DZ Card Philippines

Inc.
Revenue Cycle

Column1 No. Input Process

1 Client's Purchase
Sales Order Entry Sales Representative will accept?
Order/Customer Order

Sales Order Entry 2 Approved Purchase Order Acctg department will approve?

Filling the orders 3 Sales Order Checking of inventory

once confirmed that inventories were

Filling the orders 4 J.O. enough
 Shipping (sales) 5 Finished goods Ready to Ship

Shipping (sales) 6 Finished goods Shipment

Billing and Collection 7 Billing Payment/Collection

 Output Department/Person in Charge Documents Received

Approved Purchase Order Sales Department P.O. from client

Sales Order Acctg Department S.O. by DZP

Job Order.

Picking slip - The picking

ticket printed by the sales
order entry triggers the
shipping process and is used
to identify which products to
remove from inventory.
A physical count is compared
with the quantities on the
picking ticket and packing
slip.
Acctg/inventory and warehouse staf
The packing slip lists the
quantity and description of
each item included in the
shipment.

The bill of lading is a legal

contract that defines
responsibility for the goods
in transit.

Finished goods Warehouse?/accrtg/inventory

Billing - Accurate billing is
crucial and requires
information identifying the
items and quantities
shipped, prices, and special
sales terms. Acctg

SOA - to summarize if the

customers have outstanding
balances

Delivery receipt

O.R. Acctg
 No. of Copies Where the individual copies end up Entry Made Should be Entry

3 (1) client (2) sales (3) acctg

3 (1) acctg (2) warehouse (3)Inventory

(dr) finished goods (cr) raw

mats
 (dr) A/R (cr) Sales
(1) acctg (2) warehouse/inventory (3)
3 (dr) COGS (cr) FG
client
(dr) COGS (cr) A/p

3 (1) acctg (2) warehouse (3) client

3 (1) Client (2) Acctg (3) filing (dr) Cash (cr) A/R
By whom: Remarks
 The billing/accounts
receivable function should
not have physical access to
cash or checks.

The accounts receivable

Acctg function must be able to
identify the source of any
remittances and the
applicable invoices that
should be credited.

Checks are received and

deposited.
A remittance list is
prepared and entered on-
line showing the customer,
invoice number, and the
amount of each payment.
The system performs a
number of on-line edit
checks to verify the
accuracy of data entry.
 Applicable Control
Threat Procedures

1. Incomplete or
inaccurate customer Data entry edit checks
orders

Credit approval by credit

2. Credit sales to manager, not by sales
customers with poor function; accurate
credit records of customer
Sales Order Entry account balances

Signatures on paper
3. Legitimacy of documents; digital
orders signatures and digital
certificates for e-business

4. Stockouts, carrying Inventory control systems

costs and markdowns

Applicable Control
Threat Procedures
1. Shipping errors:
Reconciliation of sales
•Wrong merchandise order with picking ticket
and packing slip; bar
•Wrong quantities code scanners; data entry
application controls
•Wrong address
Restrict physical access to
Shipping inventory;

Documentation of all
internal transfers of
2. Theft of inventory inventory; periodic
physical counts of
inventory and
reconciliation of counts
of recorded amounts
 Threat Applicable Control
Procedures
1. Failure to bill Separation of shipping
customers and billing functions;
Prenumbering of all
shipping documents and
periodic reconciliation to
invoices; reconciliation of
picking tickets and bills of
lading with sales orders

Billing and
Accounts
Receivable

2. Billing errors Data entry edit control

Price lists
3. Posting errors in Reconciliation of
updating accounts subsidiary accounts
receivable receivable ledger with
general ledger; monthly
statements to customers

Threat Applicable Control

Procedures
1. Segregation of duties;
Theft minimization of cash
of handling; lockbox
Cash arrangements; prompt
endorsement and deposit
of all receipts
Cash Collections
Periodic reconciliation of
bank statement with
records by someone not
involved in cash receipts
processing
Payable entries