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  • Revenue Cycle

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    fathma azzahro
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    The document discusses the revenue cycle of a company. It describes the key activities in the revenue cycle including sales order processing, returns processing, and cash receipts. It outlines the basic technology systems used to manage the revenue cycle. It also discusses advanced integrated systems and the risks and internal controls needed to mitigate errors and fraud throughout the revenue cycle such as unauthorized access to records or misappropriation of cash. Finally, it briefly mentions how companies have reengineered their revenue cycle processes using EDI and internet technologies.

    Original Description:

    EDI technology was devised to expedite routine transactions between manufacturer and wholesalers and retailers. F. Reengineering Using the Internet Organizations worldwide have home pages on the internet to promote their products and solicit sales

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    The document discusses the revenue cycle of a company. It describes the key activities in the revenue cycle including sales order processing, returns processing, and cash receipts. It outlines the basic technology systems used to manage the revenue cycle. It also discusses advanced integrated systems and the risks and internal controls needed to mitigate errors and fraud throughout the revenue cycle such as unauthorized access to records or misappropriation of cash. Finally, it briefly mentions how companies have reengineered their revenue cycle processes using EDI and internet technologies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    29 views2 pages

    Revenue Cycle

    Uploaded by

    fathma azzahro
    The document discusses the revenue cycle of a company. It describes the key activities in the revenue cycle including sales order processing, returns processing, and cash receipts. It outlines the basic technology systems used to manage the revenue cycle. It also discusses advanced integrated systems and the risks and internal controls needed to mitigate errors and fraud throughout the revenue cycle such as unauthorized access to records or misappropriation of cash. Finally, it briefly mentions how companies have reengineered their revenue cycle processes using EDI and internet technologies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    The Revenue Cycle

    A. Overview of Revenue Cycle Activities

    Sales Order Procedures. Sales Return Procedures Cash Receipts Procedures


    1. Receive Order. 1. Prepare Return Slip. 1. Open Mail, and Prepare
    2. Check Credit. 2. Prepare Credit Memo. Remittance List.
    3. Pick Goods. 3. Approve Credit Memo. 2. Record and Deposit
    4. Ship Goods. 4. Update Sales Journal. Checks.
    5. Bill Customer. 5. Update Inventory and 3. Update AR Records.
    6. Update Inventory AR Records. 4. Update General
    Records. 6. Update General Ledger. Ledger.
    7. Update A/R Records. 7. Prepare Return Slip. 5. Reconcile Cash
    8. Post to General 8. Prepare Credit Memo. Receipts and
    Ledger. 9. Approve Credit Memo. Deposits.
    10. Update Sales Journal.
    11. Update Inventory and
    AR Records.
    12. Update General Ledger.

    B. Basic Technology Revenue Cycle


    Basic Technology Sales Order Processing Basic Technology Cash Receipts System
    System
    1. Sales Department. 1. Mail Room.
    2. Credit Department Approval. 2. Cash Receipts.
    3. Warehouse Procedures 3. Account Receivable.
    4. The Shipping Department. 4. General Ledger Department.
    5. The Billing Department. 5. Controller’s Office.
    6. AR, Inventory Control, and General
    Ledger Department.

    C. Advanced Technology Revenue Cycle


    Integrated Sales Order Processing System Sales Procedures Integrated Cash Receipts System
    1. Mail Room
    2. Cash Receipts Department.
    3. Automatic Data Processing Procedures.
    4. Controller’s Office

    D. Revenue Cycle Risks and Internal Controls


    An objective of IC is to mitigate the risk from errors and fraud.
    1. Selling to un-creditworthy customers.
    Physical Control IT Controls
    1. Transaction Authorization. Automated Credit Checking
    2. Segregation of Duties

    2. Shipping customers the wrong items or incorrect quantities.


    Physical Control IT Controls
    Independent Verification. Scanner Technology.
    Automated Inventory Ordering.

    3. Inaccurately recording sales and cash receipts transactions in journals and accounts.
    Physical Control IT Controls
    - Transaction Authorization. - Data input Edits.
    - Accounting Records. - Automated Posting to Subsidiary and
    - Pre-numbered Documents GL Accounts.
    - Special Journals. - File Backup.
    - Subsidiary ledgers.
    - General Ledgers
    - Files.
    - Independent Verification.

    4. Misappropriation of cash receipts and inventory.


    Physical Control IT Controls
    - Transaction Authorization. - Multilevel Security
    - Supervision.
    - Access Controls.
    - Segregation of Duties.

    5. Unauthorized access to accounting records and confidential reports.


    E. Reengineering Using EDI
    EDI technology was devised to expedite routine transactions between manufacturer and
    wholesalers and retailers.
    F. Reengineering Using the Internet
    Organizations worldwide have home pages on the internet to promote their products and solicit
    sales.

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