PLEASE ONLY LIST 5 WEAKNESSES NOT 10.
1. Based on the notes (i.e., narrative), list 10 weaknesses in the revenue cycle. At least one weakness must come from each area (general notes, marketing and sales, shipping, business office, accounting, IT). For each weakness, identify why it is a weakness/what could go wrong, and then suggest a control to mitigate the weakness. The ERP system automatically logs the date of shipment. A listing of unfilled (pending) orders can be generated from the system based on orders entered that do not list a shipping number, FedEx identification number and shipping weight. One is rarely produced because the company historically has not had a problem with orders being unfulfilled beyond 24 hours. The system allows an order entered late one day (noted as pending) to be overridden and released by the Director of IT as if the order had been fulfilled. The ERP system leaves no trail when this occurs, and simply removes the pending flag. TechWear strongly believes in its products and has an unlimited 90-day return policy that allows a customer to return any product for any reason within 90 days of purchase. Additionally, it warrants its products against manufacturing defects for two years. If a product is returned (which has not happened yet) the Shipping Department issues a credit memo to the customer, which results in a reversal of the sale. Business Office Director (responsible for billing and collections) Cash is collected either via checks received through the mail or a bank lockbox (which is the preferred method, given the size of its customers), whereby payments are posted by the bank directly into TechWear's depository account. Customer billing disputes, which management says have been rare, are resolved by the Business Office. Thus far, there have been no bad debt write-offs, which management credits to the quality of its products and its extensive background checks. On a quarterly basis, the Business Office reviews an "Aged AR" listing of old accounts warranting further attention. If necessary, an allowance for bad debts would be recorded in the general ledger. Actual bad debts would be charged against the allowance. Accounting Supervisor The Accounting Office is responsible for making the bank deposit. It also reconciles the depository bank account at month-end, ensuring that all cash receipts have been accounted for. The main responsibility of the Accounting Office is to monitor daily sales and produce action reports for management. These are system-generated reports that are reviewed by an accounting analyst who flags adverse sales trends. The focus is on meeting company targets. Director of IT The IT Department (consisting of two individuals) is responsible for ensuring that Tech Wear's website is running efficiently and is protected from internal and external threats. The Director has "super user rights and can access any system. His assistant has full read-only rights and can only make changes to test files. The assistant has been charged with monitoring sales activity and ensuring continuity and security. 1. Based on the notes (i.e., narrative), list 10 weaknesses in the revenue cycle. At least one weakness must come from each area (general notes, marketing and sales, shipping, business office, accounting, IT). For each weakness, identify why it is a weakness/what could go wrong, and then suggest a control to mitigate the weakness. The ERP system automatically logs the date of shipment. A listing of unfilled (pending) orders can be generated from the system based on orders entered that do not list a shipping number, FedEx identification number and shipping weight. One is rarely produced because the company historically has not had a problem with orders being unfulfilled beyond 24 hours. The system allows an order entered late one day (noted as pending) to be overridden and released by the Director of IT as if the order had been fulfilled. The ERP system leaves no trail when this occurs, and simply removes the pending flag. TechWear strongly believes in its products and has an unlimited 90-day return policy that allows a customer to return any product for any reason within 90 days of purchase. Additionally, it warrants its products against manufacturing defects for two years. If a product is returned (which has not happened yet) the Shipping Department issues a credit memo to the customer, which results in a reversal of the sale. Business Office Director (responsible for billing and collections) Cash is collected either via checks received through the mail or a bank lockbox (which is the preferred method, given the size of its customers), whereby payments are posted by the bank directly into TechWear's depository account. Customer billing disputes, which management says have been rare, are resolved by the Business Office. Thus far, there have been no bad debt write-offs, which management credits to the quality of its products and its extensive background checks. On a quarterly basis, the Business Office reviews an "Aged AR" listing of old accounts warranting further attention. If necessary, an allowance for bad debts would be recorded in the general ledger. Actual bad debts would be charged against the allowance. Accounting Supervisor The Accounting Office is responsible for making the bank deposit. It also reconciles the depository bank account at month-end, ensuring that all cash receipts have been accounted for. The main responsibility of the Accounting Office is to monitor daily sales and produce action reports for management. These are system-generated reports that are reviewed by an accounting analyst who flags adverse sales trends. The focus is on meeting company targets. Director of IT The IT Department (consisting of two individuals) is responsible for ensuring that Tech Wear's website is running efficiently and is protected from internal and external threats. The Director has "super user rights and can access any system. His assistant has full read-only rights and can only make changes to test files. The assistant has been charged with monitoring sales activity and ensuring continuity and security
