mike jian F8-13.Sale cycle 2 Dec 2014 Q5 2.pdfVIP

Sale cycle Dec 2014 Q5 Deficiency Control Brenda the sales clerk receives customer orders, raises sales invoices and processes payments for hotel customers. This is a lack of segregation of duties and could lead to a risk of fraudulent transactions or errors, as no one checks the work undertaken by this clerk. Another sales ledger clerk should be involved in the processing of hotel customer transactions so that no one individual undertakes all elements of the sales cycle. The work could be split so that one clerk raises orders and invoices but a second clerk processes the payments. Sale cycle Dec 2014 Q5 Deficiency Control Hotel customers have contracted sales prices; however, as online trade prices are automatically loaded into the sales invoices, Brenda has to manually amend the invoices. This significantly increases the risk of error, as if Brenda incorrectly increases the sales prices, then this can lead to a loss of customer goodwill and if they are too low, this results in a loss of revenue for Hummingbird. As hotel customers account for 40% of revenue, consideration should be given to amending the sales system so that each customer’s agreed prices are pre-loaded, therefore no manual amendment of invoices would be required. If this is not feasible, then all sales invoices for hotel customers should be double checked by another member of the finance department prior to being sent out. Sale cycle Dec 2014 Q5 Deficiency Control Credit limits are determined by the finance director when a new trade customer is set up in the system. However, these limits could be out of date, resulting in limits being too high and sales being made to poor credit risks or too low and Hummingbird losing potential revenue. Customer credit limits should be regularly reviewed by the finance director and updated based on the level of sale transactions and credit risk. Sale cycle Dec 2014 Q5 Deficiency Control Customer orders and goods despa