Ronato, Joy Marie G.
BIT 004-ACTCY21S2
Module 2: Assignment - Revenue Cycle, Expenditure Cycle and Conversion Cycle
Every firm uses three transaction cycle processes. The expenditure cycle still requires a
corporation to buy property, supplies, and employees. This generates cash flows from the
company to several resource providers. But most business-to-business transactions are based on
credit agreements between trade partners, so actual cash payment does not occur at the moment
of resource acquisition, and there is a time lag of days or weeks between the two occurrences.
Due to the time lag between occurrences, this system is divided into subsystems that process
each component of the cycle separately. A marketable product or service is created using all the
resources employed during the spending cycle. The main subsystems include production
planning and control and cost accounting. Finally, the revenue cycle results in a cash flow from
customers to the company. This is a revenue cycle transaction. With two components (physical
and financial), this cycle implies a time lag between the delivery of products or services and the
real cash received. It contains two subsystems: sales order processing and cash receipts. Cash
received is spent on resources, which are then converted into completed commodities and sold to
customers during the revenue cycle. This cash flow cycle occurs throughout the company's life.
Let's start by defining efficiency. "Operational efficiency" is a broad notion that can be
applied to any or all aspects of a bank's daily operations. It measures the amount of effort put in
to fulfill the goals efficiently. It helps create new work methods that improve quality and
production. Profitability is directly impacted by operational efficiency. Business excellence
requires operational efficiency. It's the methodical management of a company's resources to
maximize outcomes. We are implementing an employee reward program to increase operational
efficiency. One of the greatest methods to implement an operational efficiency plan is to directly
link it to an incentive program. When compensated, employees are motivated to finish a project
or activity. Giving employees something concrete to appreciate is beneficial. It also improves
operational efficiency. Faster transactions will please customers if you streamline your company,
boost productivity, and eliminate processing errors. Finally, following processes consistently
helps the operation improve. Efficiency requires consistency. Create and maintain consistent
protocols throughout your organization's activities to avoid confusion and rework.
The revenue cycle processes cash sales, credit sales, and cash receipts. The revenue
cycle's physical and financial components are considered separately. Order filling A business's
regular duties include preparing sales orders, crediting customers, shipping goods (or services),
billing customers, and recording transactions (accounts receivable, inventory, expenses, and
sales). Receipts Credit sales take days or weeks to clear. Receiving cash, putting it in the bank,
and recording it (accounts receivable and cash). Your health system's digital entrance can be
redesigned to improve patient happiness and revenue cycle efficiency. Nerdery professionals can
assist with provider discovery, scheduling, and payment/copayment integration. For your
company, setting up a revenue cycle committee can help. The committee's main goal should be
to figure out where things go wrong and then how to fix them. As a learning organization, you
want to continuously improve and discover revenue cycle gaps. It may be discovered that patient
eligibility is reviewed on the day of service rather than as scheduled, resulting in many denials.
Change the scheduling process to verify eligibility.
Transaction cycles are linked groupings of business transactions. The transaction cycle
has three stages: revenue, spending, and conversion. Despite the fact that each cycle has its own
set of obligations and goals, they all share a few traits. For example, all three TPS cycles capture
financial data and distribute it to users to aid them with daily chores. Transaction cycles also
create a large amount of raw data that is utilized in management reports and financial statements.
Due to their financial impact on the organization, transaction cycles demand the accountant's full
attention.
References:
http://www.engineering-bachelors-degree.com/business-information-
management/uncategorized/introduction-to-transaction-processingan-overviewtransaction-
cyclesthe-expenditure-cyclethe-conversion-cycle-and-the-revenue-cycle/
https://www.linkedin.com/pulse/how-improve-operational-efficiency-organization-ivan-luizio-
magalh%C3%A3es
https://www.wipfli.com/insights/articles/hc-5-ways-to-improve-your-revenue-cycle-management
https://www.nerdery.com/healthcare/system-operations/
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