Financial Base Phase and Cash Receipts Process

Financial Base Phase of the Sales Order Process

• Involves receiving cash from customers
• Second phase of the sales order process
• Includes tasks such as:
  • Receiving cash from customers
  • Posting cash receipts to accounts receivable
  • Updating cash accounts

Cash Receipts Process

• Involves receiving cash from customers
• Three main tasks:
  • Open, middle, and prepare remittance advice
  • Record and deposit checks
  • Update accounts receivable and cash accounts

Remittance Advice

• A document that accompanies the customer's payment
• Contains information about the payment, such as:
  • Amount paid
  • Customer's check number
  • Date of payment
• Used to update accounts receivable and cash accounts

Updating Accounts Receivable and Cash Accounts

• Accounts receivable is updated to reflect the customer's payment
• Cash accounts are updated to reflect the increase in cash
• The general ledger is also updated to reflect the changes

Bank Reconciliation

• Process of reconciling the company's cash records with the bank's records
• Involves comparing the company's cash records with the bank's statements
• Any discrepancies are investigated and resolved

Internal Control

• Measures to prevent and detect errors and fraud in the cash receipts process
• Includes:
  • Separation of duties
  • Authorization of transactions
  • Supervision and review
  • Physical control over cash and checks

Manual System

• Uses paper documents and manual processes
• Includes:
  • Remittance advice
  • Deposit slip
  • Check and cash receipts journal
• Can be time-consuming and prone to errors

Automated System

• Uses computerized systems and electronic documents
• Includes:
  • Point of Sale (POS) system
  • Cash receipts journal
  • Automatic updates to accounts receivable and cash accounts
• Faster and more accurate than manual systems

Point of Sale (POS) System

• A computerized system that records sales transactions
• Real-time system that updates inventory and accounts receivable
• Can be connected to the inventory system
• Can be used to track sales and customer data

System Flow Diagram

• A diagram that shows the flow of data and processes in a system
• Can be used to analyze and design systems
• Includes:
  • Input and output documents
  • Processing and storage functions
  • Flow of data between functions### Retail Point of Sale System Overview
• The system includes a cash drawer, receipt printer, barcode scanner, and an all-in-one touchscreen PC with a card reader attached.
• Other hardware options available include integrated scales, customer displays, and pin pads for EMV and debit payments.
• A tablet with the same software is also available for a more mobile option.

Employee Management

• An employee card is provided with all orders, allowing employees to swipe in and out of the system.
• The system can track employee hours, even if they're not a cashier.
• Cashiers can learn to use the system in as little as 10-15 minutes.

Inventory Management

• Inventory items can be added by scanning the barcode, entering the description, cost, and price, and setting the quantity in stock.
• Items can be linked to vendors to help with reordering.
• The system can track inventory levels and automatically generate purchase orders when levels reach a certain point.

Sales and Reporting

• Sales can be easily tracked and reported on, including detailed daily reports and flash reports.
• Reports can be customized to show sales by department, payment type, and more.
• The system can also track tax collected and provide a summary of sales for the day, week, month, etc.

Purchase Orders and Inventory Replenishment

• The system includes a purchase order feature that can be used to send orders to vendors electronically or by printing them out.
• The system can automatically generate purchase orders when inventory levels reach a certain point.
• Inventory can be easily received and updated in the system when stock is delivered.

Financial Base Phase of the Sales Order Process

• Receiving cash from customers is the main objective of this phase
• It is the second phase of the sales order process
• Tasks involved include:
  • Receiving cash from customers
  • Posting cash receipts to accounts receivable
  • Updating cash accounts

Cash Receipts Process

• The process involves receiving cash from customers
• Three main tasks are involved:
  • Preparing remittance advice
  • Recording and depositing checks
  • Updating accounts receivable and cash accounts

Remittance Advice

• A document that accompanies the customer's payment
• Contains information about the payment, including:
  • Amount paid
  • Customer's check number
  • Date of payment
• Used to update accounts receivable and cash accounts

Updating Accounts Receivable and Cash Accounts

• Accounts receivable is updated to reflect the customer's payment
• Cash accounts are updated to reflect the increase in cash
• The general ledger is also updated to reflect the changes

Bank Reconciliation

• The process of reconciling the company's cash records with the bank's records
• Involves comparing the company's cash records with the bank's statements
• Any discrepancies are investigated and resolved

Internal Control

• Measures to prevent and detect errors and fraud in the cash receipts process
• Includes:
  • Separation of duties
  • Authorization of transactions
  • Supervision and review
  • Physical control over cash and checks

Manual System vs. Automated System

• Manual system: uses paper documents and manual processes
  • Includes remittance advice, deposit slip, and check and cash receipts journal
  • Can be time-consuming and prone to errors
• Automated system: uses computerized systems and electronic documents
  • Includes Point of Sale (POS) system, cash receipts journal, and automatic updates to accounts receivable and cash accounts
  • Faster and more accurate than manual systems

Point of Sale (POS) System

• A computerized system that records sales transactions
• Real-time system that updates inventory and accounts receivable
• Can be connected to the inventory system
• Can be used to track sales and customer data

System Flow Diagram

• A diagram that shows the flow of data and processes in a system
• Can be used to analyze and design systems
• Includes:
  • Input and output documents
  • Processing and storage functions
  • Flow of data between functions

Retail Point of Sale System Overview

• Includes hardware such as cash drawers, receipt printers, barcode scanners, and all-in-one touchscreen PCs with card readers
• Other hardware options available include integrated scales, customer displays, and pin pads for EMV and debit payments
• Tablets with the same software are also available for a more mobile option

Employee Management

• Employees are provided with a card to swipe in and out of the system
• The system can track employee hours, even if they're not a cashier
• Cashiers can learn to use the system in as little as 10-15 minutes

Inventory Management

• Inventory items can be added by scanning the barcode, entering the description, cost, and price, and setting the quantity in stock
• Items can be linked to vendors to help with reordering
• The system can track inventory levels and automatically generate purchase orders when levels reach a certain point

Sales and Reporting

• Sales can be easily tracked and reported on, including detailed daily reports and flash reports
• Reports can be customized to show sales by department, payment type, and more
• The system can also track tax collected and provide a summary of sales for the day, week, month, etc.

Purchase Orders and Inventory Replenishment

• The system includes a purchase order feature that can be used to send orders to vendors electronically or by printing them out
• The system can automatically generate purchase orders when inventory levels reach a certain point
• Inventory can be easily received and updated in the system when stock is delivered