Fitter’s current sales order accounting processes involves recording sales in ea
ID: 389547 • Letter: F
Question
Fitter’s current sales order accounting processes involves recording sales in each division and then periodically sending certain sales data to Accounting for invoicing and financial reporting. Complete sales order data are retained in each sales division for business analysis purposes. Assume that different divisions of the Yummy Foods Company buy NRG-A and NRG-B bars from each of Fitter’s sales divisions. To complicate matters, some divisions of Yummy buy store-brand bars from Fitter. (Yummy owns convenience store outlets.) Fitter management has asked for an analysis of the Yummy Foods account. They want to determine if there are opportunities to expand the company’s relationship with Yummy; however, they want to assess the profitability of the relationship before proceeding. The management team wants to see what products each division sells to Yummy, how much is sold, and on what terms. Assume that in Fitter’s current system, all the required data are available only at the sales division level. What steps will be needed to pull this company- wide analysis together? (Review how each division sells its products.) Do you think a sales division manager will be enthusiastic about sharing all data with his or her counterpart in the other division? Do you think there might be some reluctance? Why? (**This is before ERP's and SAP systems)...
Explanation / Answer
Answer:
As per Fitter’s current system, all the required data are available only at the sales division level. Then the steps will be needed to pull this company- wide analysis together is that we need to collect data from all division of the Fitter and compile them together and run the analysis so that Fitter can understand the business revenue and profitability for all the division as a one company. The Fitter needs to organize the data collection process on a regular periodic basis, so that the common data are available for business use and analysis. The analysis for each business division will help in understanding the sale potential for each division and understands the sale process for each division.
No, we do not think that a sales division manager will be enthusiastic about sharing all data with his or her counterpart in the other division. Generally the sales division manager will not be interested in sharing his sale data with his counterpart in other division, as it provides the platform for comparison of sale divisions.
Yes, there might be some reluctance because the sale data sharing with counterpart will creates following issues for the sale divisional manager as below
High Time Engagement: Sale divisional manager needs to prepare the data and send it their counterpart. This manual process will call for good amount of time of sale divisional manager and in return he will not gain anything.
Competition: the sale data sharing by sale divisional manager will create a competition among the divisions, hence they will hide the correct data, as the data sharing may show them lower performer in the division.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.