Question

1. Goodfellows Manufacturing Company is a mature user of the SAP ERP order processing system. Goodfellows recently acquired another manufacturing company and it wants to consolidate its customer records into Goodfellows' SAP ERP system. What are two things Goodfellows must do before it consolidates the other manufacturing company's customer records into its SAP ERP system?

2. Why should management or an organizational function that is independent of the sales order function, prepare the master price list?

3. Describe the procedures for a sales return and explain how the procedures relate to the segregation of duties of authorization, custody of assets, and record keeping

Answer 1

1. Goodfellows Manufacturing Company is a mature user of the SAP ERP order processing system. Goodfellows recently acquired another manufacturing company and it wants to consolidate its customer records into Goodfellows' SAP ERP system. What are two things Goodfellows must do before it consolidates the other manufacturing company's customer records into its SAP ERP system?

Before consolidating customer ( master) record in to SAP ERP system will be as below :

1. Account Group – classification features within the customer master records
2. Sales Organization – Independent unit that is responsible for Sales processing of a product or Product Line
3. Distribution channel – means of getting a product to the customer
4. Division – Group of Product and services
5. Data Reconciliation – identify reconciliation Method and tool for each data objective --- Develop reconciliation procedure – Testing and dress Rehearsals- Sign off Business with acceptable % of error records

Why should management or an organizational function that is independent of the sales order function

In any Organization , the sales department plays a pivotal role in the success of the business . The Sales unit is to bridge gap between the potential customer’s need and the products /services that the organization offers that can fulfil their needs

Sales lead conversion – as mentioned above , sales person always act as bridge between product and potential customer .

Business Growth –Sales paly a key role in the building of loyalty and trust between customer and business. In the digital age , they are extremely influential , due to the reach and power of social media and online media

Customer retention – Advantage of the impact of sales can have not only on revenue but also on brand , reputation , long term customer retention and

Master price list represents – A master proc list applies for the whole company. Once a price list is Marked as Master , the system will use it when creating an order for a customer who has price set up by default and has no price list associated for a given product .

Only one price list can be marked as Master .

Please use following process while create a Price list as master –

1. Go to set up – Price List
2. Lick on The new price List green button
3. The Add price list window will open , enter the name , description , select ALL as the price list type and check the box of Master Price list – click on save to finish

Once saved , the price list will be marked with a green tag and will be visible from the Manage Price Lists screen .

1. Sales Return procedure – A company must have procedures in place for receiving returned goods, crediting the customers account and placing the items back in Inventory .
2. When customer return goods , the goods are handled by the receiving department . Returned goods are typically accompanied by documentation from the customer . A receiving Log is prepared that list the of all returned items and a receiving report records the quantity received . A receiving report is a source document completed by personnel in the receiving dock that documents the quantity and condition / Quality of item received
3. Record the Return- Record a sales transaction for a cash sales , debot cash and credit sales . For credit sales, debit – account receivable and credit- sales .Properly recording the return is a key element and a absolute necessary to keep the books accurate . After completing the return process , the item must also log back into Inventory or separate into returned items classified as discount for future sales promotion

Verify the return and record the sales return Transactions

1. Segregation of Duties of Authorization ( SOD) – One of the key concepts in placing Internal Control over a company’s asset is segregation of duties. Segregation of duties serves two key purpose .

1. It ensures that there is oversight and review to catch errors
2. It helps to prevent fraud or theft because it requires two people in order to hide a transaction

Segregation of duties involves separating three main functions and having them conducted by different employees :

1. Having custody of assets
2. Being able to authorise the use of assets

Record keeping of assets