For any reputable organization, the aspect or function of a proper accounting system is a matter that cannot be ignored. In Australia, and the world over the regulation of accounting standards have continuously been fostered so as to curb the vices which normally arise from financial misstatements. For this reason most organizations, irrespective of the level of transactions, have been keen in ensuring that they meet the set standards so as to avoid the various repercussions which may arise from either, accidental or planned financial misstatements. One of the most effective ways of doing so is by investing in efficient and easy to use accounting software. The purpose of choosing a good accounting software is to aid not only the accounts and finance team, but all the departments in carrying out their activities in a more efficient manner and in a way that will limit the amount of errors which arise from omission or commission of accounting data (Noreen et al 2014). This report will try to describe and prescribe the best accounting information system for Blundstone Footwear Company with the hope of helping them make an informed decision going forward.
Blundstone Footwear Company is an Australian based company which deals mainly in the making of foot high quality footwear. It is a conglomeration of highly integrated group of companies being run by a family who rich history in the industry dates way back in the early 1900’s (Blundstone.com 2018). The company has manufacturing facilities based in various countries across the globe where the produce over 400,000 pairs of gumboots annually. In 2011, it was reported that Bundstone was the most worn boot brand in Australia and their partnering brand John Bull was regarded as the best work out boot brand in New Zealand. The company is dedicated to continue to providing high quality footwear products that surpass their customers’ expectations.
Business activities can be termed as those activities that are carried out by an organization with the aim of making profit. Business activities can be categorized in various ways depending on nature of the organization; however for most organizations, business activities can be broken down as how they appear in the annual report. Using this method, business activities can be broken down to; operating activities, financing activities, and investing activities (Albertoni, Elia & Piscitello 2017)
Operating activities are basically those activities which are undertaken with the main intention being, to deliver goods or services to the market (Andreas 2017). The key operating business activities that Blundstone Footwear Company carries out to realize their objectives can be listed as follows; manufacturing, which involves the sourcing of raw materials from suppliers, processing of the raw materials to come up with finished goods, and packaging the finished products in readiness to distribute to the final consumer. From manufacturing, the next operating business activity is distribution of the finished product to the market. This is followed by marketing the products and finally the actual selling of the product to the client. The magnitude of the listed operating activities in a multinational organization like Blundstone Footwear Company is immense, hence, the need to have an integrated accounting system that will enable the organization to work in an efficient and precise manner.
Financial activities on the other hand can be termed as those activities which are undertaken in order to finance the business expansion or operation. It mainly involves transaction between the organization and its investors and creditors (Caselli & Gatti 2017). Some of the financial activities carried out by Blundstone Footwear Company include, issuance of shares to partners, injection of new equity by the shareholders, payment of dividend to its shareholders, obtaining and/or payment of credit to creditors just to mention a few.
The last category of business activity being undertaken by Blundstone Footwear Company is investing activity. These are basically those activities which involve the long term investment of the company’s assets with the aim of getting positive future returns (Baker & Xuan 2016). It also includes the disposal of long term assets of the company.
Blundstone Footwear Company is a reputable company which thrives on a brand of quality. The main aim of the organization is to ensure that they meet their customer’s expectations by providing high quality affordable footwear in a profitable manner. For the company to realize their high levels of quality, there are certain key business requirements which need to be in place. One of the requirements is the raw material that is to be used to make the final product. The sourcing of the raw materials and in a timely manner is of major importance for them to realize quality end product.
Another requirement is having a correct marketing plan and system which resonates with the customers. Blundstone Footwear Company exports its products globally which prompts them to have an elaborate marketing strategy that will respond with the diverse markets. They also need to have an efficient system of operations which will enable them to produce their products in a cost effective manner. In order to achieve all these, it is prudent for the organization to invest in a proper accounting system to keep track of its financial and inventory records which makes it a key business requirement (Smidt et al 2018). The main factor which will dictate how these requirements are met is the business processes the company undertakes which are listed as explained in the next section.
For Blundstone Footwear Company to achieve its objectives, there are various key business processes that take place. One of the company’s main processes is manufacturing. The process of manufacturing involves other micro processes whose ultimate result is the quality product produced by the company. In manufacturing, the organization carries out research on which materials they should use, what is the best procedure to handle or treat those material, and how all these translates to meeting the product dynamics of their client (Börger & Raschke 2018). Basically the whole aspect of product development goes into the manufacturing process. Quality assurance is also a vital process within manufacturing whose main aim is to ensure that there is reduction of defects and wastage, and above all, to meet the quality standards of the customers (Dale & Plunkett 2017).
There is also the process of customer acquisition and relationship management. This is mainly done through sales and marketing strategy. Since the organization sells its products in different countries, the aspect or acquiring and maintaining a positive customer relationship is one which needs to be looked from a holistic angle (Piercy 2010). Proper marketing and sales strategy processes such as advertising are put in place to achieve that
Human resource management process is also a vital process in the organization. The major function of this business process is to ensure that the employees of the company are working in a harmonious and efficient manner thus achieving high level of productivity (Mondy & Martocchio 2016). Blundstone Footwear Company is a company which is founded on fair treatment of its employees. In its company codes, it is explained that employees in all their branches are to be employed ethically in a process that is free from exploitation. From such a process the organization is bound to get the best value for money from the investment it has made in its human resource processes.
Financial processes are also one of the key processes which aid the company at meeting its objectives. Within the financial process there is the aspect of analysis, reporting and management of capital. This is a vital process within the organization in the sense that it allows the company to source and allocate the resources needed for it to achieve its objectives. The subsequent processes involved under the financial process of the company include, billing processes, budgeting processes, collection and analysis of data, preparation of financial statements, and risk management processes just to mention a few (Marinova, Malinauskaite & Lueg 2014).
Product distribution is also another key process whose main function is to ensure the products produced reach their respective market destination. The fact that the company is a multinational organization with its market spread out globally, it makes the logistic aspect of product distribution to be quite challenging if not approached in a proper manner (Christopher 2016).
There are several outcomes that are expected from these processes; one of them being, meeting the customer needs at a cost effective manner through the efficient manufacturing process. It is also expected that the standards of the products will continue being maintained at high levels due to the quality assurance process (Cabanillas et al 2014).
Another outcome to be expected by the company is that through their financial processes, a proper accounting and accountability mechanism that is in place will help prevent cases of financial misstatements, fraud, misappropriation of funds and any other related issues (Vladychyn 2017). It is also expected that the employees will be positively motivated to work for the organization in an efficient and ethical manner thereby boosting the productivity levels (Massingham & Al Holaibi 2017).
Given the company’s interest in purchasing an accounting system, there are various issues that need to be considered in order to make the right selection of system.
One of the most important elements that the company should consider is its scope of the company itself; not only the present, but it should also factor its future plans in terms of expansion when analyzing the scope aspect (Collier 2015). Within the scope the company should analyze what the system is supposed to do other than the basic accounting.
Another aspect that should be considered is cost aspect. The fact that the system might be beneficial doesn’t negate the cost aspect of purchasing it. A cost benefit analysis should be done to ascertain whether the system will be truly worth it and if the changes to be gained is worth the investment (Simkin et al 2014). Normally the system is gauged against the traditional system, and comparisons are made on what the company will gain, how much it will save by implementing the system and whether the system will bring a significant contribution to the overall returns of the company.
Another aspect to be considered is the skill set required to operate and maintain that system. According to Adenike & Michael (2016), the organization should consider whether its current employees are able to operate such a system and if not whether training can be done or there will be a necessity to hire new staff and all these at what cost. The availability of skills needed to operate such a system is important in ensuring that the company makes the most out of it.
Lastly, the organization should also consider the access and portability of the system. Blundstone Footwear Company has branches spread out across different countries; therefore, it is expected that all the branches will be using integrated accounting software that links the activities of all branches. It is for this reason that one of the requirements of the system be ability to be used from the different branches of the company.
What are the system requirements that are ideal for the company’s needs? The system requirements majorly depend on the type of account system to be used (Ismail & King 2014). From the business processes of Blundstone Footwear Company, it can be seen that there is need for a more comprehensive system that can be able to perform cross departmental processes.
These are just but some of the requirements that the system should posses, for it to be used across the whole organization, and in turn integrating the various data obtained, and providing an understandable report. The report can later be used even by senior management for decision making (Monk & Wagner 2013).
There are a number of accounting systems available in the market which the company can choose. Each system vendor has various options to choose from depending on the how much the company is willing to spend on the system and also the size of business. It is to be noted that with the increase in price, there is an increase in the number of features offered by the system. This section will try to compare the different price features from three vendors, namely; SAP, MYOB and Xero with the hope of assisting the company make a prudent decision on the right package to choose from.
Starting with SAP, they have four main packages each with their own features with cloud services being a common feature in all of them. Given that Blundstone Footwear Company is a big organization, it will not be appropriate to take an accounting system which belongs to a small and medium enterprise. The major reason for this being that, the company might not be able to get the most out of the product. For SAP, one feature on their high end product seemed appealing as compared to the rest. The on-premise and private cloud environments make it more secure as compared to their other products. Other than this, it has a multitude of features which are just right for the company. Some of these features include; an enhanced planning and financial analysis tool. It also has an automated risk and compliance detection system which will help prevent risks and compliance related issues. The system also has the capability to run an enterprise wide, quality management processes which can foster the aspect of continuous improvement there by scaling up the levels of product quality (SAP 2018). The system has several other features which can be of great boon to the company’s operations.
Similarly MYOB has several packages which the organization can choose from but their major categories are packages for small businesses and big businesses. The features contained in their big business package far suits the organization as compared to the later package. In one of their business package that was more suitable to the company entailed the capability to do job costing and manage to track end to end process service items which seemed quite relevant to the manufacturing process of the organization (Myob.com 2018). The same package also had a tool to mange and sales and customer interactions which was also a plus in the customer acquisition and management processes.
When it comes to Xero, its categories are placed with regards to the type of organization that wants to purchase the system. Some of the categories include manufacturing, retailing, startups among others. The manufacturing package has the capability of monitoring the stock levels. The system can also be able to monitor the progress of financial statements that suits or being used by the organization (Xero 2018). They can also be able to print professional quotes on the go irrespective of the location.
From this it can be concluded that most high end systems have the prerequisite features needed by the company to advance to the next level.
Based on functionality both SAP and MYOB are equally up to the task of providing the needed accounting support to the organization. Using the business processes as the basis of comparison, the two can be analyzed as follows;
Finance aspect
Basically, both systems have almost similar capabilities that aid finance processes. Both can be able to run real time data entry and reporting. Both systems are able to carry out analysis of financial information and display them in accordance to the reporting needs of the organization.
Both systems are able to reduce the amount of manual paper work that is normally involved in accounting. The systems are also able to accomplish this by linking up with different payment systems.
Both systems also allow for better financial control through real time collection of data which can also be of great help in preventing financial misappropriation.
There are some few differences between the two. For example, SAP can be able to manage risk and compliance proactively thereby reducing instances of fraud or non-compliance of financial standards. This feature is not available in MYOB. Likewise, MYOB has a feature that can allow the management of fixed asset which is not present in the SAP software.
Human resource aspect
Both systems are equally matched in this regard. It is apparent that both systems are able to streamline payroll processes through integration of employee data and cost- center information and at the same through their respective employee portal they are able to address any matter arising which is human resource related.
Manufacturing aspect
Both systems are able to keep track of an organizations’ inventory thus they can aid in ensuring that there is going to be a consistent flow of materials for production. The two systems also have the capability to keep track, monitor and even aid in key operational processes
Customer Acquisition and relationship management
Both tools have the capability to manage sales and customer interaction. Though the functionality is slightly different
From the two accounting systems, most of the core business processes and activities will be catered for. The two tools are more or less similar in terms of capability, with slight differences in functionality. That being the case, the aspect of choice might need to be determined by other factors like price and usability. In terms of the features that both systems have, it can be concluded that both systems have great capabilities to be of use in the company.
Conclusion
From this report, we can come to a conclusion that having a properly selected accounting system, the business can have tremendous gains in terms of cost saving and operational efficiency. We have also established that, the requirements of the system are primarily dictated by the business processes and business requirements. Likewise, the future growth of the business should also help in analyzing which accounting software to purchase.
References
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