REVENUE CYCLE

Question 1

ORDERING FUNCTION

Answer 1

Customer places an order, do credit check on new credit customer and ensure old credit customer doesn’t go over the credit limit.
Numerical order, customer name, quantity and price list.
authorised by credit/sales manager.

Question 2

DISPATCH FUNCTION

Answer 2

Warehouses packages the order, picking slips, delivery note, ensure the correct order goes to the correct customer. Security ensure that goods in the delivery vehicle match the delivery note

Question 2

INVOICE FUNCTION

Answer 2

invoice issued to delivered goods and record in system, delivery note must match the invoice

Question 3

OBJECTIVES

Answer 3

OCCURRENCE/VALIDITY - All recorded sales are valid and supported by documentation
COMPLETENESS - All sales are recorded and nothing is left out
ACCURACY - All sales recorded with the correct amount
RECORDING - All sales are recorded correctly
AUTHORISATION - Sales are authorised by sales manager
CLASSIFICATION - Cash or credit, internal or external
CUT-OFF - Sales recorded timeously in correct period

Question 3

CREDIT MANAGEMENT FUNCTION

Answer 3

Keep in check of payments from debtors, send reminders and monthly statements and ensure payment received, limit credit risk and minimise bad debts

Question 3

RECORDING REVENUE FUNCTION

Answer 3

revenue recorded completely, accurately and in correct period.

Question 4

INTERNAL CONTROLS

Answer 4

HOW TO ACHIEVE THE OBJECTIVES

Question 5

TEST OF CONTROLS

Answer 5

SAMPLING,INSPECTION, RE-PERFORMANCE, THIS ENSURES THAT THE CONTROLS SET ARE WORKING