Sales Order

To understand this procedure, your team first met with Azlina, the sales officer. She first explained the nature of SESB sales operation. The sales are made to the resellers that have registered with SESB. Each reseller receives a pre-numbered purchase order booklet from SESB office upon its registration. Periodically, the reseller completes the purchase order form for reordering purpose. The reseller specifies the description of the ordered products and the quantity, respectively. The purchase order form is faxed/e-mailed to SESB's head office for processing. The reseller may also bring the purchase order form directly to the head office for ordering purpose. Your team further asked about the process of handling the customer's order. The following description was provided by Azlina: As a sales officer, she is responsible to review and to approve the order made by a reseller. Upon receiving the pre-printed purchase order copy from the reseller, she then checks the reseller's account status by referring to the customer's weekly report file. The accounts unit prepares the customer account's summary report weekly for the sales officer reference. Based on the customer's account record, she approves the reseller's order and transfers the order details into the sales order form (prepared in duplicate carbon copies). She then forwards the original sales order copy to a store executive. Meanwhile, the second sales order copy is filed together with the pre-printed purchase order by the reseller's name. In case of the customer exceeds its credit limit, Azlina remarks the customer's order as 'on hold' and files the customer's purchase order copy into 'Pending Customer's Order' file. She then notifies the customer to clear the pending payment before the order being processed. Your team then met Selamat, the store executive who is responsible for managing inventory and delivery related tasks. As he mentioned, he has two operation employees to help him in his unit. As your team observed, the storeroom area is securely locked and only accessible by the authorised employees. You also noticed that the 2,000 square feet storage area is also equipped with the fire extinguishers and smoke detectors. When requested to elaborate further on his responsibilities, he described as follows: Upon receiving the reseller's sales order details, he first checks the inventory card for the current inventory balances. If all the ordered products are available, he then requests the operation employee to pick up the ordered goods from the store shelves based on the verified sales order copy. He then instructs the operation employee to complete the duplicate copy of the delivery note by specifying the sales order details and the delivery agent. The employee also attaches the sales order copy to the packaging. The packed order is kept in the collection area while waiting for the delivery. Selamat's description of the existing delivery procedures are summarised as below: The appointed delivery agent comes to the head office three times a week to collect the packed goods and deliver to the respective reseller. The agent picks up the packed inventories from the operation employee and signs on the delivery note prepared earlier. While the delivery agent retains the second copy of the delivery notes, the operation employee provides the original copy of an annotated delivery note to Selamat for recording purpose. He is responsible to update the respective inventory cards based on the number of units delivered. He then signs the completed delivery note and forwards it to the account officer.

REQUIRED:

Identify TWO (2) possible weaknesses in the SESB's procedures. Provide an appropriate argument to support each of the weaknesses highlighted.