order to cash cycle

7/21/2019 Order to Cash Cycle

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ORDER to CASH PROCESS

Process id

Process Description How addressed in Orion Outsourcable?

Y / N

Remarks

1 Enquiry from customers

A separate file is maintained to keep all these

enquiries

Operations – Sales – Reports – Transaction listing – Sales enquiry

2 Quotation is sent to customers based on enquiry

Each quotation is entered in the system for future

reference

Quotation is mostly based on standard price list.

In exceptional cases, Marketing Manager / E!

"ould appro#e different price "ith $ustification

Operations – Sales – Quotation tocustomersCan be queried

3 %ales !rder recei#ed from a customer &

a printed document through courier is recei#ed by

the marketing department

Can be pulled from sales quotationor can be placed directly

4 Marketing department #erifies the agreed termsand conditions as to its price quantity deli#ery

schedule pay term etc., and appro#es the %ales

!rder

'he #erification is done "ith the quotation andsubsequent discussions "ith the prospecti#e

customer

ppro!e t"e document by enablingappro!e button

# Marketing department enters the sales order in the

system and generates a unique document numberfor the same

utomatic generation of documentnumber as speci$ed in SO setup

% %tock on hand is checked "ith the deli#ery

schedule

Stoc& can be queried at any timebefore deli!ery

' Mo#ement of stock from one location to another

"here the sale takes place is effected in time

%tock transfer note is generated by the transferor

department and sent to transferee dept and the

accounts department

Transferor dept( – )ocation TransferOut Transferee dept( – )ocation Transfer *n

+ Export is ensured "ith proper documentation set C"ec& t"roug" )C setup ,sales –setup – transaction setup – )Csetup-

. ost Insurance (

"hether reco#erable from customer or not

I) reco#erable from customer the same isad$usted in the in#oice

d/ustment can be made in t"ein!oice as line item



Process id


Y / N

Remarks

10 *eli#ery note is prepared and sent along "ith

in#oice

+ecessary documents are attached "ith the

in#oice depending upon the type of consignment

oad

ail

%hip

Air"ay

*n!oice setup in generic parameter

Set up t"e statutory parameter insales in!oice setup

11 -efore actual deli#ery of an item, quality is

checked by the quality department

*n!entory – masters – qualityrelated – qc parameter

12 Quality department certifies the quality of the

item on the *eli#ery note

*n!entory – masters – qualityrelated – qc parameter

13 %igned copy of the customer relating to deli#ery

in time and "ithout damage is recei#ed by !

Refer point %

14 Accounts department checks and compares the

signed copy "ith its department copy

Refer point %

1# ollection is made on due date

ollection is al"ays by "ay of cheque

) Recei!ables and payables –

transactions recei!ables Creceipts and by ban& payment in) transactions

1% !#erdue outstanding from customers

eminders are sent based on the extent ofo#erdue.

Interest "ould be charged in consultation "ith the

Marketing manager for large amounts o#erdue for

a long period of time

unning letter

1' Ad#ance is paid by the customer if the terms 0

conditions specify so.

eceipt is prepared and sent to customer by theaccounts department

rocurement – master supplierrelated – ayment terms

1+ ash discount is offered at the discretion of E!and the marketing manager

iscount o5ered t"roug" T6master setup(

Sales – setup – accounts – cas"discount account setup

1. )or all cash sales, collection is sent to Account

department e#eryday.

In case collection is by "ay of cheque, a

statement is sent to ! and it "ill be reconciled"ith the -ank statement e#ery fortnight

Cas" sales amount t"roug" cas"receipt option in ) transactions

) Recei!ables and payables –transactions recei!ables Creceipts and by ban& payment in) transactions

20 ollection by "ay of credit card

redit slip is sent to bank "ith a statement to !.

%imilar reconciliation as in 1234 is carried out by

!

Only 7an& statement is c"ec& tosee t"e reali8ation and entrypassed( 9or& around is possible bytreating it as ost dated

21 %ales eturn

Items recei#ed from customer as sales return are

supported by customer document and an In"arddocument prepared by %tores / 5arehouse

department

Operations – sales – transactions –sales return

22 Marketing department mentions the reasons for

the return on the in"ard document clearly

mentioning the cost in#ol#ed.

Reason code master



Process id


Y / N

Remarks

23 Accounts department raises credit note based on

1*ebit note4 from the customer and the appro#al

from Marketing department

) transactions – ) transactions– credit note

24 oot cause analysis made by marketingdepartment and distributed to E! and Marketing

Manager

:ot a!ailable

2# Any repair "ork done after "arranty period

Marketing department recei#es enquiry fromcustomer

Can be ad/usted ;it" debit orcredit note depending on t"e case

2% Marketing executi#e carries out an inspection of

the item and sends his quote to the customer "itha copy to Accounts department

Sales – return materialaut"ori8ation – processing –generate ;arranty details

2' !nce the quote is agreed by the customer, repair

is undertaken and a singed copy of the customer

about satisfied "ork is sent to Accountsdepartment

To be c"ec&ed

2+ In#oice is raised by accounts department and sent

to customer "ith the appro#al of finance

executi#e

<inancial 6ntry eneration

2. ustomer old

Accounts department intimates Marketing

manager about the poor collection from a

customer and it is $ointly decided "hether to do

any future transaction "ith a customer and also"hen to release the hold

Te=t data can be captured

30 redit analysis and control

eceipt is ensured on time and o#erdue isanaly6ed

Area "ise sales executi#es are identified to ensure

periodic collection

Credit control Reports

31 -ad debts ( extreme care is taken

only E! has the authority

6ntry to be passed in )

32 -ank reconciliation

1refer separate section4

Refer separate section

77

Accounts department passes necessary $ournal

entries at the time of deli#ery / in#oicingcollection and for sales return

ccounts department passes /ournal entry

34 8ist of reports

1"ould be attached4

Statement of Outstanding>ebtorsaged nalysis

3# *ata %ecurity

9ersons responsible for in#oice preparation debit /

credit memo are identified and no other official

can ha#e access to create or modify these

documents

dministrator – menu pass;ord

order to cash cycle

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