What is the most important duties that should be segregated in the sales and collection cycle?

The most important duties that should be segregated in the sales and collection cycle are::

• Receiving orders for sales
• Granting credit (credit approval)
• Shipping goods
• Maintaining inventory records
• Billing customers and recording sales
• Maintaining general accounting records
• Maintaining detailed accounts receivable records
• Processing cash receipts
• Pursuing unpaid accounts

Segregation of duties should be used extensively in the sales and collection cycle for two reasons. First, cash receipts are subject to easy manipulation. second, the large number and nature of transactions within the cycle make the procedure of cross-checking, where one employees duties automatically serve to verify the accuracy of anothers, highly desirable.