The targets of the billing process are to guarantee the customers are billed for those sales, invoices are exact, and the clients are billed for all sales. Accurate billing is vital and requires information discovering the things and quantities shipped, prices, and special sales terms. But, sometimes hazards might happen; the business deal might derive from either a blunder or a scam. The business might face failing to bill customers. The failing will cause loss of assets and profits and inaccurate sales, inventory and accounts receivable data. For instance, the employees who deliver the product to might not bill the clients as they customers are their friends. Besides, no reconciliation of inventory amounts sent with billings might cause failure to bill customers. This may cause undetected underbilling. In addition, the bookkeeper might do not occasionally verify that sales purchases and shipping tips have been invoiced.
So, the business must take notice of the problems confronted and decrease the risk of problems and fraud. The company may divide the shipping and delivery and billing function to avoid that the failing to costs customers. The internal control can control the billing and shipping and delivery information should be included on the computer system to give reconciliation of inventory quantities sent and billed. The business internal control must regularly verify that sales requests and shipping advices have been invoiced. It is because accurate and timely billing is crucial. The Billing Section may require information from the Shipment Office on items and quantities sent and from Sales on prices and other sales conditions. The basic document created is the sales invoice. Invoices may be sent or received in paper form and in invoice-less systems, ensure every delivery is recorded, because the shipment triggers recording of the bill receivable. The well"managed inside control should also combine the billing process with sales and marketing by using data about a customers past buys to send information about related products and services with the monthly declaration. All sales seat tickets should be prenumbered and accounted for. This might quickly spot absent tickets.
On top of this, I would recommend that the On-line data entrance by sales personnel. The system will include credit assessments on customers as well as check inventory availableness Email notification of every department (delivery, billing, etc. ) whenever another division functions an action (e. g. , billing is notified whenever transport gets into data indicating an order has been released)
Furthermore, there might be the billing problem occurred during the sales purchase. The billing might be underbilling or overbilling. This may cause lack of advantage and customer dissatisfaction. The worker might put together the invoices without notification about what was shipped and when. This may cause the billing faults when shipping and delivery goods. The employees maybe package with the wrong price list of the merchandise or goods to cause overbilling customers.
The solution for the billing mistake can be managed by prepare invoice only after receive duplicate of transport advice indicating amounts shipped and date. The internal control can use the prices of computer-based such as have computer retrieve prices from the inventory grasp file. This may prevent the wrong price with the goods delivery or even wrong price incorrect goods. Moreover, the company can use date accessibility edit control to remove the billing mistake. Have the machine to check on the inventory availability as order data are joined with the costs of it. The company can also use online terminal to enter sales order date in to the system as orders are received to avoid the number error with billing error. Inner control can also do have something to save all the inventory or product list with pricing list so the company may use barcode scanners to scan the products order. It could avoid the data key in error.
Furthermore, for the billing error I suggest that use passwords to limit usage of authorized users, also to restrict the duties each staff may perform and which data they may access in case to avoid the inventory data and prices altered by the employees. Next we can also check quantities on packing slip against amounts on sales order to make certain again the right goods shipping and delivery and the billing cost.
In addition, publishing errors in upgrading accounts receivable is one of the hazards of the billing in revenue pattern. Accounts can be written off for fraud of cash anticipated to uncollectible accounts are not determined based on established criteria. Any of fees received, cash receipts, and uncollectible accounts charge could be either understated or overstated because of undetected distinctions between the subsidiary ledger and the general ledger. Also, fees attained and cash receipts or accounts receivable could be understated because of failure to track record billings, cash receipts, and write-offs accurately. Trial balances of the accounts receivable subsidiary ledger are not prepared independently of, or verified and reconciled to, the accounts receivable control bank account in the overall ledger. It triggers customer dissatisfaction and loss of sales and may indicate theft of cash
To solve of this threat problems, the inner control can create and use standards for writing off accounts receivable. Write off should be certified by someone who doesn't have access to cash and regular reconciliation of the subsidiary accounts receivable ledger to the overall ledger control take into account accounts receivable. Besides, the invoice will be prepared when the order is approved and the inventory, accounts receivable and basic ledger data are updated at that time to prevent the delay between order and shipment so the monthly bill can post into consideration receivable just with time to avoid any error happened. Between, in case to all the error in retaining the client accounts, the business inside control may modify checks such as validity inspections on customer and invoice numbers so volumes are applied to the correct profile. The company can also make the field check up on it to ensure repayment volumes are numeric. To be sure there are no problem occurred during the updating of consideration receivable, the internal control shall make the reconciliation of subsidiary accounts receivable ledger with basic ledger and sending the monthly assertions to every customer to provide 3rd party review.
To reduce this danger, I would recommend that the company can compare the number of accounts up to date with the number of check received. A number of inputs edit assessments (limit bank checks, range investigations, reasonableness lab tests, etc. ) to ensure completeness of data accessibility and precision. Besides, establishment of electronic digital lockboxes with banking institutions so that customer repayments go directly to companys account. Use email notification of each division whenever another department does an action. The machine that provide will include the credit checks on customers as well as check inventory supply to stay away from the posting problem in updating bank account receivable and maintaining customer accounts.
