Bucks Phyz: Corporate Credit Cards and Internal Control Report

This business report, prepared for Bucks Phyz, analyzes the company's internal controls and the potential implementation of corporate credit cards. It examines the sales process, highlighting weaknesses such as data entry issues, inadequate employee training on the new pricing tool, and ineffective authorization and credit check policies. The report identifies risks associated with these weaknesses, including potential data loss, fraudulent activities, and financial losses. Recommendations are provided to strengthen internal controls, including segregating duties, improving the billing system, providing proper training, and strictly enforcing authorization and credit check procedures. The report also discusses the advantages of corporate credit cards, such as mitigating risks and streamlining payments, while recommending their issuance to key personnel only. The report concludes with a call to action, urging management to implement the suggested changes to improve operational efficiency and financial security.

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BUSINESS REPORT
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Executive Summary
The main purpose of this assignment is to provide to a business report to the management of
Bucks Phyz. The management is considering introducing corporate credit cards for its clients.
The report will be analyzing the internal control of the Bucks Phyz and also determining the
strengths and potential risks of the businesses. The report will contain recommendations on
internal control and also the advantages of issuing corporate credit cards to its clients. The
report will be finally end with a conclusion.

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Table of Contents
Introduction................................................................................................................................3
Sales Overview of the Company................................................................................................3
Figure 1: (Diagram showing Key areas in Sales process)..........................................................4
Internal Control Weaknesses......................................................................................................4
Corporate Credit Cards..............................................................................................................7
Reference....................................................................................................................................9

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Introduction
The report will be analyzing the whether the Bucks Phyz Company requires to issues
corporate credit cards for its clients and whether the issuance of corporate credit cards will
help in the operations of the business. The report in this case study is being presented from
the view point of accountant of Bucks Phyz. The report will be analyzing the potential
weakness of the internal control structure of the company and will be suggesting a strategy
which can improve the internal control of the business when the strategy is implemented
(Almeida, KIM & Kim, 2015).
Bucks Phyz is a medium sized company which has a annual turnover of $ 2.5 million.
The purpose of this assignment is that being the accountant of the company, the sales process
is to be reviewed which will be done considering the interviews of the staffs of sales
department of the company. The business has been affected by frauds, scams and changing
environment of the company. The company has also been affected changing in the key
personnel of the company (Zikmund et al. 2013). This report will provide recommendations
which will be improving the internal control of the company and also analyze the need of
corporate credit cards in business.
Sales Overview of the Company
There has been change in the operations of the Bucks Phyz which also includes the
sales department. The sales process has implemented a new pricing tool which can effectively
calculate the prices of the offers that are sent out by managers. This new tool considers the
cost structure of the company and EBIT targets of the company which the old tool completely
lacked (Wu, Chen & Olson, 2014). The authorization policy of the company the new pricing
tool lies with the head of sales and managers and finance director. The other issues which
exist in the sales process ios that the standard contract template which is currently used by the

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New Pricing Tool followed by Managers of Sales
Department
Authorization Policy of new pricing tool from Head of
Sales, Sales Managers and Finance Director.
Credit Checking process managed by Sales head and AR
manager
company is up to the mark in terms of quality. The credit check policy of the company
includes checking of credit worthiness of the clients on the basis of credit ratings as provided
by credit rating agencies.
Figure 1: (Diagram showing Key areas in Sales process)
Source: (Author Made)
Internal Control Weaknesses
The analysis of sales process has revealed the following weakness which are
discussed below:
Sales Process Internal Control
Weakness
Impact Recommendation
Data Entry Process Implementation of
the new customers
into the operative
The pricing template
introduction for a new
client of the business
The company must
segregate the duties
among the employees

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system of the
company is done by
Alfred and Joy. The
area of risk is the
creation of pricing
template against the
name of a new
customer which
requires manual data
entry and also the
system review is also
heavy which
increases the chances
of data being
misplaced or
misstated
(Hammersley,
Myers & Zhou,
2012).
and the lack of
maintenance of the
same in the system can
cause the business to
lose data of important
customers of the
business (Cheng,
Dhaliwal & Zhang,
2013). The company
will then not be able to
keep record of the
situation which in turn
may results in losses
for the company. The
free access to the ERP
system may result in
fraudulent activities by
altering major
customer’s data. The
billing system of the
company should be
designed in such a way
that the clients are able
to relate with the same.
of the business. In
order words a
particular employee
must be given the
responsibility of data
entry and management
of the system where the
data is to be entered.
This will reduce the
chances of misplacing
important customer’s
data (Banerjee &
Canals-Cerdá, 2012).
The company also
needs to implement a
new or make changes
to the current billing
system that the
management currently
employs.
New pricing tool The new pricing tool
which has been
Improper training of
employees may cause
The company needs to
properly train its

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introduced in the
Bucks Phyz requires
the managers to be
properly trained in
order to successfully
implement it and also
work with the same
(Feng, McVay &
Skaife, 2014).
major calculations
errors of prices that are
sent out. This will
impact the business
tremendously.
employees in managing
and utilizing the
pricing tool.
Authorization Policy The authorization
process which the
managers have to
follow in case of
following the new
pricing tool is not
effectively followed by
the management, even
the head of the sales
admits that in certain
situations the
authorizations can be
ignored.
The standardised
process of
authorization policy if
not followed strictly
will provide scope for
the managers to
indulge in fraudulent
activities. These
managers can send
offer to clients at a
higher price than usual.
The management has
the option to either
introduce a new
standardized process or
follow strictly the
established
standardized process
with rare room for
exceptions.
Credit Check Process The company credit
check policy need to be
implemented for every
customers and the
Similarly if the credit
checking process is not
strictly followed by the
management then it
The checking of the
credit worthiness of a
customer should be
made mandatory. The

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policy should be
strictly followed by the
management in order
to avoid any major
losses (Siddiqi, 2012).
will result in major
losses for the company
as customers are not
always genuine.
system should be
designed in such a way
that without checking
the credit worthiness of
a particular customer
no deals would be
permitted (Bakshi &
Chowdhury, 2013).
Employee code Another weakness
which can be identified
is that there is no
presence of employee
behaviour code which
can control and also
built relationship
between the
employees.
If proper behavioural
code is not established
by the management
then this gives scope to
the employees to
indulge in fraudulent
activity.
The Company needs to
introduced a new
behavioural code
which needs to be
followed by everyone.
Corporate Credit Cards
Corporate credit cards are cards which are used to make payments. Many of the
companies provide their employees with corporate credit cards which can be used to make
personal payment, handle business related expenses and is quite useful when the employee is
travelling (Agarwal et al. 2014).
Risks of Credit Cards Impacts Internal Control

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The basic risks which the
company faces while using
credit cards is the
unauthorised sanction of
money from business which
might be due fraudulent
activity or error. The
management of Bucks Phyz
can avoid such a risk by
appointing a team of
employee who will be
responsible for looking after
and monitoring the
transactions by credit cards.
The introduction of corporate
credit cards in Bucks Phyz
will be of great advantage to
the business (Doppelt, 2017).
The most basic advantage
associated with the
introduction of corporate
credit cards is that the
company can mitigate some
of the risks which the
business is associated with.
Besides this, it will be
effective in the payments
which the company has to
make to its suppliers or
employees and this will
reduce the cost of operations
which the businesses incur.
The management of Bucks
Phyz should issues corporate
credit cards to only the key
personnel of the business
who are responsible for the
key areas of the business.
The finance managers of the
Bucks Phyz should be
provided with credit cards.
The internal control of the
business should be such that
the credit cards are allowed
to only key personnel of the
business.