Prepare a flowchart depicting the sales to cash collection and reporting processes for Crazy Jay’s Restaurant Chain.

Individual Flowcharting Assignment – 20 Points
Due Date: Friday, September 20, 2019

Background
To meet the requirements in Section 404 of the Sarbanes-Oxley Act of 2002, management must have documentation that describes the design of controls over relevant financial statement assertions. In many cases, management is creating flowcharts of its financial reporting systems to provide that design documentation.

Requirements

You have been asked to prepare a flowchart depicting the sales to cash collection and reporting processes for Crazy Jay’s Restaurant Chain. If your last name begins with M-S, you will prepare PART A. If your last name begins with T-Z, you will prepare PART B. Note: You will want to read both parts to gain a full understanding of the process.

To produce a professional looking flowchart, you will prepare your flowchart using Microsoft Visio flowcharting software. This software is used by most of the accounting firms and you’ll want some first-hand experience with using it. This software is loaded on all the MAC lab machines and Nelson Hall labs in the basement. You can also use it at home via the NCSU VCL (virtual computing lab). You cannot use PowerPoint or Word to do this.

As you prepare your flowchart, you want to make sure that the reader is able to follow your flowchart step-by-step (see “Overview of Business Processes and Visio” video posted on Moodle). You don’t want any “dead ends” that fail to describe where the reader must go to next. Remember to depict each process clearly and in sufficient detail without overloading any symbols with text that exceeds the symbol size. Also include annotated risks and controls throughout the process where appropriate (see “KMPG Flowcharting Implementation Guide” posted on Moodle).

The video from class contain the detailed instructions on how to use Visio. Once you are in Visio, you will find pull-down menu options to select the flowcharting stencils (the symbols that you can drag and drop). When you are finished, save your VISIO file and then ALSO export your file to create a PDF version. Submit your files to Moodle. Note you should have 2 files (.vsdx and .pdf)

Sales to Cash Collection and Reporting Procedures for Crazy Jay’s Restaurant Chain
Crazy Jay’s restaurant chain operates in 35 restaurants in North Carolina. Below is how the Sales to Cash Collection and Reporting process works at each restaurant location.

Part A: Sales and Cash Deposit Processes
Crazy Jay’s utilizes an order tracking system called POINTOFSALE 4 which transmits orders entered by the servers to the kitchen, and accumulates daily sales by server. Each server has a unique system ID and enters orders via one of several terminals, each located within a different dining room of a given restaurant location. The only terminal containing cash is located in the “Mellow Bar” section of the restaurant, to which only the bartenders and the managers are allowed access.

Servers begin their shift with 20 dollars in small bills and coins that they are required to bring from home. As servers enter orders and collect customer receipts, the POINTOFSALE 4 system tracks all financial and ordering transactions. While POINTOFSALE 4 processes all credit card transactions electronically, the servers hold on his or her own person all collected cash until the end of the shift. At the end of each order, once the server closes out the customer order, the POINTOFSALE 4 system prints a two-copy detailed receipt. One copy of the receipt is held by the server while the other copy is given to the customer. At the end of each shift, the POINTOFSALE 4 system produces the server’s activity report, which details payment information by customer.

A server takes this activity report to the manager, declares his or her cash tips for the day, and settles the ‘‘account’’ by netting the cash in his or her pocket with the sales declared by the POINTOFSALE 4 system. The manager repeats this procedure for each server for the day, and in turn combines these cash collections with cash from the Bar terminal to deposit the next morning in the bank.

The manager records the total amount collected from all servers on the cash reconciliation form (a paper document) and files it along with the corresponding deposit slip. The manager then places the deposit slip, along with the cash into the safe. Deposits are made each morning.

Part B: Reconciliation and Reporting Processes :The restaurant bookkeeper, verifies that the sum of the cash and credit card slip totals on the cash reconciliation form for the prior day reconcile to the confirmation received from the bank of the deposit processed. After the reconciliation is performed, the bank’s email confirmation is printed and attached to the cash reconciliation form and filed together by date.

Overnight, POINTOFSALE 4 processes all transactions downloaded from each server through the register closing process (from the terminals) and summarizes that information in a Daily Sales Report, which is an electronic file stored on the store’s server. Each night, an electronic copy of the Daily Sales Report file from each restaurant is transmitted automatically at midnight to the corporate office main server. The restaurant server also automatically generates a paper copy of the Daily Sales Report for each restaurant nightly. It summarizes total restaurant sales, as well as subtotals of cash and credit sales, by restaurant terminal. These reports are filed by date at each store.

At month end, the restaurant computer server uses each day’s Daily Sales Report file to generate a Monthly Sales Report file for each store. This file contains daily sales totals for the restaurant for each day of the month. This Monthly Sales Report information is electronically transmitted to the corporate office. Each restaurant’s server generates a printout of the Monthly Sales Report at month end. The corporate office computer server uses this information to prepare and print a consolidated General Ledger, which summarizes the postings of monthly sales totals from each restaurant to the consolidated sales account.

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