Final Exam Terms (AIS)

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Vendor master data

contains a record of each vendor that is approved for use by the organization. In addition to storing identification data, such as name, address, telephone numbers, e-mail addresses, bank information, and payment terms and methods, these are used by management to evaluate vendor performance and to make various ordering decisions.

Customer master data

contains a record of every customer with whom a company is authorized to regularly do business

cash disbursements events data

contains, in chronological sequence, the details of each cash payment made. Accordingly, each record in this data store shows the payment date, vendor identification, disbursement voucher number (if a voucher process is used), vendor invoice numbers and gross invoice amounts, cash discount taken on each invoice, net invoice amounts, check amounts, and check number (or other payment identification such as those used for electronic payment)

accounts receivable master data

repository of all unpaid invoices issued by an organization and awaiting final disposition

Electronic bill presentment and payment (EBPP)

B2C systems that use a website to post customer bills and to receive their electronic payments

electronic invoice presentment and payment (EIPP)

B2B system that combine e-invoicing and e-payment processes to 1. send inovices 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

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 sales)

Automated clearing house network

a batch processing system for the interbank clearing of electronic payments

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 bill 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

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)

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 (each shipment) and the customer typically makes payments for specific invoices when those invoices are due

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 and 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

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 so that the 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

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 invoices

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

Debit card

a form of payment that authorizes the collector to transfer funds electronically from the payer's 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 slip

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 accounts receivable; aka a charge card

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

evaluated receipt settlement (ERS)

a process by which an organization pays for a purchase on the basis of goods receipt

Acceptance report

a report that formally acknowledges the satisfactory completion of an agreed upon service

accounts payable master data

a repository of all unpaid vendor invoices. The data includes vendor number, vendor invoice number and date, terms, date due, line item details (items, quantities, cost), and invoice total.

Purchase order (PO)

a request for the purchase of goods or services from a vendor

Web 2.0

a 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 and other online communities, and virtual worlds

Packing slip

a shipping document that is included with a package and identifies the customer, the shipment destination, and the contents of the package

Radio-frequency identification (RFID)

a system for sending and receiving data, using wireless technology, between an RFID tag (a chip with an antenna) and an RFID transceiver

Paperless systems

a system that eliminates documents and forms as the medium for conducting business

ABC analysis

a technique for ranking items in a group based on the value, activity, sales, or other relevant metric for the items

Economic order quantity (EOQ)

a technique of analyzing all incremental costs associated with acquiring and carrying particular items of inventory.

Electronic funds transfer (EFT) / ePayments

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

Approve purchase requisition

an authorized individual, or several individuals, such as cost center or department management, should do this to ensure that the purchase is within an applicable budget and that the purchase is desirable

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)

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)

Billing/accounts receivable/cash receipts (B/AR/CR)

an interacting structure of people, equipment, activities, and controls designed to create information flows and records that support repetitive work routines of 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

accounts payable/cash disbursements (AP/CD) process

an interacting structure of people, equipment, activities, and controls that is designed to create information flows and records that handle the repetitive work routines of the accounts payable department and cashier, support the decision needs of those who manage the accounts payable department and cashier, and assist in the preparation of internal and external reports

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

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

Purchase requisition

an internal request to acquire goods and services

Independent authorization to record receipts

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 the 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 do this to ensure that an appropriate supplier has been selected and that the correct goods and services, for the correct amounts, are being purchased

Compare vendors for favorable prices, terms, quality, and product availability

before executing a purchase, prospective vendors should be compared to determine that they are 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 capture, storage, retrieval, and presentation of images of objects such as pictures and documents

purchasing events data

contains, in chronological sequence, the details of each invoice that is recorded. Each record shows the date recorded; vendor invoice number; account distribution, such as assets, expenses, freight, sales tax (or the clearing account for inventory receipts); and gross invoice amount

accounts receivable (AR) adjustment 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

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

Scanners

input devices that capture printed images or documents and convert them into electronic digital signals (i.e. into binary representations of the printed image or document) that can be stored on computer media

B2B marketplaces

particular websites or portals that may be used as sources of supply in the procurement process

Reorder point (ROP) analysis

recognizes that each item of inventory is unique with respect to the rate at which it is sold.

Sales order master data

records in this type of data are created on completion of a sales order

reconcile bank accounts

records of cash disbursement 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

Customer acknowledgement

sent to the customer to provide notification of an order's acceptance and expected shipment date

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

Supply chain management

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 to the customers

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

E-procurement

the use of information technology and networks (such as the Internet) to automate significant portions of the procurement process

Independent shipping authorization

this establishes, for the shipping personnel, that someone other than the warehouse personnel authorized the shipment. Typically, this would be 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

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

Inspect goods

upon receipt of goods they should be inspected by qualified personnel to ensure that the correct goods are received in acceptable condition

Review file of open sales orders (tickler file)

used to detect any shipments that should have taken place; ensures that all shipments are made in a timely manner

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 accounts

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


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