Section: Revenue Subsystem Subsection No: 050-01

Subsection: Overview Page: 1 of 3

OVERVIEW

The Revenue Cycle of Chuabols Corporation focuses on the receipt of orders, sales

order approval, release of goods from warehouse, delivery and billing of goods, receipt of

payment, issuance of official receipt, preparation of sales report, accounting for sales

returns and establishment and assessment of receivables for the home office while it also

has over-the-counter sales in its branches.

The Revenue subsystem of Chuabols Corporation is a semi-automated system

accessed by appropriate personnel which is supported by source documents prepared by

designated personnel. The personnel who are given access to the system is separate and

distinct to the personnel who are tasked to prepare source documents. Pertinent

information in a sales transaction is stored in separate databases such as Transaction Files,

Register Files and Master Files.

The over-the-counter sales in the branches starts with the receipt of orders with the

preparation of Cash Sales Invoice by the Store Clerk and receipt of payment from the

customer which is then reconciled by the Store Manager backed up by the Daily Cash

Sales Report to be forwarded to the Controller.

The sales process in the home office begins with the receipt of order from the order

supported by a Sales Order document. For cash sales, Sales Order is then forwarded to

the Sales Department Manager for approval of the encoded details in the system with the

corresponding notices to Warehouse Department and Production Department. For credit

sales, the customer shall be investigated by the Credit Officer with a Credit Investigation

Report to be forwarded to the Treasurer for approval before appropriate notice to related

departments shall be made. For new credit customers, the General Manager shall be

involved in the review and assessment of the Credit Investigation Report.

Section: Revenue Subsystem Subsection No: 050-01
Subsection: Overview Page: 2 of 3

After approval of Sales Order, the Sales Department sends the Sales Order to the

Warehouse Department and subsequently forwarded to the Accounting Department who

is tasked to update the Finished Goods Master File. For cash sales, Cash Sales Invoices is

prepared by the Cashier to be forwarded to the Sales Department. For credit sales, Charge

Sales Invoices is prepared by the Sales Department. The Sales Department updates the

Sales Register File by creating a Sales Invoice Transaction File. The Sales Invoices is

forwarded to the Delivery Personnel. The Delivery Personnel delivers the order to the

customer. For cash sales, payment is received by the Delivery Personnel. For credit sales,

the Delivery Personnel forwards the Charge Sales Invoice to the Accounts Receivable

Clerk.

For cash sales, payment is then forwarded to the Cashier and subsequently to the

Controller for the update of the Cash in Bank Master File in the system. For credit sales,

a statement of account generated by the system is given to the customer through the

Collection Officer. Payment is then forwarded to the Cashier to be deposited to the bank

with notification sent to the Accounts Receivable Clerk. Accounts Receivable Clerk

updates the Accounts Receivable Subsidiary File and correspondingly, the Accounts

Receivable Master File. All deposit slips are then forwarded to the Treasurer.

A sales report in the home office is prepared by the Sales Department Manager that

is generated through the system representing the Sales Transaction in the company both

in the home office and branches for the day with specifications to the Sales Mix which is

then sent to the Production Department Manager for assessment of the sales.

The accounting for Sales Returns starts with the validation of the Sales Return

represented by the Sales Return Slip prepared by the Receiving Personnel. The Sales

Return Slip is then forwarded to the Warehouse Department and Sales Department for
Section: Revenue Subsystem Subsection No: 050-01
Subsection: Overview Page: 3 of 3

approval. The Sales Clerk encodes the details in the Sales Return Slip to the system and

creates the Sales Return Transaction File to be reviewed by the Sales Department

Manager. A Credit Memo is then prepared after approved by the Treasurer by the

Accounts Receivable Clerk after receipt of Sales Return Slip and updates the Accounts

Receivable Subsidiary File before the authorization of the Sales Return.

The assessment of Receivables begins with the Accounts Receivable Aging Report

with a suggested list of write-offs prepared by the Accounts Receivable Clerk. It is then

forwarded to the Credit Officer and prepared the Write Off Memo. It is subsequently

forwarded to the Controller and General Manager for review and approval of the Write

Off Memo. The Write Off Memo is then forwarded to the Board of Directors for approval.

A list of delinquent customers is prepared by the Accounts Receivable Clerk and

forwards the Collection Officer for a follow up of due accounts.