Post-Sale processes
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Transcript of Post-Sale processes
2
Objectives
At the end of this lecture you should be able to…
List the main functions of a Sales department
Explain some of the problems associated with sales.
List the documents associated with sales Describe the information flow within a
Sales Department.
These objectives relate to LO 1 – Concepts, theories and principles related to the use of computing in business, and Indicative content – Functional areas of business, marketing sales and production etc. and Sales Order Processing
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Cash, Credit or both?
A cash only business asks for payment at the point of sale – e.g. Tesco
A credit business operates on accounts, and allows customers a period – usually 30 days – before payment.
Some businesses allow both – e.g. B&Q are mainly cash, but allow account customers to buy on credit.
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Cash Sales
Cash might mean £ and pence Cash also includes plastic…. In this
case the cash payment is made by the card company, and they allow their customer the credit.
Using credit cards costs money – the card company has overheads!
The retailer pays - generally 2.5% but can be more – 4 or 5%
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Example You buy and item from GladRags
costing £100, and pay by credit card. Card charges 2.5% - or £2.50, so
GladRags gets £97.50. (Annual t/o £1m ?)
If you don’t pay off all your credit card, they will also charge you interest – so they make money both ways!
So – why do companies take card payments?
Are debit (switch) cards the same?
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Credit Sales Mean your customers have an account. You need references – bank, other businesses. Takes time to set up Need to decide on credit limit, payment terms
etc. Needs administration – often called credit
control Customers expect regular statements You don’t get your money for 30 days You need to finance all your costs until
payment. Why bother? Could you do business without it?
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Both….
Doesn’t pay to set up credit for small amounts.
Looking to catch large / regular customers
May need to offer attractive terms, or discounts
May not advertise different prices – bad for customer relations!
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Centralisation
Large companies with multiple branches often have one centralised credit control centre
E.g Mavis Gerkins – local builders merchant, approx 1900 depots in UK, Credit controlled in Nottingham centre, employs >100 staff.
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So - let’s sell something on credit
Customer wants to open an account – form sent
Credit checking – references etc. Account approved – terms set Order placed - may be telephone,
internet, order form etc. Usually has customer reference number.
Order recorded, passed to despatch.
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Despatch prepare the order for delivery, may be all, or if some items out of stock, part of total ordered.
Despatch tell Sales what they have sent. Sales prepare the invoice – based on what has
been delivered The balance of the order is recorded, for when
the items are available. Cycle repeated for all orders Monthly statements are sent Payments are received, and allocated to
accounts Invoices in excess of 30 days have to be chased.
So - let’s sell something on credit
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A Typical Process Model….
• First list your elements…
• Then assemble your model…
Data StoreData FlowProcessExternal Entity
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Set up new accounts
Customer
Receive +Check Orders
Referees
Despatch goods
Customer Details
Stock Records
Despatches
S Invoices
Credit Notes
Prepare Invoices
Credit NotesStatements
Customer
ReceivePayments
Orders
Payments
The Sales Ledger?
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What does the IT system do for the Sales Dept?
• Most companies have a computerised system where the Sales Ledger is integrated with the stock records.
• Holds customer records – account details, delivery address etc.• Holds copies of orders received • Checks orders against credit limit – can block ‘bad’ accounts• Allows despatch notes to be matched against orders• Automatically updates stock with items sent• Produces & records Invoices• Hold records of all transactions on each account – invoices, credit
notes, payments etc. • Produces monthly statements• Allows payments to be matched to account• Identifies overdue invoices• Can produce management reports – routine and ad-hoc.
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Sales Order Processing
Refines the ordering process Orders can be confirmed immediately, as credit
and stock levels can be accessed on-line Eliminates part orders, can offer alternatives Instant access to account history for all queries Generates automatic invoice and despatch
notes Can accept 3rd party payment Can be telephone or more and more web based. Web – are customers doing the work? Look at ‘ticketless’ airlines – how much work is
customer doing?
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Telesales – curse or blessing?
Computerised databases - can be bought
Automated calling - saves operator Pre-written dialogue Recorded for follow ups Unscrupulous use – bogus prizes etc. Is there an way to opt out?
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Ask yourself… What are the essential steps in processing a
sales order What are the problems of part fulfilled orders When are credit notes issued Give 3 advantages and 3 disadvantages of credit
sales Why do large companies usually centralise their
credit control departments Why do most large retailers accept credit card
payment Why do some firms refuse credit cards but
accept debit cards? Give some advantages and disadvantages of
selling goods on-line.
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Payment Processing
All business transactions are accompanied by a document that forms the basis of ‘double entry bookkeeping’
Most transactions are related to the sale or purchase of goods, services, capital items and consumables
So far we have concentrated on pre sale processes today we will look at what happens after the sale
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The order is placed
The receipt of goods is recorded
A refund is requestedIf there is a problem
Payment is made
BUYER SELLER
The order is received
The goods are supplied
Payment is requested
A refund may be agreed
Payment is requested again
The money is received
Purchase order
Delivery note
Invoice
Credit note
Statement of account
Remittance advice
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Invoice
Tells the buyer how much is owed
Sent by seller of goods Kept by buyer of goods Contains
Address of sellerAddress where invoice is sentWhere the goods were sent toReference number