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FlowchartDefinition-graphical representation of a business process, including information processes (inputs, data processing, data storage, and outputs), as well as the related operations processes (people, equipment, organization, and work activities)Understanding the flow of transactionsIdentify where controls have been implementedIdentify where gaps in controls may existsDefining or improving controls to close any gapsSymbols-Match description of diagram with the diagramException routine (error routine)- handle required actions for out-of-the-ordinary (exceptional) or erroneous events data, processing performed in other-than-normal situations should be documented below the level 0 with reject stubs that indicate that exceptional processing must be performedData Flow Diagrams: portray business process activities, stores data, flows of data among those elements3 typescontext: top-level, or least detailed, diagram of a system depicting the system and all its activities as a single bubble and showing the data flows into and out of the system and into and out of the external entitieshighest levelone internal entity (entity within the system that transforms data such as accounting clerks, departments, and computers) circlesseveral external entities (entities outside the system that send data to, or receive data from, the system) squaresphysical: graphical representation of a system showing the system’s internal and external entities, and the flows of data into and out of these entitiesspecifies where, how, and by whomsame external entities as contextmore internal entities than contextlabeled with titles of positions or computerdepicts system’s infrastructurelogical: graphical representation of a system showing the system’s processes (as bubbles), data stores, and the flows of data into and out of the processes and data storesspecifies whatsame external entities as contextmore internal entities than contextmany levels possible (not necessary)labeled with what’s being doneportrays system’s activitiesbalanced diagramdefinition: DFDs are balanced when the external data flows of two or more DFDs are equivalent, same external entities and data flowsidentify if diagram is balanced or nottop-down partitioningthe successive subdividing, or “exploding” of logical DFDs that, when performed, leads to a set of balanced DFDsOrder entry/sales processFirst 4 steps in order-to-cash processConsists ofPresales activitiesSales order processingPicking and packing goodsShippingCustomer acknowledgement- notifies the customer of the order’s acceptance and the expected shipment datePicking ticket- authorizes the warehouse to “pick” the goods from the shelf and send them to shipping, identifies the goods to be picked and usually indicates the warehouse locationBill of lading-contract between the shipper and the carrier in which the carrier agrees to transport the goods to the shipper’s customerPacking slip- sent with the package to identify the customer, destination, and contentsTickler file- (review file of open sales orders) to detect any shipments that should have taken place, this will ensure that all shipments are made in a timely mannerTrigger-data flow or event that causes a process to beginPreformatted screens is directed primarily at ensuring input accuracyDigital image processing systems are capable of capture, storage, retrieval and presentation of pictures and documentsBar code readers- devices that use light reflection to read differences in bar code patterns in order to identify a labeled itemValid shipping notice input is support by an approved sales order and an actual shipment of goodsCustomer order input validity comes from a valid shipping notice/customer master data?Most important asset to any company is a happy customerLogical level 0 DFDBe familiar with the bubbles and the data flowsB/AR/CR processCompletes the order to cash processConsists of:Billing customersManaging customer accountsSecuring paymentReview Logical Level 0 DFDBe familiar with the bubbles and the data flowsKnow the Treasurer’s goal:Make funds available to acquire assets, make investments, or reduce interest chargesReduce float and hasten the availability of good fundsTriggers of the process:Billing-shipping notificationCash receipts-check and remittance adviceLapping:Fraud by which funds being paid by one customer are stolen, and the theft is covered up by applying funds from another customer to the first customer’s accountRotation of duties and forced vacations help prevent this type of fraudImmediately endorse incoming checks:To protect payments from being fraudulently misappropriated, thereby securing the cash assetChecks should be restrictively endorsed as soon as possible following their receipt in the organizationTwo types of accounts receivable systems:Balance-forwardAR records show a customer’s balance-current, past-due, and current account activity, including current charges, finance charges for past-due balances, and paymentsMonthly statements display previous balance, payments, and balance forward, to which is new charges added to get the current balance dueUnpaid current balances are rolled into the past-due balancesOpen-itemAppropriate where invoices are prepared and sent for each salesIn the AR master data, each record consists of individual open invoices, to which payments and adjustments are appliedPeriodic statements list invoices and payment detailsMonthly, or at specified times, customer accounts are aged and an aging schedule is printedTwo types of billing systemsPre-billing systemInvoice prepared upon acceptance of customer order (after inventory and credit checks)Little or no delay between receiving order and shippingPost-billing systemInvoices are prepared after goods are shipped and shipping notice compared to sales order noticeMay be delay between receiving the order and shippingLockbox- payments are send directly to a third-party lockbox service for more secure, timely, efficient and accurate processing (a bank)Float- time between payment by the customer and the availability of good fundsGood funds- funds on deposit and available for useElectronic bill presentment- B2C systems that use a Web site to post customers’ bills and to receive their electronic paymentsBiller direct method- company posts its bills/invoices to its own Web site, or Web site hosted by third partyConsolidation/aggregation method- bills are posted to Web site hosted by billing company’s own


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UMD BMGT 326 - Exam 3

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