Business Processes

Question 1

What are the business process modeling tools?

Answer 1

• Data flow diagram- documents logical flow of data through a process
• Flowcharts- visual representation of logical flow through a process and provides insights
• System interface diagrams- demonstrates how users and functions interface with the org’s systems (no physical flow)
• Process narratives- written docs that tell the story of the process

Question 2

Define the revenue business process

Answer 2

• made up of recurring business activities surrounding the sale and delivery of goods/services including the collection of payments from customers
• involves managing customer accounts and relationships and exchanging info through invoices and payments

Question 3

What are the 4 revenue process activities?

Answer 3

1. sales order receipt and entry
2. delivery of goods or services
3. customer billing
4. payment collections

Question 4

What are the key documents involved in the revenue process?

Answer 4

• Sales order- lists details of the customer order like the items/services ordered, quantity, prices, delivery terms.
• Pick ticket- a list provided to the warehouse or inventory function detailing the items and quantities to be picked and packaged to be sent to the shipping department
• Packing slip- details the items and their quantities and is included in the shipment for verification
• Bill of lading- accompanies a shipment that provides a contract concerning the allocation of responsibilities between seller, carrier and customer
• Sales invoice- acknowledges receipt of payment
• Remittance advice- notice of payment sent by the customer to the selling org

Question 5

Define the expenditure business process

Answer 5

• recurring business activities surrounding the purchase and subsequent payment for goods and services
• complements the revenue cycle, as it is the customer side of the revenue process
• involves placing orders, receiving and paying for goods and services, maintaining supplier records

Question 6

What are the 4 expenditure process activities?

Answer 6

1. placing an order for goods/services
2. goods are delivered and/or services rendered
3. receipt and approval of billing by performing a 3 way match with the PO, receiving report and vendor invoice
4. bill payment

Question 7

What are the key documents involved in the expenditure process?

Answer 7

• Purchase requisition- a request generated by an individual that goods/services be purchased by purchaser
• Purchase order- document sent by the buyer to the seller indicating the goods or services desired, the quantities and timing needs and the agreed-upon price
• Receiving report- indicates what goods/services were received, quantity received, timing of receipt and corresponding PO
• Supplier invoice- document sent to the org from the supplier detailing goods/services ordered along with the cost of the order and payment instructions
• Voucher- contains the PO, receiving report and supplier invoice to verify that the invoice matches what was ordered and received

Question 8

Define the human resources and payroll business processes

Answer 8

• made up of recurring business activities that manage the employees of an organization
• includes the life cycle of an employee at an org from hiring to firing/quitting

Question 9

What are the 7 human resources process activities?

Answer 9

1. Hiring employees
2. Onboaring and training
3. establishing a reporting structure
4. assigning employees to departments, functions and jobs
5. monitoring, reviewing and evaluating employee performance
6. responding to employee concerns
7. establishing and enforcing termination procedures

Question 10

What are the 5 payroll process activities?

Answer 10

1. est. compensation plans
2. assigning and updating compensation
3. activity reports
4. third party withholdings and rates
5. payroll disbursement

Question 11

What are the key documents involved in the payroll process?

Answer 11

• Time card- details the amount of time each hourly wage employee worked and should be compensated for
• Payroll register- details the breakdown of each employee’s gross pay, all employee’s deductions and their net pay
• Paycheck- digital or physical doc that authorizes payment from the org to the employee
• Earnings statement- accompanies the paycheck detailing the employee’s earnings and deductions for the current period and YTD totals

Question 12

Define the manufacturing business process

Answer 12

• made up of recurring business activities surrounding the design, development and production of goods
• determines whether raw materials can be effectively and efficiently transformed into FG
• directly linked to both the revenue and expenditure processes bc this process requires the purchase of goods to be transformed and sold

Question 13

What are the 5 manufacturing process activities?

Answer 13

1. Product design and engineering
2. Product development
3. Manufacturing forecasting and scheduling
4. Manufacturing ops
5. Manufacturing and fixed asset accounting and reporting

Question 14

What are the key documents involved in the manufacturing process?

Answer 14

• Bill of materials- specifies all of the components and quantities required to manufacture a product
• Production instructions- AKA “operations list”, explains in detail the specific steps and sequence of those steps needed to accurately manufacture a product
• Production schedule- details the allocation of resources and time needed to manufacture each product in a specified quantity during a provided time period
• Production order- a doc issued within a company to authorize the manufacture of a specified quantity of a given product during a provided time period

Question 15

Define the finance and reporting business process

Answer 15

• made up of recurring business activities surrounding the financial management of an organization, including the treasury function, the recording of transactions in the GL and the creation of FS

Question 16

What are the 3 finance and reporting process activities

Answer 16

1. Treasury function will manage the cash flow and financial activities of an organization
2. GL updates
3. FS and managerial report generation

Question 17

What are the key documents involved in the F&R process?

Answer 17

• General ledger- records all JEs that occur. A summary-level ledger that pulls info from account-specific subledgers
• Trial balance- lists all of an org’s accounts and their balances derived from the GL
• Bank statements- doc provided by financial institutions that demonstrates beginning and ending balances and all transactions for a given period
• FS- orgs must generate periodic FS incl. the TB from which an org can create the statement of financial position, I/S, CF statement and the statement of change in equity, all of which require notes and disclosures
• Management reports- these reports will vary but may include forecasts, budgets, and balanced scorecards

Question 18

Before a process can be documented, what must the person documenting it fully understand?

Answer 18

key personnel, the impacted documents and info, the process origination and the ultimate process disposition or reporting

Question 19

To gain an understanding of the process, the documenter will start by doing what?

Answer 19

conducting research on the process by reviewing policies and procedures, then conduct interviews/provide questionnaires to involved personnel and then observe walk-throughs of the process