Revenue Cycle
• This chapter deals initially with the accounting system being
part of the company’s information system
• Also focuses on control activities which are put in place to control the
sale of the company’s goods or services, and the collection of amounts
owed in respect of those sales
• The is also known as the sales and collection cycle
,Stages in the Revenue Cycle
• Oder department
• Dispatch
• Delivery
• Invoicing
• Payment
• Recording
, Ordering
• the order department is responsible for receiving orders from customers
• It sets in motion the filling of the order.
• When an order is received from the store, the order department confirms that the customer’s account
date”
• i.e. the amount owed is within the terms and limit set for that customer and that processing the curren
will not push the customer beyond his credit limit. This only applies to business that offer credit purch
• The order is then put into motion and the items are then be dispatched to the store.
Example.
Steve (Pty) Ltd, a customer of Maige Ltd, has a credit limit of R50 000 on its account and must pay with
days.
He ordered goods costing R10 000
• order department must check whether any portion of the balance on Stepps (Pty) Ltd’s account has b
outstanding for longer than 60 days
• If Stepps (Pty) Ltd is not within its terms and limit, the order department will need to obtain the author
of the credit management department to initiate the sale.
• the order department will also confirm that the goods ordered by the customer are “in stock” (availabl
initiating the sale.
• This chapter deals initially with the accounting system being
part of the company’s information system
• Also focuses on control activities which are put in place to control the
sale of the company’s goods or services, and the collection of amounts
owed in respect of those sales
• The is also known as the sales and collection cycle
,Stages in the Revenue Cycle
• Oder department
• Dispatch
• Delivery
• Invoicing
• Payment
• Recording
, Ordering
• the order department is responsible for receiving orders from customers
• It sets in motion the filling of the order.
• When an order is received from the store, the order department confirms that the customer’s account
date”
• i.e. the amount owed is within the terms and limit set for that customer and that processing the curren
will not push the customer beyond his credit limit. This only applies to business that offer credit purch
• The order is then put into motion and the items are then be dispatched to the store.
Example.
Steve (Pty) Ltd, a customer of Maige Ltd, has a credit limit of R50 000 on its account and must pay with
days.
He ordered goods costing R10 000
• order department must check whether any portion of the balance on Stepps (Pty) Ltd’s account has b
outstanding for longer than 60 days
• If Stepps (Pty) Ltd is not within its terms and limit, the order department will need to obtain the author
of the credit management department to initiate the sale.
• the order department will also confirm that the goods ordered by the customer are “in stock” (availabl
initiating the sale.
