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| Complete Cash Sales Step-by-Step Process |
Complete Cash Sales Process for a 100% Export-Oriented Textile Company:
A 100% export-oriented group of companies in the textile sector usually carries out its sales activities under two main categories:
1. Export Sales
2. Cash Sales (Local Sales)
About the Author:
Hello, I’m Md. Harun-or-Rashid,
a content creator, blogger, and your learning partner.
In this article, I explain the complete cash sales process
followed by a 100% export-oriented textile company, with a practical view of
both operational and accounting procedures.
This guide walks you through each step—from buyer negotiation to final sales accounting—so you can clearly understand how cash sales are executed in real-life textile operations.
Introduction:
This article describes the end-to-end cash sales process, along with the internal workflow followed in a 100% export-oriented textile industry.
The main objectives are to help readers understand:
· How cash sales are processed in practice
· How production and sales activities move step by step
· How Sales, Accounts, Stores, and Production departments work together
This article is especially useful for:
· Accounts & Finance professionals
· Sales & Distribution personnel
· Production and Store officers
· Management trainees and fresh graduates
This article focuses only on the Cash Sales Process.
Cash Sales Process (Step-by-Step):
1. Negotiation with the Buyer:
Usually handled by top management, the negotiation covers key commercial terms such as:
· Price: Final product price agreement
· Quantity: Confirmation of order volume
· Quality: Buyer approval based on product samples
· Delivery Terms: Clear delivery date and location
· Payment Method: Payment through cash deposit or RTGS transfer to the company’s bank account.
2. Receipt of Cash Deposit Slip:
The buyer deposits the payment into the company’s designated bank account, either by cash deposit or RTGS transfer.
3. Confirmation of Payment:
The accounts department verifies the payment from the bank statement or deposit confirmation.
4. Issuance of Money Receipt:
After payment confirmation, an official money receipt is issued to the buyer.
5. Money Receipt Journal Entry:
The accounts team records the transaction in the accounting system by passing the necessary journal entry.
6. Delivery Order (DO Letter):
Once payment is confirmed, the sales department prepares the Delivery Order (DO) authorizing product release.
7. Issuance of Delivery Challan:
The Sales & Distribution Department issues the delivery challan for the physical movement of goods.
8. Issuance of Mushak 6.3 Challan:
A VAT-compliant Mushak 6.3 challan is prepared according to applicable VAT regulations.
9. Accounts Approval – Delivery Journal:
The accounts department reviews and approves the delivery-related accounting entry.
10. Accounts Approval – Sales Journal:
Finally, the sales journal entry is approved and posted in the accounting system.
Frequently Asked Questions (FAQ):
This FAQ section answers the most common questions about the cash sales process at a 100% export-oriented textile company. It is designed to help readers quickly understand practical issues such as documentation, VAT compliance, departmental roles, and accounting treatment. Whether you are a finance professional, sales executive, production officer, or management trainee, these answers will clarify how cash sales are executed step by step in real textile operations.
1. What is the cash sales process in a textile company?
The cash sales process includes buyer negotiation, receipt of payment, verification by accounts, issuance of money receipt, preparation of delivery order, delivery challan, Mushak 6.3 issuance, and final approval of delivery and sales journals.
2. Can a 100% export-oriented textile company make local cash sales?
Yes. A 100% export-oriented textile company can make local cash sales by following the applicable Bangladesh VAT laws, which is 20 % of Total Sales proceeds by involving specifi vat rate @Tk. 5 per kg yarn sales, issuing Mushak 6.3, and maintaining proper documentation and approvals.
3. What documents are required for cash sales?
Key documents include the cash deposit slip or RTGS advice, money receipt, delivery order (DO), delivery challan, Mushak 6.3 challan, and approved accounting journal entries.
4. Why is the cash sales process important for textile companies?
The cash sales process is important because it ensures quick cash inflow, better inventory control, transparent accounting, and regulatory compliance. It also helps textile companies efficiently manage local sales without disrupting their core export-oriented operations.
5. What are common risks in the cash sales process?
Common risks include improper documentation, VAT non-compliance, inventory mismatches, and revenue leakage. A well-defined cash sales process helps minimize these risks and ensures transparency and accountability.
6. How can textile companies improve their cash sales process?
Textile companies can improve their cash sales process by implementing clear SOPs, digital invoicing, regular audits, proper staff training, and strong coordination between sales, finance, and compliance teams.
7. What is Mushak 6.3, and why is it important?
Mushak 6.3 is a VAT challan issued for local sales. It ensures VAT compliance and is mandatory for reporting sales under the Bangladesh VAT regulations.
8. Which departments are involved in the cash sales process?
The main departments involved are Sales, Accounts, Production, Store, and Distribution. Each department plays a specific role to ensure smooth delivery, accurate accounting, and regulatory compliance.
9. Why is the accounts department's approval critical in cash sales?
Accounts approval ensures that payments are properly received, journal entries are accurate, VAT is correctly accounted for, and financial records remain transparent and audit-ready.
10. How is the sales process different in a 100% export-oriented textile company?
In a 100% export-oriented textile company, the sales process is mainly focused on export orders supported by LCs or export contracts. However, cash sales are handled as a separate process and must comply with local sales approvals, VAT rules, customs regulations, and internal company policies.
Conclusion:
The cash sales process in a 100% export-oriented textile group depends on strong coordination between Sales, Accounts, Production, and Store departments. Proper documentation, timely approvals, and strict compliance with VAT regulations are essential to ensure smooth operations, financial accuracy, and full transparency.
When each department follows the process correctly, cash sales can be completed efficiently and without risk.
Accurate documentation, proper approvals, and compliance with VAT regulations ensure smooth operations and financial transparency.