System and method for rules-based capitalization

In an embodiment, a computer-based system in a business organization is configured with a set of business rules. The computer-based system is further configured to receive an indication of a transaction within the business organization, and to automatically determine, based on the set of business rules, a location in a recording system of the business organization to record data regarding the transaction.

BACKGROUND

Business organizations must account for all aspects of their businesses including assets, inventory, costs, and other general ledger items. In business organizations today, these decisions are made by persons in the organization as the need arises. For example, when an automobile arrives at an automobile dealership, that automobile should be added to the dealership's inventory. In contrast, if that automobile is received by a taxi company, that automobile should be listed as a depreciable asset. While this is a relatively simple example, much more complex situations involving technical and complex accounting rules and practices exist. Moreover, if the person making this recording decision is not an accountant, or a person knowledgeable in the relevant business rules of the organization, there is a greater chance that the proper recording will not be generated. Indeed, even if highly skilled accountants are used to make such decisions, there will still be situations in which reasonable accountants may disagree regarding the proper accounting of an object in the business organization. The art is therefore in need of a different method and system to properly implement the business rules, and in particular the accounting rules, of business organizations.

SUMMARY

In an embodiment, a computer-based system in a business organization is configured with a set of business rules. The computer-based system is further configured to receive an indication of a transaction within the business organization, and to automatically determine, based on the set of business rules, a location in a recording system of the business organization to record data regarding the transaction.

DETAILED DESCRIPTION

The functions or algorithms described herein are implemented in software or a combination of software and human implemented procedures in one embodiment. The software comprises computer executable instructions stored on computer readable media such as memory or other type of storage devices. The term “computer readable media” is also used to represent carrier waves on which the software is transmitted. Further, such functions correspond to modules, which are software, hardware, firmware or any combination thereof. Multiple functions are performed in one or more modules as desired, and the embodiments described are merely examples. The software is executed on a digital signal processor, ASIC, microprocessor, or other type of processor operating on a computer system, such as a personal computer, server or other computer system.

FIG. 1illustrates an example embodiment of a flow chart illustrating a general business process100. In the process100, a business organization decides to purchase goods at operation105. A purchase order is generated at110, and the goods are received at operation115. The goods may be any physical object120, such as an automobile, a computer, a photocopier, or office furniture. Upon receiving the object120, the business organization should decide how to document and keep track of that object according to the business rules of the industry of which it is a part, any legal regulations pertaining to the industry, any best practices of the industry, and/or any standards of the business organization. For example, as illustrated in operation125inFIG. 1, the object may need to be classified into certain categories depending on the rules of the business organization and/or the industry. More particularly, if the object is a vehicle, and the business organization is a vehicle rental service, the business rules of the industry an/or particular business organization may require that the vehicle be tracked as to the type of vehicle, such as a sedan, van, light truck, heavy truck, limousine, or some other type of vehicle.

FIG. 2illustrates a flow chart of a process200to automatically determine the categories into which to place objects according to the business rules of the organization. First, a computer system is configured with the business rules of the particular company, the industry of which that company belongs to, or some other set of business rules at operation205. After the configuration, the system receives at operation210some sort of indication that a transaction has occurred within the business organization. This indication may take on any form, and may include a paper document, an electronic document, a voice transmission, or a video transmission. Then, the system may determine at operation215, based on the business rules that were used to configure the system, a location in a recording system of the business organization to record data regarding the transaction.

FIG. 3illustrates a particular embodiment of the systems ofFIGS. 1 and 2, and relates particularly to the automation of the proper accounting of an object that is purchased by a business organization. Specifically,FIG. 3illustrates a business process300in which a decision is made to purchase an object at operation305, a purchase order is generated at operation310, and the object320is received at operation315. The object320is then classified according to the accounting rules configured into the system at325, and the accounting rules determine whether the object should be classified as an asset330, an inventory item335, a cost340, or placed on a general ledger345. In an embodiment, the classification places the object into a ledger and/or sub-ledger, wherein the ledger is a portion of a balance sheet. The accounting rules at325may include the general accounting rules and principles of a particular country, a particular industry, a particular company, or a division within a company. In an embodiment, one advantage of such a system is that the system is repeatable and more easily audited. That is, when a particular object320enters into a business organization, the automatic systems ofFIGS. 1,2, and3will always handle that object in the same manner—i.e., the element of human subjectivity has been removed. Indeed, the person in the business organization who first receives the object320in many cases will not even know how the system eventually accounts for the object (i.e., as an asset, cost, inventory, or general ledger item). It is this consistency that begets easier and repeatable audits.

In an embodiment, a rules-based activation decision is implemented via a table.FIG. 4illustrates an example embodiment of such a table. InFIG. 4, a table400has a post field410, a sequence field420, and a sub-ledger field430. For example, inFIG. 4, a document or other indication may come into the system indicating that a material A has been purchased by the business organization. The system may then read the table400to determine the manner in which material A should be accounted for. Specifically, table400, and in particular the sequence field420of table400, will determine the order that the sub-ledgers are checked to see if material A should be classified in one sub-ledger or another. Referring again to table400, the sequence450indicates that the fixed asset (FXA) sub-ledger should be checked first to see if material A should be listed as a fixed asset. The fixed asset process will determine if material A should be listed as a fixed asset on the ledger. For example, if the business organization was a vehicle leasing business, and material A was an automobile, then the asset ledger process would place the object A on the asset sub-ledger. If the object A is not placed on the asset sub-ledger, then, as indicated by sequence460in the table400, the inventory (INV) sub-ledger process is invoked. If the material A should be made part of inventory, such as is the case for an automobile in an automobile dealership, then the inventory sub-ledger process records the automobile as part of the inventory. If the material A is not made part of the organization's inventory, then as indicated by sequence470in the table400, a cost sub-ledger process is invoked to determine if the material A should be listed as a cost. If the material A is not recorded as a cost, then, as indicated by sequence480in the table400, a general ledger (GL) process is invoked to determine if the material A should be placed on a general sub-ledger. If the process fails to place the object A on the general sub-ledger, then in one embodiment, the system notes this as a failure and writes a message to a log file.

In the embodiment shown inFIG. 5, a hardware and operating environment is provided that is applicable to any of the servers and/or remote clients shown in the other Figures.

As shown inFIG. 5, one embodiment of the hardware and operating environment includes a general purpose computing device in the form of a computer20(e.g., a personal computer, workstation, or server), including one or more processing units21, a system memory22, and a system bus23that operatively couples various system components including the system memory22to the processing unit21. There may be only one or there may be more than one processing unit21, such that the processor of computer20comprises a single central-processing unit (CPU), or a plurality of processing units, commonly referred to as a multiprocessor or parallel-processor environment. In various embodiments, computer20is a conventional computer, a distributed computer, or any other type of computer.

The system bus23can be any of several types of bus structures including a memory bus or memory controller, a peripheral bus, and a local bus using any of a variety of bus architectures. The system memory can also be referred to as simply the memory, and, in some embodiments, includes read-only memory (ROM)24and random-access memory (RAM)25. A basic input/output system (BIOS) program26, containing the basic routines that help to transfer information between elements within the computer20, such as during start-up, may be stored in ROM24. The computer20further includes a hard disk drive27for reading from and writing to a hard disk, not shown, a magnetic disk drive28for reading from or writing to a removable magnetic disk29, and an optical disk drive30for reading from or writing to a removable optical disk31such as a CD ROM or other optical media.

The hard disk drive27, magnetic disk drive28, and optical disk drive30couple with a hard disk drive interface32, a magnetic disk drive interface33, and an optical disk drive interface34, respectively. The drives and their associated computer-readable media provide non volatile storage of computer-readable instructions, data structures, program modules and other data for the computer20. It should be appreciated by those skilled in the art that any type of computer-readable media which can store data that is accessible by a computer, such as magnetic cassettes, flash memory cards, digital video disks, Bernoulli cartridges, random access memories (RAMs), read only memories (ROMs), redundant arrays of independent disks (e.g., RAID storage devices) and the like, can be used in the exemplary operating environment.

A plurality of program modules can be stored on the hard disk, magnetic disk29, optical disk31, ROM24, or RAM25, including an operating system35, one or more application programs36, other program modules37, and program data38. A plug in containing a security transmission engine for the present invention can be resident on any one or number of these computer-readable media.

A user may enter commands and information into computer20through input devices such as a keyboard40and pointing device42. Other input devices (not shown) can include a microphone, joystick, game pad, satellite dish, scanner, or the like. These other input devices are often connected to the processing unit21through a serial port interface46that is coupled to the system bus23, but can be connected by other interfaces, such as a parallel port, game port, or a universal serial bus (USB). A monitor47or other type of display device can also be connected to the system bus23via an interface, such as a video adapter48. The monitor40can display a graphical user interface for the user. In addition to the monitor40, computers typically include other peripheral output devices (not shown), such as speakers and printers.

The computer20may operate in a networked environment using logical connections to one or more remote computers or servers, such as remote computer49. These logical connections are achieved by a communication device coupled to or a part of the computer20; the invention is not limited to a particular type of communications device. The remote computer49can be another computer, a server, a router, a network PC, a client, a peer device or other common network node, and typically includes many or all of the elements described above I/0 relative to the computer20, although only a memory storage device50has been illustrated. The logical connections depicted inFIG. 5include a local area network (LAN)51and/or a wide area network (WAN)52. Such networking environments are commonplace in office networks, enterprise-wide computer networks, intranets and the internet, which are all types of networks.

When used in a LAN-networking environment, the computer20is connected to the LAN51through a network interface or adapter53, which is one type of communications device. In some embodiments, when used in a WAN-networking environment, the computer20typically includes a modem54(another type of communications device) or any other type of communications device, e.g., a wireless transceiver, for establishing communications over the wide-area network52, such as the internet. The modem54, which may be internal or external, is connected to the system bus23via the serial port interface46. In a networked environment, program modules depicted relative to the computer20can be stored in the remote memory storage device50of remote computer, or server49. It is appreciated that the network connections shown are exemplary and other means of, and communications devices for, establishing a communications link between the computers may be used including hybrid fiber-coax connections, T1-T3 lines, DSL's, OC-3 and/or OC-12, TCP/IP, microwave, wireless application protocol, and any other electronic media through any suitable switches, routers, outlets and power lines, as the same are known and understood by one of ordinary skill in the art.