Accounting Information Systems - Example

Accounting Information Systems. Number: Lecturer: 3.0 Revenue Cycle. The company deals in furniture products that are sold all over Australia. The revenue cycle therefore involves the selling of these furniture products in exchange for money. The cycle is initiated by the clients who come in person, send purchase orders via mail or email for specific furniture products. The revenue cycle is completed by several people who handle the processes in the cycle. They include i) Clients ii) Sales clerk iii) Accountant iv) Inventory clerk The client initiates the revenue cycle by issuing a purchase order in person or via mail to the sales clerk in the sales department. The sales clerk then confirms with the inventory clerk whether there ordered items are in stock. The inventory clerk issues a confirmation to the sales clerk who then prepares an invoice that is given to the customer. The client uses the invoice to make payments to the accounts clerk for the items in the purchase order. Once payment has been done, the client can collect the items or the items are delivered to them. The accounts clerk issues a receipt for the payments made by the client. The following section provides a detailed description of the processes, the data files and the document flow in the revenue cycle. 4.0 Revenue cycle Processes, Data files and data flow charts. The revenue cycle starts with the customer submitting a purchase order to the sales department. This initiates a series of processes that involve several files and produces documents that are used throughout the cycle. Some of the common processes in the cycle include: a) Purchase order processing. Once the client has submitted a purchase order that has all the items they need, the sales clerk processes the order by entering it into the system and confirming with the inventory clerk whether the items ordered are available. Once the inventory clerk confirms the availability of the products, the sales clerk begins the next process. b) Billing The sales clerk prepares an invoice that has all the details of the items ordered by the client. The invoice is then returned to the client who will then use it to make payments for the items. The invoice can also be sent through the email or by mail. c) Payment processing Once the client has made the payments according to the issued invoice, the accountant will receive the payment document which is a cheque, payment slip or cash. The accountant will then counter check with the invoice and issue a receipt for the payment. d) Dispatch The receipt of payment is taken to the sales clerk who will then prepare a dispatch or a delivery note that will be used as an authorization for dispatch of items from the inventory. The inventory clerk releases the purchased items according to the delivery or dispatch note. The company can deliver the items to the client or the client can collect the items from the company. Data files. The revenue cycle comprise of several files that are used to store data and information that are required for the completion of the cycle. The client file is used to store the details of the clients in the company. The purchases file stores all the purchase orders issued by the clients to the company. The two files are stored and maintained by the sales clerk in the sales department. Another important file is the items file, which contains all the details of items available for sale in the company. This is maintained and regularly updated by the inventory clerk. Finally the invoice file contains all the invoices and records of payments made by the client to the company. This is kept in the accounts department. Document Flow. The processes mentioned generate documents used by different people in the revenue cycle. The purchase order is issued by the client to the sales department where the sales clerk enters the information and processes the order. The sales clerk issues an invoice to the client after confirming with the inventory clerk of the availability of the items. A copy of the invoice is also sent to the accounts department. Once the client receives the invoice, they make payments to the accounts department where they are issued with a receipt of payment. A copy of the receipt is sent to the sales clerk for dispatch of items purchased by the client. Once the sales clerk receives the receipt, they prepare a dispatch note or a delivery note that will be used to get the items from the inventory. The items and the delivery note or dispatch is given to the client. The following document flowchart illustrates the document flow process in the revenue cycle. 5.0 MS Access Database. The database is created using the MS Access RDBMS. It contains four tables used to store various records used in the company. The details of the tables are described below: a) Client Table. The clients table contains the details of the clients in the company. These details are entered by the sales clerk as the client makes his/her purchase order. Some of the fields making up the table include: i) Client_Id ii) Client Name iii) Address iv) Location v) Mobile contact vi) email Address The Client_Id is the primary key to this table. It uniquely identifies each client in the table. The figure below shows the screen shot of the Clients table as created in MS Access. b) Products Table This table is basically an inventory table that stores all the details of all the products sold by the company. The Products table contains details such as: i) Product_No ii) Product Name iii) Price iv) Quantity The Product_No uniquely identifies each product in the database. c) Orders Table Orders made by the client are stored in the orders table. The orders table maintains all the details of orders made by clients to the sales department. The fields in the orders table include: i) Order_No ii) Client_Id iii) Client Name iv) Date v) Product_No vi) ProductName vii) Quantity The Order_No acts the primary key while the Client_id and Product_No act as foreign keys linking the table to other relevant tables in the database. d) Invoice Table The invoice table stores the list of all invoices submitted to the client and subsequently used for payment purposes by the client. The details in this table include: i) Inv_No ii) Date iii) Order_No iv) Product _No v) Product_Name vi) Client_Id vii) ClientName viii) Quantity ix) Price In this table the Inv_No is the primary key while the order_no, product_no,client_Id are the foreign keys linking the table to other tables in the database. The diagram below shows the details in the table as created in MS Access RDBMS. Reference Gelinas, Ulrich, and Richard Dull. 2009. Accounting Information Systems. 8th ed. Mason, OH: South Western Cengage Learning. Gelinas, Ulric, Richard Dull, and Patrick Wheeler. 2012. Accounting Information System. 9th ed. Mason, OH: South-Western Cengage Learning. Hall, James. 2012. Accounting Information Systems. 8th ed. Mason, OH: South Western Cengage Learning. Read More