ORDER TO CASH PROCESS Sales Department Customers send their orders by mail or fax to the sales department. Upon receiving an order, a sales clerk checks the credit worthiness via a terminal the customer record in Money Talk’s Customer Master file to review the available credit before creating a Sales Invoice record. For customers with no or insufficient available credit, the clerk submits the order to the credit manager for approval. If granted, the credit manager verbally authorizes and instruct the clerk to offer or increase the customer’s line of credit accordingly. For approved sales, a record is added to the Sales Invoice file in Money Talk’s O2C system which automatically assigns an Invoice Number, which is the primary key for the record. The clerk manually enters the remainder of the order data. Chai Wan Warehouse Based on input from the sales invoice, the computer terminal at Chai Wan Warehouse retrieves from Money Talk’s O2C system and automatically prints a Stock Release, which the Chai Wan Warehouse staff uses to pick the goods. The goods are sent to the Shipping Department along with the Stock Release. Once the goods have left the Chai Wan Warehouse, the clerk at the warehouse update the Money Talk to confirms to the system the quantity sold and the system automatically updates the Quantity on Hand field in the respective inventory record in the Inventory Subsidiary Ledger. Shipping Department The Shipping Department upon receiving the goods from the warehouse, checks and prepares them for shipment, selects a carrier and prepares the Packing Slip and Bill Of Lading (BOL). Once the goods are shipped, the clerk update Money Talk to record the shipment to the Shipping Log file. Billing Department At the end of the day Money Talk automatically searches the Sales Invoice and Shipping Log files for items shipped and prepares a hard copy Customer Invoice, which is mailed to the customer the next day. Cash Receipts Tiffany, the cash receipts clerk, receives the customer cheques and Remittance Advices directly from the customer. She records this transaction by entering the Invoice Number (taken from the Remittance Advice) into Money Talk. The system automatically creates a Cash Receipts record. Tiffany then manually adds the customer number, amount, and payment date to the Cash Receipts record. At the end of the day she prepares a deposit slip and sends the cheques to the bank. She files customers’ Remittance Advices in her office. CASE REQUIREMENTS Prepare an As-Is Data Flow Diagram for the Order to Cash and identify at least 3 exposures, circle and number the exposure where the exposure is. In tabular form, against each numbered exposure as indicated in A, describe ONE possible risk and suggest ONE control procedure that can mitigate the exposure identified. Prepare a To-Be System Flowcharts for the process that incorporate your recommendations in A above.
ORDER TO CASH PROCESS
Sales Department
Customers send their orders by mail or fax to the sales department. Upon receiving an order, a sales clerk checks the credit worthiness via a terminal the customer record in Money Talk’s Customer Master file to review the available credit before creating a Sales Invoice record. For customers with no or insufficient available credit, the clerk submits the order to the credit manager for approval. If granted, the credit manager verbally authorizes and instruct the clerk to offer or increase the customer’s line of credit accordingly. For approved sales, a record is added to the Sales Invoice file in Money Talk’s O2C system which automatically assigns an Invoice Number, which is the primary key for the record. The clerk manually enters the remainder of the order data.
Chai Wan Warehouse
Based on input from the sales invoice, the computer terminal at Chai Wan Warehouse retrieves from Money Talk’s O2C system and automatically prints a Stock Release, which the Chai Wan Warehouse staff uses to pick the goods. The goods are sent to the Shipping Department along with the Stock Release. Once the goods have left the Chai Wan Warehouse, the clerk at the warehouse update the Money Talk to confirms to the system the quantity sold and the system automatically updates the Quantity on Hand field in the respective inventory record in the Inventory Subsidiary Ledger.
Shipping Department
The Shipping Department upon receiving the goods from the warehouse, checks and prepares them for shipment, selects a carrier and prepares the Packing Slip and Bill Of Lading (BOL). Once the goods are shipped, the clerk update Money Talk to record the shipment to the Shipping Log file.
Billing Department
At the end of the day Money Talk automatically searches the Sales Invoice and Shipping Log files for items shipped and prepares a hard copy Customer Invoice, which is mailed to the customer the next day.
Cash Receipts
Tiffany, the cash receipts clerk, receives the customer cheques and Remittance Advices directly from the customer. She records this transaction by entering the Invoice Number (taken from the Remittance Advice) into Money Talk. The system automatically creates a Cash Receipts record. Tiffany then manually adds the customer number, amount, and payment date to the Cash Receipts record. At the end of the day she prepares a deposit slip and sends the cheques to the bank. She files customers’ Remittance Advices in her office.
CASE REQUIREMENTS
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Prepare an As-Is Data Flow Diagram for the Order to Cash and identify at least 3 exposures, circle and number the exposure where the exposure is.
-
In tabular form, against each numbered exposure as indicated in A, describe ONE possible risk and suggest ONE control procedure that can mitigate the exposure identified.
-
Prepare a To-Be System Flowcharts for the process that incorporate your recommendations in A above.
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