Transcription of THE REVENUE CYCLE
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THE REVENUE CYCLE
4 James A. HallChapterAccounting Information Systems, 4th. REVENUE CycleStudy Notes Prepared by H. M. Savage South-Western Publishing Co., 2004 Page 4-1 CHAPTER 4 THE REVENUE CYCLEThe REVENUE CYCLE is the set of activities in a business which brings about the exchange ofgoods or services with customers for cash. Most business transactions are conducted on acredit basis. Cash is received after goods are shipped to the customer. Your book discussesthis as a two phase process: the physical phase in which goods or services are transferred tothe buyer; and the financial phase in which the cash is received from the buyer. The firstphase is handled by the sales order processing subsystem, the latter by the cash first section of the chapter provides an overview of the REVENUE CYCLE presented as amanual system. The second section examines various ways to computerize this effort, fromtraditional data processing to process reengineering.
system is a very important part of the revenue cycle. It is also an extremely vulnerab le part. Cash is very liquid and has been known to walk away if not tied down. Again, an overview of the system is given in a data flow diagram. Fig. 4-10, on page 188, shows the procedures required to receive payment, update records, and get the money to the ...
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