Revenue Cycle – Sales to Cash Collections (Chapter 10) (copy)

Revenue Cycle

Recurring business activities and information processing for providing goods/services to customers and collecting cash.

Primary Objective of Revenue Cycle

Deliver the right product, right place, right time, and right price.

Core Activities of Revenue Cycle

Sales Order Entry, Shipping, Billing, Cash Collection.

Sales Order Entry Process Steps

Take Customer Order, Approve Customer Credit, Check Inventory Availability, Respond to Customer Inquiries.

Customer Credit Approval Levels

General Authorization (existing customers with credit limits) and Specific Authorization (new or problematic credit).

Inventory Availability Check

Process to ensure sufficient stock is available to fulfill a sales order.

CRM Systems

Tools that aggregate customer data for personalized service and retention reminders.

Picking Ticket

Document listing SKUs and quantities for picking orders in shipping.

Packing Slip

Document included with a shipment that details item descriptions and quantities.

Cash Collection Techniques

Methods such as Turnaround Documents, Lockbox, EFT, and Credit Cards to expedite cash flow.

Segregation of Duties

Dividing responsibilities among different roles to prevent fraud and errors, e.g., authorization vs. recording vs. custody.

Credit Memo

Document issued for returns, allowances, or write-offs to adjust customer accounts.

Customer Acquisition Cost

Cost to acquire a new customer, estimated to be approximately 5 times higher than retaining an existing customer.

RFID Tag Storage Capacity

Can store up to 128 bytes of data.

Credit Card Processing Fees

Fees charged by credit card companies, typically between 2% and 4% of gross sales.