Emilio S.

Lim
Appliances

Group 4C
Leader: Barba, Arra Kassandra M.
Members: Caragay, Crislyn A.
Cruz, Eloisa Mae D.
Maun, Roma Angela D.
Panaligan, Rowena C.
Pedro, Frances Anne M.
Valencia, Jillianne Faye L.
 A.
Emilio S. Lim Appliances in Bataan was established since 1999. Their main office was located in
Makati and established since 1967 and operated for 50 years. The nature of their business is merchandising
business and they also have a real estate business. The purpose of their business is “To be a household
name in providing quality and affordable appliances to Filipino families”.
All home appliances such as television, washing machine, refrigerator, air conditioner, microwave
oven, electric fan, and component are available in their store with different brands such as Haier, TCL,
LG, Sharp, Condura, Sanyo, KDK, Eurotek, Skyworth, Changhong, Hitachi, La Germania, Lenovo,
Samsung, Sony, Union, and Wow which also their direct supplier. They offer cash basis and installment
basis for their customers. Based on the management, 20-30% of their customer prefer installment basis in
purchasing their product. When the customer renders an installment basis, the store make a background
check to their customer before they make sales. Their main office is the one who purchase an order for
their branches to their direct supplier and deliver it in every branches.
Since the ESLA have three branches in Bataan they make a job rotation to their employees. They
make job rotation to provide benefits to both employees and the employer, and it supposed to increase
employee interest level and motivation.
Their peak season is every summer and Christmas season. In summer, most appliances sold are air
conditioner and electric fan and in Christmas season are most of their appliances are sold. They are
profitable because most of the customer prefer them because they offer net price while the other store
offer suggested retail price.
The ESLA has a quick turnover in terms of their inventory and they are liquid since there is a quick
turnover of their asset into cash because many customer purchase to them. They also offer more affordable
prices than the other appliances store.
B.
Control Environment is prominently and consistently followed in compliance with Internal Control
because the ESLA carefully define various measures to safeguard its assets, check the reliability and
accuracy of accounting information, ensure compliance with management policies, and evaluate operating
performance and efficiency. One important control is limited access to assets. This control feature assures
that only authorized and responsible employees can obtain access to key assets.
There is also a proper segregation of duties in ESLA to ensure that there is oversight and review
to catch errors. It helps to prevent fraud or theft because it requires two people to collude in order to hide
a transaction. In ESLA, there is also a Rotation of duties where there employees have assigned in every
branches periodically so that it is more difficult for users to collaborate to exercise complete control of a
transaction and subvert it for fraudulent purposes.
The invoice such as sales invoice and billing invoice has a pre-numbered and properly organized
to prevent the loss of transaction. There is an asset control within the ESLA since the business has a huge
investment in inventory so they have to prevent the theft of the employees. When ESLA purchasing an
inventory to their direct supplier the main office is the one who handle the purchasing order and deliver it
to their branch that needed supply. Purchases should be initiated only by appropriate supervisory
personnel, in accord with budgets or other authorizing plans. The purchasing action should be undertaken
by trained purchasing personnel who know how to negotiate the best terms (with full understanding of
freight issues, discount issues, and so forth). A purchase order should be prepared to initiate the actual
order. When goods are received by the branch, the branch should not accept them without inspection,
including matching the goods to an open purchase order to make sure that what is being delivered was in
fact ordered. The branch should prepare a receiving report, indicating that goods have been received in
good order. There is low possibility of error because when they receive the supply coming from the home
office the guard is the first one who will inspect the product before the manager and all of the employees
in the branch will make sign to the receiving form to confirm that the quantity of product that they receive
is correct.
In making the operation of ESLA more efficient they offer more affordable price of their products
than the other appliances store. They have a strict internal control for their employees and make them to
obey in rules and regulation of the business. They have a weekly inspection of their supervisor in every
branches.
C.
In making the physical audit, ESLA making their physical count of their inventory manually every
week and when receiving a stocks from home office they check the serial number if correct. If there is a
difference between the physical count and the records they keep the management investigate about it.
They also monitored their inventory turnover by checking the stock book of manager and purchasing if
tally. If ESLA want to know if the inventory that they received and issued is correct they will review the
delivery receipt and inventory of stock unit.
Standardizing documents used for financial transactions, such as invoices, internal materials
requests, inventory receipts, can help to maintain consistency in record keeping over time. Using standard
document formats can make it easier to review past records when searching for the source of a discrepancy
in the system. A lack of standardization can cause items to be overlooked or misinterpreted in such a
review. In the transaction of the ESLA they make a one-day process, the cash that they receive in one-day
transaction will deposited it to the bank immediately and make report about that transaction.
They keep their inventory in central location because it allows them to keep it more secure. They
also have locks and security code in the system to ensure that only trusted personnel have access to the
inventory and records.
When the customer purchase appliance which is cash basis, the manager will prepare sales order
and doubled check by the finance officer, then the finance officer will prepare official receipt for the
customer. When it is installment basis, they will conduct an interview and customer investigation. They
will give application form for the assurance in the monthly payment. The form will be attached to
organization chart and documented.
In cash receipts, cash payment, installment payment and down payment’s deposit slip will be filed
for documents and the cash received will deposit to bank every day.
D.
The best recommendation for the ESLA is to have a CCTV to monitor the action of their employees
within the entity. The assurance of their delivery because there is a time that the customer makes complain
about the time of their delivery. The manager should have a good moral character and pleasing personality
because their manager in their some branch is not friendly and have an attitude towards their customer.
 DOCUMENT FLOWCHA
INSTALLMENT SALE

ACCOUNTS RECEIVABLE
SALES DEPARMENT TABLE FINANCE

Manager A

Prepare
Installment Sales
Form Order

Installment
Form
Prepare Reference
Invoice File
Prepare
Sales
Order
Sales Order

Installment Form Invoice

A Sales Order

F
C
Customer Attached to
Chart Customer
Record Chart

Installment Form
Customer Chart

F
B

DOCUMENT FLOWCHAR
CASH SALES

SALES DEPARMENT

Customer

Sales Order
 Check and
Sign Sales
Order

Checked and
signed Sales A
Order

Checked and
Signed Sales
Order

F
 DOCUMENT FLOWCHART
CASH RECEIPTS
CASHIER TABLE
ACCOUNT RECEIVABLE TABLE
MAIL CLERCK’S TABLE

A B
CUSTOMER

BILL DP
IP BILL
Down CASH
Payment PAYMENT

Installment PREPARE
MONTHLY
payment RECEIVABLE
ACCOUNT
RECEIVABL
FORM E JOURNAL
CASH PREPARE 2
B
PAYMENT OFFICIAL 1
RECEIPT
O.R.
O.R
DP MONTHLY
RECEIVABLE
FORM
IP
CASH
PAYMENT F
CUSTOMER F
A DP
IP CASH
RECEIPT
CP RECORD AND JOURNAL
PREPARE
DEPOSIT SLIP
DEPOSIT SLIP
 INVENTORY CYCLE
INVENTORY DEPARTMENT STOCKROOM Sales department SHIPPING

Main Office/ Supplier A B

C

Physical Inventory 2 Physical Inventory 2

Physical Inventory 1 Physical Inventory 1

Physical Inventory 1
Inventory Form Physical Inventory
Inventory Form Inventory Form

Perform Customer
Sign
Physical
inventory
count of F Customer
form
inventory
Physical Inventory 2

Physical Inventory 2

Physical Inventory 1

Inventory Form Physical Inventory 1

Inventory Form
Checking
and
recounting
of inventory C