Accounting Information Systems - Essay Example

Accounting Information Systems. Number: Lecturer: 3 Revenue cycle Garden Nursery’s revenue cycle is an important cycle that illustrates how the revenue in the company is generated. The following section describes the revenue cycle and provides a document flow chart. There are various actors in this cycle who ensure the cycle is complete by being responsible for various processes in the cycle. They include: i) Customers. ii) Purchasing department clerk. iii) Account clerk. iv) Supplier. v) Inventory personnel. The revenue cycle essentially involves all the activities and processes from the time a product is ordered by a client to the point in which the product is delivered or collected by the client in exchange for money. The client makes an order for a particular product to the purchasing department where the clerk will process the order and forward it to the inventory personnel. The inventory personnel will confirm availability of the products and service. Upon confirmation, the clerk sends a confirmation to the customer and begins the billing process. The billing process is done by the clerk who then sends an invoice to the client for the products in the purchase order. Once the client receives the invoice, then they can make the necessary payments to the accounts clerk before collecting the products purchased. Payments can be made by cheque or by cash to the accounts department of the company. 4.0 Files, processes and documents in the revenue cycle. The revenue cycle comprise four major processes that yield different files and documents that are used both in the revenue cycle and in other cycles in the company. These processes and the subsequent files and documents include: i) Order processing: this process is initiated by the customer who makes an order for particular products from the company. He issues a purchase order to the clerk in the purchasing department. The clerk stores the purchase order in a file named Purchase_orders. This file contains all orders made by different customers for different clients. The clerk also creates a file for the customers where the details for all the customers are stored. ii) Billing: Once the clerk files the purchase order, he confirms availability of products from the inventory file maintained by the inventory clerk and issues a confirmation to the client. At this point the customer is given an invoice of products in the purchase order. A copy of the invoice is stored in the invoices file. This file has all the invoices stored in the company. iii) Payment: Once the customer is issued with the invoice by the purchasing department clerk, he then can make payments for the ordered products to the accounts clerk. Payment is made by cash or by bankers cheque. The customer is then issued with a receipt of payment. iv) Dispatch of orders: In case of orders made by mail that require delivery, the purchasing department clerk makes arrangement to dispatch the orders. Orders are delivered through road transport as mentioned earlier. In this case the products are delivered together with a receipt of payment and a delivery note. In summary, the files involved in this cycle include; customer file, purchase orders, inventory file and invoice file. The cycle generates a series of documents from each of the mentioned processes. These documents are moved from one point to another throughout the cycle. The following document flowchart illustrates the flow of documents in the cycle. 5.0 Database and file structure The documents depicted in the flow chart are stored in files that are collectively maintained in a database. The documents are generated from data and information that are stored in these files. Microsoft Access 2010 is used to create the database for Garden Nursery Company. The basic unit for a file in Ms Access is the fields and records that will form the table which acts as a file for the database. As mentioned above there are basically four files which can be translated to tables namely: Customer, Purchase orders, inventory and invoice. This section provides an explanation of all the files in the database, their fields and the relationship with one another. 1) Customer file. The customer file stores all the records and information of all the customers. The table is generated by the purchase clerk based on the information provided by the customer while making a purchase order. This file contains the customer details and information organised in the following fields: The Customer Id is the primary key to the table and uniquely identifies each record in the database file. Here is a snapshot of the database details as created in Ms Access. 2) Inventory The inventory table contains the products details in the company. The products are defined by the inventory clerk and assigned a unique product code that is used to identify the product. Some of the fields in this table include: The Product No is the primary key to the Table. It uniquely identifies the records that are entered into this table. The screenshot for the table in the database. 3) Purchase Orders The purchase order file is used to store all the records and data on orders made by different customers. The file entails the following fields: The screen shot with few records stored in the file; 4) Invoice This file stores all the invoices that are sent to the customer and retained in the accounts office for payment purposes. The invoice table in the database will therefore have the following fields: In this table, the invoice No acts as the primary key and uniquely identifies each record or invoice in the database. The following snapshot shows the table and few of the records as created in access. All other files are linked to this file through composite and foreign keys that creates the link. For instance, the Customer_No field links to the customer table while the Order_no links to the purchase order file. No record can be kept in this table that does not exist in the customer and purchase order tables. In addition to the tables and queries generated in the database, reports of transactions can also be generated. These reports are ideal for easy reporting and presentation of data and information in the database. References Hall, James. 2004. Accounting Information Systems. 4th ed. Mason, OH: South-Western Cengage Learning. Roger, Chiang, Siau Keng, and Hardgrave Bill. Systems Analysis and Design: Techniques, Methodologies, Approaches, and Architectures. M.E. Sharpe, 2009. Read More