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Mail Room
Place where customers
payments and remittance
advices arrived.
It is where envelopes are
opened.

Cash Receipts
(fg. 4-14)

Accounts
Receivable
The AR department uses the remittance
advices to reduce the customers
account balances consistent with the
amount paid.
The AR Clerk prepares a summary of
changes in account balances, which is
sent to the general ledger department.

General Ledger
Department
Upon receipt of the journal voucher and
account summary from cash receipts and
AR, respectively, the general ledger clerk
reconciles the information and posts to
the control accounts.

Controllers Office
Someone from the controllers office
periodically performs a bank
reconciliation by comparing deposit
slips returned from the bank,
account summaries used to post to
the accounts, and journal vouchers.

Concluding
Remarks

First, notice how manual systems

generate a great deal of hard-copy
(paper) documents. Physical
documents need to be purchased,
prepared, transported, and stored.
Hence, these documents and their
associated tasks add considerably
to the cost of system operation.

Concluding
Remarks

Second, for purposes of internal

control, many functions such as the
billing, AR, inventory control, cash
receipts, and the general ledger are
located in physically separate
departments. These are laborintensive and thus error-prone
activities that add greatly to the
cost of system operation.

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Automation
Involves using technology to improve
the efficiency and effectiveness of a
task.
Automated System simply replicates
the traditional (manual) system.

Reengineering
Involves radically rethinking the
business process and the work flow.
OBJECTIVE: Improve operational
performance and reduce costs by
identifying and eliminating non-value
added tasks.

Point-of-Sale
Systems

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3 Key Fields
Sales Order Number
Account Number
Inventory Number

Sales Order
Number

Primary Key (PK) because it is the only field that

uniquely identifies that uniquely identifies each
record in the file.
This is the preprinted number on the physical
source document that is transcribed during the
keystroke operation.
Is critical in preserving the audit trail.
Provides link between digital records stored on a
computer disk and the physical source documents.

Account Number,
Inventory Number
Both secondary keys (SK) as neither
of these keys uniquely identifies
sales order records.
The values for these keys are not
unique.
Their purpose is to locate the
corresponding records in the AR
subsidiary and inventory master
files.

Batch Sales Order

System
(fg. 4-16)

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Credit Department
Approval
When credit is approved, the sales
department releases copies of the sales
order to the billing, warehouse, and
shipping departments.
The customer order and credit approval
are then placed in the open order file.

Warehouse
Procedures

Warehouse clerk receives the stock

release copy of the sales order and
uses this to pick the goods.
The inventory and stock release are
then sent to the shipping
department.

De

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Keystroke
The keystroke clerk converts
the hard-copy shipping notices
to digital form to produce a
transaction file of sales orders.

Edit Run
It first validates all transaction
records in the batch by performing
clerical and logical tests on the
data.
Field checks , limit tests, range
tests, price-times-quantity
extensions.

Update
Procedures
(fg. 4-17)

Sales Order Transaction

Inventory Master File
Accounts Receivable Master
File