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The Order Entry/Sales (OE/S) Process

Introduction
The order entry/sales (OE/S) process includes the first four steps in the order-to-cash process
1. 2. 3. 4. pre-sales activities sales order processing picking and packing the goods shipping

Billing and processing the customer payment, are described in Chapter 11, the billing/accounts receivable/cash receipts process

The OE/S Process Flowchart

Control Matrix for OE/S


Control Goals of the OE/S Business Process Control Goals of the Operations Process Ensure effectiveness of operations: Ensure efficient employmen t of resources (people, computers) Ensure security of resources (inventory, customer master data) Control Goals of the Information Process For sales order inputs (i.e., customer orders), ensure: For sales order and inventory master data, ensure: For shipping notice inputs (i.e., shipment data), ensure: For sales order and inventory master data, ensure:

Recommended control plans

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IC

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UC

UA

IV

IC

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U C

UA

P-1: Enter customer order close to where the order is received P-2: Customer credit check

P-1

P-1

P-1

P-1

P-1

P-2

P-2

P-2

P-3: Populate input screens with master data P-4: Programmed edit checks

P-3

P-3

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P-3

P-3

P-4

P-4

P-4

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P-5: Compare input with master data

P-5

P-5

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P-5

P-5

P-6: Preformatted screens

P-6

P-6

P-6

P-6

P-7: Online prompting

P-7

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P-8: Procedures for rejected inputs

P-8

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P-8

P-8

P-9: Confirm input acceptance

P-9

P-9

OE/S Control Matrix, Contd.


Control Goals of the OE/S Business Process Control Goals of the Operations Process
Ensure effectiveness of operations: Ensure efficient employm ent of resource s (people, computer s) Ensure security of resources (inventory, customer master data)

Control Goals of the Information Process


For sales order inputs (i.e., customer orders), ensure: For sales order and inventory master data, ensure: For shipping notice inputs (i.e., shipment data), ensure: For sales order and inventory master data, ensure:

Recommended control plans

IV

IC

IA

UC

UA

IV

IC

IA

UC

UA

P-10: One-for-one checking of picking ticket with the goods P-11: Enter shipment data in shipping P-12: Turnaround document

P-10

P-10

P-10

P-10

P-10

P-11

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P-11

P-12

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P-13: Automated data entry

P-13

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P-13

P-14: Independent shipping authorization P-15: One-for-one checking of goods, picking ticket, sales order M-1: Independent customer master data maintenance M-2: Review open sales orders (tickler file) M-1

P-14

P-14

P-15

P-15

P-15

M-1

M-1

M-2

M-2

P-1: Enter customer order close to where the order is received.


P-2: Customer credit check. P-3: Populate input screens with master data. P-4: Programmed edit checks.

P-5: Compare input data with master data.


P-6: Preformatted screens.

P-7: Online prompting.


P-8: Procedures for rejected inputs.
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P-9: Confirm input acceptance.


P-10: One-for-one checking of picking tickets with the goods. P-11: Enter shipment data in shipping. P-12: Turnaround document (picking ticket).

P13: Automated data entry.


P-14: Independent shipping authorization.

P-15: One-for-one checking of goods, picking ticket, sales order.

M-1: Independent customer master data maintenance.


M-2: Review open sales orders (tickler file).

INTRODUCTION
The billing/accounts receivable/cash receipts (B/AR/CR) process is an interacting structure of people, equipment, methods, and controls designed to create information flows and records that accomplish the following: 1. Support the repetitive work routines of the credit department, the cashier, and the accounts receivable department 2. Support the problem-solving processes of financial managers 3. Assist in the preparation of internal and external reports

SYSTEMS FLOWCHART OF THE BILLING FUNCTION

P1: Review shipped not billed sales order P2: Compare the input shipping notice to the sales order master data P3: Independent billing authorization P4: check for authorized prices, terms, freight, and discounts P5: Independent pricing data

P6: Confirm input acceptance


P7: Reconcile input and output batch totals

P8: Procedures for rejected units M1: Confirm customer accounts regularly M2: Computer agreement of batch totals

SYSTEMS FLOWCHART OF THE CASH RECEIPTS BUSINESS PROCES

P1: Immediately endorse incoming checks P2: Turnaround documents P3: Enter cash receipts close to where cash is received P4: Edit cash receipts for accuracy P5: Compare input data with master data P6: Manual agreement of batch totals P7: Procedures for rejected inputs P8: One-for-one checking of deposit slip and checks.

M1: Immediately separate checks and remittance advices M2: Reconcile bank account regularly M3: Monitor open accounts receivable