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Discussion and Illustration

19 January, 2016 - 12:35

We start with the highest-level view of the general ledger reporting process; namely, the context diagram, shown in Figure 15.5.

Note the business event data flows from the business processes discussed in THE “ORDER-TO-CASH” PROCESS: PART I, MARKETING AND SALES (M/S); THE “ORDER-TO-CASH” PROCESS: PART II, REVENUE COLLECTION (RC) ; THE “PURCHASE-TO-PAY” (PTOP) PROCESS; INTEGRATED PRODUCTION PROCESSES (IPP) . If you are uncertain about the nature and timing of any of these updates, go back to the appropriate business process chapter and review them.


Logically, each business event from a feeder process can be posted directly, individually,and immediately to the general ledger. As a practical matter, physical implementations vary. For example, the flows from the feeder processes could comprise summaries of a number of business events posted periodically at the end of a day, week, or month. For example, the RC process may collect data related to sales and send it to the general ledger. The resulting summarized entry to the general ledger would include postings to sales and accounts receivable.

Figure 15.5 Business Reporting—Context Diagram 


In an enterprise system, these business event data are recorded separately for each sale within the module designed for that business process (e.g., sales). In some enterprise system implementations, these business event data could be batched during sales processing and then used to update the general ledger database at one point. However, the enterprise system maintains data for each individual business event in the underlying business process database, which, for sales, corresponds to the Orderto- Cash process. At this point, however, let’s continue to concentrate on the logical connections of the individual feeder processes with the general ledger.


Figure 15.6 shows the general ledger/business reporting process level 0 DFD. Let’s take a moment to talk about bubble 1.0, “Validate business event updates.” What might be involved here? Here are some examples:

  • We would want to check business event updates to make sure that they come from the correct feeder process. Do you agree that this check addresses the information system goal of ensuring event data input validity?
  • We also want to make sure that no business event updates have been overlooked (recall the discussion of input completeness in each business process chapter).

Bubbles 4.0, 5.0, and 6.0 are also worth examining more carefully in this figure.

  • For general distribution, the business reports in bubble 4.0 and related information are often posted to the entity’s Web site. Frequently, at this stage, the financial statements are reformatted to take advantage of embedded links that can be placed into the Web page. For instance, some companies provide hot links in the financial statements directly to the financial statement notes to make it easier for users to tie the notes with specific financial statement accounts.
  • Process 5.0, “Record budget,” provides one example of how the business reporting process can fuel reporting systems that rely on information that has been aggregated in the system—in this case, providing information related to both budgeted and actual results.
  • Process 6.0, like some that you encountered in INTEGRATED PRODUCTION PROCESSES (IPP) , is triggered by a temporal event (i.e., the data flow into the process from the general ledger master data), rather than by a data flow from another process or from an external entity. Specifically, at an appropriate time, the condition of the general ledger accounts indicates that the accounts should be closed before repeating the accounting cycle for the next accounting period.

Review Question

What major logical processes does the business reporting process perform?