Post sale processes
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Post-Sale processes. (special thanks to Geoff Leese). 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

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Post sale processes

Post-Sale processes

(special thanks to Geoff Leese)


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

Cash credit or both
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.

Cash sales
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%


  • 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?

Credit sales
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?

Post sale processes

  • 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!


  • 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.

So let s sell something on credit
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.

So let s sell something on credit1
So - let’s sell something on credit

  • 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.

Post sale processes

External Entity


Data Flow

Data Store

A Typical Process Model….

  • First list your elements…

  • Then assemble your model…

Post sale processes

Customer Details

Stock Records


S Invoices



Credit Notes



Set up new


Receive +

Check Orders






Credit Notes


The Sales Ledger?



Post sale processes

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.

Sales order processing
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?

Payment fraud
Payment Fraud

  • How big is the problem?

  • Who is responsible?

  • What steps can be taken?

Telesales curse or blessing
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?

Ask yourself
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.

Payment processing
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

Post sale processes



Purchase order

The order is received

The goods are supplied

Payment is requested

A refund may be agreed

Payment is requested again

The money is received

The order is placed

The receipt of goods

is recorded

A refund is requested

If there is a problem

Payment is made

Delivery note


Credit note

Statement of


Remittance advice


  • Tells the buyer how much is owed

  • Sent by seller of goods

  • Kept by buyer of goods

  • Contains

    • Address of seller

    • Address where invoice is sent

    • Where the goods were sent to

    • Reference number


  • This presentation has considered the documents that are produced and used to support the post sale processes.

  • Useful web sites:

    • (Nov 08)

    • (Nov 08)