Sales Cycle
Revenue Cycle
Introduction
As an external auditor who audits the financial statements of Fraser & Neave Holdings Berhad, he has to ensure the Fraser & Neave’s financial statement reflects true and fair view accordance with approved accounting standards. To access the accounting system and internal controls starting point is Revenue Cycle. Sales cycle is the process businesses use to describe the financial progression of company’s accounts receivables from the beginning which the company acquire product to the end of cycle when the company received cash payments from customers in cash or within credit terms if there is credit sales of products.
The sales accounting system of such an entity is relatively unaffected by whether the merchandise is acquired from others. Thus Sales cycle is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting their cash payments. The primary objective of the sales cycle is providing the right product in the right place at the right time for the right price.
Credit sales
An order entry function is starting point in the credit sales cycle. Under this function orders received, accepted and then translated into shipping and billing instructions. Order entry may or may not be integrated with the accounting system. The original order may be a written purchase order mail in by a customer, or be taken over the phone or through electronic lodgment by mechanism such as the Internet.
Sales order
At this point, a decision needs to be made concerning whether to accept the order. Specific approval of credit department my required, there may be a list of approved customers determined by the credit department; or credit limits may be established that are checked by order entry. The availability of the items ordered is also established by checking the inventory records for the level of inventory items currently on hand.
Shipping
Introduction
As an external auditor who audits the financial statements of Fraser & Neave Holdings Berhad, he has to ensure the Fraser & Neave’s financial statement reflects true and fair view accordance with approved accounting standards. To access the accounting system and internal controls starting point is Revenue Cycle. Sales cycle is the process businesses use to describe the financial progression of company’s accounts receivables from the beginning which the company acquire product to the end of cycle when the company received cash payments from customers in cash or within credit terms if there is credit sales of products.
The sales accounting system of such an entity is relatively unaffected by whether the merchandise is acquired from others. Thus Sales cycle is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting their cash payments. The primary objective of the sales cycle is providing the right product in the right place at the right time for the right price.
Credit sales
An order entry function is starting point in the credit sales cycle. Under this function orders received, accepted and then translated into shipping and billing instructions. Order entry may or may not be integrated with the accounting system. The original order may be a written purchase order mail in by a customer, or be taken over the phone or through electronic lodgment by mechanism such as the Internet.
Sales order
At this point, a decision needs to be made concerning whether to accept the order. Specific approval of credit department my required, there may be a list of approved customers determined by the credit department; or credit limits may be established that are checked by order entry. The availability of the items ordered is also established by checking the inventory records for the level of inventory items currently on hand.
Shipping