Structuring Effective Controls Over the Five Primary Transaction Cycles
This is one part of a series designed to help organizations identify risks and improve internal controls over financial reporting. Click here to access the rest of the series, including a set of five downloadable tools organizations can use to help assess their own controls.
Chapter 2, Sales to Collection, describes the processes, risks and recommended controls associated with taking customer orders, fulfilling contracts or delivering goods, invoicing customers and receiving payments.
Sales to Collection processes address how you initiate and process sales, deliver products or services, process invoices and record revenue or accounts receivable, process cash receipts and monitor collections. Key processes include:
- Sales and order entry
- Order fulfillment, delivery and invoicing
- Accounts receivable
- Cash receipts
Chapter 2 includes an overview of sales, invoicing and collection functions, descriptions of processes and subprocesses, descriptions of internal controls organizations can leverage to manage risks, and a table describing key risks and controls for each process and subprocess.
In addition, this chapter includes a downloadable, customizable risk–control matrix with a detailed list of risk considerations by process, with suggested controls to address each one.
Why It Matters
Whatever the size or complexity of your organization, implementing the right controls over sales to collection processes lays the foundation for a well-controlled financial reporting environment. This guide gives you tools to begin assessing and improving your own organization’s controls.
Executive Resource Center
This is an overview in a series of articles designed to help organizations identify risks and improve internal controls over financial…