gelinas-dull 8e chapter 10 revised september 2009
TRANSCRIPT
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Chapter 10The Order Entry/Sales
(OE/S)Process
Accounting Infor ation Syste s !e"lric #$ %elinas and &ichard 'ull
010 Cengage *earning$ All &ights &eser+ed$ ,ay not -e copied. scanned. or duplicated.in hole or in part. e cept for use as per itted in a license distri-uted ith a certain product
or ser+ice or other ise on a pass ord protected e-site for classroo use
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*earning O-2ecti+es• Describe the relationship between the OE/S process and its
business environment.
• Illustrate the potential of the OE/S process to assist managementdecision making.
• Summarize how E ! add"ons# e"business# and other technologiescan improve the effectiveness and efficienc$ of the OE/S process.
• Depict the t$pical logical and ph$sical characteristics of the OE/Sprocess.
• !repare a control matri% for some t$pical OE/S processes#including e%planations of how business process control plans canaccomplish OE/S operations and information process controlgoals.
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Introduction• &he order entr$/sales 'OE/S( process
includes the first four steps in the order"to"cash process
). pre"sales activities*. sales order processing+. picking and packing the goods,. shipping
• -illing and processing the customerpa$ment# are described in hapter ))# thebilling/accounts receivable/cash receipts'-/ / ( process.
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Process 'efinition and
3unctions• &he primar$ function of the OE/S
process is to create information flowsthat support the following0
1 epetitive work routines of the sales orderdepartment# the credit department# and
the shipping department. 1 Decision needs of those who manage
various sales and marketing functions.
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4ori5ontal 6ie OE/S
). ustomer
placesorder.
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4ori5ontal 6ie OE/S
*. Sales orderdepartmentre2uests
creditapprovalfrom creditdepartment.
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4ori5ontal 6ie OE/S
+. reditdepartmentinformssales orderdepartmentofdispositionof creditre2uest.
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4ori5ontal 6ie OE/S,. Sales order
departmentacknowledgesorder to thecustomer ',a(#
and notifies thewarehouse',b(# shipping',c( and-/ /
process ',d( ofthe sales order.
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4ori5ontal 6ie OE/S
3. 4arehousesends
completedpickingticket toshipping.
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4ori5ontal 6ie OE/S 5. Shipping
departmentinformscarrier '5a(#-/ /
process '5b(#the generalledgerprocess '5c(#and the sales
orderdepartment'5d( of theshipment.
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6ertical Perspecti+e of the OE/SSyste
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,anage ent 7uestions• 4here is sales volume '2uantit$ and dollars(
concentrated6
• 4ho are the specific ma7or customers 'b$ salesand b$ profitabilit$(# both present and potential6
• 4hat opportunities e%ist to sell after"salesservices8 to cross sell and to up"sell6
• 4hat kinds of advertising and promotions havethe greatest influence on customers6
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"sing 'ata ,ining to Support
,ar8eting• Intended to allow the use of sophisticated
statistical and other anal$tical software to
help an organization9s members developinsights about customers# processes# andmarkets.
• Data warehousing and data mining havebecome common application to increasethe effectiveness of pricing and promotions.
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%lo-al e -usiness• E"business s$stems are divided into two categories0
1 -u$ Side• S$stems use the Internet to automate and manage
corporate vendors and purchases.• &he predominant technolog$ in this area is electronic data
interchange ' EDI (. 1 Sell Side
• S$stems are designed to allow a compan$ to market# sell#deliver# and service goods and services to customersthroughout the world via the Internet.
• pplications can handle both -*- and -* businesstransactions.
• One facet is known as customer relationship management(CRM) applications.
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C&, Syste s• Designed to manage all data related to customers.
1 :ocus of E ! vendors who realize the need to tap intothis market and to integrate ; data with the other dataalread$ residing within the E ! s$stem9s database.
• Software supports the organizing and retrieving ofinformation on historical sales activities and promotionsplanning. 1 :acilitates matching sales promotions with customers9
bu$ing trends.
1 -uzzword is
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The OE/S Process 9Conte t 'iagra
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OE/SProcess
*e+el 0'iagra
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TheOE/S
Process 9
'iagra1:
6alidateSalesOrder
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'iagra 1: 6alidate Sales Order • ).) " 6erify in+entory a+aila-ility
1 &riggered b$ a customer order.
1 In2uir$ of inventor$ master file to check inventor$ availabilit$.
1 < vailable to promise ' &!(= can be complicated.
1 :acilitated b$ an enterprise system that can look worldwide and upand down the suppl$ chain to determine when goods can bedelivered.
1 If inventor$ is on hand# the order is forwarded for further processing#as depicted b$ the data flow
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'iagra 1: 6alidate Sales Order
• ).* " Chec8 credit 1 !rocess ).* establishes the customer9s e%istence and then
approves credit.
1 4ith an enterprise system one record should e%ist for each
customer# wherever located and from whatever parts of theorganization he or she makes purchases.
• &his allows an organization to readil$ determine the amountof credit available to a customer worldwide.
• 4ithout a central database a customer could incur multiplereceivable balances that in total e%ceed their credit limit.
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'iagra 1: 6alidate Sales Order
• 1$; Co plete sales order 1 !rocess ).+ receives an accepted order from !rocess ).*.
• Order is completed b$ adding price information.
• ould be a complicated calculation based on who andwhere the customer is and if the item is to be discounted.
1 >e%t !rocess ).+ performs the following activitiessimultaneousl$0
• ?pdates the inventor$ master data to allocate the 2uantit$ordered to the sales order.
• ?pdates the sales order master data to indicate that acompleted sales order has been created.
• Disseminates the sales order.
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'iagra 1 'isse ination 'ata3lo s: 6alidate Sales Order
• pic8ing tic8et authorizes the warehouse to
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SAP Sales Order In
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The OE/S Process='iagra :
Co plete Pic8ing Tic8et
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The OE/S Process='iagra ;:
E ecute Shipping >otice
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The OE/S Process='iagra ;'isse ination of 'ata 3lo s:
E ecute Shipping >otice• Shipping?s -illing notification " notifies billing to begin the billing
process.
• @ill of lading " contract between the shipper and the carrier in whichthe carrier agrees to transport the goods to the shipper9s customer. 1 &he carrier9s signature on the bill of lading# and/or the customer9s
signature on some other form of receipt# substantiates the shipment.
• ! ac8ing slip " attached to the outside of a package8 identifies the
customer and package contents.• %eneral ledger in+entory sales update " notifies the general ledger
process that inventor$ has been sold and that cost of goods sold hasincreased.
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OE/S 'ata Stores
• ;arketing data
• ustomer master data
• Sales order master data
• master data
• Inventor$ master data
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Entity&elationship(E &) 'iagrafor the OE/S
Process
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OE/S Process &elational Ta-les
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Auto ated 'ata Entry
• @ar code readers are devices that use lightreflection to read differences in bar codepatterns in order to identif$ a labeled item.
• Optical character recognition (OC&) issimilar to bar code readers work# but recognizea pattern of handwritten or printed characters.
• Scanners are input devices that captureprinted images or documents and convert theminto electronic digital signals that can be storedon computer media.
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'igital I age Processing• omputer"based s$stems for capture# storage# retrieval# and
presentation of images of real or simulated ob7ects.• ;a7or steps in a t$pical digital image processing s$stem0
1 Scanners are generall$ used to capture images or documents. 1 etrieve the image of a source document which ma$ be printed.
1 fter input# additional processing ma$ take place.• dditional data related to the document might be added# or
someone might act on data contained in the document.• etrieval and processing capabilities ma$ be incorporated
into e%isting applications.• @inking these images in an enterprise system makes
accessibilit$ easier. Information can readil$ be distributedthroughout the organization to where it is needed.
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The OE/S Process 3lo chart
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The OE/S Process 3lo chart• Starts with customer calls received in the
customer service center.
• ustomer service representatives ' S ( ma$perform a number of services for a customerincluding0 1 hecking the availabilit$ of inventor$
1 Determining the status of open orders
1 Initiating orders
1 onfirming orders
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The OE/S Process 3lo chart• S enters a sales order and sees a screen like the S ! screen in :igure )A.5 'Slide *A(.
• S$stem prompts the S to enter the customer number.
• If the customer number is not found# s$stem re7ects the order and the event recording isterminated.
• If the customer number is valid# s$stem retrieves standing data from the customer master
data such as customer name# address and credit terms.
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The OE/S Process 3lo chart• S enters the other data in the sales order 'i.e.
items and 2uantities ordered(# guided b$ the cursor#moving to each new position in the preformattedscreen. 1 S$stem automaticall$ displa$s the description and price for
each item ordered.
• If the total amount of the current order# an$ openorders# and the outstanding receivable balancee%ceeds the customer9s credit limit# the S iswarned# the order is suspended# and creditre7ection procedures are initiated.
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The OE/S Process 3lo chart• If the total amount is within the customer9s creditrange# the processing continues.
• If the balance shown on the inventor$ data is less thanthe 2uantit$ ordered# back order procedures areinitiated.
• &he computer updates the sales order and inventor$master data and gives the S a sales order numberthat is rela$ed to the customer.
• Simultaneousl$# a picking ticket# containing a bar codeof the sales order number# is printed in the warehouse.
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The OE/S Process 3lo chart
• s each item is picked# warehousepersonnel insert the picked 2uantities onthe picking ticket.
• 4hen all the goods have been picked#the$ compare the goods to the pickingticket# initial the ticket# and move thegoods and completed picking ticket tothe shipping department.
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The OE/S Process 3lo chart
• Shipping personnel scan the barcode on the picking ticket to bringthe sales order up on their computerscreen.
• fter confirmation that the order and2uantities are correct# the option torecord the shipment is selected.
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The OE/S Process 3lo chart
• omputer updates the sales order# inventor$#and general ledger master data to reflect theshipment and to print a packing slip and bill oflading.
• Boods are packed# with the packing slipinside# the shipping label 'bill of lading( isattached to the bo%# and the bo% is given to
the carrier for deliver$.• &he completed picking ticket is discarded.
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The OE/S Process 3lo chart
• Error routines would be initiated if0 1 customer record did not e%ist
1 customer9s credit limit was not sufficient 1 goods were not available in the correct
2uantit$
1 goods to be shipped did not match thepicking ticket and the sales order
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Sa ple SAP Sales Analysis
&eport
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Control ,atri for OE/S
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Control ,atri for OE/S (Cont?d)$