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Revenue and receipts cycle - Coggle Diagram
Revenue and receipts cycle
Ordering function
Key documents
Internal sales order
Price list
Credit application form
Credit Bureau information
Customer order
When an order is received person responsible generates an internal sales order
Internal sales order should
Be numerical
Contain customer details
Specify quantity ordered
Contain prices per official list
Authorised by credit manager / sales manager
Identify customer
New customers must follow credit application process
Complete application form
Background checks performed to check creditworthiness
If successful, credit department determines credit limit
Info captured on permanent master file
Chnages to details must be authorised by credit controller
Existing customers
Client should present account number or ID number
Order should be checked against credit limit
Dispatch function
Key documents
Picking slip
Delivery note
Back order note
List of deliveries
Picking of goods
Person responsible for this
Uses a signed copy of the picking slip
Dlivery note generated once goods have been picked
Goods out of stock identified and a back order note created
Transfer of goods to dispatch
Goods transferred to be packed, labelled and delivered
Delivery of goods
Delivery note should be generated
Sequentially numbered
Describes quanity and the goods
Signed by client - acknowledgement of recipet of goods
Recorded in a register to be matched with invoice
Issued in duplicate copy
Counter sales
customer should sign the DN or invoice
Checking of items to the invoice
Gate control
gaurds should count goods and agree with DN, and sign
Gaurds should check quantity on DN vs quanity being delivered
Invoicing function
Key documents
Sales invoice
Price list
On return of a signed DN from customer
DN should be matched with the ISO
Invoice should be generated
Numerical list of DNs and invoices frequently produced and followed up on by a senior person
Quantities on the invoice are obtained from delivery note
Price on invoice obtained from price list
Calculations reviewed by an independent person
Revenue recording function
Key documents
Invoice
Sales journal
Debtors ledger
General ledger
Invoices must be recorded accurately and entered against correct debtor
Compare invoice to DN to check the following
Quanity
Description
Prices
Sequence checks on invoices - missing or duplicate numbers followed up
4, Trace posting from sales journal - debtors ledger - general ledger
Monthly statements sent out by independent person
Credit management function
Key docs
Docs throughout cycle
Age analysis
Monthly statement
Credit bureau info
Credit applicaton process
Identification of debtor to be handed over to lawyers
Reciepts from debtors
Basic controls
Segregation of duties
Different forms of cash should be kept and recorded separately
Stationery control
Money recieved via mail
Safeguarding of money
Controls over cash
Cashiers
Petty cash
Controls over bank acount
Bank a/c reconciled with cashbook
Independent persion writes up cashbook
Reviewed by senior independent official
EFTs is also a valid receipt method
Risks
Lapping / Rolling
Kiting
Procedures to mitigate risks
Positive a/c receivable confirms
Surprise cash counts and bank recons
Cash summaries compared to entries in cash reciepts and cash payment records.