THE SALES/COLLECTION BUSINESS PROCESS

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
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
  customers 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
EXHIBIT 6-4 Traditional Automated
Sales/Collection Process Flowchart-Shipping
7
EXHIBIT 6-7 Traditional Automated
Sales/Collection Process Flowchart-Cashier
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
EXHIBIT 6-9 REAL Model for Christopher, Inc.
(Without relationship semantics)
10
EXHIBIT 6-10 Partial REAL Diagram for JT Video
11
EXHIBIT 6-11 Partial REAL Model for CAEC
12
(No Transcript)