The Design And Implementation Of Internal Control On Revenue And Collections Cycle For SUBOR Education And Electronic Co., Ltd

The SUBOR Corporation (The SUBOR Educational and Electronics Co Ltd in Zhong Shan City) is a topic small private enterprise. With the foreign company entering China, the market environment becoming increasingly standardized and increasingly fierce market competition, the private enterprises are becoming difficult for living. The revenue is the essence of living and profit for private enterprise. In the former developing stage, it often take revenue seriously at the same time lose sight of total internal control of sales and collections cycle. The leaks of revenue and collections circle reflect the shortcoming in internal control system for the private enterprise. It is the direct reason that the paper select revenue and collections circle of SUBOR Corporation to research internal control.In this paper, the research aim is to design the internal control system by the core areas--revenue and collections circle of SUBOR Corporation. The system should accord with the characteristics of private enterprises and reduce the running risk.This paper is divided into four parts:The first chapter is the summarization of the SUBOR Company. The SUBOR Company is introduced respectively of the historical development, management belief, business characteristics and the product marketing system. To the characteristics of the products industry, the competitors made more detailed analysis. Finally, the SUBOR Company is given the brief analysis by using SWOT.The second chapter analyzed sales and receivables link of internal control systems for the SUBOR Company. First, it is introduced the marketing arm of the company, and given a briefing on the existing system of internal controls from the control environment and control flow both sides. Secondly, the sales and receivables linked with the problems of the internal control system analysis. A lot of issues are put forward such as division of responsibilities, the lack of a systematic review of credit, cost of sales is too large, the supervisory mechanism are not sound.The third chapter is on the foundation of the second part. In sales and receivables link, the critical control point redesign of the internal control system is the core thesis. The domestic and abroad internal control theory was mentioned, a brief description of the status quo. This paper is also used the theoretical basis on COSO internal enterprise and risk management framework for a brief introduction. In the SUBOR Company sales and collections circle, the objectives and principles of internal control designing is put forward. That the ultimate goal is to maximize profits, the highest satisfaction for customers.Firstly, the sales circle of SUBOR Company is redesigned.In the building of internal control environment, to add a sales management department on the original structure is imaged. Sales of the original cause of its duties are to supervise the operations of the department and examine the credit conduct for approval. It is stressed for the need to strengthen the building of enterprise culture. On control of human resources, managers should adopt incentive and restraint mechanisms for stuff both ways. We must not neglect the monitoring mechanism of the full authorization. Bounding to be guided by the general staff of the regime, incentive mechanism is for the control method.Marketing controls in design process, the principle of separation of duties is to accept customer orders, credit vetting credit, compiling sales orders, sales orders by supply, shipments, sales invoices issued to record sales cash and bank deposits for record revenue, for sales discounts, discount, rebate and other critical control points in the paper.Secondly, in the internal control system of the SUBOR Company, accounts receivable are on the basis of a detailed internals to be designed.In this section, emphasis is given control of the first accounts receivable program management. Stressed that the responsibility for managing the sales staff, customer focused and detailed explanation of the credit control and credit approval process control, and the establishment of customer credit files. No cash flow impact from the accounting department to establish the principle of the new line of credit and term perspective. Accounts receivable in the control link. Expounded the accounts receivable tracking control, and regularly check claims confirmed regular aging analysis, bad such details, while stressing that the supervision and control of accounting records. The control later in accounts receivable, from the client's internal controls and risk management of the external debt are both in the paper.The fourth chapter gives the SUBOR Company in the sale and receivable links the implementation and monitoring of internal control systems. And also gives the feedback. Any new design demands all staff to attend internal management from ideology. People approve the new internal control system which is the beginning of implementation. In implementation of internal control, by using of spot inspect method, survey chart method, verification method and inquiry method, several critical control points such as shipments, credit vetting, sales discount and rebate were evaluated and revised. Finally the sales and collection aspects of the implementation of the internal monitoring and feedback were introduced. The limitation of internal control designing on SUBOR Company and private enterprise was pointed out.This paper is based on the background of the SUBOR Company and COSO internal control theory. The new designs on internal control were put forward in revenue and collections circle. Taking into account the characteristics of private enterprises and the size restrictions, the paper attempt to control reasonable costs and bring in the greatest benefit to enterprises. So it is designed only to critical control points of sales and collection aspects. Through flow picture method and designing chart method, the design to the internal control has enough focalization links to the former leak of sales circle.This paper links to small and medium sized private enterprises in the internal control system. It is provided practical experiences to be designed and perfect. It can help them to reduce its credit risk and improve internal control and management level of practical significance.