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Summary Revenue & Receipts and Payments & Purchases Perfect Cycle (Auditing 288/388)
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Bank & Cash Perfect Cycle Purchases & Payments Perfect Cycle
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Auditing 288/388 Summary
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CASH SALES CYCLEWHEN THE GRANTING
ACCEPT AND PROCESS ORDER DISPATCHING OF GOODS INVOICING AND RECORDING
OF CREDIT OCCURS
ORDER FORM DELIVERY NOTE (INVENTORIES AVAILABLE) SALES INVOICE
ORDER FORM
1. Customers’ orders goods 1. New client 1. In the warehouse: 1. The signed delivery note is sent to the Invoicing
2. The order clerk must prepare a pre- • There should • The order is sent to the WH clerk who checks signature and a pre-numbered
numbered order form that includes the be a credit • The storeman then sends an email to the sales sales invoice is drawn up in duplicate:
details of the purchaser, description & application dept. to confirm receipt of the order • Info of purchaser
amount and approval • The chief storeman then instructs the packers to • Sales transaction & amount owing
• Prices as quoted to client • Credit checks pack the order • Payment conditions
• Prices according to approved price • A credit limit 2. The delivery note must be & incl: 2. The # sequence is checked by the accountant &
lists should also be • Pre-numbered and prepared by one of the outstanding orders must be followed up on
• The previous year sales levels to set storeman 3. The invoicing clerk/accountant (SoD) must:
determine if the person qualifies for 2. Existing client • Date of dispatch • Agree to info on invoice
discount • Available • The purchaser and address • Check castings and VAT
3. The order must be sent to the credit credit • The description and amount in fivefold • Compare price with the authorised price list
manager: • Additional 3. The delivery note must be authorised & signed by chief 4. A suspense file for no signed delivery notes must
• Check that all info is correct and if credit storeman be kept and checked regularly by the accountant
client is a member 4. Before goods leave WH, the storeman must: 5. The accountant will then post the invoice to the
• Ensures that clients fill credit form / • Compare physical goods with delivery note sales journal and then to debtors and general
authorizes credit • Check QQD and ensure correct stock has been journal
• Sign document dispatched 6. The accountant must then perform a monthly
• Compare the prices with the • If differences à notify order clerk in writing recon and signs as proof
approved prices 5. A list of undelivered items should be kept à once 7. Copies:
4. The copy that remains in the dept. must available the storeman should inform the order clerk • Customer – so that he can pay for the goods
then be: 6. The # sequence of the delivery note must be checked and delivered
• Filed in # sequence & check outstanding items must be followed up on • Acc dept. – as evidence that the goods have
• Outstanding orders must be followed 7. The delivery register must be reviewed regularly by the been invoiced
up on security guard 8. Account/monthly statement
5. Copies: 8. Copies: • Monitoring of control objectives
• Customer – as evidence that order is • Two copies to client for QQD review • A pre-numbered monthly statement must
executed • One signed by the client and returned to delivery be created in twofold:
• Acc dept. – as evidence that the staff i. Customer – inform of
order has been received • The order must be signed by delivery staff to account balance
• Warehouse – order can be prepared ensure he is happy with the conditions of goods ii. Acc dept – as a record of
• Order clerk – for our own records • Sales dept. – as evidence that order was executed statements issued
and invoicing • Remains at WH – as evidence that inventories have • Details: Invoices issued, payments made,
been dispatched discounts allowed, returns & end balance
• Inventory clerk – so inventory records can be 9. Payment advice slip – attached to the monthly
updated statement indicating payment
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