Question

Elite publishing Company has established Business Book Club, Inc. (BBC) a subsidiary that operates as follows:

BBC’s editors select from among recently published business books those they believe will be most interesting to business people. BBC will purchase these books in large quantities at approximately 40% of list price and then sell them to their club members at approximately 75% of the list price. Both direct mail and advertisements in selected publication are used to solicit new customers. The advertisements offer an introductory membership bonus whereby new members who purchase one book will receive four free titles. Each month, club members receive a list of new selections and a book order form. For every four books purchase, members earn one free book. You have been called upon to design a computerized billing and book inventory system for BBC. The advertising manager want to know which advertising media are most effective, the credit manager wants to know which accounts are more than 90 days past due, and the editors want to know which books are best-sellers for the club.

Required:

• Identify the input transactions that this system must process and the output documents and reports that the system should b designed to produce.

• Describe how information technology (IT) can be used to maximize efficiency of sales order entry, shipping, billing, and cash collections.

• Describe the control procedures that should be included in this system.

Answer 1

Requirement 1

The input transaction process in which date indicate the date that you really assimilated the benefit as well as the accounting date indicate the date that you start expensing reduction. The accounting date is confirm against the release periods for customer Asset administration that are stored in the FIN_OPEN_PERIOD chart to decide the time to which it is expenditure. The peculiarity among the transaction date as well as the accounting date settle on whether some prior period reduction needs to be considered transaction as well as fragment of financial details in your business books Elite publishing company file. Other than you have improved things to do than enter annually’ value of checks, account, as well as deposits, so the inclusive approach is sensible only if you immediately newly started your sales in the company.

For the output documents and reports that the system should be planned to produce. First, you require knowing your profits as well as expense accounts’ completely. To get that information, create a profits statement from your previous accounting arrangement. To documentation those time-to-date income as well as expense numbers generates a journal entry. Enter in the Date field with the previous day of the past period, like as 8/26/20 to record financial outcome for the primary half of the datebook year. In the periodical entry chart, add a line for every income as well as expense account. Fill the values for profits financial credits in the Credit column, as well as values for cost accounts in the withdrawal column.

Requirement 2

By using the information technology we used to maximize productivity of sales order entry, shipping, billing, and cash collections. In taking client orders, order information are arriving on a sales order paper which may be finished as well as received in the company store, by using the information technology mail, on a website. The sales order specifies item figures of ordered, also the quantities, cost, as well as salesperson. To decrease person error, clients should fill data themselves using the information technology as much as possible.   Information technology can get better proficiency as well as effectiveness by routing online orders unswervingly to the store for picking as well as shipping. By using sales record in the use of information technology to modify solicitations, gift selection boards to modify orders using electronic information exchange to connection a corporation directly with its clients or supervise the customer’s record using email as well as immediate messaging to inform sales staff of cost changes in addition to raises with equipping deal staff with personal computers as well as handheld approach to give presentations, cost, marketing as well as technical information, etc.  A main shipping choice is the Logistical software device can assist identify most favorable locations to reduce amount of record carried, meet clients’ requirements, and optimize.

Billing is information technology processing movements that repackages as well as recapitulate information from the sales regulate entry as well as shipping activities. Need details from the Shipping section on items as well as quantities shipped along with from Sales on prices plus extra sales terms. By information technology like use email etc may be sending as well as received in computerized form. Included AIS may also combine the billing procedure with sales as well as marketing by using information about a client’s past buys to send details about related orders as well as services with the journal statement.

Possible method of information technology to collecting cash contain turnaround papers that are send to financial credits receivable by using software lockboxes, by using information technology electronic finances transfer as well as electronic bill payment.

Requirement 3

The control procedures that should be included in this system are like

Require credit approval prior to shipment. You will have difficulties collecting financial credits expected if a charge is shipped to a client with a terrible credit rating. Therefore, need the signed support of the credit section on all sales orders over a definite dollar amount.

Verify contract terms. If there are extraordinary payment terms, confirm them before producing an invoice. Or else, accounts expected will hold invoices that clients refuse to pay.

Evidence read invoices. If an invoice for a huge-dollar quantity contains a fault, the client may hold up payment awaiting you forward a modify invoice. Think about needed the evidence reading of big invoices to lessen this difficulty.

Restrict access to the billing software. As immediately noted somebody could interrupt incoming payments from clients as well as hide the stealing with a credit memo. Then you should code word-protect entrée to the billing software to stop the illegal production of credit memos.