The internal control system and receivables management in corporate organizations case study: Vision Group
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A well-managed Internal Control System is a risk mitigation strategy as it supports receivables of an organization and enhances business continuity. Internal Control Systems can make significant contribution to an organization by providing a number of efficiency and other benefits including improved corporate governance, improved receivables and reduced costs. The aim of this study was to examine Internal Control Systems and Receivables Management at Vision Group. The specific objectives of the study were to: examine the effect of preventive controls on receivable management, examine the effect of detective internal controls on receivable management and last but not least examine the effect of corrective internal controls on receivable management in Vision Group. The theoretical framework for this study was derived from the COSO framework. A sample of 40 respondents was selected for the study using purposive and convenient random sampling techniques. The study sample included 5 staff from operations, 7 staff from finance, 8 staff from sales, 12 staff from credit and 4 staff from marketing department. The study was both qualitative and quantitative in nature, and data was collected using questionnaires, interviews and backed by documentary sources. The data was analyzed using SPSS. The findings of the study showed that there was a statistically significant relationship between Preventive, Detective and Corrective Controls on Receivables Management in Vision Group. This implies that the more ICS are adhered too, the higher the chances that Vision Group will achieve its set of objectives on Receivables Management. Having known the significance of Internal Controls, Vision Group needs to ensure that they continuously review and monitor those controls to ensure that they are operational. On the basis of the findings, it was recommended that the management of Vision Group needs to continuously monitor and evaluate end-to-end procedures not only of collections practices, but of all of the process within the revenue cycle that ultimately result in the state of accounts receivable balances, starting with sales and ending with cash application. Only after the Vision Group has developed a thorough understanding of how and when cash flows from the customer into the organization can a structure be designed to best optimize those flows.