Chick Paints Ltd

A review of

  Account Receivable (Sales Ledger)


  Chic Paints Ltd

      Report contents

      Page number

    1. Terms of reference

    2. Executive summary

    3. Methodology

    4. Introduction

    5. Review of the accounting system

    6. Recommendations

    7. Cost benefit analysis

    8. Appendices

  1. Terms of reference

  1. This report investigates the accounting system in place within Chic Paints Ltd with regard to making recommendations to improve the Accounts Receivable,   Sales Ledger system, credit control and the controls in place to protect it – and to reduce the system’s exposure to fraud.

      2. The Accounts receivable process management is critical to the
          business. Managed correctly, it can help the organisation reduce bad debt,
          improve cash flow and minimize administrative overhead. One of the most
          common causes of cash flow problems is poorly managed accounts

  3. The report analyses the recommendations made in terms of the costs and benefits to Chic Paint Ltd , and analyses the potential for fraud as a risk to the organisation.

  4. Implementing of all the recommendation of this report should improve efficiency of the whole run of the Sales Ledger.

      The report has been prepared to cover the requirements of the Internal Controls and Evaluating Accounting Systems Paper that is part of the AAT Level 4 Diploma in Accounting.

    2. Executive summary

  1. This report analyses the internal controls within the accounting system of Chic Paints Ltd and makes recommendations to improve them. Internal controls can support the accounting function by reducing the risk of fraud and ensuring that accounting system operates appropriately – and that the controls change appropriately as the environment they operate in changes. The key findings are that an automated...