A number of policies are related to the order entry, credit, and shipment areas can assist in the enforcement of controls. The next list itemizes four order entry policies that are intended to avoid fraudulent orders, ensure proper pricing, and avoid the acceptance of special customer terms. There are also three policies related to credit [...]

It is increasingly common for companies to allow customers to place orders through electronic forms over the Internet, while other firms have created in­terfaces into their order entry modules that allow electronic data interchange (EDI) messages to be entered without manual intervention. It is necessary to create a set of automated controls for these inputs, [...]

The evaluated receipts process was first discussed in Chapter 2 as an ad­vanced approach for planned purchases within the accounts payable system. This system involves issuing a purchase order number for each authorized delivery by a supplier, which the supplier affixes to its physical order to the company; the company’s receiving staff then matches the [...]

In some situations, a company does not keep a product in stock for deliv­ery to customers. Instead, it routes customer orders directly to its supplier, who in turn ships the goods directly to the customer. As a result, the com­pany never handles the related inventory at all, which reduces its working capital requirements. However, additional [...]

Credit management is a difficult process to integrate into the order entry process flow in an automated manner. At best, systems can be designed to automatically approve modest changes in credit levels, grant credit at very low levels to new customers, or hand off credit issues to employees when order sizes or submitted financial information [...]

It is increasingly unlikely that companies will use entirely paper-based order entry and shipment systems, but some smaller ones still use this ap­proach. The flowchart in Exhibit 1 shows the basic process flow for these organizations, with the minimum set of controls needed to ensure that it op­erates properly. In essence, the order entry person [...]