Prime Parts, Inc (PPI) is a leading wholesaler of aftermarket auto parts and supplies for the automotive repair and reseller industry PPI provides national reach, rapid delivery, and customized account service PPI is expanding its operations and introducing a new information system to handle the large volume of sales as a result of its growing business You have conducted interviews with the managers who oversee the sales and cash receipts system The following is a summary of your discussions Use this narrative to prepare a system flowchart to depict the sales and cash receipts system (Revenue Cycle) for PPI The sales department receives sales orders from customers and enters the sales order information into the system to determine availability If the items on the sales order are available, then a picking ticket (2 copies) is generated One copy of the picking ticket is forwarded to the warehouse and the other copy along with the original sales order is filed alphabetically in the sales department If the items on the sales order are not available, then a backorder request is generated and forwarded to the purchasing department, and the sales order is filed alphabetically in a temporary file In the warehouse, the picking ticket is used to pick and pack the order and it is forwarded with the picking ticket to the shipping department In shipping, the order is verified as to the correct items and quantities If the order is correct, the order information is entered into the system to update inventory and a packing slip (3 copies) is generated The order along with the packing slip is shipped to the customer One copy of the packing slip is sent to billing and the other copy of the packing slip along with the picking ticket are filed in shipping alphabetically If the order is not correct, it is sent back to the warehouse with the picking ticket In the billing department, the packing slip is entered into the system to update Inventory and accounts receivable An invoice is generated (2 copies) One copy of the invoice is mailed to the customer, while the other copy of the invoice is filed with the packing slip alphabetically by customer in the billing department Customer checks are received in the mail room with a remittance and forwarded to the cash receipts department where a deposit slip is prepared The customer checks and the deposit slip are forwarded to the treasurer department where the checks are endorsed and taken with the deposit slip to the bank The remittances are forwarded to the accounts receivable department where the information is entered into the system to update accounts receivable An accounts receivable aging report is generated and forwarded to the controller department Remittances are filed alphabetically in the accounts receivable department Understand a system before flowcharting it Interview users, developers, auditors and managements, or have them complete a questionnaire Read a narrative description of the system, or walk though system transactions Identify the entities to be flowcharted Identify departments, job functions, and external parties Identify documents, reports and information flows, as well as the activities or processes performed on the data Divide the flowchart into columns for each department involved When several departments of functions need to be shown, divide the flowchart into columns and label each one Flowchart the activities of each entity in its respective column Flowchart the normal flow of operations Ensure that all procedures and processes are in proper order Identify exception procedures using the annotation symbol Organize the flowchart Design the flowchart so that the information flows from top to bottom and from left to right Given the flowchart a clear beginning and ending Designate where each document originates, and show the final disposition of all documents so that there are no loose ends that leave the reader dangling To depict items sent or received somewhere outside the system (e g customer) use a terminal symbol Use standard flowcharting symbols and clearly label all symbols Write a description of the input, process, or output inside the symbol Multiple copies of documents For multiple copies of a document, place document numbers in the top right hand corner of a symbol The number should accompany the symbol as it moves through the system Manual processing symbol Each manual processing symbol should have an input and an output Do not directly connect two documents, except when moving from one column to another, it is best to show the document in both places Similarly no two processes should appear consecutively Page connectors Use off page connectors to move from one flowchart page to another Consider using on page connectors to avoid excess flow lines and thereby producing a neat looking page Clearly label all connectors to avoid confusion Use arrowheads on all flow lines Do not assume the reader will know the direction of the flow Also, connect each flow line and symbol neatly and completely Multiple pages If a flowchart cannot fit on a single page, clearly label the pages as follows 1 of 3, 2 of 3, and so on Show documents or reports in the column where they are created Then show them moving to another column for further processing Files Show data entered into or retrieved from a computer file as passing through a processing operation (a computer program) first Draw a line from a document to a file to indicate that it is being filed A manual process is not needed to show a document entering a file or going coming to from another department Draw a rough sketch of the flowchart Be more concerned with capturing correctly each process and document than with making a perfect drawing Few systems can be flowcharted in a single draft Redesign the flowchart Avoid clutter and a large number of crossed lines Verify the flowchart accuracy Review it with the people familiar with the system Be sure all users of flow charting conventions are consistent

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Prime Parts, Inc. (PPI) is a leading wholesaler of aftermarket auto parts and supplies for the automotive repair and reseller industry. PPI provides national reach,

Prime Parts, Inc. (PPI) is a leading wholesaler of aftermarket auto parts and supplies for the automotive repair and reseller industry. PPI provides national reach, rapid delivery, and customized account service. PPI is expanding its operations and introducing a new information system to handle the large volume of sales as a result of its growing business. You have conducted interviews with the managers who oversee the sales and cash receipts system. The following is a summary of your discussions. Use this narrative to prepare a system flowchart to depict the sales and cash receipts system (Revenue Cycle) for PPI. The sales department receives sales orders from customers and enters the sales order information into the system to determine availability. If the items on the sales order are available, then a picking ticket (2 copies) is generated. One copy of the picking ticket is forwarded to the warehouse and the other copy along with the original sales order is filed alphabetically in the sales department. If the items on the sales order are not available, then a backorder request is generated and forwarded to the purchasing department, and the sales order is filed alphabetically in a temporary file. In the warehouse, the picking ticket is used to pick and pack the order and it is forwarded with the picking ticket to the shipping department. In shipping, the order is verified as to the correct items and quantities. If the order is correct, the order information is entered into the system to update inventory and a packing slip (3 copies) is generated. The order along with the packing slip is shipped to the customer. One copy of the packing slip is sent to billing and the other copy of the packing slip along with the picking ticket are filed in shipping alphabetically. If the order is not correct, it is sent back to the warehouse with the picking ticket. In the billing department, the packing slip is entered into the system to update Inventory and accounts receivable. An invoice is generated (2 copies). One copy of the invoice is mailed to the customer, while the other copy of the invoice is filed with the packing slip alphabetically by customer in the billing department. Customer checks are received in the mail room with a remittance and forwarded to the cash receipts department where a deposit slip is prepared. The customer checks and the deposit slip are forwarded to the treasurer department where the checks are endorsed and taken with the deposit slip to the bank. The remittances are forwarded to the accounts receivable department where the information is entered into the system to update accounts receivable. An accounts receivable aging report is generated and forwarded to the controller department. Remittances are filed alphabetically in the accounts receivable department.

Understand a system before flowcharting it.

Interview users, developers, auditors and managements, or have them complete a questionnaire. Read a narrative description of the system, or walk though system transactions.

Identify the entities to be flowcharted.

Identify departments, job functions, and external parties. Identify documents, reports and information flows, as well as the activities or processes performed on the data.

Divide the flowchart into columns for each department involved.

When several departments of functions need to be shown, divide the flowchart into columns and label each one. Flowchart the activities of each entity in its respective column.

Flowchart the normal flow of operations.

Ensure that all procedures and processes are in proper order. Identify exception procedures using the annotation symbol.

Organize the flowchart

Design the flowchart so that the information flows from top to bottom and from left to right.

Given the flowchart a clear beginning and ending.

Designate where each document originates, and show the final disposition of all documents so that there are no loose ends that leave the reader dangling. To depict items sent or received somewhere outside the system (e.g. customer) use a terminal symbol.

Use standard flowcharting symbols and clearly label all symbols.

Write a description of the input, process, or output inside the symbol.

Multiple copies of documents.

For multiple copies of a document, place document numbers in the top right-hand corner of a symbol. The number should accompany the symbol as it moves through the system.

Manual processing symbol.

Each manual processing symbol should have an input and an output. Do not directly connect two documents, except when moving from one column to another, it is best to show the document in both places. Similarly no two processes should appear consecutively.

Page connectors.

Use off-page connectors to move from one flowchart page to another. Consider using on-page connectors to avoid excess flow lines and thereby producing a neat-looking page. Clearly label all connectors to avoid confusion.

Use arrowheads on all flow lines.

Do not assume the reader will know the direction of the flow. Also, connect each flow line and symbol neatly and completely.

Multiple pages.

If a flowchart cannot fit on a single page, clearly label the pages as follows: 1 of 3, 2 of 3, and so on.

Show documents or reports in the column where they are created.

Then show them moving to another column for further processing.

Files.

Show data entered into or retrieved from a computer file as passing through a processing operation (a computer program) first. Draw a line from a document to a file to indicate that it is being filed. A manual process is not needed to show a document entering a file or going/coming to/from another department.

Draw a rough sketch of the flowchart.

Be more concerned with capturing correctly each process and document than with making a perfect drawing. Few systems can be flowcharted in a single draft.