The Revenue Cycle by Shaffa Wati

shaffawati0608 — 2021-04-24 17:17:01 UTC

1. Sales to un-creditworthy customer (possibility of bad debt)
2. Ship wrong items/quantities
3. Inaccurate record
4. Misapproriate of assets
5. Unauthorized access

IT Control

shaffawati0608 — 2021-04-24 17:17:39 UTC

1. Automates credit check
2. - System scan the item
- Automated Inventory system
3. -Edits input data properly
-Automated posting to accounts
-File backup
4. Multilevel security
5. -Password control
- Multilevel security to prevent unauthorized access

Risk

shaffawati0608 — 2021-04-24 17:30:52 UTC

How To Control?

shaffawati0608 — 2021-04-24 17:31:20 UTC

Physical Control

shaffawati0608 — 2021-04-24 17:35:43 UTC

1. - authorize transaction(review client credit background).
- separation of duties to avoid fraud.
2. shipping department verify & reconcile with order.
3. -prepare remittance list to counter check the info
-prepare accounting records
4. -transaction authorization
-supervision
-segregation of duties
5. -guard access control

THE PHYSICAL SYSTEM

aidaqistinazainuri — 2021-04-25 06:16:32 UTC

aidaqistinazainuri — 2021-04-25 06:20:04 UTC

- It is the combination of computer technology and human activities

- Smaller business tend to rely less on technology and more on manual procedures, whereas larger companies tend to employ advanced technologies

BASIC TECHNOLOGY SALES ORDER PROCESSING SYSTEM

aidaqistinazainuri — 2021-04-25 06:56:24 UTC

DFD OF CASH RECEIPT PROCEDURE

aidaqistinazainuri — 2021-04-25 07:21:08 UTC

POS SYSTEM

shaffawati0608 — 2021-04-25 17:21:54 UTC

-Used extensively in:
>grocery store, department stores & other types of retails.
-Involves the exchange of goods directly for cash in transaction at the point of sale.
-Inventory kept at the store not in separate warehouse.

HOW POS SYSTEM WORK

shaffawati0608 — 2021-04-25 17:28:03 UTC

REENGINEERING

shaffawati0608 — 2021-04-25 17:32:38 UTC

DOING BUSINESS VIA EDI

shaffawati0608 — 2021-04-25 17:34:36 UTC

-Computer to computer exchange of standard business documents such as purchase orders, invoices, inventory levels and shipping notices. EDI software solutions facilitate the exchange of business documents and data across a variety of platforms and programs.

-EDI poses unique control problems for organizations

Retails that EDI
-Wal-Mart, JCPenney, Supervalu, and Hallmark Cards

DOING BUSINESS ON THE INTERNET

shaffawati0608 — 2021-04-25 17:39:50 UTC

-Thousands of organizations worldwide have home pages on the Internet to promote their products and solicit sales.

-Typically, Internet sales are credit card transactions that are sent to the seller’s e-mail file.
Example include B2B and business-to-consumer (B2C) transactions.

-Connecting to the Internet exposes the organization to threats from computer hackers, viruses, and transaction fraud.

-Most organizations take these threats seriously and implement controls, including password techniques, message encryption, and firewalls, to minimize their risk.

1. Open mail and prepare remittance list

aidaqistinazainuri — 2021-04-29 00:22:39 UTC

- Remittance list contains information needed to service individual customer's accounts.
- This remittance advice is a form of turnaround document and it is most apparent in firms that process large volumes of cash receipts daily.

2. Record and deposit checks
-A cash receipts employee verify the accuracy and completeness of the checks against the list prelist
- Deposit slip = Show the amount of the day's receipts and forwards this along with the checks to the bank.

3. Update Account Receivable Accounts
- The remittance advice are used to post to customers' accounts in the AR subsidiary.

4. Update Record Ledger
- The general ledger function reconciles the figures, post to the cash and AR control accounts, and files the journal voucher.

5. Reconcile cash receipts and deposits.
- Compare the following documents :
1) A copy of the prelist
2) Deposit slips received from the bank
3) Related journal vouchers

aidaqistinazainuri — 2021-04-29 00:48:03 UTC

1. Sales Department
- Sales process begins with the customer contacting the sales department by telephone, mail, e-mail, fax, or person

2. Credit Department Approval
- Verify the customer's creditworthiness by using the department computer to review the customer's credit in the customer's file
- When credit is approved, the sales department clerks pull the various copies of the sales orders from the pending file and releases them to the billing, warehouse, and shipping department

3. Warehouse Procedure
- The inventory items and stock release are the sent to the shipping department
- Warehouse clerk uses the department PC to record inventory reduction in the stocks records

4. The Shipping Department
- If the order is determined to correct, a bill of lading is prepared, and the products are packed and shipped via common carrier to the customer.
- The clerks use the department PC to record the transaction in the shipping log and sends the shipping notice and stock release document to the billing department

5. The Billing Department
- The billing clerks use the department PC to compile the relevant facts about the transaction ( product price, handling charges, discount terms) and bill the customer.

6. Accounts Receivable, Inventory Control, and General Ledger Departments
- Upon receipt of the documents from billing department, the AR and inventory controls clerks update their respectively subsidiary ledgers

2) Basic Technology Cash Receipt System

syazlina5027 — 2021-04-29 07:10:18 UTC

1. Mail Room - received customer payment and remittance advice,

the clerk will :

reconcile
endorses
gathers into batches
prepare remittance list (RL)
sent RL and checks to cash receipt department
RA and RL to AR department

2. Cash Receipts - received RL and check from mail room, the casher will :

records checks in cash receipt journal
sent to bank with 2 copies of deposit slip
prepares journal voucher
sent it to general ledger department

3. Account Receivable - use the RA to reduce customer's account balance consistent with amount paid, the AR clerk will :

prepares summary of changes to account balance
sent to general ledger department

4. General Ledger Department - once received document from AR and cash receipt department, the general ledger clerk will :

reconciles the information
post to the control accounts

5. Controller's Office - the controller office clerk will :

responsible to the accounting document
prepares financial report

3) Advance Technology Integrated Sales Order Processing System

syazlina5027 — 2021-04-29 07:12:53 UTC

Sale Procedures

The Sales Clerk's - receives customer order, the clerk will :

1. Check customer's request either approved or denied by:

accesses inventory subsidiary file
check the availability of inventory item requested

2. If credit is approved,

system adds a record to the sale invoice file
transmits a digital stock release document to the warehouse
send digital copy of the packaging slip to the shipping department

The Warehouse Clerk's will :

produce a hard-copy printout of the electronically transmitted stock release document
pick out the goods
sends to the shipping department with a copy of stock release

The Shipping Clerk's will :

1. Once received goods from warehouse,

reconciling the goods with packing slip
preparing for shipment
select a carrier

2. After goods are shipped,

clerk will access the system
transmits a digital shipping notice to signal that the transaction is complete

The System will :

update the customer's credit history record
reduce the quantity-on-hand filed in the inventory subsidiary records
Determines if the inventory quantity-on-hand has fallen below the recorder point
places an "on-order" flag in inventory record
insert a shipped date in sales invoice record to indicate the order's status
update GL account
produce and distributes various management report

4) Advance Technology Integrated Cash Receipts System

syazlina5027 — 2021-04-29 07:14:30 UTC

1. Mail Room - received check and remittance advice, the clerk will :

endorse check for deposit only
reconciles check and RA
prepare RL
check, RA & copy of RL sent to cash receipt department

2. Cash Receipt - the clerk will :

reconcile check, RA & RL
prepare deposit slip
access cash receipt system
creates a record on remittance file (cash receipt journal)
file RL, RA & deposit slip
security group deposit checks in the bank

3. Automatic Data Processing Procedures - when cash receipt data entry complete, the system will :

closes the sales invoices covered by customer check with placing customers check number and payment date
post to GL account
prepare and distribute various management report

4. Controller's Control - clerk will :

reconciliation of RL, bank deposit slip, cash receipt journals and GL cash account.