SALES ORDER PROCESSING

RECEIVE ORDER

- Sales order starts with the receipt of a customer order

 Order may arrive by mail or telephone or filed representative
- Purchase order issues by buyer (Customer Order) Small Business entity
 Ex: Big grocery store to small store
- Sales Order issues by Seller
 Call from bicol order a t-shirt for Brgy Fiesta
- Magkaiba ang standard format ng prcessing system ng Sales order and ng Purchase
Order
SALEES RETUERN PROCESSING

-Some other companies Expect na may return goods or Return Items.

-bakit may return products

* Nagkamili ng na-shipped na product

* May defect yung product

*Na-damage yung product sa shipment

* Buyer refuse the product kasi late or delay yung pagdala ng product ki customer

- Customer request credit para dun sa product na ibinalik.

KAPAG NAIBALIK NA YUNG PRODUCT, SI RECEIVING DEPARTMENT EMPLOYEE BIBILANGIN AT

IINSPECT YUNG PRODUCT AT MAGPREPARE NG DALAWANG RETURN SLIP.

Return Slip - A document where describing the item,

Nalagay, San binili yung item, Name, address and Contact # ni customer

Amount, Product name, Reason for return

IBABALIK YUNG PRODUCT SA WAREHOUSE TO BE RESTOCK KASMA NUNG KOPYA NG RETURN SLIP

AND YUNG SECOND COPY ISESEND SA SALES FUNCTION PARA MAG PREPARE NG CREDIT MEMO

CREDIT MEMO -is a document issued by a seller to a buyer. Credit memo act as a source
document for the sales return journal. In other words the credit note is evidence of the
reduction in sales. 

Bakit gumawa ng Credit Memo at Bakit Kailangan ng Approval?

- To Reduce the existing balance or the Entire cost of an item purchased at para mag
reflect ito sa AR of the customer and Sales Figure.

Credit Approval

– Bakit kailangan ng Approval kasi to evaluate the circumstances to make a

judgement to approve or disapprove your credit memo.
 IBABALIK NI MANAGER YUNG APPROVED CREDIT MEMO SA SALES DEPARTMENT

UPDATE SALES JOURNAL

-PARA i-UPDATE NI SALES DEPARTMENT YUNG SALES JOURNAL and irerecord as A

contra Entry.

-Then ifoforward ni sales department yung Approved Credit memo sa Inventory

Function for posting.

-And then the Sales Return are summarized in a journal voucher and isesent sa
General Ledger Department

BAKIT KAILNGAN I UPDATED SI INVENTORY AND AR?

- KASI PARA MAG REFLECT YUNG CORRECTION SA SA INVENTORY RECORD and Adjust
yung AR ni Customer and Inventory records.

UPDATE INVENTORY And AR

Then sa inventory function adjusts THE INVENTORY RECORD

-then forwards the credit memo to AR and adjust the AR ni Customer

And Then Inventory control send a JOURNAL VOUCHER summarizing the total value of
inventory Returnd and AR also submits an AR account summary to the General Ledger
function and the General ledger figures and post the following CONTROL ACCOUNTS

DR CR
Inventory xx
Sales return and Allowances xx
Cost of good sold xx
AR xx
Cash Receipts Procedure

OPEN MAIL & PREPARE REMITTANCE ADVICE

*Remittance advice is a turnaround document are product documents of one system that
become source documents for another system. A turnaround document is
a document that has been output from a computer, some extra information potentially
added to it, and then returned to become an input document.

* Remittance advices contain information needed to service individual customers’ accounts.

This includes payment date, account number, amount paid, and customer check number

* The top portion is the Remittance Advice (Binabalik sa company kasama payment or
checque), and the bottom portion is the actual bill (a customer statement that the billing
department sends out periodically. In other cases, this could be the original customer invoice,
which was described in the sales order procedures)

* Remittance advice is very help because you have a customer’s copy of sales order that shows
items and quantity shipped, unit prices shipping charges and total amount owed by the
customers (is simplified as a reminder to the customer that this is the amount of payable that
you have and remittance advice is can be also a copy of inviouce that sent of the customer in
selling. )

*Mail Room personnel sent the checks and remittance advices to Administrative Clerk. And Si clerk sya
mag eendorse ng check for “Deposit only” and reconciles the amount on each remittance advice with
the corresponding check. Then the clerk records each check on a form called a remittance list (or cash
prelist) ANO ANG REMITTANCE LIST .. Listahan sya ng lahat ng remittances na tanggap

Sa Example clerk papres 3 Remittance List

1. Orig. copy is sent with the checks sa Record and Deposit Check. (Cash Receipts Dept)
-To provide a proof this is the payment given by the customer, and then together with the
checks …. the Cash receipts department will double check…. If the checks is delivered it’s actually
complete base in the list.
2. And The second one goes with the Remittance Advices to Update the AR Function (AR)
-To inform AR that such customer already paid their dues. So that the Subsidiary ledger and AR
will be reduce.
3. And the one goes to the reconciliation task (Controller)
- The head accounting department will have a copy of prelist for the purpose of
reconciliation
MOST OF THE WORK IN CASH COLLECTION IS HAPPEN IN CASH RECEIPTS DEPT.

RECORD AND DEPOSIT CHECKS

*cash receipts employee verifies the accuracy and completeness of the checks against the prelist

Icheck mo kung tama yung signature ni customer , tama yung amount and kung para
saan ang invoice na ito.

*After reconciling the prelist to checks … irerecord mo lahat ng cheks sa cash receipts journal

* Prepare a deposit slip – because this check will have to remit to the bank

*after reconciliation of the return deposit slip the cash receipts employee will prepare a summy ournal
voucher and send it to General Ledger so that they can manage the control account.

UPDATE AR (AR subsidiary ledger ang minimaintain nila)

- The Remittance advices post to the costumer account in the AR Subsidiary ledger
 In order to reduce the amount of receivables from the customer na
nagbayad
- Periodically, the changes in account balances are summarized and sent to the general
ledger function.

UPDATE THE GENERAL LEDGER

-Upon receipt of the journal voucher and the account summary, the general ledger function
reconciles the figures, posts to the cash and AR control accounts, and files the journal voucher.

RECONCILE CASH RECEIPTS AND DEPOSITS.

-Periodically (weekly or monthly), a clerk from the controller’s office (or an employee not
involved with the cash receipts procedures) reconciles cash receipts by comparing the following
documents: (1) a copy of the prelist, (2) deposit slips received from the bank, and (3) related journal
vouchers.

-ALL OF THE MOVEMENTS WILL BE MONITORED BY THE CONTROLLER.

Transaction Authorization

* Proper authorization of the Transaction or documents should occur so that only valid transaction get
processed

SO IN OUR REVENUE CYCLE THE FF SHOUD BE NOTED

Credit departmend

Return policy

Remittance list

SO …SI AR ….HINDI PWEDE MAGBAWAS NG RECEIVABLES NG ISANG CUSTOMER WITHOUT CASH

PRELIST

Segregation of duties – no employee should have 2 or more of the ff duties.

1. Transaction authorization should be separate from transaction processing
2. 2. Asset custody should be separate from the task of asset record keeping
3. 3. The organization should be structured so that the perpetration of a fraud requires collusion
between two or more individuals.

 Segregation of Duties in Sales Order Processing

- Credit Authorization should separate from sales order processing
- Inventory control should separate from warehouse
- AR subsidiary ledger should separate sa from general ledger

Segregation of Duties in Cash receipts processing

*Si cashiers they should not be made to record cash receipts. MAGKAIBA DAPAT NG
NAGRERECORD NG CASH RECEIPTS AND NAGHAHANDLE NG CASH DEPOSITS OR CHASH PAYMENT

* AR Subsidiary ledger should separate from general ledger.

Ex: si rose sya ng open ng file and nareceive na yung checks worth 20k
na galling ki customer, and at the same time sya din ang nag record ng
narecieved nyang checks ki customer at dahil may katalinohan si rose,
kinuha nya yung 20k para sa sarili nya . so yung 20k hindi mag aapply
sa balance ni customer..then...after a week tumawag si customer and
nag reklamo na nagsent sya ng checks and ito yung check #...then si
rose yung sinned ni customer B at na receive nya inirecord nya ki
customer A.

Super vision
-This control activity is more of enhancing function rather than
primary control function.
-this is to supplement the lack of of other controls

Sample nasa papel

If hindi po pinagkakatiwalaan yung nagbibilang ng pera or ng
hahandle ng inventory. Maglalagay ka sa

ACCOUNTING RECORDS
 NASA PAPEL

FILES

ACCESS CONTROL
NASA PAPEL

INDEPENDENT VERIFICATION

BAKIT KAILANGAN MAY INDEPENDENT VERIFICATION ?

 PARA MAIWASAN MAGKAROON NG DESCREPANCY. KASI PAG
MAY DESCREPANCY MAGKAKAROON NG BACK ORDER.