2. Well Come To Our Presentation Accounting Information System Topic: Report on Revenue Cycle

3. GROUP SIX (6)

5.  AIS is a structure that a business uses to collect, store, manage, process, retrieve and report its financial data.  A computer-based method for tracking accounting activity.  Accounting Information System is a designed to support all accounting functions and activities.

6.  Revenue cycle is primary external exchange of information with customers.  In their revenue cycle they have  Sales Order.  Billing  Delivery.  Cash Collection.

7.  The revenue cycle is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting cash in payment for those sales  Even though companies use different steps depending up on their business type but the overall procedure is the same.  The revenue cycle starts when companies begin taking the order and is not complete until companies receives payment and pass the point of no return

8.  The primary of objective of revenue cycle is to provide the right product in the right place, at the right time for the right price.  In addition A well-designed accounting information system of revenue cycle should provide adequate controls to ensure that the following objectives are met: ▪ All transactions are properly authorized. ▪ All recorded transactions are valid (actually occurred). ▪ All valid, authorized transactions are recorded. ▪ All transactions are recorded accurately. ▪ Assets, (cash, inventory etc) are safeguarded from loss or theft. ▪ Business activities are performed efficiently and effectively

9.  Under revenue cycle of accounting information system there are four basic business activities. I. Sales order entry II. Shipping III. Billing and updating accounts receivable IV. cash collections

10. I. Sales order Entry  The sales order entry entail four stapes  Taking the customer’s order  Checking and approving customer credit  Checking inventory availability  Responding to Customer Inquiries II. Shipping  Shipping the desired merchandise. This process entails two steps  Picking and packing the order  Shipping the order

11. III. Billing customer & updating Account Receivable This process entails two separate but related tasks:  Invoicing Source document: sales invoice  Updating account receivable Source document: credit memo and monthly statements IV. Cash Collections  The final step in the revenue cycle is cash collections  The cashier handles customer remittances and deposits them in the bank  A remittance list provides the names and amounts of all customer remittances, and sends it to accounts receivable

12. IV. Cash Collections  The final step in the revenue cycle is cash collections  The cashier handles customer remittances and deposits them in the bank  A remittance list provides the names and amounts of all customer remittances, and sends it to accounts receivable

13. i. Sales Order Entry  Incomplete or inaccurate customer orders,  Credit sales to customers with poor credit history  legitimacy of orders  Stock outs, Carrying costs & markdowns.  Data entry edit checks  Credit approval by credit manager and accurate records of customer account balances  Signatures on paper documents  Inventory control system and Physical inventory counts ThreatsControl

14. ii. Shipping  Shipping errors like wrong merchandise,wrong quantities, wrong address  Theft of inventory  Fail of ship the goods  Data Reconciliation of sales order with picking ticket and packing slip; bar code scanners; data entry application controls  Restrict physical access to inventory  periodic physical counts of inventory Threats Control

15.  Failure to bill customers  Billing errors  Posting errors in updating accounts receivable  Inaccurate or invalid credit memos.  Separation of shipping and billing functions  Reconciliation of picking tickets and bills of lading with sales orders  Data entry edit control configure system for automatically enter price data  Reconciliation of subsidiary accounts receivable ledger with general ledger, monthly statement to customers Threats Control iii. Billing and account Receivable

16.  Theft of Cash  Cash flow problem  Handling cash or checks and posting remittance to customer accounts should be done by different person  Performing reconciliation of cashiers cash book and bank account by an independent person  Lockbox, Discounts for early payment, cash flow budgeting iv. Cash Collection Threats Control

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