1. The University of Tampa
ACC 351: Accounting Information Systems
Spring 2015
Section H/ Day
Transaction Processing System Analysis
Practical Assignment 1
Melanie Humphreys
Lyle Siegel
Latifa Seini
1
2. 1. SELECTED SYSTEM
(a) Host Business
Name Outeraction, Inc.
Location 502 South Fremont Avenue Suite 1509 Tampa, Fl 33606
Description
Outeraction makes companies stand out from their competitors by making video
blogs.
(b) Host Business Contact
Name Matthew Rutkovitz
Title Founder
Responsibilities
Day to day responsibilities are associated with keeping Outeraction prospering and
growing. This also includes the growth for the future of the business as well as
focusing on current customers.
Telephone (813)563-2411
Email matt@outeraction.com
(c) TPS Definition
Process Accounts Receivable for Outeraction Clients
Cycle Revenue Cycle
Subcycle(s) Billing/Account Receivable
Scope Determine billing amounts and updating customer Accounts Receivable
(d) Analysis Methods
Direct
Observations
(Required)
Explanation
Telephone conversation lasted about 20 minutes discussing the
nature of the billing and accounts receivable aspect of the
business. We received an invoice to see the invoice terms, how
it is addressed and formatted, how the client is billed for the
services provided, and to identify the period of payment.
Visit
Schedule
February 10, 2015
February 13, 2015
Inquiries
(Required)
Explanation Telephone interview questions for Outeraction:
Sample
Questions
1. What accounting/ billing system is used?
2. How are invoice terms determined?
3. How are invoices prepared?
4.
When does the company determine to start preparing
clients video?
5.
Reviews
(Recommended)
Documents Reviewed Invoice
Files/Records
Reviewed
Reports Reviewed
Restrictions No financial statements and legitimate billing information.
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3. 2. SYSTEM DESCRIPTION
(a) System Function (1-2 sentences)
The primary function for the accounts receivable for Outeraction, is to capture invoice information,
prepare client billing information, and update client receivables.
(b) Operations Process Objectives (Effectiveness, Efficiency Objectives)
1. To ensure billing information gets sent to the correct customer.
2. To ensure client invoices are received in a timely manner.
3. To ensure the client payments are received on the noted payment terms.
4. To ensure client receivables are protected.
(c) Information Process Objectives (Input, Processing, Output Integrity Objectives)
1. To ensure clients are billed for the proper video service.
2. To ensure billing invoices are sent to correct client.
3 To ensure customer paid for the proper service at the proper amount.
4.
(d) IS Components (People, Data, Processes, IT Infrastructure, Facilities)
People
Employees- setting up the video set, providing the video equipment, recording the
video blogs, update all billing information.
Customers- pay monthly fee for service, describe the video they want produced.
Data
The amount of views on average the video blogs get, the cost of video production,
and the company process of determining billable amount for hours spent on the
set.
Subprocesses
Subprocess
1.0:
Access and update the costumer’s profile.
Subprocess
2.0:
Compute billing transaction.
Subprocess
3.0:
Record the billing transaction.
Subprocess
4.0:
Complete the video production.
IT
Infrastructure
Hardwar
e:
MacBook Pro, Sony a7, Canon 7d
Software: Quickbooks, Final Cut Pro, customized software for analytics
Network: iCloud, Dropbox
Facilities Location of video production
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4. Narrative for the Outeraction video Order Process
Para Line Text
1 1
2
3
4
5
Outeraction is a small and flexible video production
studio that specializes in making short (about 60-90
seconds) video blogs for companies who want to market
their businesses. The customer orders and has their
videos produced using the following procedures.
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7
8
9
10
11
At Outeractions, the customer first calls in to order their
video. They specify the type of video, how long they
want it, when they want to shoot. Once specified, the
employee enters the customer’s order in their computer
for their records. The computer stores the customer’s
information.
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13
14
15
16
17
18
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Once the customer requests a video, Outeraction will
then generate an invoice and the payment rate is billed
based on the number of hours on average spent filming
the video blog. The invoice is then electronically sent to
the customer. Payment terms are net/30 and must be fully
paid before video shooting occurs. Outeraction receives
payment from customer and updates accounts receivable
and cash accounts.
4 20
21
22
23
24
The Outeraction team will then discusses with the
customer a script for the video they want to shoot. Pre-
production for video blog begins. A script is then
finalized to last the duration of 60 to 90 seconds and the
script is imported into the teleprompter.
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26
27
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Next, a date and location is set for the shooting to begin.
After the video has been filmed, Outeraction edits the
video and delivers the video via iCloud/ Dropbox. All
billing information and accounts receivables are updated.
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5. Table of Entities and Activities: Outeraction Accounts Receivable Process
Entities L, P Activities Subprocesses
Customer (E)
Clerk (I)
Customer (E)
Clerk
Computer
6,2
7,2
8,2
9,2
10,2
1. Places order.
2. Asks for video specifications.
3. Presents information on video details, including
duration.
4. Enters all information on computer for records.
5. Stores information.
1.0
Determine Video
Specifications
Clerk
Clerk
Computer
Computer
Clerk
13,3
14,3
15,3
18,3
18,3
6. Generates invoice.
7. Payment rate is determined.
8. Invoice is sent to customer.
9. Check is received.
10. Enters the amount paid.
2.0
Compute and
Record Billing
Transaction
Customer
Clerk
Customer
Computer
21,4
22,4
23,4
24,4
11. Develops script.
12. Pre-production.
13. Script is finalized to be 90 seconds in length.
14. Import script into the teleprompter.
3.0
Script
Development
5
6. Customer
Clerk
Clerk
iCloud (I)
25,5
25,5
26,5
27,5
15. Sets a date and location for video to be shot.
16. Shoots video.
17. Edits video.
18. Delivers video to customer.
4.0
Complete Video
Production
Customer
Outeraction Video Order
Process
iCloud
Outeraction Context Diagram
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8. Customer
Logical Diagram for
Outeraction Accounts
Receivable
1.0
Determine Video
Specifications
2.0
Compute and
Record Billing
Transactions
3.0
Script
Development
4.0
Complete Video
Production
Customer and
Video Records
Accounts
Receivable
Record
Server
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9. Customer
Flowchart for Outeraction
Accounts Receivable Process
Clerk Computer
Processes
Request
Access
Customer
Request
Update Video
Details
Stores Customer
Video
Information
Customer’s and
Video File
Sends Invoice to
Customer
Displays
Invoice
Receive
Payment
Access
Accounts
Receivable
Accounts
Receivable
Records
Generate
Invoice
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11. Memo
To: Matt Rutkovitz
Cc: AJ Green
From: Team Zenith
Date: 12 March 2015
Re: Outeraction Accounts Receivable Process
Team Zenith has been able to analyze and critique Outeraction’s accounts receivable process at length, with
internal and external factors that are included in the process. As a team, we have identified strengths,
weaknesses, and have concluded with recommendations and how feasible they are too the company.
To begin, we noticed with how new of a company Outeraction is, there is most certainly a lot more strengths
then weaknesses. For example, as a team, we believe the most valuable strengths Outeraction possesses for the
accounts receivable process includes, receiving full customer payments before filming the video blogs,
providing all necessary film equipment to the shoot, agreement for three months with the incentive to have a
free video on the fourth month, and finally all invoices and final cuts of the video are delivered electronically to
customers. This reemphasizes capturing the data, storing data in a safe place, maintaining data in a safe place for
videos, and finally having internal controls and procedures for properly distributing and sending the video to the
clients. However, when a company is still new and has several key strengths, there is still going to be
weaknesses associated with the business. We discovered that waiting for the full payment to be received in order
to begin shooting is inefficient because the company could bill in intervals based on amount of time being
filmed rather than waiting for a lump sum. Also, to improve the accounts receivable, Outeraction needs more
customers to build the company name, and that is very difficult to accomplish when meeting clients and
potential clients at coffee shops to discuss details and a future with each other.
Together as a collective group we have discussed some recommendations to help Outeraction improve their
business model and become a more successful business by improving their accounts receivable. The company
meets with clients and potential clients at coffee shops, such as Starbucks, which to another business whom
wants a video blog could be turned off by the lack of professionalism of an office space. We would recommend
starting to lease a reasonable amount of office space to make an impression on clients that is more appealing to
them to sign a higher amount of businesses. Also, having office space will open up the door to expanding your
equipment with a studio in the office, which will result in a higher accounts receivable balance because clients
will have to owe money for the great service. The last recommendation is to offer clients a cash discount period
when they first sign on to attract them to the Outeraction culture and leave them wanting more.
While the recommendations provided might be hard to process, financially speaking Outeraction will be able to
provide a great service in the long run. Leasing a office space is more economically sound then owning the
building because you do not have to pay for an office mortgage, which can be very pricey. The office space
however, can be very operational and provide more integrity to the Outeraction business. Next, the operational
feasibility of experimenting with a cash discount, could be hard on the business at first for not generating a lot of
cash flow; however, if Outeraction starts to lease office space and generates a larger clientele base in video
blogs, where there are no direct competitors, the cash discounts could be more profitable and valuable in the
long-run for the business structure.
In conclusion, we believe that Outeraction is unlike another business on the market right now with the unique
services they provide to a variety of businesses. The strengths significantly outweigh the weaknesses by a large
margin. Therefore, we believe with our recommendations that Outeraction has untapped potential to achieve
everything with the video blog industry.
References
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12. Gelinas, U. J., Dull, R. B. & Wheeler, P.R. (2015). Accounting Information Systems, 10e.
Southwestern-Cengage Learning.
Rutkovitz, M. (n.d.) Invoice 1011 (PDF). Retrieved from Outeraction documents.
Walters, M. (n.d.). Information Systems Concept Notes (Word document). Retrieved
from https://ut.blackboard.com
Walters, M. (n.d.). Systems Documentation Notes (Word document). Retrieved
from https://ut.blackboard.com
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