10e Appendix 10 - ROMNMC10_0131475916.QXD 2/3/05 8:04 PM...

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Shipping 399 Appendix AOE’s Legacy Revenue Cycle System AOE’s legacy revenue cycle system was characterized by distinct subsystems to sup- port each of the four basic revenue cycle activities. Sales Order Entry Figure 10A-1 (see next page) depicts a typical batch-oriented sales order entry process such as the one formerly used at AOE. As they completed calls, sales representatives wrote up orders on preprinted forms. These forms were faxed nightly to the sales order department, where they were assembled in batches of approximately 50 transactions for data entry. Before proceeding with data entry, batch totals (a record count and a hash total of quantities ordered) were manually calculated for each group of 50 trans- actions. Sales order clerks then entered only the following items for each transaction: customer account number, salesperson number, product numbers and quantities, and requested delivery date. The customer number was used to access the appropriate record in the customer file. The system then retrieved the customer’s name and address to complete the sales order. Similarly, the product number was used to access the appropriate record in the inventory file and to retrieve the item description and price. At this point, a number of edit checks were performed to ensure input accuracy. Transaction records that passed these edit tests represent accurate and valid sales orders. Those that failed one or more tests were listed in an error and exception report for investigation and correction. As the orders were entered, the system also automatically calculated batch totals. After processing, these system-generated batch totals were compared with those calcu- lated manually to ensure that all transactions were entered. Any discrepancies were investigated and corrected. The use of small batches facilitated identifying error sources. The batches of valid sales orders were then merged into one large transaction file to process the orders and update the various master files. The system first calculated the sales amount and compared it with the customer’s available credit (credit limit less any outstanding unpaid purchases). Orders that failed this credit check were printed on a credit rejections report. The credit manager evaluated this report and determined whether to increase the customer’s credit limit or reject the order. Accepted orders were reentered with the next batch of orders. Customers who were denied credit were notified that their order must be prepaid (these last two steps are not shown in Figure 10A-1). Next, the system checked availability of inventory to fill accepted orders. If inventory was available, the customer’s available credit balance was reduced for the amount of the sale and the quantity-available field in the inventory file was reduced for the amount of the order. Otherwise, a back-order record was generated for the needed items. Finally, the sales order, packing slip, and picking tickets were created.
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10e Appendix 10 - ROMNMC10_0131475916.QXD 2/3/05 8:04 PM...

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