Chapter 12 - Sales/Collection process. After studying this chapter you will be able to: Explain its role and purpose; list and discuss, in order, the steps in the process; explain how the generic structure of most AIS applies to the process; process common transactions; design & critique internal controls based on common risk exposures; develop & interpret process-related systems documentation. | Chapter 12 Sales/Collection Process Outline Expected outcomes Process role & purpose Process steps AIS components Systems documentation Expected outcomes With respect to the sales / collection process: Explain its role and purpose. List and discuss, in order, the steps in the process. Explain how the generic structure of most AIS applies to the process. Process common transactions. Design & critique internal controls based on common risk exposures. Develop & interpret process-related systems documentation. Process role and purpose Sell goods and services to clients On account For cash Collect payment from clients Value chain relationships Marketing and sales Outbound logistics Service (to the extent service is sold) Process steps Take customer order. Forms: customer order Agents: Sales staff, customer Approve customer’s credit. Forms: customer order (to verify total amount) Agents: Credit department Process steps Fill the order based on approved credit. Forms: Picking list Agents: Warehouse staff Ship the product. Forms: Packing list, bill of lading Agents: Delivery staff and / or common carrier Process steps Bill the customer. Forms: Customer order, bill of lading, invoice Agents: Billing clerks, customer Collect payment. Forms: Invoice, remittance advice, customer check Agents: Cash receipts clerks, customer Process uncollectible receivables as necessary. Process steps Lecture break 12-1 Which steps in the sales / collection process could be made more efficient / effective with information technology? How is human judgment involved in the sales / collection process? AIS components Inputs & outputs Forms listed on previous slides Processes Process steps Accounting cycle Common transactions Sales for cash Sales on account Cash collections Inventory returns Freight payments Bad debt write-off AIS components Storage Master files Employee Inventory Customer Transaction files Sales Cash receipts Junction files Sales / inventory AIS components Internal . | Chapter 12 Sales/Collection Process Outline Expected outcomes Process role & purpose Process steps AIS components Systems documentation Expected outcomes With respect to the sales / collection process: Explain its role and purpose. List and discuss, in order, the steps in the process. Explain how the generic structure of most AIS applies to the process. Process common transactions. Design & critique internal controls based on common risk exposures. Develop & interpret process-related systems documentation. Process role and purpose Sell goods and services to clients On account For cash Collect payment from clients Value chain relationships Marketing and sales Outbound logistics Service (to the extent service is sold) Process steps Take customer order. Forms: customer order Agents: Sales staff, customer Approve customer’s credit. Forms: customer order (to verify total amount) Agents: Credit department Process steps Fill the order based on approved credit. Forms: Picking list
