Minimizing Credit Card Risks for Businesses

This assignment examines the risks associated with credit card use in a business context, specifically focusing on Bucks Phyz. It highlights the company's inadequate internal control system and recommends improvements such as implementing individual payment card systems for employees and developing clear corporate policies regarding credit card usage. The document also suggests issuing corporate credit cards to both employers and employees to streamline business expenses and mitigate risks.

Internal Controls

Executive Summary
The present report has been undertaken with the aim of reviewing the sales process of
Bucks Phyz and providing recommendations for its improvement. In this context, the report has
illustrated that there are many internal control weaknesses present in the sales process of the
company such as manual entry system that can lead to the occurrence of many errors such as
misplacement of data. The company is recommended to implement internal controls for
overcoming such weakness such as developing a system that verifies the overall data entered
continually for minimizing the chances of error occurrence. Also, the company is recommended
to adopt the use of corporate credit cards for both the employer and the employees for meeting
the business related expenditure instantly. This is necessary because the present system restricts
the employees and employer to incur specific expenses related with the operational activities of
the company and therefore impacting its overall performance.

Contents
Introduction......................................................................................................................................4
Overview of Sales Process for Bucks Phyz.....................................................................................4
Internal control present in the sales process of the Bucks Phyz......................................................4
Impact of Introduction of Corporate Credit Cards..........................................................................6
Detailed Review of Benefits and Potential Risks associated with the introduction of such cards
......................................................................................................................................................6
Specific Internal Controls to be implemented for Minimizing the Risks Associated with the
Use of Credit Cards......................................................................................................................7
Recommendation to CEO regarding who should be issued Corporate Credit Card....................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
The present report is developed for providing an analysis of the sales process of Bucks
Phyz on the perspective of an accountant. Bucks Phyz is a medium sized company that is
presently focusing on implementing some changes in its sales process. The review of the sales
process of the company has been undertaken on the basis of the information extracted from the
key personnel related to the sales process. The report provides an overview of the sales process
of the company with identification of weakness in the process their impact on the organizational
performance. The report also provides an analysis of the specific internal controls to be
implemented for overcoming the identified weakness and the recommendations for improving
the efficiency of the sales process of the company in future context.
Overview of Sales Process for Bucks Phyz
The present sales process of the company consists of developing a pricing template for
the customers through entering the customer data into the system manually. The process includes
extracting the customer data from the sales contracts through the use of business ID, address and
contact details. The information extracted is entered into the billing system for creating the
customer profile. This is followed by the creation of a pricing template and linking it to the
customer profile. The overall sales process of the company is monitored and controlled by the
finance director, AR manager, head of sales, sales manager and master data specialists (Internal
Control Case Study, n.d.).
Internal control present in the sales process of the Bucks Phyz
Internal Control
Weaknesses in Bucks Phyz
sale Process
Impact of these weaknesses
on the organization
Specific internal controls to
mitigate the risk
Sales data of the customers are
manually entered into the
system and this makes the
sales process highly
At the time of creating the
price template for the
customers a lot of detailed
data is entered manually and
In order to mitigate these risks
that arises due to manual
entering of data, there is
requirement to introduce the

complicated and prone to
errors such as misplacement of
data very frequently
the system view is too bulky
that operator finds it very
difficult to manually enter the
data. There are many cases
where customers have
demanded to make the
significant changes in the
contracts.
system where customers
places the order online and it
is forwarded to the sales team
to make a review and check all
the appropriate details. After
checking all the details in
sales invoice, it should get
approved and customer must
be asked to make payment or
issue the credit note as per
his/her convenience. There is
need for introducing a broader
view into the sales system so
that it is easy to enter details
manually if required (Gelinas,
Dull, Wheeler and Hill, 2017).
No review of customer data is
done once it has been
manually entered at the initial
stage unless the specific
reason to check the same is
required
Bucks Phyz has no policy to
review the customer data after
the initial input stage due to
very less cost benefit ratio. As
there is no review of customer
data after the initial stage this
might create problem while
processing the sales through
the particular customer in case
there is some error left while
making data entry. The
account receivable department
may get trouble while making
the bank reconciliation if there
is unavailability of proper
There is requirement of
specific internal control to
mitigate the risk of data entry
of customers. There must be
policy to make review of the
complete list of customers
once in a month or two
months so that quality check
can be improved and details of
the customers can be
maintained up to date. In order
to make review, access rights
can be given to sales team so
that whenever they make
contact with the particular

details of the customers customer they can verify the
details and make corrections if
required (Hall, 2015).
Billing system does not have
any automated data quality
check controls that focuses on
the customer data that has
been entered into the system
and guide the users in case of
mistake. However there is
standard format, using that
users can enter data into the
system but as mentioned all
the fields are not relevant.
There is no proper indicator
that there is no requirement of
such fields to be entered and
no message displayed for type
of data that should be entered
while filling the specific field.
Billing system is highly prone
to the unwanted mistakes
while making the entry of the
customer data into the
respective fields as there is no
automated system that keeps
the check on the data that has
been entered in the billing
system. In case of any error
that has been left while
processing the bills it will lead
to occurrence errors due to no
internal checks done.
Billing system must be made
in such a manner that there is
specific requirement of each
field and if any wrong data has
been entered a alert message
must be shown and advise
message must be shown to the
user to enter the correct details
(Knechel and Salterio, 2016).
Impact of Introduction of Corporate Credit Cards
Detailed Review of Benefits and Potential Risks associated with the
introduction of such cards
The company is planning to introduce corporate credit card for meeting the business
related expenditure of the employees. The company is planning to introduce such cards for
overcoming the problem faced by the employees for meeting the business related expenses as
they are required to raise a purchase order and then sent it to the supplier under the present
system. Therefore, the employees are unable to incur the business expenses through the use of
online medium. As such, the introduction of corporate credit cards by the company will help the

employees to instantly meet their business expenses and thus they can incur any expenditure
without waiting for gaining approval for reimbursement. However, the potential risks related
with the use of such cards by the company are mixing of personnel and business expenditure by
the employees. Thus, the employees can include their personal expenses in the unapproved
expenses on the credit cards (Simon, 2017).
Specific Internal Controls to be implemented for Minimizing the Risks
Associated with the Use of Credit Cards
The company should also introduce specific internal controls for reducing the chances of
occurrence of any type of risk. Thus, the company should introduce the individual payment card
system for the employees. This type of card system provides the responsibility to the employees
for submitting the overall expense report to the management. Thus, the management reviews the
overall expenses incurred by an employee properly before their reimbursement. Thus, it helps in
identification of any personal expenses that might be mixed up with the business expenses by the
employees. The employees are provided with the authority of paying the issuer directly for any
unapproved expenses but the reimbursement will be made after the review of the management
team. Thus, the introduction of such corporate credit cards will provide advantage to the
company for reducing the chances of any risk occurrence due to mixing of personal and business
related expenses by the employees. Also, the management should develop proper corporate
policies for proving an understanding to the employees regarding the need of providing such
cards to them for misusing the chances of its misuse. The credit card should be issued against the
name of an employee to whom the card belongs for avoiding the chances of occurrence of nay
confusion during the reimbursement of the expenses (Turner and Weickgenannt, 2016).
Recommendation to CEO regarding who should be issued Corporate Credit
Card
The corporate credit card should be issued by the CEO for both the employer and the
employees. The employee credit card should be issued so that the key personnel of the company
can meet the company related expenditure instantly without causing any delay in its operational
activities. The employee’s related credit card should be issued so that they can meet their
business related expenses during the time of travel and other situations instantly. For example,
they can undertake specific trainings for improving their job performance by taking the

permission of their supervisor any distant location and can meet its associated expenses
adequately (Kurtz and Boone, 2008).
Conclusion
The overall internal control present in the Bucks Phyz is very poor and many
improvements are required to be done in order to make the whole process run smoothly. The
business organizations around the world are adopting the use of technology devices that are
highly automated with high accuracy but Bucks Phyz is still dependent upon the manual system
of data entry and processing of data. It is highly recommended to the Bucks Phyz to implement
the suggested internal controls improvements in the above table and make sure that these
improvements are made after developing the proper strategies for their implementation and
review the same through the initial testing. The idea of corporate credit cards will solve the
problem of petty expenses that occurs at the employees and the employers end. This will ensure
the smooth functioning of the operational activities of the company and thereby improving its
overall performance.

References
Gelinas, U.J., Dull, R.B., Wheeler, P. and Hill, M.C. 2017. Accounting Information Systems.
Cengage Learning.
Hall, J.A. 2015. Accounting Information Systems. Cengage Learning.
Internal Control Case Study. n.d. Bucks Phyz.
Knechel, W.R. and Salterio, S.E. 2016. Auditing: Assurance and Risk. Taylor & Francis.
Kurtz, D. and Boone, L. 2008. Contemporary Business. Cengage Learning.
Simon, M. 2017. Corporate credit cards: How they work, benefits, drawbacks. Retrieved 16
January, 2018, from https://www.creditcards.com/credit-card-news/corporate-credit-card-
1267.php
Turner, L. and Weickgenannt, A. 2016. Accounting Information Systems: The Processes and
Controls. John Wiley & Sons.