Intro to Databases

AIS Business Processes

GROUP 3
 TOPICS

COLLECTING AND REPORTING

2 ACCOUNTING INFORMATION
DESIGNING REPORTS
FROM SOURCE DOCUMENTS TO OUTPUT

1
BUSINESS PROCESS FUNDAMENTALS REPORTS
OVERVIEW OF THE FINANCIAL ACCOUNTING CYCLE
CODING SYSTEM

3
SALES PROCESS
OBJECTIVES OF THE SALES PROCESS
INPUTS TO THE SALES PROCESS
OUTPUTS OF THE SALES PROCESS

5
CURRENT TRENDS IN BUSINESS PROCESS
BUSINESS PROCESSES OUTSOURCING (BPO)
BUSINESS PROCESS MANAGEMENT SOFTWARE

4 THE PURCHASING PROCESS

OBJECTIVES OF THE PURCHASING PROCESS
INPUTS OF THE PURCHASING PROCESS
OUTPUTS OF THE PURCHASING PROCESS
 BUSINESS PROCESS FUNDAMENTALS
OVERVIEW OF THE FINANCIAL ACCOUNTING CYCLE
Post journal Record and Prepare Prepare a
entries to a post adjusting financial post-closing
ledger journal entries statements trial balance

STEP 1 STEP 3 STEP 5 STEP 6

STEP 2 STEP 4 STEP 6 STEP 7

Prepare an Prepare an Record and

Record
unadjusted adjusted trial post closing
transaction
trial balance balance journal entries
in a journal
 CODING SYSTEM

❖Coding system is a system of signals used to represent letters or numbers in

transmitting messages.

❖Code is the backbone of most software programs and applications.

Each line of code serves as an instruction—a logical, step-by-step mechanism
for computers, servers, and other machines to perform an action.
CODING SYSTEM A SYSTEM WITHOUT A CODE

Uncoded entry takes a great deal of recording space, is time-consuming to record,

and is obviously prone to many types of errors.

The negative effects of this approach may be seen in many parts of the organization:
1. Sales staff. Properly identifying the items sold requires the transcription of large amounts of detail
onto source documents. Apart from the time and effort involved, this tends to promote clerical errors
and incorrect shipments.
2. Warehouse personnel. Locating and picking goods for shipment are impeded and shipping errors will
likely result.
3. Accounting personnel. Postings to ledger accounts will require searching through the subsidiary files
using lengthy descriptions as the key. This will be painfully slow, and postings to the wrong accounts will
be common.
CODING SYSTEM A SYSTEM WITH CODES

Other uses of data coding in AIS are to:

❑ Concisely represent large amounts of complex information

that would otherwise be unmanageable.
❑ Provide a means of accountability over the completeness of
the transactions processed.
❑ Identify unique transactions and accounts within a file.
❑ Support the audit function by providing an effective audit trail.
CODING SYSTEM
NUMERIC AND ALPHABETIC CODING SCHEMES
SEQUENTIAL CODES

BLOCK CODES

GROUP CODES

ALPHABETIC CODES

MNEMONIC CODES
 CODING SYSTEM NUMERIC AND ALPHABETIC CODING SCHEMES

SEQUENTIAL CODES

➢Represent items in sequential order

➢Used to prenumber source documents
➢Track each transaction processed
➢Identify any out-of-sequence documents

➢Advantage- Sequential coding supports the reconciliation of a batch transactions

➢Disadvantage- Arbitrary information
- Hard to make changes and insertions
CODING SYSTEM NUMERIC AND ALPHABETIC CODING SCHEMES

BLOCK CODES
➢ Represent whole classes by assigning each class a specific range within the coding scheme
➢ Used for chart of accounts
o The basis of the general ledger
➢ Allows for the easy insertion of new codes within a block
o Don’t have to reorganize the coding structure
➢ Disadvantage:
o Arbitrary information
 CODING SYSTEM NUMERIC AND ALPHABETIC CODING SCHEMES

GROUP CODES
➢ Represent complex items or events involving two or more pieces of data using fields
with specific meaning
➢ For example, a coding scheme for tracking sales might be 04-09-476214-99, meaning:
Store number Dept. Number Item Number Salesperson
04 09 476214 99
➢ Disadvantages:
o Arbitrary information
o Overused
CODING SYSTEM NUMERIC AND ALPHABETIC CODING SCHEMES

ALPHABETIC CODES

➢ Used for many of the same purposes as numeric codes

➢ Can be assigned sequentially or used in block and group coding techniques
➢ May be used to represent large number of items
o Can represents up to 26 variations per field
➢ Disadvantage:
o Arbitrary information
CODING SYSTEM NUMERIC AND ALPHABETIC CODING SCHEMES

MNEMONIC CODES

➢ Alphabetic characters used as abbreviations, acronyms, and other types of

combinations
➢ Do not require users to memorize the meaning since the code itself is
informative and not arbitrary
o NY = New York
➢ Disadvantages:
o Limited usability and availability
 CODING SYSTEMS

There are several

1. Mnemonic Codes important factors to
DESIGN consider when
designing an accounting
2. Sequence Codes CONSIDERATION code. First, it must serve
TYPES OF CODES IN CODES some useful purpose.
3. Block Codes Second, it must be
consistent. Third,
managers must plan for
4. Group Codes future expansion.
 COLLECTING AND
REPORTING ACCOUNTING
INFORMATION
DESIGNING REPORTS

Users need many different types of

accounting reports—some might
be every hour and others not as
often. An AIS might issue some
reports only when a particular
event occurs.
 CHARACTERISTICS OF
GOOD REPORTS
Good output reports share similar
characteristics regardless of their
type, such as (1) useful, (2)
convenient format, (3) easy to
identify, and (4) consistent.
For example, summary reports
should contain financial totals,
comparative reports should list
related numbers in adjacent columns,
and descriptive reports should
present results systematically.
IDENTIFICATION
AND CONSISTENCY
Good managerial reports always
contain fundamental identification,
including headings (company name,
organizational division or
department, etc.), page numbers,
and dates.

AIS reports should be consistent: (1)

over time, (2) across departmental
or divisional levels, and (3) with
general accounting practice.
Consistency over time allows
managers to compare information
from different time periods.
From Source Documents
to Output Reports 1

Companies use a variety of source

documents to collect data for the
AIS. The chief concerns in the data
collection process are accuracy,
timeliness, and cost-effectiveness.

Purchase Order

This source document represents a

purchase order (number 36551)
generated from the BSN Bicycles’
database system to purchase goods
from the Lu Company, a sporting
goods distributor
 For instance, the purchasing
department keeps one copy to
document the order and to
serve as a reference for future
inquiries. Accounting and
receiving departments also
receive copies. Purchase orders
are normally sequentially
numbered for easy reference at
a later date.

A sample of purchase order

From Source Documents
to Output Reports
1 2

Companies use a variety of source

documents to collect data for the
AIS. The chief concerns in the data
collection process are accuracy,
timeliness, and cost-effectiveness.

Purchase Order Sales Invoice

This source document represents a
purchase order (number 36551)
generated from the BSN Bicycles’
database system to purchase goods
from the Lu Company, a sporting
goods distributor
The sales invoice duplicates much of the
information on the original purchase
order. New information includes the
shipping address, a reference to the
purchase order number, the shipping
date, due date, the sales invoice number,
and the customer identification number.
 The Lu Company might produce as many as six
copies of the sales invoice. Two (or more) copies
are the bill for the customer. The shipping
department keeps a third copy to record that it
filled the order. A fourth copy goes to the
accounting department for processing accounts
receivable. The sales department retains a fifth
copy for future reference. Finally, the inventory
department receives a sixth copy to update its
records related to the specific inventory items
sold.

A sample sales invoice

 THE SALES PROCESS

OBJECTIVES OF THE SALE PROCESS INPUTS (SOURCE DOCUMENTS) OUTPUTS (REPORTS)

Tracking sales of goods or services to customers Sales order Financial statement information
Filling customers orders Sales Invoice Customer billing statement
Maintaining customer records Remittance advice Aging report
Billing for goods and services Shipping notice Bad debt report
Collecting payments for goods and services Debit/credit memoranda Cash receipt forecast
Forecasting sales and cash receipts Customer listing
Sales analysis report
 THE PURCHASING PROCESS

OBJECTIVES OF THE PURCHASING PROCESS INPUTS (SOURCE DOCUMENTS) OUTPUTS (REPORTS)

Tracking purchases of goods or services from Purchase requisition Financial statement information
vendors Purchase order Vendor checks
Tracking amounts owed Vendor listing Check register
Maintaining vendor records Receiving report Discrepancy reports
Controlling inventory Bill of lading Cash requirements forecast
Making time and accurate vendor payments Packing slip Sales analysis report
Forecasting purchases and cash outflows Debit/credit memoranda
CURRENT TRENDS IN
BUSINESS PROCESSES
BUSINESS PROCESSES
OUTSOURCING (BPO)
Companies outsource business
processes such as human
resources, finance and
accounting, customer services,
learning services and training,
and information technology
BUSINESS PROCESSES
MANAGEMENT (BPM)
SOFTWARE
Business Process Management
(BPM) software packages help
companies collect corporate
knowledge, data, and business
rules into a business system to
improve core business
processes
THANK YOU!

GROUP 3

ACABO, MAC LHENRY

ARANILLA, MERCY
GAMOHAY, CARAH JEAN
GRULLO, LOLITO
ORAIZ, JOZEL