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CHAPTER 6

CHAPTER 6. THE SALES/COLLECTION BUSINESS PROCESS. The sales collection process is a series of operating events that collectively serve to attract customers, help customers select goods and services., deliver the goods and services requested and collect payments for the goods and services.

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CHAPTER 6

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  1. CHAPTER 6 THE SALES/COLLECTION BUSINESS PROCESS

  2. The sales collection process is a series of operating events that collectively serve to attract customers, help customers select goods and services., deliver the goods and services requested and collect payments for the goods and services. If the sales/collection process does not function well, it is unlikely the organization will the generate sufficient revenue to sustain itself. Generating revenue is the key to achieving growth and profitability Planned production this planning impacts financial resources the organizations must secure and manage through the financing process. In not-for-profit instructions, the revenue/collection and acquisition/payment processes are highly integrated because of the use of fixed budgets.

  3. The Following explanation of the flowchart is organized by operating events : • Take Order • Approve Credit • Fill Order • Ship Product • Bill Customer • Receive Payment • Information Processes • An Overview of The Traditional Automated Sales/ Collection Process • Information technology has been applied to the traditional sales/collection process. • Typical IT applications automated the business and information process rules f the manual system

  4. From Customer or salesperson Customer’s order Enter order via terminal Error and exception display Performed by sales order clerk Merchandise inventory master file Customer master file Edit order, perform credit check, and check inventory Open sales order file file Customer’s order Orders Print order document Picking slip Acknowledge 1 Sales order To warehouse To customer Orders EXHIBIT 6-3 Traditional Automated Sales/Collection Process Flowchart-Order Entry

  5. To refer to these flowcharts as you read the following narrative Order Entry Warehousing/Shipping Billing Remittance Account Receivable Receive Customer Payments The information risk of lapping. Lapping occurs when a employee steals cash from a customer payment and delays posting a payment to the customer’s account. Other information risk associated with receiving cash include failing to record a customer payment, accepting duplicate payments for the same invoice, crediting a payment to the wrong customers account and depositing a payment in the wrong cash account.

  6. From mail room Picking list (amended) Enter data concerning goods delivered to shipping Performed by shipping clerk Error and exception display Edit data concerning picked goods Packing list (amended) Shipping file Shipping Reference file Print shipping document Packing slip Pack goods with packing slip enclosed and ship Performed by shipping clerk Shipping File C To carrier and customer To billing 1 shipping notice 2 1 Bill of lading 2 EXHIBIT 6-4 Traditional Automated Sales/Collection Process Flowchart-Shipping

  7. EXHIBIT 6-7 Traditional Automated Sales/Collection Process Flowchart-Cashier From mail room Performed by cashier Compare 1 Remittance list Check From other Sources Check Enter data from checks Cash receipts file Add new check data to file andprints output 1 Remittance list Checks C/R File From other Sources From other Sources From other Sources C 1 Deposit slip Cash receipts 1 Listing (journal) 2 2 3 3

  8. Organizations can significantly improve processes by following just one simple principle Embedding IT into the business process allows business and information processes to be improved simultaneously. The sales/collection process contributes several important numbers for external reporting, including gross sales, sales returns, sales allowances, sales discounts, bad debt expense and the accounts receivable balance. Accounting uses information from this process to prepare management reports and financial statements

  9. (1,1) Customer (1,1) (0,*) (1,1) Call on Customer (1,1) (0,*) (1,1) (0,*) (0,*) (1,1) Sales personal (0,*) (1,1) Receive Customer order (0,*) (0,*) (1,1) (1,*) (0,*) Order Personnel (1,1) (1,*) (0,*) Inventory Prepare Shipment Warehouse personal (0,*) (1,1) (1,*) (0,*) (1,1) (1,*) (0,*) Shipping personnel (0,*) (0,*) (1,1) Deliver Goods to Customer Bank (1,1) (0,*) Cash (1,1) (0,*) (0,*) (1,1) Carrier (1,*) (0,*) (0,*) Collect Payment (0,*) (1,1) Treasury personnel EXHIBIT 6-9 REAL Model for Christopher, Inc. (Without relationship semantics)

  10. Supplier (1,1) (0,*) Item Order Salesperson (1,*) (1,*) (0,*) (1,1) (0,*) Customer (1,1) EXHIBIT 6-10 Partial REAL Diagram for J&T Video

  11. Supplier Item (1,1) (1,1) Sale (1,1) (1,1) (0,*) (0,*) (0,*) Category Customer (0,*) (1,*) (0,*) (1,*) (0,*) (1,1) (0,*) Purchase employee Buyer/SP (1,1) (0,*) EXHIBIT 6-11 Partial REAL Model for CAEC

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