progra( changes! >oth o' these 'unctions (ust also &e separate 'ro( the daily task o' operating the syste(! $TS# % 75! ;o is E@+ (ore than technology )hat uni4ue control pro&le(s (ay it pose A"S#E@+ represents a uni4ue &usiness arrange(ent &eteen the &uyer and seller in hich they agree- in advance- to the ter(s o' their relationship on such ite(s as selling price- 4uantities- delivery ti(es- pay(ent ter(s and (ethods o' handling disputes! The ter(s o' agree(ent are &inding!
Lock on the cash draer +nternal cash register tape that can &e accessed only &y the (anager $hysical security over the inventory! The 'olloing are e?a(ples# Steel ca&les to secure e?pensive leather coats to the clothing rack! Locked shocases to display .eelry and costly electronic e4uip(ent!
:agnetic tags attached to (erchandise- hich ill sound an alar( hen re(oved 'ro( the store! "ote to +nstructor# So(e physical security devices could also &e classied a s supervision $TS# % 7*! @escri&e the key tasks in the sales order process A"S#Sales order procedures include the tasks involved in receiving and processing a custo(er order- lling the order and shipping products to the custo(er- &illing the custo(er at the proper ti(e- and correctly accounting 'or the transaction! $TS# % 76! )hat is the purposesG o' the stock release docu(ent A"S#The stock release docu(ent also called the picking ticketG is sent to the arehouse to identi'y the ite(s o' inventory that have &een sold and (ust &e located and picked 'ro( the arehouse shelves! +t also provides 'or(al authori,ation 'or arehouse personnel to release the specied ite(s! $TS# % 7! )hat is the role o' the shipping notice A"S# The shipping notice triggers the &illing process! )hen the goods are shipped the shipping notice is 'orarded to the &illing 'unction as evidence that the custo(erHs order as lled and shipped! This docu(ent conveys pertinent ne 'acts such as the date o' ship(ent- the ite(s and 4uantities actually shipped- the na(e o' the carrier- and 'reight charges! $TS# % 79! )hat is a &ill o' lading A"S#The &ill o' lading- is a 'or(al contract &eteen the seller and the shipping co(pany carrierG to transport the goods to the custo(er! This docu(ent esta&lishes legal onership and responsi&ility 'or assets in transit! $TS# % 53! )hat is the purpose o' the credit (e(o A"S#This docu(ent is the authori,ation 'or the custo(er to receive credit 'or the (erchandise returned! Acredit (e(o (ay &e si(ilar in appearance to a
sales order! So(e syste(s (ay actually use a copy o' the sales order (arked credit (e(o! $TS# % ESSAM %! )hen Clipper :ail
o' lading- credit (e(o! A"S# A sales order is used to collect in'or(ation needed to initiate the sales process! +t can &e a copy o' the custo(erHs purchase order prepared &y the custo(er or a docu(ent prepared &y a (e(&er o' the sales staD in response to (ail- phone or personal contact ith the custo(er! +t contains in'or(ation a&out the custo(er- the type and 4uantity o' (erchandise &eing re4uested- price in'or(ation- shipping in'or(ation- etc! The &ill o' lading is prepared &y the shipping clerk! +t is a 'or(al contract &eteen the seller and the carrier ho ill transport the goods to the custo(er! +t contains in'or(ation a&out the carrier- the custo(erdescriptions o' the packagesG &eing shipped- declared value o' the goodsand in'or(ation on 'reight charges- including ho (uch and ho ill pay! A credit (e(o is a docu(ent authori,ing issuance o' credit to a custo(er 'or returned goods! +t is prepared in the sales depart(ent a'ter receipt o' a return slip 'ro( receiving! +t shos the custo(erHs na(e- reason 'or the return- a list o' ite(s and prices- and the total a(ount o' credit! :any credit (e(os re4uire additional authori,ation! $TS# % 8! )hat 'eatures o' a reengineered cash receipts syste( contri&ute to i(proved control and reduced costs )hat co(plicates the process A"S# A reengineered cash receipts syste( can include auto(ated (ail processing that opens envelopes and separates checks and re(ittance advices in a (anner that li(its access o' the (ail roo( clerk to the checks! So'tare can &e used to read the a(ount o' pay(ent and co(pare to the a(ount due- veri'y that the check has &een signed- etc! 0ood1 transactions continue through processing- e?ceptions are handled separately! Checks are sent to the cash receipts depart(ent 'or deposit- listings o' transactions are sent to accounts receiva&le- cash receipts- and general ledger depart(ents! This process is co(plicated hen the organi,ation receives (any partial pay(ents- single pay(ents covering (ultiple invoices- or encounters (any clerical errors on the part o' custo(ers! $TS# % B! )hat role does each o' the 'olloing depart(ents play in the sales order processing su&syste(# sales- credit- and shipping >e co(plete! A"S#The sales depart(ent receives the order in'or(ation 'ro( the custo(er- either &y (ail- phone- or in person! +n'or(ation is captured on a sales order 'or( hich includes custo(er na(e- account nu(&er- na(enu(&er and description o' ite(s ordered- 4uantities and unit prices plus ta?es- shipping in'o- discounts- 'reight ter(s! This 'or( is usually prepared
in (ultiple copies that are used 'or creditapproval- packing- stock releaseshipping- and &illing! The credit depart(ent provides transaction authori,ation &y approving the custo(er 'or a credit saleand returns and alloances! The shipping depart(ent receives in'or(ation 'ro( the sales depart(ent in the 'or( o' packing slip and shipping notice! )hen the goods arrive 'ro( the arehouse- the docu(ents are reconciled ith thestock release papers! The goods are packed and la&eled! The packing slip is included! The shipping notice is sent to &illing! A &ill o' lading is prepared to acco(pany the ship(ent! $TS# % *! )ith regard to segregation o' duties- rule one is that transaction authori,ation and transaction processing should &e separated! )hat does this re4uire in the revenue cycle A"S#)ithin the revenue cycle- the credit depart(ent is separate 'ro( the rest o' the process! ;ence- theauthori,ation o' the transaction granting o' creditG is independent! +' other people- e!g!- sales staD- ere a&le to authori,e credit sales- there ould &e the te(ptation to approve sales to any custo(er- even those knon to not &e credit orthy! $TS# % 6! )ith regard to segregation o' duties- rule to is that asset custody and record keeping should &e separated! )hat does this re4uire in the revenue cycle A"S#+n the revenue cycle- the arehouse has custody o' physical assets hile accounting especially general ledger and inventory controlG (aintains the records! Also- in the cash receipts su&syste(- cash receipts has custody o' the asset cashG hile general ledger and accounts receiva&le keep the records! $TS# % ! )hat role does each o' the 'olloing depart(ents play in the cash receipts su&syste(# (ail roo(- cash receipts- accounts receiva&le- and general ledger >e co(plete! A"S# The (ail roo( receives the custo(erHs pay(ent=usually a check acco(panied &y a docu(ent called a re(ittance advice hich (ay &e a copy o' the invoice sent to the custo(erG! :ail clerks separate the toprepare a cash prelist or re(ittance list hich lists all the pay(ents received and sends the checks to the cashier and re(ittance advices to accounts
receiva&le! +n cash receipts so(eone e!g!- cashierG restrictively endorses the checks and records the pay(ents in the cash receipts .ournal! A deposit slip is prepared hich acco(panies the checks to the &ank! The accounts receiva&le depart(ent posts 'ro( the re(ittance advices to the custo(er accounts in the AR su&sidiary ledger! The general ledger depart(ent records cash receipts to the cash and AR control accounts &ased on the list 'ro( the (ailroo( and the su((ary report o' posting 'ro( A/R! $TS# % 9! For each o' the 'olloing docu(ents- descri&e its purposethe 'unctional area preparing it- and the key data included# re(ittance advice- re(ittance list- deposit slip! A"S#A re(ittance advice is sent &y the custo(er to acco(pany pay(ent! ;oever- it is o'ten part o' or acopy o' the invoice previously sent &y the &illing depart(ent a'ter the goods ere shipped! A re(ittance list is o'ten called a cash prelist and is prepared &y the (ail roo( clerk to record all cash received! +t acco(panies the checks to the cashier! A deposit slip is prepared &y the cashier to acco(pany the checks to the &ank! This is usually apreprinted &ank 'or(! $TS# % %3! ;o is independent verication carried out in a (anual revenue syste( A"S#+ndependent verication occurs in several depart(ents as part o' the sales order processing syste(! The shipping depart(ent veries that the goods released &y the arehouse 'or ship(ent- as shon on the stock release docu(ent- (atch the packing slip! >illing co(pares the shipping notice ith theinvoice to &e sure custo(ers are &illed only 'or goods shipped! And general ledger reconciles the.ournal vouchers prepared &y &illing- inventory control- cash receipts- and accounts receiva&le! Thisreconciliation 'ocuses on a (atch &eteen hat as ordered- hat as re(oved 'ro( the stockroo(- hat as shipped- hat as &illed- cash received- and credit to the custo(er account! $TS# %
