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REVENUE CYCLE

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sidd sharifuddin

on 28 September 2015

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Transcript of REVENUE CYCLE

Prepared by :
IRWAN BIN TAJARI (DIA122003)
MUHAMAD DANISH BIN MOHD YUSOFF (DIA132025)
MUHAMMAD NAUFAL HAFITDZUL NAIM BIN AZMAN (DIA131012)

MUHAMMAD ANBIYA BIN AZMAN (DIA131060)
ZULFIKAR

ACCOUNTING INFORMATION SYSTEM :
SECRET RECIPE : Revenue Cycle Activities
CAFÉ CONCEPT AND AMBIENCE
Secret Recipe Cakes & Café offers a friendly and personalised full-service dining experience for customers and incorporates a modern contemporary and vibrant interior concept with comfort ambience, and great food. It provides a great respite for customers to enjoy good food and quality time with friends, family or associates, after a long day at work.

Online purchasing also implemented to the customer who are busy with their work, so by online purchasing it easy to them to buy any food through online. There are variety type of food such as starter, asian classic, chicken, fish and lamb, pasta, kid’s club and many kind of food categories.

INTRODUCTION
Secret Recipe is a lifestyle café chain in Malaysia, started in 1997. Secret Recipe has established its brand name in Malaysia, Singapore, Philippines, Australia, Indonesia, Thailand, Brunei, Pakistan and Cambodia as well. It serves cakes and fusion food (prefabricated/commercially processed) in a service environment.
The company has registered double digit growth for the past five years. In a period of seven years, Secret Recipe has expanded by over 100 cafes throughout the region.
A leading and largest café chain in Malaysia, with Halal certification awarded by Jabatan Kemajuan Islam Malaysia (JAKIM), Secret Recipe is committed to continue to adhere to the standards of preparation of all food and processing plant in the restaurant in accordance to the regulatory guidelines including HACCP and VHM guidelines. Customers are offered 20 types of fusion food, 40 cake creations and pastries, with a range of ice cream and beverages.

CONTENT
Revenue Cycle
• Generally, revenue cycle is a different perspective on the normal sales cycle in which calculations begin on the day the company meets the potential customers and follows the transactions throughout the sales period, continuing on with future relationship between company and customer.
• The revenue cycle is a set of business activities and related information process with providing goods and services to customers and collecting cash in payment for those sales.
Revenue Cycle Objective
The revenue cycle’s primary objective is to provide the 4 right:

Right product
• Right place
• Right time
• Right price
To accomplish that objective, management must make many key decisions.

AIS basic functions
There are 3 basics functions of the AIS in the revenue cycle.
1. Capturing and processing data about business activities.
2. Storing and organizing the data to support decision making.
3. Providing control: Ensure reliability of data & safeguard resources

Revenue Cycle Business Activities
Four basic business activities performed in revenue cycle:
• Sales order entry
• Shipping
• Billing
• Cash collections

Sales Order
Sales order entry process entails four steps:
1. Taking the customer’s order.
2. Checking and approving customer credit.
3. Checking inventory avaibility.
4. Responding to Customer Inquiries.

REVENUE CYCLE ACTIVITIES IN ‘SECRET RECIPE’
SHIPPING
Orders will only be processed upon receipt of full payment.
Secret Recipe requires at least 72 hours processing your orders.
For a successful delivery, we require a full address, contact number and person, time of sending.
Secret Recipe will not accept responsibilities for late or non-deliveries under the following circumstances:
Secret Recipe will make one (1) attempt to contact the recipient upon the first unsuccessful delivery. We may arrange to have the same order delivered at a later time within the same day. This may result in an additional surcharge to the customer
Recipient is not present at the address given at the time which the delivery was requested to take place.
The address given was incorrect or insufficient.
No such person at the given address.
No valid contact number was given to us to make reasonable attempts to contact the recipient in order to execute the order successfully.
Secret Recipe will not accept responsibilities for late or non-deliveries under the following circumstances:
In the event of any non-delivery, no requests for refund will be entertained due to the perishable nature of our products.
Refusal of any item by the recipient will still be considered as delivered and no refund will be made

In rare cases of delayed delivery due to circumstances beyond our control, Secret Recipe will not be held liable for any claims.
A delivery surcharge of RM10 per order, around Klang Valley, will be imposed

Multiple products for delivery to the same venue at the same time, under the same customer bill will be charged a one-time delivery fee. Deliveries to multiple venues, even under the same customer bill, will be charged as separate deliveries.
Should there be a request to redirect orders, there will be an additional delivery charge of RM30.

BiLLiNG
The billing process is recorded in the company they use to indicate invoice as a statement of the list of products and prices, it as evidence in case something unexpected. In addition, it can facilitate business transactions between customers and vendors where they can refer to the list of items they have purchased, invoice can also record all business transactions where it can be stored in one statement each month, so it will always be updated if of any fraud.
CASH COLLECTION
‘Secret Recipe’ provides the method of payment with these methods:
1. Cash (purchase directly from the outlet). This method use when the customers visit the outlet and purchase any product by using cash money or with the credit card.
2. Online payment (advance pay-in via internet banking). ‘Secret Recipe’ using IPay88 for any customer purchasing through online.

As a conclusion, after study about revenue cycle you're learned about the basic business activities and data processing operating in the revenue cycle,including sales order entry, billing,shipping and cash collection. You're also learned about decisions that need to be made in the revenue cycle and what information is required to make these decisions. Finally you're learned about the major threats that present themselves in the revenue cycle and the controls that can be instigated to mitigate those threats.
THREATS & SECURITY
Sales Order Entry
Shipping
Billing and Accounts Receivable
Cash Collection
Sales Order Entry
Revenue Cycle Diagram
CONCLUSION
Threats 1 : Incomplete or Inaccurate Customer Orders

- Incomplete or inaccurate information about the customer and their order could prove embarrassing because most likely you will need to call that customer to get the correct information.

Control
-
Data entry control, such as completeness checks :
automatic lookup of reference data like customer address and reasonableness tests comparing quantity ordered to past history


Threats 4 : Stockouts, carrying costs and markdowns

- Sales could be lost due to stocks outs.
- Excess inventory means additional carrying costs and potential markdown

Control

- Accurate inventory control and sales forecasting systems.
- Online inventory systems that allow recording of changes to inventory in real time

Threats 1 : Theft of inventory

- Loss of assets
- Inaccurate inventory records ( since thieves don't generally record the reduction in inventory)
Control
- Inventory should be kept in a secure location with restricted access
- Inventory transfers should be documented
- Inventory should be released for shipping only with approved sales orders

Threats 2 : Shipping Errors

- Shipping the wrong items or quantities of merchandise
- Shipping to the wrong locations / address may also result in loss of the assets
Control
- Online systems can reduce the risk of shipping errors if shipping personnel are required to enter the quantities of items being send before the goods are shipped..This enable detecting and correcting and mistakes before deliver the merchandise by comparing the shipping data to the sales order.
Threats 1 : Failure to bill customers

- Loss of assets and revenue
- Inaccurate data on sales,inventory,and accounts receivable
Control
- Segregating the shipping and billing functions can reduce this threat
Threat 1 : Theft of cash

- Loss of cash
Control
- Segregation of duties should be used to reduce this risk :
i) Handling cash or checks and posting remittances to customer accounts
ii) Handling cash or checks and authorizing credit memos
iii) Issuing credit memos and maintaining customer account

Revenue Cycle Diagrams
Customer
Sales Order
Respond to Customer Inquiries
Customer
Orders
Orders
Approve
Orders
Acknowledgement
Rejected
Orders
Take
Order
Approve
Credits
Check
Inventory
Availability
Pick and
Pack
Ship
Goods
Sales
Order
Entry
INVOICING
CUSTOMER
Update
Accounts Receivable
BiLLiNG
THE END :)
Full transcript