According to the past performance fo the KK, wa have found many risky steps during the sale process including the theft by its staff. In the new system, we decide to buide a main warehouse in the UK, which can store the products and delivery them to the distribution centres. In this part of the report, it will demonstrate the new sale system firstly, and then the weakness and the internal controls will be mentioned as well as the responsbilities of external auditors.
1. The principal docimentation, processes and records in the sales and return system
Sales system
The Sales Department
1. Receiving the order from the customer: Prepare the receipt of order and record all the information about the order including the goods and the customer into the database.
2. Preparation of the order: Check the payment method. If it is the credit sale, go to the credit check step, otherwise generate the sale order. Two copies of it will be sent to the main warehouse and the distribution centre respectively and leave one copy in the sale department.
The main warehouse
1. Check the inventory: Check whether the goods ordered is available. If it is, send the comfirmation to the custmor and prepare the sales invoice, picking list and packing slip. If not, send the request to the product department.
2. Picking the goods: Pick the ordered goods with the picking list and update the inventory ledger. Initial the picking list and demostrate the completeness.
3. Delivery to the distribution centres: Check the picking list with the packing slip and then generate the delivery note. Pack up the inventory and send it to the distribution centres.
The distribution centres
1. Reveiving the package from the main warehouse
2. Shipping the goods: A courier company will collect the packages everyday and send them to the customers. Generate the despatch note. One will be sent to the customer, one is for courier company and the other one is left in the company.
The accounting department
1. Sending the invoice to the customer who purchase on credit: Record the information on sales invoice into the account receivable ledger. Send one of it to the customer, leave one in the company.
2. Confirm the payment: If company has received the payment from customer, send the receipt of payment to the customer and leave one copy in the company. Record the transaction into general ledger. If not, prepare the provision of bad debt.
3. Complete the sale
Sales return system
The distribution centres
1. Receive the goods return from