Existing System of Revenue Cycle Management †MyAssignmenthelp.com

Question: Discuss about the Existing System of Revenue Cycle Management. Answer: Introduction The company is engaged in the business of manufacturing and selling of computer components which includes motherboards, microchips and graphics card. Motherboards and More Pty Ltd are one of the main suppliers to the manufacturers of computers and repairers all over Australia. This organization is of eight years and insists on integrated ERP systems for their ICT solutions. This organization has the administrative offices which are situated in the central city building and performs the operations including manufacturing, shipment of the ordered goods while the receiving department is situated on the outskirts of the town with the distance of 10 minutes. The company has three different issues which are faced by the management lately- revenue cycle, internal control and probable attack of ransomware in their ERP system.(Solutiondots, 2017) The revenue cycle of the company is originated through placement of order by the customers on the company website, or by email or over phone. All the sales are done on credit payment basis with terms of payment are fixed with the credit allowed period of 14 days. The company offers 2% discount to the customers who are paying their dues by three days from generation of invoice. (CSU I. , 2017) The normal trend of payment of the regular customers is to pay their invoices by 3 days from date of invoice. As a result of this practice of credit sales, the company faces loss of revenue through demarcation of doubtful debts with the ultimate step to write off. Around 18% of the total credits sales are to be considered as non-collectable due to big numbers of online orders are being denied by the customers on the ground of not ordering the products or receiving the merchandise ordered. The normal practice of the revenue cycle starts with picking of orders followed by subsequent action of send ing to the warehouse for order processing as per customers name by alphabets. This warehouse is used for both receiving the incoming materials and dispatching of goods against sales orders. The company is normally running with the trend of receipt of ten to twenty incoming deliveries from different supply chain stakeholders. The revenue cycle starts with receipt of order from customer, arranging the goods from the inventories in the warehouse with subsequent shipment to the customers. The generation of invoice happens once the shipment is done. The invoices then directly impact the receivables by increasing the amount. The subsequent payments made for those invoices are processed either through bank or through cash receipts to make the sales complete.(Donald E. Kieso, 2017) Internal controls- weaknesses and respective remedies As the business grows for Motherboards and More Pty Ltd, the erstwhile infrastructure and the job style is failing the need of the organization. It is mostly found that the company has internal weaknesses in the strategic area of credit policy(Times, 2017) and the execution policy of dispatch system and inventory management(Tradegecko, 2017). Appended below the table of weaknesses with their respective impacts and probable remedies to come out of these internal weaknesses:(Kokemuller, 2017) Weaknesses Impact Remedies Credit policy Direct impact on working capital To revise the existing credit policy by fixing the criteria of being credit customers Dispatch system Wrong dispatch of products resulting to reduction of sales due to non attentive attitude of the warehouse staffs Identification of ordered item and tagging them with the specific order of customers Impact on working capital by reduction of receivables for cancellation of orders for improper dispatch of goods Proper verification of goods before dispatching Inventory management Non derivation of inventories as current assets in proper manner to ascertain the balance sheet in true and professional manner A practice of quarterly inventory checking is to be made with proper reconciliation of products as per receipts and dispatches to arrive at the physical closing stock Ransomware Attack The article on present ransomware attack as provided by CFO shows that this attack is damaging the ICT system of the company through the loopholes created by the old version of windows. After hacking the system through ransomware, the hackers start demanding money from the affected.(CSU, 2017) Although there are security alert by some mysterious identity, the provider, Microsoft had announced about their remedies related to such alerts to be covered. Basic problem of the affected users of systems is that they are not upgrading their system as per the latest version of Microsoft and thus the entire computer system is being affected by the said Ransomware. This attack has no geographical limit as it has attacked almost all the countries with its evil footfall. The victimised users may be affected through old version of Windows, accessing fictitious softwares called as Malware(Rouse, 2017) or through spam mails alluring the recipient of different unrealistic offers.(Brandom, 2017) Effective internal control to avoid ransomware attacks To ensure effective internal control to combat ransomware attack, Motherboards and More Pty Ltd has to consider first the sources through which the attack may hit the system. The company is working on ERP system which normally runs through different portals for different purposes. Moreover the company has its own website which is the fascia of the company. Normally the ERP system is supported by Windows. The company should use the legalised version of Windows for professional use with multi user facility and upgrade the same from time to time as per the updates available on the system provided by Microsoft. Moreover to control the access over spam mails the company should use secured version of internet connection by adopting Virtual Private Network (VPN) which can restrict the unwanted infiltrators in the system. It is mostly found that personal mails are accessed while the users work on the company system. That should be restricted with only option of using the company email facili ties while they are in the office. Moreover proper allocation of layer of authentication through multi level password for the users can also be helpful for ensuring internal control over the ERP system of the company to confirm the safeguard for the company software.(McCafferty, 2017) Conclusion It is observed for the case study of Motherboards and More Pty Ltd that the company is facing problem in the operations of its sales due to improper infrastructure, which is unable to face the problems generated through its enhanced operation. The company has faced problem in the area of operations of sales, control of receivables, dispatch system and inventory management. The company has also constant threat of ransomware attack which is the threat for global business community. To mitigate those threat and weaknesses, the company has to rethink about the present work strategy of the company so far its operations management is concerned. Particularly the areas of credit policy, dispatch system and inventory management has to be refurbished in order to make weaknesses of those areas as their areas of strength. To combat the threat of ransomware attacks, the company has to fasten its belt so far its ICT solution is concerned. The ERP system is to be more secured by implementation of a vailable resources through which the company can ensure mitigation of risks related to ransomware attack to the computerised systems of the company. It is also to be understood that proper management can only be ensured through application of justified and logical solutions to accomplish the organizational objectives. The internal weaknesses can be well managed through proper implementation of operations strategies while for external threat; internal controls are to be made tight to ensure that the company can run business without problem to accomplish their corporate objectives. References: Brandom, R. (2017, 06 27). A new ransomware attack is infecting airlines, banks, and utilities across Europe. Retrieved 09 24, 2017, from The Verge: https://www.theverge.com/2017/6/27/15879480/petrwrap-virus-ukraine-ransomware-attack-europe-wannacry CSU. (2017). Retrieved 09 25, 2017, from Charles Stuart University: https://interact2.csu.edu.au/webapps/blackboard/execute/content/file?cmd=viewcontent_id=_1658545_1course_id=_25885_1 CSU, I. (2017). Revenue Cycle. Retrieved 09 25, 2017, from Charles Stuart university: https://interact2.csu.edu.au/webapps/blackboard/execute/content/file?cmd=viewcontent_id=_1658546_1course_id=_25885_1 Donald E. Kieso, e. a. (2017). Revenue Cycle. Retrieved 09 24, 2017, from AZCentral: https://yourbusiness.azcentral.com/accounts-generally-included-revenue-cycle-company-17373.html Kokemuller, N. (2017). Examples of COmpnay Weaknesses. Retrieved 09 24, 2017, from Chron: https://smallbusiness.chron.com/examples-company-weaknesses-69993.html McCafferty, J. (2017, 05 23). Five Preventative Controls for Ransomware Attacks. Retrieved 09 24, 2017, from MIS Training Institute: https://misti.com/internal-audit-insights/five-preventative-controls-for-ransomware-attacks Rouse, M. (2017). Malware. Retrieved 09 24, 2017, from Searchsecurity: https://searchsecurity.techtarget.com/definition/malware Solutiondots. (2017). ERP- Full for and meaning. Retrieved 09 24, 2017, from Solutiondots: https://solutiondots.com/blog/what-is-erp-full-form.html Times, F. (2017). ft.com/lexicon. Retrieved 09 24, 2017, from Financial Times: https://lexicon.ft.com/Term?term=credit-policy Tradegecko. (2017). Inventory Management. Retrieved 09 24, 2017, from Tradegecko: https://www.tradegecko.com/learning-centre/what-is-inventory-management