15 differences between the Revenue Cycle,

Expenditure Cycle, Production Cycle, Payroll Cycle,

Investing Cycle, and Financing Cycle in detail
Expenditure Production Investing Financing
Aspect Revenue Cycle Payroll Cycle
Cycle Cycle Cycle Cycle
Covers the Referring to Focus on Deals with
Tracks the Manages
process of the activities buying and obtaining
process of compensation
acquiring involved in selling long- funds through
selling goods or to employees,
1. goods/services creating term assets loans, shares,
services and including
Definition needed for finished like property, or bonds and
collecting wages,
operations and goods from equipment, managing
payment from salaries, and
paying raw and repayments or
customers. benefits.
suppliers. materials. investments. dividends.
Accurately
Optimize compensate
Maximize sales Ensure smooth Enhance the Secure funding
production employees
and ensure procurement of value of the at a low cost
2. efficiency while
timely necessary company’s and manage
Primary and quality complying
collection to resources and assets and repayment
Objective while with labor
maintain cash maintain cost achieve long- schedules
minimizing laws and
flow. control. term returns. efficiently.
waste. company
policies.
Production
Financial
Sales team, staff, Human Investors,
Procurement analysts,
customers, inventory resources, lenders,
3.Main team, suppliers, asset
accounts managers, payroll team, shareholders,
Participants accounts managers,
receivable and quality and and financial
payable team. and
team. control employees. controllers.
accountants.
teams.
Loan
Customer Production Timesheets, Investment agreements,
Purchase
orders, sales schedules, payroll agreements, share
orders, supplier
invoices, inventory registers, tax purchase certificates,
4. invoices, goods
delivery records, and records, and deeds, sale repayment
Documents receipt notes,
receipts, quality bank agreements, schedules, and
payment
payment control transaction and valuation interest
records.
receipts. checklists. slips. reports. payment
records.
5.Involves Sales Procurement of Transformati Payment of Transactions Activities
transactions goods/services on of raw wages, taxes, involving the related to
 acquisition or
materials raising capital
and credit and payment to and benefits disposal of
into finished or repaying
management. vendors. to employees. long-term
goods. debt.
assets.
Selling
Purchasing Manufacturi Paying salaries Purchasing Issuing shares,
products to
office supplies, ng cars, to office machinery, taking loans
customers,
machinery, or producing workers, selling old for business
5.Examples generating
raw materials furniture, or factory vehicles, or expansion, or
invoices, and
and paying assembling workers, and buying stocks repaying a
collecting
suppliers. electronics. freelance staff. and bonds. bank loan.
payments.
Can increase
Affects cash
cash inflow
flow Decreased Can either
Increase cash (borrowing or
Decreases cash indirectly cash flow due reduce (asset
inflow when equity
6.Impact on flow due to through to payroll purchase) or
payments are funding) or
Cash Flow payments made inventory disbursements increase
received from decrease it
to suppliers. costs and and tax (asset sale)
customers. (repayments
production payments. cash flow.
or dividend
expenses.
payouts).
Regular, Periodic
Occurs weekly, Occasional, Periodic,
Ongoing as depending on based on
bi-weekly, or based on the depending on
sales and operational production
7.Frequency monthly, need to funding needs
collections needs and schedules or
depending on acquire or or repayment
occur regularly. supplier customer
payroll cycles. sell assets. schedules.
contracts. demand.
Does not
Indirectly Does not
Has no direct directly
Reduces impacts directly
Directly impact on generate
revenue revenue by impact
8.Revenue generates revenue but revenue but
through costs of determining revenue but
Impact income for the ensures ensures
goods/services product contributes
business. employee sufficient
purchased. availability to long-term
productivity. funds for
and quality. growth.
operations.
Involves
Involves costs of Includes
May involve payroll costs, Involves Involves
goods/services production
bad debts or including capital costs interest on
9.Cost purchased and costs like raw
delayed salaries, and loans or costs
Impact interest on materials,
payments from benefits, and depreciation of issuing
overdue labor, and
customers. statutory of assets. shares.
payments. overhead.
deductions.
10.Risks Bad debts, late Overstocking, Production Payroll errors, Poor High interest
payments, or understocking, delays, non- investment rates, inability
high customer or supplier inventory compliance decisions, to repay loans,
returns. unreliability. spoilage, or with tax laws, asset or dilution of
poor-quality or employee obsolescence ownership.
goods. dissatisfaction. , or market
 downturns.
Return on
Collection Cost efficiency, Payroll Debt-to-equity
Production investment
period, supplier expense ratio, ratio, cost of
output, (ROI), asset
accounts payment cycle, employee capital, and
11.KPIs efficiency turnover
receivable and retention, and repayment
ratio, and ratio, and
turnover, bad procurement error rate in schedule
cost per unit. profit from
debt ratio. cycle time. payroll. compliance.
asset sales.
Payroll
Manufacturi
Customer Procurement management ERP systems,
ng execution Financial
Relations systems, software and treasury
systems management
12. management accounts human management
(MES), software and
System Used (CRM) and payable resource software, and
inventory asset tracking
accounting modules, and information financial
management tools.
software. ERP systems. systems planning tools.
systems.
(HRIS).
Recorded as
Recorded as Recorded as
Recorded as Recorded as Recorded as equity,
13. cost of goods fixed assets,
accounts accounts salary expense liabilities,
Accounting manufacture depreciation,
receivable and payable and and payroll interest, or
Impact d and or investment
revenue. expenses. liabilities. dividend
inventory. income.
expenses.
Production
Procurement staff, Financial Investors,
Sales team, HR, payroll
14. team, suppliers, operations managers, creditors, and
customers, and team, and
Stakeholders and finance team, and investors, and financial
finance team. employees.
team. inventory accountants. institutions.
managers.
It depends Occurs
Follows Linked to
Dependent on It depends on on irregularly
regular payroll funding
15. credit terms supplier production based on
schedules requirements
Cash Flow and customer payment terms cycle investment
(weekly, bi- or loan
Timing payment (e.g., advance, duration and opportunities
weekly, or repayment
schedules. credit). inventory or asset
monthly). timelines.
turnover. disposals.