Business Processes

Question 1

What are the 5 Specific Business Processes?

Answer 1

• Sales/Revenue Cycle
• Purchase/Expenditure Cycle
• Resource Cycle
• Production Cycle
• Financing Cycle

Question 2

What is Sales/Revenue Cycle?

Answer 2

Process begins with customer order and ends with the collection of cash. Primary objectives are to process sales and collect cash timely & efficiently.

Question 3

What are the Objectives & Activities of Sales/Revenue Cycle?

Answer 3

Sales Order Entry,
* Respond to customer inquiries, check & approve customer credit, check inventory available. Electronic Data Interchange (EDI).
Shipping,
* Determine delivery method & issue goods.
Cash Collection,
* Electronic Funds Transfer (EFT). Financial Electronic Data Interchange (FEDI)
Billing,
* Invoice customers and maintain customer accounts. EDI.

Question 4

What is the Purchase/Expenditure Cycle?

Answer 4

Begins with request for goods/services and ends with payment of cash. Primary objectives are to purchase high quality goods at best price and pay vendors at optimal time.

Question 5

What are the Activities within the Purchase/Expenditure Cycle?

Answer 5

• Purchase request (what to order)
• Order goods (who from?)
• Receive goods (accept delivery, verify quantity and quality)
• Pay
• Approve Payment.

Question 6

What is the Production Process?

Answer 6

Begins with use of raw materials and ends with transfer of finished goods to warehouse. Primary objectives are to convert raw materials to finished goods efficiently and collect/report information.

Question 7

What are the Activities Within the Production Process?

Answer 7

• Track purchases
• Control inventory
• Coordinate production process
• Monitor manufacturing costs
• Provide inputs for budgets.

Question 8

What is the 2 Processes in the Resource Cycle?

Answer 8

Human Resource Management Process
Fixed Asset Management Process

Question 9

What are the Activities in the Human Resource Management Process?

Answer 9

• Hire
• Training
• Assigning
• Compensating (method of payment)
• Evaluating (reward performance, identify training needs)
• Terminating.

Question 10

What is Fixed Asset Management Process?

Answer 10

Long-term Assets. Concerned with tracking purchase, maintenance, depreciation, valuation, and disposal.

Question 11

What is the Finance Process?

Answer 11

How Company acquires and uses financial resources. Sales of goods/services via (borrowed) cash, liquid assets, investment, or selling ownership shares. Minimise cost of capital & maximise ROI.
Effective book management, cost of capital optimisation, earn max return of investments, project cash flows.