Internal Audit Program for Financial Controls
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Takogee- Revenues and Accounts Receivable
- Sales Invoicing and Contracts
- Cash Receipts
Common questions
Powered by AIProvisions for bad and doubtful debts are significant as they anticipate potential losses from non-payment by customers, aligning with Group policy to reduce financial exposure. This practice ensures financial statements reflect a more accurate financial position by accounting for expected credit losses .
Matching service delivery records with sales invoices ensures accuracy in billing and customer accounts. If discrepancies arise, they need to be investigated thoroughly to resolve any inconsistencies between documentation and actual services rendered, maintaining the integrity of financial records .
Orders that would cause the total outstanding balance to exceed the credit limit are flagged and require approval from higher-level management before fulfillment. This process ensures additional oversight and prevents unauthorized extensions of credit .
Preparing and reviewing monthly reports that detail aged analysis of debtors, significant overdue balances, accounts in dispute, customer balances exceeding credit limits, and unallocated cash are critical to maintaining financial visibility and control. These reports help identify issues early, manage cash flow effectively, and ensure that corrective actions are taken promptly .
High-risk accounts are not approved unless security is provided. This can include guarantees, letters of credit, or retention of title clauses that are capable of being implemented effectively. These measures ensure that payment is secured and risks are minimized .
Key steps to handling cash receipts include banking all receipts promptly and securely locking them if not immediately banked. Additionally, receipts should be allocated against outstanding invoices within one week of receipt to maintain accurate accounts and cash flow management .
Customer disputes and queries are managed by mailing customer statements periodically and investigating issues on a timely basis. A responsible official monitors this process to ensure resolutions are reached efficiently, fostering good customer relations and maintaining accurate financial records .
The credit control function is closely coordinated with the opening of new accounts and amendments to credit limits and terms. This involvement ensures that any changes are consistent with the overall credit policy and that customer creditworthiness is continually assessed to prevent overextension of credit .
A documented credit policy should cover several essential components: standard terms and conditions of payment, levels of authority to vary policy terms and the conditions under which terms may be altered, assessment criteria for prospective customers for credit, the authority responsible for setting and amending credit limits, and the procedures for controlling and following up on overdue accounts .
To protect the integrity of pricing data and contractual terms within computerized systems, changes are subject to strict access controls. This means only authorized personnel can approve changes, thereby reducing the risk of unauthorized or erroneous modifications .
