Internal Control Weaknesses in Sales Process of Buck Phyz

Accounting Information System
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Contents
Executive summary....................................................................................................................3
Introduction................................................................................................................................4
Q1. Overview of the sales process.............................................................................................5
Q2. Internal control weaknesses and their impact on Buck Phyz..............................................6
Q3. Corporate credit card.........................................................................................................10
Conclusion................................................................................................................................12
Reference..................................................................................................................................13
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Executive summary:
The following report consists detailed analysis of the internal weaknesses of sales process of
Buck Phyz. Buck Phyz has been facing various structural changes and this report is formed
for investigating the issues in the sales process. The sales process is vital to the organization
as it leads to revenues generation and profits for the organization. Buck Phyz has a hierarchy
which includes CEO, FD and under the FD, there is AR manager, head of sales and financial
accountant. Sales processes mainly include AR, MD specialists, and sales managers. Sales
managers are responsible for making ultimate’s sales and then further reconcile the details of
creditworthiness and payments mechanism with the AR department. Sales managers
formulate legal contracts for clients which are approved by Finance director or head of sales.
The company has faced various internal weaknesses such as improper communication across
different segments, low-security channels/ policies, weak measures for rescuing from credit
losses. This report has made possible suggestions which can be implemented for improving
the weaknesses such as inducing meetings, attachment of client’s personal wealth with the
contracts, clear verification of potential customer before approving for sales. A corporate
credit card is also another important concept discussed over here. Buck Phyz employees face
issue while making business-related expenses such as the purchase of training course. There
are possible solutions such as the issuance of CCC can aid employee to make direct payment
and an effective audit trail can check for possible fraud detection or misleading activities.
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Introduction:
The sales process of Buck Phyz includes sales managers who sales their offers to potential
customers. Sales managers receive commissions on every customer's invoice (not on credit
notes) generated. Sales contracts are formed, cross-verified for creditworthiness, for database
installation by MD managers and AR managers makes day to day reconciliation of payments.
Internal control systems are integral to the organization for finding any form of fraudulent
accounting activities taking place in the organization. For accounting internal control, the
responsibility lies with finance director and Accounts receivable manager, who head a team
of three AR specialized persons. AR manager, in consultation with FD, overview the ledgers
of, credit customers, whose balance are opened and decides upon immediate actions. Bucks
Phyz is facing issues with payments of small expenditures which are essential and hence,
employees have to make payments by themselves. Corporate credit cards can be an effective
solution to the issue.
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