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By Hollander, Denna, Cherrington

PowerPoint slides by:Bruce W. MacLean,

Faculty of Management,

Dalhousie University

Accounting, Information Technology,

and Business Solutions, 2nd Edition

Irwin/McGraw-Hill The McGraw-HillCompanies, Inc., 2000

Chapter 8

Other Business Processes

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The McGraw-HillCompanies, Inc., 2000Irwin/McGraw-Hill

Chapter Objectives

Identify the characteristics of otherbusiness processes and related IT

applications.

Identify the weaknesses of the

traditional processes and their IT

application architecture.

Develop REAL models of the various

business processes. Identify opportunities to improve the

business processes.

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1

3

n

2

Job timetickets

CostAccounting

Post to

job ordercost

sheets

3

Bank

Imprestpayroll

account

Deposit checkin imprestfund

Employees

Paycheck

6

1

3

n

2

IndividualChecks

Cashier/CashDisbursement

Sign check &deposit inimprest

fund

6

Prepareemployee

pay checks

1

3

n

2

Job timetickets

Factory

SupervisorReviews

2

2

1

3

n

2

Job timetickets

1

3

n

2

Timecards

Timekeeping

Reconcile& approve

timecards

1

3

n

2

Job timetickets

1

3

n

2

Time

cards

34

1

3

n

2

Approvedtime cards

Payroll

Verify pay

rates &deductions

PayrollRegister

4

1

5

AccountsPayable

PayrollRegister

Prepare cashdisbursementdocuments

Payroll registerpay voucher,check

5

Process

Personnel

1

Authorize Rateand Deductions

EmployeeRecords

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Human Resource Business Process

Strategy & Objectives To provide the human labor and expertise that an

organization needs to function efficiently and

effectively.

Traditional Manual Payroll Process

Uses an extensive amount of paper to capture,

convey, store and report information.

Traditional Computerized Payroll Process Collection of personal and payroll data entered

into an employee payroll master file.

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FromTimekeeping

Performed by a

payroll clerk

Attendance time cards

Prepare batch

total

Attendance time cardsPerformed in the Data

Processing Department

Time data

Run 1 - Sort by employee number

Batch

total

Key-to-disk &

edit

Exemption and

summary report

Sorted time data

Run 2 - Update employee file

& prepare paychecks

Exemption and

summary report

Traditional Automated PayrollProcess Flowchart

Payroll action

records

Access employee records

& make changes

Employee payroll master file

Enter change data

Personnel

Department

Performed by

personnel clerks assoon as changes are

approved

A

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To general ledger

procedureTo cashier

Paychecks

To Payroll

Department

Run 2 - Update

employee file &

prepare paychecks

Payment

register

Employee

payroll master

file

General Ledger

transaction file

Exemption and

summary report

Traditional Automated PayrollProcess Flowchart

A

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7/21The McGraw-HillCompanies, Inc., 2000Irwin/McGraw-Hill

Information Needs in the HumanResource Business Process

Approve headcount In many organizations approved headcount is a key tool for

controlling labor cost.

For example, a supervisor wishing to increase headcount

must prepare the necessary paperwork to identify and justifythe need for a new position.

There is an extensive review process

that requires the division manager, area

controller, and executive vice presidentto approve the request.

Only when all these approvals are obtained

can the position be opened for hiring.

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Hire employees Organizations continue to need professional, support staff, and technical

personnel in todays competitive, advanced business environment.

Individuals agree to work in exchange for wages, benefits, and other

rewards.

Hiring is the process of matching the skills and interests of people with

the needs of the organization.

Important in the hiring process is an accurate description of the

organizations needs. Not only must accurate

projections be made of the number of individuals

needed, but also organizations must develop job

descriptions and skill requirements associated

with each job position. Those responsible for

hiring use the job descriptions and skill requirements

as a basis for selecting new hires.

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Training Training requires:

an understanding of the current knowledge and skills of the people to

be trained,

identifying the desired skills and knowledge, and a program toprovide what is currently lacking.

Maintaining a record of each employees training can provide

important information in assigning employees to new jobs.

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Assigning Part of managements responsibility is to organize and direct

the work of employees.

Organizing involves identifying the activities to be performed,

structuring the activities into jobs, and positioning the jobsinto departments, project teams, or divisions.

Competent individuals who have the skills, abilities, and

training necessary to perform them must fill jobs.

To effectively assign people to jobs, management mustreceive information on the operating events that must be

performed, the skills required to perform them, and the skills,

abilities, and training of each employee.

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Compensating Employee compensation may come in the form of a salary,

commission, salary plus commission, rate per hour, or rate

per piece (based on units of work).

Most managers and top-level executives are paid a salary andperhaps a bonus depending on the profitability of the

company.

Manual-type work is typically paid by the hour with a

premium rate for overtime hours. Overtime pay may be computed on a daily basis (any time

over eight hours per day), or on a weekly basis (any time

over 40 hours per week).

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Evaluating Performance evaluations serve several important functions in

an organization:

They provide a basis for recognizing and rewarding performance.

They guide personnel actions such as hiring, firing, and promoting. They provide individuals with information for their own personal

development.

They identify training needs for the organization.

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Terminating Terminating employees is the most undesirable of all

operating events.

Unfortunately, this has become an important event as many

companies attempt to downsize or rightsize.

Effectively performing each of the aforementioned events is

important in avoiding problems with this event.

Doing a quality job of hiring and training

employees can reduce the likelihoodof having to subsequently terminate them.

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ProposeHeadcount

Assign

Employees

Review/

Approve

Headcount

HireEmployees

Train

Employees

Pay

Employees

Terminate/Retire

Employees

Headcount

List

Employees

CashPayroll

Employee

Trainers

HiringOfficers

Planning

Committee

Supervisor

REAL Model of the Human Resource

Business Process

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Acquisition/PaymentProcess

Human ResourceProcess

Sales/CollectionProcess

FinancingBusinessProcess

OtherFinancing

Alternatives

ConversionBusiness

Process

Cash

Goods and

Services

Cash

Cash

Materials

Labor

Labor

Labor

Cash

Sample Process Relationships

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Approve

New Loans

Invest

Excess Funds

Borrow

Money

Sell

Stock

Receive

Cash

Approve

Principal &

Interest

Payments

Disburse

Cash

Debt Financial

Instruments

Cash

Asset Financial

Instruments

Accounting

Clerk

Financing

Institution

Finance

Employee

ExecutiveCommittee

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*) (1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(1,1)

(0,*)

(1,1)

(1,1)(1,1)

(0,*)

(0,*)

Sample Equity Company Financing REALModel

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Inputs Outputs

ConversionProcess

Raw Materials

Equipment

Labor

Products

Services

Acquire Input through: Sell Outputs through:Acquisition/Maintenance/Payment

Process

Human Resource Process

Sales/Collection Process

Sample Conversion Process DataFlows

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Raw Materials

Acquired Used

Labor

Costs

Equipment and Other

AllocatedAmount

Work In Process

MaterialsLaborOverhead

UnitsCompleted

Finished Goods

UnitsCompleted

UnitsSold

Flow of Resources - ManufacturingProcess

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Raw

Material

Inventory

FinishersFinish and

Label

PourersPour Glass

into Molds

Heat GlassCompound

FurnaceOperators

Work in

Process

Inventory

Equipment

Finished

Goods

Inventory

PackagersPackage

Bottles(0,*)

(0,*)

(0,*)

(0,*)

(1,1)

(1,1)

(1,1)

(1,1)(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(0,*)

(1,*)

(1,*)

(1,*)

(1,*)

(1,*)

(1,*)

(1,*)(1,*)

(1,*)

(1,*)

(1,*)

(1,1)

(1,*)

(1,1)

(1,1)

(1,1)

Nichols Bottles Conversion Process

Model

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AcquireFinancing

Receive

Cash

Hire & Use

EmployeeServices

Convert/Build

Products

Sell Goods/

Services

Purchase

Resources

Disburse

Cash

FinancialInstruments

Property, Plant,& Equipment

Cash

Vendors

Employees

Customers

Goods/Services

Resources

Investors

& Creditors

Generic Overview of an EntireBusiness

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Th M G Hill C i I 2000Irwin/McGraw Hill

Event Resources Agents

Acquire financing Financing

instruments

Employees

Investors

Creditors

Acquire resources toproduce goods/services

Inventory EmployeesVendors

Acquire employee services Employee Resources Employees

Acquire property, plant,

and equipment

Property, plant, and

equipment

Employees

Vendors

Convert resources to

finished goods or services

for sale

Inventory Employees

Sell goods or services Inventory Employees

Customers

Receive cash Cash Employees

CustomersCreditors

Investors

Disburse cash Cash Employees

Vendors

Creditors

Investors

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