The University of Tampa

ACC 351: Accounting Information Systems

Spring 2015Section H/ Day

Transaction Processing System AnalysisPractical Assignment 1

Melanie HumphreysLyle SiegelLatifa Seini

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1. SELECTED SYSTEM(a) Host BusinessName Outeraction, Inc.Location 502 South Fremont Avenue Suite 1509 Tampa, Fl 33606

DescriptionOuteraction makes companies stand out from their competitors by making video blogs.

(b) Host Business ContactName Matthew RutkovitzTitle Founder

ResponsibilitiesDay 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)563-2411Email matt@outeraction.com(c) TPS DefinitionProcess Accounts Receivable for Outeraction ClientsCycle Revenue CycleSubcycle(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, 2015February 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 ReviewedReports Reviewed

Restrictions No financial statements and legitimate billing information.

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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)

PeopleEmployees- 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.

DataThe 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

Hardware:

MacBook Pro, Sony a7, Canon 7d

Software: Quickbooks, Final Cut Pro, customized software for analyticsNetwork: iCloud, Dropbox

Facilities Location of video production

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Table of Entities and Activities: Outeraction Accounts Receivable ProcessEntities L, P Activities Subprocesses

Narrative for the Outeraction video Order ProcessPara Line Text1 1

2345

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.

2 67891011

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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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.

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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.

5 25262728

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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Customer (E)Clerk (I)Customer (E)

ClerkComputer

6,27,28,2

9,210,2

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.

1.0Determine Video

Specifications

ClerkClerkComputerComputerClerk

13,314,315,318,318,3

6. Generates invoice.7. Payment rate is determined.8. Invoice is sent to customer.9. Check is received.10. Enters the amount paid.

2.0Compute and

Record Billing Transaction

CustomerClerkCustomerComputer

21,422,423,424,4

11. Develops script.12. Pre-production.13. Script is finalized to be 90 seconds in length.14. Import script into the teleprompter.

3.0Script

Development

CustomerClerkClerkiCloud (I)

25,525,526,527,5

15. Sets a date and location for video to be shot.16. Shoots video.17. Edits video.18. Delivers video to customer.

4.0Complete Video Production

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6

7

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Memo

To: Matt RutkovitzCc: AJ GreenFrom: Team Zenith Date: 15 April 2023Re: 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.

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References

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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