THE REVENUE CYCLE: SALES AND CASH COLLECTIONS
Chapter 10
TASK PROCESSES/ FLOWS
SALES/BILLING Accept Order Approve Credit Verify Quantities Fill Order Ship Order Bill Customer Journalize Sale
A/R, C/R Update Ledger Mail Statements Receive $ Post C/R to A/R Journalize C/R
RETURNS, W/O Approve Return, W/O Prepare JE, JV Receive Merchandise
DOCUMENTS/ Customer Order & File Price List FILES Credit File Invoice/Sales Order & File Shipping Documents
REPORTS
Sales Recap Sales Analysis by...
Customer Statements Remittance Advices Prelistings of C/R Deposit Slips A/R Ledger C/R Journal Cash Summary Cash Flow A/R Turnover
Credit Memos W/O Authorizations Inventory Receipts G/L W/O File
W/O's Returns Returns by Product, reason
INTERNAL CONTROLS
Authorizations Prenumber documents Reconciliations Separation of duties Computer checks
Control Examples
(Note: These are just some examples -- I want you to think about more and to think about WHY they are necessary -- e.g., what could happen if these controls were not there?) Authorization -- credit approval Prenumber documents -- sales order, shipping documents, invoices, credit memos Reconciliations -- sales order & picking ticket/packing slip, physical inventory, sales order & invoices & bills of lading, bank statements, subsidiary & control account Separation of duties -- shipping & billing, cash receipts & recording Computer checks -- validity (customer acct #s, inventory stock #s); redundant data checks (customer acct # & customer name, product item # & item description); field checks; limit checks; range checks; reasonable checks; completeness checks