The document describes the sales/collection process and value chain. It discusses the primary and support activities in the value chain. The sales/collection process generally comprises seven steps: taking the customer's order, approving credit, filling the order, shipping the product, billing the customer, collecting payment, and processing uncollectible receivables. It also outlines the flowchart and documents involved in each step, as well as internal controls and how information technology supports the process.

1. Sales/Collection
Process
ACC202
Kateri Manglicmot
BSIT – IV

2. Value Chain

4. Value Chain
Primary Activities
Creates value directly

5. INBOUND LOGISTICS
An integral element of business
operations for a manufacturing
firm, involving the processes of
receiving, storing and distributing
raw materials for use in production.

6. OPERATIONS
It transform resource or data inputs into desired goods,
services, or results, and create and deliver value to the
customers. Two or more connected operations constitute a
process, and are generally divided into four basic categories:
(1) processing, (2) inspection, (3) transport, and (4) storage.

7. OUTBOUND LOGISTICS
It refers to the same for goods
going out of a business.
Inbound and outbound
logistics combine within the
field of supply-chain
management, as managers seek
to maximize the reliability and
efficiency of distribution
networks while minimizing
transport and storage costs.

8. MARKETING & SALES
Marketing is not advertising.
Marketing is finding out what
people want, why they want it
and how much they’ll spend.
Don't confuse marketing with
advertising.
Sales is sales! It's converting an
inquiry or lead into a contract or
shipment. Sales is not market
research, business development
or advertising.

9. SERVICE
The promotion of economic activities
offered by a business to its
clients. Service marketing might
include the process of selling
telecommunications, health treatment,
financial, hospitality, car rental, air
travel, and professional services.

10. Value Chain
Support Activities
Creates value indirectly

11. PROCUREMENT
Procurement involves the process of
selecting vendors, establishing payment
terms, strategic vetting, selection, the
negotiation of contracts and actual
purchasing of goods. It is concerned with
acquiring (procuring) all of the goods,
services, and work that is vital to an
organization.

12. INFORMATION TECHNOLOGY
Information technology (IT) is the
application of computers to store,
study, retrieve, transmit, and
manipulate data, or information,
often in the context of a business or
other enterprise. They draw
on technologies that support the
analysis of customer and competitor
information to improve the
strategic focus of sales activities.

13. HUMAN RESOURSE MANAGEMENT
Human Resource Management
(HRM) is the function within an
organization that focuses on the
recruitment of, management of, and
providing direction for the people
who work in an organization. It is
commonly referred to as
the HR Department to maximize
employee performance in service of
an employer's strategic objectives.

14. INFRASTRUCTURE
Infrastructure is the basic physical
systems of a business or nation;
transportation, communication, sewage,
water and electric systems are all
examples of infrastructure. These
systems tend to be high-cost investments;
however, they are vital to a country's
economic development and prosperity.

15. Process Steps
Overall, the sales / collection process comprises everything from
taking a customer’s order through collecting payment from the
customer. Details may vary across organizations, but the sales /
collection process generally comprises seven generic steps.

16. 1. Take the customer’s order.
2. Approve the customer’s credit.
3. Fill the order based on approved credit.
4. Ship the product.
5. Bill the customer.
6. Collect payment.
7. Process uncollectible receivables as needed
Process Steps

17. Process Steps Flowchart
Start
To Warehouse End
Place Order
Customer
Order
Order
Database
Grant
Credit
?
Approved
Customer
Order
Inform
Customer
Cancel Order
Customer
Order Taking
Department Credit Department

18. AIS Elements (Input / Output)

19. Documents
Customer Order
• Summarizes items ordered
and prices
• Originates in sales
department
• Terminates in warehouse
Picking List
• Guides selection of items
from warehouse
• Originates in warehouse
• Terminates in shipping
department
Packing List
• Specifies contents of
shipment
• Originates in shipping
department
• Terminates with customer

20. Documents
Bill of Lading
• Specifies freight terms
• FOB destination or shipping
point
• Freight prepaid or collect
• Originates in shipping
department
• Terminates with common
carrier
Customer Invoice
• Bills client
• Originates in billing
department
• Terminates with customer
Customer Check
• Remits payment
• Originates with customer
• Terminates with cash
receipts department

21. Documents
Remittance Advice
• Provides source document
for AIS
• Originates with customer
• Terminates with
accounting
Deposit Slip
• Transmits cash receipts to
bank
• Originates with cash
receipts department
• Terminates with bank

22. 1. Establishing a formal credit approval process
2. Maintaining adequate inventory
3. Incorporating independent order checking
4. Insuring goods in transit
5. Matching documents prior to billing
6. Separating duties: authorization, custody, recordkeeping
7. Endorsing checks restrictively
8. Reconciling the bank statement
Internal Controls

23. 1. Maintain customer lists
2. Generate sequentially-numbered forms
3. Look up inventory status
4. Identify unpaid and past-due invoices
5. Record transactions in the accounting information system
Information Technology

24. References:
http://myweb.scu.edu.tw/~hankgau/Docs/AIS/IM/Ch.12%20-
%20Sales-Collection%20Process.pdf
https://en.wikipedia.org/wiki/
http://studylib.net/doc/10203047/chapter-11-sales---collection-
process