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Revenue and receipts cycle - Coggle Diagram
Revenue and receipts cycle
Ordering function
Documents - CO, ISO, PL
Risks - Accepting orders from non-account holders/customers who aren't credit-worthy.
Loss of customer goodwill if orders aren't filled timeously.
Objective - To record orders from customers and initiate action to fill them.
Dispatch function
Documents - PS, DN
Risks - Incorrect goods dispatched.
Goods stolen in dispatch.
Valid picking slips not acted upon.
Goods removed (stolen) from stock using fictitious/unauthorized sales.
Objective - To fill accepted orders promptly and accurately and to ensure only authorised orders are acted upon.
Recording function
Documents - I, SJ
Risks - Invoices are omitted/duplicated from the sales journal.
Objective - To record sales made and to raise the corresponding debtor promptly.
Credit management function
Documents - Records are relevant, AA, MS
Risks - Debtors pay late/do not pay at all.
Debtors are prematurely or inappropriately written off.
Debtors are written off without authority.
Objective - The purpose of this function is to limit the loss from bad debts and to encourage debtors to pay promptly.
Invoice function
Documents - SI, PL
Risks - Goods supplied may not be invoiced, loss of business.
Invoice incorrectly prepared.
Objective - To notify the customer promptly of amounts due for goods supplied.