There are a large number of controls that may be required in the sales cycle due to the importance of this area in any business and the possible opportunities that exist for diverting sales away from the business and other persons benefiting.
- The orders should be checked against the customer’s account; this should be evidenced by initialing. Any new customer should be referred to the credit control department before the order is accepted.
- Existing customers should be allocated to a credit limit and it should be ascertained whether this limit is to be exceeded if the new order is accepted. If so the matter should be referred to credit control.
- All orders received should be recorded on pre-numbered sales order documents.
- All orders should be authorized before any goods are dispatched
- The sales order should be used to produce a despatch note for the goods outwards department. No goods may be dispatched without a dispatch note.
- Despatch notes should be pre-numbered and a register kept of them to relate to sales invoices and orders
- Goods dispatch notes should be authorized as goods leave and checked periodically to ensure they are complete and that all have been invoiced.
(c) Invoicing and credit notes
- Sales invoices should be authorized by a responsible official and referenced to the original authorized order and dispatch note.
- All invoices and credit notes should be entered in sales day book records, the accounts receivable ledger, and accounts receivable ledger control account. Batch totals should be maintained for his purpose.
- Sales invoices and credit notes should be checked for prices, costs and calculations by a person other than one preparing the invoice.
- All invoices and credit notes should be serially pre-numbered and regular sequence checks should be carried out.
- Credit notes should be authorized by someone unconnected with despatch or accounts receivable ledger functions.
- Copies of cancelled invoices should be retained.
- Any invoices cancellation should lead to a cancellation of the appropriate despatch note.
- Cancelled and free of charge invoices should be signed by a responsible official.
- Each invoice should distinguish between different types of sales and nay sales taxes. Any coding of invoices should be periodically checked independently.
- Any goods returned by the customer should be checked for obvious damage and, when accepted, a document should be raised.
- All goods returned should be used to prepare appropriate credit notes.
- A receivables ledger control account should be prepared regularly and checked to individual sales ledger balances by an independent official.
- Receivables ledger personnel should be independent of despatch and cash receipt functions
- Statements should be sent regularly to customers.