Revenue cycle primary objective to provide the right product in the right place at the right time for the right price.
4 Basic Revenue cycle Activities 1. Sales order entry 2. Shipping 3. Billing 4. Cash collections
3 steps to sales order entry 1. taking the customer's order 2. checking and approving customer credit 3.
process checking inventory availability.
Electronic data interchang (EDI) the use of computerized communications and a standard coding scheme to
submit business documents electronically in a format that can be automatically
processed by the recipient's information system.
Basic threat for sales order entry important data about the order is either missing or inaccurate.
credit limit the maximum allowable account balance that management wises to allow for a
customer based on the customer's past credit history and ability to pay.
Accounts receivable aging report a roport listing customer account balances by length of time outstanding.
back order a document authorizing te purchase or production of items that is created when
there is insufficient inventory to meet customer orders.
Customer relationship a system that contains customer-related data organized in a manner to facilitate
management systems (CRM) custoer service, sales, and retention.
1st threat to shipping picking the wrong items or the wrong quantity
2 steps to shipping 1. picking and packing the order 2. shipping the order
packing slip list the quantity and description of each item included in the shipment.
bill of lading document used to establish responsibility for shipping goods via a third party.
sales invoice a document that notifies customers of the amount to be paid and where to send
payment.
open-invoice method method of maintaining customer accounts that generates paments for each
individual sales transaction.
balance-forward method method of maintaining accounts receivable in which customers typically pay
according to the amount shown on a monthly statement, rather than by individual
invoices.
monthly statements a document summerizing all transactions that occurred during the past month
and informing customers of their current account balance.
cycle billing producing monthly statements for subsets of customers at different times.
credit memo a document used to authorized reducing the balance in a customer account.
electronic funds transfer (EFT) the transfer of funds between two or more organizations or individuals using
computers and other automated technology.
financial electronic data a system theat integrates EFT and EDI information.
interchange (FEDI)
cash flow budget a budget that shows projected cash inflows and outflows for a specified period
so that an organization can anticipate the need for short-term borrowing.