Lecture Revenue Cycle

The revenue cycle is a recurring set of business activities and related information processing operations associated with:
–Providing goods and services to customers
–Collecting their cash payments
The primary external exchange of information is with customers.


The primary objective of the revenue cycle:
–Provide the right product in the right place at the right time for the right price.

In AIS point of veiw, We have to know:

How the three basic AIS functions are carried out in the revenue cycle, i.e.:

•Capturing and processing data
•Storing and organizing the data for decisions
•Providing controls to safeguard resources (including data)

For basic business activities in RC are:
- Sales order entry
- Shipping
- Billing
- Cash Collection



For control objectives

In the revenue cycle (or any cycle), a well-designed AIS should provide adequate controls to ensure that the following objectives are met:

–All transactions are properly authorized
–All recorded transactions are valid
–All valid and authorized transactions are recorded
–All transactions are recorded accurately
–Assets are safeguarded from loss or theft
–Business activities are performed efficiently and effectively
–The company is in compliance with all applicable laws and regulations
–All disclosures are full and fair