CH 4 Accounting & Finance

CH 4 Accounting & Finance -...

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ERP Systems: Accounting and  Finance
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Accounting and Finance Processes At the operational level the purpose of Accounting systems is to produce transactions, such as paychecks, checks to vendors, customer invoices, and purchases orders. At the conceptual level, an accounting system supports operational and management control functions.
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Accounting Processes Accounting processes are following: - Operational processes produce daily transaction on a periodic basis. It includes general ledger, fixed assets, sales order, accounts receivable, accounts payable, inventory control, purchase order, payroll. Management control processes , such as budgeting and cash management, support decisions on how to allocate resources to maximize profitability and to cut costs.
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Accounting and Finance Processes Accounting processes involves following steps: - First of all a sales order is entered, which generates an inventory update to the inventory system. This triggers the purchase of additional stock when stock level reaches certain points. The purchase order system creates purchase orders and tracks which purchase orders have been filled, which items are on back order, and when orders are expected to be received.
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Accounting and Finance Processes Sales order generates invoice to the customer from Accounts Receivable System, thus updating accounts receivable balance. The Accounts Receivable System generates Aging Report that shows account balances, which are overdue. Payments to suppliers are made through Accounts Payable System
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Accounting: Problems without ERP Subsystems Problems Credit  management Accounts  receivable  balances  on  customer  accounts can fall out of date and result in mis- information  in  sales  about  customer  credit  limits.
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