue Cycle” replaced by interactive computer terminals

    SALES ORDER PROCESSING Advantages of Real-Time Processing


    1. Customer placing an order (sales order form) - shortens the cash cycle
    2. Transaction is authorized for credit approval by the - better inventory management can lead to a
    credit department competitive advantage
    3. Sales info is released to - fewer clerical errors
    a. Billing - reduces amount of expensive paper documents
    b. Warehouse
    c. Shipping Reengineered Cash Receipts
    4. Merchandise is picked from warehouse and sent to - mail room is a frequent target for reengineering
    shipping (stock records are adjusted) - envelopes received by companies from their
    5. Merchandise, packing slip and bill of lading are customers are scanned to provide a control procedure
    prepared by shipping and sent to customer against theft
    6. Shipping info is sent to Billing (compiles and - machines open the envelopes to lessen human
    reconciled relevant facts and issues an invoice to intervention
    customer; transfers info to AR and Inventory - AI is used to read handwriting
    Control)
    7. AR records info in the AR subsidiary ledger POINT-OF-SALE SYSTEM
    8. Inventory Control adjusts the Inventory subsidiary - used extensively in retail establishments
    ledger - clerk scans the universal product code to compute
    9. Billing, AR and Inventory Control submits the amount due
    summary info to the General Leger Department
    REENGINEERING USING ELECTRONIC DATA
    CASH RECEIPTS PROCESSES INTERCHANGE
    1. Customer checks and remittance advice are - EDI helps to expedite transactions
    received in the mail room
    2. Cash receipt dept: REENGINEERING USING THE INTERNET
    a. Verify the accuracy and completeness of the - most orders are made with credit/debit cards
    checks - mainly done with e-mail systems
    b. Updates cash receipt journal - security and control over data is a concern
    c. Prepares a deposit slip
    d. Prepares a journal voucher to be sent to general PC-BASED ACCOUNTING SYSTEM
    ledger - used by small firms and some large decentralized
    3. AR posts from remittance advice to the AR firms
    Subsidiary ledger - allows one or few individuals to perform entire
    4. GL reconciles journal voucher from Cash Receipt accounting function
    and AR dept
    5. Controller reconciles the bank accounts

    COMPUTER-BASED ACCOUNTING SYSTEMS


    Automation - use technology to improve efficiency
    and effectiveness
    - authorizations and data access can be performed
    through computer screens
    - decreases he amount of paper
    - Store data in electronic files

    Re-engineering - use technology to restructure


    business processes and firm organization
    - uses real-time technology

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