Ch. 12 The Revenue Cycle: Sales To Cash Collections

Front 1

Revenue Cycle

Back 1

Recurring set of business activiites and related information processing operations associated with providing goods and services to customers and collecting cash in payment for those sales.

Front 2

Four Basic Revenue Cycle Activities

Back 2

1. Sales order entry
2. Shipping
3. Billing
4. Cash Collections

Front 3

Sales Order

Back 3

Document that is usually an electronic form displayed on a computer monitor screen that reveals information about item numbers, quantities, prices and other terms of sales.

Front 4

Electronic Data Interchange (EDI)

Back 4

Used to submit the order electronically in a format compatible with the company's sales order processing system.

Front 5

Credit Limit

Back 5

Maximum allowable account balance that management wishes to allow for a customer based on that customer's past credit history and ability to pay.

Front 6

Accounts receivable aging report

Back 6

Lists customer account balances by length of time outstanding.

Front 7

Electronic transfer of funds

Back 7

Transfer of funds between two or more organizations using computers and/or automated technology

Front 8

FEDI

Back 8

System that integrates EFT and EDI information. Customer sends both remittance data and funds transfer instructions together, seller receives both.

Front 9

Balance-Forward method

Back 9

Method of maintaining accounts receivable that generates one payment for all sales made the previous month.

Front 10

Credit Memo

Back 10

Document used to authorize reducing the balance in a customer account

Front 11

Open-invoice method

Back 11

Method of maintaining customer accounts that generates payments for each individual sales transaction

Front 12

Bill of lading

Back 12

Document used to establish responsibility for shipping goods via a third party.

Front 13

Cycle billing

Back 13

Process of dividing customer account master file into subsets and preparing invoices for one subset at a time.

Front 14

Remittance Advice

Back 14

Turnaround document returned by customers with payments.

Front 15

Customer relationship management (CRM) System

Back 15

"System that contains customer-related data organized in a manner to facilitate customer service, sales, and retention."

Front 16

Lockbox

Back 16

Post office box to which customers send payments.

Front 17

Back order

Back 17

Document used to indicate stock outs exist

Front 18

Picking ticket

Back 18

Document that authorizes removal of merchandise from inventory

Front 19

packing slip

Back 19

lists the quantity and description of each item included in the shipment.

Front 20

Sales invoice

Back 20

Notifies customers of the amount to be paid and where to send payment.

Front 21

Monthly statement

Back 21

Lists all transactions, including both sales and payments, that occurred during the past month and informs customers of their current account balances.

Front 22

Remittance list

Back 22

A document (generally prepared by mailroom personnel) identifying the names and amounts of all customer remittances (sending money to recipient), and sends it to accounts receivable.

Front 23

Electronic lockbox

Back 23

The bank electronically sends the company information about the customer account number and the amount remitted as soon as it receives and scans those checks.

Front 24

Cash flow budget

Back 24

Provides estimates of cash inflows (projected collections from sales) and outflows (outstanding payables). It can alert an organization of short-term cash shortages or surpluses.