New Sales And Sales Returns System

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Introduction As long as there are opportunities, there are fraudsters. The crucial commitment of a company is to try to prevent a potential fraud, rather than recovering the losses after its occurrence. And in order for such risks to be eliminated or reduced to the least, effective and efficient information systems and internal control systems must be in place. The following report is going to be based on the new sales and sales returns system that will be implemented in Karla Kay plc, identifying and addressing its principal risks using an effective internal control system. Then, a description of the work that KK’s external auditors will have to undertake in respect of the internal controls of the new sales system and the new sales…show more content…
Then, the goods are directly transferred to the shipping department. Subsequently, the whole packing slip together with the dispatch note are prepared and the shipping information is being processed. Finally, the goods together with the dispatch note and the whole packing slip are sent to the customer. Of course, the payment is something important to consider. The billing department must process the receivable’s payment information. Afterwards, by sending out a sales invoice (and also a customer statement periodically if needed) the debtor will be informed of the outstanding amount that needs to be paid. Moreover, the accounting records, the sales process reports and the data storage must be updated to reflect the changes made. When the payment is eventually received (whether the company receives cash or cheque with or without a remittance advice), the accounting records have to be updated again. Moving on to the new sales returns system, the responsible department is the receiving department. After receiving the products returned by a customer, action has to be taken. The customer may need the company to replace the (damaged or wrong) goods that have been returned, or the customer may want a refund. The company may also issue a credit memorandum to the customer, informing that the outstanding balance is reduced by the returned stock’s amount. One way or another, the accounting records must be updated once more. b)

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