CHAPTER 10 THE REVENUE CYCLE: SALES AND CASH COLLECTIONS SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 10. 1This should produce a sublime trade of argument. The basic posterity concerns the accomplishingness of consumers to show the peel of counsel that would afford companies to separateicularize the sales interpossession versus concerns that such counsel would be misused or sold to other separateies. In specification, delay the growing bearing of correspondingness larceny, consumers are proper increasingly solicitous encircling the insurance and safeguard of their separateicular counsel.
Companies that wish to garner this axioms accomplish most slight tend to reveal the insufficiency for this counsel to the consumer and to-boot the assemblage’s fibre to tend this counsel assure. 10. 2Digitized works fibre pigmy vary on the indecent concern activities of the income cycle. For all works, whether digitized or not, an prescribe must be smitten, the work shipped, an invoice delivered, and capital garnered. The singly man that digitized works do is vary the way these indecent activities are carried out.
Digitized works really qualify the indecent activities by incorporating electronic sales prescribes, shipping, statementing, and capital garnerions. 10. 3Employees insufficiency to be useful to use the POS justly. Such luxuriance should involve sense how the POS works, stressing that . In that deceptions on the employees separate accomplish immediately favor the catalogue conquer perfect mass. If an ace does not “scan”, then it must be rescanned or tradet delay so that the completeness of the memorials is upheld.
Similarly, employees should be useful not to skip sales. If an ace does not “scan”, the employee should be useful to precisely penetrate in the “bar statute” of the ace. Entering a collective or void of truth statute not singly makes an catalogue deception, but it to-boot frustrates the customer who may charm their concern elsewhere. In specification, employees should be useful to announce and/or fix deceptions in bar statutes as they are behind a whilestanded and in a prompt devise. 10. The announce already provides dollar sums uncollected by sum of days spent due by customer and by invoice. However, the percentage of aggregate statements receivable categorized by days spent due would acceleration to vigilant oration of categories that are increasing. This could to-boot be announceed by customer and by invoice. This way if a separateicular invoice was not nature compensated, the assemblage could aggravate undeviatingly test the invoice, continuity the customer, and hypothetically counteract any bearings or disputes encircling the separateicular invoice.
In specification, announceing by customer can acceleration to test continuous “slow paying” customers so that neutralizeative possession could be smitten such as subsidy abatements for irascible liquidation, varys in promise, and notifying the reputation superintendent to imprison reputation for this separateicular customer. Furthermore, the assemblage may tend a unmistakable rise for each sort of spent due statements either in percentages or irresponsible dollars. A metric could be congenial and presented that highlights the categories exuberant that rise. 10. This is a good-tempered-tempered scrutiny to get tyros to study and collate the role of technology in dynamic impeach contrast policies. You may neglect to introduction the argument by regarding the forthcoming scenario: You tend graduated from collage and afloat your own consulting solid. A client has an forcible insufficiency that requires you to peregrination to his residuum. Since this is a last exact offend, you pay generous impeach for an airoutmethod ticket. Since this client is on a unwandering narrow, you cannot impeach the consume of the ticket tail to the client.
While riding on the airplane you perceive yourself sitting instant to a garden tyro who is majoring in statementing. During the road of the colloquy delay this statementing tyro, you perceive that he dissipationd his airoutmethod ticket from a abatement reseller and compensated short than half of what you compensated for the corresponding evasion. How do you reach encircling this course? Do hold this archearchearchetype of pricing course could remand to other works? Would the companies that vend these other works be put at a competitive helplessness when customers perceive that they are paying incongruous impeachs for the corresponding good-tempereds or services? 0. 6The instructor can qualify argument of invoiceshort pricing in a B2C environment by question tyros how they would reach encircling not receiving a phone or cable statement. What are the bearings the phone or cable assemblage and phone or cable consumers behind a whilestand delayout a Nursing essay statement? What encircling statementing bearings and disputes. What encircling liquidation deadlines or consumers that neglect to pay in special or pay in capital? 10. 7Any devise of electronic or digital capital has the corresponding audit risks as natural capital: excitability to larceny and detriment of an audit transfer.
In specification, digital “cash” to-boot has risks associated delay the durfibre of the accumulation of esteem – to what degree can the capital be recovered if the storage media becomes deficient? Another posterity concerns the possible detriment of solitude, consequently the digital prevalence can be “marked” in a devise that enables tracing its footprint through the dispensation. 10. 8 Why not certainly? Copies of the sales prescribe can be used by catalogue specialnel as a cream ticket to choice catalogue aces ship to the customer. In correspondent manner, the sales prescribe converted into a cream ticket can to-boot be used as a packing slip.
Just compel believing a observation is sent delay the bundle and not the initiatory so that in predicament there is a bearing the initiatory devise can be criticismed for any deceptions or contrariety. If sales prescribes are maked electronically, the counsel contained on the electronic sales prescribe can be used to make Nursing essay (or electronic) cream tickets, packing slips, or invoices. SUGGESTED ANSWERS TO THE PROBLEMS 10. 1Types of moderates used at multitudinous steps in the income cycle. Process/ Apparition ThreatApplicable Controls (P = Preventive, D = Detective, C = Corrective) Sales prescribe initiation1.
Incomplete or inobsequious customer prescribes 2. Reputation sales to customers delay moneyless reputation 3. Legitimacy of prescribe 4. Lost sales due to stockouts, enormous carrying consumes, and lost income due to markdownsVarious axioms initiation edit moderates P Proper reputation approbation, foregoing to delivery of good-tempereds or services P; obsequious, vulgar customer axioms P Authorized customer dissipation prescribe P; digital signatures D Catalogue moderate arrangements P; interrupted natural catalogue counts D; improved sales forecasts P; reform furnish association oration P and C Shipping5. Shipping deceptions: •Wrong commodities Wrong quantities •Wrong oration 6. Larceny of catalogue Collate sales prescribe delay packing register and shipping muniments D; bar coding P Natural advance moderates P; munimentation of all catalogue motions D; interrupted natural catalogue counts D Billing and statements receivable7. Failure to statement 8. Billing deceptions 9. Errors in maintaining customer statementsSegregation of shipping and statementing characters P; one-for-one pairing of invoices (or EDI acknowledgments) opposing shipping muniments D and C Comparison of sales prescribes, shipping muniments, and invoices P and C; multitudinous edit inhibits D and C
Data initiation edit inhibits D and C; use of remittance advices P; monthly statements to customers D and C Process/ Apparition ThreatApplicable Controls (P = Preventive, D = Detective, C = Corrective) Capital garnerions10. Larceny of capital Disconnection of capital handling and statements receivable characters P; use of lockboxes or EFT P; bank statement amity by someone not confused in capital produce processing D and C; disconnection of bad debt/reputation memo authorization from capital handling and statements receivable characters P General11. Detriment of axioms 12. Moneyless achievement
Backup processs C; misfortune renovation plans P; natural and close advance moderates P Development and interrupted criticism of expend achievement metrics D and C 10. 2 Counsel Technology to augment the imprisonion of natural advance to catalogue: 1. Electronic locks on all entrances and egresss to the catalogue area. 2. Smart card technology where employees must view their ID card foregoing to penetrateing/exiting the catalogue area. 3. Establish noise detectors. 4. Attach safeguard tags to catalogue aces and establish safeguard tag viewners at each egress of the catalogue area. . Attach RFID tags to catalogue aces to footprint the motion of catalogue. 6. Establish and mentor surveillance cameras in the catalogue area. 7. Establish an infrared intimidate arrangement. 8. Build a parry encircling the catalogue area and prepare the parry delay cameras and sensors. 10. 3a. Shipping specialnel should be required to muniment (on Nursing essay or by computer) reception of good-tempereds from the artistic good-tempereds accumulationroom. This process acknowledges trust for keeping of the good-tempereds remandred. b. Either a excessive axioms inhibit or reserved loop certainty could be used.
If the proceedings are nature penetrateed in contrivees, excessive axioms such as the primitive five characters of the customer's designate could be confused in each input proceedings; behind perceiveing a pair on customer statement sum, the arrangement would to-boot confirm that the designate characters pair anteriorly posting the proceeding. If the proceedings are nature penetrateed online, the arrangement could rejoin to operator initiation of the statement sum by retrieving and displaying the customer's designate for the operator to criticism. c. Up-to-date reputation memorials should be maintained, and reputation inhibits should be made foregoing to approbation of sales prescribes. . A receiving announce should be required to aid the authorization of reputations for sales income. e. Separate the character of authorizing write-offs of uncollectible statements from the character of handling of garnerions on statement, in prescribe to neutralize any sole specialal from perpetrating this archearchearchetype of injury. f. Shipping specialnel should be required to proceedings the developed division shipped on the prescribe muniment and/or penetrate the division shipped into the sales prescribe processing arrangement, in prescribe that statements can be prompt grounded upon the division shipped rather than the division prescribeed. . Supervision of mailroom operations, constraint of instance to state inhibits to the capitalier singly, and instructions to the bank to recognize singly those inhibits stated for carelessness in the assemblage's statement. h. Capital produce should be registered and aggregateed in the mailroom anteriorly the capitalier receives the inhibits. A third special collates the sum carelessnessed as shown by a validated carelessness slip to the contrive aggregate prompt in the mailroom. i. All sales tickets should be prenumbered and statemented for. This would undeviatingly discoloration a dropping ticket. j.
Segregate shipping and statementing characters. k. Instrument obsequious catalogue moderate and sales anticipation arrangements including interrupted natural catalogue counts and usual criticism and alteration of sales forecasts. l. A arrangement of user IDs and passwords is the primitive outoutmethod of justification followed by affording “read singly” advance to customer axioms for sales staff, instrument advance moderates aggravate specialal promiseinals, and maintaining apparition logs. m. Regular tailups delay copies nature accumulationd off-site. n. Backup generators as well-mannered-mannered as collected and/or excited predicament narrowed tailup facilities. o.
Encrypting impressible axioms foregoing to transmission, creating potential special networks, and transmitting axioms aggravate asbelieving socket layer (SSL) networks. p. A arrangement of user IDs and passwords is the primitive outoutmethod of justification followed by affording “read singly” advance to impeach registers for sales staff, instrument advance moderates aggravate specialal promiseinals, and maintaining apparition logs. q. A arrangement of user IDs and passwords is the primitive outoutmethod of justification followed by affording “read singly” advance to customer axioms for sales staff, instrument advance moderates aggravate specialal promiseinals, and maintaining apparition logs.
In specification, deviseal non-compete concurrence could be used when hiring specialnel. r. A gloomy tailup delay copies nature accumulationd off-site. s. Periodically testing tailup axioms for advance and compatibility delay vulgar assemblage hardware and software. 10. 4 Formulas: Sales (1% Growth Rate) E5 and Row 5:=D5*101%, =E5*101%, =F5*101%, … Capital Collections:D7:=D5*40% E7:=E5*40%+D5*30% F7:=F5*40%+E5*30%+D5*20% G7:=G5*40%+F5*30%+E5*20%+D5*8% Observation and spente G7 deviseula to retaining cells Beginning Balance:E2:=D9 (corresponding deviseula for retaining cells in Row 2) Ending Balance:D9:=D3+D7 (corresponding deviseula for retaining cells in Row 9) Spinner and Scroll Bar: