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Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127

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BuyFindarrow_forward

Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127
Textbook Problem

Describe the relative advantages of EBPP systems, a lockbox, charge cards, debit cards, and ACH payments from the standpoint of both the party making the payment and the party receiving the payment.

Summary Introduction

To explain: The advantages of various systems.

Introduction:

B/AR/CR process:

It is an accounting process with an interacting structure of different process supporting the decision-making activities of the financial managers.

Explanation

The advantages of various systems:

EBPP systems:

  • It reduces the time between billing and cash receipt.
  • It reduces the float for the payee.
  • The cost associated in preparing the bill electronically and sending is reduced.
  • The payee can use the website for marketing purposes and also enhance the customer services.

Lockbox:

  • It reduces the float for the payee.
  • It reduces the requirement of clerical staff for processing cash receipts.
  • The bank protects the cash from diversion.
  • The accounts receivable of the payer and the payee is updated in a timely manner.

Charge cards:

  • It consolidates the billing and payment process reducing the clerical effort on the payer and the payee side...

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