CHAPTER I

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It was in mid-2004 when Mr. Norbert B. Pagaspas decided to venture into
business in the flourishing herbal industry. He established and registered Shanne
Herbal Products in Buenavista, Agusan del Norte to carry out the core intentions
of the business enterprise. After finding a suitable temporary site for the
laboratory, it was then renovated in accordance with Bureau of Food and Drugs
(BFAD) requirements.
With the release of the BFAD License to Operate (LTO) in November 30,
2004, business operations began with just a few workers helping out in the
manufacturing process of the initial batches of Shanne Herb-plus capsules which
were then distributed to a few and selected outlets/pharmacies in Agusan del
Norte and Misamis Oriental.
The business steadily followed an upward trend in its growth. More people
were needed to run the operations in the three major departments:
Administration, Production Department, and Marketing Department.
In 2006, Shanne Herbal Oil and Shanne Herbal Soap were introduced to
the market. The new products were readily accepted. There was a rise in the
gross income on the same year that was mainly attributed to the opening of
business operations in the Visayas area and the expansion of coverage in the
Mindanao operations.
Another factor is the favourable consumer feedback and patronage, and
the managements commitment to provide high quality herbal products and
innovative marketing strategies.

The business is expected to grow much further in the coming years, and
the volume of the manufacturing process will be beyond the capacity of the
present laboratory. With the advent of the governments policy on Good
Manufacturing Practices (GMP) for all food manufacturers, management realized
that to renovate and refurbish the laboratory in strict compliance with GMP would
be deemed impractical. Management decided to construct a new 3-storey
laboratory building that will faithfully conform to GMP guidelines and BFAD
requirements.
With the establishment of the new laboratory building, management hopes
to expand its product lines and will soon venture into cosmetics and
pharmaceuticals.
Currently, Shanne Herbal Products operates in 16 key areas in the
Visayas and Mindanao. In Cagayan de Oro City, a Shanne Herbal office can be
located in A&G Arcade, Lapasan Highway. They deliver products within Misamis
Oriental, Camiguin province, and in the Lanao area.

Mission of the Company

Shanne Herbal Products is dedicated to produce high quality products
manufactured in compliance with international safety and quality standards.

Vision of the Company

Shanne Herbal Products shall be the preferred company in herbal dietary
supplements and pharmaceutical products offering superior quality, value,
convenience and satisfaction to customers in the Philippines and abroad.
Objectives of the Company
The company aims to provide affordable products that are beneficial to the
health of the people in the country and abroad. It perseveres to provide customer
satisfaction with the highest quality of herbal ingredients. Furthermore, it
promotes the use of natural ingredients in medicinal purposes.
Organizational Chart

Branch Manager

Book Keeper

Sales Clerk

Sales Representative

1.2 STATEMENT OF THE PROBLEM

This part tackles the problem that leads to the development of the Sales
System of Shanne Herbal Products.
Specific problems are:

1.
2.
3.

Sales data are hard to locate.

Up-to-date reports for the use of management are hard to generate.
Records are not legibly written, thus causing to the unreliability of
financial data.

1.3 OBJECTIVES OF THE STUDY

The study aims to provide Shanne Herbal Products with an easier and
more modern alternative in doing their sales.
Specifically, it aims to:
1.
2.
3.

Provide real-time sales data.

Develop a system that easily generates reports to user queries.
Create a database that would organize necessary details pertaining to
sales.

1.4 SIGNIFICANCE OF THE STUDY

The findings of this study will be beneficial to the following:
The Management of Shanne Herbal Products. Data and sales analysis
can be performed with the access of real-time information. Thus, the
management will be able to make better decisions and plan accordingly.
The Clerk of Shanne Herbal Products. The over-all system is very
advantageous in increasing the productivity of the clerk. He or she would not
have to manually write them on paper. The system would ensure accuracy and
speed in recording sales transactions.
The Customers of Shanne Herbal Products. The system would also be
beneficial to the customers since it makes reliable outputs of the calculation of
their bills. Customers would be served better and faster by the clerk.

1.5 SCOPE AND LIMITATION OF THE STUDY

The proposed study is limited to keeping track of sales of Shanne Herbal
Products. It is concerned with reports relevant for the management to make
timely decisions and justifiable assessment of the business. Reports which
present labor auditing are not anymore within the scope of the study. The
limitations of the study include not involving the probability that customers would
carry out credit card transactions. Also, credit is not viable to customers who
directly place orders in the center.

1.6 METHODOLOGY
1.6.1 SOURCES OF DATA
The primary source of data came from an interview with Mrs. Rose
Cabunoc, the book keeper and Ms. Jenny Cagatin, the sales clerk of Shanne
Herbal Products, regarding the companys background and its business activities
related to sales. The researchers also reviewed some of their source documents
which the management refers to in coming up with reports. Secondary sources
and information were gathered further from academic books and the World Wide
Web.
1.6.2 METHODS AND TECHNIQUES
The researchers used the Unified Modeling Language or UML like the
Class Diagram, Activity Diagram, Sequence Diagram and Use Case Diagram.
1.6.3 TOOLS

The study aims to develop a Sales System using Microsoft Visual Basic
6.0 for the front-end and Microsoft Access for the back-end.
1.6.4 DEVELOPMENT PROCESS
Requirements
definition

System and
software design

Implementation and
unit testing

Integration and
system testing

Operational
Maintenance
Figure 1. Waterfall Model
CHAPTER II
REVIEW OF LITERATURE AND STUDIES
The following are reviews, which show significant learning to the study.
They are grouped into the following headings: Point-of-Sale System Overview,
Sales/Collection Process, and Database Management Software.
Point-of-Sale System Overview

In any business establishment, its important to keep records of all

transactions. A Transaction Processing System (TPS) performs the essential role
of collecting and processing the daily transactions of the organization (Lucy,
1997). One TPS is a sales order processing system, or order-entry system. It
routinely records sales orders and also provides data to other systems that fill
those orders, maintain inventory levels, and bill the customer (Schultheis et. al,
1998).
Point-of-Sale (POS) Systems are another facet of the order-entry system.
POS Systems capture data about orders at the point of sale and are frequently
found in fast food chain stores, department stores, and grocery chain stores.
POS Systems provide immediate updates to sales and inventory systems and
allow firms to monitor sales trends minute by minute. They also allow firms to
capture customer data and preferences and add the information to their data
warehouses (Schultheis et. al, 1998).
The POS System allows simple ordering through its features such as
unlimited menus with pictures, on screen review for modification, automatic
calculation of tax and tender, tracking of complete audit trails, and quick tender
keys. Furthermore, it can offer automatic calculation of profit margin percentage,
instant reports, built-in real-time data, and the ability to manage the register from
a back office computer. The reports that can be generated are the following:
Sales and Profits, Top Sellers and Worst Sellers, Shopping List, Sales by
Category, End of Day Report, Daily Financial Summary, and Hourly Sales
Report.

Sales/Collection Process
The objective of the sales/collection process is to sell and deliver goods
and services to customers and collect payment. The finished goods and services
from the conversion process are sold to customers (external entities) in
exchange for their payment, usually in the form of cash (Haag et. al, 2005). The
sales/collection business process is sometimes called the revenue transaction
cycle or the order to cash mega-process; therefore, one must look past the labels
an enterprise assigns to its various activities and examine the substance to
identify the sales/collection process for a given enterprise. Information from the
sales/collection process can provide decision-making support for many
information customers (Dunn et. al, 2005).
Database Management Software
In order to carry out the systems task, a database is necessary. A
database is a file of data structured in such a way that it may serve a number of
applications. The data structures and relationships require highly technical
software known as the Database Management Software (DBMS) to deal with
them. The DBMS is a complex software system which constructs, expands and
maintains the database. It also provides the link, or interface, between the user
and the data in the base (Lucy, 1997).
Data collection begins with a transaction (e.g. taking a customer order)
and results in data that serves as input to the TPS. The Product ID for each item
is determined, and its price retrieved from the item database. The Point-of-Sale
TPS uses the price data to determine the customers bill. The stores inventory

and purchase databases record the number of units of an item purchased the
date, the time, and the price. The inventory database generates a management
report notifying the store manager to reorder items that have fallen below the
reorder quantity. The detailed purchases database can be used by the store or
sold to marketing research firms or manufacturers for detailed sales analysis
(Stair and Reynolds, 2008).
The important of recording sales in the most accurate way could not be
stressed more than enough. To Haag et. al (2005), sales are the life-blood of
most companies. Without cash flows from sales, companies cannot remain in
business very long. In a rapidly changing, ever more competitive Information Age
economy, every organization that wants to grow must sooner or later develop an
effective sales and inventory system.

CHAPTER III
REQUIREMENTS, ANALYSIS AND DESIGN
3.1 NARRATIVE DESCRIPTION OF THE CURRENT SYSTEM
Shanne Herbal Products current system employs a manual way in
conducting sale transactions. The steps indicated below comprise a summary of
business activities undertaken to process the sales:

1. The clerk lists in an official receipt the customers orders, indicating the
quantity and the amount of each product.
2. The customer pays the total amount indicated in the official receipt.
3. The clerk gives a copy of the official receipt to the customer, while another
copy is left to files.
4. All official receipts collected by the clerk from the day are handed over to
the book keeper for recording and preparing the daily sales report.
5. In a sales transaction involving delivery of products to different outlets, the
process starts with a telephone notification by the outlet for delivery of
ordered products.
6. A delivery receipt is prepared by the clerk, and sent to the ordering outlet
together with the products.
7. The receiving clerk of the outlet acknowledges the delivery receipt and a
copy of it is sent back to the center for recording of account receivables.
8. When payment is made by the outlet, the record is updated by the clerk
and a copy of cash invoice is prepared to be sent to the outlet.

3.2 NARRATIVE DESCRIPTION OF THE PROPOSED SYTSTEM

The proposed system employs an electronic way of recording sale
transactions where the clerk will only enter into the system the order placed by
the customer. Below are the steps involved with the proposed system:

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1. Before the clerk conducts the sale transactions toward his customers, he
or she confirms the authority to do so by logging in his username and
password to the system.
2. The clerk enters the customer information, the purchase and the payment
details of the customer.
3. An official receipt is then printed out for the customer.
4. In a sales transaction involving delivery, the clerk enters the outlet
information into the system, including the ordered items.
5. A delivery receipt is then printed out to be sent to the outlet together with
the ordered products.
6. The clerk saves the total accounts receivable of that outlet for future
reference.
7. When payment is made, the accounts receivable record of the outlet is
updated.

3.3 ANALYSIS OF REQUIREMENTS

Shanne Herbal Products Sales System offers financial reports and the
necessary forms essential in monitoring and conducting sales transactions.
INPUTS

Customer Information

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Order Information

Payment Information

Outlet Information

Sales Order Details

Outlet Payment Details

PROCESSES
During a sales transaction, the system records the customers information,

customers order and payment. On the other hand, when an outlet makes sales
orders, the system records and saves the outlet information, the sales order
details, and the payment details of the company when due.
OUTPUTS

Invoices

Rejected Sales Order Notice

Delivery Receipt

Accounts Receivable Information

Financial Report

Sales Report

Summary of Delivery

3.4 SYSTEM DESIGN

3.4.1 CONTEXT DIAGRAM

Direct
Customers

Management

Outlets
0
Shanne
Herbal
Products
Sales
System

12
Accounting

3.4.2 USE-CASE DIAGRAM

Logs to
System

Add Customer
Information

Add Customer
Orders

Check
Discount
Cancel
Accounts
Print
Save
Print
Check
Add
Save
Save
Invoice
Outlet
Delivery
Account
Outlet
Outlet
Options
Receivable
Information
Customer
Receivable
Orders
Payment
Receipt
Record

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Sales Clerk

Printer
<<Participate>>

Generate
Reports

Manager

Update
Records

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3.4.3 ACTORS DESCRIPTION

The actors in the system are the sales clerk and the manager. The
supporting actor is the printer. Below are their descriptions:
Sales Clerk The sales clerk is an employee whose job is to administer sales
transactions towards customers and outlets representatives. As the main person
to conduct sales, he is given the authority to enter sales data into the system. He
has the right to update records, to save pertinent data, and delete accounts.
Manager The manager monitors the financial status and the business activities
of the company. Thus, he has the right to access the database and extract
information from it through reports. He has also the authority to update, change,
or delete any data and/or information regarding the products.

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