Chapter 2 - Business Systems Flashcards
What are the 5 stages of the sales cycle?
- Order received
- Goods despatched
- Invoice is raised
- Transaction recorded in books
- Money received
Name 2 control objectives for sales for Stage 1 - Order received
- Sells to customers with good credit ratings
- Deals with orders promptly
Name 2 examples of sales controls in Stage 1 - Order received
Credit checks carried out on new customers
All orders are checked against customers credit limit
Sequentially pre-numbered order forms (can identify each order by number and make sure ones aren’t missed)
Name 2 control objectives for sales in Stage 2 - Despatch goods
- Inventory is kept secure
- All movements are recorded correctly
Name 2 examples of sales controls in Stage 2 - Despatch goods
- Inventory is kept physically secure with restricted access
- Use goods despatched register and use sequentially pre-numbered despatch notes
- Make sure customer signs for all deliveries
Name 2 control objectives for sales in Stage 3 - Invoicing
- Ensure all goods are paid for
- Invoices are accurate
Name 2 examples of sales controls in Stage 3 - Invoicing
- All invoices issued matches Goods Despatched Notes
- Check all GDNs are provided (will know due to being Sequentially numbered)
Name 2 control objectives for sales in Stage 4 - Recording transactions
- All transactions are recorded accurately
- All information is complete
Name 2 examples of sales controls in Stage 4 - Recording transactions
- Stamp GDN’s and invoices recorded
- Review all invoices and GDNs to ensure no gap in sequential order
- Produce customer statements
Name 2 control objectives for sales in Stage 5 - Receiving money
- All receipts are recorded in cash book and banked promptly
- Receipts are recorded against correct customer ledgers
Name 2 examples of sales controls in Stage 5 - Receiving money
- Bank reconciliations done at regular intervals
- Monies not received are chased for payment
- Review of Aged Receivables accounts are done at regular intervals
