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hello welcome to our video lecture for
chapter 2 overview of transaction
processing and ERP systems enterprise
resource planning systems the
transaction storage is all about data
processing right you have an input
possibly a source document great but
transactions such as paying an invoice
then you have to process that
information that you got your input then
you have to store it and create some
information output which is usually
financial statements or supporting
evidence for the journal entry input is
pretty much you capture the transaction
that basically trigger the business
event so you're either capturing the
sale of property plant and equipment or
the acquisition you popu what might be
copy you might be capturing the purchase
of inventory etc once you get the data
you obviously have to ensure that it's
accurate and complete one of our
audience standards is completeness and
that built into your data input then
more important thing you want to make
sure that the company's policies are
followed for and that's your internal
control so you want to make sure those
are in place and that they're actually
being followed and performed you capture
the data in it's basically some activity
of interest a stale a purchase of
inventory or other payables then you
want to make sure what's affected it
could be cash it could be inventory
could be accounts receivable then who
initiated that activity was it a
customer calling to purchase items was
it you as the entity calling a vendor to
get replenishment of stock or your
employee when it comes to payroll and HR
all the information that you are
capturing comes from source documents
and third-party documents are the most
reliable so a virus the
a bank statement that is far more
reliable than a report I created myself
such as a Pio source documents is data
when the actual transaction takes place
so similar to revenue recognition once a
transaction takes place you're allowed
to record it when it's earned and
documents can come in several formats
paper turnaround maybe you're getting
you're getting these documents from a
cash register or a point-of-sale a
scanner that will like in Walmart that
tells you yes we've sold us storage is
basically how everything is organized
and that's key you have a chart of
accounts which lists all the account
numbers and the description of the
account and that is what gives you the
capability of recording a transaction to
one of those accounts that the key to
establishing a chart of account is make
sure it works with you and built with
you in your organization so you might
have a just a simple account number for
the first segment of that general ledger
account then you may have another
segment which includes possibly the
regional area or the division and then
the final segment might be for the
department the data storage can also
take place in the format of transaction
journal so every time you have a say a
lot you say that's a transaction or for
cash receipts every time there's a
payment on account receivables you would
have a accounts receivable journal then
you would also have the I'm sorry the
cash dispersements journal you also have
subsidiary ledgers such as accounts
receivable or accounts payable or
and those transactions once you've
looked at the chart of accounts you've
analyzed the transaction posted it to
the proper sub ledger it should be
posted to the sub ledger and the general
ledger at the same time that way there
was no discrepancies between the two the
purpose of data storage is to give us an
audit trail right it gives us evidential
matter supporting the transactions that
we're conducting in the AIS system so
this just goes through the audit trail
for a particular invoice and you will
see here is the invoice in our sales
journal then the full amount of that
sales journal is in your general ledger
for accounts receivable you will also
have a general ledger for credit sales
as part of that piece so then that would
be your actual recording of the sale
then you would have the subsidiary
ledger then you've got practice in
Chapter one on what that would look like
data can is stored in master files or
transaction files so you would have
different attributes so here's your
customer number the name address credit
limit and balance and basically the
master file for the customer might have
this information and including their
address now the credit limit and balance
could be different the credit limit
could also be part of the screen where
you're entering any customer for the
first time and then your balance is
obviously the outstanding balance so
those and that balance will give you
further details in the to the
transaction that comprised that balance
there are four types of processing or
crud for short acronyms are only your
friend so the data processing you have
to create a record so similar to what a
row is in Excel
to add that customer or add a vendor in
that module then you would like you read
the data in that module you update any
previous record of data that needs to be
possibly showing a cash receipts towards
the customers account and then you
delete data we don't really delete too
much we purge it's possible because
we're always so afraid
but deleting data could mean that you're
just reversing an entry you can have
batch processing when you do data which
is you do everything at one particular
point in time so that fact of activity
for that day such as sales shipped would
be processed in a back to the sales
journal or real time which is basically
when it occurs so obviously if every
time you scan something at Walmart it
automatically generates the journal
entry to record the revenue that would
be real-time output is basically
database files online or soft copy and
printed out hard copy with everything
being automated and then the efficiency
of going paperless obviously online
seems have been more plausible when you
do you might have to just print things
out such as an invoice to the customer
you might have to print a report for
your monthly sales in order to calculate
sales persons commission or you can
actually do a query which is that where
you're retrieving information from
several pieces of data such as tables
for customer with the address and then
tables for sales and cash receipts to
that customer to get your accounts
receivable balance ERP systems
enterprise resource planning basically
gives all the activities for an
organization puts them all together so
big in production that will say what
we're going to produce payroll will
probably tell us all of our employees
and what they make and the current pay
sales gives us the activity that we're
actually selling a product purchasing we
might be replenishing our inventory and
financial reporting most of these areas
can also be a module in your AIS system
advantages of ERP it's a better flow of
the information so it's a central
database or a data warehouse
it can have several access points once
the data is captured then it you know
you don't longer need the sale to enter
data about a customer than accounting
has that same data for invoicing you can
you can go to that table and that record
of that customer and use the same
information so there's no duplication it
also controls of the data we can enhance
security controls giving people access
to the system for only those portions
that they need so if you're processing
tax receipts and they are you would just
have access possibly to the air module
and it gives you a big standardization
or a better workflow and that helps you
get those standardization so the
procedures are second nature the
internal controls are follow of the
reports are generated know the bad side
of ERP could be costly way long to
implement it complex and there's
obviously with anything employees or
people they're just not susceptible to
change but the cost and the complexity
probably make it the big donor probably
the biggest disadvantages why several
companies do not enter eight an ERP
system so these are all the terms that
you've learned in this chapter hopefully
this helps you get a better
understanding of a is and transaction
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