Manual Sales Order Processing

—     Begins with a customer placing an order.

-        The sales department captures the essential details on a sales order form.

—     The transaction is authorized by obtaining credit approval by the credit department.

—     Sales information is released to:

-        Billing.

-        Warehouse (stock release or picking ticket).

-        Shipping (packing slip and shipping notice).

—     The merchandise is picked from the Warehouse and sent to Shipping. 

-        Stock records are adjusted.

-        The merchandise, packing slip, and bill of lading are prepared by Shipping and sent to the customer.

—     Shipping reconciles the merchandise received from the Warehouse with the sales information on the packing slip.

-        Shipping information is sent to Billing. Billing compiles and reconciles the relevant facts and issues an invoice to the customer and updates the sales journal. Information is transferred to:

- Accounts Receivable (A/R).

- Inventory Control.

—     A/R records the information in the customer’s account in the accounts receivable subsidiary ledger.

—     Inventory Control adjusts the inventory subsidiary ledger.

—     Billing, A/R, and Inventory Control submits summary information to the General Ledger dept., which then reconciles this data and posts to the control accounts in the G/L.

DFD of Sales Order Processing:

Overview of the Manual Cash Receipts System:

•      The customer’s checks and remittance advices are received in the Mail Room.

•       A mail room clerk prepares cash prelist and sends it list along with the checks to Cash Receipts.

•       A copy of the cash prelist is sent to Accounts Receivable and the Controller.

•      The Cash Receipts department verifies the accuracy and completeness of the checks, updates the cash receipts journal, prepares a deposit slip, and prepares a journal voucher and sends to General Ledger. 

DFD of Cash Receipts Processing