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Agents are individuals, groups, or systems that perform roles in a business event, either internally (employees) or externally (customers/suppliers).

A business event is a single activity or step within a broader business process, like placing an order, making a payment, or delivering a product.

Business processes are collections of related activities performed by stakeholders to achieve a specific goal, such as selling, buying, or manufacturing.

Three basic business processes include selling, buying, and manufacturing things.

A conversion business process transforms raw inputs (materials, labor, intellectual property) into finished products or services for sale.

Sub-steps of conversion business events include assembly, growing, excavating, and harvesting.

Deconstruction involves breaking down a business process into individual events to analyze each component more effectively.

An event is a single step or activity within a business process that contributes to achieving the goals of the process.

An event trigger is the action that starts a business event; for example, a customer order triggers the shipping process.

Extended enterprise business processes span across organizational boundaries and involve interactions with external entities like suppliers and customers.

An external agent is a party outside the organization involved in a event, such as a vendor, customer, or regulatory body.

For-profit businesses aim to generate profits for owners or shareholders and include corporations, sole proprietorships, and partnerships.

An integrated value chain system includes the set of value chains within an industry, including suppliers, channels, and customers.

An internal agent is a party within the organization that participates in a business event, like employees, departments, or automated systems.

Linkages are the connections between activities or processes within or across organizations, and their management can create competitive advantages.

Locations are physical or virtual places where events occur and are important for tracking and auditing processes.

Margin represents the difference between the value created by activities and the cost of those activities, reflecting profitability.

Not-for-profit organizations aim to provide services or benefits to stakeholders and include charities, government agencies, and educational institutions.

The order to cash business process involves attracting and retaining customers, delivering goods/services, and collecting payments.

Sub-steps of the order to cash process:

• Marketing to potential customers
• Negotiating terms of sale
• Selecting goods/services for delivery
• Preparing goods/services for delivery
• Delivering goods/services
• Receiving payment
• Possibly accepting customer returns

Outsourcing is hiring external parties to perform functions/processes, to reduce costs or increase efficiency.

Michael Porter developed the value chain concept for analyzing and optimizing business activities.

Primary activities are core business activities that create customer value, such as inbound logistics, operations, outbound logistics, marketing and sales, and service.

The procure to pay business process involves acquiring and paying for needed goods/services such as raw materials or utilities.

Sub-steps of the procure to pay process:

• Identifying need and internally requesting purchase
• Negotiating a purchase order with a vendor
• Receiving and inspecting goods/services from a vendor
• Storing and/or maintaining goods
• Paying the vendor
• Returning goods to the vendor

Resources encompass tangible (inventory, cash) and intangible (intellectual property, labor) assets used in business processes.

Strategically significant business events are critical for achieving organizational goals and objectives.

Support activities are secondary activities that facilitate primary activities, such as procurement, technology development, HR, and firm infrastructure.

The value chain is a framework for analyzing value-creating activities, including primary/support activities, and enables organizations to optimize processes for competitive advantage.

ACH (Automated Clearing House) is a secure payment transfer network connecting U.S. financial institutions for electronic funds transfers (EFT).

Available to Purchase (ATP) refers to inventory available to fulfill sales orders after accounting for current commitments.

Backorder are items ordered by a customer but not currently in stock, to be delivered later.

Balance Forward Approach applies customer payments to the total outstanding balance, rather than specific invoices.

A bill of lading is a legal document detailing the goods being transported, the carrier, and shipping terms.

A cash receipts transaction data store is a repository of records documenting each cash payment received.

Closed transactions are orders, invoices, or records that have been fully processed and are no longer active.

A credit memo is a document issued to adjust or reduce a customer's accounts receivable balance, often due to returns or pricing adjustments.

A customer master data store contains customer information, including contact details and account status.

A customer order is a formal request to purchase goods or services.

Customer Relationship Management (CRM) software manages customer interactions and data throughout the business relationship.

Cycle billing staggers statement and payment due dates across the month for different customer groups.

Data Flow Diagrams (DFDs) are graphical representations of data processes, flows, and storage within an information system.

EDI (Electronic Data Interchange) is the computer-to-computer exchange of business documents in a standard format.

Electronic Funds Transfer (EFT) transfers funds between bank accounts electronically, without paper money.

Enterprise Resource Planning (ERP) integrates software systems to automate and link processes like sales, finance, and inventory.

Financial Electronic Data Interchange (FEDI) combines EFT with EDI to transmit payments and related information simultaneously.

General authorization is a credit approval process for customers who meet predetermined conditions.

A general ledger system maintains a company's financial records.

An inventory master data store contains information on inventory items, including descriptions, quantities, and locations.

Lockbox is a bank service for collecting customer payments via a designated post office box and directly depositing them into the business's account.

Master Data Store holds data about entities like customers, products, and vendors.

Monthly/Periodic Customer Statements summarize outstanding invoices and account activity.

An open sales invoice has been sent to the customer but not yet paid.

An open sales order has been approved but not yet fulfilled and invoiced.

An order acknowledgment confirms to the customer that their order has been received and accepted.

The order to cash process includes receiving, processing, fulfilling orders, and collecting payments.

A packing slip lists the contents of shipped goods.

A picking slip/ticket authorizes warehouse staff to retrieve specific items for an order.

A reference data store contains data primarily used for reference, like price lists and product catalogs.

Remittance advice details which invoices a customer payment should be applied to.

A remittance list logs all payments received during a period.

Return Material Authorization (RMA) approves customer returns for refund or credit.

A sales history data store records completed sales for historical analysis.

A sales invoice details the sold goods or services, price, and payment terms.

A sales invoice transaction data store records all sales invoices issued.

A sales order confirms the details and approval of a customer's order.

A sales order transaction data store stores records of approved sales orders.

A shipper/carrier reference data store provides information about shipping carriers and routes.

A shipping notice communicates details and tracking information about a shipped order to the customer.

A shipping transaction data store records shipping activities.

Specific authorization is a detailed credit approval process for higher-risk customers.

The specific invoice method matches customer payments to specific invoices.

A stockout occurs when there is insufficient inventory to fulfill an order.

A transaction data store records individual business events, like sales or payments.

A turnaround document includes a detachable section for return with payment or response.

Unapplied cash refers to payments received but not yet matched to a specific account or invoice.

An advance shipping notice (ASN) is sent by the vendor with details about a pending delivery, like contents and logistics.

Bar coded products have machine-readable codes for tracking, identifying, and counting inventory.

A blanket purchase order is an agreement outlining ongoing purchases of specific items at set prices to streamline recurring orders.

A cash disbursement transaction data store records payments made to settle liabilities or invoices.

Corporate debit cards (procurement cards) are used by employees for authorized purchases.

A debit memo authorizes reducing a purchase liability or recording a refund for returned/defective goods.

Economic Order Quantity (EOQ) calculates the optimal order size to minimize ordering and holding costs.

Encumbrance records a contingent liability in government accounting, indicating a purchase order has been issued with funds reserved.

Evaluated Receipt Settlement (ERS) eliminates the need for a vendor's invoice by matching the purchase order and receiving report to authorize payment.

An inventory master data store has detailed info, such as product descriptions, stock levels, and locations.

Just in Time Inventory (JIT) reduces inventory levels by only receiving goods as needed, thereby reducing costs.

Kanban is a JIT scheduling system used to signal when new inventory should be produced based on demand.

Materials Requirements Planning (MRP) schedules material purchases and production based on forecasts, to synchronize production schedules.

An open vendor's invoice (open payable) transaction data store records liabilities for goods/services received but not yet paid.

An open purchase order has been issued to a vendor but not yet fulfilled or closed by receipt of goods/services.

An open purchase requisition requests goods/services internally but has not yet been converted into an approved purchase order.

The procure to pay process includes purchasing and paying for goods/services needed by an organization.

A purchase order is sent to a vendor to deliver specified goods/services at agreed-upon prices and terms.

A purchase order transaction data store records and tracks purchase orders issued by an organization.

A purchase request transaction data store records requests for goods/services before they're converted into purchase orders.

A purchase requisition initiates a request to purchase specific goods/services and typically requires approval.

A receiving report documents goods/services received and any discrepancies noted.

A receiving report transaction data store stores records of goods/services received.

A request for proposal (RFP) invites vendors to suggest proposals for goods/services, often in complex procurements.

A request for quotation (RFQ) requests price quotes from vendors for specific goods/services.

A reverse auction involves vendors competing to offer the lowest price, with prices decreasing over time.

A service-level agreement (SLA) specifies services, performance standards, and terms agreed upon between a service provider and the organization.

A supplier (vendor) master data store records data about suppliers, like contact information, performance history, and products/services offered.