AIS Set 2
sales event data
A file comprised of invoice or sales order records created as the sales process captures sales events, through the preparing and sending of an invoice.
inventory master data
A file or table of data that contains a record of each item stocked in the warehouse or regularly ordered from a vendor.
purchase requisitions data
A file or table where purchase requisitions are compiled.
vendor master data
contains a record of each vendor that is approved for use by the organization
Customer Master Data
contains a record of every customer with whom a company is authorized to regularly do business
accounts receivable master data
repository of all unpaid invoices issued by an organization and awaiting final disposition
accounts payable master data
repository of all unpaid vendor invoices
post-billing system
A billing system in which invoices are prepared after goods have been shipped and the sales order notification (sales order) has been matched to shipping's billing notification (shipping notice).
pre-billing system
A billing system in which invoices are prepared immediately on acceptance of a customer order—that is, after inventory and credit checks have been accomplished but before the goods have been shipped.
Vendor Invoice
A business document that notifies the purchaser of an obligation to pay the vendor for goods (or services) that were ordered by and shipped to the purchaser.
purchase order master data
A compilation of open purchase orders that includes the status of each item on order.
open-item system
A complex accounts receivable system appropriate in situations where invoices are prepared and sent for each sale (i.e., each shipment), and the customer typically makes payments for specific invoices when those invoices are due.
independent validation of vendor invoices
A control to ensure that recorded vendor invoices come from purchase order and receiving data created by entities other than the entity that records the vendor invoices; used to preclude unauthorized and invalid accounts payable records.
blind copy
A copy of a document on which certain data is blanked out (i.e., blinded) so that persons receiving that copy will not have access to those data.
picking ticket
A data flow—often a sales order copy—that authorizes the warehouse to "pick" the goods from the shelf and send them to shipping.
Lockbox
A postal address, maintained by the firm's bank, which is used solely for the purpose of collecting checks. The bank processes the receipts, providing a quick update to the firm's bank balance, and provides the collecting company with the remittance advice (RA) data to update customer accounts.
acceptance report
A report that formally acknowledges the satisfactory completion of an agreed upon service.
packing slip
A shipping document that is included with a package and identifies the customer and the contents of the package.
Reorder point (ROP) analysis
A technique for determining when to reorder an item based on the item's unique sales rate.
Economic Order Quantity (EOQ)
A technique that calculates the optimum quantity of an item to order, analyzing all incremental costs associated with acquiring and carrying the particular item in inventory.
Approve purchase requisition
An authorized individual, or several individuals, such as cost center or department management, should approve purchase requisitions to ensure that the purchase is within an applicable budget and that the purchase is desirable.
Compare shipment to sales order and picking ticket
An example of one-for-one checking that ensures that the shipment will be authorized and accurate. Any discrepancy among these items might indicate an unauthorized or duplicate shipment (no open sales order) or an inaccurate shipment (quantities to be shipped do not agree with the picking ticket or open sales order).
Order entry/sales (OE/S) process
An interacting structure of people, equipment, activities, and controls that is designed to create information flows that support the repetitive work routines of the sales order department, credit department, and shipping department and the decision needs of those who manage various sales and marketing functions.
accounts payable/cash disbursements (AP/CD) process
An interacting structure of people, equipment, activities, and controls that is designed to handle the repetitive work routines of the accounts payable department and the cashier, to support the decision needs of those who manage the accounts payable department and cashier, and to assist in the preparation of internal and external reports
Purchasing Process
An interacting structure of people, equipment, activities, and controls to handle the repetitive work routines of the purchasing department and receiving department, support the decision needs of those who manage the purchasing and receiving departments, and assist in the preparation of internal and external reports.
Electronic Invoice Presentment and Payment (EIPP)
B2B systems that combine e-invoicing and e-payment processes to (1) send invoices to customers via a Web portal or secure network using a third-party service provider and to (2) receive electronic payments that are initiated by the payer, processed by the third party, and settled by the ACH network, wire transfer, or debit or credit card company.
Electronic Bill Presentment and Payment (EBPP)
B2C systems that use a Web site to post customer bills and to receive their electronic payments.
Independent authorization to record receipt
Before a receipt can be accepted and recorded, the receipt data should be compared with the PO master data to determine that an approved PO, prepared by someone other than receiving personnel, is on file.
Compare input receipt data to PO data
Before a receipt can be accepted and recorded, the receipt data should be compared with the PO master data to determine that the correct goods have been received.
Approve purchase order
Before being issued, the appropriate personnel should approve POs to ensure that an appropriate supplier has been selected and that the correct goods and services, for the correct amounts, are being purchased.
Review file of open sales orders (tickler file)
By reviewing a file of open sales orders, i.e., shipments that should have taken place, we can ensure that all shipments are made in a timely manner
sales order master data
Records in the sales order master data are created on completion of a sales order.
Reconcile bank account
Records of cash disbursements and receipts are matched to the bank's records to ensure that all disbursements and receipts recorded by the bank were authorized and accurate. An entity other than accounts payable and cash disbursements should perform this reconciliation.
Independent vendor master data maintenance
Requires that there is a separation of duties between the personnel who create vendor records (to authorize purchases and payments) and those that create and approve POs, record accounts payable, and approve payments.
SCM software
Software that helps plan and execute the steps in an organization's supply chain, including demand planning; acquiring inventory; and manufacturing, distributing, and selling the product.
cash receipts event data
The data created when customer payments are recorded, which contains the details of each payment as reflected on the RA accompanying a payment.
Independent customer master data maintenance
This assumes that there is a segregation of duties between the personnel who create the customer record (to authorize sales to the customer) and the personnel who create the sales order (execute the sale).
Inspect goods
Upon receipt of goods they should be inspected by qualified personnel to ensure that the correct goods are received in acceptable condition.
Use authorized vendor data
Vendors should be vetted to determine their suitability to provide the organization with goods and services. The screening process might include vendor financial viability and performance record. The vendor data includes payment terms, address, and bank account.
Automated Clearing House (ACH) network
a batch processing system for the interbank clearing of electronic payments
remittance advice (RA)
a business document used by the payer to notify the payee of the items being paid
invoice
a business document used to notify the customer of an obligation to pay the seller for the merchandise (or service) ordered and shipped (or provided, if a service)
bill of lading
a contract between the shipper and the carrier in which the carrier agrees to transport the goods to the shipper's customer
Match invoice, purchase order, and receiving report
a control plan where an invoice should be matched to the corresponding purchase order & receiving report data to ensure that items on the invoice were ordered and received and that the invoice is accurately recorded
customer credit check
a control process performed to ensure that an organization does not extend more credit to a customer than is prudent; usually performed before accepting a customer's order
independent authorization to make payment
a control to ensure that only authorized payments are made by enforcing segregation of duties between the accounts payable record keeping and payment execution
debit card
a form of payment that authorizes the collector to transfer funds electronically from the payer's bank account to the collector's bank account
lapping
a fraud by which funds being received by one customer are stolen, and the theft is covered up by applying funds received from another customer to the first customer's account
vendor packing list
a list that accompanies the purchased inventory from the vendor and identifies the contents of a shipment and triggers the receiving process
credit card
a method of payment whereby a third party (such as a bank), for a fee, removes from the collector the risk of noncollection of the account receivable; also known as a charge card
Evaluated Receipt Settlement (ERS)
a process by which an organization pays for a purchase on the basis of the goods receipt
Purchase Order (PO)
a request for the purchase of goods or services from a vendor
Radio Frequency Identification (RFID)
a system for sending and receiving data, using wireless technology, between an RFID tag and an RFID transceiver
ABC analysis
a technique for ranking items in a group based on the value, activity, sales, or other relevant metric for the items
ePayments
a variety of procedures for transmitting cash funds between entities via electronic transmission instead of using paper checks
electronic funds transfer (EFT)
a variety of procedures for transmitting cash funds between entities via electronic transmission instead of using paper checks
Balance-forward system
accounts receivable records consist of a customer's balance, categorized as current and past-due, and current account activity includes items such as current charges, finance charges for past-due balances, and payments
purchase receipts data
an event data store with each record reflecting a receipt of goods and services
Compare picking ticket to picked goods
an example of one-for-one checking that ensures that the correct goods are picked from the shelf and that any errors are detected and corrected in a timely manner (e.g. before the goods get to the shipping department)
billing/accounts receivable/cash receipts (B/AR/CR) process
an interacting structure of people, equipment, activities, and controls designed to create information flows and records that support repetitive work routines of the credit department, cashier, and accounts receivable department, support the problem-solving process of financial managers, and assist in the preparation of internal and external reports
purchase requisition
an internal request to acquire goods and services
Compare vendors for favorable prices, terms, quality, and product availability
before executing a purchase, prospective vendors should be compared to determine that they re the optimal choice for the purchase
supply chain
comprises the connections from the suppliers of merchandise and raw materials through to an organization's customers. These connections include the flow of information, materials, and services
Digital image processing systems
computer-based systems for the capture, storage, retrieval, and presentation of images of objects such as pictures and documents
Cash Disbursements events data
contains, in chronological sequence, the details of each cash payment made. accordingly each record in the data shows the pmnt date, vendor ID, disbursement voucher number (if voucher process used), vendor INV numbers & gross inv amoutns, cash discounts taken on each inv net inv amounts, check amnts, and check # or other pmnt ID
purchasing events data
contains, in chronological sequence, the details of each invoice that is recorded. Each record shows the date recorded; vendor inv number, acct distributions, such as assets, expenses, freight, sales tax (or the clearing account for inventory receipts); and gross inv amount
accounts receivable (AR) adjustments events data
created as sales returns, bad debt write-offs, estimated doubtful accounts, or similar adjustments are processed
optical character recognition
data entry into a system using light reflection for pattern recognition of handwritten or printed characters
bar code readers
devices that use light reflection to read differences in bar code patterns to identify a labeled item
receiving report
document used to record merchandise receipts
Independent shipping authorization
establishes for shipping personnel that someone other than the warehouse personnel authorized the shipment. Typically accomplished by sending a copy of the sales order from customer service directly to the shipping department or by giving the shipping personnel access to open sales order records on the sales order master data. Without this control, warehouse personnel could cause a shipment by simply sending goods to the shipping department. This control assumes a segregation of duties among sales, the warehouse, and shipping.
purchase returns and allowances
events that include the reduction of accounts payable due to returning items purchased or for a price allowance or other agreement with the vendor
good funds
funds on deposit and available for use
scanner
input devices that capture printed images or documents and convert them into electronic digital signals that can be stored on computer media
customer acknowledgement
sent to the customer to provide notification of an order's acceptance and expected shipment date
Supply Chain Management (SCM)
the combination of processes and procedures used to ensure the delivery of goods and services to customers at the lowest cost while providing the highest value
Web 2.0
the set of tools that allow people to build social and business connections, share information, and collaborate on projects online. Tools include blogs, wikis, social-networking, & other online communities, & virtual worlds
Confirm purchase order to requesting department
to prevent duplicate purchase requests and to allow the requesting department to ensure that a PO is created, the requesting department should be informed when a PO has been issued in response to a purchase requisition
float
when applied to cash receipts, the time between the customer tendering payment and the availability of good funds
bullwhip effect
wild demand and supply fluctuations caused by the multiplication of orders up the supply chain