Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Utility Patent
1998-10-08
2001-01-02
Stamber, Eric W. (Department: 2765)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
Utility Patent
active
06169974
ABSTRACT:
BACKGROUND OF THE INVENTION
Bank card associations, such as MasterCard and VISA, have been established to process the enormous volume of credit card transactions that are generated across the country. The credit card associations work with credit card issuers who provide credit cards to consumers and businesses, and with merchant acquirers who establish contracts with merchants to process their credit card transactions and provide payments to the merchants. The credit card issuers extend credit to the cardholders and collect fees and interest for providing the credit card services. This overall system has been developed over many years and has evolved into a high speed, effective operation that handles a very large number of transactions which minimizes the cost per transaction, thereby making such services available on a very wide scale at a moderate cost to the users.
Large business entities typically are organized with multiple cost centers in order to monitor and control the expenses associated with each such cost center and to measure the productivity or profit of each cost center. Most business organizations require the use of extensive supplies, other than for manufacturing products, in order to perform the objectives of the business. Such supplies are typically distributed from one or more stock rooms or supply rooms located on the premises of the business entity. Although these in-house supply facilities provide merchandise and services much like retail stores, the actual operation of such facilities is generally much different from a conventional retail operation. In particular, the merchandise is purchased in bulk by the business entity and distributed as needed throughout the company, but there is no actual sale of the merchandise when it is distributed to company employees. There are typically a large number of such transactions each month, but each transaction involves a relatively small dollar amount of merchandise. Therefore, any system implemented in-house to merely track each transaction and allocate it to a particular cost center is economically impractical unless the per transaction cost is quite small in comparison to the value of each transaction. Thus, with low transaction values and high volume, it becomes very difficult for a business to economically track the in-house allocation of expenses for supplies and services. Therefore, there is a need for a method to rapidly, accurately and economically track such transactions.
SUMMARY OF THE INVENTION
An embodiment of the present invention is a method for processing transactions between specific costs centers of a business entity which has an in-house supply facility. This process utilizes a conventional bank card association that functions in conjunction with a financial entity which includes both a merchant acquirer and a credit card issuer. The first step of the method comprises generating transaction information for each transaction between the cost centers and the supply center. The transaction information includes at least data identifying the business entity, the specific cost center which initiated the transaction, the amount of the transaction and the date of the transaction. This transaction information is transmitted to a network services host computer which provides authorization data for the transactions. The transaction information is transferred from the network services host computer to a merchant accounting system, which collects such information from multiple sources, and then transfers the transaction data to a bank card association. The bank card association transfers at least a part of the transaction information to the credit card issuer, which after receipt of the transaction information, transfers transaction funds, which correspond to the transaction amounts, to the bank card association. The bank card association transfers the funds to the merchant accounting system which in turn transfers the funds to the merchant acquirer. The merchant acquirer then transfers the transaction funds to the credit card issuer, which upon receipt offsets the transaction funds previously transferred from the credit card issuer to the bank card association. The credit card issuer generates a report of the in-house business transactions and the report includes data indicating at least the transaction amount and the cost center involved in the transaction. Finally, the credit card issuer provides a transaction report in an electronic form to the business entity, which uses the report to update its general ledger and thereby allocate the costs of merchandise and services supplied internally to the appropriate cost centers.
REFERENCES:
patent: 5621796 (1997-04-01), Davis et al.
patent: 5677955 (1997-10-01), Doggett et al.
patent: 5748908 (1998-05-01), Yu
patent: 5875435 (1999-02-01), Brown
patent: 5963925 (1999-10-01), Kolling et al.
patent: 5963926 (1999-10-01), Kumomura
patent: 5987132 (1999-11-01), Rowney
patent: 5987140 (1999-11-01), Rowney et al.
Rapp, Susan J; McCubbin, Douglas P; “Implementing a purchasing card program,” TMA Journal, v17n2, pp.: 30-38, 30-38 Mar./Apr. 1997, ISSN:1080-1162, JRNL Code:JCG.
Buonanni, D; Swendrzynski, Bob; “Supply Distribution Systems: ATMs of Health Care,” Hospital Materials Management, v20, issue12, Dec. 1, 1995.
Heuer, Steffan; “Upping the Ante in Purchasing Cards,” Bank Technology News, Jul. 1, 1998.
“Purchasing Card Market Boasts Huge Potential,” Bank Technology News, Feb. 1, 1998.
Palmer, Richard J; Ward, Walter D; “Charge it!,” Journal of Accountancy, v184, n1, Jul. 1, 1997.*
Baumgartner James W.
Smith Cynthia M.
Paymentech, Inc.
Sidley & Austin
Stamber Eric W.
Thompson, Jr. Forest O
LandOfFree
Method for closed loop processing of transactions utilizing... does not yet have a rating. At this time, there are no reviews or comments for this patent.
If you have personal experience with Method for closed loop processing of transactions utilizing..., we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Method for closed loop processing of transactions utilizing... will most certainly appreciate the feedback.
Profile ID: LFUS-PAI-O-2445032