Accounting Information System for Revenue Cycle Management

Question: Discuss about theAccounting Information System for Revenue Cycle Management. Answer: Introduction An accurate identification and acceptance of the sales of an organization is an important internal control element for the firms income statement. The sales of a company represent the primary source of the operational cash flow of the company and thus they need to be protected, monitored and managed using effective internal controls (Davis Doyle, 2016). The following procedure should be used by the firm to account and recognize for all the sales of the company. Overview of the revenue cycle To ensure success and efficiency of the companys success , the following steps should be taken. Due to the recent ransom ware outbreak, the company should take appropriate steps to ensure that the companys data is protected from these type of attacks (Orvis, 2006). First, is the sales order entry procedure. This involves processing customers orders in an organized and efficient manner to ensure that that there is prompt and accurate shipment. The second step is point of sale orders procedure. In this step the organization should ensure that they provide POS point of sales procedures to guarantee that the postings of the sales correctly have an effect on inventory and cash. However, there should be authorizations and proper reviews by the stores manager (Lirov, 2007). The third step is customer credit approval and terms procedure,: The company should take this step with the seriousness it deserves because it is at this step that potential collection problems are reduced. Any new customer will be evaluated before any credit extension is approved. .the organization should outline clear guidelines on how potential customers get credit approvals before sales orders are consummated (Revenue cycle management toolkit, 2008). The fourth step in the cycle is sales order acceptance procedure. This sis meant to ensure that the company provides the highest levels of service to its customers and also minimizing any problems coming from the orders. Thus, the recommendation is that the company should verify all orders before they are consummated. The fifth step is shipment to the customer followed by invoicing which should be done in a timely manner to ensure that the customers make timely payments. Revenue cycle risks There are several risks that are associated with the revenue cycle. These include ensuring that there is accuracy of sales and authorization. The organization should ensure that prices are correctly quoted and they follow the pricing policy of the organization (Julisch Kruegel, 2005). Another risk associated with the revenue cycle is reviewing how credit terms are extended to customers who pose a credit risk to the company. Another risk is making sure that during shipment , the goods are not delivered to the wrong person or company. Thus the organization should ensure that they get the correct address of the customer. Other risks include sales to customers with poor credit,shipping errors, theft of inventory, failure to bill customers, billing errors, theft of cash among others (Mesa Graziano Holtzman, 2005). Specific internal controls that could be implemented The organization should set up an independent credit approval function that also deals with good customer accounting to prevent selling to customers with a poor credit history. For the organization to prevent shipping errors it should reconcile the picking tickets, data entry controls , bar code scanners with the shipping notices (Julisch Kruegel, 2005). Other internal controls that should be put in place to reduce theft of inventory and inaccurate records include putting measures to ensure good accountability, secure inventory and frequently reconcile the physical count of the goods with the records. The internal control that preventys failure to bill customers is that the organization should ensure that shipping and billing should be carried out at the same time. Also, the organization should ensure that they reconcile all the sales documents and pre number the shipping documents (Bu?schkes Laskov, n.d.). Theft of cash is reduced by separating duties and assigning separate officers to undertake handling cash and posting of accounts to different individuals. Deposit the cash from sales instantly to the bank and bank reconciliation to be done by a non cash handler. Loss of data is reduced by regular off site and on site backup. Ransom ware attack Ransom ware is malicious software that threatens to block access to the victims data and publish the data to the public unless some ransom is paid. The software varies from simple to complex. While the simple ransom ware is easy to reverse especially for a knowledgeable person, there is a more complex and advanced ransom ware known as crypto viral extortion which makes an organizations files inaccessible by encrypting the victims files (Graham, 2008). A victim cannot recover their data without using a generated key that is only given after payment of ransom in form of bitcoins amd Ukash which makes its difficult to trace the perpetrators. Conclusion in conclusion, an organization can prevent its data from ransom ware attacks by backing up all the organizations information in a completely different system. Second, the staff should always be wary of suspicious websites, emails and apps and lastly using an effective and up to date antivirus. References Bu?schkes, R., Laskov, P.Detection of intrusions and malware vulnerability assessment. Davis, N., Doyle, B. (2016).Revenue cycle management best practices. Chicago, Illinois: AHIMA Press. Graham, L. (2008).Internal controls. Hoboken, N.J.: John Wiley Sons. Julisch, K., Kruegel, C. (2005).Intrusion and Malware Detection and Vulnerability Assessment. Berlin Heidelberg: Springer-Verlag. Lirov, Y. (2007).Practicing profitability. Marlboro, N.J.: Affinity Billing. Mesa Graziano, C., Holtzman, M. (2005).Management's reports on internal controls. Florham Park, N.J.: FERF. Orvis, S. (2006).Revenue cycle management. Marblehead, MA: HCPro. Revenue cycle management toolkit. (2008). Marblehead, MA.